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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

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

~~133,526,139~~154,314,660 shares of common stock were outstanding as of ~~October 28, 2020.~~November 3, 2021.

In addition to historical information, this Quarterly Report on Form 10-Q (this “Form 10-Q”) may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are subject to the “safe harbor” created by those sections. All statements, other than statements of historical facts included in this Form 10-Q, including statements concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, our results of operations, financial position, our business outlook, business trends and other information are forward-looking statements. Words such as “estimates,” “expects,” “contemplates,” “will,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts,” “may,” “should” and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs, estimates and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, estimates and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Form 10-Q. Such risks, uncertainties and other important factors that could cause actual results to differ include, among others, the risks, uncertainties and factors set forth under Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended ~~June 27, 2020~~July 3, 2021 (the “Form 10-K”), as such risk factors may be updated from time to time in our periodic filings with the Securities and Exchange Commission (the “SEC”), including under Part II, Item 1A, Risk Factors of this Form 10-Q, and are accessible on the SEC’s website at www.sec.gov, and also include the following:

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

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

(In millions, except per share data)	As of September 26, 2020			As of June 27, 2020			As of October 2, 2021			As of July 3, 2021
ASSETS
Current assets:
Cash	$	417.2		$	420.7		$	35.1		$	11.1
Accounts receivable, less allowances of $80.1 and $86.7		1,284.2			1,258.6
Accounts receivable, less allowances of $48.8 and $42.6								2,164.9			1,580.0
Inventories, net		1,523.9			1,549.4			2,864.0			1,839.4
Income taxes receivable		164.0			156.5			73.1			49.6
Prepaid expenses and other current assets		79.6			68.7			211.7			100.3
Total current assets		3,468.9			3,453.9			5,348.8			3,580.4
Goodwill		1,349.5			1,353.0			2,220.5			1,354.7
Other intangible assets, net		887.5			918.6			1,280.1			796.4
Property, plant and equipment, net		1,512.3			1,479.0			1,978.5			1,589.6
Operating lease right-of-use assets		445.3			441.2			650.8			438.7
Restricted cash		11.1			11.1			7.1			11.1
Other assets		65.3			62.9			95.9			74.8
Total assets	$	7,739.9		$	7,719.7		$	11,581.7		$	7,845.7
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Outstanding checks in excess of deposits	$	106.1		$	110.4
Trade accounts payable		1,456.9			1,608.0
Trade accounts payable and outstanding checks in excess of deposits								2,374.1			1,776.5
Accrued expenses and other current liabilities		496.9			678.0			709.9			625.0
Long-term debt - current installments		108.3			107.6
Finance lease obligations—current installments		36.1			30.3			71.5			48.7
Operating lease obligations—current installments		83.6			84.4			105.8			77.0
Total current liabilities		2,287.9			2,618.7			3,261.3			2,527.2
Long-term debt		2,551.4			2,249.3			3,669.7			2,240.5
Deferred income tax liability, net		121.2			115.6			376.1			140.4
Finance lease obligations, excluding current installments		200.8			185.7			355.0			255.0
Operating lease obligations, excluding current installments		369.7			362.4			560.5			378.0
Other long-term liabilities		188.2			177.4			235.6			198.5
Total liabilities		5,719.2			5,709.1			8,458.2			5,739.6
Commitments and contingencies (Note 10)
Shareholders’ equity:
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 132.0 million shares issued and outstanding as of September 26, 2020; 1.0 billion shares authorized, 131.3 million shares issued and outstanding as of June 27, 2020		1.3			1.3
Common Stock: $0.01 par value per share, 1.0 billion shares authorized, 152.8 million shares issued and outstanding as of October 2, 2021; 132.5 million shares issued and outstanding as of July 3, 2021								1.5			1.3
Additional paid-in capital		1,713.4			1,703.0			2,764.6			1,752.8
Accumulated other comprehensive loss, net of tax benefit of $3.5 and $3.6		(9.9	)		(10.3	)
Accumulated other comprehensive loss, net of tax benefit of $1.6 and $1.9								(4.6	)		(5.3	)
Retained earnings		315.9			316.6			362.0			357.3
Total shareholders’ equity		2,020.7			2,010.6			3,123.5			2,106.1
Total liabilities and shareholders’ equity	$	7,739.9		$	7,719.7		$	11,581.7		$	7,845.7

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

(In millions, except per share data)	Three Months Ended September 26, 2020			Three Months Ended September 28, 2019		Three Months Ended October 2, 2021			Three Months Ended September 26, 2020
Net sales	$	7,046.8		$	6,243.0	$	10,386.3		$	7,046.8
Cost of goods sold		6,231.3			5,531.6		9,244.0			6,231.3
Gross profit		815.5			711.4		1,142.3			815.5
Operating expenses		779.7			647.9		1,094.1			779.7
Operating profit		35.8			63.5		48.2			35.8
Other expense, net:
Interest expense		38.8			17.3		44.0			38.8
Other, net		(1.0	)		-		(1.3	)		(1.0	)
Other expense, net		37.8			17.3		42.7			37.8
(Loss) income before taxes		(2.0	)		46.2
Income tax (benefit) expense		(1.3	)		10.1
Net (loss) income	$	(0.7	)	$	36.1
Income (loss) before taxes							5.5			(2.0	)
Income tax expense (benefit)							0.8			(1.3	)
Net income (loss)						$	4.7		$	(0.7	)
Weighted-average common shares outstanding:
Basic		131.7			104.0		139.7			131.7
Diluted		131.7			105.6		141.2			131.7
(Loss) earnings per common share:
Earnings (loss) per common share:
Basic	$	(0.01	)	$	0.35	$	0.03		$	(0.01	)
Diluted	$	(0.01	)	$	0.34	$	0.03		$	(0.01	)

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

($ in millions)	Three months ended September 26, 2020			Three months ended September 28, 2019			Three Months Ended October 2, 2021			Three Months Ended September 26, 2020
Net (loss) income	$	(0.7	)	$	36.1
Other comprehensive income (loss), net of tax:
Net income (loss)							$	4.7		$	(0.7	)
Other comprehensive income, net of tax:
Interest rate swaps:
Change in fair value, net of tax		(0.3	)		(0.5	)		(0.2	)		(0.3	)
Reclassification adjustment, net of tax		0.7			(0.6	)		1.3			0.7
Other comprehensive income (loss)		0.4			(1.1	)
Total comprehensive (loss) income	$	(0.3	)	$	35.0
Foreign currency translation adjustment, net of tax								(0.4	)		—
Other comprehensive income								0.7			0.4
Total comprehensive income (loss)							$	5.4		$	(0.3	)

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

Additional

Accumulated
Other

Total

Common Stock

Paid-in

Comprehensive

Retained

Shareholders’

(In millions)

Shares

Amount

Capital

Loss

Earnings

Equity

Balance as of June 29, 2019

103.8

$
1.0

$
866.7

$
(0.2
)

$
430.7

$
1,298.2

Net income

—

—

—

—

36.1

36.1

Interest rate swaps

—

—

—

(1.1
)

—

(1.1
)
Issuance of common stock under stock-based compensation plans

0.4

—

(4.5
)

—

—

(4.5
)
Stock-based compensation expense

—

—

4.4

—

—

4.4

Balance as of September 28, 2019

104.2

1.0

866.6

(1.3
)

466.8

1,333.1

Balance as of June 27, 2020

131.3

1.3

1,703.0

(10.3
)

316.6

2,010.6

Net loss

—

—

—

—

(0.7
)

(0.7
)
Interest rate swaps

—

—

—

0.4

—

0.4

Issuance of common stock under stock-based compensation plans

0.4

—

(1.7
)

—

—

(1.7
)
Issuance of common stock under employee stock purchase plan

0.3

—

7.8

—

—

7.8

Stock-based compensation expense

—

—

4.3

—

—

4.3

Balance as of September 26, 2020

132.0

$
1.3

$
1,713.4

$
(9.9
)

$
315.9

$
2,020.7

					Additional			Accumulated Other						Total
	Common Stock				Paid-in			Comprehensive			Retained			Shareholders’
(In millions)	Shares		Amount		Capital			Income (Loss)			Earnings			Equity
Balance as of June 27, 2020		131.3	$	1.3	$	1,703.0		$	(10.3	)	$	316.6		$	2,010.6
Net loss		—		—		—			—			(0.7	)		(0.7	)
Interest rate swaps		—		—		—			0.4			—			0.4
Issuance of common stock under stock-based compensation plans		0.4		—		(1.7	)		—			—			(1.7	)
Issuance of common stock under employee stock purchase plan		0.3		—		7.8			—			—			7.8
Stock-based compensation expense		—		—		4.3			—			—			4.3
Balance as of September 26, 2020		132.0		1.3		1,713.4			(9.9	)		315.9			2,020.7

Balance as of July 3, 2021		132.5		1.3		1,752.8			(5.3	)		357.3			2,106.1
Net income		—		—		—			—			4.7			4.7
Interest rate swaps		—		—		—			1.1			—			1.1
Foreign currency translation adjustment		—		—		—			(0.4	)		—			(0.4	)
Issuance of common stock under stock-based compensation plans		0.4		—		(4.9	)		—			—			(4.9	)
Conversion of Core-Mark shares of common stock		19.9		0.2		998.6			—			—			998.8
Conversion of Core-Mark stock-based compensation ⁽¹⁾		—		—		9.2			—			—			9.2
Stock-based compensation expense		—		—		8.9			—			—			8.9
Balance as of October 2, 2021		152.8		1.5		2,764.6			(4.6	)		362.0			3,123.5

(1) Represents the portion of replacement stock-based compensation awards that relates to pre-combination vesting.

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

($ in millions)	Three months ended September 26, 2020			Three months ended September 28, 2019			Three Months Ended October 2, 2021			Three Months Ended September 26, 2020
Cash flows from operating activities:
Net (loss) income	$	(0.7	)	$	36.1
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities
Net income (loss)							$	4.7		$	(0.7	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities
Depreciation		52.8			33.9			57.0			52.8
Amortization of intangible assets		29.3			8.8			41.7			29.3
Amortization of deferred financing costs		3.6			4.5			2.2			3.6
Provision for losses on accounts receivables		(2.0	)		4.1			0.2			(2.0	)
Change in LIFO reserve								11.3			(8.7	)
Stock compensation expense		4.7			4.4			10.0			4.7
Deferred income tax expense		5.5			(5.6	)
Deferred income tax (benefit) expense								(0.3	)		5.5
Loss on extinguishment of debt								3.2			—
Other non-cash activities		(3.1	)		(0.1	)		(0.5	)		(3.1	)
Changes in operating assets and liabilities, net
Accounts receivable		(23.6	)		(3.7	)		(77.3	)		(23.6	)
Inventories		25.5			(54.3	)		26.1			34.2
Income taxes receivable		(7.5	)		12.0			0.5			(7.5	)
Prepaid expenses and other assets		(15.1	)		0.9			10.2			(15.1	)
Trade accounts payable		(151.0	)		57.4
Outstanding checks in excess of deposits		(4.3	)		(19.0	)
Trade accounts payable and outstanding checks in excess of deposits								21.2			(155.3	)
Accrued expenses and other liabilities		(46.1	)		4.8			(78.4	)		(46.1	)
Net cash (used in) provided by operating activities		(132.0	)		84.2
Net cash provided by (used in) operating activities								31.8			(132.0	)
Cash flows from investing activities:
Purchases of property, plant and equipment		(40.8	)		(22.8	)		(24.4	)		(40.8	)
Net cash paid for acquisitions								(1,382.6	)		—
Proceeds from sale of property, plant and equipment		6.1			0.3			0.4			6.1
Net cash used in investing activities		(34.7	)		(22.5	)		(1,406.6	)		(34.7	)
Cash flows from financing activities:
Net borrowings (payments) under ABL Facility		301.0			(49.0	)
Borrowing of Notes due 2027		—			1,060.0
Net borrowings under ABL Facility								786.9			301.0
Borrowing of Notes due 2029								1,000.0			—
Repayment of Notes due 2024								(350.0	)		—
Cash paid for debt issuance, extinguishment and modifications		—			(0.7	)		(21.5	)		—
Payments under finance lease obligations		(8.0	)		(4.6	)		(15.0	)		(8.0	)
Payments on financed property, plant and equipment		(0.3	)		(0.4	)		(0.1	)		(0.3	)
Cash paid for acquisitions		(135.6	)		(0.5	)		(0.6	)		(135.6	)
Proceeds from employee stock purchase plan		7.8			—			—			7.8
Proceeds from exercise of stock options		2.5			1.4			1.5			2.5
Cash paid for shares withheld to cover taxes		(4.2	)		(5.9	)		(6.4	)		(4.2	)
Net cash provided by financing activities		163.2			1,000.3			1,394.8			163.2
Net (decrease) increase in cash and restricted cash		(3.5	)		1,062.0
Net increase (decrease) in cash and restricted cash								20.0			(3.5	)
Cash and restricted cash, beginning of period		431.8			25.4			22.2			431.8
Cash and restricted cash, end of period	$	428.3		$	1,087.4		$	42.2		$	428.3

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

(In millions)	As of September 26, 2020		As of June 27, 2020		As of October 2, 2021		As of July 3, 2021
Cash	$	417.2	$	420.7	$	35.1	$	11.1
Restricted cash⁽¹⁾		11.1		11.1		7.1		11.1
Total cash and restricted cash	$	428.3	$	431.8	$	42.2	$	22.2

(In millions)	Three months ended September 26, 2020		Three months ended September 28, 2019		Three Months Ended October 2, 2021		Three Months Ended September 26, 2020
Debt assumed through finance lease obligations	$	28.9	$	26.8	$	35.7	$	28.9
Purchases of property, plant and equipment, financed		0.2		0.9		—		0.2
Non-cash issuance of PFG stock in exchange for Core-Mark stock						1,008.0		—

(In millions)	Three months ended September 26, 2020		Three months ended September 28, 2019		Three Months Ended October 2, 2021		Three Months Ended September 26, 2020
Cash paid during the year for:
Interest	$	10.8	$	11.9	$	11.8	$	10.8
Income taxes paid, net of refunds		0.7		2.5
Income tax payments, net						0.6		0.7

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

Performance Food Group Company, through its subsidiaries, markets and distributes primarily national and company-branded food and food-related products to customer locations across the United ~~States.~~States and Canada. The Company serves both of the major customer types in the restaurant industry: (i) independent customers, and (ii) multi-unit, or “Chain” customers, which include some of the most recognizable family and casual dining restaurant chains, as well as schools, business and industry locations, healthcare facilities, and retail establishments. The Company also specializes in distributing candy, snacks, beverages, cigarettes, other tobacco products, health and beauty care products and other items ~~nationally~~within the United States and Canada to vending distributors, big box retailers, theaters, convenience stores, drug stores, grocery stores, liquor stores, travel providers, and hospitality providers.

On September 1, 2021 Performance Food Group Company completed the acquisition of Core-Mark. As a result, the Company expanded its convenience business within the Vistar segment, which now includes operations in Canada. Refer to Note 5. Business Combinations for additional details regarding the acquisition of Core-Mark.

The consolidated financial statements have been prepared by the Company, without audit, with the exception of the ~~June 27, 2020~~July 3, 2021 consolidated balance sheet, which was derived from the audited consolidated financial statements included in the Form 10-K. The financial statements include consolidated balance sheets, consolidated statements of operations, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity, and consolidated statements of cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, shareholders’ equity, and cash flows for all periods presented have been made.

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

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

~~The Company is subject to risks and uncertainties as~~As a result of ~~COVID-19.~~the Core-Mark acquisition on September 1, 2021, PFG now has operations in Canada. The ~~unprecedented impact of COVID-19 has grown throughout the world, including in the United States,~~operating assets and ~~governmental authorities and businesses have implemented numerous measures attempting to contain and mitigate the effects~~liabilities of the ~~virus, including travel bans~~Company’s Canadian operations, whose functional currency is the Canadian dollar, are translated to U.S. dollars at exchange rates in effect at period-end. Translation gains and restrictions, quarantines, shelter in place orders, shutdowns and social distancing requirements. These measures have adversely affected and may further adversely affect the Company’s operations and the operations of its customers and suppliers. In markets where governments have imposed restrictions on travel outside of the home, or where customers are practicing social distancing, many of our customers, including restaurants, schools, hotels, movie theaters, and business and industry locations, have reduced or discontinued operations, which has adversely affected and is expected to continue to adversely affect demand in the foodservice industry, including demand for our products and services.

We expect that COVID-19 could have a material adverse impact on our future results of operations and liquidity. However, the extent to which COVID-19 will affect our financial position, liquidity, and results of operations is uncertain.

~~Accounts receivable are comprised of trade receivables from customers in the ordinary course of business,~~losses are recorded atin Accumulated Other Comprehensive Income (“AOCI”) as a component of stockholders’ equity. Revenue and expenses from Canadian operations are translated using the ~~invoiced amount, and primarily do not bear interest. Accounts receivable also includes other receivables primarily related to various rebate and promotional incentives with~~monthly average exchange rates in effect during the ~~Company’s suppliers. Receivables are recorded net of~~period in which the ~~allowance for credit losses on the~~

accompanying consolidated balance sheets. The Company evaluates the collectability of its accounts receivable based on a combination of factors. The Company regularly analyzes its significant customer accounts, and when it becomes aware of a specific customer’s inability to meet its financial obligations to the Company, such as bankruptcy filings or deterioration in the customer’s operating results or financial position, the Company records a specific reserve for bad debt to reduce the related receivable to the amount it reasonably believes is collectible.transactions occur. The Company also ~~records reserves for bad debt for other customers based~~recognizes gains or losses on ~~a variety~~foreign currency exchange transactions between its Canadian and U.S. operations, net of ~~factors, including~~applicable income taxes, in the ~~length~~consolidated statements of time the receivables are past due, macroeconomic considerations, and historical experience. If circumstances related to specific customers change, the Company’s estimates of the recoverability of receivables could be further adjusted. Refer to Note 3. Recently Issued Accounting Pronouncements for further discussion of the Company’s adoption of ASU 2016-13.operations. The Company currently does not hedge Canadian foreign currency cash flows.

In ~~June 2016,~~December 2019, the Financial Accounting Standards Board (“FASB”) ~~issued Accounting Standards Update (“ASU”) 2016-13,~~ ~~Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ ~~and has issued subsequent amendments to this guidance~~. The pronouncement changes the impairment model for most financial assets and will require the use of an “expected loss” model for instruments measured at amortized cost. Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019. The Company adopted the new standard at the beginning of fiscal 2021. Companies are required to apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. The Company determined this update did not have a material impact on the Company’s consolidated financial statements upon adoption. Refer to Note 2. Summary of Significant Accounting Policies and Estimates for further discussion of the Company’s reserve for credit losses related to its accounts receivable.

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

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

The Company markets and distributes primarily national and company-branded food and food-related products to customer locations ~~across~~in the United ~~States.~~States and Canada. The Foodservice segment supplies a “broad line” of products to its customers, including the Company’s performance brands and custom-cut meats and seafood, as well as products that are specific to each customer’s menu requirements. Vistar distributes candy, snacks, beverages, cigarettes, other tobacco products and other products to various customer channels. The Company disaggregates revenue by product offerings and determined that disaggregating revenue at the segment level achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note ~~13.~~14. Segment Information for external revenue by reportable segment.

The Company has customer contracts in which incentives are paid upfront to certain customers. These payments have become industry practice and are not related to financing the customer’s business, nor are they associated with any distinct good or service to be received from the customer. These incentive payments are capitalized and amortized over the life of the contract or the expected life of the customer relationship on a straight-line basis. The Company’s contract asset for these incentives totaled ~~$14.7~~$20.8 million and ~~$15.3~~$19.9 million as of ~~September 26, 2020~~October 2, 2021 and ~~June 27, 2020,~~July 3, 2021, respectively.

~~There were 0 acquisitions during~~During the first quarter of fiscal 2022, the Company made 1 acquisition in a cash and stock transaction valued at $2.4 billion. There were 0 acquisitions in the first quarter of fiscal 2021.

On September 1, 2021, the Company acquired Core-Mark in a transaction valued at $2.4 billion, net of cash received. Under the terms of the transaction, Core-Mark shareholders received $23.875 per share in cash and 0.44 shares of the Company’s stock for each Core-Mark share outstanding as of August 31, 2021. The following table summarizes the purchase price for the acquisition:

The $1.1 billion cash portion of the acquisition was financed using borrowings from the ABL Facility (as defined in Note 6. Debt). The Core-Mark acquisition strengthens the Company’s business diversification and expands its presence in the convenience store channel. The Core-Mark acquisition is reported in the Vistar segment.

Assets acquired and liabilities assumed are recognized at their respective fair values as of the acquisition date. The following table summarizes the preliminary purchase price allocation for each major class of assets acquired and liabilities assumed for the fiscal 2022 acquisition:

Intangible assets consist primarily of customer relationships, trade names, and technology with useful lives of 11 years, 5 years, and 5 years, respectively, and a total weighted-average useful life of 9.3 years. The excess of the estimated fair value of assets acquired and the liabilities assumed over consideration paid was recorded as $865.9 million of goodwill on the acquisition date. The goodwill reflects the value to the Company associated with the expansion of geographic reach and scale of our distribution footprint and enhancements to the Company’s customer base. The Company is in the process of determining the amount of goodwill that is deductible for income tax purposes.

The net sales and net income related to Core-Mark recorded in the Company’s Consolidated Statements of Operations since the acquisition date of September 1, 2021 are $1.6 billion and $1.0 million, respectively.

The following table summarizes the unaudited pro-forma consolidated financial information of the Company as if the acquisition had occurred on June 28, 2020.

These pro-forma results include nonrecurring pro-forma adjustments related to acquisition costs incurred, including the amortization of the step up in fair value of inventory acquired. The pro-forma net income for the three months ended September 26, 2020 includes $55.8 million, after-tax, of acquisition costs assuming the acquisition had occurred on June 28, 2020. The recurring pro-forma adjustments include estimates of interest expense for the Notes due 2029 and estimates of depreciation and amortization associated with fair value adjustments for property, plant and equipment and intangible assets acquired.

These unaudited pro-forma results do not necessarily represent financial results that would have been achieved had the acquisition actually occurred on June 28, 2020 or ~~fiscal 2020.~~future consolidated results of operations of the Company.

The acquisition of Eby-Brown Company LLC (“Eby-Brown”) in fiscal 2019 included contingent consideration, including earnout payments in the event certain operating results are achieved during a defined post-closing period. ~~As of June 27, 2020, the Company had accrued $191.2 million related to this contingent consideration.~~ In the first quarter of fiscal 2021, the Company paid the first earnout payment of $185.6 million, which included $68.3 million as a financing activity cash outflow and $117.3 million as an operating activity cash outflow in the consolidated statement of cash flows for the three months ended September 26, 2020. As of ~~September 26, 2020,~~October 2, 2021 the Company has accrued ~~$6.1~~$7.0 million related to additional earnout payments. Earnout liabilities are measured using unobservable inputs that are considered a Level 3 measurement.

~~In fiscal 2020, the Company acquired Reinhart from Reyes Holdings, L.L.C.~~ The Reinhart acquisition is reported in the Foodservice segment. Assets acquired and liabilities assumed were recognized at their respective fair values as of the acquisition date. In the first quarter of fiscal 2021, the Company paid a total of $67.3 million related to the final net working capital acquired, which is reflected as a financing activity cash outflow in the consolidated statement of cash flows for the three months ended September 26, 2020.

Subsequent to September 26, 2020, the Company paid $12.2 million for an acquisition. The acquisition will be reported within the Company’s Vistar segment. The Company is in the process of determining the fair values of the assets acquired and liabilities assumed.

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


(In millions)	As of September 26, 2020			As of June 27, 2020			As of October 2, 2021			As of July 3, 2021
ABL Facility	$	1,011.0		$	710.0		$	1,373.2		$	586.3
5.500% Notes due 2024		350.0			350.0			-			350.0
6.875% Notes due 2025		275.0			275.0			275.0			275.0
5.500% Notes due 2027		1,060.0			1,060.0			1,060.0			1,060.0
4.250% Notes due 2029								1,000.0			-
Less: Original issue discount and deferred financing costs		(36.3	)		(38.1	)		(38.5	)		(30.8	)
Long-term debt		2,659.7			2,356.9			3,669.7			2,240.5
Less: current installments		(108.3	)		(107.6	)		-			-
Total debt, excluding current installments	$	2,551.4		$	2,249.3		$	3,669.7		$	2,240.5

PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, iswas a party to the Fourth Amended and Restated Credit Agreement dated December ~~31,~~30, 2019 (as amended by the First Amendment to Fourth Amended and Restated Credit Agreement dated as of April 29, 2020, and the Second Amendment to Fourth Amended and Restated Credit Agreement dated as of May 15, 2020, the ~~“ABL Facility”~~“Prior Credit Agreement”). The ~~ABL Facility has~~Prior Credit Agreement had an aggregate principal amount of ~~$3.11~~$3.0 billion under the revolving loan facility and ~~matures~~was scheduled to mature on December 30, ~~2024, of which $110 million is a 364-day maturity loan that is junior to~~2024.

On September 17, 2021, PFGC and Performance Food Group, Inc. entered into the Fifth Amended and Restated Credit Agreement (the “ABL Facility”) with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other ~~obligations owed~~lenders party thereto, which amends the Prior Credit Agreement. The ABL Facility, among other things, (i) increases the aggregate principal amount available under the revolving loan facility from $3.0 billion under the Prior Credit Agreement to $4.0 billion under the ABL Facility, ~~(“Additional Junior Term Loan”).~~ ~~The Second Amendment~~(ii) extends the stated maturity date from December 30, 2024 under the Prior Credit Agreement to September 17, 2026 under the ABL Facility, ~~entered into on May 15, 2020 temporarily expands~~and (iii) includes an alternative reference rate, which provides mechanisms for the ~~definition of accounts receivable and is effective only until delivery~~use of the ~~first Borrowing Base Certificate after November 30, 2020.~~Secured Overnight Financing Rate as a replacement rate upon a LIBOR cessation event.

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

Borrowings under the ABL Facility bear interest, at Performance Food Group, Inc.’s option, at (a) the Base Rate (defined as the greater of (i) the Federal Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or (iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. The ABL Facility also provides for an unused commitment fee rate of 0.25% per annum. Borrowings under the Additional Junior Term Loan bear interest at LIBOR plus 5.0% per annum with respect to any loan which is a LIBOR loan and Prime plus 4.0% per annum with respect to any loan which is a base rate loan.

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

(Dollars in millions)	As of September 26, 2020			As of June 27, 2020			As of October 2, 2021			As of July 3, 2021
Aggregate borrowings	$	1,011.0		$	710.0		$	1,373.2		$	586.3
Letters of credit under ABL Facility		166.0			139.6			200.8			161.7
Excess availability, net of lenders’ reserves of $63.5 and $64.9		1,536.6			1,712.2
Excess availability, net of lenders’ reserves of $107.5 and $55.1								2,426.0			2,252.0
Average interest rate		2.32	%		2.85	%		1.59	%		2.32	%

On ~~August 9, 2018,~~July 26, 2021, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal amount of itsNotes due 2029, pursuant to an indenture dated as of July 26, 2021. The Notes due 2029 are jointly and severally guaranteed on a senior unsecured basis by PFGC ~~entered into a Continuing Agreement for Letters~~and all domestic direct and indirect wholly-owned subsidiaries of ~~Credit (the “Letters of Credit Facility”)~~PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The ~~Letters~~Notes due 2029 are not guaranteed by the Company.

Initially the Company expected to use the proceeds from the Notes due 2029 to finance the cash consideration payable in connection with the Core-Mark acquisition, to redeem the 5.500% Notes due 2024, and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2029. However, since there was no requirement to hold the funds in escrow until the Core-Mark Acquisition closed, a portion of the net proceeds from the Notes due 2029 were used to pay down the outstanding balance of the Prior Credit ~~Facility is an uncommitted facility that provides~~Agreement on July 26, 2021. The Notes due 2024 were redeemed in full on July 27, 2021. The Company then funded the cash consideration for the ~~issuance~~Core-Mark Acquisition with borrowings under the Prior Credit Agreement.

The Notes due 2029 were issued at 100.0% of ~~letters~~their par value. The Notes due 2029 mature on August 1, 2029, and bear interest at a rate of ~~credit~~4.250% per year, payable semi-annually in arrears.

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2029 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2029 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at any time prior to August 1, 2024, at a redemption price equal to 100% of the principal amount of the Notes due 2029 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on August 1, 2024, Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at a redemption price equal to 102.125% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.163% and 100% of the principal amount redeemed on August 1, 2025, and August 1, 2026, respectively. In addition, at any time prior to August 1, 2024, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2029 from the proceeds of certain equity offerings at a redemption price equal to 104.250% of the principal amount thereof, plus accrued and unpaid interest.

The indenture governing the Notes due 2029 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2029 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2029 to become or be declared due and payable.

On May 17, 2016, Performance Food Group, Inc. issued and sold $350.0 million aggregate principal amount ~~not~~of its 5.500% Senior Notes due 2024 (the “Notes due 2024”), pursuant to ~~exceed $40.0 million. Each letter~~an indenture dated as of ~~credit shall have~~May 17, 2016. As described above, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal of its Notes due 2029 and used a ~~term not~~portion of the proceeds to ~~exceed one year; however,~~redeem the Notes due 2024 in full. A significant portion of this redemption was considered an extinguishment, resulting in a ~~letter~~$3.2 million loss on extinguishment of ~~credit may renew automatically~~debt within interest expense from the write-off of the pro-rata portion of the unamortized original issue discount and deferred financing costs related to the debt extinguishment. A portion of this redemption was considered a modification in accordance with ~~its terms. A fee equal to 2.5% per annum on~~FASB ASC 470-50, Debt-Modifications and Extinguishments, and as a result, $0.5 million of unamortized deferred financing costs and original issue discount for the ~~average daily amount available to be drawn on each day under each outstanding letter~~Notes due 2024 was deferred as deferred financing costs of ~~credit is payable quarterly. As of September 26, 2020,~~ the ~~Company has $28.3 million letters of credit outstanding under the Letters of Credit Facility.~~Notes due 2029.

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

which are accounted for separately. The difference between the operating lease right-of-use assets and operating lease liabilities primarily relates to adjustments for deferred rent, favorable leases, and prepaid rent.

Subsidiaries of the Company have entered into numerous operating and finance leases for various warehouses, office facilities, equipment, tractors, and trailers. Our leases have remaining lease terms of 1 year to 2019 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year. Certain full-service fleet lease agreements include variable lease payments associated with usage, which are recorded and paid as incurred. When calculating lease liabilities, lease terms will include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

Certain of the leases for tractors, trailers, and other vehicles and equipment provide for residual value guarantees to the lessors. Circumstances that would require the subsidiary to perform under the guarantees include either (1) default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) decisions not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sales proceeds less than the residual value of the leased assets specified in the lease agreements. Residual value guarantees under these operating lease agreements typically range between 6% and 16% of the value of the leased assets at inception of the lease. These leases have original terms ranging from 5 to 7 years and expiration dates ranging from ~~2020~~2021 to 2027. As of ~~September 26, 2020,~~October 2, 2021, the undiscounted maximum amount of potential future payments for lease residual value guarantees totaled approximately ~~$22.9~~$18.7 million, which would be mitigated by the fair value of the leased assets at lease expiration.

The following table presents the location of the right-of-use assets and lease liabilities in the Company’s consolidated balance sheet as of October 2, 2021 and July 3, 2021 (in millions), as well as the weighted-average lease term and discount rate for the Company’s leases:

Leases	Consolidated Balance Sheet Location	As of October 2, 2021			As of July 3, 2021
Assets:
Operating	Operating lease right-of-use assets	$	650.8		$	438.7
Finance	Property, plant and equipment, net		437.1			294.6
Total lease assets		$	1,087.9		$	733.3
Liabilities:
Current
Operating	Operating lease obligations—current installments	$	105.8		$	77.0
Finance	Finance lease obligations—current installments		71.5			48.7
Non-current
Operating	Operating lease obligations, excluding current installments		560.5			378.0
Finance	Finance lease obligations, excluding current installments		355.0			255.0
Total lease liabilities		$	1,092.8		$	758.7

Weighted average remaining lease term
Operating leases		8.5 years			8.6 years
Finance leases		6.2 years			6.2 years
Weighted average discount rate
Operating leases			3.9	%		4.6	%
Finance leases			3.9	%		4.5	%

The following table presents the location of lease costs in the Company’s consolidated statement of operations for the periods reported (in millions):

							Three Months Ended
Lease Cost	Statement of Operations Location	Three months ended September 26, 2020		Three months ended September 28, 2019		Statement of Operations Location	October 2, 2021		September 26, 2020
Finance lease cost:
Amortization of finance lease assets	Operating expenses	$	7.2	$	4.7	Operating expenses	$	12.9	$	7.2
Interest on lease liabilities	Interest expense		3.0		2.2	Interest expense		3.9		3.0
Total finance lease cost		$	10.2	$	6.9		$	16.8	$	10.2
Operating lease cost	Operating expenses		27.8		28.1	Operating expenses		29.6		27.8
Short-term lease cost	Operating expenses		5.1		5.9	Operating expenses		10.9		5.1
Total lease cost		$	43.1	$	40.9		$	57.3	$	43.1

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

(In millions)	Three months ended September 26, 2020		Three months ended September 28, 2019		Three Months Ended October 2, 2021		Three Months Ended September 26, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	24.6	$	26.8	$	28.7	$	24.6
Operating cash flows from finance leases		3.0		2.2		3.9		3.0
Financing cash flows from finance leases		8.0		4.6		15.0		8.0
Right-of-use assets obtained in exchange for lease obligations:
Operating leases		26.8		8.7		19.7		26.8
Finance leases		28.9		26.8		35.7		28.9

Future minimum lease payments under non-cancelable leases as of ~~September 26, 2020~~October 2, 2021are as follows (in millions):

Fiscal Year	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Remainder of 2021	$	78.8	$	34.0
2022		91.6		44.6
Remainder of 2022					$	102.7	$	63.3
2023		75.1		43.4		122.2		80.9
2024		56.5		42.6		99.2		79.4
2025		42.4		38.4		81.1		74.3
2026						67.0		70.5
Thereafter		214.7		78.3		328.5		113.2
Total future minimum lease payments	$	559.1	$	281.3	$	800.7	$	481.6
Less: Interest		105.8		44.4		134.4		55.1
Present value of future minimum lease payments	$	453.3	$	236.9	$	666.3	$	426.5

As of ~~September 26, 2020,~~October 2, 2021, the Company has additional operating and finance leases that have not yet commenced which total ~~$36.3~~$33.3 million in future minimum lease payments. These leases relate primarily to vehicle and warehouse leases and are expected to commence in ~~the third quarter of fiscal 2021 and first quarter of~~ fiscal 2022 with lease terms of 152 to 10 years.

The carrying values of cash, accounts receivable, trade accounts payable and outstanding checks in excess of deposits, ~~trade accounts payable,~~ and accrued expenses approximate their fair values because of the relatively short maturities of those instruments. The derivative assets and liabilities are recorded at fair value on the balance sheet. The fair value of long-term debt, which has a carrying value of ~~$2,659.7~~$3,669.7 million and ~~$2,356.9~~$2,240.5 million, is ~~$2,738.6~~$3,773.2 million and ~~$2,402.0~~$2,346.2 million at ~~September 26, 2020~~October 2, 2021 and ~~June 27, 2020,~~July 3, 2021, respectively, and is determined by reviewing current market pricing related to comparable debt issued at the time of the balance sheet date and is considered a Level 2 measurement.

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

The Company’s effective tax rate was ~~64.7~~%14.7% for the three months ended October 2, 2021 and 64.7% for the three months ended September 26, ~~2020 and~~ ~~21.9% for the three months ended September 28, 2019.~~2020. The effective tax rate varied from the 21% statutory rate primarily due to ~~the relative size of~~ state taxes, federal credits and other permanent ~~items compared to the pre-tax loss for the first quarter of fiscal 2021.~~items. The excess tax benefit of exercised and vested stock awards is treated as a discrete item. The effective tax rates for three months ended ~~September 26, 2020~~October 2, 2021 differed from the prior year period due to the ~~increase~~decrease of state taxes, non-deductible expenses, and discrete items as a percentage of book income, which was significantly ~~lower~~higher than the book income for the same period of fiscal ~~2020.~~2021.

As of ~~September 26, 2020~~October 2, 2021 and ~~June 27, 2020,~~July 3, 2021, the Company had net deferred tax assets of ~~$184.1~~$265.7 million and ~~$186.2~~$159.2 million, respectively, and deferred tax liabilities of ~~$305.3~~$641.7 million and ~~$301.8~~$299.6 million, respectively. As of ~~June 27, 2020,~~October 2, 2021 and July 3, 2021, the Company had established a valuation allowance of $1.3 million and $0.7 million, respectively, net of federal benefit, against deferred tax assets related to certain net operating losses which are not likely to be realized due to limitations on utilization. ~~There was no~~The change in the

deferred tax balances and the valuation allowance asrelates primarily to the acquisition of ~~September 26, 2020.~~Core-Mark’s deferred tax assets and deferred taxes established in purchase accounting. The Company believes that it is more likely than not that the remaining deferred tax assets will be realized.

The Company records a liability for uncertain tax positions in accordance with FASB ASC 740-10-25, Income Taxes – General – Recognition. As of ~~September 26, 2020~~October 2, 2021 and ~~June 27, 2020,~~July 3, 2021, the Company had approximately ~~$0.5~~$0.3 million and ~~$0.5~~$0.3 million of unrecognized tax benefits, respectively. ~~It is reasonably possible that~~The Company does not expect a material decrease ~~of approximately $0.2 million~~ in ~~the balance of~~ unrecognized tax benefits ~~may~~will occur ~~within~~in the next twelve ~~months primarily due to statute of limitations expirations, that, if recognized, would affect the effective tax rate.~~months.

The Company had outstanding contracts and purchase orders ~~for~~of $121.1 million related to capital projects and services ~~totaling $50.4 million~~including purchases of compressed natural gas for its trucking fleet at ~~September 26, 2020.~~October 2, 2021. Amounts due under these contracts were not included on the Company’s consolidated balance sheet as of ~~September 26, 2020.~~October 2, 2021.

The Company from time to time enters into certain types of contracts that contingently require it to indemnify various parties against claims from third parties. These contracts primarily relate to: (i) certain real estate leases under which subsidiaries of the Company may be required to indemnify property owners for environmental and other liabilities and other claims arising from their use of the applicable premises; (ii) certain agreements with the Company’s officers, directors, and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship; and (iii) customer agreements under which the Company may be required to indemnify customers for certain claims brought against them with respect to the supplied products. Generally, a maximum obligation under these contracts is not explicitly stated. Because the obligated amounts associated with these types of agreements are not explicitly stated, the overall maximum amount of the obligation cannot be reasonably estimated. Historically, the Company has not been required to make payments under these obligations and, therefore, no liabilities have been recorded for these obligations in the Company’s consolidated balance sheets.

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

~~U.S. Equal Employment Opportunity Commission Lawsuit~~. In March 2009, the Baltimore Equal Employment Opportunity Commission (“EEOC”) Field Office served the Company with company-wide (excluding, however, our Vistar and Roma Foodservice operations) subpoenas relating to alleged violations of the Equal Pay Act and Title VII of the Civil Rights Act (“Title VII”), seeking certain information from January 1, 2004 to a specified date in the first fiscal quarter of 2009. In August 2009, the EEOC moved to enforce the subpoenas in federal court in Maryland, and the Company opposed the motion. In February 2010, the court ruled that the subpoena related to the Equal Pay Act investigation was enforceable company-wide but on a narrower scope of data than the original subpoena sought (the court ruled that the subpoena was applicable to the transportation, logistics, and warehouse functions of the Company’s broadline distribution centers only and not to the Company’s PFG Customized distribution centers). The Company cooperated with the EEOC on the production of information. In September 2011, the EEOC notified the Company that the EEOC was terminating the investigation into alleged violations of the Equal Pay Act. In determinations issued in September 2012 by the EEOC with respect to the charges on which the EEOC had based its company-wide investigation, the EEOC concluded that the Company engaged in

a pattern of denying hiring and promotion to a class of female applicants and employees into certain positions within the transportation, logistics, and warehouse functions within the Company’s broadline division in violation of Title VII. In June 2013, the EEOC filed suit in federal court in Baltimore against the Company. The litigation concerns two issues: (1) whether the Company unlawfully engaged in an ongoing pattern and practice of failing to hire female applicants into operations positions; and (2) whether the Company unlawfully failed to promote one of the three individuals who filed charges with the EEOC because of her gender. The EEOC seeks the following relief in the lawsuit: (1) to permanently enjoin the Company from denying employment to female applicants because of their sex and denying promotions to female employees because of their sex; (2) a court order mandating that the Company institute and carry out policies, procedures, practices and programs which provide equal employment opportunities for females; (3) back pay with prejudgment interest and compensatory damages for a former female employee and an alleged class of aggrieved female applicants; (4) punitive damages; and (5) costs. The court bifurcated the litigation into two phases. In the first phase, the jury will decide whether the Company engaged in a gender-based pattern and practice of discrimination and the individual claims of one former employee. If the EEOC prevails on all counts in the first phase, no monetary relief would be awarded, except possibly for the single individual’s claims, which would be immaterial. The remaining individual claims would then be tried in the second phase. At this stage in the proceedings, the Company cannot estimate either the number of individual trials that could occur in the second phase of the litigation or the value of those claims. For these reasons, the Company is unable to estimate any potential loss or range of loss in the event of an adverse finding in the first and second phases of the litigation.

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

The parties filed cross motions for summary judgment, on March 18, 2020, the court denied both parties’ motions, which means the case will be set for trial. The court has not yet determined a trial date and has informed the parties that it is unsure of when the case could be set because of COVID-19. In the meantime, and because the hiring practices of the Company have changed significantly over the past several years, the Company and the EEOC have engaged in substantive settlement discussions to determine if the litigation could be resolved on mutually agreeable terms. The Company has accrued an amount deemed immaterial to the consolidated financial statements related to a potential settlement payment. The Company cannot assure that the EEOC will agree to a settlement offer or that it will not need to accrue or pay additional amounts in the future. If these discussions do not result in a resolution of the case, the Company will continue to vigorously defend itself.

JUUL Labs, Inc. Marketing Sales Practices, and Products Liability Litigation. In October 2019, a Multidistrict Litigation action (“MDL”) was initiated in order to centralize litigation against JUUL Labs, Inc. (“JUUL”) and other parties in connection with JUUL’s ~~E-Cigarettes~~e-cigarettes and related devices and components in the United States District Court for the Northern District of California. On March 11, 2020, counsel for ~~Plaintiffs~~plaintiffs and the Plaintiffs’ Steering Committee filed a Master Complaint in the MDL naming, among several other entities and individuals including JUUL, Altria Group, Inc., Philip Morris USA, Inc., Altria Client Services LLC, Altria Group Distribution Company, Altria Enterprises LLC, certain members of management and/or individual investors in JUUL, various e-liquid manufacturers, and various retailers, including the Company’s ~~subsidiary~~subsidiaries Eby-Brown and Core-Mark, as ~~a defendant.~~defendants. The Master Complaint also named additional distributors of JUUL products (collectively with Eby-Brown the “Distributor Defendants”). The Master Complaint contains various state law claims and alleges that the Distributor Defendants: (1) failed to disclose JUUL’s nicotine contents or the risks associated; (2) pushed a product designed for a youth market; (3) engaged with JUUL in planning and marketing its product in a manner designed to maximize the flow of JUUL products; (4) met with JUUL management in San Francisco, California to further these business dealings; and (5) received incentives and business development funds for marketing and efficient sales. Individual plaintiffs may also file separate and abbreviated Short Form Complaints (“SFC”) that incorporate the allegations in the Master Complaint. JUUL, and Eby-Brown are parties to a Domestic Wholesale Distribution Agreement dated March 10, 2020, and JUUL has agreed to defend and indemnify Eby-Brown under the terms of that agreement and is paying Eby-Brown’s outside counsel fees directly. In addition, Core-Mark and JUUL have entered into a March 8, 2021 Defense and Indemnity Agreement pursuant to which JUUL has agreed to defend and indemnify Core-Mark, and JUUL is paying Core-Mark’s outside counsel fees directly.

On May 29, 2020, JUUL filed a motion to dismiss on the basis that the alleged state law claims are preempted by federal law and a motion to stay/dismiss the litigation based on the Food and Drug Administration’s (“FDA”) primary jurisdiction to regulate ~~E-Cigarette~~

e-cigarette and related vaping products and pending FDA review of JUUL’s Pre-Market Tobacco Application (“PMTA”). On June 29, 2020, Eby-Brown and Core-Mark, along with the other Distributor Defendants, filed similar motions incorporating JUUL’s ~~arguments~~.arguments. The court denied these motions on October 23, 2020.

The court has also entered an order governing the selection of bellwether plaintiffs and setting key discovery and other deadlines in the litigation. Bellwether trials are test cases generally intended to try a contested issue common to several plaintiffs in mass tort litigation. The results of these proceedings are used to shape the litigation process for the remaining cases and to aid the parties in assessing potential settlement values of the remaining claims. Here, the court authorized a pool of ~~twenty-four~~24 bellwether plaintiffs, with plaintiffs selecting six cases, the combined defendants selecting six cases, and the court selecting ~~twelve~~12 cases at random. ~~Fact discovery concerning the pool of twenty-four cases is scheduled to close in April 2021, at which time~~The court and the parties ~~will submit confidential briefs explaining which cases they view best for trial. The court will then select~~have completed the bellwether selection process, and the first of four bellwether ~~trial cases and additional discovery will be conducted in those cases. The first bellwether trial~~trials has been set for ~~February 22,~~April 18, 2022, with the remaining three trials set for the ~~second~~third and ~~third~~fourth calendar quarters of 2022. Eby-Brown and Core-Mark have been dismissed from each of the bellwether cases and will not be parties or participants to those trials. The Distributor Defendants and the retailers do, however, remain named defendants in various SFCs that were not selected as bellwether trial plaintiffs. The litigation of those claims is not scheduled to occur until after the bellwether trials conclude. In the meantime, discovery related to the claims in the Master Complaint continues as to the Distributor Defendants.

On September 3, 2020, the Cherokee Nation filed a parallel lawsuit in Oklahoma state court against several entities including JUUL, e-liquid manufacturers, various retailers, and various distributors, including Eby-Brown and Core-Mark, alleging similar claims to the claims at issue in the MDL (the “Oklahoma Litigation”). The defendants in the Oklahoma Litigation attempted to transfer the case into the MDL, but a federal court in Oklahoma remanded the case to Oklahoma state court before the Judicial Panel on Multidistrict Litigation effectuated the transfer of the MDL, which means the Oklahoma Litigation is no longer eligible for transfer to the MDL. The Oklahoma Litigation is in the middle of discovery. Trial is tentatively set to start in or after October 2022. The indemnity JUUL has provided to Eby-Brown and Core-Mark also applies to the Oklahoma Litigation. On March 29, 2021, the Cherokee Nation dismissed Eby-Brown from the Oklahoma Litigation.

At this time, the Company is unable to predict whether FDA will approve JUUL’s PMTA, nor is the Company able to estimate any potential loss or range of loss in the event of an adverse finding against it in the ~~litigation.~~MDL or any subsequent litigation which may occur related to the individual SFCs. The Company will continue to vigorously defend itself.

Merger Litigation. The Company and Core-Mark were subject to litigation arising out of the anticipated acquisition of Core-Mark. On July 6, 2021, Matthew Whitfield, who alleged that he was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Southern District of New York naming as defendants Core-Mark, the individual directors of Core-Mark (together, the “Core-Mark Defendants”), Performance Food Group Company, and two subsidiaries the Company established in connection with its anticipated acquisition of Core-Mark, captioned Whitfield v. Core-Mark Holding Company, Inc. et al., No. 1:21-cv-05803 (the “Whitfield Litigation”).

In addition, related litigation was filed against the Core-Mark Defendants only. On June 28, 2021, Shiva Stein, who alleged that she was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Southern District of New York, captioned Stein v. Core-Mark Holding Company, Inc. et al., No. 1:21-cv-05606 (the “Stein Litigation”). On August 6, 2021, Jose Ram, who alleged that he was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Southern District of New York, captioned Ram v. Core-Mark Holding Company, Inc. et al., No. 1:21-cv-06658 (the “Ram Litigation”). On August 10, 2021, Richard Lawrence, who alleged that he was a shareholder of Core-Mark, filed a civil action in the United States District Court for the District of Delaware, captioned Lawrence v. Core-Mark Holding Company, Inc. et al., No. 1:21-cv-01158 (the “Lawrence Litigation”). On August 11, 2021, Matthew Walker, who alleged that he was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Central District of California, captioned Walker v. Core-Mark Holding Company, Inc. et al., No. 2:21-cv-06469 (the “Walker Litigation”). On August 11, 2021, Jeffrey D. Justice II, who alleged that he was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Eastern District of Pennsylvania, captioned Justice v. Core-Mark Holding Company, Inc. et al., No. 2:21-cv-03584 (the “Justice Litigation”). On August 12, 2021, Brian Jones, who alleged that he was a shareholder of Core-Mark, filed a civil action in the United States District Court for the Central District of California, captioned Jones v. Core-Mark Holding Company, Inc. et al., No. 2:21-cv-06522 (the “Jones Litigation,” and together with the Whitfield Litigation, the Stein Litigation, the Ram Litigation, the Lawrence Litigation, the Walker Litigation and the Justice Litigation, the “Merger Actions”).

The plaintiffs in the Merger Actions alleged that the Registration Statement filed with the Securities and Exchange Commission omitted material information related to the acquisition, namely certain (1) financial projections the Company and Core-Mark performed and the basis for those projections and (2) information regarding the analysis Barclay’s performed on behalf of Core-Mark. The plaintiffs sought to enjoin the consummation of the acquisition and requests that the court order the defendants to issue an amended Registration Statement and declare that the defendants violated certain U.S securities laws. In the event the acquisition is consummated, the plaintiffs sought an award of damages. The Company denied that it or Core-Mark violated any laws in connection with the proposed acquisition and believed that the claims were without merit. However, in order to avoid the risk of the Merger Actions delaying or adversely affecting the acquisition and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Core-Mark and the Company determined that Core-Mark would voluntarily supplement the public disclosures filed in connection with the acquisition in exchange for plaintiffs’ agreement to dismiss all claims in the Merger Actions with prejudice. The parties reached such agreement on August 12, 2021. On August 13, 2021, Core-Mark filed the supplemental disclosures on Form 8-K and Schedule 14A. On August 16, 2021, plaintiff in the Stein Litigation voluntarily dismissed her complaint. On August 19, 2021,

plaintiffs in the Whitfield Litigation and the Justice Litigation voluntarily dismissed their complaints. On September 13, 2021, plaintiff in the Ram Litigation voluntarily dismissed his complaint. On October 13, 2021, plaintiffs in the Lawrence Litigation, the Walker Litigation and the Jones Litigation voluntarily dismissed their complaints.

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

The Company participates in and has an equity method investment in a purchasing alliance that was formed to obtain better pricing, to expand product options, to reduce internal costs, and to achieve greater inventory turnover. The Company’s investment in the purchasing alliance was ~~$4.8~~$7.7 million as of ~~September 26, 2020~~October 2, 2021 and ~~$3.5~~$6.0 million as of ~~June 27, 2020.~~July 3, 2021. For the three-month periods ended October 2, 2021 and September 26, 2020, ~~and September 28, 2019,~~ the Company recorded purchases of ~~$243.7~~$465.7 million and ~~$254.2~~$243.7 million, respectively, through the purchasing alliance.

Basic earnings per common share is computed by dividing net income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per common share is calculated using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. The Company’s potential common shares include outstanding stock-based compensation awards and expected issuable shares under the employee stock purchase plan. In computing diluted earnings per common share, the average closing stock price for the period is used in determining the number of shares assumed to be purchased with the assumed proceeds under the treasury stock method. Potential common share of 0.3 million for the three months ended October 2, 2021 were not included in computing diluted earnings per common share because the effect would have been antidilutive. For the three months ended September 26, 2020 the diluted loss per common share is the same as basic loss per common share because the inclusion of potential common shares ~~is antidilutive. For the three months ended September 28, 2019, potential common shares of 0.4 million were not included in computing diluted earnings per share because the effect~~ would have been antidilutive.

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

(In millions, except per share amounts)	Three months ended September 26, 2020			Three months ended September 28, 2019		Three Months Ended October 2, 2021		Three Months Ended September 26, 2020
Numerator:
Net (Loss) Income	$	(0.7	)	$	36.1
Net income (loss)						$	4.7	$	(0.7	)
Denominator:
Weighted-average common shares outstanding		131.7			104.0		139.7		131.7
Dilutive effect of potential common shares		-			1.6		1.5		-
Weighted-average dilutive shares outstanding		131.7			105.6
Basic (loss) earnings per share	$	(0.01	)	$	0.35
Diluted (loss) earnings per share	$	(0.01	)	$	0.34
Weighted-average dilutive common shares outstanding							141.2		131.7
Basic earnings (loss) per common share						$	0.03	$	(0.01	)
Diluted earnings (loss) per common share						$	0.03	$	(0.01	)

In connection with the Core-Mark acquisition, the Company assumed the outstanding stock-based compensation awards from Core-Mark’s 2010 Long-Term Incentive Plan and 2019 Long-Term Incentive Plan. On September 1, 2021, each outstanding time-based restricted stock unit (“RSU”) held by a non-employee director of Core-Mark was cancelled and converted into the right to receive 0.44 shares of PFGC common stock (“Exchange Ratio”) and $23.875 in cash, without interest (“Per-Share Cash Amount”). Time-based RSUs held by Core-Mark employees were converted to PFG RSUs based on the prescribed ratio in the merger agreement. The ratio was calculated as the sum of the Exchange Ratio plus the quotient of the Per-Share Cash Amount divided by the volume weighted average sale price of PFGC common stock for the 10 full consecutive trading days ending on August 31, 2021 (“Stock Award Exchange Ratio”). Each performance-based restricted stock unit (“PSU”) of Core-Mark was converted into a PFG RSU based on the greater of the actual performance as of the acquisition date or the target performance level multiplied by the Stock Award Exchange Ratio. The pro-rata actual level of performance for the applicable performance metrics were greater than target, therefore, the PSUs were converted based on actual performance. The PFG RSUs granted as a result of the conversion are subject to the same terms and conditions, such as vesting schedule and termination related vesting provisions, as the Core-Mark awards were subject to prior to their conversion.

On September 1, 2021, the Company granted 614,056 RSUs with a grant date fair value of $49.55 per share. With the assistance of a specialist, the total $30.4 million grant date fair value was bifurcated with $9.2 million recognized as pre-combination vesting within the purchase price as consideration transferred and $21.2 million is post-combination expense to be recognized over the weighted average remaining vesting period of 1.80 years.

The Company has 2 reportable segments: Foodservice and Vistar. The Foodservice segment markets and distributes food and food-related products to independent restaurants, ~~Chain~~chain restaurants, and other institutional “food-away-from-home” locations. Foodservice offers a “broad line” of products, including custom-cut meat and seafood, as well as products that are specific to our customer’s menu requirements. The Vistar segment distributes candy, snacks, beverages, cigarettes, other tobacco products, and other products to customers in the vending, office coffee services, theater, retail, hospitality, convenience store and other channels. Intersegment sales represent sales between the segments, which are eliminated in consolidation. Management evaluates the performance of each operating segment based on various operating and financial metrics, including total sales and EBITDA.

Corporate & All Other is comprised of corporate overhead and certain operations that are not considered separate reportable segments based on their size. This includes the operations of the Company’s internal logistics unit responsible for managing and allocating inbound logistics revenue and expense. Corporate & All Other may also include capital expenditures for certain information technology projects that are transferred to the segments once placed in service.

(In millions)	Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated		Foodservice		Vistar		Corporate & All Other		Eliminations			Consolidated
For the three months ended October 2, 2021
Net external sales												$	6,357.7	$	4,021.0	$	7.6	$	—		$	10,386.3
Inter-segment sales													4.3		0.5		109.2		(114.0	)		—
Total sales													6,362.0		4,021.5		116.8		(114.0	)		10,386.3
Depreciation and amortization													64.3		28.8		5.6		—			98.7
Capital expenditures													16.3		5.9		2.2		—			24.4
For the three months ended September 26, 2020
Net external sales	$	5,034.7	$	2,005.8	$	6.3	$	—		$	7,046.8	$	5,034.7	$	2,005.8	$	6.3	$	—		$	7,046.8
Inter-segment sales		1.7		0.5		94.6		(96.8	)		—		1.7		0.5		94.6		(96.8	)		—
Total sales		5,036.4		2,006.3		100.9		(96.8	)		7,046.8		5,036.4		2,006.3		100.9		(96.8	)		7,046.8
Depreciation and amortization		61.8		11.7		8.6		—			82.1		61.8		11.7		8.6		—			82.1
Capital expenditures		7.1		29.9		3.8		—			40.8		7.1		29.9		3.8		—			40.8
For the three months ended September 28, 2019
Net external sales	$	3,927.0	$	2,310.5	$	5.5	$	—		$	6,243.0
Inter-segment sales		3.9		0.6		74.5		(79.0	)		—
Total sales		3,930.9		2,311.1		80.0		(79.0	)		6,243.0
Depreciation and amortization		24.6		11.6		6.5		—			42.7
Capital expenditures		8.2		8.7		5.9		—			22.8

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

	Three Months Ended						Three Months Ended
	September 26, 2020			September 28, 2019			October 2, 2021			September 26, 2020
Foodservice EBITDA	$	156.2		$	104.0		$	159.9		$	156.2
Vistar EBITDA		11.7			51.5			68.4			11.7
Corporate & All Other EBITDA		(49.0	)		(49.3	)		(80.1	)		(49.0	)
Depreciation and amortization		(82.1	)		(42.7	)		(98.7	)		(82.1	)
Interest expense		(38.8	)		(17.3	)		(44.0	)		(38.8	)
(Loss) income before taxes	$	(2.0	)	$	46.2
Income (loss) before taxes							$	5.5		$	(2.0	)

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

(In millions)	As of September 26, 2020		As of June 27, 2020		As of October 2, 2021		As of July 3, 2021
Foodservice	$	5,489.1	$	5,529.1	$	5,823.9	$	5,791.7
Vistar		1,432.8		1,385.4		5,463.9		1,759.1
Corporate & All Other		818.0		805.2		293.9		294.9
Total assets	$	7,739.9	$	7,719.7	$	11,581.7	$	7,845.7

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

We market and distribute over ~~200,000~~250,000 food and food-related products to customers across the United States and Canada from ~~over 100~~approximately 139 distribution facilities to over ~~200,000~~275,000 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~~nationally branded products, and products bearing our customers’ brands. Our product assortment ranges from “center-of-the-plate” items (such as beef, pork, poultry, and seafood), frozen foods, and groceries to candy, snacks, beverages, cigarettes, and other tobacco products. We also sell disposables, cleaning and kitchen supplies, and related products used by our customers. In addition to the products we offer to our customers, we provide value-added services by allowing our customers to benefit from our industry knowledge, scale, and expertise in the areas of product selection and procurement, menu development, and operational strategy.

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

We believe that our short-term performance has been, and is expected to continue to be, adversely affected by the COVID-19 pandemic.

In response to the rapid spread of COVID-19 across the country, federal, state, and local governments ~~have~~ implemented measures to reduce the spread of COVID-19, including travel bans and restrictions, quarantines, shelter in place orders, shutdowns and social distancing requirements. These measures ~~have~~ adversely affected workforces, suppliers, customers, consumer sentiment, economies, and financial markets, and, along with decreased consumer spending, ~~have~~ led to an economic downturn in many of our markets.

As an essential element of the country’s food supply chain, the Company has continued to operate all of it distribution centers. Despite the Company’s continued operations, mandatory and voluntary containment measures in response to COVID-19 ~~have~~ had a significant impact on the food-away-from-home industry. Many restaurants have closed, are restricting the number of patrons they will serve at one time, or are only providing carry-out or delivery options. These restrictions ~~have~~ also impacted businesses throughout the economy, including theaters, retail operations, schools, and other businesses to whom we provide products and services, which collectively have adversely affected our results of operations.

During our first quarter of fiscal ~~2021, we continued~~2022, economic and operating conditions for our business improved significantly. As governmental restrictions are eased, consumers are returning to ~~experience~~consuming food away from home, traveling, and attending events at entertainment venues. However, the ~~adverse impact~~Company and industry may continue to face challenges as the recovery continues, such as availability of ~~COVID-19 on~~product supply, increased product and logistics costs, and access to labor supply. The extent to which these challenges will affect our ~~operations, including significant decreases in sales. Despite these difficulties, we have taken steps to ensure a strong~~future financial position, ~~including steps to maintain financial~~ liquidity, ~~forging new partnerships with grocery locations, supporting restaurant customers with the transition to higher volumes of take-out and delivery, and other means.~~

Although we believe we have taken prudent measures to maintain our financial liquidity and support our business, the impacts of COVID-19 have had, and are expected to continue to have, an adverse impact on numerous aspects of our business, financial condition and results of operations including, but not limited to, our growth, product costs, liquidity, supply chain, labor, logistics, and customer demand for our products. Additionally, the impacts of COVID-19 have had, and are expected to continue to have, an adverse effect generally on consumer spending, industry demand, and the global economy and financial markets generally. Furthermore, we cannot predict the duration of the COVID-19 pandemic or future governmental regulations or legislation that may be passed as a result of ongoing or future COVID-19 outbreaks. The continued impact of COVID-19 and the enactment of additional governmental regulations and restrictions may further adversely impact the global economy, the restaurant industry, and our business specifically, despite prior or future actions taken by the Company.remains uncertain.

Despite the near-term impact of the COVID-19 pandemic, we believe that our long-term performance is principally affected by the following key factors:

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

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

Management measures operating performance based on our EBITDA, defined as net income before interest expense, interest income, income taxes, and depreciation and amortization. EBITDA is not defined under accounting principles generally accepted in the United States of America (“GAAP”) and is not a measure of operating income, operating performance, or liquidity presented in accordance with GAAP and is subject to important limitations. Our definition of EBITDA may not be the same as similarly titled measures used by other companies.

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

In addition, our management uses Adjusted EBITDA, defined as net income before interest expense, interest income, income and franchise taxes, and depreciation and amortization, further adjusted to exclude certain items that we do not consider part of our core operating results. Such adjustments include certain unusual, non-cash, non-recurring, cost reduction, and other adjustment items permitted in calculating covenant compliance under our ABL Facility and indentures (other than certain pro forma adjustments permitted under our ABL Facility and indentures governing the Notes due ~~2024,~~2025, Notes due ~~2025~~2027, and Notes due ~~2027~~2029 relating to the Adjusted EBITDA contribution of acquired entities or businesses prior to the acquisition date). Under our ABL Facility and indentures, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and making

restricted payments is tied to ratios based on Adjusted EBITDA (as defined in the ABL Facility and indentures). Our definition of Adjusted EBITDA may not be the same as similarly titled measures used by other companies.

Adjusted EBITDA is not defined under GAAP and is subject to important limitations. We believe that the presentation of Adjusted EBITDA is useful to investors because it is frequently used by securities analysts, investors, and other interested parties, including our lenders under the ABL Facility and holders of our Notes due ~~2024,~~2025, Notes due ~~2025~~2027, and Notes due ~~2027,~~2029 in their evaluation of the operating performance of companies in industries similar to ours. In addition, targets based on Adjusted EBITDA are among the measures we use to evaluate our management’s performance for purposes of determining their compensation under our incentive plans.

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

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

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

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

	Three Months Ended											Three Months Ended
	September 26, 2020			September 28, 2019		Change			%			October 2, 2021			September 26, 2020			Change			%
Net sales	$	7,046.8		$	6,243.0	$	803.8			12.9		$	10,386.3		$	7,046.8		$	3,339.5			47.4
Cost of goods sold		6,231.3			5,531.6		699.7			12.6			9,244.0			6,231.3			3,012.7			48.3
Gross profit		815.5			711.4		104.1			14.6			1,142.3			815.5			326.8			40.1
Operating expenses		779.7			647.9		131.8			20.3			1,094.1			779.7			314.4			40.3
Operating profit		35.8			63.5		(27.7	)		(43.6	)		48.2			35.8			12.4			34.6
Other expense, net
Interest expense		38.8			17.3		21.5			124.3			44.0			38.8			5.2			13.4
Other, net		(1.0	)		-		(1.0	)	NM				(1.3	)		(1.0	)		(0.3	)		30.0
Other expense, net		37.8			17.3		20.5			118.5			42.7			37.8			4.9			13.0
(Loss) income before income taxes		(2.0	)		46.2		(48.2	)		(104.3	)
Income tax (benefit) expense		(1.3	)		10.1		(11.4	)		(112.9	)
Net (loss) income	$	(0.7	)	$	36.1	$	(36.8	)		(101.9	)
Income (loss) before income taxes													5.5			(2.0	)		7.5			375.0
Income tax expense (benefit)													0.8			(1.3	)		2.1			161.5
Net income (loss)												$	4.7		$	(0.7	)	$	5.4			771.4
EBITDA	$	118.9		$	106.2	$	12.7			12.0		$	148.2		$	118.9		$	29.3			24.6
Adjusted EBITDA	$	135.2		$	127.7	$	7.5			5.9		$	183.7		$	135.2		$	48.5			35.9
Weighted-average common shares outstanding:
Basic		131.7			104.0		27.7			26.6			139.7			131.7			8.0			6.1
Diluted		131.7			105.6		26.1			24.7			141.2			131.7			9.5			7.2
(Loss) earnings per common share:
Earnings (loss) per common share:
Basic	$	(0.01	)	$	0.35	$	(0.36	)		(102.9	)	$	0.03		$	(0.01	)	$	0.04			400.0
Diluted	$	(0.01	)	$	0.34	$	(0.35	)		(102.9	)	$	0.03		$	(0.01	)	$	0.04			400.0

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

	Three months ended					Three Months Ended
	September 26, 2020			September 28, 2019		October 2, 2021			September 26, 2020
	(In millions)					(In millions)
Net (loss) income	$	(0.7	)	$	36.1
Net income (loss)						$	4.7		$	(0.7	)
Interest expense(1)		38.8			17.3		44.0			38.8
Income tax (benefit) expense		(1.3	)		10.1
Income tax expense (benefit)							0.8			(1.3	)
Depreciation		52.8			33.9		57.0			52.8
Amortization of intangible assets		29.3			8.8		41.7			29.3
EBITDA		118.9			106.2		148.2			118.9
Non-cash items ~~(1)~~(2)		11.0			7.0		(0.3	)		11.0
Acquisition, integration and reorganization ~~(2)~~(3)		4.5			11.6		32.8			4.5
Productivity initiatives and other adjustment items ~~(3)~~(4)		0.8			2.9		3.0			0.8
Adjusted EBITDA	$	135.2		$	127.7	$	183.7		$	135.2

Three months ended ~~September 26, 2020~~October 2, 2021 compared to the three months ended September ~~28, 2019~~26, 2020

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 ~~$803.8~~$3,339.5 million, or ~~12.9%~~47.4%, from $7,046.8 million, including $305.3 million of excise taxes in the first three months of fiscal 2021 ~~compared~~ to $10,386.3 million, including $586.0 million of excise taxes for the first three months of fiscal ~~2020.~~ 2022. Net sales for the first three months of fiscal 2022 includes $2,081.5 million of sales of cigarettes as compared to $1,056.4 million for the prior year period.

The increase in net sales was primarily attributable to the acquisition of ~~Reinhart,~~Core-Mark on September 1, 2021, which contributed ~~$1,457.5~~$1,572.3 million of net sales ~~during~~since the acquisition date. The increase in net sales was also driven by growth in cases sold due to the declining effects of COVID-19 on the restaurant industry, and an increase in selling price per case as a result of inflation. Overall food cost inflation was approximately 11.1% for first three months of fiscal ~~2021. Case~~2022. Total case volume increased ~~8.9%~~approximately 27% in the first three months of fiscal ~~2021~~2022 compared to the first three months of fiscal ~~2020.~~2021. Excluding ~~the impact of the Reinhart acquisition,~~Core-Mark, organic case volume ~~declined 17.5%~~increased 17.8% in the first three months of fiscal ~~2021~~2022 compared to the first three months of fiscal ~~2020 due primarily to the effects of COVID-19.~~2021.

Gross profit increased ~~$104.1~~$326.8 million, or ~~14.6%~~40.1%, for the first three months of fiscal ~~2021~~2022 compared to the first three months of fiscal ~~2020.~~2021. The ~~acquisition of Reinhart contributed an~~ increase in gross profit was primarily driven by the acquisition of ~~$197.9~~Core-Mark. The Core-Mark acquisition contributed gross profit of $89.1 million ~~for~~since the ~~first three months of fiscal 2021 as compared to the prior year period.~~

~~Gross profit was negatively impacted by a decline in organic case volume and increases in inventory write-offs. For the first three months of fiscal 2021 the Company recorded a total of $11.9~~acquisition date, which included $8.8 million of ~~inventory write-offs primarily as a result~~amortization of the ~~impact~~step up in fair value of ~~COVID-19 on our operations, which is~~inventory acquired. Also, gross profit increased due to case growth in Foodservice and an increase in the gross profit per case driven by growth in the independent channel. Independent customers typically receive more services from us, cost more to serve, and pay a ~~$5.7 million increase from the first three months of fiscal 2020. Gross~~higher gross profit ~~as a percentage of net sales was 11.6% for the first three months of fiscal 2021 compared to 11.4% for the first three months of fiscal 2020.~~per case than other customers.

Operating expenses increased ~~$131.8~~$314.4 million, or ~~20.3%~~40.3%, for the first three months of fiscal ~~2021~~2022 compared to the first three months of fiscal ~~2020.~~2021. The increase in operating expenses was primarily driven by the acquisition of ~~Reinhart. Reinhart~~Core-Mark. Core-Mark contributed ~~$155.5~~$78.4 million of operating expenses, excluding depreciation and amortization, since the acquisition date. Operating expenses also increased as a result of an increase in case volume and the resulting impact on variable operational and selling expenses, as well as an increase in

personnel expenses. In the first three months of fiscal 2022, there was a $52.3 million increase in temporary contract labor costs, including travel expenses associated with the contract workers, compared to the prior year period as a result of the current labor market’s impact on the Company’s ability to hire and retain qualified labor. Additionally, operating expenses increased as a result of an increase in professional fees of $20.7 million related to the Core-Mark acquisition and fuel expense of $15.2 million due to higher fuel prices for the first three months of fiscal 2021. In the first quarter of fiscal 2021, the Company recorded a benefit of $2.7 million related to reserves for expected credit losses as compared to bad debt expense of $3.6 million for the first quarter of 2020. Additionally, operating expenses decreased as a result of decreases in personnel expenses, fuel expense, travel expenses, professional fees, and contingent consideration accretion expense2022 compared to the prior year period.

Depreciation and amortization of intangible assets increased from ~~$42.7 million in the first three months of fiscal 2020 to~~ $82.1 million in the first three months of fiscal ~~2021.~~2021 to $98.7 million in the first three months of fiscal 2022. Depreciation of fixed assets and amortization of intangible assets increased as a result of the ~~Reinhart acquisition.~~Core-Mark acquisition, partially offset by accelerated amortization of certain customer relationships and abandoned information technology projects in the prior year.

The Company reported net income of $4.7 million for the first three months of fiscal 2022 compared to a net loss of $0.7 million for the first three months of fiscal ~~2021 compared to~~2021. This increase in net income ~~of $36.1 million for the first three months of fiscal 2020~~ was ~~due~~attributable to the ~~impact of COVID-19 on our operations, the~~$12.4 million increase in operating ~~expenses discussed above,~~profit, partially offset by increases in interest expense and ~~an increase in interest~~income tax expense. The increase in interest expense was primarily the result of an increase in average borrowings outstanding during the first quarter of fiscal ~~2021~~2022 related to financing the acquisition of Core-Mark compared to the prior year period.

The Company reported an income tax ~~benefit~~expense of ~~$1.3~~$0.8 million for the first three months of fiscal ~~2021~~2022 compared to an income tax ~~expense~~benefit of ~~$10.1~~$1.3 million the first three months of fiscal ~~2020. Our~~2021. The Company’s effective tax rate for the three months ended ~~September 26, 2020~~October 2, 2021 was ~~64.7%~~14.7% compared to ~~21.9%~~64.7% for the three months ended September ~~28, 2019.~~26, 2020. The effective tax rate for the first three months of fiscal ~~2021 increased~~2022 decreased from the prior year period primarily due to ~~the increase of non-deductible expenses~~state taxes, stock compensation, and discrete items as a percentage of book income, which was ~~significantly lower~~higher than the book income for the prior year period.

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

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

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

	Three Months Ended												Three Months Ended
	September 26, 2020			September 28, 2019			Change			%			October 2, 2021			September 26, 2020			Change			%
Foodservice	$	5,036.4		$	3,930.9		$	1,105.5			28.1		$	6,362.0		$	5,036.4		$	1,325.6			26.3
Vistar		2,006.3			2,311.1			(304.8	)		(13.2	)		4,021.5			2,006.3			2,015.2			100.4
Corporate & All Other		100.9			80.0			20.9			26.1			116.8			100.9			15.9			15.8
Intersegment Eliminations		(96.8	)		(79.0	)		(17.8	)		(22.5	)		(114.0	)		(96.8	)		(17.2	)		(17.8	)
Total net sales	$	7,046.8		$	6,243.0		$	803.8			12.9		$	10,386.3		$	7,046.8		$	3,339.5			47.4

	Three Months Ended												Three Months Ended
	September 26, 2020			September 28, 2019			Change			%			October 2, 2021			September 26, 2020			Change			%
Foodservice	$	156.2		$	104.0		$	52.2			50.2		$	159.9		$	156.2		$	3.7			2.4
Vistar		11.7			51.5			(39.8	)		(77.3	)		68.4			11.7			56.7			484.6
Corporate & All Other		(49.0	)		(49.3	)		0.3			0.6			(80.1	)		(49.0	)		(31.1	)		(63.5	)
Total EBITDA	$	118.9		$	106.2		$	12.7			12.0		$	148.2		$	118.9		$	29.3			24.6

Three months ended ~~September 26, 2020~~October 2, 2021 compared to the three months ended September ~~28, 2019~~26, 2020

Net sales for Foodservice increased ~~$1,105.5~~$1,325.6 million, or ~~28.1%~~26.3%, from the first three months of fiscal ~~2020~~2021 to the first three months of fiscal ~~2021.~~2022. This increase in net sales was driven by growth in cases sold due to the ~~Reinhart acquisition, as well as~~declining effects of COVID-19 on the restaurant industry, and an increase in selling price per case as a result of inflation. ~~Reinhart contributed $1,457.5 million of net sales during the~~Overall food cost inflation was approximately 14.3% for first three months of fiscal ~~2021. The Reinhart acquisition also expanded~~2022, which was driven primarily by price increases for disposable items and center-of-the plate items such as meat, poultry, and seafood. Securing new and expanding business with independent customers ~~resulting~~resulted in independent case growth of approximately ~~28.0%~~21.2% in the first three months of fiscal ~~2021~~2022 compared to the prior year period. Excluding the impact of Reinhart, independent cases declined 6.3% in the first three months of fiscal 2021 compared to the first three months of fiscal 2020. The decline in independent cases in the first three months of fiscal 2021 was driven by the impact of COVID-19 on the restaurant industry. For the quarter, independent sales as a percentage of total Foodservice segment sales were ~~35.5%~~39.2%.

EBITDA for Foodservice increased ~~$52.2~~$3.7 million, or ~~50.2%~~2.4%, from the first three months of fiscal ~~2020~~2021 to the first three months of fiscal ~~2021.~~2022. 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 ~~33.1%~~22.7% in the first three months of fiscal ~~2021,~~2022, compared to the prior year period, driven by an increase in the ~~Reinhart acquisition which contributed~~gross profit per case, as well as an increase in cases sold. The increase in gross profit per case was driven by a favorable shift in the mix of ~~$197.9 million for the first three months of fiscal 2021. The increase was partially offset by the decline~~cases sold to independent customers, including more Performance Brands products sold to our independent customers. Cases sold to independent businesses result in case volume and net sales discussed above. For the first three months of fiscal 2021, Foodservice recorded $8.1 million of inventory write-offs primarily due to the impact of COVID-19, which is an increase of $2.8 million over the prior year period.higher gross margins within this segment.

Operating expenses excluding depreciation and amortization for Foodservice increased by ~~$113.0~~$146.7 million, or ~~28.6%~~28.9%, from the first three months of fiscal ~~2020~~2021 to the first three months of fiscal ~~2021.~~2022. Operating expenses increased primarily as a result of an increase in case volume and the ~~acquisition~~resulting impact on variable operational and selling expenses, as well as an increase in personnel expenses. The increase in personnel expenses includes a $47.5 million increase in temporary contract labor costs, including travel expenses associated with the contract workers, compared to the prior year period as a result of ~~Reinhart which contributed $148.1~~the current labor market’s impact on the Company’s ability to hire and retain qualified labor. Operating expenses also increased due to a $10.0 million ~~of operating expenses~~increase in fuel expense due to higher fuel prices for the first three months of fiscal 2021. In the first quarter of fiscal 2021, Foodservice recorded a benefit of $6.2 million related to reserves for expected credit losses compared to bad debt expense of $2.8 million for the first quarter of fiscal 2020. Operating expenses also decreased due to decreases in personnel and fuel expenses2022 as compared to the prior year period.

Depreciation and amortization of intangible assets recorded in this segment increased from ~~$24.6 million in the first three months of fiscal 2020 to~~ $61.8 million in the first three months of fiscal ~~2021. Depreciation~~2021 to $64.3 million in the first three months of ~~fixed assets and amortization of intangible assets increased as a~~fiscal 2022. This increase was the result of the ~~acquisition~~accelerated amortization of ~~Reinhart. Total depreciation and amortization related~~certain customer relationships.

Three months ended October 2, 2021 compared to the ~~acquisition~~three months ended September 26, 2020

Net sales for Vistar increased $2,015.2 million, or 100.4%, from $2,006.3 million, which includes $305.3 million of ~~Reinhart was $35.7 million~~excise taxes, for the first three months of fiscal ~~2021.~~

~~Three months ended September 26, 2020 compared~~2021 to ~~the three months ended September 28, 2019~~

~~Net sales~~$4,021.5 million, which includes $586.0 million excise taxes, for ~~Vistar declined $304.8 million, or 13.2%, from~~ the first three months of fiscal ~~2020 to the first three months of fiscal 2021.~~2022. Net sales for the first three months of fiscal ~~2021~~2022 includes ~~$305.3~~$2,081.5 million ~~related to tobacco excise taxes,~~of sales of cigarettes as compared to ~~$291.7~~$1,056.4 million for the prior year period. The ~~decrease~~increase in net sales was driven primarily by the ~~continued~~Core-Mark acquisition as well as the improving economic ~~effects of~~conditions following the COVID-19 pandemic. ~~Due~~The Core-Mark acquisition contributed $1,572.3 million of net sales since the acquisition date, which includes $283.1 million related to ~~the various initiatives to slow the spread of COVID-19, there have been significant declines~~tobacco excise taxes. Case volume in the channels significantly impacted by the COVID-19 pandemic is gradually improving. The vending, theater, office coffee service, ~~office supply,~~ hospitality, and travel channels ~~for~~all experienced case volume growth in the first three months of fiscal 2021, which are likely to remain as long as social distancing guidelines remain in place. The declines in the theater channel are expected to remain significant, as many theaters have temporarily suspended operations due2022 compared to the ~~lack of releases of new films.~~prior year period.

EBITDA for Vistar ~~declined $39.8~~increased $56.7 million, or ~~77.3%~~484.6%, from the first three months of fiscal ~~2020~~2021 to the first three months of fiscal 2022. 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 $175.6 million, or 120.3%, for the first three months of fiscal 2022 compared to the first three months of fiscal 2021. Core-Mark contributed gross profit of $89.1 million since the acquisition date, which included $8.8 million of amortization of the step up in fair value of inventory acquired. Additionally, there was an increase in procurement gains, as well as a favorable shift in the channel mix that impacted this segment. Gross profit ~~declined $61.5~~as a percentage of net sales increased from 7.3% for the first quarter of fiscal 2021 to 8.0% for the first quarter of fiscal 2022 as a result of the favorable shift in channel mix.

Operating expenses excluding depreciation and amortization for Vistar increased $118.5 million, or ~~29.6%~~88.1%, for the first three months of fiscal 2021 compared to the first three months of fiscal 2020, driven by the effects of COVID-19 described above. Additionally, for the first three months of fiscal 2021, Vistar recorded $3.8 million of inventory write-offs primarily as a result of the current economic environment due to COVID-19, which is an increase of $2.8 million compared to the prior year period. Gross profit as a percentage of net sales declined from 9.0% for the first quarter of fiscal 2020 to 7.3% for the first quarter of fiscal 2021 as a result of growth in the convenience store channel, which has lower margins.

The Company continues to have a risk for unreserved inventory related to our major theater customers within the Vistar segment. However, these customers’ contracts include provisions whereby the customer reimburses the Company for any inventory losses.

~~Operating expenses, excluding depreciation and amortization, decreased $21.3 million, or 13.7%, for the first three months of fiscal 2021~~2022 compared to the prior year period. Operating expenses ~~decreased~~increased primarily as a result of ~~decreased sales~~the acquisition of Core-Mark, which contributed an additional $77.3 million of operating expenses since the acquisition date. Operating expenses also increased as a result of the increase in case volume described above ~~decreases~~and the resulting impact on variable operational and selling expenses, along with increases in personnel expense and fuel expense, ~~and a reduction in contingent consideration accretion expense of $3.2 million as compared~~due to higher fuel prices for the first three months of fiscal 2020. In the first quarter of fiscal 2021, Vistar recorded a total of $3.5 million of bad debt expense related to expected credit losses for customer receivables primarily due to the impact of COVID-19, which represents an increase of $2.7 million2022 as compared to the ~~first quarter of fiscal 2020.~~prior year period.

Depreciation and amortization of intangible assets recorded in this segment increased from ~~$11.6 million in the first three months of fiscal 2020 to~~ $11.7 million in the first three months of fiscal ~~2021.~~2021 to $28.8 million in the first three months of fiscal 2022. Depreciation of fixed assets and amortization of intangible assets

increased as a result of the Core-Mark acquisition. Total depreciation and amortization related to the acquisition of Core-Mark was $11.3 million since the acquisition date. The remaining increase was the result of the accelerated amortization of certain trade names and recent capital outlays for transportation and warehouse equipment, warehouse expansion, and information technology.

Three months ended ~~September 26, 2020~~October 2, 2021 compared to the three months ended September ~~28, 2019~~26, 2020

Net sales for Corporate & All Other increased ~~$20.9~~$15.9 million from the first three months of fiscal ~~2020~~2021 to the first three months of fiscal ~~2021.~~2022. The increase was primarily attributable to an increase in logistics services provided to our other ~~segments.~~segments for increased case volume.

EBITDA for Corporate & All Other was a negative $80.1 million for the first three months of fiscal 2022 compared to a negative $49.0 million for the first three months of fiscal ~~2021 compared to a negative $49.3 million for the first three months of fiscal 2020.~~2021. The ~~increase~~decline in EBITDA was primarily driven by ~~a decline~~an increase in professional fees ~~and outside services~~ of ~~$6.1~~$21.3 million related to recent acquisitions, an increase in stock-based compensation expense of $5.3 million, and ~~a decline in travel expenses, partially offset by~~ the additional corporate operating expenses, excluding depreciation and amortization, of $1.1 million associated with the acquisition of ~~Reinhart.~~Core-Mark.

Depreciation and amortization of intangible assets recorded in this segment ~~increased~~decreased from ~~$6.5 million in the first three months of fiscal 2020 to~~ $8.6 million in the first three months of fiscal 2021 to $5.6 million in the first three months of fiscal 2022 as a result of accelerated depreciation for abandoned information technology projects in the ~~acquisition of Reinhart.~~prior year.

We have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facility, operating and finance leases, and normal trade credit terms. We have typically funded our acquisitions with additional borrowings under our credit facility. Our working capital and borrowing levels are subject to seasonal fluctuations, typically with the lowest borrowing levels in the third and fourth fiscal quarters and the highest borrowing levels occurring in the first and second fiscal quarters. We borrow under our credit facility or pay it down regularly based on our cash flows from operating and investing activities. Our practice is to minimize interest expense while maintaining reasonable liquidity.

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

Our cash requirements over the next 12 months and beyond relate to our long-term debt and associated interest payments, operating and finance leases, and purchase obligations. For ~~example, in response~~information regarding the Company’s expected cash requirements related to long-term debt and operating and finance leases, see Note 6. Debt and Note 7. Leases, respectively, of the ~~impact~~consolidated financial statements. As of ~~COVID-19 in fiscal 2020,~~October 2, 2021, the Company ~~strengthened its liquidity by~~had total purchase obligations of $121.1 million, which includes agreements for purchases related to capital projects and services in the normal course of business, for which all significant terms have been confirmed, as well as a minimum amount due for various Company meetings and conferences. Purchase obligations also include amounts committed to various capital projects in process or scheduled to be completed in the coming fiscal years. As of October 2, 2021, the Company had commitments of $83.1 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings under the ~~borrowing $400.0 million on the revolving line of credit under our~~ ABL Facility ~~entering into the First Amendment~~ to the ABL Facility to provide the $110.0 million Additional Junior Term Loan, issuing and selling shares of common stock for net proceeds of $337.5 million, and issuing and selling $275.0 million aggregate principal of the Notesfulfill these commitments. Amounts due ~~2025 (all defined below in “—Financing Activities”).~~

~~The unprecedented impact of COVID-19 has grown throughout the world, including~~under these agreements were not included in the ~~United States, and governmental authorities and businesses~~Company’s consolidated balance sheet as of October 2, 2021.

We do not have ~~implemented numerous measures attempting~~any off-balance sheet arrangements that have or are reasonably likely to ~~contain and mitigate the effects~~have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of ~~the virus, including social distancing requirements. These measures have adversely affected and may further adversely affect the Company’s~~ operations, ~~and the operations of its customers and suppliers. In markets where governments have imposed restrictions on travel outside of the home,~~liquidity, capital expenditures or where customers are practicing social distancing, many of our customers, including restaurants, schools, hotels, movie theaters, and business and industry locations, have reduced or discontinued operations, which has and is expected to continue to adversely affect demand in the foodservice industry, including demand for our products and services.capital resources.

We believe that our cash flows from operations and available borrowing capacity will be sufficient both to meet our anticipated cash requirements over at least the next 12 months and to maintain sufficient liquidity for normal operating ~~purposes.~~purposes and to fund capital expenditures.

As of ~~September 26, 2020,~~October 2, 2021, our cash balance totaled ~~$428.3~~$42.2 million, including restricted cash of ~~$11.1~~$7.1 million, as compared to a cash balance totaling ~~$431.8~~$22.2 million, including restricted cash of $11.1 million, at ~~June 27, 2020.~~July 3, 2021.

Three months ended ~~September 26, 2020~~October 2, 2021 compared to the three months ended September ~~28, 2019~~26, 2020

During the first three months of fiscal ~~2021~~2022 and first three months of fiscal ~~2020,~~2021, our operating activities provided cash flow of $31.8 million and used cash flow of $132.0 million, ~~and provided cash flow of $84.2 million,~~ respectively. The ~~decrease~~increase in cash flows provided by operating activities in the first three months of fiscal ~~2021~~2022 compared to the first three months of fiscal ~~2020~~2021 was largely driven by the prior year payment of $117.3 million of contingent consideration related to the acquisition of Eby-Brown Company LLC and ~~investments~~improvements in working capital.

Cash used in investing activities totaled $1,406.6 million in the first three months of fiscal 2022 compared to $34.7 million in the first three months of fiscal ~~2021 compared to $22.5~~2021. These investments consisted primarily of cash paid for the acquisition of Core-Mark of $1,382.6 million infor the first three months of fiscal ~~2020. These investments consisted primarily of~~2022 with no acquisitions in the prior year period, and capital purchases of property, plant, and equipment of ~~$40.8~~$24.4 million and ~~$22.8~~$40.8 million for the first three months of fiscal ~~2021~~2022 and the first three months of fiscal ~~2020,~~2021, respectively. For the first three months of fiscal ~~2021,~~2022, purchases of property, plant, and equipment primarily consisted of outlays for information technology, warehouse equipment, warehouse expansions and improvements, and transportation equipment. The following table presents the capital purchases of property, plant, and equipment by segment:

	Three months ended				Quarter Ended
(Dollars in millions)	September 26, 2020		September 28, 2019		October 2, 2021		September 26, 2020
Foodservice	$	7.1	$	8.2	$	16.3	$	7.1
Vistar		29.9		8.7		5.9		29.9
Corporate & All Other		3.8		5.9		2.2		3.8
Total capital purchases of property, plant and equipment	$	40.8	$	22.8	$	24.4	$	40.8

AsDuring the first three months of ~~September 26, 2020, the Company had commitments~~fiscal 2022, our financing activities provided cash flow of ~~$35.4~~$1,394.8 million, ~~for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using~~which consisted primarily of $1.0 billion in cash ~~flows from operations or borrowings~~received from the issuance and sale of the Notes due 2029 and $786.9 million in net borrowings under our Prior Credit Agreement and ABL Facility ~~to fulfill these commitments.~~

~~Financing Activities~~, partially offset by $350.0 million in cash used for the repayment of the Notes due 2024.

During the first three months of fiscal 2021, our financing activities provided cash flow of $163.2 million, which consisted primarily of $301.0 million in net borrowings under our ~~ABL facility,~~Prior Credit Agreement, partially offset by $135.6 million in payments related to ~~recent~~ acquisitions.

During the first three months of fiscal 2020, our financing activities provided cash flow of $1,000.3 million, which consisted primarily of $1,060.0 million in cash received from the issuance and sale of the Notes due 2027, partially offset by $49.0 million in net payments under our ABL facility.

The following describes our financing arrangements as of ~~September 26, 2020:~~October 2, 2021:

~~ABL~~Credit Facility: PFGC, Inc. (“PFGC”), a wholly-owned subsidiary of the Company, iswas a party to the Fourth Amended and Restated Credit Agreement dated December 30, 2019 ~~( as~~(as amended by the First Amendment to Fourth Amended and Restated Credit Agreement dated as of April 29, 2020, and the Second Amendment to Fourth Amended and Restated Credit Agreement dated as of May 15, 2020, the ~~“ABL Facility”~~“Prior Credit Agreement”). The ~~ABL Facility has~~Prior Credit Agreement had an aggregate principal amount of ~~$3.11~~$3.0 billion ~~matures~~under the revolving loan facility and was scheduled to mature on December ~~30, 2024, of which $110.0 million is a 364-day maturity loan that is junior to~~20, 2024.

On September 17, 2021, PFGC and Performance Food Group, Inc. entered into the Fifth Amended and Restated Credit Agreement (the “ABL Facility”) with Wells Fargo Bank, National Association, as Administrative Agent and Collateral Agent, and the other ~~obligations owed~~lenders party thereto, which amends the Prior Credit Agreement. The ABL Facility, among other things, (i) increases the aggregate principal amount available under the revolving loan facility from $3.0 billion under the Prior Credit Agreement to $4.0 billion under the ABL Facility, ~~(“Additional Junior Term Loan”). The Second Amendment~~(ii) extends the stated maturity date from December 30, 2024 under the Prior Credit Agreement to September 17, 2026 under the ABL Facility, ~~entered into on May 15, 2020 temporarily expands~~and (iii) includes an alternative reference rate, which provides mechanisms for the ~~definition of accounts receivable and is effective only until delivery~~use of the ~~first Borrowing Base Certificate after November 30, 2020.~~ Secured Overnight Financing Rate as a replacement rate upon a LIBOR cessation event.

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

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

(Dollars in millions)	As of September 26, 2020			As of June 27, 2020			As of October 2, 2021			As of July 3, 2021
Aggregate borrowings	$	1,011.0		$	710.0		$	1,373.2		$	586.3
Letters of credit under ABL Facility		166.0			139.6			200.8			161.7
Excess availability, net of lenders’ reserves of $63.5 and $64.9		1,536.6			1,712.2
Excess availability, net of lenders’ reserves of $107.5 and $55.1								2,426.0			2,252.0
Average interest rate		2.32	%		2.85	%		1.59	%		2.32	%

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) ~~$200.0~~$320.0 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 and certain of its subsidiary’s ability to incur additional indebtedness, pay dividends, create liens, make investments or specified payments, and dispose of assets. The ABL Facility provides for customary events of default, including payment defaults and cross-defaults on other material indebtedness. If an event of default occurs and is continuing, amounts due under such agreement may be accelerated and the rights and remedies of the lenders under the ABL Facility may be exercised, including rights with respect to the collateral securing the obligations under such agreement.

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

The proceeds from the Notes due 2024 were used to pay in full the remaining outstanding aggregate principal amount of the loans under the Company’s term loan facility and to terminate the facility; to temporarily repay a portion of the outstanding borrowings under the ABL Facility; and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2024.

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

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2024 will have the right to require Performance Food Group, Inc. to make an offer to repurchase each holder’s Notes due 2024 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. currently may redeem all or part of the Notes due 2024 at a redemption price equal to 101.325% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 100.000% of the principal amount redeemed on June 1, 2021.

The indenture governing the Notes due 2024 contains covenants limiting, among other things, PFGC and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2024 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2024 to become or be declared due and payable.

Senior Notes due 2027: On September 27, 2019, PFG Escrow Corporation (which merged with and into Performance Food Group, Inc.) issued and sold $1,060.0 million aggregate principal amount of the Noted due 2027. The Notes due 2027 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2027 are not guaranteed by Performance Food Group Company.

The proceeds from the Notes due 2027, along with an offering of shares of the Company’s common stock and borrowings under the ~~ABL Facility,~~Prior Credit Agreement, were used to fund the cash consideration for the acquisition of Reinhart ~~acquisition~~Foodservice, L.L.C. and to pay related fees and expenses.

The Notes due 2027 were issued at 100.0% of their par value. The Notes due 2027 mature on October 15, 2027 and bear interest at a rate of 5.500% per year, payable semi-annually in arrears.

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2027 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2027 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2027 at any time prior to October 15, 2022 at a redemption price equal to 100% of the principal amount of the Notes due 2027 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on October 15, 2022, Performance Food Group, Inc. may redeem all or a part of the Notes due 2027 at a redemption price equal to 102.750% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.375% and 100% of the principal amount redeemed on October 15, 2023 and October 15, 2024, respectively. In addition, at any time prior to October 15, 2022, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2027 from the

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

The indenture governing the Notes due 2027 contains covenants limiting, among other things, PFGC and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2027 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2027 to become or be declared due and payable.

Senior Notes due 2025: On April 24, 2020, Performance Food Group, Inc. issued and sold $275.0 million aggregate principal amount of the Notes due 2025, pursuant to an indenture dated as of April 24, 2020. The Notes due 2025 are jointly and severally guaranteed on a senior unsecured basis by PFGC and all domestic direct and indirect wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The Notes due 2025 are not guaranteed by Performance Food Group Company.

The proceeds from the Notes due 2025 were used for working capital and general corporate purposes and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2025.

The Notes due 2025 were issued at 100.0% of their par value. The Notes due 2025 mature on May 1, 2025 and bear interest at a rate of 6.875% per year, payable semi-annually in arrears.

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2025 will have the right to require Performance Food Group, Inc. to repurchase each holder’s Notes due 2025 at a price equal to 101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2025 at any time prior to May 1, 2022 at a redemption price equal to 100% of the principal amount of the Notes due 2025 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on May 1, 2022, Performance Food Group, Inc. may redeem all or a part of the Notes due 2025 at a redemption price equal to 103.438% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.719% and 100% of the principal amount redeemed on May 1, 2023 and May 1, 2024, respectively. In addition, at any time prior to May 1, 2022, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2025 from the proceeds of certain equity offerings at a redemption price equal to 106.875% of the principal amount thereof, plus accrued and unpaid interest.

The indenture governing the Notes due 2025 contains covenants limiting, among other things, PFGC’s and its restricted subsidiaries’ ability to incur or guarantee additional debt or issue disqualified stock or preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into transactions with affiliates; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; create certain restrictions on the ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2025 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2025 to become or be declared due and payable.

~~Letters of Credit Facility~~Senior Notes due 2029: On ~~August 9, 2018,~~July 26, 2021, Performance Food Group, Inc. issued and sold $1.0 billion aggregate principal amount of its Notes due 2029, pursuant to an indenture dated as of July 26, 2021. The Notes due 2029 are jointly and severally guaranteed on a senior unsecured basis by PFGC ~~entered into a Continuing Agreement for Letters~~and all domestic direct and indirect wholly-owned subsidiaries of ~~Credit (the “Letters of Credit Facility”)~~PFGC (other than captive insurance subsidiaries and other excluded subsidiaries). The ~~Letters~~Notes due 2029 are not guaranteed by Performance Food Group Company.

The proceeds from the Notes due 2029 were used to pay down the outstanding balance of the Prior Credit ~~Facility is an uncommitted facility that provides for~~Agreement, to redeem the ~~issuance~~Senior Notes due 2024, and to pay the fees, expenses, and other transaction costs incurred in connection with the Notes due 2029.

The Notes due 2029 were issued at 100.0% of ~~letters~~their par value. The Notes due 2029 mature on August 1, 2029 and bear interest at a rate of ~~credit~~4.250% per year, payable semi-annually in ~~an aggregate amount~~arrears.

Upon the occurrence of a change of control triggering event or upon the sale of certain assets in which Performance Food Group, Inc. does not apply the proceeds as required, the holders of the Notes due 2029 will have the right to ~~exceed $40.0 million. Each letter of credit shall have~~require Performance Food Group, Inc. to repurchase each holder’s Notes due 2029 at a ~~term not to exceed one year; however, a letter of credit may renew automatically in accordance with its terms. A fee~~price equal to ~~2.5% per annum~~101% (in the case of a change of control triggering event) or 100% (in the case of an asset sale) of their principal amount, plus accrued and unpaid interest. Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at any time prior to August 1, 2024 at a redemption price equal to 100% of the principal amount of the Notes due 2029 being redeemed plus a make-whole premium and accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, beginning on August 1, 2024, Performance Food Group, Inc. may redeem all or a part of the Notes due 2029 at a redemption price equal to 102.125% of the principal amount redeemed, plus accrued and unpaid interest. The redemption price decreases to 101.163% and 100% of the principal amount redeemed on August 1, 2025 and August 1, 2026, respectively. In addition, at any time prior to August 1, 2024, Performance Food Group, Inc. may redeem up to 40% of the Notes due 2029 from the proceeds of certain equity offerings at a redemption price equal to 104.250% of the principal amount thereof, plus accrued and unpaid interest.

The indenture governing the Notes due 2029 contains covenants limiting, among other things, PFGC’s 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 ~~average daily amount available~~ability of PFGC’s restricted subsidiaries to make dividends or other payments to PFGC; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important exceptions and qualifications. The Notes due 2029 also contain customary events of default, the occurrence of which could result in the principal of and accrued interest on the Notes due 2029 to become or be drawn on each day under each outstanding letter of credit is payable quarterly. As of September 26, 2020, the Company has $28.3 million letters of credit outstanding under the Letters of Credit Facility.declared due and payable.

As of ~~September 26, 2020,~~October 2, 2021, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due ~~2024,~~2025, the Notes due ~~2025~~2027, and the Notes due ~~2027.~~2029.

Refer to the “Contractual Cash Obligations” section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K for details on our contractual obligations and commitments to make specified contractual future cash payments as of June 27, 2020.

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 for Foodservice increased ~~$2,154.3~~$334.8 million from ~~$3,334.8 million as of September 28, 2019 to~~ $5,489.1 million as of September 26, ~~2020.~~2020 to $5,823.9 million as of October 2, 2021. During this time period, this segment increased its inventory, accounts receivable, property, and plant and equipment, partially offset by decreases in intangible assets and operating lease right-of-use assets. Total assets for Foodservice increased $32.2 million from $5,791.7 million as of July 3, 2021 to $5,823.9 million as of October 2, 2021. During this time period, the segment increased its inventory, property, plant and equipment, and operating lease right-of-use assets, partially offset by decreases in intangible assets and accounts receivable.

Total assets for Vistar increased $4,031.1 million from $1,432.8 million as of September 26, 2020 to $5,463.9 million as of October 2, 2021. Total assets for Vistar increased $3,704.8 million from $1,759.1 million as of July 3, 2021 to $5,463.9 million as of October 2, 2021. During both time periods, the segment increased its inventory, goodwill, accounts receivables, intangibles, operating lease right-of-use assets, prepaid and other current assets, ~~accounts receivable, inventory, goodwill,~~ and ~~intangible~~other assets primarily due to the acquisition of Reinhart. Total assets for Foodservice decreased $40.0 million from $5,529.1 million as of June 27, 2020 to $5,489.1 million as of September 26, 2020. During this time period, the segment decreased its inventory and intangible assets, partially offset by increases in accounts receivable and property, plant and equipment.

Total assets for Vistar decreased $110.0 million from $1,542.8 million as of September 28, 2019 to $1,432.8 million as of September 26, 2020. During this time period, this segment decreased its accounts receivable, inventory, and intangibles, partially offset by an increase in its property, plant and equipment and operating lease right-of-use assets. Total assets for Vistar increased $47.4 million from $1,385.4 million as of June 27, 2020 to $1,432.8 million as of September 26, 2020. During this time period, the segment increased its property, plant and equipment, inventory, operating lease right-of-use assets, and accounts receivable.Core-Mark.

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, leases, and goodwill and other intangible assets, which are described in the Form 10-K. There have been no material changes to our critical accounting policies and estimates as compared to our critical accounting policies and estimates described in the Form 10-K.

Our market risks consist of interest rate risk and fuel price risk. There have been no material changes to our market risks since ~~June 27, 2020.~~July 3, 2021. For a discussion on our exposure to market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risks” in the Form 10-K.

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

There were no changes in our internal control over financial reporting (as that term is defined in Rule 13a-15(f) under the Exchange Act), that occurred during the fiscal quarter ended ~~September 26, 2020~~October 2, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As permitted by applicable SEC guidance, the scope of our evaluation regarding changes in our internal control over financial reporting during the fiscal quarter ended September 26, 2020 excluded internal control over financial reporting for Reinhart, which was acquired on December 30, 2019.

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

While it is impossible to determine with certainty the ultimate outcome of any of these proceedings, lawsuits, and claims, management believes that adequate provisions have been made or insurance secured for all currently pending proceedings so that the ultimate outcomes will not have a material adverse effect on our financial position. ~~During the three months ended September 26, 2020, there have been no material changes~~Refer to ~~legal proceedings from those discussed in the Form 10-K.~~Note 10. Commitments and Contingencies within Part I, Item 1. Financial Statements for disclosure of ongoing litigation.

There have been no material changes to our principal risks that we believe are material to our business, results of operations, and financial condition from the risk factors previously disclosed in the Form 10-K, which is accessible on the SEC’s website at www.sec.gov.

The following table provides information relating to our purchases of the Company’s common stock during the first quarter of fiscal ~~2021.~~2022.

Period

Total Number
of Shares
Purchased(1)

Average Price
Paid per
Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plan(2)

Maximum Dollar Value
of Shares that May Yet
Be Purchased Under the
Plan (in millions)(2)

June 28, 2020—July 25, 2020

—

$
-

—

235.7

July 26, 2020—August 22, 2020

37,603

32.99

—

235.7

August, 23, 2020—September 26, 2020

79,303

37.15

—

235.7

Total

116,906

$
35.81

—

Period	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan(2)		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plan (in millions)(2)
July 4, 2021—July 31, 2021		—	$	-		—	$	235.7
August 1, 2021—August 28, 2021		64,010	$	44.85		—	$	235.7
August 29, 2021—October 2, 2021		78,594	$	44.46		—	$	235.7
Total		142,604	$	44.64		—

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

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


Delaware		43-1983182
(State or other jurisdiction of incorporation or organization)		(IRS employer identification number)

12500 West Creek Parkway Richmond, Virginia 23238		(804) 484-7700
(Address of principal executive offices)		(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:

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

		Page

Special Note Regarding Forward-Looking Statements		3

PART I - FINANCIAL INFORMATION		5

Item 1.	Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2022

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	3032

Item 4.	Controls and Procedures	3032

PART II - OTHER INFORMATION		3233

Item 1.	Legal Proceedings	3233

Item 1A.	Risk Factors	3233

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3233

Item 3.	Defaults Upon Senior Securities	3233

Item 4.	Mine Safety Disclosures	3233

Item 5.	Other Information	3233

Item 6.	Exhibits	3334

SIGNATURE		3435

(In millions, except shares, cash per share, exchange ratio, and closing price)
Core-Mark shares outstanding at August 31, 2021		45,201,975
Cash consideration (per Core-Mark share)	$	23.875
Cash portion of purchase price	$	1,079.2
Core-Mark shares outstanding at August 31, 2021		45,201,975
Exchange ratio (per Core-Mark share)		0.44
Total PFGC common shares issued		19,888,869
Closing price of PFGC common stock on August 31, 2021	$	50.22
Equity issued	$	998.8
Equity compensation (1)	$	9.2
Total equity portion of purchase price	$	1,008.0
Debt assumed, net of cash	$	303.4
Total purchase price	$	2,390.6

(In millions)	Fiscal 2022
Net working capital	$	982.5
Goodwill		865.9
Intangible assets with definite lives:
Customer relationships		370.0
Trade names		140.0
Technology		7.0
Property, plant and equipment		387.4
Operating lease right-of-use assets		218.8
Other assets		20.9
Deferred tax liabilities		(235.7	)
Finance lease obligations		(102.1	)
Operating lease obligations		(217.6	)
Other liabilities		(46.5	)
Total purchase price	$	2,390.6

Exhibit No.		Description

~~3.1~~10.1		Fifth Amended and Restated ~~Bylaws of~~Credit Agreement, dated September 17, 2021, among PFGC, Inc., Performance Food Group, ~~Company~~Inc., Wells Fargo, National Association, as Administrative Agent and Collateral Agent, the other borrowers from time to time party thereto, and the other lenders thereto (incorporated by reference to Exhibit ~~3.1~~10.1 to the Company’s Current Report on Form 8-K (File No. 001-37578) filed with the Securities and Exchange Commission on ~~August 21, 2020~~September 20, 2021).

~~10.1~~		~~Form of Time-Based Restricted Stock Agreement (Graded Vesting) under the 2015 Omnibus Incentive Plan~~
~~10.2~~		~~Form of Time-Based Restricted Stock Agreement (Cliff Vesting) under the 2015 Omnibus Incentive Plan~~
~~10.3~~		~~Form of Performance-Based Restricted Stock Agreement (with Retirement provision) under the 2015 Omnibus Incentive Plan~~
~~10.4~~		~~Form of Performance-Based Restricted Stock Agreement (without Retirement provision) under the 2015 Omnibus Incentive Plan~~
31.1		CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

32.2		CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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