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

                                  Our Company

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

The Company has two reportable segments: Foodservice and Vistar. Our Foodservice
segment distributes a broad line of national brands, customer brands, and our
proprietary-branded food and food-related products, or "Performance Brands."
Foodservice sells to independent and multi-unit "Chain" restaurants and other
institutions such as schools, healthcare facilities, 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.

                       Key Factors Affecting Our Business

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 the first nine months of fiscal 2021, we continued to experience the
adverse impact of COVID-19 on our operations, including significant decreases in
sales. Despite these difficulties, we have taken steps to ensure a strong
financial position, including steps to maintain financial liquidity, forging new
customer relationships, supporting restaurant customers with the transition to
higher volumes of take-out and delivery, and other means.



Even as governmental restrictions are eased and economies gradually, partially,
or fully reopen in certain states and markets, the ongoing economic impacts and
health concerns associated with the pandemic may continue to affect consumer
behavior and spending in the channels we serve. The extent to which these
changes will affect our future financial position, liquidity, and results of
operations remains uncertain.



                                       20

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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:

• Changing demographic and macroeconomic trends. Until recently due to the

COVID-19 pandemic the share of consumer spending captured by the

food-away-from-home industry has increased steadily for several decades.

The share increases in periods of increasing employment, rising disposable

income, increases in the number of restaurants, and favorable demographic


        trends, such as smaller household sizes, an increasing number of dual
        income households, and an aging population base that spends more per
        capita at foodservice establishments. The foodservice distribution

industry is also sensitive to national and regional economic conditions,

such as changes in consumer spending, changes in consumer confidence, and

changes in the prices of certain goods.

• Food distribution market structure. The food distribution market consists


        of a wide spectrum of companies ranging from businesses selling a single
        category of product (e.g., produce) to large national and regional
        broadline distributors with many distribution centers and thousands of
        products across all categories. We believe our scale enables us to invest
        in our Performance Brands, to benefit from economies of scale in
        purchasing and procurement, and to drive supply chain efficiencies that

enhance our customers' satisfaction and profitability. We believe that the


        relative growth of larger foodservice distributors will continue to
        outpace that of smaller, independent players in our industry.

• Our ability to successfully execute our segment strategies and implement

our initiatives. Our performance will continue to depend on our ability

to successfully execute our segment strategies and to implement our

current and future initiatives. The key strategies include focusing on

independent sales and Performance Brands, pursuing new customers for both

of our reportable segments, expansion of geographies, utilizing our

infrastructure to gain further operating and purchasing efficiencies, and


         making strategic acquisitions.


                 How We Assess the Performance of Our Business

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

Net Sales

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

Gross Profit



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

EBITDA and Adjusted EBITDA



Management measures operating performance based on our EBITDA, defined as net
income before interest expense, interest income, income taxes, and depreciation
and amortization. EBITDA is not defined under 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, Notes due 2025 and Notes
due 2027 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

                                       21

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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, Notes due 2025 and Notes due 2027, in their
evaluation of the operating performance of companies in industries similar to
ours. In addition, targets based on Adjusted EBITDA are among the measures we
use to evaluate our management's performance for purposes of determining their
compensation under our incentive plans.

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

• exclude certain tax payments that may represent a reduction in cash

available to us;

• do not reflect any cash capital expenditure requirements for the assets


        being depreciated and amortized that may have to be replaced in the
        future;

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

needs; and

• do not reflect the significant interest expense, or the cash requirements,

necessary to service our debt.

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

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

other non-cash charges; and

• does not include acquisition, restructuring, and other costs incurred to

realize future cost savings and enhance our operations.

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



               Results of Operations, EBITDA, and Adjusted EBITDA

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



                                                              Three Months Ended
                                         March 27, 2021       March 28, 2020      Change         %
Net sales                               $        7,202.5     $        7,000.7     $ 201.8          2.9
Cost of goods sold                               6,369.8              6,193.2       176.6          2.9
Gross profit                                       832.7                807.5        25.2          3.1
Operating expenses                                 809.3                824.9       (15.6 )       (1.9 )
Operating profit (loss)                             23.4                (17.4 )      40.8       (234.5 )
Other expense, net
Interest expense                                    37.1                 35.2         1.9          5.4
Other, net                                          (1.6 )                7.9        (9.5 )         NM
Other expense, net                                  35.5                 43.1        (7.6 )      (17.6 )
Loss before income taxes                           (12.1 )              (60.5 )      48.4        (80.0 )
Income tax benefit                                  (4.5 )              (20.3 )      15.8        (77.8 )
Net loss                                $           (7.6 )   $          (40.2 )   $  32.6        (81.1 )
EBITDA                                  $          105.8     $           74.0     $  31.8         43.0
Adjusted EBITDA                         $          121.2     $          131.1     $  (9.9 )       (7.6 )
Weighted-average common shares
outstanding:
Basic                                              132.3                115.9        16.4         14.2
Diluted                                            132.3                115.9        16.4         14.2
Loss per common share:
Basic                                   $          (0.06 )   $          (0.35 )   $  0.29        (82.9 )
Diluted                                 $          (0.06 )   $          (0.35 )   $  0.29        (82.9 )




                                       22

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                                                               Nine Months Ended
                                         March 27, 2021       March 28, 2020       Change          %
Net sales                               $       21,094.5     $       19,312.3     $ 1,782.2         9.2
Cost of goods sold                              18,635.2             17,082.2       1,553.0         9.1
Gross profit                                     2,459.3              2,230.1         229.2        10.3
Operating expenses                               2,339.2              2,103.5         235.7        11.2
Operating profit                                   120.1                126.6          (6.5 )      (5.1 )
Other expense, net
Interest expense                                   114.0                 78.9          35.1        44.5
Other, net                                          (4.7 )                7.7         (12.4 )        NM
Other expense, net                                 109.3                 86.6          22.7        26.2
Income before income taxes                          10.8                 40.0         (29.2 )     (73.0 )
Income tax expense                                   1.5                  2.9          (1.4 )     (48.3 )
Net income                              $            9.3     $           37.1     $   (27.8 )     (74.9 )
EBITDA                                  $          371.9     $          304.7     $    67.2        22.1
Adjusted EBITDA                         $          414.4     $          401.7     $    12.7         3.2
Weighted-average common shares
outstanding:
Basic                                              132.0                108.1          23.9        22.1
Diluted                                            133.2                109.5          23.7        21.6
Earnings per common share:
Basic                                   $           0.07     $           0.34     $   (0.27 )     (79.4 )
Diluted                                 $           0.07     $           0.34     $   (0.27 )     (79.4 )






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



                                               Three Months Ended                         Nine Months Ended
                                      March 27, 2021        March 28, 2020       March 27, 2021       March 28, 2020
                                                 (In millions)                              (In millions)
Net (loss) income                    $           (7.6 )    $          (40.2 )   $            9.3     $           37.1
Interest expense                                 37.1                  35.2                114.0                 78.9
Income tax (benefit) expense                     (4.5 )               (20.3 )                1.5                  2.9
Depreciation                                     50.7                  49.3                158.4                118.3
Amortization of intangible assets                30.1                  50.0                 88.7                 67.5
EBITDA                                          105.8                  74.0                371.9                304.7
Non-cash items (1)                               13.0                   6.1                 31.1                 18.8
Acquisition, integration and
reorganization (2)                                3.6                  36.9                 13.0                 60.7
Productivity initiatives and other
adjustment items (3)                             (1.2 )                14.1                 (1.6 )               17.5
Adjusted EBITDA                      $          121.2      $          131.1     $          414.4     $          401.7



(1) Includes adjustments for non-cash charges arising from stock-based

compensation and gain/loss on disposal of assets. Stock-based compensation

expense was $7.0 million and $5.2 million for the third quarters of fiscal

2021 and fiscal 2020, respectively, and $19.3 million and $14.0 million for

the first nine months of fiscal 2021 and fiscal 2020, respectively. In

addition, this includes a decrease in the last-in-first-out ("LIFO") reserve

of $2.3 million for Foodservice and an increase of $3.7 million for Vistar

for the third quarter of fiscal 2021 compared to a decrease of $1.1 million

for Foodservice and an increase $0.5 million for Vistar for the third quarter

of fiscal 2020. The LIFO reserve increased $5.1 million for Foodservice and

$4.2 million for Vistar for the first nine months of fiscal 2021 compared to

increases of $0.9 million for Foodservice and $2.2 million for Vistar for the

first nine months fiscal 2020.

(2) Includes professional fees and other costs related to acquisitions, costs of

integrating certain of our facilities, and facility closing costs.

(3) Consists primarily of amounts related to fuel collar derivatives, certain

financing transactions, lease amendments, legal settlements and franchise tax

expense, and other adjustments permitted by our ABL Facility and indentures.

Fiscal 2020 also includes $5.8 million of development costs related to


    certain productivity initiatives the Company no longer pursued as a result of
    the Reinhart acquisition.


                                       23

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Consolidated Results of Operations

Three and nine months ended March 27, 2021 compared to the three and nine months ended March 28, 2020

Net Sales

Net sales growth is a function of case growth, pricing (which is primarily based
on product inflation/deflation), and a changing mix of customers, channels, and
product categories sold. Net sales increased $201.8 million, or 2.9%, for the
third quarter of fiscal 2021 compared to the third quarter of fiscal 2020 and
increased $1,782.2 million, or 9.2%, for the first nine months of fiscal 2021
compared to the first nine months of fiscal 2020. The increase in net sales for
the third quarter of fiscal 2021 was driven by an increase in selling price per
case as a result of inflation and mix. The increase in net sales for the first
nine months of fiscal 2021 was primarily attributable to the acquisition of
Reinhart, which contributed $4,195.2 million of net sales during the first nine
months of fiscal 2021, compared to $1,355.1 million for the first nine months of
fiscal 2020.

Case volume decreased 4.2% in the third quarter of fiscal 2021 and increased
3.9% in the first nine months of fiscal 2021, compared to the same periods of
fiscal 2020. Excluding the impact of the Reinhart acquisition, case volume
declined 13.4% in the first nine months of fiscal 2021 compared to the same
period of fiscal 2020 due primarily to the effects of COVID-19.

Gross Profit



Gross profit increased $25.2 million, or 3.1%, for the third quarter of fiscal
2021 compared to the third quarter of fiscal 2020 as a result of an increase in
the gross profit per case driven by case growth in Foodservice, particularly in
the independent channel. Independent customers typically receive more services
from us, cost more to serve, and pay a higher gross profit per case than other
customers. Gross profit increased $229.2 million, or 10.3%, for the first nine
months of fiscal 2021 compared to the first nine months of fiscal 2020 driven by
the acquisition of Reinhart, which contributed an increase in gross profit of
$399.3 million for the first nine months of fiscal 2021, compared to the prior
year period.

Gross profit was negatively impacted by a decline in organic case volume driven
by the effects of COVID-19 described above. Additionally, for the third quarter
and first nine months of fiscal 2021, the Company recorded a total of $8.9
million and $27.8 million of inventory write-offs, respectively, compared to
$14.4 million and $25.7 million for the third quarter and first nine months of
fiscal 2020, respectively. The year-to-date increase was primarily a result of
the current economic environment due to COVID-19, with the third quarter of
fiscal 2021 decrease resulting from recent improvements in economic conditions.
Gross profit as a percentage of net sales was 11.6% for the third quarter of
fiscal 2021 compared to 11.5% for the third quarter of fiscal 2020, and 11.7%
for the first nine months of fiscal 2021 compared to 11.5% for the first nine
months of fiscal 2020.

Operating Expenses

Operating expenses decreased $15.6 million, or 1.9%, for the third quarter of
fiscal 2021 compared to the third quarter of fiscal 2020 and increased $235.7
million, or 11.2%, for the first nine months of fiscal 2021 compared to the
first nine months of fiscal 2020. The increase in operating expenses for the
first nine months of fiscal 2021 was primarily driven by the acquisition of
Reinhart. Reinhart contributed an additional $292.6 million of operating
expenses, excluding depreciation and amortization, for the first nine months of
fiscal 2021. For both the third quarter and first nine months of fiscal 2021,
excluding the impact of the additional Reinhart operating expenses, the Company
decreased its operating expenses related to personnel expenses, fuel expense,
insurance expense, travel expenses, professional fees, and contingent
consideration accretion expense compared to the prior year periods. In the third
quarter and first nine months of fiscal 2021, the Company recorded benefits of
$6.0 million and $9.4 million, respectively, related to reserves for expected
credit losses as compared to bad debt expense of $21.3 million and $29.8 million
for the third quarter and first nine months of fiscal 2020, respectively. These
decreases in operating expenses were partially offset by increases in annual
bonus expense. In the third quarter and first nine months of fiscal 2021, the
Company recorded expense of $29.6 million and $78.0 million, respectively,
related to annual bonus expense as compared to a benefit of $32.4 million and
expense of $6.1 million for the third quarter and first nine months of fiscal
2020, respectively.

Depreciation and amortization of intangible assets decreased from $99.3 million
in the third quarter of fiscal 2020 to $80.8 million in the third quarter of
fiscal 2021. The decrease was primarily driven by accelerated amortization of
customer relationships and trade names related to Reinhart recorded in the prior
year. Depreciation and amortization of intangible assets increased from $185.8
million for the first nine months of fiscal 2020 to $247.1 million in the first
nine months of fiscal 2021 as a result of the Reinhart acquisition.

Net (Loss) Income

Net loss decreased $32.6 million, or 81.1%, for the third quarter of fiscal 2021 compared to the third quarter of fiscal 2020. The decrease in net loss was primarily attributable to the $40.8 million increase in operating profit discussed above.

Net income decreased $27.8 million, or 74.9%, for the first nine months of fiscal 2021 compared to the first nine months of fiscal 2020. The decrease in net income was primarily attributable to the impact of COVID-19 on our operations, the increase in


                                       24

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operating expenses discussed above, and an increase in interest expense. The
increase in interest expense was primarily the result of an increase in average
borrowings outstanding during fiscal 2021 compared to the prior year period.

The Company reported an income tax benefit of $4.5 million and income tax
expense of $1.5 million for the third quarter and first nine months of fiscal
2021, respectively, compared to an income tax benefit of $20.3 million and
income tax expense of $2.9 million for the third quarter and first nine months
of fiscal 2020, respectively. Our effective tax rates for the third quarter and
first nine months of fiscal 2021 were 37.1% and 14.2%, respectively, compared to
33.6% and 7.3% for the three and nine months ended March 28, 2020, respectively.
The effective tax rates for the third quarter and first nine months of fiscal
2021 increased from the prior year periods primarily due to the increase of
state taxes and non-deductible expenses as a percentage of book income. Book
income for the nine months ended March 27, 2021 was significantly lower than the
book income for the nine months ended March 28, 2020.

Segment Results





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

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

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

Net Sales



                                                 Three Months Ended
                             March 27, 2021       March 28, 2020      Change        %
Foodservice                 $        5,186.5     $        4,949.9     $ 236.6        4.8
Vistar                               2,012.3              2,049.2       (36.9 )     (1.8 )
Corporate & All Other                   96.9                107.1       (10.2 )     (9.5 )
Intersegment Eliminations              (93.2 )             (105.5 )      12.3       11.7
Total net sales             $        7,202.5     $        7,000.7     $ 201.8        2.9




                                                  Nine Months Ended
                             March 27, 2021       March 28, 2020       Change         %
Foodservice                 $       15,110.3     $       12,728.2     $ 2,382.1       18.7
Vistar                               5,973.4              6,579.5        (606.1 )     (9.2 )
Corporate & All Other                  293.2                265.7          27.5       10.4
Intersegment Eliminations             (282.4 )             (261.1 )       (21.3 )     (8.2 )
Total net sales             $       21,094.5     $       19,312.3     $ 1,782.2        9.2


EBITDA



                                             Three Months Ended
                         March 27, 2021       March 28, 2020      Change         %
Foodservice             $          138.3     $           91.7     $  46.6        50.8
Vistar                              16.8                 40.7       (23.9 )     (58.7 )
Corporate & All Other              (49.3 )              (58.4 )       9.1        15.6
Total EBITDA            $          105.8     $           74.0     $  31.8        43.0




                                             Nine Months Ended
                        March 27, 2021      March 28, 2020      Change         %
Foodservice             $         449.8     $         309.3     $ 140.5        45.4
Vistar                             67.2               148.8       (81.6 )     (54.8 )
Corporate & All Other            (145.1 )            (153.4 )       8.3         5.4
Total EBITDA            $         371.9     $         304.7     $  67.2        22.1




Segment Results-Foodservice

                                       25

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Three and nine months ended March 27, 2021 compared to the three and nine months ended March 28, 2020

Net Sales

Net sales for Foodservice increased $236.6 million, or 4.8%, from the third
quarter of fiscal 2020 to the third quarter of fiscal 2021 and increased
$2,382.1 million, or 18.7%, from the first nine months of fiscal 2020 to the
first nine months of fiscal 2021. The increase in net sales for the third
quarter of fiscal 2021 was driven by growth in cases sold as certain states
began to ease COVID-19 restrictions, as well as an increase in selling price per
case as a result of inflation. Securing new and expanded business with
independent customers resulted in independent case growth of approximately 6.3%
in the third quarter of fiscal 2021 compared to the prior year period. For the
quarter, independent sales as a percentage of total Foodservice segment sales
were 33.9%.

The increase in net sales for the first nine months of fiscal 2021 was driven by
the Reinhart acquisition, as well as an increase in selling price per case as a
result of inflation. Reinhart contributed $4,195.2 million of net sales during
the first nine months of fiscal 2021, compared to $1,355.1 million for the first
nine months of fiscal 2020. The Reinhart acquisition also expanded business with
independent customers, resulting in independent case growth of approximately
19.4% for the first nine months of fiscal 2021, compared to the prior year
period. Excluding the impact of Reinhart, independent cases declined 1.5% in the
first nine months of fiscal 2021, compared to the prior year period. The
year-to-date decline in independent cases was driven by the impact of COVID-19
on the restaurant industry.

EBITDA

EBITDA for Foodservice increased $46.6 million, or 50.8%, from the third quarter
of fiscal 2020 to the third quarter of fiscal 2021 and increased $140.5 million,
or 45.4%, from the first nine months of fiscal 2020 to the first nine months of
fiscal 2021. These increases were the result of an increase in gross profit,
partially offset by an increase in operating expenses excluding depreciation and
amortization. Gross profit increased 8.0% in the third quarter of fiscal 2021,
compared to the prior year period, as a result of an increase in the gross
profit per case, as well as an increase in cases sold. Gross profit increased
22.4% in the first nine months of fiscal 2021, compared to the prior year
period, driven by the Reinhart acquisition, which contributed an increase in
gross profit of $399.3 million for the first nine months of fiscal 2021, as well
as an increase in gross profit per case, compared to the prior year period. The
increases in gross profit per case were driven by a favorable shift in the mix
of cases sold, including more Performance Brands products sold to our
independent customers. Cases sold to independent businesses result in higher
gross margins within this segment.

Operating expenses excluding depreciation and amortization for Foodservice
increased by $2.7 million, or 0.5%, from the third quarter of fiscal 2020 to the
third quarter of fiscal 2021 and increased by $219.9 million, or 16.9%, from the
first nine months of fiscal 2020 to the first nine months of fiscal 2021.
Operating expenses increased for the first nine months of fiscal 2021 primarily
as a result of the acquisition of Reinhart, which contributed an additional
$280.1 million of operating expenses for the first nine months of fiscal 2021.
Excluding the impact of the additional Reinhart operating expenses, operating
expense increased as a result of increases in bonus expense for the third
quarter and first nine months of fiscal 2021, partially offset by reduced
personnel expenses as compared to the prior year periods. In the third quarter
and first nine months of fiscal 2021, Foodservice recorded expenses of $15.2
million and $39.5 million, respectively, related to annual bonus expense as
compared to a benefit of $19.3 million for the third quarter and no annual bonus
expense for the first nine months of fiscal 2020. Operating expenses also
experienced decreases in fuel expenses of $2.0 million and $15.0 million and
decreases in insurance expense of $5.0 million and $12.9 million during the
third quarter and first nine months of fiscal 2021, respectively, compared to
the prior year periods. In the third quarter and first nine months of fiscal
2021, Foodservice recorded benefits of $5.5 million and $13.5 million,
respectively, related to reserves for expected credit losses as compared to bad
debt expense of $15.9 million and $22.0 million for the third quarter and first
nine months of fiscal 2020.

Depreciation and amortization of intangible assets recorded in this segment
decreased from $79.9 million in the third quarter of fiscal 2020 to $57.9
million in the third quarter of fiscal 2021 as a result of accelerated
amortization of customer relationships and trade names related to Reinhart
recorded in the prior fiscal year. Depreciation and amortization of intangible
assets recorded in this segment increased from $130.3 million in the first nine
months of fiscal 2020 to $182.4 million in the first nine months of fiscal 2021
as a result of the acquisition of Reinhart. Total depreciation and amortization
related to the acquisition of Reinhart increased $51.9 million for the nine
months ended March 27, 2021, compared to prior year period.

Segment Results-Vistar

Three and nine months ended March 27, 2021 compared to the three and nine months ended March 28, 2020

Net Sales

Net sales for Vistar declined $36.9 million, or 1.8%, from the third quarter of
fiscal 2020 to the third quarter of fiscal 2021 and declined $606.1 million, or
9.2%, from the first nine months of fiscal 2020 to the first nine months of
fiscal 2021. Net sales for the third quarter and first nine months of fiscal
2021 includes $276.9 million and $863.6 million, respectively, related to
tobacco excise taxes, as compared to $256.9 million and $815.9 million for the
prior year periods. The decrease in net sales was driven primarily by the
continued economic effects of the COVID-19 pandemic. Due to the various
initiatives to slow the spread of COVID-19, there have been significant declines
in the theater, vending, office coffee service, office supply, hospitality, and
travel channels for the first nine months of fiscal 2021, which are likely to
continue as long as social distancing guidelines remain in place. The declines
in the theater, travel, hospitality, office coffee service, office supply, and
vending channels are expected to gradually improve, as certain states have begun
to ease restrictions allowing many locations to resume operations in the fourth
quarter of fiscal 2021.

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EBITDA

EBITDA for Vistar declined $23.9 million, or 58.7%, from the third quarter of
fiscal 2020 to the third quarter of fiscal 2021 and declined $81.6 million, or
54.8%, from the first nine months of fiscal 2020 to the first nine months of
fiscal 2021. Gross profit declined $25.5 million, or 13.9%, for the third
quarter fiscal 2021 and $132.3 million, or 21.9%, for the first nine months of
fiscal 2021 compared to the respective prior year periods, driven by the effects
of COVID-19 described above. Additionally, for the third quarter of fiscal 2021,
Vistar recorded $1.7 million of inventory write-offs, a decrease of $1.8 million
compared to the prior year period. For the first nine months of fiscal 2021,
Vistar recorded $7.7 million of inventory write-offs, an increase of $3.2
million compared to the prior year period. The year-to-date increase was
primarily a result of the current economic environment due to COVID-19, with the
third quarter of fiscal 2021 decrease resulting from recent improvements in
economic conditions. Gross profit as a percentage of net sales declined from
9.0% for the third quarter of fiscal 2020 to 7.8% for the third quarter of
fiscal 2021 and from 9.2% for the first nine months of fiscal 2020 to 7.9% the
first nine months of fiscal 2021 as a result of the continued 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
continue to operate under contracts that include provisions whereby the customer
reimburses the Company for inventory losses. Additionally, many theaters plan to
resume operations in the fourth quarter of fiscal 2021, which would further
reduce this risk.

Operating expenses, excluding depreciation and amortization, decreased $1.4
million, or 1.0%, for the third quarter of fiscal 2021 and $50.4 million, or
11.1%, for the first nine months of fiscal 2021 compared to the prior year
periods. Operating expenses decreased primarily as a result of decreased sales
volume described above, decreases in personnel and fuel expenses, and a
reduction in contingent consideration accretion expenses of $2.0 million and
$10.0 million for the third quarter and first nine months of fiscal 2021,
respectively, as compared to prior year periods. Additionally, for the third
quarter and first nine months of fiscal 2021, Vistar recorded a benefit of $0.5
million and expense of $4.1 million, respectively, related to reserves for
expected credit losses for customer receivables. These reserves represent
declines in bad debt expense of $5.9 million and $3.7 million compared to the
third quarter and the first nine months of fiscal 2020, respectively. These
declines were partially offset by increases in annual bonus expense for the
third quarter and first nine months of fiscal 2021, as compared to prior year
periods. In the third quarter and first nine months of fiscal 2021, Vistar
recorded expenses of $6.7 million and $17.7 million, respectively, related to
annual bonus expense as compared to a benefit of $6.7 million and expense of
$3.8 million for the third quarter and first nine months of fiscal 2020,
respectively.

Depreciation and amortization of intangible assets recorded in this segment
increased from $13.1 million in the third quarter of fiscal 2020 to $16.6
million in the third quarter of fiscal 2021 and increased from $36.2 million in
the first nine months of fiscal 2020 to $42.6 million in the first nine months
of fiscal 2021.

Segment Results-Corporate & All Other

Three and nine months ended March 27, 2021 compared to the three and nine months ended March 28, 2020

Net Sales



Net sales for Corporate & All Other decreased $10.2 million from the third
quarter of fiscal 2020 to the third quarter of fiscal 2021 due to a decrease in
logistic services to our other segments resulting from decreased case volume.
Net sales for Corporate & All Other increased $27.5 million from the first nine
months of fiscal 2020 to the first nine months of fiscal 2021 as a result of an
increase in logistics services provided to our other segments for increased case
volume due to the acquisition of Reinhart.

EBITDA



EBITDA for Corporate & All Other was a negative $49.3 million for the third
quarter of fiscal 2021 compared to a negative $58.4 million for the third
quarter of fiscal 2020 and was a negative $145.1 million for the first nine
months of fiscal 2021 compared to a negative $153.4 million for the first nine
months of fiscal 2020. The improvements in EBITDA were primarily driven by
declines in professional fees of $17.9 million for the third quarter of fiscal
2021 and $24.6 million for the first nine months of fiscal 2021 compared to the
respective prior year periods, as well as declines in travel expenses. These
declines were partially offset by the increases in annual bonus expense. Annual
bonus expense of $7.7 million and $20.8 million was recorded in the third
quarter and first nine months of fiscal 2021, respectively, as compared to a
benefit of $6.4 million and expense of $2.3 million for the third quarter and
first nine months of fiscal 2020, respectively.

Operating expenses also increased as a result of increases in insurance expense
for the third quarter and first nine months of fiscal 2021. Additionally, the
increase in operating expenses for the first nine months of fiscal 2021 was
driven by the additional corporate expenses associated with the acquisition of
Reinhart, as compared to the prior year periods.

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Depreciation and amortization of intangible assets recorded in this segment
remained flat at $6.3 million for both the third quarter of fiscal 2021 and the
third quarter of fiscal 2020 and increased from $19.3 million in the first nine
months of fiscal 2020 to $22.1 million in the first nine months of fiscal 2021
as a result of information technology acquired in the Reinhart transaction.

                        Liquidity and Capital Resources

We have historically financed our operations and growth primarily with cash
flows from operations, borrowings under our credit facility, operating and
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. For
example, in response to the impact of COVID-19 in fiscal 2020, the Company
strengthened its liquidity by 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, which was
paid off early and in full on February 5, 2021, 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 Notes due 2025 (all defined below in
"-Financing Activities").



COVID-19



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 demand for our products and services. Even as governmental
restrictions are eased and economies gradually, partially, or fully reopen in
certain states and markets, the ongoing economic impacts and health concerns
associated with the pandemic may continue to affect consumer behavior and
spending in the channels we serve. The extent to which these changes will affect
our future financial position, liquidity, and results of operations remains
uncertain.

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.

As of March 27, 2021, our cash balance totaled $112.6 million, including
restricted cash of $11.1 million, as compared to a cash balance totaling $431.8
million, including restricted cash of $11.1 million, as of June 27, 2020. The
$319.2 million decrease in cash is primarily due to the early pay off, in full,
of the $110.0 million Additional Junior Term Loan and payments under our ABL
Facility.


Nine months ended March 27, 2021 compared to the nine months ended March 28, 2020



Operating Activities

During the first nine months of fiscal 2021 and fiscal 2020, our operating
activities provided cash flow of $173.1 million and $17.6 million, respectively.
The increase in cash flow provided by operating activities in the first nine
months of fiscal 2021 compared to the first nine months of fiscal 2020 was
largely driven by improvements in working capital and income tax refunds of
$117.8 million received during the first nine months of fiscal 2021, partially
offset by the payment of $117.3 million of contingent consideration related to
the acquisition of Eby-Brown.

Investing Activities

Cash used in investing activities totaled $130.4 million in the first nine
months of fiscal 2021 compared to $2,089.3 million in the first nine months of
fiscal 2020. These investments consisted primarily of payments for business
acquisitions of $18.1 million and $1,989.0 million for the first nine months of
fiscal 2021 and the first nine months of fiscal 2020, respectively, along with
capital purchases of property, plant, and equipment of $118.9 million and
$101.1 million for the first nine months of fiscal 2021 and the first nine
months of fiscal 2020, respectively. For the first nine months of fiscal 2021,
purchases of property, plant, and equipment primarily consisted of outlays for
information technology, warehouse equipment, warehouse expansions and
improvements, and transportation equipment. The following table presents the
capital purchases of property, plant, and equipment by segment:



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                                                                     Nine Months Ended
(Dollars in millions)                                       March 27, 2021       March 28, 2020
Foodservice                                                $           49.9     $           37.8
Vistar                                                                 64.2                 44.7
Corporate & All Other                                                   4.8                 18.6

Total capital purchases of property, plant and equipment $ 118.9


    $          101.1



As of March 27, 2021, the Company had commitments of $38.0 million for capital projects related to warehouse expansion and improvements and warehouse equipment. The Company anticipates using cash flows from operations or borrowings from the ABL Facility to fulfill these commitments.

Financing Activities



During the first nine months of fiscal 2021, our financing activities used cash
flow of $361.9 million, which consisted primarily of $103.8 million in net
payments under our ABL Facility, $136.4 million in payments related to recent
acquisitions, $110.0 million in repayment of the Additional Junior Term Loan,
and $27.3 million in payments of finance lease obligations.

During the first nine months of fiscal 2020, our financing activities provided
cash flow of $2,429.5 million, which consisted primarily of $1,060.0 million in
cash received from the issuance and sale of the Notes due 2027, $950.4 million
in net borrowings under our ABL facility, and $490.6 million in net proceeds
from the issuance of common stock. These sources of cash were partially offset
by $37.5 million paid for debt issuance costs associated with the Notes due 2027
and borrowings under the ABL Facility and $16.9 million in payments of finance
lease obligations.

The following describes our financing arrangements as of March 27, 2021:



ABL Facility: PFGC, Inc. ("PFGC"), a wholly-owned subsidiary of the Company, is
a party to the Fourth Amended and Restated Credit Agreement dated December 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"). The
ABL Facility has an aggregate principal amount of $3.0 billion, which matures on
December 30, 2024. The incremental $110 million, 364-day maturity loan that is
junior to the other obligations owed under the ABL Facility ("Additional Junior
Term Loan") was paid off early and in full on February 5, 2021. Performance Food
Group, Inc., a wholly-owned subsidiary of PFGC, is the lead borrower under the
ABL Facility, which is jointly and severally guaranteed by, and secured by the
majority of the assets of, PFGC and all material domestic direct and indirect
wholly-owned subsidiaries of PFGC (other than captive insurance subsidiaries and
other excluded subsidiaries). Availability for loans and letters of credit under
the ABL Facility is governed by a borrowing base, determined by the application
of specified advance rates against eligible assets, including trade accounts
receivable, inventory, owned real properties, and owned transportation
equipment. The borrowing base is reduced quarterly by a cumulative fraction of
the real properties and transportation equipment values. Advances on accounts
receivable and inventory are subject to change based on periodic commercial
finance examinations and appraisals, and the real property and transportation
equipment values included in the borrowing base are subject to change based on
periodic appraisals. Audits and appraisals are conducted at the direction of the
administrative agent for the benefit and on behalf of all lenders.

Borrowings under the ABL Facility bear interest, at Performance Food Group,
Inc.'s option, at (a) the Base Rate (defined as the greater of (i) the Federal
Funds Rate in effect on such date plus 0.5%, (ii) the Prime Rate on such day, or
(iii) one month LIBOR plus 1.0%) plus a spread or (b) LIBOR plus a spread. The
ABL Facility also provides for an unused commitment fee rate of 0.25% per annum.
Borrowings under the Additional Junior Term Loan, which was paid off early and
in full on February 5, 2021, bore interest at LIBOR plus 5.0% per annum with
respect to any loan which was a LIBOR loan and Prime plus 4.0% per annum with
respect to any loan which was a base rate loan.

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





(Dollars in millions)                            As of March 27, 2021       As of June 27, 2020
Aggregate borrowings                            $                496.2     $               710.0
Letters of credit under ABL Facility                             161.8                     139.6
Excess availability, net of lenders' reserves                  2,003.1                   1,712.2
of $56.0 and $64.9
Average interest rate                                             1.56 %                    2.85 %


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 million and (ii) 10% of the lesser of the borrowing base
and the revolving credit facility amount for five consecutive business days. The
ABL Facility also contains customary restrictive covenants that include, but are
not limited to, restrictions on PFGC's ability to incur additional indebtedness,
pay dividends, create liens, make investments or specified payments, and dispose
of assets. The ABL Facility provides for customary events of default, including
payment defaults and cross-defaults on other material indebtedness. If an event
of default occurs and is continuing, amounts due under such agreement may

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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 Notes 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, were used to fund
the cash consideration for the Reinhart acquisition 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

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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.

As of March 27, 2021, the Company was in compliance with all of the covenants under the ABL Facility and the indentures governing the Notes due 2024, the Notes due 2025 and the Notes due 2027.


                            Contractual Obligations

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

                         Off-Balance Sheet Arrangements

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

                            Total Assets by Segment

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



Total assets for Foodservice decreased $245.5 million from $5,734.2 million as
of March 28, 2020 to $5,488.7 million as of March 27, 2021. During this time
period, this segment decreased its inventory, intangible assets, operating lease
right-of-use assets, and property, plant and equipment, partially offset by an
increase in accounts receivable. Total assets for Foodservice decreased $40.4
million from $5,529.1 million as of June 27, 2020 to $5,488.7 million as of
March 27, 2021. During this time period, the segment

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decreased its inventory, intangible assets, and operating lease right-of-use
assets, partially offset by an increase in accounts receivable and property,
plant and equipment.

Total assets for Vistar increased $65.3 million from $1,524.0 million as of
March 28, 2020 to $1,589.3 million as of March 27, 2021. During this time
period, this segment increased its property, plant and equipment and operating
lease right-of-use assets, partially offset by decreases in inventory, accounts
receivable, and intangible assets. Total assets for Vistar increased
$203.9 million from $1,385.4 million as of June 27, 2020 to $1,589.3 million as
of March 27, 2021. During this time period, the segment increased its property,
plant and equipment, operating lease right-of-use assets, inventory, and
accounts receivable.

                   Critical Accounting Policies and Estimates

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

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