UNITEDTable STATESof Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15~~(d)Mark ~~OF THE~~One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~FOR~~For ~~THE~~the ~~QUARTERLY~~quarterly ~~PERIOD~~period ~~ENDED~~ended ~~July 3~~September 29, ~~2004~~2007

~~Commission File No.: 0-22192~~OR

~~PERFORMANCE~~o ~~FOOD~~TRANSITION ~~GROUP~~REPORT ~~COMPANY~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Tennessee (State or Other Jurisdiction of Incorporation or Organization)	54-0402940 (I.R.S. Employer Identification No.)
12500 West Creek Parkway Richmond, Virginia (Address of Principal Executive Offices)	23238 (Zip Code)
(804) 484 -7700 (Registrant's Telephone Number, Including Area Code)

For the transition period from to

~~Indicate~~Commission byFile 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 daysNo.: 0-22192

XPERFORMANCE ~~Yes~~FOOD NoGROUP COMPANY

~~Indicate~~(Exact byname ~~check~~of ~~mark whether the~~ registrant ~~is an accelerated filer (~~as ~~defined~~specified in ~~Rule~~its ~~12b-2 of the Exchange Act~~charter).

X Yes No


Tennessee		54-0402940

(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

12500 West Creek Parkway
Richmond, Virginia		23238

(Address of Principle Executive Offices)		(Zip Code)

~~As of August 9, 2004, 46,411,287 shares of the issuer's common stock were outstanding.~~(804) 484-7700

~~Report~~(Registrant’s oftelephone ~~Independent~~number, ~~Registered~~including ~~Public~~area ~~Accounting Firm~~code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by ~~The~~Section 13 ~~Board~~or 15(d) of ~~Directors~~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 ~~Shareholders~~(2) has been ~~Performance~~subject ~~Food~~to ~~Group~~such ~~Company:~~filing requirements for the past 90 days.

Weþ ~~have~~Yes o reviewed the accompanying condensed consolidated balance sheet of Performance Food Group Company and subsidiaries (the Company) as of July 3, 2004, the related condensed consolidated statements of earnings for the three-month and six-month periods ended July 3, 2004 and June 28, 2003 and the condensed consolidated statements of cash flows for the six-month periods ended July 3, 2004 and June 28, 2003. These condensed consolidated financial statements are the responsibility of the Company's management.No

WeIndicate ~~conducted~~by ~~our~~check ~~reviews~~mark inwhether ~~accordance~~the ~~with~~registrant ~~the~~is ~~standards~~a oflarge ~~the~~accelerated ~~Public~~filer, ~~Company~~an ~~Accounting~~accelerated ~~Oversight~~filer, or ~~Board~~a ~~(United~~non-accelerated ~~States)~~filer. A ~~review~~See ofdefinition ~~interim financial information consists principally~~ of ~~applying~~“accelerated ~~analytical~~filer ~~procedures~~ and ~~making~~large ~~inquiries~~accelerated offiler” ~~persons responsible for financial and accounting matters. It is substantially less~~ in Rule 12b-2 ~~scope than an audit conducted in accordance with the standards~~ of the ~~Public~~Exchange ~~Company~~Act. ~~Accounting Oversight Board~~ (~~United~~Check ~~States~~one)~~, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.~~:

~~Based~~þ onLarge ~~our~~accelerated ~~reviews,~~filer o weAccelerated ~~are~~filer o ~~not~~Non-accelerated aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with United States generally accepted accounting principles.filer

WeIndicate ~~have~~by ~~previously~~check ~~audited,~~mark inwhether ~~accordance with~~ the ~~standards~~registrant ofis ~~the~~a ~~Public~~shell ~~Company~~company ~~Accounting Oversight Board~~ (~~United States) the consolidated balance sheet of Performance Food Group Company and subsidiaries~~ as ofdefined ~~January~~in 3,Rule 12b-2 ~~2004, and the related consolidated statements~~ of ~~earnings, shareholders' equity and cash flows for~~ the Exchange ~~year then ended (not presented herein~~Act)~~; and in our report dated February 3, 2004, we expressed an unqualified opinion on those consolidated financial statements~~. Our report referred to changes in accounting for business combinations and goodwill and other intangibles. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of January 3, 2004 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

~~/s/KPMG~~o ~~LLP~~Yes þ No

~~Richmond~~As of November 1, ~~Virginia August~~2007, 935,481,351 ~~2004~~shares of the issuer’s common stock were outstanding.

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PERFORMANCE FOOD GROUP COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands)				July 3, 2004			January 3, 2004
ASSETS
Current assets:
	Cash and cash equivalents		$		55,123	$	38,916
	Accounts receivable, net, including
		retained interest in securitized receivables			250,040		242,340
	Inventories				285,521		257,198
	Other current assets				31,468		43,421
		Total current assets			622,152		581,875
Property, plant and equipment, net					381,437		363,052
Goodwill, net				584,016			582,966
Other intangible assets, net				191,992			196,814
Other assets				14,032			11,761
	Total assets		$		1,793,629	$	1,736,468
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Outstanding checks in excess of deposits		$		102,532	$	81,797
	Current installments of long-term debt				1,133		1,358
	Trade accounts payable				275,934		235,392
	Other current liabilities				164,779		150,377
		Total current liabilities			544,378		468,924
Long-term debt, excluding current installments				290,161			353,919
Deferred income taxes				118,074			109,810
		Total liabilities			952,613		932,653
Shareholders' equity				841,016			803,815
	Total liabilities and shareholders' equity		$		1,793,629	$	1,736,468
See accompanying notes to unaudited condensed consolidated financial statements.

TABLE OF CONTENTS

PERFORMANCE FOOD GROUP COMPANY AND SUBSIDIARIES
PART I — FINANCIAL INFORMATION
Condensed Consolidated Statements of Earnings (Unaudited)
	Item 1. Financial Statements
			Three Months Ended							Six Months Ended
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(In thousands, except per share amounts)				July 3, 2004			June 28, 2003			July 3, 2004			June 28, 2003
	Item 3. Quantitative and Qualitative Disclosures About Market Risks
Net sales			$	1,555,722		$	1,366,883		$	3,020,789		$	2,635,988
	Item 4. Controls and Procedures
Cost of goods sold				1,320,321			1,151,879			2,566,870			2,221,646
PART II — OTHER INFORMATION
	Gross profit			235,401			215,004			453,919			414,342
	Item 1. Legal Proceedings
Operating expenses				200,098			171,258			401,861			340,192
	Item 1A. Risk Factors
	Operating profit			35,303			43,746			52,058			74,150
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Other income (expense), net:
	Item 3. Defaults Upon Senior Securities
	Interest expense			(4,786	)		(4,955	)		(9,535	)		(9,745	)
	Item 4. Submission of Matters to a Vote of Security Holders
	Loss on sale of receivables			(506	)		(378	)		(974	)		(702	)
	Item 5. Other Information
	Other, net			374			207			894			1,400
	Item 6. Exhibits
		Other expense, net		(4,918	)		(5,126	)		(9,615	)		(9,047	)
Signature
		Earnings before income taxes		30,385			38,620			42,443			65,103
Exhibit Index
Income tax expense				11,589			14,676			16,171			24,739
Ex-10.1 Restated Employee Stock Purchase Plan
		Net earnings	$	18,796		$	23,944		$	26,272		$	40,364
Ex-10.2 Amended and Restated 401(k) Plan
Weighted average common shares outstanding				46,344			45,451			46,161			45,398
Ex-10.3 Amended and Restated Senior Management Severance Plan
Basic net earnings per common share			$	0.41		$	0.53		$	0.57		$	0.89
Ex-10.4 Amended 2006 Cash Incentive Plan
Weighted average common shares and dilutive
Ex-10.5 Amended 2007 Cash Incentive Plan
	potential common shares outstanding			53,325			52,817			47,166			52,749
Ex-10.6 Restated SERP
Diluted net earnings per common share			$	0.39		$	0.49		$	0.56		$	0.84
Ex-15 Letter regarding unaudited information from KPMG LLP.
See accompanying notes to unaudited condensed consolidated financial statements.
Ex-31.1 Section 302 Certification of the CEO
Ex-31.2 Section 302 Certification of the CFO
Ex-32.1 Section 906 Certification of the CEO & CFO

PERFORMANCE FOOD GROUP COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (Unaudited)
					Six Months Ended
(In thousands)					July 3, 2004			June 28, 2003
Cash flows from operating activities:
	Net earnings				$	26,272		$	40,364
	Adjustments to reconcile net earnings to net cash provided
		by operating activities:
			Depreciation			24,133			20,593
			Amortization			4,071			4,144
			Gain on sale of investment			-			(956	)
			Tax benefit on exercise of stock options			3,347			2,066
			Other			779			1,074
			Change in operating assets and liabilities, net			37,628			33,323
				Net cash provided by operating activities		96,230			100,608
Cash flows from investing activities:
	Purchases of property, plant and equipment					(42,899	)		(53,121	)
	Net cash paid for acquisitions					(1,061	)		(11,361	)
	Proceeds from sale of investment					-			4,500
	Proceeds from sale of property, plant and equipment and other					368			303
				Net cash used in investing activities		(43,592	)		(59,679	)
Cash flows from financing activities:
	Increase (decrease) in outstanding checks in excess of deposits					20,735			(12,906	)
	Net payments on revolving credit facility					(63,229	)		(19,833	)
	Principal payments on long-term debt					(754	)		(1,491	)
	Cash paid for debt issuance costs					(15	)		(732	)
	Proceeds from employee stock option, incentive and
	purchase plans					6,832			4,728
				Net cash used in financing activities		(36,431	)		(30,234	)
Net increase in cash and cash equivalents						16,207			10,695
Cash and cash equivalents, beginning of period						38,916			33,660
Cash and cash equivalents, end of period					$	55,123		$	44,355
See accompanying notes to unaudited condensed consolidated financial statements.

~~PERFORMANCE~~Report ~~FOOD~~of ~~GROUP~~Independent ~~COMPANY~~Registered ~~AND~~Public ~~SUBSIDIARIES~~Accounting Firm

~~Notes~~The toBoard ~~Unaudited~~of ~~Condensed~~Directors ~~Consolidated~~and ~~Financial~~Shareholders Performance ~~Statements~~Food Group Company:

1We have reviewed the accompanying condensed consolidated balance sheet of Performance Food Group Company and subsidiaries (the Company) as of September 29, 2007, the related condensed consolidated statements of earnings for the three-month and nine-month periods ended September 29, 2007 and September 30, 2006 and the related condensed consolidated statements of cash flows for the nine-month periods ended September 29, 2007 and September 30, 2006. ~~Basis~~ These condensed consolidated financial statements are the responsibility of ~~Presentation~~the Company’s management.

~~The~~We ~~accompanying~~conducted ~~condensed~~our ~~consolidated~~reviews ~~financial~~in ~~statements~~accordance ofwith ~~Performance~~standards ~~Food~~of ~~Group~~the Public Company ~~and~~Accounting ~~subsidiaries~~Oversight Board (~~the~~United ~~"Company"~~States). asA review of ~~July~~interim 3,financial ~~2004,~~information ~~and~~consists ~~for~~principally ~~the~~of ~~three~~applying analytical ~~months~~procedures ~~and~~to ~~six~~financial ~~months~~data ~~ended~~and ~~July~~making 3,inquiries ~~2004~~of ~~and~~persons ~~June~~responsible ~~28,~~for ~~2003,~~financial and ~~are~~accounting ~~unaudited~~matters. ~~The~~ ~~unaudited~~It ~~January~~is 3,substantially ~~2004~~less ~~condensed~~in ~~consolidated~~scope ~~balance~~than ~~sheet~~an ~~was~~audit ~~derived~~conducted ~~from~~in accordance with the ~~audited~~standards ~~consolidated~~of ~~balance sheet included in~~ the Public Company's ~~latest~~Accounting ~~Annual~~Oversight ~~Report~~Board on(United ~~Form~~States), ~~10-K. The~~the ~~unaudited~~objective of ~~condensed~~which ~~consolidated~~is ~~financial~~the ~~statements~~expression ~~have~~of ~~been~~an ~~prepared~~opinion inregarding ~~accordance with accounting principles generally accepted in~~ the ~~United~~financial ~~States~~statements oftaken ~~America~~as ~~for~~a ~~interim~~whole. Accordingly, ~~financial~~we ~~reporting~~do ~~and~~not inexpress ~~accordance~~such ~~with~~an ~~Rule 10-01 of Regulation S-X~~opinion.

InBased ~~the~~on ~~opinion~~our ~~of management~~reviews, ~~the~~we ~~unaudited condensed consolidated financial statements contained in this report reflect all adjustments, consisting of only normal recurring accruals, which~~ are ~~necessary~~not ~~for~~aware ~~a fair presentation~~ of ~~the financial position and the results of operations for the interim periods presented. The results of operations for~~ any ~~interim~~material ~~period~~modifications ~~are~~that ~~not~~should ~~necessarily~~be ~~indicative~~made ofto ~~results for~~ the condensed ~~full~~consolidated ~~year. References~~financial instatements ~~this~~referred ~~Form 10-Q~~ to ~~the~~above ~~2004~~for ~~and~~them ~~2003 quarters and periods refer~~ to ~~the~~be ~~fiscal~~in ~~three-month~~conformity ~~and~~with U.S. ~~six-month~~generally ~~periods~~accepted ~~ended~~accounting ~~July 3, 2004 and June 28, 2003, respectively~~principles.

~~These~~We ~~unaudited~~have ~~condensed~~previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated ~~financial~~balance ~~statements~~sheet of Performance Food Group Company and subsidiaries as of December 30, ~~note~~2006, ~~disclosures~~and the related consolidated statements of earnings, shareholders’ equity and ~~other~~cash ~~information~~flows ~~should~~for bethe ~~read~~year then ended (not presented herein); and in ~~conjunction~~our report ~~with~~dated ~~the~~February 26, 2007, we expressed an unqualified opinion on those consolidated financial statements. ~~and~~In ~~notes~~our ~~thereto~~opinion, ~~included~~the information set forth in the ~~Company's~~accompanying ~~latest~~condensed ~~Annual~~consolidated balance ~~Report~~sheet onas ~~Form~~of ~~10-K~~December 30, 2006 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

~~2. Summary~~/s/ ofKPMG ~~Significant Accounting Policies~~LLP

~~Use~~Richmond, ofVirginia November 5, ~~Estimates~~2007

The preparation of the condensed consolidated financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Company's condensed consolidated financial statements and notes thereto. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, goodwill and other intangible assets, reserves for claims under self-insurance programs, sales incentives, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization and tax liabilities. Actual results could differ from these estimates.2

RevenueTable Recognitionof Contents

~~The~~PART ~~Company~~I ~~recognizes~~– ~~sales~~FINANCIAL when persuasive evidence of an arrangement exists, the price is fixed or determinable, the product has been delivered to the customer and there is reasonable assurance of collection of the sales proceeds. Sales returns are recorded as reductions of sales.INFORMATION

~~Stock-Based~~Item 1. ~~Compensation~~Financial Statements.

AtPERFORMANCE ~~July~~FOOD 3,GROUP ~~2004,~~COMPANY ~~the~~AND Company had stock-based employee compensation plans, which are accounted for under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. Accordingly, no stock-based employee compensation cost has been reflected in net earnings in the condensed consolidated statements of earnings for the 2004 and 2003 quarters and periods, except when there was a modification to a fixed award. The following table illustrates the effect on net earnings and net earnings per common share as if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation. The fair value of each option was estimated at the grant date using the Black-Scholes option-pricing model.SUBSIDIARIES

(In thousands, except per share amounts)		2004 Quarter			2003 Quarter			2004 Period			2003 Period
Net earnings, as reported	$	18,796		$	23,944		$	26,272		$	40,364
Add: Stock-based compensation included
in net earnings, net of related
tax effects		-			-			228			-
Deduct: Stock-based compensation
determined under the fair-value based
method for all awards, net of related
tax effects		(1,931	)		(1,766	)		(3,741	)		(3,655	)
Pro forma net earnings	$	16,865		$	22,178		$	22,759		$	36,709
Net earnings per common share:
Basic - As reported	$	0.41		$	0.53		$	0.57		$	0.89
Basic - Pro forma	$	0.36		$	0.49		$	0.49		$	0.81
Diluted - As reported	$	0.39		$	0.49		$	0.56		$	0.84
Diluted - Pro forma	$	0.35		$	0.46		$	0.49		$	0.77

Condensed Consolidated Balance Sheets (Unaudited)

Recently Issued Accounting Pronouncements


(In thousands)	September 29, 2007		December 30, 2006

Assets
Current assets:
Cash and cash equivalents	$	97,524	$	75,087
Accounts receivable, net, including retained interest in securitized receivables		224,840		226,058
Inventories		343,468		308,901
Other current assets		36,598		35,419

Total current assets		702,430		645,465
Goodwill, net		356,509		356,509
Property, plant and equipment, net		309,103		291,947
Other intangible assets, net		45,040		47,575
Other assets		19,846		18,279

Total assets	$	1,432,928	$	1,359,775

Liabilities and Shareholders’ Equity
Current liabilities:
Outstanding checks in excess of deposits	$	96,363	$	88,023
Current installments of long-term debt		63		583
Trade accounts payable		291,538		269,590
Other current liabilities		138,533		146,524

Total current liabilities		526,497		504,720
Long-term debt and capital lease obligations, excluding current installments		9,546		11,664
Deferred income taxes		53,301		48,582

Total liabilities		589,344		564,966
Shareholders’ equity		843,584		794,809

Total liabilities and shareholders’ equity	$	1,432,928	$	1,359,775

InSee ~~November~~accompanying ~~2003,~~notes ~~the Emerging Issues Task Force ("EITF"), reached a final consensus on EITF No. 03-10, "Application of Issue No. 02-16 by Resellers~~ to ~~Sales~~unaudited ~~Incentives~~condensed Offered to Consumers by Manufacturers" ("EITF No. 03-10"). EITF No. 03-10 states that certain sales incentive arrangements are not subject to the guidance in EITF No. 02-16. EITF No. 03-10 also requires disclosure of the accounting policy with respect to vendors' sales incentive arrangements. EITF No. 03-10 is effective for fiscal years beginning after December 15, 2003. The Company's adoption of EITF No. 03-10 in the 2004 period did not have a material impact on its consolidated financial ~~position or results of operations~~statements.

~~Reclassifications~~3

CertainTable priorof period amounts have been reclassified to conform to the current period's presentation.Contents

~~3. Business~~PERFORMANCE ~~Combinations~~FOOD GROUP COMPANY AND SUBSIDIARIES

~~During~~Condensed ~~the~~Consolidated ~~2004~~Statements ~~period, the Company paid $1.1 million and issued approximately 22,000 shares~~ of ~~its~~Earnings ~~common stock, valued at approximately $750,000, primarily related to contractual obligations in the purchase agreement for Carroll County Foods, Inc.~~ (~~"Carroll County Foods"~~Unaudited)~~. The Company recorded these amounts as additional purchase price, with corresponding increases to goodwill.~~

In 2003, the Company paid $11.0 million to the former shareholders of Fresh International Corp. and its subsidiaries (collectively "Fresh Express"). These payments were for certain contractual obligations and associated taxes related to the purchase of Fresh Express, which the Company acquired in 2001. Also, in the 2003 period, the Company paid $5.2 million and issued approximately 25,000 shares of its common stock, valued at approximately $891,000, related to contractual obligations in the purchase agreements for All Kitchens, Inc. ("All Kitchens"), Thoms-Proestler Company and TPC Logistics, Inc. (collectively "TPC"), Carroll County Foods and other companies acquired. The Company acquired All Kitchens and TPC in 2002 and Carroll County Foods in 2000. The Company recorded these earnout payments as additional purchase price, with corresponding increases in goodwill.


	Three Months Ended						Nine Months Ended
(In thousands, except per share amounts)	September 29, 2007			September 30, 2006			September 29, 2007			September 30, 2006

Net sales	$	1,578,888		$	1,429,765		$	4,673,285		$	4,347,285
Cost of goods sold		1,370,975			1,235,412			4,063,438			3,772,475

Gross profit		207,913			194,353			609,847			574,810
Operating expenses		182,717			174,242			548,766			522,447

Operating profit		25,196			20,111			61,081			52,363


Other expense, net:
Interest income		973			818			2,676			1,680
Interest expense		(521	)		(394	)		(1,620	)		(1,118	)
Loss on sale of receivables		(1,964	)		(1,903	)		(5,712	)		(5,402	)
Other, net		57			121			136			274

Other expense, net		(1,455	)		(1,358	)		(4,520	)		(4,566	)

Earnings from continuing operations before income taxes		23,741			18,753			56,561			47,797
Income tax expense from continuing operations		7,660			6,578			20,526			17,780

Earnings from continuing operations, net of tax		16,081			12,175			36,035			30,017
Loss from discontinued operations		(44	)		(132	)		(238	)		(150	)

Net earnings	$	16,037		$	12,043		$	35,797		$	29,867


Weighted average common shares outstanding:
Basic		34,843			34,369			34,707			34,322
Diluted		35,230			34,624			35,150			34,780

Basic earnings (loss) per common share:
Continuing operations	$	0.46		$	0.35		$	1.04		$	0.87
Discontinued operations		—			—			(0.01	)		—

Net earnings	$	0.46		$	0.35		$	1.03		$	0.87


Diluted earnings (loss) per common share:
Continuing operations	$	0.46		$	0.35		$	1.03		$	0.86
Discontinued operations		—			—			(0.01	)		—

Net earnings	$	0.46		$	0.35		$	1.02		$	0.86

~~Also~~See inaccompanying ~~2003,~~notes the Company finalized the purchase price of Middendorf Meat Company ("Middendorf Meat"), resulting in the return of $2.2 million in cash and $1.4 million in the Company's common stock (approximately 46,000 shares) from the former owners of Middendorf Meat, related to ~~the~~unaudited ~~closing~~condensed ~~net~~consolidated ~~worth~~financial ~~adjustment and certain related claims~~statements. ~~The Company recorded this adjustment to the purchase price as a reduction of goodwill.~~

4~~. Net Earnings Per Common Share~~

BasicTable net earnings per common share ("EPS") is computed by dividing net income available to common shareholders (numerator) by the weighted-average number of common shares outstanding (denominator) during the period. Diluted EPS is computed using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be repurchased upon the exercise of stock options. Contents

InPERFORMANCE ~~October~~FOOD ~~2001,~~GROUP ~~the~~COMPANY ~~Company~~AND issued $201.3 million aggregate principal amount of 5½% convertible subordinated notes due in 2008 (the "Convertible Notes"). The calculation of diluted EPS is done on an "if-converted" basis and without conversion of the Convertible Notes. If the calculation of diluted EPS is more dilutive assuming conversion of the Convertible Notes, the after-tax interest on the Convertible Notes is added to net income in the numerator, and the shares into which the Convertible Notes are convertible are added to the dilutive shares in the denominator. In the 2004 and 2003 quarters and the 2003 period the Convertible Notes were dilutive and were included in the computation of diluted EPS. In the 2004 period, the Convertible Notes were anti-dilutive and were excluded from the computation of diluted EPS. A reconciliation of the numerators and denominators of the basic and diluted EPS computations is as follows:SUBSIDIARIES

	2004 Quarter					2003 Quarter
(In thousands, except per share amounts)		Net Earnings	Shares		Per-Share Amount		Net Earnings	Shares		Per-Share Amount
Amounts reported for basic EPS	$	18,796	46,344	$	0.41	$	23,944	45,451	$	0.53
Effect of dilutive securities:
Stock options		-	873				-	1,258
Convertible Notes		1,860	6,108				1,863	6,108
Amounts reported for diluted EPS	$	20,656	53,325	$	0.39	$	25,807	52,817	$	0.49

Condensed Consolidated Statements of Cash Flows (Unaudited)

Options to purchase 1,430,740 shares that were outstanding at July 3, 2004, were excluded from the computation of diluted shares because of their anti-dilutive effect on EPS for the 2004 quarter. The exercise price of these options ranged from $33.00 to $41.15. Options to purchase approximately 658,000 shares that were outstanding at June 28, 2003 were excluded from the computation of diluted shares because of their anti-dilutive effect on EPS for the 2003 quarter. The exercise price of these options ranged from $34.57 to $38.50.


	Nine Months Ended
(In thousands)	September 29, 2007			September 30, 2006

Cash flows from operating activities of continuing operations:
Earnings from continuing operations	$	36,035		$	30,017
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities of continuing operations:
Depreciation		19,860			18,776
Amortization		2,289			2,523
Stock compensation expense		4,803			3,605
Deferred income taxes		7,656			(3,144	)
Tax benefit on exercise of equity awards		860			825
Other		154			872
Change in operating assets and liabilities, net		(22,797	)		(7,417	)

Net cash provided by operating activities of continuing operations		48,860			46,057

Cash flows from investing activities of continuing operations:
Purchases of property, plant and equipment		(52,504	)		(34,499	)
Proceeds from sale of property, plant and equipment		15,938			324

Net cash used in investing activities of continuing operations		(36,566	)		(34,175	)

Cash flows from financing activities of continuing operations:
Increase (decrease) in outstanding checks in excess of deposits		8,340			(9,894	)
Principal payments on long-term debt		(2,638	)		(427	)
Proceeds from employee stock option, incentive and purchase plans		6,965			7,527
Excess tax benefit on exercise of equity awards		809			757
Repurchase of common stock		—			(39,617	)

Net cash provided by (used in) financing activities of continuing operations		13,476			(41,654	)

Cash provided by (used in) continuing operations		25,770			(29,772	)

Cash flows from discontinued operations:
Cash (used in) provided by operating activities of discontinued operations		(3,095	)		6,489
Cash used in investing activities of discontinued operations		(238	)		(150	)

Total cash (used in) provided by discontinued operations		(3,333	)		6,339

Net increase (decrease) in cash and cash equivalents		22,437			(23,433	)
Cash and cash equivalents, beginning of period		75,087			99,461

Cash and cash equivalents, end of period	$	97,524		$	76,028

Supplemental disclosure of non-cash transactions:
Debt assumed through capital lease obligation		—		$	9,000

	2004 Period					2003 Period
(In thousands, except per share amounts)		Net Earnings	Shares		Per-Share Amount		Net Earnings	Shares		Per-Share Amount
Amounts reported for basic EPS	$	26,272	46,161	$	0.57	$	40,364	45,398	$	0.89
Effect of dilutive securities:
Stock options		-	1,005				-	1,243
Convertible Notes		-	-				3,726	6,108
Amounts reported for diluted EPS	$	26,272	47,166	$	0.56	$	44,090	52,749	$	0.84

See accompanying notes to unaudited condensed consolidated financial statements.

5~~. Receivables Facility~~

InTable July 2001, the Company entered into the Receivables Facility, under which PFG Receivables Corporation, a wholly owned, special-purpose subsidiary, sold an undivided interest in certain of the Company's trade receivables. PFG Receivables Corporation was formed for the sole purpose of buying receivables generated by certain of the Company's operating units and selling an undivided interest in those receivables to a financial institution. Under the Receivables Facility, certain of the Company's operating units sell a portion of their accounts receivable to PFG Receivables Corporation, which in turn, subject to certain conditions, may from time to time sell an undivided interest in these receivables to a financial institution. The Company's operating units continue to service the receivables on behalf of the financial institution at estimated market rates. Accordingly, the Company has not recognized a servicing asset or liability. Contents

~~The~~PERFORMANCE ~~Company~~FOOD ~~received~~GROUP ~~$78.0~~COMPANY ~~million~~AND of proceeds from the sale of the undivided interest in receivables under the Receivables Facility in 2001 and has continued to securitize its accounts receivable. Under the original terms of the Receivables Facility, the amount of the undivided interest in the receivables owned by the financial institution could not exceed $90.0 million at any one time. During the 2003 quarter, the Company increased the amount of the undivided interest in the receivables that can be owned by the financial institution to $165.0 million. In July 2003, the Company sold an incremental undivided interest in receivables under the Receivables Facility and received an additional $32.0 million of proceeds. These proceeds were used to repay borrowings under the Company's revolving credit facility and to fund working capital needs. On June 28, 2004, the Company extended the term of its Receivables Facility through June 27, 2005.SUBSIDIARIES

AtNotes ~~July 3, 2004, securitized accounts receivable totaled $203.1 million, including $110.0 million sold~~ to ~~the~~Unaudited ~~financial~~Condensed ~~institution~~Consolidated ~~and~~Financial derecognized from the condensed consolidated balance sheet. Total securitized accounts receivable includes the Company's residual interest in accounts receivable ("Residual Interest") of $93.1 million. At January 3, 2004, securitized accounts receivable totaled $189.4 million, including $110.0 million sold to the financial institution and derecognized from the consolidated balance sheet, and including the Residual Interest of $79.4 million. The Residual Interest represents the Company's retained interest in receivables held by PFG Receivables Corporation. The Residual Interest was measured using the estimated discounted cash flows of the underlying accounts receivable, based on estimated collections and a discount rate approximately equivalent to the Company's incremental borrowing rate. The loss on sale of the undivided interest in receivables of $506,000 and $378,000 in the 2004 and 2003 quarters, respectively, and $974,000 and $702,000 in the 2004 and 2003 periods, respectively, is included in other expense, net, in the condensed consolidated statements of earnings and represents the Company's cost of securitizing those receivables with the financial institution.Statements

The Company records the sale of the undivided interest in accounts receivable to the financial institution in accordance with SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities. Accordingly, at the time the undivided interest in receivables is sold, the receivables are removed from the Company's consolidated balance sheet. The Company records a loss on the sale of the undivided interest in these receivables, which includes a discount, based upon the receivables' credit quality and a financing cost for the financial institution, based upon a 30-day commercial paper rate. At July 3, 2004, the rate under the Receivables Facility was 1.62% per annum.

1.		*Basis of Presentation*

		The accompanying condensed consolidated financial statements of Performance Food Group Company and subsidiaries (the “Company”) as of September 29, 2007 and for the three-month and nine-month periods ended September 29, 2007 and September 30, 2006 are unaudited. The unaudited December 30, 2006 condensed consolidated balance sheet was derived from the audited consolidated balance sheet included in the Company’s latest Annual Report on Form 10-K. The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial reporting and Rule 10-01 of Regulation S-X.

		In the opinion of management, the unaudited condensed consolidated financial statements contained in this report reflect all adjustments, consisting of only normal recurring accruals, which are necessary for a fair presentation of the financial position and the results of operations for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. References in this Form 10-Q to the 2007 and 2006 quarters and periods refer to the fiscal three-month and nine-month periods ended September 29, 2007 and September 30, 2006, respectively. These unaudited condensed consolidated financial statements, note disclosures and other information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K.

2.		*Summary of Significant Accounting Policies*

		Use of Estimates

		The preparation of the condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the Company’s condensed consolidated financial statements and notes thereto. The most significant estimates used by management are related to the accounting for the allowance for doubtful accounts, reserve for inventories, goodwill and other intangible assets, reserves for claims under self-insurance programs, vendor rebates and other promotional incentives, bonus accruals, depreciation, amortization, share-based compensation and income taxes. Actual results could differ from the estimates.

		Inventories

		The Company’s inventories consist of food and non-food products. The Company values inventories at the lower of cost or market using the first-in, first-out method. At September 29, 2007 and December 30, 2006, the Company’s inventory balances of $343.5 million and $308.9 million, respectively, consisted primarily of finished goods. Costs in inventory include the purchase price of the product and freight charges to deliver the product to the Company’s warehouses. The Company maintains reserves for slow-moving, excess and obsolete inventories. These reserves are based upon category, inventory age, specifically identified items and overall economic conditions.

		Revenue Recognition

		The Company recognizes sales when persuasive evidence of an arrangement exists, the price is fixed or determinable, the product has been delivered to the customer and there is reasonable assurance of collection of the sales proceeds. Sales returns are recorded as reductions of sales.

The key economic assumptions used to measure the Residual Interest at July 3, 2004 were a discount rate of 2.50% and an estimated life of approximately 1.5 months. At July 3, 2004, an immediate adverse change in the discount rate and estimated life of 10% and 20%, with other factors remaining constant, would reduce the fair value of the Residual Interest with a corresponding increase in the loss on sale of receivables, but would not have a material impact on the Company's consolidated financial condition or results of operations.6

6. GoodwillTable andof Other Intangible AssetsContents

The following table presents details of the Company's intangible assets as of July 3, 2004 and January 3, 2004:

		Reclassifications

		Certain prior period amounts have been reclassified to conform to the current period’s presentation.

		Recently Issued Accounting Pronouncements

		The Financial Accounting Standards Board (“FASB”) issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in GAAP, and requires enhanced disclosures about fair value measurements. This statement will apply when other accounting pronouncements require or permit fair value measurements; it does not require new fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those years. The Company will adopt this pronouncement in its first quarter of fiscal 2008; however, the Company does not anticipate it will have a material impact on its consolidated financial position and results of operations.

		In February 2007, the FASB issued SFAS No. 159, The Fair Value Option of Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities. Subsequent changes in fair value of these financial assets and liabilities would be recognized in earnings when they occur. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company will adopt this pronouncement in the first quarter of fiscal 2008; however, the Company does not anticipate it will have a material impact on its consolidated financial position and results of operations.

3.		*Discontinued Operations*

		In 2005, the Company sold all of its stock in the subsidiaries that comprised its fresh-cut segment to Chiquita Brands International, Inc. (“Chiquita”); as such, all amounts pertaining to the Company’s former fresh-cut segment are presented as discontinued operations. Accordingly, unless otherwise noted, all amounts presented in the accompanying condensed consolidated financial statements, including all note disclosures, contain only information related to the Company’s continuing operations.

4.		*Earnings Per Common Share*

		Basic earnings per common share (“EPS”) is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the quarter. Diluted EPS is computed using the weighted average number of common shares and dilutive potential common shares outstanding during the quarter. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased with proceeds under the treasury stock method.

		A reconciliation of the basic and diluted EPS computations is as follows:

	As of July 3, 2004											As of January 3, 2004
	2007 Quarter											2006 Quarter
(In thousands)		Gross Carrying Amount					Accumulated Amortization		Net				Gross Carrying Amount				Accumulated Amortization		Net
(In thousands, except per share									Per-Share											Per-Share
Intangible assets with definite lives:
amounts)	Earnings				Shares				Amount			Earnings				Shares				Amount
Customer relationships			$	110,824		$	17,548	$		93,276	$			110,824	$	14,529		$		96,295
Basic EPS – continuing operations	$	16,081				34,843			$	0.46		$	12,175				34,369			$	0.35
Trade names and trademarks				33,724			3,163			30,561				33,733		2,563				31,170
Dilutive effect of equity awards		—				387				—			—				255				—
Debt issuance costs				9,392			3,737			5,655				9,408		3,011				6,397
Diluted EPS – continuing operations	$	16,081				35,230			$	0.46		$	12,175				34,624			$	0.35
Non-compete agreements				4,568			3,151			1,417				4,778		2,927				1,851
Patents				350			66			284				350		48				302
Total intangible assets with definite lives			$	158,858		$	27,665	$		131,193	$			159,093	$	23,078		$		136,015
Intangible assets with indefinite lives:
Goodwill (1)			$	599,534		$	15,518	$		584,016	$			598,484	$	15,518		$		582,966
Trade names (1)				60,934			135			60,799				60,934		135				60,799
Total intangible assets with indefinite lives			$	660,468		$	15,653	$		644,815	$			659,418	$	15,653		$		643,765

(Options to purchase approximately 1).5 million shares that were outstanding at September 29, 2007 were excluded from the computation of diluted shares because of their anti-dilutive effect on EPS for the 2007 quarter. The exercise price of these options ranged from $30.00 to $41.15. Options to purchase approximately 2.1 million shares that were outstanding at September 30, 2006 were excluded from the

The Company recorded amortization of intangibles of $2.4 million for each of the 2004 and 2003 quarters (including approximately $350,000 amortization of debt issuance costs in each quarter), and $4.8 and $4.9 million for the 2004 and 2003 periods, respectively (including approximately $750,000 amortization of debt issuance costs in each period). The estimated future amortization of intangible assets as of July 3, 2004, is as follows:7

(In thousands)			Amount
2004 (remaining quarters)		$	4,853
2005			9,322
2006			8,941
2007			8,451
2008			7,878
2009			7,105
Thereafter			84,643
	Total	$	131,193

~~The~~computation ~~following~~of ~~table~~diluted ~~presents~~shares ~~the~~because ~~changes~~of intheir ~~the~~anti-dilutive ~~net~~effect ~~carrying~~on ~~amount~~EPS offor ~~goodwill allocated to~~ the ~~Company's~~2006 ~~reportable~~quarter. ~~segments,~~The asexercise ~~defined~~prices inof ~~Note~~these 9,options ~~during~~ranged ~~the~~from ~~2004~~$27.30 ~~period:~~to $41.15.

(In thousands)		Broadline Segment			Fresh-cut Segment			Total
		2007 Period										2006 Period
Balance at January 3, 2004	$	350,493		$	232,473		$	582,966
(In thousands, except per share										Per-Share						Per-Share
Goodwill acquired		1,811			-			1,811
amounts)		Earnings				Shares				Amount		Earnings		Shares		Amount
Purchase accounting adjustments		(761	)		-			(761	)
Basic EPS – continuing operations		$	36,035				34,707			$	1.04	$	30,017		34,322	$	0.87
Balance at July 3, 2004	$	351,543		$	232,473		$	584,016
Dilutive effect of equity awards			—				443				—		—		458		—
Diluted EPS – continuing operations		$	36,035				35,150			$	1.03	$	30,017		34,780	$	0.86

In the 2004 period, the Broadline segment acquired goodwill of $1.8 million through payments related to contractual obligations associated with certain acquisitions. For further details on goodwill changes, see Note 3.

5.		*Stock Based Compensation*

		Effective January 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based Payment (“SFAS 123(R)”), using the modified-prospective transition method. Under this transition method, compensation cost recognized in fiscal 2007 and 2006 includes: 1) compensation cost for all share-based payments granted through December 31, 2005, but for which the requisite service period had not been completed as of December 31, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123 and 2) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123(R).

		Stock Option and Incentive Plans

		During the 2007 period, the Company granted approximately 225,000 stock appreciation rights under the Company’s 2003 Equity Incentive Plan (the “2003 Plan”). The stock appreciation rights have a capped maximum appreciation amount and are settled in the Company’s common stock. The Company also awarded approximately 252,000 shares of restricted stock. All of the grants made in the 2007 period generally vest four years from the date of grant. Approximately $0.4 million and $0.3 million of stock compensation expense was recognized in the condensed consolidated statements of earnings in the 2007 and 2006 quarters, respectively, and $1.4 million and $0.9 million in the 2007 and 2006 periods, respectively, for stock options and stock appreciation rights and $1.1 million and $1.0 million in the 2007 and 2006 quarters, respectively, and $3.2 million and $2.0 million in the 2007 and 2006 periods, respectively, for restricted stock grants. The Company has not made any grants of other stock based awards under the 2003 Plan.

		Employee Stock Purchase Plan

		Purchases made on July 13, 2007 under the Company’s Employee Stock Purchase Plan (the “Stock Purchase Plan”) totaled approximately 43,000 shares and the grant date fair value was estimated to be $4.98 per share. Purchases made on January 15, 2007 under the Stock Purchase Plan totaled approximately 56,000 shares and the grant date fair value was estimated to be $4.32 per share. The purchase price is equal to 85% of the market price on the last day of the purchase period. Stock compensation expense recognized in the condensed consolidated statements of earnings was nominal in both the 2007 and 2006 quarters, and $0.2 million and $0.7 million in the 2007 and 2006 periods, respectively, for the Stock Purchase Plan.

		All Share-Based Compensation Plans

		The total share-based compensation cost recognized in operating expenses in the condensed consolidated statements of earnings in the 2007 and 2006 quarters was $1.5 million and $1.3 million, respectively, and $4.8 million and $3.6 million in the 2007 and 2006 periods, respectively, which represents the expense associated with our stock options, stock appreciation rights, restricted stock and shares purchased under the Stock Purchase Plan. At September 29, 2007, there was approximately $5.5 million of total unrecognized compensation cost related to unvested stock options and stock appreciation rights and $11.3 million of total unrecognized compensation cost related to unvested shares of restricted stock, which will be recognized over the remaining vesting periods.

~~7. Inventories~~8

TheTable following table provides details of inventories as of July 3, 2004 and January 3, 2004: Contents

(In thousands)		July 3, 2004		January 3, 2004
6.		FIN 48
Finished goods	$	275,406	$	239,892
		The Company adopted the Financial Accounting Standards Board’s Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), effective at the beginning of fiscal 2007. As a result of the adoption of FIN 48, the Company recognized a charge of approximately $0.5 million to its beginning retained earnings balance. As of the date of adoption, the Company had unrecognized tax benefits of $6.9 million ($5.6 million net of federal tax benefit), of which $3.2 million ($2.3 million net of federal tax benefit) could affect the effective tax rate for continuing operations. As of September 29, 2007, the Company had unrecognized tax benefits of $5.5 million ($4.5 million net of federal tax benefit), of which $2.1 million ($1.4 million net of federal tax benefit), if recognized, could affect the effective tax rate for continuing operations.
Raw materials, including growing crops		10,115		17,306
		It is the Company’s continuing practice to recognize interest and penalties related to uncertain tax positions in income tax expense. Approximately $1.0 million and $0.8 million were accrued for interest related to uncertain tax positions at September 29, 2007 and December 30, 2006, respectively.
Inventories	$	285,521	$	257,198
		As of September 29, 2007 and December 30, 2006, substantially all federal, state and local and foreign income tax matters have been concluded for years through 2002. It is reasonably possible that a decrease of $1.8 million ($1.0 million net of federal tax benefit) in the balance of unrecognized tax benefits may occur within the next twelve months due to statutes of limitations expirations, filing of amended returns, and closing and/or settling of audits. Of this amount, up to $1.0 million ($0.7 million net of federal tax benefit) could affect the effective tax rate of continuing operations.
7.		Receivables Facility
		In 2001, the Company entered into a receivables purchase facility (the “Receivables Facility”), under which PFG Receivables Corporation, a wholly owned, special-purpose subsidiary, sold an undivided interest in certain of the Company’s trade receivables. PFG Receivables Corporation was formed for the sole purpose of buying receivables generated by certain of the Company’s operating units and selling an undivided interest in those receivables to a financial institution. Under the Receivables Facility, certain of the Company’s operating units sell a portion of their accounts receivable to PFG Receivables Corporation, which in turn, subject to certain conditions, may from time to time sell an undivided interest in these receivables to a financial institution. The Company’s operating units continue to service the receivables on behalf of the financial institution at estimated market rates. Accordingly, the Company has not recognized a servicing asset or liability. During the 2007 second quarter, the Company extended the term of the Receivables Facility through June 23, 2008.
		At September 29, 2007, securitized accounts receivable totaled $233.6 million, including $130.0 million sold to the financial institution and derecognized from the condensed consolidated balance sheet. Total securitized accounts receivable include the Company’s residual interest in accounts receivable (“Residual Interest”) of $103.6 million. At December 30, 2006, securitized accounts receivable totaled $250.8 million, including $130.0 million sold to the financial institution and derecognized from the consolidated balance sheet, and including Residual Interest of $120.8 million. The Residual Interest represents the Company’s retained interest in receivables held by PFG Receivables Corporation. The Residual Interest was measured using the estimated discounted cash flows of the underlying accounts receivable, based on estimated collections and a discount rate approximately equivalent to the Company’s incremental borrowing rate. The loss on the sale of the undivided interest in receivables of $2.0 million and $1.9 million in the 2007 and 2006 quarters, respectively, and $5.7 million and $5.4 million in the 2007 and 2006 periods, respectively, is included in other expense, net, in the condensed consolidated statements of earnings and represents the Company’s cost of securitizing those receivables with the financial institution. At September 29, 2007, the rate under the Receivables Facility was 6.3% per annum.
		The key economic assumptions used to measure the Residual Interest at September 29, 2007 were a discount rate of 6.0% and an estimated life of approximately 1.5 months. At September 29, 2007, an immediate adverse change in the discount rate and estimated life of 10% and 20%, with other factors remaining constant, would reduce the fair value of the Residual Interest, with a corresponding increase in

~~8. Commitments and Contingencies~~9

TheTable Company's Fresh-cut segment has contracts to purchase produce, some of which have variable quantities, with minimum and maximum limits. The Company's minimum commitments under produce purchase contracts totaled $106.7 million at July 3, 2004, which expire at various times throughout 2004 and 2005. The Company's Fresh-cut and Customized segments also had outstanding purchase orders for capital projects totaling $3.0 million and $9.9 million, respectively, at July 3, 2004. At July 3, 2004, the Company's Broadline segment had contracts to purchase product totaling $8.1 million, which expire throughout 2004. Amounts due under these Fresh-cut, Customized and Broadline contracts were not included on the Company's condensed consolidated balance sheet as of July 3, 2004, in accordance with generally accepted accounting principles.Contents

The Company has entered into numerous operating leases, including leases of buildings, equipment, tractors and trailers. In certain of the Company's leases of tractors, trailers and other vehicles and equipment, the Company has provided residual value guarantees to the lessors. Circumstances that would require the Company to perform under the guarantees include either (1) the Company's default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) the Company's 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. The Company's residual value guarantees under these operating lease agreements typically range between 4% and 20% of the value of the leased assets at inception of the lease. These leases have original terms ranging from two to nine years and expiration dates ranging from 2004 to 2011. As of July 3, 2004, the undiscounted maximum amount of potential future payments under the Company's guarantees totaled $5.4 million, which would be mitigated by the fair value of the leased assets at lease expiration. The assessment as to whether it is probable that the Company will be required to make payments under the terms of the guarantees is based upon the Company's actual and expected loss experience. Consistent with the requirements of FASB Interpretation No. ("FIN") 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others," the Company has recorded $55,000 of the $5.4 million of potential future guarantee payments on its condensed consolidated balance sheet as of July 3, 2004.

		the loss on sale of receivables, but would not have a material impact on the Company’s consolidated financial condition or results of operations.

8.		*Goodwill and Other Intangible Assets*

		The following table presents details of the Company’s intangible assets as of September 29, 2007 and December 30, 2006:

In connection with certain acquisitions, the Company has entered into earnout agreements with certain of the former owners of the businesses that the Company has acquired. These agreements are based upon certain sales, operating profit, net earnings and affiliate distributor targets, as defined in each agreement. These earnout payments are for companies acquired in 2001 and 2002, and may include payments in cash and/or shares of the Company's common stock. As of July 3, 2004, the maximum potential earnout obligation, assuming all future earnout targets are met in their earliest possible years, totaled $23.3 million: $8.0 million in the remainder of 2004, $13.6 million in 2005 and $1.7 million in 2006. These contingent payments are not recorded on the Company's condensed consolidated balance sheet at July 3, 2004, in accordance with generally accepted accounting principles. If paid, these earnout payments would increase the goodwill of the companies acquired. If the future earnout targets are not met, these maximum amounts will be lower, or the Company may not be required to make any payments.


	As of September 29, 2007						As of December 30, 2006
	Gross						Gross
	Carrying		Accumulated				Carrying		Accumulated
(In thousands)	Amount		Amortization		Net		Amount		Amortization		Net

Intangible assets with definite lives:
Customer relationships	$	31,746	$	12,588	$	19,158	$	32,859	$	12,100	$	20,759
Trade names and trademarks		17,228		4,093		13,135		17,228		3,539		13,689
Deferred financing costs		3,570		2,577		993		3,570		2,332		1,238
Non-compete agreements		3,163		3,143		20		3,353		3,198		155

Total intangible assets with definite lives	$	55,707	$	22,401	$	33,306	$	57,010	$	21,169	$	35,841

Intangible assets with indefinite lives:
Goodwill*	$	368,535	$	12,026	$	356,509	$	368,535	$	12,026	$	356,509
Trade names*		11,869		135		11,734		11,869		135		11,734

Total intangible assets with indefinite lives	$	380,404	$	12,161	$	368,243	$	380,404	$	12,161	$	368,243

9* Amortization was recorded before the Company’s adoption of SFAS No. ~~Industry~~ ~~Segment~~142, ~~Information~~Goodwill and Other Intangible Assets.

The Company ~~has~~recorded ~~three~~amortization ~~operating~~expense ~~segments:~~of ~~broadline~~$0.8 ~~foodservice~~million ~~distribution ("Broadline"); customized foodservice distribution ("Customized");~~ and ~~fresh-cut~~$0.9 ~~produce~~million ~~processing~~in ~~("Fresh-cut"). Broadline~~the ~~markets~~2007 and ~~distributes~~2006 ~~more~~quarters, ~~than 60~~respectively,~~000~~ ~~national~~ and ~~proprietary~~$2.5 ~~brand~~million ~~food~~ and ~~non-food~~$2.8 ~~products~~million toin athe ~~total~~2007 ofand ~~approximately~~2006 47periods,~~000~~ ~~street and chain customers~~respectively. ~~Broadline~~ ~~consists~~These ofamounts 19included ~~distribution~~amortization ~~facilities that design their own product mix, distribution routes and delivery schedules to accommodate the needs~~ of adebt ~~large~~issuance ~~number~~costs of ~~customers~~approximately ~~whose~~$0.1 ~~individual~~million ~~purchases vary~~ in ~~size.~~both Inthe ~~addition,~~2007 ~~Broadline~~and ~~operates~~2006 ~~three~~quarters, ~~locations~~and ~~that provide merchandising services to independent foodservice distributors~~$0. ~~Customized~~2 ~~services~~million ~~family~~ and ~~casual-dining chain restaurants~~$0.3 ~~These~~million ~~customers~~in ~~generally~~the ~~prefer~~2007 ~~a centralized point of contact that facilitates item~~ and ~~menu~~2006 ~~changes~~periods, ~~tailored distribution routing and customer service~~respectively. The ~~Customized~~estimated ~~distribution~~future ~~network~~amortization ~~distributes~~expense ~~nationwide~~on ~~and~~intangible ~~internationally~~assets ~~from~~as ~~seven distribution facilities. Fresh-cut purchases, processes, packages and distributes a variety~~ of ~~packaged,~~September ~~ready-to-eat salads and other fresh-cut produce nationwide to food retailers. Fresh-cut also distributes various fresh produce offerings~~29, ~~primarily~~2007 tois ~~third-party~~as distributors for resale mainly to quick-service restaurants located throughout the United States. Fresh-cut operations are conducted at seven processing/distribution facilities and two distribution facilities.follows:

	Broadline			Customized		Fresh-cut		Corporate & Intersegment			Consolidated
(In thousands)		Amount
(In thousands)
2007 (remaining quarter)		$	804
2004 Quarter
2008			3,148
Net external sales	$	775,084		$	517,779	$	262,859	$	-		$	1,555,722
2009			3,146
Intersegment sales		188			77		3,658		(3,923	)		-
2010			3,056
Total sales		775,272			517,856		266,517		(3,923	)		1,555,722
2011			2,791
Operating profit		20,262			6,093		16,011		(7,063	)		35,303
2012			2,785
Total assets		815,224			156,420		672,372		149,613			1,793,629
Thereafter			17,576
Interest expense (income)		2,722			148		4,580		(2,664	)		4,786
Total amortization expense		$	33,306
Loss (gain) on sale of receivables		2,101			667		-		(2,262	)		506
Depreciation		3,258			1,073		7,003		846			12,180
Amortization		908			-		1,132		-			2,040
Capital expenditures		1,809			4,131		14,562		1,263			21,765

	Broadline		Customized		Fresh-cut		Corporate & Intersegment			Consolidated
9.		Share Repurchase and Retirement
(In thousands)
		During the 2006 period, the Company completed purchases under its $100 million repurchase program announced in August 2005, resulting in the repurchase of 1.5 million additional shares of its common stock at prices ranging from $25.93 to $29.61, for a total purchase price of $39.6 million, including transaction costs.
2003 Quarter
10.		Commitments and Contingencies
Net external sales	$	687,695	$	442,464	$	236,724	$	-		$	1,366,883
		At September 29, 2007, the Company’s Broadline and Customized segments had outstanding commitments for capital projects totaling $32.0 million and $3.2 million, respectively. Amounts due under these contracts
Intersegment sales		259		106		4,475		(4,840	)		-
Total sales		687,954		442,570		241,199		(4,840	)		1,366,883
Operating profit		20,620		5,953		21,543		(4,370	)		43,746
Total assets		774,024		132,232		647,346		119,185			1,672,787
Interest expense (income)		3,738		51		4,914		(3,748	)		4,955
Loss (gain) on sale of receivables		1,529		569		-		(1,720	)		378
Depreciation		3,457		869		5,527		585			10,438
Amortization		942		-		1,124		-			2,066
Capital expenditures		6,628		13,605		13,070		(390	)		32,913

	Broadline		Customized		Fresh-cut		Corporate & Intersegment			Consolidated
(In thousands)
2004 Period
Net external sales	$	1,498,735	$	1,018,665	$	503,389	$	-		$	3,020,789
Intersegment sales		455		154		7,852		(8,461	)		-
Total sales		1,499,190		1,018,819		511,241		(8,461	)		3,020,789
Operating profit		30,580		9,563		27,054		(15,139	)		52,058
Total assets		815,224		156,420		672,372		149,613			1,793,629
Interest expense (income)		5,802		319		9,262		(5,848	)		9,535
Loss (gain) on sale of receivables		4,051		1,317		-		(4,394	)		974
Depreciation		6,623		2,144		13,781		1,585			24,133
Amortization		1,808		-		2,263		-			4,071
Capital expenditures		4,113		5,580		30,275		2,931			42,899

	Broadline		Customized		Fresh-cut		Corporate & Intersegment			Consolidated
(In thousands)
2003 Period
Net external sales	$	1,330,378	$	855,406	$	450,204	$	-		$	2,635,988
Intersegment sales		472		200		8,273		(8,945	)		-
Total sales		1,330,850		855,606		458,477		(8,945	)		2,635,988
Operating profit		32,582		10,828		39,769		(9,029	)		74,150
Total assets		774,024		132,232		647,346		119,185			1,672,787
Interest expense (income)		7,559		116		9,596		(7,526	)		9,745
Loss (gain) on sale of receivables		2,561		1,071		-		(2,930	)		702
Depreciation		7,031		1,719		10,890		953			20,593
Amortization		1,885		-		2,259		-			4,144
Capital expenditures		8,255		16,267		27,944		655			53,121

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

		were not included on the Company’s condensed consolidated balance sheet as of September 29, 2007, in accordance with generally accepted accounting principles.

		The Company has entered into numerous operating leases, including leases of buildings, equipment, tractors and trailers. In certain of the Company’s leases of tractors, trailers and other vehicles and equipment, the Company has provided residual value guarantees to the lessors. Circumstances that would require the Company to perform under the guarantees include either (1) the Company’s default on the leases with the leased assets being sold for less than the specified residual values in the lease agreements, or (2) the Company’s decision not to purchase the assets at the end of the lease terms combined with the sale of the assets, with sale proceeds less than the residual value of the leased assets specified in the lease agreements. The Company’s residual value guarantees under these operating lease agreements typically range between 4% and 20% of the value of the leased assets at inception of the lease. These leases have original terms ranging from two to eight years and expiration dates ranging from 2007 to 2014. As of September 29, 2007, the undiscounted maximum amount of potential future payments under the Company’s guarantees totaled $7.5 million, which would be mitigated by the fair value of the leased assets at lease expiration. The assessment as to whether it is probable that the Company will be required to make payments under the terms of the guarantees is based upon the Company’s actual and expected loss experience. Consistent with the requirements of FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees of Indebtness of Others (“FIN 45”), the Company has recorded $80,000 of the $7.5 million of potential future guarantee payments on its condensed consolidated balance sheet as of September 29, 2007.

11.		*Sale-leaseback Transaction*

		During the 2007 period, the Company entered into a substitution of collateral and sale-leaseback transaction involving one of its Broadline operating facilities and one of its former fresh-cut segment operating facilities. This transaction resulted in the Company being released from a guarantee of future lease payments on one of its former fresh-cut segment facilities that was sold to Chiquita. The Company’s Broadline operating facility was sold to a third party and leased back pursuant to a lease agreement with an initial term expiring in 2026. This transaction resulted in a gain of approximately $2.9 million. In accordance with SFAS No. 98, Accounting for Leases: Sale-Leaseback Transactions involving Real Estate, the gain will be amortized over the life of the lease as a reduction of lease expense.

12.		*Industry Segment Information*

		The Company has two operating segments included in its continuing operations: broadline foodservice distribution (“Broadline”) and customized foodservice distribution (“Customized”). As previously discussed in Note 3, the Company’s former fresh-cut segment is accounted for as a discontinued operation. Broadline markets and distributes more than 65,000 national and proprietary brand food and non-food products to a total of over 41,000 street and chain customers. Broadline consists of 19 distribution facilities that design their own product mix, distribution routes and delivery schedules to accommodate the needs of a large number of customers whose individual purchases vary in size. In addition, Broadline operates three locations that provide merchandising services to independent foodservice and non-foodservice distributors. Customized services casual and family dining chain restaurants. These customers generally prefer a distribution system that facilitates overall program management, menu and promotional roll-out changes, individualized customer service and tailored distribution routing. The Customized distribution network distributes nationwide and internationally from eight distribution facilities.

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms "we," "our," "us," or "Performance Food Group" as used in this Form 10-Q refer to Performance Food Group Company and its subsidiaries. References in this Form 10-Q to the 2004 and 2003 quarters and periods refer to our fiscal three-month and six-month periods ended July 3, 2004 and June 28, 2003, respectively. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q.11

OverviewTable of Contents

Our net sales in the 2004 quarter and period increased 13.8% and 14.6% over the 2003 quarter and period, respectively, with all of our sales growth in the 2004 quarter and period coming from existing operations. Food price inflation contributed approximately 6% to our growth in net sales in the 2004 quarter and 5% to our growth in net sales in the 2004 period. Our Broadline and Customized segments experienced significant inflation in the 2004 quarter and period. Inflation was less than 1% in our Fresh-cut segment in both the 2004 quarter and period.


2007 Quarter					Corporate and			Total Continuing
(In thousands)	Broadline		Customized		Intersegment			Operations

Net external sales	$	966,211	$	612,677	$	—		$	1,578,888
Intersegment sales		299		52		(351	)		—
Total sales		966,510		612,729		(351	)		1,578,888
Operating profit		23,041		8,403		(6,248	)		25,196
Interest expense (income)		2,554		1,291		(4,297	)		(452	)
Loss (gain) on sale of receivables		2,883		740		(1,659	)		1,964
Depreciation		4,789		1,749		65			6,603
Amortization		728		—		—			728
Capital expenditures		26,353		4,301		46			30,700

Gross profit margin, which we define as gross profit as a percentage of net sales, declined in both the 2004 quarter and period compared to the 2003 quarter and period, driven primarily by our inability to leverage our cost infrastructure in the Fresh-cut segment due to the loss of contribution margin from certain foodservice customers that exited during the 2004 quarter and period and the slowing of the category growth at retail. Gross margin was also negatively impacted by the Fresh-cut segment's fruit initiative, described below. Broadline gross profit margin declined in the 2004 quarter and period versus the 2003 quarter and period, impacted by the lower, though improving, margins at Quality Foods, Inc., a shift in sales mix toward center-of-the-plate items, which include beef, poultry, seafood and other protein items, and inflation. Additionally, gross profit margin in our Customized segment was negatively impacted by inflation.


2006 Quarter					Corporate and			Total Continuing
(In thousands)	Broadline		Customized		Intersegment			Operations

Net external sales	$	864,516	$	565,249	$	—		$	1,429,765
Intersegment sales		129		47		(176	)		—
Total sales		864,645		565,296		(176	)		1,429,765
Operating profit		18,558		7,125		(5,572	)		20,111
Interest expense (income)		5,929		1,496		(7,849	)		(424	)
Loss (gain) on sale of receivables		2,977		745		(1,819	)		1,903
Depreciation		4,818		1,580		68			6,466
Amortization		817		—		—			817
Capital expenditures		7,955		1,023		20			8,998

Our Broadline segment's operating profit margin, which we define as operating profit as a percentage of net sales, in the 2004 quarter and period declined compared to the 2003 quarter and period, impacted by the lower gross profit margin and costs associated with transitioning into new multi-unit business.


2007 Period					Corporate and			Total Continuing
(In thousands)	Broadline		Customized		Intersegment			Operations

Net external sales	$	2,835,812	$	1,837,473	$	—		$	4,673,285
Intersegment sales		931		150		(1,081	)		—
Total sales		2,836,743		1,837,623		(1,081	)		4,673,285
Operating profit		57,221		25,250		(21,390	)		61,081
Interest expense (income)		4,317		3,709		(9,082	)		(1,056	)
Loss (gain) on sale of receivables		8,329		2,414		(5,031	)		5,712
Depreciation		14,596		5,069		195			19,860
Amortization		2,289		—		—			2,289
Capital expenditures		42,677		9,734		93			52,504

Our Customized segment was negatively affected in the 2004 quarter and period by incremental costs associated with temporary labor and related costs in connection with a labor dispute at one of our facilities that began in the fourth quarter of 2003. After the end of the 2004 quarter, we received a petition from our drivers in Elkton, Maryland, stating that they no longer wished to be represented by the union. Accordingly, we were legally obligated to withdraw recognition from the union. Going forward, we intend to add warehouse capacity in our Customized segment throughout 2004 and 2005 to accommodate future growth.


2006 Period					Corporate and			Total Continuing
(In thousands)	Broadline		Customized		Intersegment			Operations

Net external sales	$	2,596,465	$	1,750,820	$	—		$	4,347,285
Intersegment sales		398		167		(565	)		—
Total sales		2,596,863		1,750,987		(565	)		4,347,285
Operating profit		49,884		22,889		(20,410	)		52,363
Interest expense (income)		16,816		4,455		(21,833	)		(562	)
Loss (gain) on sale of receivables		7,988		2,304		(4,890	)		5,402
Depreciation		13,840		4,709		227			18,776
Amortization		2,523		—		—			2,523
Capital expenditures		30,610		3,656		233			34,499

Our Fresh-cut segment continued to grow sales in the packaged salad category at a rate higher than retail category growth. However, the rate of growth in the retail category industry-wide slowed during the 2004 quarter. While the category has occasionally experienced periods of slower growth, the slowdown in the 2004 quarter was significant. The most recent market data available to us indicates a continued slowing of the category growth. We are monitoring category growth trends and we will continue to assess any ongoing impact on our business. While our long-term plan has been to rationalize some of our Fresh-cut segment's foodservice business, this transition has been moving at a faster pace than anticipated. Our focus continues to be one of shifting our customer mix away from less stable customer relationships to more long-term partnerships with retail and foodservice customers. We will continue to experience an impact on our earnings into 2005 as we absorb costs for refocusing and retooling certain processing plants to a customer and product mix that we expect to be more stable and profitable. Also during the 2004 quarter, to meet customer needs, Fresh-cut rolled out new fruit products for certain key customers more quickly than planned. These rollouts increased our cost of goods sold as a percentage of net sales. We expect the increased costs to continue at a diminishing rate over the remainder of 2004.12

GoingTable forward, we continue to be very focused on managing the growth we are generating in our business, adding new capacity and driving operational improvements in each of our business segments. We continue to seek innovative means of servicing our customers and producing a unique product to distinguish ourselves from others in the marketplace.Contents

~~Results~~Total ofassets ~~Operations~~by reportable segment and reconciliation to the condensed consolidated balance sheets are as follows:

Net sales


(In thousands)	September 29, 2007		December 30, 2006

Broadline	$	935,899	$	901,752
Customized		271,939		261,975
Corporate & Intersegment		225,090		196,048

Total assets	$	1,432,928	$	1,359,775

		2004 Quarter						2003 Quarter					2004 Period							2003 Period
			Net		% of				Net		% of				Net		% of				Net		% of
(in thousands)			sales		total				sales		total				sales		total				sales		total
Broadline	$		775,272		49.8	%	$		687,954		50.3	%		$	1,499,190		49.6	%	$		1,330,850		50.5	%
Customized			517,856		33.3				442,570		32.4				1,018,819		33.7				855,606		32.4
Fresh-cut			266,517		17.1				241,199		17.6				511,241		16.9				458,477		17.4
Intersegment*			(3,923	)	(0.2	)			(4,840	)	(0.3	)			(8,461	)	(0.2	)			(8,945	)	(0.3	)
Total net sales	$		1,555,722		100.0	%	$		1,366,883		100.0	%		$	3,020,789		100.0	%	$		2,635,988		100.0	%

*IntersegmentTable salesof are sales between the segments, which are eliminated in consolidation.Contents

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

~~Broadline~~Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” the “Company,” or “Performance Food Group” as used in this Form 10-Q refer to Performance Food Group Company and its subsidiaries other than those making up our former fresh-cut segment. References in this Form 10-Q to the 2007 and 2006 quarters and periods refer to our fiscal three-month and nine-month periods ended September 29, 2007 and September 30, 2006, respectively. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Form 10-Q and our consolidated financial statements and the related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the fiscal year ended December 30, 2006.

~~Broadline~~In ~~net~~2005, ~~sales~~we ~~represented~~sold ~~49.8%~~all ~~and 50.3%~~ of our ~~consolidated~~stock ~~net sales~~ in the ~~2004~~companies ~~and~~comprising ~~2003~~our ~~quarters,~~fresh-cut ~~respectively. Broadline~~segment ~~net~~to ~~sales~~Chiquita Brands ~~were~~International, 49Inc.6% ~~and~~In ~~50.5%~~accordance ofwith ~~our~~SFAS ~~consolidated net sales in 2004 and 2003 periods~~No. 144, ~~respectively. The~~Accounting ~~decrease~~for asthe aImpairment ~~percentage~~or Disposal of ~~our~~Long-Lived ~~consolidated~~Assets, ~~net~~it ~~sales~~is inaccounted ~~the~~for ~~2004~~as ~~quarter~~a ~~and~~discontinued ~~period~~operation. ~~compared~~The tofollowing detailed ~~the~~discussion ~~2003 quarter~~ and ~~period~~analysis ~~was~~is ~~due~~representative ~~primarily~~of ~~to increased sales in~~ our ~~Customized~~continuing ~~segment,~~operations ~~discussed below~~only.

~~Customized~~Overview

~~Customized~~Our net sales ~~represented~~in ~~33.3%~~the ~~and~~2007 32quarter increased 10.4% ofcompared ~~our~~to ~~consolidated~~the ~~net~~2006 ~~sales~~quarter and increased 7.5% in the ~~2004~~2007 ~~and~~period ~~2003~~compared ~~quarters,~~to ~~respectively~~the 2006 period. ~~Customized~~ ~~net~~Inflation ~~sales~~was ~~were~~approximately ~~33.7~~5% in the 2007 quarter and ~~32.~~4% ofin ~~our~~the ~~consolidated~~2007 ~~net~~period. ~~sales~~Sales in the ~~2004~~2007 quarter and ~~2003~~period ~~periods,~~were ~~respectively~~impacted by increased street sales in our Broadline segment and increased sales to existing customers in our Customized segment. ~~The~~ Our ~~increase~~gross margin percentage, which we define as gross profit as a percentage of ~~our consolidated net~~ sales, decreased in the ~~2004~~2007 quarter and period ~~compared~~primarily due to the ~~2003~~impact ~~quarter~~of inflation in our Broadline and Customized ~~period~~segments, ~~was~~partially ~~due~~offset by improvements related to our procurement initiatives in our Broadline segment. While our operating expenses increased primarily due to increased personnel and insurance costs in both the 2007 quarter and period and stock compensation in the 2007 period, our operating expense ratio, which we define as operating expenses as a percentage of net sales, decreased, primarily due to ~~the~~higher ~~new~~sales levels ~~customers~~and ~~discussed~~improved ~~above~~operating efficiencies.

~~Fresh-cut~~Going forward, we will continue to be focused on managing the growth we are generating in our business, adding new capacity and driving operational improvements in each of our business segments. We continue to seek innovative means of servicing our customers to distinguish ourselves from others in the marketplace.

Fresh-cut segment net sales represented 17.1% and 17.6% of our consolidated net sales in the 2004 and 2003 quarters, respectively. Fresh-cut net sales were 16.9% and 17.4% of our consolidated net sales in the 2004 and 2003 periods, respectively. The decrease as a percentage of our consolidated net sales in the 2004 quarter and period compared to the 2003 quarter and period was due primarily to the sales growth in our Customized segment discussed above.14

CostTable of goods soldContents

~~Consolidated. In~~Results ~~the 2004 quarter, cost~~ of goods sold increased $168.4 million, or 14.6%, to $1.32 billion, compared to $1.15 billion in the 2003 quarter. In the 2004 period, cost of goods sold increased $345.2 million, or 15.5%, to $2.57 billion, compared to $2.22 billion in the 2003 period. Cost of goods sold as a percentage of net sales, or the cost of goods sold ratio, was 84.9% in the 2004 quarter and 85.0% in the 2004 period, compared to 84.3% in both the 2003 quarter and period. The increase in the cost of goods sold was due primarily to inflation and other factors discussed below.Operations

~~Broadline~~Net Sales

Customized


	2007 Quarter						2006 Quarter						2007 Period						2006 Period
Net Sales				% of						% of						% of						% of
(In thousands)	Net Sales			Total			Net Sales			Total			Net Sales			Total			Net Sales			Total

Broadline	$	966,510			61.2	%	$	864,645			60.5	%	$	2,836,743			60.7	%	$	2,596,863			59.7	%
Customized		612,729			38.8	%		565,296			39.5	%		1,837,623			39.3	%		1,750,987			40.3	%
Intersegment*		(351	)		—			(176	)		—			(1,081	)		—			(565	)		—

Net sales	$	1,578,888			100.0	%	$	1,429,765			100.0	%	$	4,673,285			100.0	%	$	4,347,285			100.0	%

~~Fresh-cut~~* Intersegment sales are sales between the segments, which are eliminated in consolidation.

~~Gross~~Consolidated. ~~profit~~In the 2007 quarter, net sales increased $149.1 million, or 10.4%, to $1.6 billion. In the 2007 period, net sales increased $326.0 million, or 7.5%, to $4.7 billion. We estimated that inflation was approximately 5% in the 2007 quarter and 4% in the 2007 period. Both segments are discussed in more detail in the following paragraphs.

Broadline. In the ~~2004~~2007 quarter, ~~gross~~Broadline ~~profit~~net sales increased $20101.4 9 million, or 911.58%, to $~~235~~966.4 5 million, compared to $~~215~~864.0 6 million in the ~~2003~~2006 quarter. In the ~~2004~~2007 period, ~~gross~~Broadline ~~profit~~net sales increased $39239.6 9 million, or 9.62%, to $~~453~~2.~~9 million~~8 billion, compared to $~~414~~2.36 billion ~~million~~ in the ~~2003~~2006 period. ~~Gross~~ We ~~profit~~estimated ~~margin~~that ~~was~~food ~~15.1~~price inflation of approximately 7%, primarily in the ~~2004~~dairy, ~~quarter~~meat and poultry ~~15.0%~~product incategories, ~~the~~contributed ~~2004~~to ~~period,~~the ~~respectively,~~increase ~~compared~~in toBroadline’s ~~15.7%~~net sales in both the ~~2003~~2007 quarter and period. In the 2007 quarter and period, sales also increased due to increased street sales. ~~The~~ ~~decline~~In inthe ~~gross~~2007 ~~profit~~period, ~~margin~~sales ingrowth ~~all~~was partially offset by decreased sales to certain multi-unit accounts as a result of our ~~segments~~planned isexit ~~discussed~~of ~~above~~that inbusiness ~~"Cost~~during of2005 ~~goods~~and ~~sold~~the first quarter of 2006."

~~Operating~~Broadline ~~expenses~~net sales represented 61.2% and 60.5% of our net sales in the 2007 and 2006 quarters, respectively. Broadline net sales represented 60.7% and 59.7% of our net sales in the 2007 and 2006 periods, respectively. The increase as a percentage of our net sales was primarily due to the increase in sales and the impact of inflation, as noted above.

~~Consolidated~~Customized. In the ~~2004~~2007 quarter, ~~operating~~Customized ~~expenses~~net sales increased $2847.8 4 million, or ~~16.~~8.4%, to $~~200~~612.1 7 million, compared to $~~171~~565.3 million in the ~~2003~~2006 quarter. In the ~~2004~~2007 period, ~~operating~~Customized ~~expenses~~net sales increased $6186.7 6 million, or 185.10%, to $~~401~~1.~~9 million, compared to $340~~8 billion.2 ~~million~~The increase in the ~~2003~~2007 ~~period. Operating~~quarter ~~expenses~~and asperiod awas primarily ~~percentage~~due ofto ~~net~~continued ~~sales~~growth ~~were~~with 12existing customers.9% inWe ~~the~~estimated ~~2004~~that ~~quarter~~food ~~and~~price ~~13.3%~~inflation of inapproximately ~~the~~2% ~~2004~~contributed ~~period,~~to ~~compared~~our tosales ~~12.5%~~growth in the ~~2003~~2007 quarter. ~~and~~Inflation ~~12.9~~was approximately 1% in the ~~2003~~2007 period. ~~The~~ ~~increase~~Customized innet ~~operating~~sales ~~expenses~~represented as38.8% aand ~~percentage~~39.5% of ~~net~~our net sales ~~was~~in ~~due~~the ~~mainly~~2007 toand ~~increased~~2006 ~~selling~~quarters, ~~and~~respectively. ~~overhead~~Customized ~~costs~~net insales represented 39.3% and 40.3% of our ~~Fresh-cut~~net ~~segment~~sales in the 2007 and ~~increased~~2006 ~~operating~~periods, ~~expenses~~respectively. The decrease in ~~our~~the ~~Customized~~2007 quarter ~~segment~~and ~~related~~period was due to the ~~labor~~increase ~~dispute~~in Broadline sales, as discussed ~~below~~above.

~~Broadline~~We have recently added approximately $250 million in annualized new business in our Customized segment. We anticipate the rollout of this business to be completed in the fourth quarter of 2007.

~~Customized.~~Cost of goods sold

~~Fresh-cut~~Consolidated. In the 2007 quarter, cost of goods sold increased $135.6 million, or 11.0%, to $1.4 billion. In the 2007 period, cost of goods sold increased $291.0 million, or 7.7%, to $4.1 billion. Cost of goods sold as a percentage of net sales, or the cost of goods sold ratio, was 86.8% in the 2007 quarter and 87.0% in the 2007 period, compared to 86.4% in the 2006 quarter and 86.8% in the 2006 period. The increase in the cost of goods sold ratio in the 2007 quarter and period was primarily the result of inflation in both segments and a sales mix shift in our Broadline segment.

~~Corporate~~Broadline. Our Broadline segment’s cost of goods sold as a percentage of net sales in the 2007 quarter and period increased compared to the 2006 quarter and period due to inflation and sales mix changes, partially offset by improvements made related to our procurement initiatives. While inflation negatively impacted our percentage margin for the quarter and period, our gross profit dollars were not as impacted by the significant inflation in dairy,

~~Operating profit~~15

		2004 Quarter					2003 Quarter						2004 Period							2003 Period
			Operating		% of				Operating		% of				Operating		% of				Operating		% of
(In thousands)			profit		sales				profit		sales				profit		sales				profit		sales
Broadline	$		20,262		2.6	%		$	20,620		3.0	%		$	30,580		2.0	%	$		32,582		2.5	%
Customized			6,093		1.2				5,953		1.4				9,563		0.9				10,828		1.3
Fresh-cut			16,011		6.0				21,543		8.9				27,054		5.3				39,769		8.7
Corporate and Intersegment			(7,063	)	-				(4,370	)	-				(15,139	)	-				(9,029	)	-
Total operating profit	$		35,303		2.3	%		$	43,746		3.2	%		$	52,058		1.7	%	$		74,150		2.8	%

~~Consolidated~~meat and poultry categories. This is due in large part to the customary pricing of multi-unit and center-of-the-plate product categories, both of which are generally priced on a fee per case or pound basis versus a percentage mark-up on cost.

~~Broadline~~Customized. Our Customized segment’s cost of goods sold as a percentage of net sales in the 2007 quarter increased compared to the 2006 quarter primarily due to inflation of approximately 2% in the quarter. Cost of goods sold as a percentage of net sales in the 2007 period decreased compared to the 2006 period primarily due to a favorable product mix shift, partially offset by inflation of approximately 1% in the 2007 period.

~~Customized.~~ Gross profit

~~Fresh-cut~~In the 2007 quarter, gross profit increased $13. 6 million, or 7.0%, to $208.0 million, compared to $194.4 million in the 2006 quarter. In the 2007 period, gross profit increased $35.0 million, or 6.1%, to $609.8 million, compared to $574.8 million in the 2006 period. Gross profit margin was 13.2% in the 2007 quarter and 13.0% in the 2007 period, compared to 13.6% in the 2006 quarter and 13.2% in the 2006 period. The decline in our gross profit margin in the 2007 quarter and period is primarily due to inflation; however, as noted above, even though inflation caused our gross profit margin to decline, our gross profit dollars were not impacted as much by inflation as our gross profit margin.

~~Other~~Operating ~~expense, net~~expenses

~~Other expense, net, was $4~~Consolidated.9 ~~million~~In in the ~~2004~~2007 quarter, ~~and~~operating expenses increased $98.6 5 million, inor ~~the~~4.9%, ~~2004~~to ~~period~~$182.7 million, compared to $5174.1 2 million in the ~~2003~~2006 quarter ~~and $9~~.0 ~~million~~In in the ~~2003~~2007 period~~. Included in other expense~~, ~~net,~~operating ~~was~~expenses increased ~~interest expense of~~ $426.8 3 million, ~~and~~or $5.0 ~~million in the 2004 and 2003 quarters~~%, ~~respectively,~~to ~~and~~ $9548.5 8 million, incompared ~~the~~to ~~2004 period and~~ $9522.7 5 million in the ~~2003~~2006 period. ~~Other~~ Operating ~~expense,~~expenses ~~net,~~as ~~also~~a ~~included~~percentage ~~losses on the sale~~ of ~~the~~net ~~undivided~~sales ~~interest~~were in11.6% ~~receivables of $506,000~~ in the ~~2004~~2007 quarter and ~~$974,000~~11.7% in the 2007 ~~2004~~ period, ~~$378,000~~compared to 12.2% in the ~~2003~~2006 quarter and ~~$702,000~~12.0% in the ~~2003~~2006 period. ~~These~~ ~~losses~~Our ~~are~~operating expenses ~~related~~increased toin ~~our receivables purchase facility, referred to as~~ the ~~Receivables~~2007 ~~Facility,~~quarter and ~~represent~~period, ~~the~~primarily ~~discount~~due ~~from~~to ~~carrying~~increased ~~value~~personnel ~~that~~and insurance wecosts ~~incur from our sale of an undivided interest~~ in our ~~receivables~~Broadline toand ~~the~~Customized ~~financial~~segments ~~institution. The~~and increased ~~Receivables~~professional ~~Facility~~fees isand ~~discussed~~stock ~~below~~compensation in ~~"Liquidity~~our ~~and Capital Resources~~Corporate segment.~~" Also~~ ~~included~~Our inoperating ~~other~~ expense, ~~net,~~ratio indeclined in the ~~2003~~2007 quarter and period ~~was~~as a ~~gain~~result of ~~$956,000~~higher onsales ~~the~~and ~~sale~~improved operating ~~of our investment in a fresh-cut produce processing facility~~efficiencies.

~~Income~~Broadline. ~~tax~~Our Broadline segment’s operating expenses increased in the 2007 quarter and period from the 2006 quarter and period, primarily due to increased personnel and insurance costs. The operating expense ratio declined in the 2007 quarter and period due to increased sales and improved operating efficiencies, primarily as a result of increased warehouse and transportation productivity.

~~Income tax expense was $11~~Customized.6 ~~million~~Our inCustomized ~~the~~segment’s ~~2004~~operating ~~quarter,~~expenses ~~$16.2~~as ~~million~~a inpercentage ~~the~~of ~~2004~~sales ~~period,~~decreased ~~$14.7 million~~ in the 2007 ~~2003~~ quarter ~~and~~from ~~$24.7 million in~~ the ~~2003~~2006 ~~period. As~~quarter aprimarily ~~percentage~~due ofto ~~earnings~~increased ~~before~~sales ~~income taxes, the provision for income taxes was 38.1%~~ in the ~~2004~~2007 quarter and remained ~~period~~relatively ~~and~~flat ~~38.0%~~ in the ~~2003~~2007 ~~quarter and~~ period~~. Our~~ ~~effective~~compared ~~tax rate increased from 38.0%~~ to ~~38.1% in~~ the ~~second~~2006 ~~quarter of 2004 as a result of recent state tax law changes and valuation allowances that we recorded against net operating loss carryforwards~~period.

~~Net~~Corporate. ~~earnings~~Our Corporate segment’s operating expenses increased in the 2007 quarter compared to the 2006 quarter primarily as a result of increased professional fees and stock compensation expense and increased in the 2007 period compared to the 2006 period primarily as a result of increased stock compensation expense.

InOperating the 2004 quarter, net earnings decreased $5.1 million, or 21.5%, to $18.8 million from $23.9 million in the 2003 quarter. In the 2004 period, net earnings decreased $14.1 million, or 34.9%, to $26.3 million from $40.4 million in the 2003 period. Net earnings as a percentage of net sales were 1.2% in the 2004 quarter and 1.8% in the 2003 quarter. Net earnings as a percentage of net sales were 0.9% in the 2004 period, compared to 1.5% in the 2003 period.Profit

Diluted net earnings per common share


	2007 Quarter						2006 Quarter						2007 Period						2006 Period
Operating Profit	Operating			% of			Operating						Operating			% of			Operating			% of
(In thousands)	Profit			Sales			Profit			% of Sales			Profit			Sales			Profit			Sales

Broadline	$	23,041			2.4	%	$	18,558			2.1	%	$	57,221			2.0	%	$	49,884			1.9	%
Customized		8,403			1.4	%		7,125			1.3	%		25,250			1.4	%		22,889			1.3	%
Corporate		(6,248	)		—			(5,572	)		—			(21,390	)		—			(20,410	)		—

Operating profit	$	25,196			1.6	%	$	20,111			1.4	%	$	61,081			1.3	%	$	52,363			1.2	%

~~Diluted net earnings per common share, or EPS, is computed by dividing net income available to common shareholders plus dilutive after-tax interest on our $201~~Consolidated.3 million aggregate principal amount of 5½% convertible subordinated notes due in 2008, referred to as the Convertible Notes, (numerator) by the weighted-average number of common shares and dilutive potential common shares outstanding during the period (denominator). In the ~~2004~~2007 quarter, ~~diluted~~operating ~~EPS~~profit ~~decreased~~increased ~~20.4% to~~ $05.~~39 from $0.49 in the 2003 quarter. In the 2004 period~~1 million, ~~diluted~~or ~~EPS decreased 33~~25.3%, to $025.~~56 from $0.84 in the 2003 period. In the 2004 and 2003 quarters and the 2003 period~~2 million, ~~after-tax~~compared ~~interest~~to ~~expense of~~ $120.~~9 million for the quarters and $3.7 million for the 2003 period and common share equivalents of 6.~~1 million ~~were included~~ in the ~~calculation~~2006 ~~of diluted EPS because of their dilutive effect on EPS~~quarter. In the ~~2004~~2007 period, ~~after-tax~~operating ~~interest~~profit increased ~~expense of~~ $38.7 million, ~~and~~or ~~common share equivalents of 6~~16.16%, ~~million~~to ~~were excluded from the calculation of diluted EPS because they were anti-dilutive~~$61.1

~~Liquidity and Capital Resources~~16

WeTable have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facilities, the issuance of long-term debt, the sale of undivided interests in receivables sold under the Receivables Facility, operating leases, normal trade credit terms and the sale of our common stock. Despite our growth in net sales, we have reduced our working capital needs by financing our inventory principally with accounts payable and outstanding checks in excess of deposits. We typically fund our acquisitions, and expect to fund future acquisitions, with our existing cash, additional borrowings under our revolving credit facility and the issuance of debt or equity securities.Contents

~~Cash~~million, ~~and~~compared ~~cash~~to ~~equivalents totaled~~ $5552.1 4 million atin ~~July~~the 3,2006 ~~2004~~period. Operating profit margin, andefined ~~increase~~as operating profit as a percentage of ~~$16~~net sales, was 1.26% ~~million~~in ~~from~~the ~~January~~2007 quarter and 1.3% in the 2007 period, ~~2004~~compared to 1. ~~The~~4% ~~increase~~in ~~was~~the ~~due~~2006 toquarter ~~cash~~and ~~provided~~1.2% in the 2006 period. Consolidated operating profit in the 2007 quarter and period was positively impacted by improved operating ~~activities~~efficiencies, the continued growth of ~~$96.2~~higher ~~million~~margin street sales and procurement initiatives in our Broadline segment, partially offset by ~~cash~~increased ~~used~~insurance ~~investing~~costs ~~activities~~in ofour ~~$43.6~~Broadline ~~million~~ and ~~cash~~Customized ~~used~~segments and stock compensation in ~~financing~~our ~~activities~~Corporate ofsegment ~~$36.4~~and ~~million. Operating,~~increased professional ~~investing~~fees ~~and~~in ~~financing~~the ~~activities~~2007 ~~are~~quarter ~~discussed~~in ~~below~~our Corporate segment.

Broadline. Our Broadline segment’s operating profit margin was 2.4% in the 2007 quarter and 2.0% in the 2007 period, compared to 2.1% in the 2006 quarter and 1.9% in the 2006 period. Operating profit ~~activities~~margin in the 2007 quarter and period was positively impacted by procurement initiatives, improved operating efficiencies and approximately $1.8 million of insurance proceeds related to Hurricane Katrina, partially offset by the impact of inflation, primarily in the dairy, meat and poultry product categories.

InCustomized. ~~the~~Our ~~2004~~Customized ~~period,~~segment’s ~~we generated cash from~~ operating ~~activities~~profit ofmargin ~~$96.2~~was ~~million, compared to $100~~1.64% ~~million~~ in ~~the 2003 period. Cash provided by operating activities for~~ both the ~~2004~~2007 ~~and~~quarter ~~2003 periods was primarily due to increased sales in all of our business segments, partially offset by cost of goods sold~~ and ~~operating expenses~~ period, ~~discussed~~compared ~~above~~to ~~in "Results of Operations~~1.~~" Increases~~3% in ~~trade~~both ~~accounts~~the ~~payable,~~2006 ~~accrued~~quarter ~~expenses~~ and ~~deferred~~period. ~~tax~~Operating ~~liability,~~profit ~~partially~~margin ~~offset by an increase~~ in ~~inventories, also contributed to cash provided by operating activities in~~ the ~~2004~~2007 quarter ~~period. The increase in trade accounts payable was due primarily to higher inventory levels~~ and ~~timing of cash disbursements, while accrued expenses increased mainly due to increased liabilities for employee compensation, benefit costs, insurance and professional fees. In the 2003~~ period, ~~increased~~was ~~levels~~positively ofimpacted ~~trade~~by ~~accounts~~improved ~~payable,~~operating ~~accrued~~efficiencies ~~expenses~~ and ~~income~~a ~~taxes~~favorable product ~~payable~~mix ~~and decreased levels of inventories, partially offset by increased levels of accounts receivable, contributed to cash provided by operating activities~~shift.

~~Investing~~Other ~~activities~~expense, net

~~During~~Other ~~the~~expense, ~~2004 period~~net, wewas ~~used~~ $431.6 5 million ~~for~~in ~~investing~~the ~~activities,~~2007 ~~compared~~quarter toand $594.7 5 million in the ~~2003~~2007 period~~. Investing~~, compared ~~activities~~to ~~include~~$1.4 million in the ~~acquisition~~2006 ofquarter ~~businesses~~ and ~~additions~~$4.6 million toin ~~and~~the ~~disposals~~2006 ofperiod. ~~property~~Included in other expense, ~~plant~~net, ~~and~~was ~~equipment. Capital~~interest ~~expenditures~~expense ~~were~~of $420.95 million and $0.4 million in the ~~2004~~2007 ~~period~~and 2006 quarters, respectively, and $~~53.~~1.6 million and $1.1 million in the ~~2003~~2007 ~~period~~and 2006 periods, respectively. In The increase from the ~~2004~~2006 ~~period,~~quarter ~~capital~~and ~~expenditures~~period ~~totaled~~was ~~$4.1~~due ~~million~~to ininterest ~~our~~expense ~~Broadline~~associated ~~segment,~~with $5a capital lease.6 ~~million~~Also included in ~~our~~other ~~Customized~~expense, ~~segment~~net, was interest income of $301.30 million and $0.8 million in the ~~our~~2007 ~~Fresh-cut~~and ~~segment~~2006 quarters, respectively, and $2.97 million and $1.7 million in ~~our~~the ~~Corporate~~2007 ~~segment~~and 2006 periods, respectively. ~~Capital~~ ~~expenditures~~The inincrease ~~our~~from ~~Fresh-cut~~the ~~segment~~2006 ~~consisted~~quarter ~~mainly~~and ofperiod anwas ~~expansion~~primarily ofdue ~~one~~to ofan increase in our ~~processing~~cash ~~facilities~~balance ~~and~~available ~~additional~~for ~~fruit~~investment. ~~and~~Other ~~tender~~expense, ~~leaf~~net, ~~processing~~also ~~equipment. We~~included ~~expect~~losses ~~our~~on the ~~total~~sale ~~2004~~of ~~capital~~the ~~expenditures~~undivided tointerest ~~range~~in ~~between~~receivables ~~$120~~of $2.0 million and $~~140 million~~1. ~~Capital~~9 million ~~expenditures were higher~~ in the ~~2003~~2007 ~~period~~and 2006 quarters, respectively, and ~~included~~$5.7 million ~~our~~and ~~purchase~~$5.4 million ofin ~~two~~the ~~distribution~~2007 ~~centers~~and ~~totaling~~2006 ~~$15~~periods, respectively.3 ~~million~~The ~~(one~~increase infrom ~~our~~the ~~Broadline~~2006 ~~segment~~quarter and ~~one~~period inwas ~~our~~due ~~Customized~~to ~~segment),~~higher ~~expansion~~interest ofrates on our ~~Customized~~receivables facility. inThe ~~Maryland~~receivables ~~and~~facility ~~fresh-cut~~is ~~processing~~discussed ~~equipment~~below in ~~our~~“Liquidity ~~Fresh-cut~~and ~~segment~~Capital Resources.”

InIncome ~~the~~tax 2004 period, net cash paid for acquisitions consisted of $1.1 million primarily related to contractual obligations in the purchase agreement for Carroll County Foods, Inc., which we acquired in 2000. Net cash paid for acquisitions in the 2003 period was $11.4 million, including $11.0 million paid to the former shareholders of Fresh International Corp. and its subsidiaries, collectively Fresh Express, for certain contractual obligations and associated taxes related to the purchase agreement for Fresh Express. We acquired Fresh Express in 2001. Also in the 2003 period, net cash paid for acquisitions included $1.9 million, primarily related to contractual obligations in the purchase agreement for Carroll County Foods. In the 2003 period, net cash paid for acquisitions also included $1.6 million received as a result of the closing net worth adjustment and certain related claims in connection with our 2002 acquisition of Middendorf Meat Company. In the 2003 period, we also received proceeds of $4.5 million from the sale of our investment in a fresh-cut produce processing facility, recording a gain on the sale of $956,000.expense

~~Financing~~Income ~~activities~~tax expense was $7.7 million in the 2007 quarter and $20.5 million in the 2007 period, compared to $6.6 million in the 2006 quarter and $17.8 million in the 2006 period. As a percentage of earnings before income taxes, the provision for income taxes was 32.3% and 36.3% in the 2007 quarter and period, respectively, compared to 35.1% and 37.2% in the 2006 quarter and period, respectively. The decrease in the effective tax rate in the 2007 quarter and period compared to the 2006 quarter and period was primarily due to the recognition of previously unrecognized tax benefits as the statutes of limitations on certain contingencies expired in the 2007 quarter. See Note 6 to the condensed consolidated financial statements.

InEarnings ~~the~~from ~~2004~~continuing period, we repaid $63.2 million of borrowings outstanding under our revolving credit facility, referred to as the Credit Facility. In the 2003 period, we repaid $19.8 million of borrowings under our Credit Facility. We also paid $732,000 for debt issuance costs related to the Credit Facility in the 2003 period.operations

~~Our~~In ~~$350.0 million Credit Facility expires in 2006 and bears interest at a floating rate equal to, at our election,~~ the 2007 ~~agent bank's prime rate or a spread over LIBOR. This rate varies based upon our senior leverage ratio~~quarter, ~~which~~earnings ~~excludes~~from ~~subordinated~~continuing ~~debt,~~operations ~~and is defined in the credit agreement~~increased $3. ~~The Credit Facility has an annual commitment fee~~9 million, ~~ranging~~or ~~from 0~~32.201%, to 0$16.~~25% of the average daily unused portion of the total facility~~1 million, ~~based~~compared onto ~~our senior leverage ratio, as defined in the credit agreement~~$12. ~~The~~2 million ~~Credit Facility also requires the maintenance of certain financial ratios, as defined~~ in the ~~credit~~2006 ~~agreement,~~quarter and ~~contains~~increased ~~customary~~$6.0 million, ~~events~~or ~~of default~~20. ~~The~~0%, ~~Credit Facility allows for the issuance of up~~ to $9036.0 million ofin ~~standby letters of credit, which reduce borrowings available under~~ the ~~Credit~~2007 ~~Facility. At July 3~~period, ~~2004,~~compared weto ~~had~~ $2030.0 million ofin ~~borrowings~~the ~~outstanding,~~2006 ~~$51~~period.5 ~~million~~Earnings ofas ~~letters~~a percentage of ~~credit~~net ~~outstanding~~sales ~~and~~were ~~$278~~1.50% ~~million~~and ~~available~~0.9% ~~under~~in the ~~Credit~~2007 ~~Facility,~~and ~~subject~~2006 ~~to compliance with customary borrowing conditions. At July 3~~quarter, ~~2004~~respectively, ~~our~~and ~~borrowings~~0.8% ~~under~~and 0.7% in the ~~Credit~~2007 ~~Facility~~and ~~bore~~2006 ~~interest~~periods, ~~at a rate of 1~~respectively.~~69% per annum. Interest is payable monthly.~~

~~Our~~Diluted ~~associates~~net ~~who~~earnings ~~exercised~~per ~~stock~~common ~~options and purchased our stock under the employee stock purchase plan provided $6.8 million of proceeds in the 2004 period, compared to $4.7 million of proceeds in the 2003 period.~~share

~~Checks~~Diluted innet ~~excess~~earnings ofper ~~deposits~~common ~~increased~~share byfrom ~~$20.7~~continuing ~~million~~operations, inor ~~the~~EPS, ~~2004~~is ~~period~~computed ~~and decreased~~ by ~~$12.9~~dividing earnings ~~million~~from incontinuing ~~the~~operations ~~2003~~available ~~period. Checks~~to incommon ~~excess~~shareholders ofby ~~deposits~~the ~~represent~~weighted ~~checks~~average ~~that~~number of wecommon ~~have~~shares ~~written~~and ~~that~~dilutive ~~are~~potential ~~not~~common ~~yet~~shares ~~cashed~~outstanding byduring the ~~payee~~period. ~~and~~In ~~in total exceed~~ the ~~current~~2007 quarter, ~~available~~diluted ~~cash~~EPS ~~balance~~from atcontinuing ~~the~~operations ~~respective~~increased ~~bank~~$0. ~~The~~11 ~~increase~~to in$0.46 ~~checks~~from $0.35 in ~~excess~~the of2006 quarter. ~~deposits~~In in the ~~2004~~2007 period, isdiluted ~~related~~EPS tofrom ~~our~~continuing ~~efforts~~operations increased $0.17 to ~~improve~~$1.03 ~~cash~~from $0.86 ~~management~~in the 2006 period.

We believe that our cash flows from operations, borrowings under our Credit Facility and the sale of undivided interests in receivables under the Receivables Facility, discussed below, will be sufficient to fund our operations and capital expenditures for the foreseeable future. However, we will likely require additional sources of financing to the extent that we make additional acquisitions in the future.17

OffTable Balanceof Sheet Activities Contents

AtLiquidity ~~July 3, 2004, securitized accounts receivable under our Receivables Facility totaled $203.1 million, including $110.0 million sold to the financial institution~~ and ~~derecognized~~Capital from our consolidated balance sheet. Total securitized accounts receivable includes our residual interest in accounts receivable of $93.1 million. The Residual Interest represents our retained interest in receivables held by PFG Receivables Corporation. We measure the Residual Interest using the estimated discounted cash flows of the underlying accounts receivable, based on estimated collections and a discount rate approximately equivalent to our incremental borrowing rate. The loss on sale of the undivided interest in receivables of $506,000 and $378,000 in the 2004 and 2003 quarters, respectively, and $974,000 and $702,000 in the 2004 and 2003 periods, respectively, is included in other expense, net, in our consolidated statements of earnings and represents our cost of securitizing those receivables with the financial institution. See Note 5 to our condensed consolidated financial statements for further discussion of our Receivables Facility. In addition, our 2003 Annual Report on Form 10-K contains a discussion of why our Receivables Facility is considered off balance sheet financing and describes other activities, which may be defined as off balance sheet financing. On June 28, 2004, we extended the term of the Receivables Facility through June 27, 2005.Resources

~~Business~~We ~~Combinations~~have historically financed our operations and growth primarily with cash flows from operations, borrowings under our credit facilities, the issuance of long-term debt, the sale of undivided interests in receivables sold under the Receivables Facility, operating leases, normal trade credit terms and the sale of our common stock. We have reduced our working capital needs by financing our inventory principally with accounts payable and outstanding checks in excess of deposits. We typically fund our acquisitions, and expect to fund future acquisitions, with our existing cash, additional borrowings under our revolving credit facility and the issuance of debt or equity securities.

InCash ~~the~~and ~~2004~~cash ~~period,~~equivalents wetotaled ~~paid~~ $197.1 5 million ~~and issued approximately 22,000 shares of our common stock, valued~~ at ~~approximately $750~~September 29,~~000,~~ ~~primarily related to contractual obligations in the purchase agreement for Carroll County Foods~~2007, ~~which~~an weincrease ~~acquired~~of ~~in 2000~~$22. In4 million from ~~the 2003 period~~December 30, ~~we paid $11~~2006.0 ~~million~~The toincrease ~~the~~was ~~former~~due ~~shareholders of Fresh Express for certain contractual obligations and associated taxes related~~ to ~~the~~cash ~~purchase~~provided ~~agreement~~by ~~for~~operating ~~Fresh~~activities ~~Express,~~of ~~which we acquired in 2001. Also in the 2003 period, we paid~~ $148.9 million and ~~issued~~cash ~~approximately~~provided ~~19,000~~by ~~shares~~financing activities of ~~our common stock, valued at~~ $~~625,000, primarily related to contractual obligations in the purchase agreement for Carroll County Foods~~13. ~~We recorded these payments as additional purchase price~~5 million, ~~with~~partially ~~corresponding~~offset ~~increases~~by incash ~~goodwill. In the 2003 period, we finalized the purchase price of Middendorf Meat, resulting~~ used in ~~the~~investing ~~return~~activities of $136.6 million ~~in cash and $1~~.4 ~~million~~Cash inflows ~~our~~from ~~common~~discontinued ~~stock~~operations ~~(approximately~~used 46$3.3 million,~~000~~ ~~shares)~~consisting ~~from~~primarily ~~the former owners~~ of ~~Middendorf~~changes ~~Meat. These~~in ~~amounts~~discontinued ~~were~~assets ~~related to the closing net worth adjustment~~ and ~~certain related claims~~liabilities. We ~~recorded~~Operating, investing ~~these~~and ~~amounts~~financing asactivities ~~adjustments to the purchase price~~ of ~~Middendorf~~our ~~Meat,~~continuing ~~with~~operations ~~corresponding~~are ~~reductions~~discussed ~~in goodwill~~below.

~~Application~~Operating activities of ~~Critical~~continuing ~~Accounting Policies~~ operations

WeIn ~~have prepared our consolidated financial statements and~~ the ~~accompanying~~2007 ~~notes~~period, inwe ~~accordance~~generated ~~with~~cash ~~generally~~from ~~accepted~~operating ~~accounting~~activities ~~principles~~of ~~applied on a consistent basis~~$48. ~~In preparing our financial statements~~9 million, ~~management~~compared ~~must~~to ~~often~~$46.1 million ~~make~~in ~~estimates~~the ~~and~~2006 ~~assumptions~~period. ~~that~~In ~~affect~~ the ~~reported~~2007 ~~amounts~~period, ofnet ~~assets,~~income ~~liabilities,~~plus ~~revenues~~depreciation, ~~expenses~~amortization and stock ~~related~~compensation ~~disclosures~~expense, atin ~~the~~addition ~~date~~to ofan ~~the~~increase ~~financial~~in ~~statements~~accounts payable and ~~during~~a ~~the~~decrease ~~reporting~~in accounts ~~periods. Some~~receivable, ofpartially ~~those~~offset ~~judgments~~by ~~can~~an beincrease ~~subjective~~in inventories and ~~complex;~~other ~~consequently,~~assets ~~actual~~and ~~results~~a ~~could~~decrease in ~~differ~~accrued ~~from~~expenses, ~~those~~were ~~estimates. We continually evaluate~~ the ~~accounting~~main ~~policies~~factors ~~and~~contributing ~~estimates~~to wethe ~~use~~cash toprovided ~~prepare~~by ~~our~~operating activities. ~~financial~~In ~~statements. Management's~~the ~~estimates~~2006 ~~are~~period, ~~generally~~net ~~based~~income ~~upon~~plus ~~historical~~depreciation, ~~experience~~amortization and ~~various~~stock ~~other~~compensation expense, ~~assumptions~~in ~~that~~addition ~~we determine~~ to bean ~~reasonable~~increase in ~~light~~accounts ofpayable ~~the relevant facts~~ and ~~circumstances. We~~income ~~believe~~taxes, ~~that~~partially ~~our~~offset ~~critical~~by ~~accounting~~an increase ~~estimates~~in ~~include~~our ~~goodwill and other intangible assets, allowance for doubtful~~ accounts, ~~reserves for claims under self-insurance programs~~receivable, ~~reserve for~~ inventories, ~~sales~~prepaid ~~incentives,~~expenses ~~vendor rebates~~ and other ~~promotional~~current ~~incentives~~assets and ~~income~~a decrease ~~taxes. Our~~in ~~2003~~accrued ~~Annual~~expenses, ~~Report~~were onthe ~~Form~~main ~~10-K~~factors ~~describes~~contributing ~~these~~to ~~critical~~the ~~accounting~~cash ~~policies~~provided by operating activities.

~~Our~~Investing ~~financial~~activities ~~statements~~of ~~contain~~continuing other items that require estimation, but are not as critical as those discussed above. These include our calculations for bonus accruals, depreciation and amortization. Changes in estimates and assumptions used in these and other items could have an effect on our consolidated financial statements.operations

~~Recently~~During ~~Issued~~the ~~Accounting~~2007 ~~Pronouncements~~ period, we used $36.6 million in investing activities, compared to using $34.2 million in the 2006 period. Investing activities include the acquisition of businesses and additions to and disposals of property, plant and equipment. Capital expenditures were $52.5 million in the 2007 period and $34.5 million in the 2006 period. In the 2007 period, capital expenditures totaled $42.7 million in our Broadline segment, $9.7 million in our Customized segment, and $0.1 million in our Corporate segment. The increase in the capital spending in 2007 compared to 2006 is primarily due to the construction of two new replacement facilities in our Broadline segment and our continued investment in information technology, as described below. During the 2007 period, we completed a substitution of collateral and sale-leaseback transaction involving one of our Broadline operating facilities and one of our former fresh-cut segment operating facilities, resulting in proceeds of approximately $15.9 million.

InWe ~~November~~continue ~~2003,~~to ~~the~~invest ~~Emerging~~in ~~Issues~~information ~~Task~~technology. ~~Force,~~As orpart ~~EITF,~~of ~~reached~~this ainitiative, ~~final~~we ~~consensus~~are onimplementing certain ~~EITF~~applications ~~No.~~of ~~03-10,~~an ~~Application~~SAP ofsoftware ~~Issue~~package, ~~No.~~which ~~02-16~~we byexpect ~~Resellers~~ to ~~Sales~~be ~~Incentives~~completed ~~Offered~~in to2008. ~~Consumers~~We byhave specifically ~~Manufacturers. EITF~~chosen ~~No.~~the ~~03-10~~SAP ~~states~~financial ~~that~~and ~~certain~~rebate ~~sales~~income ~~incentive~~tracking ~~arrangements~~applications, ~~are~~which ~~not~~will ~~subject~~enable us to ~~the~~continue ~~guidance~~our ininitiative ~~EITF~~to ~~No.~~centralize ~~02-16. EITF~~certain ~~No.~~of ~~03-10~~our ~~also~~transactional ~~requires~~accounting ~~disclosure~~processes ofand will improve the ~~accounting~~overall ~~policy~~efficiency ~~with~~of ~~respect~~our tofinancial ~~vendors'~~reporting ~~sales~~process. ~~incentive~~These ~~arrangements. EITF~~applications ~~No.~~will ~~03-10~~also help issupport ~~effective~~our ~~for~~category ~~fiscal~~management ~~years~~initiatives. ~~beginning~~We ~~after~~expect ~~December~~to ~~15,~~make ~~2003. Our~~capital ~~adoption~~expenditures of approximately ~~EITF~~$12 ~~No.~~to ~~03-10~~$13 inmillion ~~the~~related ~~2004~~to ~~period~~this ~~did~~SAP ~~not~~implementation throughout ~~have~~2007, awhich ~~material~~is ~~impact~~included onin our ~~consolidated~~anticipated ~~financial~~capital ~~position~~expenditure orrange ~~results~~for 2007 of ~~operations~~$72 to $75 million.

~~Forward~~Financing ~~Looking~~activities ~~Statements~~of continuing operations

~~This~~During ~~Form 10-Q and~~ the ~~documents~~2007 ~~incorporated~~period, bywe ~~reference~~generated ~~herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934~~$13. ~~Forward-looking~~5 million ~~statements,~~from ~~which~~financing ~~are based on assumptions and estimates and describe our future plans~~activities, ~~strategies~~compared ~~and~~to ~~expectations,~~using $41.7 million ~~are~~in ~~generally identifiable by~~ the ~~use~~2006 ~~of the words "anticipate," "plan," "will," "believe," "estimate," "expect," "intend," "seek," "should," "could," "may," "would," or similar expressions~~period. ~~These~~ ~~forward-looking~~The ~~statements~~change ~~may~~from ~~address,~~the ~~among~~2006 ~~other~~period ~~things,~~was ~~our~~primarily ~~anticipated~~due ~~earnings, capital expenditures, contributions~~ to our ~~net~~share repurchase ~~sales~~program bythat ~~acquired~~was ~~companies,~~completed ~~sales~~in ~~momentum,~~the ~~customer~~2006 ~~and~~period ~~product~~(see ~~sales~~Note ~~mix,~~9 ~~expected~~to ~~efficiencies in~~ our ~~business~~unaudited ~~and~~condensed consolidated ~~our~~financial ~~ability to realize expected synergies from acquisitions. These forward-looking~~ statements ~~are~~for ~~subject~~details toof ~~risks,~~our ~~uncertainties~~share ~~and~~repurchase ~~assumptions, all as detailed from time to time in the reports we file with the Securities and Exchange Commission~~program).

IfChecks ~~one~~in orexcess ~~more~~ of ~~these~~deposits ~~risks~~increased orby ~~uncertainties~~$8.3 million ~~materialize,~~in orthe if2007 ~~any~~period ~~underlying~~and ~~assumptions~~decreased ~~prove~~by ~~incorrect,~~$9.9 million ~~our~~in ~~actual~~the ~~results,~~2006 ~~performance or achievements may vary materially from future results, performance or achievements expressed or implied by these forward-looking statements~~period. ~~All~~Checks ~~forward-looking~~in ~~statements~~excess ~~attributable~~of todeposits ~~us,~~represent orchecks ~~persons~~that ~~acting~~we onhave ~~our~~written that ~~behalf,~~ are ~~expressly~~not ~~qualified~~yet incashed ~~their entirety~~ by the ~~cautionary~~payee ~~statements in this section. We undertake no obligation to publicly update or revise any forward-looking statements to reflect future events or developments.~~and

~~Item 3. Quantitative and Qualitative Disclosures About Market Risks~~18

OurTable primary market risks are related to fluctuations in interest rates and changes in commodity prices. Our primary interest rate risk is from changing interest rates related to our outstanding debt. We currently manage this risk through a combination of fixed and floating rates on these obligations. As of July 3, 2004, our total debt of $291.3 million consisted of fixed and floating-rate debt of $256.3 million and $35.0 million, respectively. In addition, our Receivables Facility has a floating rate. Substantially all of our floating rates are based on LIBOR, with the exception of the rate on the Receivables Facility, which is based upon a 30-day commercial-paper rate. A 100 basis-point increase in market interest rates on all of our floating-rate debt and our Receivables Facility would result in a decrease in net earnings and cash flow of approximately $900,000 per annum, holding other variables constant. Contents

~~Significant~~in ~~commodity~~total ~~price~~exceed ~~fluctuations~~the ~~for~~current ~~certain~~available ~~commodities~~cash ~~that~~balance weat ~~purchase,~~the ~~particularly~~respective ~~for~~bank. ~~lettuce,~~The ~~could~~increase ~~have~~in achecks in ~~material~~excess ~~impact on our results~~ of ~~operations. In~~deposits ~~an attempt to manage our commodity price risk, our Fresh-cut segment,~~ in the ~~normal~~2007 ~~course~~period ofwas ~~business,~~related ~~enters into contracts~~ to ~~purchase~~timing ~~pre-established quantities~~ of ~~various~~cash ~~types~~payments. ofOur ~~produce,~~associates ~~particularly~~who exercised ~~lettuce,~~stock atoptions ~~contracted~~and ~~prices~~purchased ~~based on~~ our ~~expected~~stock ~~needs. To~~under athe ~~lesser~~Stock ~~extent,~~Purchase ~~our~~Plan ~~Broadline~~provided ~~segment also enters into contracts to purchase pre-established quantities~~ $7.0 million of ~~products~~proceeds in the ~~normal~~2007 ~~course~~period, ofcompared ~~business. Commitments that we have entered into~~ to ~~purchase~~$7.5 million ~~produce and other products in our Fresh-cut and Broadline segments as~~ of ~~January~~proceeds ~~3, 2004, are included~~ in the ~~table~~2006 ~~of contractual obligations in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Financing Activities" in our 2003 Annual Report on Form 10-K~~period.

InOur ~~the~~$400 million ~~case~~senior ofrevolving ~~produce,~~credit infacility (the ~~event~~“Credit ~~that~~Facility”) ~~the~~expires ~~amount~~in of2010 ~~produce~~and ~~that~~bears interest weat ~~have~~a ~~contracted~~floating rate equal to, ~~purchase~~at isour ~~not~~election, ~~sufficient~~the toagent ~~meet~~bank’s ~~our~~prime ~~needs,~~rate ~~either~~or ~~because~~a ofspread ~~unexpected~~over LIBOR. ~~demand~~This ~~for~~rate varies based upon our ~~products~~leverage ratio, or as adefined ~~result~~in ofthe ~~disruptions~~credit inagreement. ~~supply~~The Credit ~~(for~~Facility ~~instance~~has an annual commitment fee, ~~due~~ranging from 0.125% to ~~weather~~0.225% orof ~~disease)~~the average daily unused portion of the total facility, webased ~~will~~on beour ~~required~~leverage toratio, ~~purchase~~as ~~additional~~defined ~~produce~~in tothe ~~meet~~credit agreement. ~~our~~The ~~needs~~Credit onFacility also requires the ~~open~~maintenance ~~market~~of atcertain ~~prices~~financial ~~that~~ratios, ~~may~~as defined bein ~~significantly~~the ~~higher~~credit ~~than~~agreement, ~~our~~and ~~contracted~~contains ~~prices~~customary events of default. ~~Alternatively,~~ weThe ~~may~~Credit ~~need~~Facility allows tofor ~~enter~~the ~~into~~issuance ~~contracts~~of up to ~~meet~~$100.0 million ~~our~~of ~~forecasted~~standby ~~needs~~letters ~~during~~of ~~times~~credit, ofwhich ~~elevated~~reduce borrowings ~~market~~available ~~prices. If~~under the ~~market~~Credit ~~prices~~Facility. ~~subsequently~~At ~~decline~~September 29, 2007, we ~~are~~had ~~still~~no ~~required~~borrowings outstanding, to$48.1 million ~~pay~~of ~~the~~letters ~~contracted~~of ~~price~~credit ~~for~~outstanding and $351.9 million available under the Credit ~~contracted~~Facility, ~~amounts~~subject ofto ~~produce~~compliance with customary borrowing conditions.

~~Item~~We ~~4. Controls~~believe that our cash flows from operations, borrowings under our Credit Facility and ~~Procedures~~the sale of undivided interests in receivables under the Receivables Facility, discussed below, will be sufficient to fund our operations and capital expenditures for the foreseeable future. However, we will likely require additional sources of financing to the extent that we make acquisitions.

WeStock maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based ~~on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.~~ Compensation

~~PART~~Effective IIJanuary 1, 2006, we adopted the fair value recognition provisions of SFAS No. 123(R), Share-Based ~~OTHER~~Payment, ~~INFORMATION~~(“SFAS 123(R)”), using the modified-prospective transition method. Under this transition method, compensation cost recognized in fiscal 2007 and 2006 includes: 1) compensation cost for all share-based payments granted through December 31, 2005, but for which the requisite service period had not been completed as of December 31, 2005, based on the grant date fair value estimated in accordance with the original provisions of SFAS 123 and 2) compensation cost for all share-based payments granted subsequent to December 31, 2005, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R). Results for prior periods have not been restated.

~~Item~~The total share-based compensation cost recognized in operating expenses in our condensed consolidated statements of earnings was $1.5 million and $1.3 million in the 2007 and 2006 quarters, respectively, and $4. ~~Submission~~8 million and $3.6 million in the 2007 and 2006 periods, respectively, which represents the expense associated with our stock options, stock appreciation rights, restricted stock and shares purchased under the Stock Purchase Plan. The income tax benefit recognized upon the exercise of ~~Matters~~stock options or vesting of restricted stock awards in excess of the tax benefit related to athe ~~Vote~~compensation cost incurred was $1.7 million and $1.6 million in the 2007 and 2006 periods, respectively. At September 29, 2007, there was $5.5 million of ~~Security~~total unrecognized ~~Holders~~compensation cost related to outstanding stock options and stock appreciation rights and $11.3 million of total unrecognized compensation cost related to unvested shares of restricted stock, which will be recognized over the remaining vesting periods.

~~(a)~~Off ~~The~~Balance ~~annual~~Sheet ~~meeting of shareholders was held on May 19, 2004. (b) The following director nominees were elected by shareholders of record as of March 29, 2004:~~Activities

Class II	Votes For	Votes Against	Votes Abstained
Mary C. Doswell	36,846,330	1,357,087	-
Fred C. Goad, Jr.	36,859,330	1,344,087	-
Robert C. Sledd	37,083,518	1,119,899	-

At September 29, 2007, securitized accounts receivable under our Receivables Facility, which expires on June 23, 2008, totaled $233.6 million, including $130.0 million sold to the financial institution and derecognized from our condensed consolidated balance sheet. Total securitized accounts receivable include our residual interest in the accounts receivable, referred to as the Residual Interest, of $103.6 million. The Residual Interest represents our retained interest in the receivables held by PFG Receivables Corporation. We measure the Residual Interest using the estimated discounted cash flows of the underlying accounts receivable, based on estimated collections and a discount rate approximately equivalent to our incremental borrowing rate. The loss on sale of undivided interest in receivables of $2.0 million and $1.9 million in the 2007 and 2006 quarters, respectively, and $5.7 million and $5.4 million in the 2007 and 2006 periods, respectively, was included in other expense, net, in our condensed consolidated statements of earnings and represents our cost of securitizing those receivables with the financial institution. See Note 7 to our condensed consolidated financial statements for further discussion of our Receivables Facility. In addition, our 2006 Annual Report on Form 10-K contains a discussion of why our Receivables Facility is considered off balance sheet financing and describes other activities, which may be defined as off balance sheet financing.

~~(c) The following other matters were voted on by shareholders of record as of March 29, 2004:~~19

	Votes For	Votes Against	Votes Abstained	Broker Non-Votes
Amendment to our	31,264,729	1,123,529	933,448	4,881,711
Employee Stock Purchase
Plan to increase the number
of shares available for
issuance thereunder.

~~Item~~Application ~~6. Exhibits~~of ~~and~~Critical ~~Reports~~Accounting ~~on Form 8-K.~~Policies

(a) Exhibits:
	10.34	Amendment to Receivables Purchase Agreement dated as of June 28, 2004 by and among PFG Receivables Corporation, as Seller, Performance Food Group Company, as Servicer, Jupiter Securitization Corporation and Bank One, NA, as Agent.
	15	Letter regarding unaudited information from KPMG LLP.
	31.1	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31.2	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32.1	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K filed during the quarter ended July 3, 2004:
		On May 4, 2004, we furnished a Current Report on Form 8-K pursuant to Item 12 thereof relating to our results of operations for the quarter ended April 3, 2004.
Notwithstanding the foregoing, information furnished under Items 9 and 12 of our Current Reports on Form 8-K, including the related exhibits, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934.

We have prepared our condensed consolidated financial statements and the accompanying notes in accordance with generally accepted accounting principles applied on a consistent basis. In preparing our financial statements, management must often make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements and during the reporting periods. Some of those judgments can be subjective and complex; consequently, actual results could differ from those estimates. We continually evaluate the accounting policies and estimates we use to prepare our financial statements. Management’s estimates are generally based upon historical experience and various other assumptions that we determine to be reasonable in light of the relevant facts and circumstances. We believe that our critical accounting estimates include goodwill and other intangible assets, allowance for doubtful accounts, reserves for claims under self-insurance programs, reserves for inventories, vendor rebates and other promotional incentives and income taxes. Our 2006 Annual Report on Form 10-K describes these critical accounting policies.

~~Signature~~Our financial statements contain other items that require estimation, but are not as critical as those discussed above. These include our calculations for bonus accruals, depreciation and amortization. Changes in estimates and assumptions used in these and other items could have an effect on our consolidated financial statements.

~~Pursuant~~FIN ~~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 thereunto duly authorized.~~48

	PERFORMANCE FOOD GROUP COMPANY
	By:	/s/ John D. Austin
		John D. Austin
		Senior Vice President and Chief Financial Officer
Date: August 11, 2004

We adopted the Financial Accounting Standards Board’s Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109” (“FIN 48”), effective at the beginning of fiscal 2007. As a result of the adoption of FIN 48, we recognized a charge of approximately $0.5 million to beginning retained earnings. As of the date of adoption, we had unrecognized tax benefits of $6.9 million ($5.6 million net of federal tax benefit), of which $3.2 million ($2.3 million net of federal tax benefit) could affect the effective tax rate for continuing operations. As of September 29, 2007, we had unrecognized tax benefits of $5.5 million ($4.5 million net of federal tax benefit), of which $2.1 million ($1.4 million net of federal tax benefit), if recognized, could affect the effective tax rate for continuing operations.

Recently Issued Accounting Pronouncements

The Financial Accounting Standards Board (FASB) issued SFAS No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework for measuring fair value in GAAP, and requires enhanced disclosures about fair value measurements. This statement will apply when other accounting pronouncements require or permit fair value measurements; it does not require new fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those years. We will adopt this pronouncement in the first quarter of fiscal 2008; however, we do not anticipate that it will have a material impact on our consolidated financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option of Financial Assets and Financial Liabilities — Including an amendment of FASB Statement No. 115 (SFAS No. 159). SFAS No. 159 allows an entity the irrevocable option to elect fair value for the initial and subsequent measurement for certain financial assets and liabilities. Subsequent changes in fair value of these financial assets and liabilities would be recognized in earnings when they occur. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We will adopt this pronouncement in the first quarter of fiscal 2008; however, we do not anticipate that it will have a material impact on our consolidated financial position or results of operations.

Forward Looking Statements

This Form 10-Q and the documents incorporated by reference herein contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, which are based on assumptions and estimates and describe our future plans, strategies and expectations, are generally identifiable by the use of the words “anticipate,” “will,” “believe,” “estimate,” “expect,” “intend,” “ seek,” “should,” “could,” “may,” “would,” or similar expressions. These forward-looking statements may address, among other things, our anticipated earnings, capital expenditures, contributions to our net sales by acquired companies, sales momentum, customer and product sales mix, expected efficiencies in our

business and our ability to realize expected synergies from acquisitions. These forward-looking statements are subject to risks, uncertainties and assumptions, all as detailed from time to time in the reports we file with the Securities and Exchange Commission.

If one or more of these risks or uncertainties materializes, or if any underlying assumptions prove incorrect, our actual results, performance or achievements may vary materially from future results, performance or achievements expressed or implied by these forward-looking statements. All forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirely by the cautionary statements in this section and in our other reports that we file with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statements to reflect future events or developments.

Item 3. Quantitative and Qualitative Disclosures About Market Risks.

Our primary market risks are related to fluctuations in interest rates and changes in commodity prices. Our primary interest rate risk is from changing interest rates related to our outstanding debt. We manage this risk through a combination of fixed and floating rates on these obligations. As of September 29, 2007, our total debt of $9.6 million, including capital lease obligations of $9.0 million, consisted entirely of fixed rate debt. In addition, our Receivables Facility has a floating rate based upon a 30-day commercial paper rate and our revolving credit facility, which we currently have no outstanding borrowings on, is based on LIBOR. A 100 basis-point increase in market interest rates on all of our floating-rate debt and our Receivables Facility would result in a decrease in net earnings and cash flows of approximately $0.8 million per annum, holding other variables constant.

Significant commodity price fluctuations for certain commodities that we purchase could have a material impact on our results of operations. In an attempt to manage our commodity price risk, our Broadline segment enters into contracts to purchase pre-established quantities of products in the normal course of business. Commitments that we have entered into to purchase products in our Broadline segment as of December 30, 2006, are included in the table of contractual obligations in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financing Activities” in our 2006 Annual Report on Form 10-K.

Item 4. Controls and Procedures.

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective.

There were no changes in our internal control over financial reporting during the quarter ended September 29, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

In November 2003, certain of the former shareholders of PFG — Empire Seafood, a wholly owned subsidiary which we acquired in 2001, brought a lawsuit against us in the Circuit Court, Eleventh Judicial Circuit in Dade County, seeking unspecified damages and alleging breach of their employment and earnout agreements. Additionally, they seek to have their non-compete agreements declared invalid. We are vigorously defending ourselves and have asserted counterclaims against the former shareholders. Management currently believes that this lawsuit will not have a material adverse effect on our financial condition or results of operations.

From time to time, we are involved in various legal proceedings and litigation arising in the ordinary course of business. In the opinion of management, the outcome of such proceedings and litigation currently pending will not have a material adverse effect on our financial condition or results of operations.

Item 1A. Risk Factors.

There have been no material changes to our risk factors as previously disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 30, 2006.

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

None.

Item 3. Defaults Upon Senior Securities.

Not applicable.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits

	10.1		Amended and Restated Employee Stock Purchase Plan*

	10.2		Amended and Restated Performance Food Group Company Employee Savings and Stock Ownership Plan*

	10.3		Amended and Restated Senior Management Severance Plan*

	10.4		Amendment No. 1 to Performance Food Group Company 2006 Cash Incentive Plan*

	10.5		Amendment No. 1 to Performance Food Group Company 2007 Cash Incentive Plan*

	10.6		Amended and Restated Performance Food Group Company Supplemental Executive Retirement Plan*

	15		Letter regarding unaudited information from KPMG LLP.

	31.1		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	31.2		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

* Management Compensatory Plan or arrangement

Signature

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


PERFORMANCE FOOD GROUP COMPANY
	By:	/s/ John D. Austin
		John D. Austin
		Senior Vice President and Chief Financial Officer

Date: November 6, 2007

Exhibit Index

	10.1		Amended and Restated Employee Stock Purchase Plan*

	10.2		Amended and Restated Performance Food Group Company Employee Savings and Stock Ownership Plan*

	10.3		Amended and Restated Senior Management Severance Plan*

	10.4		Amendment No. 1 to Performance Food Group Company 2006 Cash Incentive Plan*

	10.5		Amendment No. 1 to Performance Food Group Company 2007 Cash Incentive Plan*

	10.6		Amended and Restated Performance Food Group Company Supplemental Executive Retirement Plan*

	15		Letter regarding unaudited information from KPMG LLP.

	31.1		Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

	31.2		Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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

* Management Compensatory Plan or arrangement

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