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Item 8. Financial Statements and Supplementary Data

2025-02-25 compared with 2024-02-28 · 1495 added, 1255 removed, 2137 unchanged (56% of the section changed)

16 unchanged sentences

Note 1 – Basis of Presentation and Significant Accounting Policies

Note 2 – Cybersecurity Incident

Note 2 – Cyber Incident

Note 3 – Net Sales from Contracts with Customers

Note 4 – Segment and Geographic Data

Note 5 – Business Acquisitions and Divestiture

Note 5 – Business Acquisitions

Note 6 – Inventories, Net

Note 7 – Property and Equipment, Net

16 unchanged sentences

Note 24 – Related Party Transactions

Note 25 – Subsequent Event

Index to Financial Statements

Report of Independent Registered Public Accounting Firm

1 unchanged sentence

Henry Schein, Inc.

Melville, New York

Opinion on the Consolidated Financial Statements

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United States of America.

Organizations

expressed an adverse opinion thereon.

Sponsoring Organizations of the Treadway Commission (COSO) and

our report dated February 25, 2025 expressed

an unqualified opinion thereon.

Basis for Opinion

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Committee and that:

disclosures that

financial statements;

especially challenging,

subjective or

complex judgments.

The communication

especially challenging, subjective,

communication of the

critical audit

5 unchanged sentences

accounts or disclosures to which it relates.

Business Acquisition

recorded $156 million of identifiable intangible assets related to

customer relationships and lists.

identified management’s

judgements used to

determine the

revenue growth rates

determination

relationships

critical audit matter.

The principal considerations

for our determination

were the subjective

judgement required by

management in formulating the

revenue growth rates and

assessing the appropriateness of the

discount rate used in

acquired identifiable

considerations

required to address these matters, including the extent of specialized

skill or knowledge needed.

Index to Financial Statements

Business Acquisition - Valuation of Acquired Intangible Assets

As described in Note 5 of the consolidated financial statements, the Company

acquired TriMed Inc.

(“TriMed”) in

As a result of this acquisition, management was required

to determine the fair values of the identifiable assets

acquired and liabilities assumed.

In connection with the acquisition of TriMed, the Company recorded

of identifiable intangible assets related to product development.

We identified the revenue growth rates for certain periods used in the determination of the fair value of the acquired

product development in the acquisition of TriMed as a critical audit matter.

The principal consideration for our

determination was the subjective judgement required by management

in formulating these revenue growth rates.

Auditing these considerations involved especially subjective

and challenging auditor judgement due to the nature

and extent of audit effort required to address these matters.

The primary procedures we performed to address this critical audit matter

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of the fair values of the

relationships

performance of

acquired company

audited financial

statements, and

assessing revenue

projections against industry metrics and peer-group companies.

information underlying

the determination

discount rate,

estimates of discount rates and

comparing those to the discount

rate selected by management in connection

with the determination of the fair value of the acquired customer relationships and lists in

the acquisition of

acquired product development

acquisition of TriMed

(i) reviewing

the historical performance

the acquired company utilizing their

financial statements, and (ii)

assessing the revenue projections against

industry metrics for certain periods.

We have served as the Company's auditor since 1984.

February 25, 2025

Index to Financial Statements

See accompanying notes.

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Note 1 – Basis of Presentation and Significant Accounting Policies

Index to Financial Statements

See accompanying notes.

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Interest expense

Income before taxes, equity in

earnings of affiliates and noncontrolling interests

Income before taxes, equity in earnings of affiliates and

noncontrolling interests

Equity in earnings of affiliates, net of tax

Gain on sale of equity investment

Net income attributable to noncontrolling interests

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shares outstanding:

Index to Financial Statements

See accompanying notes.

11 unchanged sentences

Foreign currency translation loss (gain)

Comprehensive income attributable to noncontrolling interests

Comprehensive loss (income) attributable to noncontrolling interests

Comprehensive income attributable to Henry Schein, Inc.

Index to Financial Statements

See accompanying notes.

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(in millions,

except share and per share data)

except share data)

$.01 Par Value

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Distributions to noncontrolling shareholders

Purchase of noncontrolling interests

Change in fair value of redeemable securities

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( 6,111,676 )

Stock issued upon exercise of stock options

Stock-based compensation expense

Shares withheld for payroll taxes

Settlement of stock-based compensation awards

Transfer of charges in excess of capital

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noncontrolling interests)

Foreign currency translation loss (excluding loss of $

Foreign currency translation gain (excluding gain of $

attributable to Redeemable noncontrolling interests)

Unrealized gain from hedging activities,

net of tax of $

Pension adjustment gain, including tax of $

Unrealized loss from hedging activities,

including tax benefit of $

Pension adjustment loss, including tax benefit of $

Distributions to noncontrolling shareholders

Purchase of noncontrolling interests

Change in fair value of redeemable securities

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Balance, December 30, 2023

Net income (excluding $

Net income (excluding loss of $

attributable to Redeemable

noncontrolling interests)

Foreign currency translation gain (excluding gain of $

Foreign currency translation loss (excluding loss of $

attributable to Redeemable noncontrolling interests)

Unrealized loss from hedging activities,

including tax benefit of $

Unrealized gain from hedging activities,

including tax of $

Pension adjustment loss, including tax benefit of $

Distributions to noncontrolling shareholders

Purchase of noncontrolling interests

Change in fair value of redeemable securities

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Balance, December 28, 2024

Index to Financial Statements

See accompanying notes.

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Non-cash restructuring charges

Gain on sale of equity investment

Stock-based compensation expense

Provision for (benefits from) losses on trade and other

accounts receivable

Provision for losses on trade and other accounts receivable

Benefit from deferred income taxes

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net of cash acquired

Proceeds from sale of equity investment

Proceeds from loan to affiliate

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Distributions to noncontrolling shareholders

Payments for contingent consideration

Acquisitions of noncontrolling interests in subsidiaries

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Cash and cash equivalents, end of period

Index to Financial Statements

HENRY SCHEIN, INC.

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Nature of Operations

We distribute health care products and services primarily to office-based dental and medical practitioners, across

dental practices, laboratories, physician practices, and ambulatory surgery centers,

as well as government,

institutional health care clinics and alternate care clinics.

We also provide software, technology and other value-

added services to health care practitioners.

We distribute health care products and value-added services primarily to office-based dental and medical

practitioners, across dental practices, laboratories, physician practices,

and ambulatory surgery centers, as well as

government, institutional health care clinics and alternate care clinics.

We also provide software and technology

services to health care practitioners.

Our dental businesses serve office-based dental practitioners, dental

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across a wide range of specialties.

We have operations or affiliates in the United States, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the

Czech Republic, France, Germany, Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg,

Malaysia, Mexico, Morocco, the Netherlands, New Zealand, Poland, Portugal,

Singapore, South Africa, Spain,

We have operations or affiliates in the United States, Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile,

China, the Czech Republic, France, Germany, Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein,

Luxembourg, Mexico, Morocco, the Netherlands, New Zealand, Peru, Poland, Portugal, South

Africa, Spain,

Sweden, Switzerland, Thailand, United Arab Emirates and the United Kingdom.

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and all of our controlled

subsidiaries.

All intercompany accounts and transactions are eliminated in

consolidation.

subsidiaries and VIE.

All intercompany accounts and transactions are eliminated

in consolidation.

Investments in

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or cash flows.

We consolidate the results of operations and financial position of a trade accounts receivable securitization which

we consider a Variable Interest Entity (“VIE”) because we are its primary beneficiary as we have the power to

direct activities that most significantly affect its economic performance and have

the obligation to absorb the

majority of its losses or benefits.

For this VIE, the trade accounts receivable transferred

to the VIE are pledged as

collateral to the related debt.

The VIE’s creditors have recourse to us for losses on these trade accounts receivable.

The primary beneficiary of a VIE is required to consolidate the assets and

liabilities of the VIE.

We are deemed to

be the primary beneficiary of the VIE when we have the power to direct activities

that most significantly affect its

economic performance and have the obligation to absorb the majority

of its losses or the right to receive benefits

that could potentially be significant to the VIE.

In determining whether we are the primary beneficiary, we

consider factors such as ownership interest, debt investments, management

representation, authority to control

decisions, and contractual and substantive participating rights of each party.

For this VIE, the trade accounts

receivable transferred to the VIE are pledged as collateral to the related debt.

The VIE’s creditors have recourse to

us for losses on these trade accounts receivable.

At December 28, 2024 and December 30, 2023,

certain trade accounts receivable that can only be used to settle

obligations of this VIE were $

certain trade

accounts receivable that can only be used to settle obligations of this VIE

million and $

million, respectively, and the liabilities of this VIE where the

creditors have recourse to us were $

respectively, and the liabilities of this VIE where the creditors have recourse to us were $

million and $

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The three levels of the fair value hierarchy are described as follows:

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Level 1— Unadjusted quoted prices in active markets for identical assets

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in active markets;

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

quoted prices for identical or similar assets or liabilities in markets

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contingencies;

the allowance for doubtful accounts;

redeemable noncontrolling

the allowance for credit losses;

hedging activity;

measurement of compensation cost for certain share-based

performance awards and cash bonus plans;

measurement of compensation

cost for certain share-based performance awards and cash bonus plans;

pension plan assumptions.

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recognize revenue when, or as, we satisfy a performance obligation.

We generate revenue from the sale of dental and medical consumable products, equipment (Health care distribution

revenues), software products and services and other sources (Technology and value-added services revenues).

Provisions for discounts, rebates to customers, customer returns and other

contra revenue adjustments are included

in the transaction price at contract inception by estimating the most likely

amount based upon historical data and

estimates and are provided for in the period in which the related sales are

Revenue derived from the sale of consumable products is recognized at the

point in time when control transfers to

the customer.

Such sales typically entail high-volume, low-dollar orders

shipped using third-party common

We believe that the shipment date is the most appropriate point in time indicating control has transferred

We generate revenue from the sale of dental and medical consumable products, equipment, and services such as

equipment repair and financial services (Global Distribution and Value-Added Services revenues), company-

manufactured specialty products (Global Specialty Products revenue), and software

products and related services

(Global Technology revenues).

Provisions for discounts, rebates to customers, customer

returns and other contra

revenue adjustments are included in the transaction price at contract

inception by estimating the most likely amount

Index to Financial Statements

HENRY SCHEIN, INC.

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(in millions, except share and per share data)

to the customer.

On the shipment date, we have no post-shipment obligations,

legal title and risks and rewards of

ownership transfer to the customer and we have an enforceable right

based upon historical data and estimates and are provided for in the

period in which the related sales are

Revenue derived from the sale of consumable products and company-manufactured

specialty products is

recognized at the point in time when control transfers to the customer, (e.g.

when legal title and risks and

of ownership transfer to the customer, we have no post-shipment obligations, and we have an enforceable

Sales of consumable products typically entail high-volume, low-dollar

orders shipped using third-party

common carriers.

Revenue derived from the sale of equipment is recognized when control

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time of delivery.

Our product generally carries standard warranty terms provided

by the manufacturer;

instances where we provide warranty labor services, the warranty costs

are accrued in accordance with Accounting

Standards Codification (“ASC”) Topic 460 Guarantees.

At December 30, 2023 and December 31, 2022, we had

accrued approximately $

Our merchandise and equipment products generally carry standard warranty

terms provided by the manufacturer;

however, in instances where we provide a warranty on company-manufactured products or labor services, the

warranty costs are accrued in accordance with Accounting Standards Codification

(“ASC”) Topic 460 Guarantees.

At December 28, 2024 and December 30, 2023, we had accrued approximately

million and $

million, respectively, for warranty costs.

respectively, for warranty costs.

Revenue derived from the sale of software products is recognized when

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over the subscription period as control is transferred to the customer.

Revenue derived from other sources, including freight charges, equipment repairs and financial

Revenue derived from other sources, including freight charges, equipment repairs

and financial services, is

recognized when the related product revenue is recognized or when

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When we sell software products together with related services (i.e.,

and technical support), we allocate revenue to software by the residual

method, using an estimate of the standalone

selling price to estimate the fair value of the undelivered elements.

and technical support), we allocate the transaction price to each

distinct performance obligation based on the

estimated standalone selling price for each performance obligation.

Bundled arrangements that include elements

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market approach;

cost-plus approach;

residual method.

There is no specific hierarchy for the use of these methods,

but the estimated selling price reflects

our best estimate of what the selling prices of each deliverable would be

if it were sold regularly on a standalone

basis taking into consideration the cost structure of our business, technical skill

required, customer location and

other market conditions.

Note 3 – Revenue from Contracts with Customers

cost-plus-margin

or the residual method.

There is no specific hierarchy for the use of these methods, but

the estimated

selling price reflects our best estimate of what the selling prices of each deliverable

would be if it were sold

regularly on a standalone basis taking into consideration the cost structure

of our business, technical skill required,

customer location and other market conditions.

Note 3 – Net Sales from Contracts with Customers

for additional disclosures of disaggregated net sales and

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for disclosures of net sales by segment and geographic data.

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Sales Returns

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The allowance for

returns is presented gross as a refund liability and we record an inventory

asset (and a corresponding adjustment to

cost of sales) for any products that we expect to be returned

and resaleable.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

returns is presented gross as a refund liability and we record a right of

return asset (and a corresponding adjustment

to cost of sales) for any products that we expect to be returned and resaleable.

Cost of Sales

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stock-based compensation expense is reflected in selling, general and administrative

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Employment Benefit Plans and other Postretirement Benefit Plans

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our consolidated statements of income.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Gains and losses that result from changes in actuarial assumptions or

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Accounts Receivable and Allowance for Credit Losses

Accounts receivable are generally recognized when health care distribution

and technology and value-added

services revenues are recognized.

In accordance with the “expected credit loss” model, the carrying amount

accounts receivable is reduced by a valuation allowance that reflects

our best estimate of the amounts that we do

not expect to collect.

In addition to reviewing delinquent accounts receivable, we consider many

estimating our reserve, including types of customers and their credit worthiness,

experience and historical data

adjusted for current conditions and reasonable supportable forecasts.

Accounts receivable are generally recognized when revenues are recognized.

In accordance with the “expected

credit loss” model, the carrying amount of accounts receivable is reduced

by a valuation allowance that reflects our

best estimate of the amounts that we do not expect to collect.

In addition to reviewing delinquent accounts

receivable, we consider many factors in estimating our reserve, including

types of customers and their credit

worthiness, experience and historical data adjusted for current conditions

and reasonable supportable forecasts.

record allowances for credit losses based upon a specific review of all

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December 30, 2023 and December 31, 2022, respectively.

Our allowance for credit losses was $

million, and $

million as of December 30, 2023, December 31, 2022, December 25, 2021,

December 26, 2020, respectively.

Additions to the allowance for the years ended December 30, 2023,

31, 2022 and December 25, 2021 were $

million and $

million, respectively.

Deductions to the

allowance for the years ended December 30, 2023, December 31, 2022

and December 25, 2021, were $

million and $

, respectively.

The following table presents our allowances for credit losses:

Balance at beginning of year

Provision for credit losses

Adjustments to existing allowances for late fees, foreign currency

exchange rates, and write-offs

Balance at end of year

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Contract Assets

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within our consolidated balance sheets.

December 30, 2023 and December 31, 2022, the current and non-current contract

liabilities were $

million, and $

million and $

million, respectively.

During the year ended December 30, 2023, we recognized

During the years ended December 28, 2024, December 30, 2023, and December

31, 2022, we recognized

substantially all of the current contract liability amounts that were previously

deferred at December 31, 2022.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

December 25, 2021, the current and non-current contract liabilities were

million and $

year ended December 31, 2022, we recognized substantially all of the current

contract liability amounts that were

previously deferred at December 25, 2021.

Current contract liabilities at December 30, 2023 included

million related to business acquisitions completed in 2023.

Acquisition-related contract liability amounts at

December 31, 2022 and December 25, 2021 were immaterial.

deferred at the beginning of each

The following table presents our contract liabilities:

Current contract liabilities

Non-current contract liabilities

Total contract

Inventories and Reserves

Inventories consist primarily of finished goods and are valued at

the lower of cost or net realizable value.

determined by the weighted-average first-in, first-out method for merchandise

and by actual cost for large

equipment and high tech equipment.

In accordance with our policy for inventory valuation, we consider

factors including the condition and salability of the inventory, historical sales, forecasted sales and market and

economic trends.

From time to time, we adjust our assumptions for anticipated

changes in any of these or other

factors expected to affect the value of inventory.

Inventories consist primarily of finished goods,

raw materials and work-in-process and are valued at the lower

cost or net realizable value.

Cost is determined by the weighted average method for merchandise and by

for large equipment and high-tech equipment.

We manufacture certain of our products for our specialty businesses

(oral surgery solutions including dental implants, endodontics, and orthopedics).

In accordance with our policy for

inventory valuation, we consider many factors including the

condition and salability of the inventory, historical

sales, forecasted sales and market and economic trends.

From time to time, we adjust our assumptions for

anticipated changes in any of these or other factors expected to affect the value of inventory.

Property and Equipment

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Depreciation is

computed under the straight-line method

using estimated useful lives (See

computed under the straight-line method using estimated useful lives

Note 7 – Property and Equipment, Net

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Capitalized Software Development Costs

Capitalized internal-use software costs consist of costs to purchase and

develop software.

For software to be used

solely to meet internal needs and for cloud-based applications used to deliver

our services, we capitalize costs

incurred during the application development stage and include such costs within

property and equipment, net within

our consolidated balance sheets.

Capitalized software costs consist of costs to purchase and develop software

for internal use and for sale or use by

For software to be used solely to meet internal needs, we capitalize

costs incurred during the

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

application development stage and include such costs within property

and equipment, net within our consolidated

balance sheets.

For software to be sold, leased, or marketed to external users, we capitalize

software development costs when technological feasibility is reached and

include such costs within investments and

software development

costs when technological feasibility is reached, and for cloud-based applications

used to deliver our services we

capitalize costs incurred during the application development stage,

and include such costs within investments and

other within our consolidated balance sheets.

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leases with a term of 12 months or less are not capitalized.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

have lease agreements with lease and non-lease components, which are

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Business Acquisitions

We account for business acquisitions under the acquisition method of accounting, under which

the net assets of

We account for business acquisitions under the acquisition method of accounting, under which the net assets of

acquired businesses are recorded at their fair value at the acquisition

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in our consolidated statements of operations.

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Any excess of acquisition consideration over the fair value of identifiable

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the fair value to the carrying value of reporting units.

We regard our reporting units to be our operating segments:

global dental;

global medical;

and technology and value-added services.

Goodwill was allocated to such reporting

units, for the purposes of preparing our impairment analyses, based on

a specific identification basis.

For the years ended December 30, 2023 and December 31, 2022, we tested goodwill

for impairment, on the first

day of the fourth quarter, using a quantitative analysis comparing the carrying value of our reporting

including goodwill, to their estimated fair values using a discounted

cash flow methodology.

When the estimated

fair value of a reporting unit exceeds its carrying amount, goodwill of the

reporting unit is considered not

Conversely, when a reporting unit’s carrying value exceeds its fair value, an impairment charge against

goodwill, limited to the total amount of goodwill allocated to that

reporting unit, is recognized.

We aggregate operating segments into the reportable

segments based on economic similarities, the nature of their products, customer

basis, and methods of distribution

Global Distribution and Value-Added Services;

Global Specialty Products;

and Global Technology.

Goodwill was allocated to such reporting units, for the purpose of

preparing our impairment analyses, based on a

specific identification basis.

During the fourth quarter of our fiscal year ended December 28, 2024,

we revised our segment structure to align

with how our Chairman and Chief Executive Officer manages the business, assesses

performance and allocates

Our revised reportable segments now consist of:

(i) Global Distribution

-Added Services;

Global Specialty Products;

and (iii) Global Technology.

Reporting units under the former structure were tested for

impairment, and no impairment was identified.

As a result of the realignment and the change in operating

segments, we reallocated goodwill to each of our new reporting units using

a relative fair value approach.

the impairment test under the new structure, it was determined that the

fair values of our reporting units more likely

than not exceeded their carrying values, resulting in no impairment.

For both the former and new structure

goodwill impairment tests as of September 30, 2024, the fair values of reporting

units were computed using the

methodology described above.

Application of the goodwill impairment test requires judgment, including

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in applying them to this analysis.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

significant inputs include estimation of future cash flows based on budget

2 unchanged sentences

reporting unit.

For the year ended December 30, 2023 and December 25, 2021, the results of

our goodwill impairment analysis did

t result in any impairments.

For the year ended December 31, 2022 we recorded a $

million impairment of

goodwill relating to the disposal of an unprofitable business whose

estimated fair value was lower than its carrying

The disposal of this business is part of our restructuring initiative

as more fully discussed in

Note 15 – Plans

of Restructuring and Integration Costs

In connection with our restructuring initiatives, during the year ended

December 28, 2024, we recorded an $

million impairment of goodwill in the Global Specialty Products segment,

relating to the disposal of a portion of a

such impairment was calculated based on the relative fair value

For the year ended

December 31, 2022, we recorded a $

million impairment of goodwill, in the Global Specialty Products segment,

relating to the disposal of an unprofitable business for which estimated

fair value was lower than carrying value.

Intangible Assets

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We have calculated the value of these intangible assets using the multi-period excess

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

earnings method, the relief-from-royalty method, and the with and without

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expected to be derived from such asset or asset group.

Definite-lived intangible assets primarily consist of non-compete agreements,

trademarks, trade names, customer

lists, customer relationships and product development.

For long-lived assets used in operations, impairment losses

are only recorded if the asset or asset groups carrying amount is not recoverable

through its undiscounted future

We measure the impairment loss based on the difference between the carrying amount and the

estimated fair value.

When an impairment exists, the related assets are written down to fair value.

Definite and indefinite-lived intangible assets primarily consist of non-compete

agreements, trademarks, trade

names, customer lists, customer relationships and product development.

For long-lived assets used in operations,

impairment losses are only recorded if the asset or asset groups carrying amount

is not recoverable through its

undiscounted future cash flows.

We measure the impairment loss based on the difference between the carrying

amount and the estimated fair value.

When an impairment exists, the related assets are written down to

During the years ended December 28, 2024, December 30, 2023

1 unchanged sentence

impairment charges within the selling, general and administrative line of our consolidated statements

of income, on

intangible assets of $

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Goodwill and Other Intangibles, Net

During the years ended December 28, 2024, December 30, 2023

December 31, 2022, we recorded impairment charges, within the restructuring and

integration costs line of our

consolidated statements of income, of $

, million, and $

million, respectively.

Note 16 – Plans

of Restructuring and Integration Costs

for additional information.

We account for income taxes under an asset and liability approach that requires the recognition of deferred income

9 unchanged sentences

federal income tax return with our 80% or greater owned U.S.

subsidiaries.

Redeemable Noncontrolling Interests

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carried at the estimated redemption amounts.

The redemption amounts have been estimated based on expected future

earnings and cash flows and, if such

earnings and cash flows are not achieved, the value of the redeemable noncontrolling

interests might be impacted.

The redemption amounts have been estimated based on recent transactions

and/or implied multiples of earnings

and, if such earnings and cash flows are not achieved, the value of the

redeemable noncontrolling interests might be

Changes in the estimated redemption amounts of the noncontrolling

interests subject to put options are

reflected at each reporting period with a corresponding adjustment

to Additional paid-in capital.

Future reductions

in the carrying amounts are subject to a “floor” amount that is equal

to the fair value of the redeemable

noncontrolling interests at the time they were originally recorded.

The recorded value of the redeemable

noncontrolling interests cannot go below the floor level.

Adjustments to the carrying amount of noncontrolling

interests to reflect a fair value redemption feature do not impact the

calculation of earnings per share.

income is reduced by the portion of the subsidiaries’ net income

that is attributable to redeemable noncontrolling

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Changes in the estimated redemption amounts of the noncontrolling

interests subject to put options are reflected at

each reporting period with a corresponding adjustment to Additional paid-in

Future reductions in the

carrying amounts are subject to a “floor” amount that is equal to the

fair value of the redeemable noncontrolling

interests at the time they were originally recorded.

The recorded value of the redeemable noncontrolling interests

cannot go below the floor level.

Adjustments to the carrying amount of noncontrolling interests

reflect a fair value redemption feature do not impact the calculation of

earnings per share.

Our net income is

reduced by the portion of the subsidiaries’ net income that is attributable

to redeemable noncontrolling interests.

Noncontrolling Interests

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hedges but are not designated as hedges for accounting purposes.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

For agreements not designated as hedges, changes in the value of the derivative,

8 unchanged sentences

changes in the fair values of our SERP and DCP liabilities.

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Foreign Currency Translation

13 unchanged sentences

Accounting Pronouncements Adopted

During the year ended December 28, 2024, we adopted Accounting Standards

Update (“ASU”) 2023-07, “

Reporting (Topic 280):

Improvements to Reportable Segments

” (“Topic 280”),

which aims to improve financial

reporting by requiring disclosure of incremental segment information on an annual

and interim basis for all public

entities to enable investors to develop more decision-useful financial analyses.

The amendments in Topic 280 do

not change how a public entity identifies its operating segments, aggregates

those operating segments, or applies

the quantitative thresholds to determine its reportable segments.

We adopted Topic

280 on a retrospective basis,

which resulted in the required additional disclosures included in our 2024

fiscal year annual consolidated financial

During the year ended December 30, 2023, we adopted ASC Topic 848,

9 unchanged sentences

financial statements.

On December 26, 2021 we adopted Accounting Standards Update

“Accounting for

Contract Assets and Contract Liabilities from Contracts with Customers” (Subtopic 805).

ASU 2021 – 08 requires

an acquirer to recognize and measure contract assets and contract liabilities acquired

in a business combination in

accordance with ASU No.

2014 - 09, “Revenue from Contracts with Customers”

At the acquisition

date, an acquirer should account for the related revenue contracts in accordance

with Topic 606 as if it had

originated the contracts.

To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine

what to record for the acquired revenue contracts.

Generally, this should result in an acquirer recognizing and

measuring the acquired contract assets and contract liabilities consistent with how

they were recognized and

measured in the acquiree’s financial statements.

Our adoption of ASU 2021 - 08 did not have a material impact on

our consolidated financial statements.

On December 27, 2020 we adopted ASU No.

“Income Taxes” (Topic

Simplifying the Accounting

for Income Taxes

Recently Issued Accounting Standards

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

(“ASU”) 2024-03, “

ASU 2019-12 simplifies the accounting for income taxes by

removing certain

exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and

simplify U.S.

GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

Our adoption of

ASU 2019-12 did not have a material impact on our consolidated

Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosure

(Subtopic 220-40)

Disaggregation of Income Statement Expenses

,” which requires additional disclosure about the

specific expense categories in the notes to financial statements at interim and

annual reporting periods.

amendments in this ASU do not change or remove current expense

disclosure requirements but affect where this

information appears in the notes to financial statements.

This ASU is effective for annual reporting periods

beginning after December 15, 2026, and interim reporting periods beginning

after December 15, 2027, with early

adoption permitted.

Upon adoption, the guidance can be applied prospectively or retrospectively.

We are currently

evaluating the impact that ASU 2024-03 will have on our consolidated

financial statements.

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “

Improvements to

Income Tax Disclosures

,” which requires public business entities to disclose

additional information in specified categories with respect to

the reconciliation of the effective tax rate to the

statutory rate for federal, state, and foreign income taxes.

It also requires greater detail about individual reconciling

items in the rate reconciliation to the extent the impact of those items

exceeds a specified threshold.

In addition to

new disclosures associated with the rate reconciliation, the ASU requires

information pertaining to taxes paid (net

of refunds received) to be disaggregated for federal, state, and foreign

taxes and further disaggregated for specific

In March 2024, the FASB issued ASU 2024-01, “

Compensation - Stock Compensation (Topic 718):

Application of Profits Interest and Similar Awards,

” which clarifies how to determine whether profits interest and

similar awards should be accounted for as a share-based payment arrangement

under Topic 718 or within the scope

of other guidance.

The ASU provides an illustrative example with multiple fact patterns

and amends the structure

of paragraph 718-10-15-3 of Topic 718 to improve its clarity and operability.

The guidance in ASU 2024-01

applies to all entities that issue profits interest awards as compensation

to employees or nonemployees in exchange

for goods or services.

Entities can apply the amendments either retrospectively to

all periods presented in the

financial statements or prospectively to profits interest awards granted

or modified on or after the date of adoption.

If prospective application is elected, an entity must disclose the nature

of and reason for the change in accounting

principle that resulted from the adoption of the ASU.

This ASU is effective for fiscal years beginning after

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

jurisdictions to the extent the related amounts exceed a quantitative threshold.

The ASU also describes items that

need to be disaggregated based on their nature, which is determined by

reference to the item’s fundamental or

essential characteristics, such as the transaction or event that triggered

the establishment of the reconciling item and

the activity with which the reconciling item is associated.

The ASU eliminates the historic requirement that entities

disclose information concerning unrecognized tax benefits having a reasonable

possibility of significantly

increasing or decreasing in the 12 months following the reporting date.

This ASU is effective for annual periods

beginning after December 15, 2024.

Early adoption is permitted for annual financial statements

that have not yet

been issued or made available for issuance.

This ASU should be applied on a prospective basis;

retrospective application is permitted.

We are currently evaluating the impact that ASU 2023 – 09 will have on our

consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “

Segment Reporting (Topic 280):

Improvements to Reportable

,” which aims to improve financial reporting by requiring disclosure

of incremental segment information

on an annual and interim basis for all public entities to enable investors to

develop more decision-useful financial

Currently, Topic

280 requires that a public entity disclose certain information about its

For example, a public entity is required to report a measure of

segment profit or loss that the CODM

uses to assess segment performance and make decisions about allocating

Topic 280 also requires other

specified segment items and amounts, such as depreciation, amortization,

and depletion expense, to be disclosed

under certain circumstances.

The amendments in this ASU do not change or remove those disclosure

and do not change how a public entity identifies its operating segments,

aggregates those operating segments, or

applies the quantitative thresholds to determine its reportable segments.

This ASU is effective for fiscal years

beginning after December 15, 2023, and interim periods within fiscal years

beginning after December 15, 2024.

Early adoption is permitted.

We do not expect that the requirements of ASU 2023 – 07 will have a material impact

on our consolidated financial statements.

Note 2 – Cybersecurity Incident

In October 2023 Henry Schein experienced a cybersecurity incident that

primarily affected the operations of our

North American and European dental and medical distribution businesses.

Henry Schein One, our practice

management software, revenue cycle management and patient relationship

management solutions business, was not

affected, and our manufacturing businesses were mostly unaffected.

We reported the incident to law enforcement

authorities, restored affected systems and applications, our distribution operations

resumed and we reactivated our

ecommerce platform.

Subsequently, on or about November 8, 2023, we determined that the threat actor obtained

personal and sensitive information maintained on our systems belonging

to certain third parties and since that date

we have notified affected and potentially affected parties as appropriate.

The scope of personal and sensitive data

impacted is still under investigation.

On November 22, 2023, we experienced a disruption

of our ecommerce

platform and related applications, which has since been remediated.

The incident adversely impacted our financial

results for the fourth quarter and full year 2023.

During the year ended December 30, 2023, we incurred $

million of expenses directly related to the

cybersecurity incident, mostly consisting of professional fees.

We maintain cybersecurity insurance, subject to

certain retentions and policy limitations.

With respect to the October 2023 cybersecurity incident, we have a $

December 15, 2024, including interim periods within those fiscal years.

We do not expect that the requirements of

ASU 2024-01 will have a material impact on our consolidated financial

In December 2023, the FASB issued ASU 2023-09, “

Income Taxes (Topic

Improvements to Income Tax

,” which requires public business entities to disclose additional

information in specified categories with

respect to the reconciliation of the effective tax rate to the statutory rate for federal, state and

foreign income taxes.

It also requires greater detail about individual reconciling items in

the rate reconciliation to the extent the impact of

those items exceeds a specified threshold.

In addition to new disclosures associated with the rate reconciliation,

ASU requires information pertaining to taxes paid (net of refunds received)

to be disaggregated for federal, state,

and foreign taxes and further disaggregated for specific jurisdictions

to the extent the related amounts exceed a

quantitative threshold.

The ASU also describes items that need to be disaggregated

based on their nature, which is

determined by reference to the item’s fundamental or essential characteristics, such as the transaction or event

triggered the establishment of the reconciling item and the activity with which

the reconciling item is associated.

The ASU eliminates the historic requirement that entities disclose information

concerning unrecognized tax

benefits having a reasonable possibility of significantly increasing

or decreasing in the 12 months following the

reporting date.

This ASU is effective for annual periods beginning after December 15, 2024.

Early adoption is

permitted for annual financial statements that have not yet been

issued or made available for issuance.

should be applied on a prospective basis;

however, retrospective application is permitted.

We are currently

evaluating the impact that ASU 2023-09 will have on our consolidated

financial statements.

Note 2 – Cyber Incident

In October 2023 Henry Schein experienced a cyber incident that primarily

affected the operations of our North

American and European dental and medical distribution businesses.

Henry Schein One, our practice management

software, revenue cycle management and patient relationship management

solutions business, was not affected, and

our manufacturing businesses were mostly unaffected.

On November 22, 2023, we experienced a disruption of our

ecommerce platform and related applications, which was remediated.

During the years ended December 28, 2024 and December 30, 2023, we had

a sales decrease in our dental and

medical distribution businesses, which we believe was primarily a

result of lower sales to episodic customers

following last year’s cyber incident.

During the years ended December 28, 2024 and December 30, 2023, we incurred

million and $

respectively, of expenses directly related to the cyber incident, mostly consisting of professional fees.

cyber insurance, subject to certain retentions and policy limitations.

With respect to the October 2023 cyber

incident, we have a $

million insurance policy, following a $

million retention.

During the years ended

December 28, 2024 we received insurance proceeds of $

million under this policy representing a partial

insurance recovery of losses related to the cyber incident, with the remaining

million of the claim being under

review by our insurance providers.

The expenses and insurance recoveries related to the cyber

included in the selling, general and administrative line in our consolidated

statements of income.

Index to Financial Statements

HENRY SCHEIN, INC.

7 unchanged sentences

Disaggregation of Net Sales

As noted further in

Note 4 – Segment and Geographic Data

during the fourth quarter of our fiscal year ended

December 28, 2024, we revised our reportable segments to align with how

the Chairman and Chief Executive

Officer manages the business, assesses performance and allocates resources.

All prior comparative segment

information has been recast to reflect our new segment structure.

The following table disaggregates our net sales by reportable and operating segment

and geographic area:

December 30, 2023

North America

International

Health care distribution

Total health care distribution

and value-added services

Total net sales

December 31, 2022

North America

International

Health care distribution

Total health care distribution

and value-added services

Total net sales

December 25, 2021

North America

International

Health care distribution

Total health care distribution

and value-added services

Total net sales

Global Distribution and Value

-Added Services

Global Dental merchandise

Global Dental equipment

-added services

Global Dental

Global Medical

Total Global Distribution

-Added Services

Global Specialty Products

Global Technology

Index to Financial Statements

HENRY SCHEIN, INC.

3 unchanged sentences

Note 4 – Segment and Geographic Data

We conduct our business through

reportable segments:

(i) health care distribution and (ii) technology

value-added services.

These segments offer different products and services to the same customer base.

dental businesses serve office-based dental practitioners, dental laboratories, schools, government

institutions.

Our medical businesses serve physician offices, urgent care centers, ambulatory care sites,

medical technicians, dialysis centers, home health, federal and state governments

and large enterprises, such as

group practices and integrated delivery networks, among other providers

across a wide range of specialties.

dental and medical groups serve practitioners in

countries worldwide.

The health care distribution reportable segment aggregates our global dental

and medical operating segments.

segment distributes consumable products, dental specialty products, small

equipment, laboratory products, large

equipment, equipment repair services, branded and generic pharmaceuticals,

vaccines, surgical products, diagnostic

tests, infection-control products, personal protective equipment products (“PPE”)

and vitamins.

Our global technology and value-added services reportable segment provides

software, technology and other value-

added services to health care practitioners.

Our technology offerings include practice management software

systems for dental and medical practitioners.

Our value-added practice solutions include practice consultancy,

education, revenue cycle management and financial services on a non-recourse

basis, e-services, practice

technology, network and hardware services, as well as continuing education services for practitioners.

The following tables present information about our reportable and operating

Health care distribution

Total health care distribution

and value-added services

Consists of consumable products, dental specialty products (including implant, orthodontic and endodontic products), small

equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical

products, diagnostic tests, infection-control products, PPE products and vitamins.

Consists of practice management software and other value-added products, which are distributed primarily to health care providers,

practice consultancy, education, revenue cycle management and financial services on a non-recourse basis, e-services, continuing

education services for practitioners, consulting and other services.

During the fourth quarter of our fiscal year ended December 28, 2024,

we revised our reportable segments to align

with how the Chairman and Chief Executive Officer manages the business, assesses

performance and allocates

Our revised reportable segments now consist of:

(i) Global Distribution

-Added Services;

Global Specialty Products;

and (iii) Global Technology.

These segments offer different products and services to

the same customer base.

All prior comparative segment information has been recast

to reflect our new segment

We aggregate operating segments into these reportable segments based on economic similarities, the nature of their

products, customer base, and methods of distribution.

Global Distribution and Value-Added Services includes

merchandise and equipment distribution businesses that serve the global dental

and medical markets;

includes value-added services such as equipment repair services, financial

services on a non-recourse basis,

continuing education services for practitioners, consulting and other

Global Distribution and Value-Added Services includes distribution to the global dental and medical markets of

national brand and corporate brand merchandise, as well as equipment and related

technical services.

also includes value-added services such as financial services, continuing

education services, consulting and other

This segment also markets and sells under our own corporate brand,

a portfolio of cost-effective, high-

quality consumable merchandise.

Global Specialty Products includes manufacturing, marketing and sales

implant and biomaterial products;

and endodontic, orthodontic and orthopedic

products and other health care-

related products and services.

Global Technology includes development and distribution of practice management

software, e-services, and other products, which are distributed to health

care providers.

Our organizational structure also includes Corporate, which consists primarily of

income and expenses associated

with support functions and projects.

Our chief operating decision maker (“CODM”) is our Chairman

and Chief Executive Officer.

Our CODM uses

adjusted operating income as the profitability metric for purposes of making

decisions about allocation of resources

to each segment and assessing performance of each segment.

Adjusted operating income provides a measure of our

underlying segment results that is in line with our approach to risk and performance

adjusted operating income as operating income adjusted to exclude

(a) direct cybersecurity costs and related

insurance recovery proceeds, (b) impairment of capitalized assets, (c)

amortization of acquisition intangibles, (d)

settlement and litigation, (e) organizational restructuring expenses, (f) impairment

of intangible assets, (g) changes

in fair value of contingent consideration, and (h) costs associated with

shareholder advisory matters.

adjustments are either:

(i) non-cash or non-recurring in nature;

(ii) not allocable

or controlled by the segment;

(iii) not tied to the operational performance of the segment.

Assets by segment are not a measure used to assess the

performance of the Company by CODM and thus are not reported in

our disclosures.

The accounting policies of the reportable segments are generally

the same as those described in

Note 1 – Basis of

Presentation and Significant Accounting Policies.

Sales and transfers between operating segments are eliminated

in consolidation.

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Segment adjusted operating income is presented in the following

table to reconcile to operating income as

presented on the consolidated statement of operations.

The reconciliation from operating income to income before

taxes and equity in earnings of affiliates is presented on our consolidated statements

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Total Gross Sales

Eliminations:

Global Distribution and Value

-Added Services

Global Specialty Products

Total eliminations

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Total Net Sales

Operating Income

Health care distribution

and value-added services

Income before taxes and equity in earnings of affiliates:

Health care distribution

and value-added services

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Total Segment Operating Income

Total Operating Income

Depreciation and Amortization

Health care distribution

and value-added services

Interest Income:

Health care distribution

and value-added services

Interest Expense:

Health care distribution

and value-added services

Health care distribution

and value-added services

Equity in Earnings of Affiliates:

Health care distribution

and value-added services

Purchases of Property and Equipment:

Health care distribution

and value-added services

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Global Distribution and Value

-Added Services:

Includes distribution of infection-control products, handpieces, preventatives,

impression materials, composites, anesthetics, teeth, gypsum, acrylics, articulators, abrasives, PPE products, branded and generic

pharmaceuticals, vaccines, surgical products, diagnostic tests, dental chairs, delivery units and lights, digital dental laboratories, X-

ray supplies and equipment, high-tech and digital restoration equipment, equipment repair services, financial services on a non-

recourse basis, continuing education services for practitioners, consulting and other services.

This segment also markets and sells

under our own corporate brand, a portfolio of cost-effective, high-quality consumable merchandise.

Global Specialty Products:

Includes manufacturing, marketing and sales of dental implant and biomaterial products;

endodontic, orthodontic and orthopedic products and other health care-related products and services.

Global Technology:

Includes development and distribution of practice management software, e-services, and other products, which

are distributed to health care providers.

Adjustments represent items excluded from segment operating income to enable comparison of financial results between periods.

The following table presents a breakdown of such adjustments:

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Health care distribution

and value-added services

Restructuring costs

Acquisition intangible amortization

Cyber incident-third-party advisory expenses, net of insurance

Changes in contingent consideration

Litigation settlements

Impairment of capitalized assets

Impairment of intangible assets

Costs associated with shareholder advisory matters

Total adjustments

The following table presents information about our operations by geographic

9 unchanged sentences

Consolidated total

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Note 5 – Business Acquisitions and Divestiture

Note 5 – Business Acquisitions

Our acquisition strategy is focused on investments in companies that

2 unchanged sentences

have already invested in businesses), and finally, those that enable us to access new products and technologies.

Acquisition of Shield Healthcare

On October 2, 2023 we acquired a

% voting equity interest in Shield Healthcare, Inc.

(“Shield”), a supplier

homecare medical products delivered directly to patients in their homes.

Based in California, Shield expands our

existing medical business by delivering a diverse range of products,

including items such as incontinence, urology,

ostomy, enteral nutrition, advanced wound care, and diabetes supplies.

Additionally, Shield offers continuous

glucose monitoring devices directly to patients in their homes.

The following table aggregates

the preliminary estimated fair value, as of the date of acquisition, of

consideration

paid and net assets acquired in the Shield acquisition:

Acquisition of TriMed

On April 1, 2024, we acquired a

% voting equity interest in TriMed Inc.

(“TriMed”), a global developer of

solutions for the orthopedic treatment of lower and upper extremities, headquartered

in California,

for consideration

This acquisition is reported in our Global Specialty Products segment.

During the year ended

December 28, 2024, we completed the accounting for this acquisition.

The following table aggregates the final fair

value, as of the date of the acquisition, of consideration paid and net

assets acquired in the TriMed acquisition:

Final Allocation

Acquisition consideration:

Deferred consideration

Redeemable noncontrolling interest

Redeemable noncontrolling interests

Total consideration

8 unchanged sentences

Total net assets acquired

Goodwill is a result of expected synergies that are expected to originate from the

acquisition as well as the expected

growth potential of Shield.

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of TriMed.

The acquired goodwill is not deductible for tax purposes.

The following table summarizes the preliminary identifiable intangible assets

acquired as part of the acquisition of

The following table summarizes the identifiable intangible assets acquired

as part of the acquisition of TriMed:

Weighted Average

Lives (in years)

Customer relationships and lists

Product development

Trademarks / Tradenames

In process research & development

Not Applicable

Except for in-process research and development (“IPR&D”), intangible assets

acquired as a result of the TriMed

acquisition are being amortized over their estimated useful lives

using the straight-line method of amortization.

The IPR&D is accounted for as an indefinite-lived intangible asset and

is not amortized until completion or

abandonment of the associated research and development efforts.

IPR&D is tested for impairment annually or

periodically if an indicator of impairment exists during the period until completion.

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

The accounting for the acquisition of Shield has not been completed

in several respects, including but not limited to

finalizing valuation assessments of accounts receivable, inventory, accrued liabilities and income and non-income

To assist in the allocation of consideration,

we engaged valuation specialists to determine the fair

value of intangible and tangible assets acquired and liabilities assumed.

will finalize the amounts recognized as

the information necessary to complete the analysis is obtained.

We expect to finalize these amounts as soon as

possible but no later than one year from the acquisition date.

The pro forma financial information has not been

presented because the impact of the Shield acquisition during the year ended

December 30, 2023 was immaterial to

our consolidated financial statements.

Acquisition of S.I.N.

Implant System

On July 5, 2023, we acquired a

% voting equity interest in S.I.N.

Implant System (“S.I.N.”).

Paulo, S.I.N.

manufactures an extensive line of products to perform dental

implant procedures and is focused on

advancing the development of value-priced dental implants.

recently expanded the distribution of its

products into the United States and other international markets.

The following table aggregates the preliminary estimated fair value, as of

the date of acquisition, of consideration

paid and net assets acquired in the S.I.N., including measurement period

adjustments recorded through December

Allocation as

Pro forma financial information and TriMed’s revenue and earnings since the acquisition date have not been

presented because the impact of the TriMed acquisition during the year ended December

28, 2024 was immaterial

to our consolidated financial statements.

Other 2024 Acquisitions

During the year ended December 28, 2024, we acquired companies within

the Global Distribution and Value-

Added Services, Global Specialty Products, and Global Technology segments.

Our acquired ownership interest in

these companies range from

Total consideration for these acquisitions was $

million (including

cash paid of $

million, fair value of previously held equity investment of

million, noncontrolling interest of

million, estimated fair value of contingent consideration payable of

million, and deferred consideration of

Net assets acquired primarily consisted of $

million of goodwill and $

million of intangible

The intangible assets acquired consisted of customer relationships

and lists of $

million, trademarks and

tradenames of $

million, product development of $

million and non-compete agreements of $

Weighted average useful lives for these acquired intangible assets were

respectively.

During the year ended December 28, 2024, we completed the accounting

for certain acquisitions that occurred in

fiscal year 2024 and we did not record any material measurement period

adjustments related to these acquisitions.

The accounting for other acquisitions in fiscal year 2024 has not been

completed in several areas, including but not

limited to pending assessment of current expected credit losses.

Goodwill is a result of the synergies and cross-selling opportunities that these acquisitions

are expected to provide

for us, as well as the expected growth potential.

The majority of the acquired goodwill is not deductible

During the year ended December 28, 2024, in connection with an acquisition

of a controlling interest of an affiliate,

we recognized a gain of approximately $

million related to the remeasurement to fair value of our previously

held equity investment, using a discounted cash flow model based on

Level 3 inputs, as defined in

Note 11 – Fair

Value Measurements

which was recorded in selling, general and administrative

in the consolidated statements of

The impact of these acquisitions, individually and in the aggregate, was

not considered material to our consolidated

financial statements.

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

2023 Acquisitions

Acquisition of Shield Healthcare

On October 2, 2023, we acquired a

% voting equity interest in Shield Healthcare, Inc.

(“Shield”), a

homecare medical products delivered directly to patients in their homes,

for consideration of $

acquisition is reported in our Global Distribution and Value-Added Services segment.

Shield expands our existing

medical business by delivering a diverse range of products, including

items such as incontinence, urology, ostomy,

enteral nutrition, advanced wound care and diabetes supplies.

Additionally, Shield offers continuous glucose

monitoring devices directly to patients in their homes.

During the year ended December 28, 2024, we completed the accounting

for our acquisition of Shield.

following table aggregates the final fair value, as of the date of the acquisition,

of consideration paid and net assets

acquired in the Shield acquisition:

Final Allocation

Acquisition consideration:

Deferred consideration

Redeemable noncontrolling interests

Total consideration

4 unchanged sentences

Current liabilities

Long-term debt

Deferred income taxes

2 unchanged sentences

Total net assets acquired

Goodwill is a result of expected synergies that are expected to originate from the

acquisition as well as the expected

growth potential of S.I.N.

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of Shield.

The acquired goodwill is not deductible for tax purposes.

Measurement period

adjustments recorded in the year ended December 30, 2023 were primarily

a result of finalization of net working

capital adjustments and third party intangible valuations.

The following table summarizes the preliminary identifiable intangible assets

acquired as part of the acquisition of

The following table summarizes the identifiable intangible assets acquired

as part of the acquisition of Shield:

Weighted Average

2 unchanged sentences

Trademarks / Tradenames

Product development

Pro forma financial information and Shield’s revenue and earnings from the acquisition date have

not been presented because the impact of the Shield acquisition was

immaterial to our consolidated financial

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

The accounting for the acquisition of S.I.N.

has not been completed

in several respects, including but not limited to

finalizing valuation assessments of accounts receivable, inventory, accrued liabilities and income and non-income

To assist in the allocation of consideration,

we engaged valuation specialists to determine the fair

value of intangible and tangible assets acquired and liabilities assumed.

will finalize the amounts recognized as

the information necessary to complete the analysis is obtained.

We expect to finalize these amounts as soon as

possible but no later than one year from the acquisition date.

The pro forma financial information has not been

presented because the impact of the S.I.N.

acquisition during the year ended

December 30, 2023 was immaterial to

our consolidated financial statements.

Acquisition of Biotech Dental

On April 5, 2023, we acquired a

% voting equity interest in Biotech Dental (“Biotech Dental”), which

provider of dental implants, clear aligners, individualized prosthetics,

and innovative digital dental software based

Biotech Dental has several important solutions for dental practices

and dental labs, including Nemotec, a

comprehensive, integrated suite of planning and diagnostic software

using open architecture that connects disparate

medical devices to create a digital view of the patient, offering greater diagnostic

accuracy and an improved patient

The integration of Biotech Dental’s software with Henry Schein One’s industry-leading practice

management software solutions will help customers streamline their

clinical as well as administrative workflow for

the ultimate benefit of patients.

The following table aggregates the preliminary estimated fair value, as

of the date of acquisition, of consideration

paid and net assets acquired in the Biotech Dental acquisition, including

measurement period adjustments recorded

through December 30, 2023:

Allocation as

of July 1, 2023

Allocation as

Acquisition of S.I.N.

Implant System

On July 5, 2023, we acquired a

% voting equity interest in S.I.N.

Implant System (“S.I.N.”) for consideration of

This acquisition is reported in our Global Specialty Products segment.

Based in São Paulo, S.I.N.

manufactures an extensive line of products to perform dental implant procedures

and is focused on advancing the

development of value-priced dental implants.

In 2023, S.I.N.

expanded the distribution of its products into the

United States and other international markets.

During the year ended December 28, 2024, we completed the accounting

for our acquisition of S.I.N.

following table aggregates the final fair value, as of the date of acquisition,

of consideration paid and net assets

acquired in the S.I.N.

Final Allocation

Acquisition consideration:

Fair value of contributed equity share in a controlled subsidiary

Redeemable noncontrolling interests

Total consideration

9 unchanged sentences

Total net assets acquired

Goodwill is a result of expected synergies that are expected to originate from the

acquisition as well as the expected

growth potential of Biotech Dental.

The acquired goodwill is deductible for tax purposes.

Measurement period

adjustments recorded in the year ended December 30, 2023 were primarily

a result of preliminary third party

intangible valuation and various other adjustments.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

The following table summarizes the preliminary identifiable intangible assets

acquired as part of the acquisition of

Biotech Dental:

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of S.I.N.

The acquired goodwill is not deductible for tax purposes.

The following table summarizes the identifiable intangible assets acquired

as part of the acquisition of S.I.N.:

Weighted Average

1 unchanged sentence

Customer relationships and lists

Trademarks / Tradenames

Product development

The accounting for the acquisition of Biotech Dental has

not been completed in several areas, including but not

limited to pending assessments of accounts receivable, inventory, intangible assets, accrued liabilities and income

and non-income based taxes.

To assist in the allocation of consideration, we engaged valuation specialists to

determine the fair value of intangible and tangible assets acquired and liabilities

We will finalize the

amounts recognized as the information necessary to complete the

analysis is obtained.

We expect to finalize these

amounts as soon as possible but no later than one year from the acquisition

The pro forma financial

information has not been presented because the impact of the Biotech Dental

acquisition during the year ended

December 30, 2023 was immaterial to our consolidated financial statements.

Other 2023 Acquisitions

During the year ended December 30, 2023, we acquired companies within

the health care distribution and

technology and value-added services segments.

Our acquired ownership interest ranged between

The following table aggregates

the preliminary estimated fair value, as of the date of acquisition, of

consideration

paid and net assets acquired for these acquisitions during the year ended

December 30, 2023:

Acquisition consideration:

Deferred consideration

Estimated fair value of contingent consideration payable

Fair value of previously held equity method investment

Redeemable noncontrolling interests

Total consideration

Identifiable assets acquired and liabilities assumed:

Current assets

Intangible assets

Other noncurrent assets

Current liabilities

Deferred income taxes

Long-term debt

Other noncurrent liabilities

Total identifiable

Total net assets acquired

Goodwill is a result of the expected synergies and cross-selling opportunities that

these acquisitions are expected to

provide for us, as well as the expected growth potential.

Approximately half of the acquired goodwill is deductible

for tax purposes.

Trademarks / Tradenames

Pro forma financial information and S.I.N.’s revenue and earnings from the acquisition date have not been

presented because the impact of the S.I.N.

acquisition was immaterial

to our consolidated financial statements.

Index to Financial Statements

HENRY SCHEIN, INC.

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(in millions, except share and per share data)

In connection with an acquisition of a controlling interest of an

affiliate, we recognized a gain of approximately $

million related to the remeasurement to fair value of our previously held

equity investment, using a discounted cash

flow model based on Level 3 inputs, as defined in

Note 10 – Fair Value Measurements

The following table summarizes the preliminary identifiable intangible

assets acquired during the year ended

December 30, 2023 and their estimated useful lives as of the date of the acquisition:

Weighted Average

Lives (in years)

Customer relationships and lists

Trademarks / Tradenames

Non-compete agreements

Product development

The pro forma financial information has not been presented because the

impact of the acquisitions during the year

ended December 30, 2023 was immaterial to our consolidated financial

2022 Acquisitions

We completed several acquisitions during the year ended December 31, 2022, which were immaterial to our

consolidated financial statements.

Our acquired ownership interests ranged from between

Acquisitions in our health care distribution segment included companies

that specialize in the distribution of dental

Within our technology and value-added services segment, we acquired a company that educates and

connects dental office managers, practice administrators and dental business leaders

across North America.

The following table aggregates the estimated fair value, as of the

date of acquisition, of consideration paid and net

assets acquired for acquisitions during the year ended December 31, 2022.

Approximately half of the acquired

goodwill is deductible for tax purposes.

Acquisition of Biotech Dental

On April 5, 2023, we acquired a

% voting equity interest in Biotech Dental, a provider of dental implants,

aligners, individualized prosthetics and innovative digital dental software based

in France, for preliminary

consideration of $

This acquisition is reported in our Global Specialty Products

Dental has several important solutions for dental practices and dental

labs, including Nemotec, a comprehensive,

integrated suite of planning and diagnostic software using open architecture

that connects disparate medical devices

to create a digital view of the patient, offering greater diagnostic accuracy and an

improved patient experience.

During the year ended December 28, 2024, we completed the accounting

for our acquisition of Biotech Dental.

The following table aggregates the final fair value, as of the date of acquisition,

of consideration paid and net assets

acquired in the Biotech Dental acquisition:

Final Allocation

Acquisition consideration:

Deferred consideration

Fair value of previously held equity method investment

Fair value of contributed equity share in a controlled subsidiary

Redeemable noncontrolling interests

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Current liabilities

Long-term debt

Deferred income taxes

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Total net assets acquired

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

The following table summarizes the identifiable intangible assets acquired during

the year ended December 31,

2022 and their estimated useful lives as of the date of the acquisition:

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of Biotech Dental.

The acquired goodwill is not deductible for tax purposes.

The following table summarizes the identifiable intangible assets acquired

as part of the acquisition of Biotech

Weighted Average

Lives (in years)

Product development

Customer relationships and lists

Trademarks / Tradenames

Non-compete agreements

2021 Acquisitions

We completed several acquisitions during the year ended December 25, 2021, which were immaterial to our

financial statements.

Our acquired ownership interests ranged from between approximately

Acquisitions within our health care distribution segment included companies

that specialize in the distribution and

manufacturing of dental and medical products, a provider of home

medical supplies, and a provider of product

kitting and sterile packaging.

Within our technology and value-added services segment, we acquired companies

that focus on dental marketing and website solutions, practice transition

services, revenue cycle management, and

business analytics and intelligence software.

Approximately half of the acquired goodwill is deductible for tax

The following table aggregates the estimated fair value, as of the date of

acquisition, of consideration paid and net

assets acquired for acquisitions during the year ended December 25, 2021

Acquisition consideration:

Deferred consideration

Estimated fair value of contingent consideration receivable

Fair value of previously held equity method investment

Redeemable noncontrolling interests

Total consideration

Identifiable assets acquired and liabilities assumed:

Current assets

Intangible assets

Other noncurrent assets

Current liabilities

Deferred income taxes

Other noncurrent liabilities

Total identifiable

Total net assets acquired

Pro forma financial information and Biotech’s revenues and earnings from the acquisition date have not been

presented because the impact of the Biotech Dental acquisition was immaterial

to our consolidated financial

Index to Financial Statements

HENRY SCHEIN, INC.

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(in millions, except share and per share data)

The following table summarizes the identifiable intangible assets acquired during

the year ended December 25,

2021 and their estimated useful lives as of the date of the acquisition:

Other 2023 Acquisitions

During the year ended December 30, 2023, in addition to those noted above,

we acquired companies within the

Global Distribution and Value-Added Services, Global Specialty Products, and Global Technology segments for

total consideration of $

Our acquired ownership interest ranged between

year ended December 28, 2024, we recorded an adjustment of $

million, within selling, general and

administrative in our consolidated statements of income, representing a change

in the fair value of contingent

consideration related to a 2023 acquisition.

During the year ended December 28, 2024, we completed the accounting

for certain fiscal year 2023 acquisitions.

In relation to these acquisitions, we did not record material adjustments

in our consolidated financial statements

relating to changes in estimated values of assets acquired, liabilities

assumed and contingent consideration assets

and liabilities.

Goodwill of $

million from these acquisitions is a result of the synergies and cross-selling opportunities

these acquisitions are expected to provide for us, as well as the expected

growth potential.

The majority of the

acquired goodwill is deductible for tax purposes.

Intangible assets of

million, consisting of $

customer relationships and lists, $

Trademarks / Tradenames

Product development

Non-compete agreements

For the years ended December 30, 2023, December 31, 2022 and December

25, 2021, there were no material

adjustments recorded in our financial statements relating to acquisitions

for which provisional amounts were

recorded in prior periods.

At December 25, 2021 we recorded an estimated contingent consideration

receivable of

million, which was subsequently increased by an additional $

million during 2022, by crediting income from

operations, based on delays in timing of government approval of a certain

million of trademarks and tradenames, $

million of product development, and

million are being amortized over their weighted average useful lives that

Pro forma financial information for our 2023 acquisitions has not been

presented because the impact of the

acquisitions was immaterial to our consolidated financial statements.

2022 Acquisitions

During the year ended December 31, 2022, we acquired companies within

the Global Distribution and Value-

Added Services, Global Specialty Products, and Global Technology segments.

Our acquired ownership interest

ranged between

For the years ended December 30, 2023 and December 31, 2022,

there were no

material adjustments recorded in our financial statements relating

to acquisitions for which provisional amounts

were recorded in prior periods.

During the year ended December 28, 2024, we recorded an

adjustment of $

million, within selling, general and administrative in our consolidated statements

of income, representing a change

in the fair value of contingent consideration related to a 2022 acquisition.

Goodwill of $

million is a result of the synergies and cross-selling opportunities that these acquisitions

expected to provide for us, as well as the expected growth potential.

Approximately half of the acquired goodwill

is deductible for tax purposes.

Intangible assets of $

million, consisting of $

million of customer relationships

million of trademarks and tradenames, and other of $

million are being amortized over their weighted

average useful lives that range from

Pro forma financial information for our 2022 acquisitions has not been

presented because the impact of the

acquisitions was immaterial to our consolidated financial statements.

Acquisition Costs

During the years ended December 28, 2024, December 30, 2023

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million and $

million in acquisition costs, which are included in “selling, general

and administrative” within

our consolidated statements of income.

In the third quarter of 2021 we received contingent proceeds of $

million from the 2019 sale of Hu-Friedy,

resulting in the recognition of an after-tax gain of $

During the fourth quarter of 2020 we received

contingent proceeds of $

million from the 2019 sale of Hu-Friedy, resulting in the recognition of an after-tax gain

We do not expect to receive any additional proceeds from the sale of Hu-Friedy.

million in acquisition costs, respectively.

These costs are included in selling, general and

administrative in our consolidated statements of income.

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Note 6 – Inventories, Net

Inventories, net consisted of the following as of:

Finished goods

Raw materials

Work-in process

Inventories, net

Our inventory reserve was $

million and $

million as of December 28, 2024 and December 30, 2023,

respectively.

Note 7 – Property and Equipment, Net

26 unchanged sentences

During the year ended December 30, 2023 we recorded a $

million impairment of capitalized costs, within our

healthcare distribution segment.

million impairment of capitalized software, within

our Global Distribution and Value-Added Services segment.

Index to Financial Statements

HENRY SCHEIN, INC.

19 unchanged sentences

within our consolidated statements of income.

Further, for the years ended December 30, 2023,

December 31, 2022 and December 25, 2021, we recognized an

Further, for the years ended December 28, 2024, December 30, 2023 and December 31, 2022, we recognized

impairment of operating lease right-of-use assets of $

21 unchanged sentences

Finance leases

Weighted Average

Discount Rate:

Average Discount

Operating leases

Finance leases

Index to Financial Statements

HENRY SCHEIN, INC.

22 unchanged sentences

leases are classified as operating leases and have a remaining lease term

of December 30, 2023, current and non-current liabilities associated with

related party operating leases were $

ranging from less than a year to

As of December 28, 2024, current and non-current liabilities associated

with related party operating leases were $

million and $

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lease liabilities, respectively.

Index to Financial Statements

HENRY SCHEIN, INC.

6 unchanged sentences

30, 2023 were

Distribution and

Global Specialty

Balance as of December 31, 2022

5 unchanged sentences

Balance as of December 28, 2024

For the year ended December 31, 2022, we recorded a $

million impairment of goodwill relating to the disposal

of an unprofitable business whose estimated fair value was lower than

its carrying value.

The disposal of this

business is part of our restructuring initiative as more fully discussed

Note 15 – Plans of Restructuring and

Integration Costs

During the fourth quarter of our fiscal year ended December 28, 2024,

we revised our segment structure to align

with how our Chairman and Chief Executive Officer manages the business, assesses

performance and allocates

Our revised reportable segments now consist of:

(i) Global Distribution

-Added Services;

Global Specialty Products;

and (iii) Global Technology.

Reporting units under the former structure were tested for

impairment, and no impairment was identified.

As a result of the realignment and the change in operating

segments, we reallocated goodwill to each of our new reporting units using

a relative fair value approach.

the impairment test under the new structure, it was determined that the fair values

of our reporting units more likely

than not exceeded their carrying values, resulting in no impairment.

For both the former and new structure

goodwill impairment tests as of September 30, 2024, the fair values of reporting

units were computed using the

methodology described in

Note 1 – Basis of Presentation and Significant Accounting Policies.

In connection with our restructuring initiatives, during the year ended

December 28, 2024, we recorded an $

million impairment of goodwill in the Global Specialty Products segment,

relating to the disposal of a portion of a

such impairment was calculated based on the relative fair value

For the year ended

December 31, 2022, in connection with our restructuring initiatives, we

million impairment of

goodwill, in the Global Specialty Products segment, relating to the disposal

of an unprofitable business for which

estimated fair value was lower than carrying value.

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Other intangible assets consisted of the following:

24 unchanged sentences

separation from us.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Amortization expense, excluding impairment charges, related to definite-lived intangible assets

2 unchanged sentences

million and $

respectively.

During the year ended December 28, 2024 we recorded $

million of impairment charges related to businesses in

our health care distribution segment, the components of which were

million primarily related to customer lists

and relationships attributable to lower than anticipated operating

margins in certain businesses, and a $

charge related to the planned exit of a business.

These impairment charges were calculated as the differences

between the carrying values and the estimated fair values

of the impaired intangible assets, using a discounted

estimate of future cash flows.

Note 15 – Plans of Restructuring and Integration Costs

for additional

our Global Distribution and Value-Added Services segment.

It included $

million of trade name impairment,

calculated using the relative fair value related to a

disposal of a business and $

million related to trade name

impairment due to business integration in connection with our restructuring

The remaining $

impairment charges related to trade names and non-compete agreements were calculated

as the differences between

the carrying values and the estimated fair values of the impaired intangible assets,

using a discounted estimate of

future cash flows.

During the year ended December 30, 2023 we recorded $

million of impairment charges related to businesses in

our health care distribution segment, the components of which were

million charge related to the disposal of

an unprofitable business and a $

million charge related to customer lists and relationships attributable to

customer attrition rates being higher than expected in certain other health

care distribution businesses.

our Global Distribution and Value-Added Services segment, consisting of $

million primarily related to customer

lists and relationships attributable to lower than anticipated operating

margins in certain businesses, and a $

million charge related to the planned exit of a business in connection with our restructuring

impairment charges were calculated as the differences between the carrying values and the estimated

the impaired intangible assets, using a discounted estimate of future

Note 15 – Plans of

Restructuring and Integration Costs

During the year ended December 31, 2022 we recorded $

million of impairment charges related to businesses in

our Global Distribution and Value-Added Services segment, the components of which were a $

million charge

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

related to the disposal of an unprofitable business in connection with

our restructuring initiatives and a $

charge related to customer lists and relationships attributable to customer attrition

rates being higher than expected

in certain other distribution and value-added services businesses.

These impairment charges were calculated as the

differences between the carrying values and the estimated fair values of the impaired intangible

assets, using a

discounted estimate of future cash flows.

Note 16 – Plans of Restructuring and Integration Costs

for additional details.

During the year ended December 25, 2021, we recorded a $

million impairment charge related ratably to a

business within our health care distribution segment and a business within

our technology and value-added services

The above intangible asset impairment charges were recorded within selling, general

4 unchanged sentences

million and $

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

Note 10 – Investments and Other

3 unchanged sentences

Notes receivable

Capitalized costs for software to be sold, leased or marketed to external

Capitalized costs for software and cloud based applications for external use

Security deposits

Acquisition-related indemnification

Acquisition-related indemnification assets

Non-current pension assets

Other long-term assets

Non-current inventory

Long-term notes receivable carry interest rates ranging from

1 unchanged sentence

November 21, 2028

Amortization expense, primarily related to capitalized costs for software to

be sold, leased or marketed to external

users, for the years ended December 30, 2023, December 31, 2022 and

December 25, 2021, was $

Amortization expense, related to capitalized costs for software to be sold,

leased or marketed to external users, and

for cloud-based applications used to deliver our services, for the years

ended December 28, 2024, December 30,

2023 and December 31, 2022, was $

million and $

million, respectively, and is included in the selling, general and administrative line within our

consolidated statements of income.

million, respectively, and is included in the

selling, general and administrative line within our consolidated statements

During the year ended December 28, 2024 we recorded a $

million impairment of capitalized software costs,

within our Global Technology segment.

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Note 10 – Fair Value Measurements

Note 11 – Fair Value

The following section describes the fair values of our financial instruments

5 unchanged sentences

Certain of our notes receivable contain variable interest rates.

We believe the carrying amounts are a reasonable

estimate of fair value based on the interest rates in the applicable markets.

Our investments and notes receivable

fair value is based on Level 3 inputs within the fair value hierarchy.

We believe the carrying amounts of the notes

receivable are a reasonable estimate of fair value based on the interest rates

in the applicable markets.

receivable fair value is based on Level 3 inputs within the fair value

The fair value of our debt (including bank credit lines, current maturities

10 unchanged sentences

Our derivative

instruments primarily include foreign currency forward agreements, forecasted

inventory purchase commitments,

foreign currency forward contracts, interest rate swaps, and total return

instruments primarily include foreign currency forward contracts, interest

rate swaps, and total return swaps.

The fair values for the majority of our foreign currency derivative contracts

17 unchanged sentences

Note 20 – Redeemable Noncontrolling

for additional information.

Interests for additional information

Intangible Assets

Assets measured on a non-recurring basis at fair value include intangibles.

2 unchanged sentences

Note 1 – Basis of Presentation and Significant Accounting

Note 8 – Goodwill and Other Intangibles, Net

Note 9 – Goodwill and Other Intangibles

, Net for additional information.

Defined Benefit Plans

Assets of our defined benefit plans are measured on a recurring basis

and are classified as Level 1 within the fair

value hierarchy.

Note 19 – Employee Benefit Plans

for additional information.

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Contingent Consideration

We estimate the fair value of contingent consideration payments as part of the acquisition price and record the

estimated fair value of contingent consideration as a liability on our

consolidated balance sheet.

For transactions

accounted for as business combinations, subsequent changes in the

estimated fair value of contingent consideration

payments are included in selling, general, and administrative expenses

in our consolidated statements of

For transactions involving changes in our ownership

in subsidiaries without a change in our control,

subsequent changes in the estimated fair value of contingent consideration

payments are recognized in additional

paid-in capital in our consolidated balance sheet.

We measure contingent consideration at the fair value on a

recurring basis using significant unobservable inputs classified as

Level 3 of the fair value hierarchy.

various valuation techniques, including the Monte Carlo simulation

and probability-weighted scenarios, to

determine the fair value of the contingent consideration liabilities on

the acquisition date and at each reporting

Our fair value measurement inputs include expected operating

performance, discount and risk-free rates,

and credit spread.

The following table presents our assets and liabilities that are measured and

7 unchanged sentences

Derivative contracts undesignated

Contingent consideration

Total liabilities

7 unchanged sentences

Redeemable noncontrolling interests

Index to Financial Statements

HENRY SCHEIN, INC.

3 unchanged sentences

Note 12 – Concentrations of Risk

Certain financial instruments potentially subject us to concentrations of

Certain financial instruments potentially subject us to concentrations of credit

These financial instruments

16 unchanged sentences

As a risk management policy, we limit the amount of credit exposure by diversifying and

utilizing numerous investment grade counter-parties.

With respect to our trade receivables, credit risk is somewhat limited due to a relatively large customer base

utilizing numerous investment grade counterparties.

With respect to our trade receivables, credit risk is somewhat limited due to a relatively large customer base and

dispersion across different types of health care professionals and geographic areas.

1 unchanged sentence

for more than

% of our net sales in either of the years ended December 30, 2023

or December 31, 2022.

respect to our sources of supply, our top 10 health care distribution suppliers and our single largest supplier

accounted for approximately

%, respectively, of our aggregate purchases for the year ended December

30, 2023 and approximately

%, respectively, of our aggregate purchases for the year ended December

% of our net sales in each of the years ended December 28, 2024,

December 30, 2023 or December

With respect to our sources of supply, our top 10 Global Distribution and Value

-Added Services

suppliers and our single largest supplier accounted for approximately

%, respectively, of our aggregate

purchases for the year ended December 28, 2024 and approximately

%, respectively, of our aggregate

purchases for the year ended December 30, 2023.

Our long-term notes receivable primarily represent strategic financing arrangements

4 unchanged sentences

While we have exposure to credit loss in the

event of non-performance by these counter-parties, we conduct ongoing

assessments of their financial and

event of non-performance by these counterparties, we conduct ongoing assessments

of their financial and

operational performance.

Index to Financial Statements

HENRY SCHEIN, INC.

22 unchanged sentences

return swaps, and interest rate swaps.

During 2019 we entered foreign currency forward contracts that we

designated as net investment hedges to hedge a

During 2019 we entered foreign currency forward contracts that we designated

as net investment hedges to hedge a

portion of our euro-denominated foreign operations.

15 unchanged sentences

operations which are designated as net investment hedges.

The aggregate notional value of these net investment

hedges, which matured on

November 16, 2023

, was approximately €

The aggregate notional value of

this net investment hedge, which matures on

The aggregate notional value of this net investment

hedge, which matures on

November 3, 2028

, is approximately €

During the years

ended December 30, 2023, December 31, 2022, and December 25, 2021,

we recorded an increase/(decrease) of

During the years ended December 28,

2024, December 30, 2023, and December 31, 2022, we recorded an

increase/(decrease) of $

million, and $

million, respectively, within other comprehensive income related to these foreign

currency forward contracts.

million, respectively, within other comprehensive income related to these foreign currency forward

Note 11 – Fair Value Measurements

8 unchanged sentences

investments in these plans was $

At December 30, 2023, the financing blended rate for

this swap was

At December 28, 2024, the financing blended rate for this swap

based on the Secured Overnight Financing Rate (“SOFR”) of

1 unchanged sentence

the years ended December 28, 2024, December 30, 2023,

and December 25, 2021, we recorded within selling,

and December 31, 2022,

we recorded within selling,

general and administrative expenses in our consolidated statement of income,

12 unchanged sentences

notional value of the interest rate swap agreements was $

For the year ended December 30, 2023, we

recorded, within accumulated other comprehensive loss within our consolidated

balance sheets, a loss of $

million related to the change in the fair value of these interest rate

swap agreements, since we have designated these

swaps agreements as cash flow hedges.

For the years ended December 28, 2024 and

December 30, 2023, we recorded, within accumulated other comprehensive

loss within our consolidated balance

sheets, a loss of $

million and $

million, respectively, related to the change in the fair value of these interest rate

swap agreements, since we have designated these swaps agreements as cash flow

Fluctuations in the value of certain foreign currencies as compared

7 unchanged sentences

to protect against currency

Index to Financial Statements

HENRY SCHEIN, INC.

19 unchanged sentences

Foreign currency forward contracts

Accrued expenses, other

November 21, 2024

Prepaid expenses and other

October 30, 2025

Interest rate swaps

3 unchanged sentences

Foreign currency forward contracts

Accrued expenses, other

Prepaid expenses and other

November 3, 2028

Undesignated hedging relationships:

Prepaid expenses and other

January 3, 2024

Accrued expenses, other

December 30, 2024

December 30, 2023

Classification

2 unchanged sentences

Foreign currency forward contracts

Prepaid expenses and other

December 28, 2023

Accrued expenses, other

November 21, 2024

Interest rate swaps

Accrued expenses, other

July 13, 2026

Derivatives used in net investment hedges:

Foreign currency forward contracts

Prepaid expenses and other

Accrued expenses, other

November 3, 2028

Undesignated hedging relationships:

Accrued expenses, other

Prepaid expenses and other

January 3, 2024

1 unchanged sentence

on our consolidated

statements of income for the years ended

December 30, 2023, December 31, 2022 and December

statements of income for the years ended December 28, 2024, December

30, 2023 and December 31, 2022:

Derivatives used in cash flow hedges:

7 unchanged sentences

and December 31, 2022.

Index to Financial Statements

HENRY SCHEIN, INC.

9 unchanged sentences

August 20, 2021

, we entered a $

, we entered into a $

billion revolving credit agreement (the “Revolving Credit Agreement”)

which was scheduled to mature on

August 20, 2026

which was subsequently amended and restated on

July 11, 2023

, we amended and restated the Revolving

Credit Agreement to, among other things, extend the maturity date

to extend the maturity date to

July 11, 2028

and update the interest rate

provisions to reflect the current market approach for a multicurrency

The interest rate on this revolving

credit facility is based on Term Secured Overnight Financing Rate (“Term SOFR”) plus a spread based on our

leverage ratio at the end of each financial reporting quarter.

The Revolving Credit Agreement requires, among

other things, that we maintain certain maximum leverage ratios.

Additionally, the Revolving Credit Agreement

contains customary representations, warranties and affirmative covenants as well

as customary negative covenants,

subject to negotiated exceptions, on liens, indebtedness, significant corporate

changes (including mergers),

dispositions and certain restrictive agreements.

As of December 30, 2023 and December 31, 2022, we had $

update the interest rate provisions to reflect the current market approach

for a multicurrency facility.

rate on this revolving credit facility is based on Term Secured Overnight Financing Rate (“

spread based on our leverage ratio at the end of each financial reporting

As of December 28, 2024 the

interest rate on this revolving credit facility was

% for a combined rate of

As of December

30, 2023 the interest rate on this revolving credit facility was

% for a combined rate of

The Revolving Credit Agreement requires, among other things, that we

maintain certain maximum leverage ratios.

Additionally, the Revolving Credit Agreement contains customary representations, warranties and affirmative

covenants as well as customary negative covenants, subject to negotiated

exceptions, on liens, indebtedness,

significant corporate changes (including mergers), dispositions and certain restrictive

As of December

28, 2024 and December 30, 2023, we had $

million and $

million in borrowings, respectively under this revolving credit facility.

During the year ended

December 30, 2023, the average outstanding balance under the Revolving Credit

Agreement was approximately

As of December 30, 2023 and December 31, 2022, there were $

million in borrowings, respectively, under this

revolving credit facility.

During the year ended December 28, 2024, the average

outstanding balance under the

Revolving Credit Agreement was approximately $

As of December 28, 2024 and December 30, 2023,

million and $

million of letters of

credit, respectively, provided to third parties under this Revolving Credit Agreement.

million of letters of credit, respectively, provided to third parties under the

Revolving Credit Agreement.

Other Short-Term Bank Credit

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lines was approximately $

At December 30, 2023 and December 31, 2022, borrowings under

As of December 28, 2024 and December 30, 2023, borrowings

short-term bank credit lines had weighted average interest rates of

%, respectively.

Index to Financial Statements

HENRY SCHEIN, INC.

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the aggregate amounts of long-term debt, including finance lease obligations

deferred debt issuance costs of $

million, maturing in each of the next five years and thereafter

are as follows:

deferred debt issuance costs, maturing in each of the next five years

and thereafter are as follows:

Private Placement Facilities

Our private placement facilities include four insurance companies, have

a total facility amount of $

are available on an uncommitted basis at fixed rate economic

terms to be agreed upon at the time of issuance, from

time to time through

Our private placement facilities provided by

insurance companies have a total facility amount of $

and are available on an uncommitted basis at fixed rate economic terms

to be agreed upon at the time of issuance,

from time to time through

October 20, 2026

The facilities allow us to issue senior promissory notes to the

fixed rate based on an agreed upon spread over applicable treasury notes

at the time of issuance.

The term of each

possible issuance will be selected by us and can range from

(with an average life no longer than

at a fixed rate based on an agreed upon spread over applicable treasury

notes at the time of issuance.

each possible issuance will be selected by us and can range from

(with an average life no longer

The proceeds of any issuances under the facilities will be used

for general corporate purposes, including

working capital and capital expenditures, to refinance existing indebtedness,

and/or to fund potential acquisitions.

for general corporate purposes,

including working capital and capital expenditures, to refinance existing

indebtedness, and/or to fund potential

acquisitions.

The agreements provide, among other things, that we maintain

certain maximum leverage ratios, and contain

restrictions relating to subsidiary indebtedness, liens, affiliate transactions, disposal

of assets and certain changes in

certain maximum leverage ratios, and

contain restrictions relating to subsidiary indebtedness, liens, affiliate transactions,

disposal of assets and certain

changes in ownership.

These facilities contain make-whole provisions in the event that we

pay off the facilities prior to the

applicable due dates.

pay off the facilities

prior to the applicable due dates.

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

The components of our private placement facility borrowings, which

have a weighted average interest rate of

%, as of December 30, 2023 are presented in the following table:

The components of our private placement facility borrowings as of December

28, 2024, which have a weighted

average interest rate of

% are presented in the following table:

June 16, 2017

June 16, 2027

September 15, 2017

September 15, 2029

January 2, 2018

January 2, 2028

September 2, 2020

September 2, 2030

The components of our private placement facility borrowings as of December

30, 2023, which have a weighted

average interest rate of

% are presented in the following table:

January 20, 2012

January 20, 2024

December 24, 2012

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Deferred debt issuance costs

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

On July 11, 2023, we entered into a

million term loan credit agreement (the “Term Credit

The interest rate on this term loan is based on the

plus a spread based on our leverage

ratio at the end of each financial reporting quarter.

This term loan matures on

July 11, 2026

We are required to

make quarterly payments of $

million from September 2024 through June 2026, with the remaining

balance due in

Previously, we had been required to make quarterly payments of $

million from September 2023

through June 2024.

As of December 28, 2024, the borrowings outstanding under

this term loan were $

At December 28, 2024, the interest rate under the Term Credit Agreement was

% for a combined

As of December 30, 2023, the borrowings outstanding under

this term loan were $

December 30, 2023, the interest rate under the Term Credit Agreement was

% for a combined rate

However, we have a hedge in place that ultimately creates an effective fixed rate of

December 28, 2024 and December 30, 2023, respectively.

The Term Credit Agreement requires, among other

things, that we maintain certain maximum leverage ratios.

Additionally, the Term

Credit Agreement contains

customary representations, warranties and affirmative covenants as well as customary

negative covenants, subject

to negotiated exceptions, on liens, indebtedness, significant corporate changes

(including mergers), dispositions and

certain restrictive agreements.

Trade Accounts Receivable Securitization

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securitization program with pricing committed for up to

This facility agreement has a purchase limit of

banks as agents, and expires on

On December 6, 2024, we extended the

expiration date of this facility agreement to

December 6, 2027

(the previous maturity date was

December 15, 2025

This facility agreement has a purchase limit of $

million with two banks as agents.

As of December 28, 2024 and December 30, 2023, the borrowings outstanding

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At December 28, 2024, the interest rate on borrowings under

this facility was based on the asset-backed commercial paper rate of

this facility was based on the

asset-backed commercial paper rate

%, for a combined rate of

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basis points depending upon program utilization.

On December 20, 2023 and February 23, 2024, we amended this facility

to temporarily adjust certain covenant

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

On July 11, 2023, we entered into a

million term loan credit agreement (the “Term Credit

The interest rate on this term loan is based on the Term SOFR plus a spread based on our leverage

ratio at the end of each financial reporting quarter.

This term loan matures on July 11, 2026.

We are required to make quarterly payments of $

million from September 2023 through June 2024 and quarterly

payments of $

million from September 2024 through June 2026, with the remaining balance

due in July 2026.

of December 30, 2023, the borrowings outstanding under this term

At December 30, 2023,

the interest on this Term Credit Agreement was

% for a combined rate of

have a hedge in place (see

Note 12 – Derivatives and Hedging Activities

for additional information) that ultimately

creates an effective fixed rate of

The Term Credit Agreement requires, among other things, that we

maintain certain maximum leverage ratios.

Additionally, the Term

Credit Agreement contains customary

representations, warranties and affirmative covenants as well as customary negative

covenants, subject to

negotiated exceptions, on liens, indebtedness, significant corporate changes

(including mergers), dispositions and

certain restrictive agreements.

Index to Financial Statements

HENRY SCHEIN, INC.

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Total provision

Index to Financial Statements

HENRY SCHEIN, INC.

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Operating lease liability

Capitalization of research and development costs

Total deferred income

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million, respectively.

The federal, state and foreign net operating loss

carryforwards will begin to expire in various years from 2024 through

The amounts of federal, state and

foreign net operating losses that can be carried-forward indefinitely are $

The federal, state and foreign net operating loss carryforwards

will begin to expire in various years from 2025 through 2044.

The amounts of federal, state and foreign net

operating losses that can be carried-forward indefinitely are $

million and $

respectively.

Index to Financial Statements

HENRY SCHEIN, INC.

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Interest expense related to loans

Tax on global

intangible low-taxed income ("GILTI")

Effect of cross border tax laws

tax provision

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% for the prior year

In 2023, the difference between our effective tax rate and the federal statutory tax rate primarily

state and foreign income taxes and interest expense.

In 2022, the difference between our effective tax rate and the

federal statutory tax rate was primarily due to state and foreign income

taxes and interest expense.

effective tax rate was

%, the difference between our effective tax rate and the federal statutory tax rate was

primarily due to state and foreign income taxes and interest expense.

In 2022, our effective tax rate was

The difference between our effective tax rate and the federal

statutory tax rate is primarily due to state and foreign income taxes

and interest expense.

On December 22, 2017, the U.S.

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million were included in accrued taxes for 2024 and 2023, respectively, and $

million and $

were included in “other liabilities” for 2023 and 2022, respectively.

million was included in

other liabilities for 2023.

Due to the one-time transition tax and the imposition of the GILTI provisions, all previously unremitted earnings

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technical and administrative

guidance on Pillar Two Model Rules in December 2021, which provides for a global minimum tax rate on the

earnings of large multinational businesses, on a country-by-country basis.

Effective January 1, 2024, the minimum

global tax rate is 15% for various jurisdictions pursuant to the Pillar Two framework.

Future tax reform resulting

from these developments may result in changes to long-standing tax principles,

which may adversely impact our

effective tax rate going forward or result in higher cash tax liabilities.

As we operate in jurisdictions which have

adopted Pillar 2, we are continuing to analyze the implications to effectively manage

the impact for 2024 and

guidance on Pillar Two rules in December 2021, which provides for a global minimum tax rate on the earnings of

large multinational businesses on a country-by-country basis.

Effective January 1, 2024, the minimum global tax

rate is 15% for various jurisdictions pursuant to the Pillar Two rules.

Future tax reform resulting from these

developments may result in changes to long-standing tax principles, which

may adversely impact our effective tax

rate going forward or result in higher cash tax liabilities.

As of December 28, 2024, the impact of the Pillar Two

rules to our financial statements was immaterial.

ASC Topic 740 prescribes the accounting for uncertainty in income taxes recognized in accordance with other

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In the normal course of business,

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

our tax returns are subject to examination by various taxing authorities.

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taken in respect of certain tax

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

The total amount of unrecognized tax benefits, which are included in “other

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million, respectively, would affect the effective tax rate if recognized.

It is possible

that the amount of unrecognized tax benefits will change in the next 12

months, which may result in a material

impact on our consolidated statements of income.

possible that the amount of unrecognized tax benefits will change in the next 12

months, which may result in a

material impact on our consolidated statements of income.

All tax returns audited by the IRS are officially closed through 2020.

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The total amount of accrued interest is included in other

liabilities,” and was $

liabilities within our consolidated balance sheets, and was $

million as of December 28, 2024 and $

million as of December 31, 2022.

of penalties accrued for during the periods presented were not material to

our consolidated financial statements.

of December 30, 2023.

The amount of penalties accrued for during the periods presented was not

material to our

consolidated financial statements.

The following table provides a reconciliation of unrecognized tax benefits:

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Balance, end of period

Index to Financial Statements

HENRY SCHEIN, INC.

2 unchanged sentences

(in millions, except share and per share data)

Note 15 – Plans of Restructuring

and Integration Costs

On August 1, 2022, we committed to a restructuring plan focused on

funding the priorities of the BOLD+1 strategic

plan, streamlining operations and other initiatives to increase efficiency.

We revised our previous expectations of

completion and we have extended this initiative through the end of 2024.

We are currently unable in good faith to

make a determination of an estimate of the amount or range of amounts

expected to be incurred in connection with

these activities, both with respect to each major type of cost associated

therewith and to the total cost, or an

estimate of the amount or range of amounts that will result in future

cash expenditures.

During the years ended December 30, 2023, December 31, 2022, and December

25, 2021, we recorded

restructuring costs of $

million, and $

Note 16 – Plans of Restructuring and Integration Costs

On August 6, 2024, we committed to a new restructuring plan (the “2024

Plan”) to integrate recent acquisitions,

right-size operations and further increase efficiencies.

During the year ended December 28, 2024, we recorded

restructuring charges associated with the 2024 Plan of $

million, which primarily related to severance and

employee-related costs, accelerated amortization of right-of-use

lease assets and fixed assets, impairment of

intangible assets related to the disposal of a portion of a business

and other exit costs.

We expect to record

restructuring charges associated with the 2024 Plan in 2025;

however an estimate

of the amount of these charges

has not yet been determined.

During the year ended December 28, 2024, in connection with the 2024 Plan,

we recorded an impairment of

goodwill and intangible assets of $

million related to the disposal of a portion of a business.

This impairment is

included in the $

million of restructuring charges discussed above and related to the Global Specialty Products

On August 1, 2022, we committed to a restructuring plan (the “2022

Plan”) focused on funding the priorities of the

BOLD+1 strategic plan, streamlining operations and other initiatives to

increase efficiency.

The 2022 Plan has

been completed as of July 31, 2024.

During the years ended December 28, 2024, December

30, 2023, and

December 31, 2022, in connection with our 2022 Plan, we recorded restructuring

million, respectively.

The restructuring costs for these

periods primarily related to severance and employee-related costs,

impairment of intangible assets, accelerated

amortization of right-of-use lease assets and fixed assets, other lease exit

costs, and certain business exit costs

discussed below.

During the year ended December 30, 2023, in connection with our restructuring

plan, we recorded an impairment of

an intangible asset of $

million related to a planned disposal of a non-U.S.

The disposal is expected to

be completed in 2024.

The restructuring costs for these periods primarily related to

severance and

employee-related costs, accelerated amortization of right-of-use

lease assets and fixed assets, impairment of

intangible assets related to disposal of a U.S.

and other exit costs.

During the year ended December 30, 2023, in connection with the 2022 Plan,

we recorded an impairment of an

intangible asset of $

million related to disposal of a U.S.

This impairment is included in the $

million of restructuring charges discussed above.

During the year ended December 31, 2022, in connection with our

restructuring plan, we vacated

buildings at our corporate headquarters in Melville, New York, which resulted in an accelerated amortization of a

right-of-use lease asset of $

million of restructuring costs discussed above and related to the Global Specialty

Products segment.

was completed during the first quarter of 2024.

During the year ended December 31, 2022, in connection with the 2022 Plan,

of the buildings at our

corporate headquarters in Melville, New York, which resulted in an accelerated amortization of a right-of-use lease

We also initiated the disposal of a non-profitable U.S.

recorded related costs of $

business within the Global Specialty

Products segment and recorded related costs of $

million, which primarily consisted of impairment of intangible

assets and goodwill,

inventory impairment, and severance and employee-related costs.

These expenses are included in the $

of restructuring charges discussed above.

assets and goodwill, inventory impairment, and severance and employee-related

costs, which are included in the

Global Specialty Products segment.

These costs are included in the $

million of restructuring charges discussed

The disposal was completed during the first quarter of 2023.

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discussed above.

On November 20, 2019, we committed to a contemplated restructuring

initiative intended to mitigate stranded costs

associated with the spin-off of our animal health business and to rationalize operations

and provide expense

efficiencies.

These activities were originally expected to be completed by

the end of 2020 but we extended them to

the end of 2021 in light of the changes to the business environment brought

on by the COVID-19 pandemic.

restructuring activities under this prior initiative were completed

The integration and restructuring costs related to Midway Dental

Supply are recorded in the

Global Distribution and Value-Added Services segment.

Index to Financial Statements

HENRY SCHEIN, INC.

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2022 fiscal years consisted of the

Ended December 30, 2023

Health Care Distribution

and Value-Added

Restructuring

December 28, 2024

Global Distribution and

Value-Added Services

Restructuring

Restructuring Costs

Severance and employee-related costs

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Loss on disposal of a business

Restructuring and integration costs-2024 Plan

Severance and employee-related costs

Accelerated depreciation and amortization

Exit and other related costs

Restructuring and integration costs-2022 Plan

Total restructuring and integration costs

Ended December 31, 2022

Health Care Distribution

and Value-Added

Restructuring

December 30, 2023

Global Distribution and

Value-Added Services

Restructuring

Restructuring Costs

Severance and employee-related costs

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Loss on disposal of a business

Integration employee-related and other costs

Total restructuring and integration costs

Ended December 25, 2021

Health Care Distribution

and Value-Added

Restructuring

Severance and employee-related costs

Total restructuring and integration costs

Index to Financial Statements

HENRY SCHEIN, INC.

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(in millions, except share and per share data)

The following table summarizes, by reportable segment, the activity related

to the liabilities associated with our

restructuring initiatives for the year ended December 30, 2023.

The remaining accrued balance of restructuring

costs as of December 30, 2023, which primarily relates to severance and

employee-related costs, is included in

accrued expenses:

other within our consolidated balance sheets.

Liabilities related to exited leased facilities are

recorded within our current and non-current operating lease liabilities within

our condensed consolidated balance

December 31, 2022

Global Distribution and

Value-Added Services

Restructuring

Restructuring Costs

Severance and employee-related costs

Impairment and accelerated depreciation and

amortization of right-of-use lease assets and other

long-lived assets

Exit and other related costs

Loss on disposal of a business

Integration employee-related and other costs

Total restructuring and integration costs

The following table summarizes, by plan year, the activity related to the liabilities associated with

our restructuring

initiatives under the 2022 Plan and the 2024 Plan for the year ended December

The remaining accrued

balance of restructuring costs as of December 28, 2024, which primarily

relates to severance and employee-related

costs, is included in accrued expenses:

other within our consolidated balance

Liabilities related to exited

leased facilities are recorded within our current and non-current operating

lease liabilities within our consolidated

balance sheets.

Balance, December 31, 2022

Restructuring and integration costs

Non-cash asset impairment and accelerated depreciation and

amortization of right-of-use lease assets and other long-lived assets

Restructuring costs

Non-cash accelerated depreciation and amortization

Non-cash impairment on disposal of a business

1 unchanged sentence

Balance, December 30, 2023

Restructuring and integration costs

Non-cash asset impairment and accelerated depreciation and

amortization of right-of-use lease assets and other long-lived assets

Restructuring costs

Non-cash accelerated depreciation and amortization

Non-cash impairment on disposal of a business

1 unchanged sentence

Balance, December 28, 2024

Index to Financial Statements

HENRY SCHEIN, INC.

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Purchase Commitments

In our health care distribution business, we sometimes enter into long-term purchase

commitments to ensure the

availability of products for distribution.

Future minimum annual payments for inventory purchase commitments

of December 30, 2023 were:

In our Global Distribution and Value-Added Services business, we sometimes enter into long-term purchase

commitments to ensure the availability of products for distribution.

Future minimum annual payments for

inventory purchase commitments as of December 28, 2024 were:

Total minimum

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We also have lifetime consulting agreements that provide for current

compensation of four-hundred thousand dollars per year, with small scheduled increases every fifth year with the

compensation of

four-hundred thousand

dollars per year, with small scheduled increases every fifth year with the

next increase in 2027.

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Henry Schein, Inc.

has been named as a defendant in multiple opioid related

lawsuits (currently less than one-

has been named as a defendant in multiple opioid

related lawsuits (currently less than one-

hundred and seventy-five (

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remain pending in state courts and are proceeding independently and outside

At this time, the

following cases are set for trial:

the action filed by DCH Health Care Authority, et al.

in Alabama state court, which

is currently set for a jury trial on July 8, 2024;

the action filed by Mobile

County Board of Health, et al.

state court, which has been set for a jury trial on August 12, 2024;

and the action filed by Florida Health Sciences

other hospitals located throughout the State of Florida) in Florida state court,

which is currently

scheduled for a jury trial in September 2025.

On January 29, 2025,

the court granted our motion for summary judgment in the action

filed by Mobile County Board of Health, et al.

Alabama state court and dismissed all claims against Henry Schein

with prejudice.

We have settled the action filed

by DCH Health Care Authority, et al.

in Alabama state court (

plaintiffs) for an immaterial amount and

the claims against Henry Schein have been dismissed with prejudice.

We have also settled

case in which we were not yet named a defendant) filed by plaintiffs represented

by the Napoli Shkolnik PLLC

law firm for an immaterial amount.

Stipulations of Discontinuance with Prejudice in those cases

this time, the following case is set for trial:

the action filed by Florida Health Sciences

hospitals located throughout the State of Florida) in Florida state court,

which is currently scheduled for a jury trial

in September 2025.

Of Henry Schein’s 2024 net sales of approximately $

sales of opioids represented less than four-tenths of 1 percent.

Opioids represent a negligible part of our

We intend to defend ourselves vigorously against these actions.

In August 2022, Henry Schein received a Grand Jury Subpoena from the United

States Attorney’s Office for the

Western District of Virginia,

seeking documents in connection with an investigation of possible

violations of the

Federal Food, Drug & Cosmetic Act by Butler Animal Health Supply, LLC (“Butler”), a former subsidiary of

Henry Schein.

The investigation relates to the sale of veterinary prescription drugs

to certain customers.

October 2022, Henry Schein received a second Grand Jury Subpoena

from the United States Attorney’s Office for

the Western District of Virginia.

The October 2022 Subpoena seeks documents relating to payments Henry

received from Butler or Covetrus, Inc.

(“Covetrus”).

Butler was spun off into a separate company and became a

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

subsidiary of Covetrus in 2019 and is no longer owned by Henry Schein.

We are cooperating with the

investigation.

billion, sales of opioids represented

-tenths of 1 percent.

Opioids represent a negligible part of our business.

We intend to defend

ourselves vigorously against these actions.

On January 18, 2024, a putative class action was filed against the Company

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24-cv-387 (the “Cruz-Bermudez Action”), based on the

October 2023 cybersecurity incident described above.

On January 26, 2024, a second putative class action was

filed against the Company based on the cybersecurity incident, also in

October 2023 cyber incident described in

Note 3 – Cyber Incident

On January 26, 2024, a second putative class

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

action was filed against the Company based on the cyber incident, also

24-cv-550 (the

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Plaintiffs assert a variety of

common law and statutory claims seeking monetary damages, injunctive

relief, costs and attorneys’ fees, and other

related relief.

The case remains pending.

We intend to defend ourselves vigorously against this action.

claims seeking monetary damages, injunctive relief, costs and attorneys’

fees, and other related relief.

22, 2024, plaintiffs voluntarily withdrew two of their five causes of action.

On April 8, 2024, the court denied the

Company’s motion to dismiss the remaining claims.

On June 6, 2024, plaintiffs and the Company informed the court that they had agreed

to a term sheet for a class

action settlement of the Cruz-Bermudez Action.

Plaintiffs and the Company entered into a class action settlement

agreement on September 13, 2024, and the court preliminarily approved

the settlement on September 16,

Under the terms of the settlement, all claims in the Cruz-Bermudez

Action will be dismissed, the Cruz-

Bermudez Action will be terminated, the Company will receive a

release of claims from the class, and the

Company will pay $

million into a fund for class members.

The court has approved the settlement and entered

the final approval order on February 20, 2025.

The settlement agreement’s effective date is

after the final

approval order assuming no appeals have been filed.

From time to time, we may become a party to other legal proceedings,

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factors, including probable recoveries from third parties.

Index to Financial Statements

HENRY SCHEIN, INC.

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Stock-based awards are provided to certain employees under our 2024 Stock Incentive

Plan and to non-employee

directors under our 2023 Non-Employee Director Stock Incentive Plan

(formerly known as the 2015 Non-

Employee Director Stock Incentive Plan) (together, the “Plans”).

The Plans are administered by the Compensation

Committee of the Board (the “Compensation Committee”).

Historically, equity-based awards to our employees

have been granted solely in the form of time-based and performance-based

restricted stock units (“RSUs”) with the

exception of our 2021 plan year in which non-qualified stock options were

issued in place of performance-based

RSUs and in 2022, when we granted time-based and performance-based

RSUs, as well as non-qualified stock

For our 2023 plan year, we returned to granting our employees equity-based awards solely

in the form of

time-based and performance-based RSUs.

Our non-employee directors receive equity-based awards solely

form of time-based RSUs.

Plan (formerly known as our

2020 Stock Incentive Plan) and to non-employee directors under our 2023 Non-Employee

Director Stock Incentive

Plan (together, the “Plans”).

The Plans are administered by the Compensation Committee of the Board

“Compensation Committee”).

Historically, equity-based awards to our employees have been granted solely in the

form of time-based and performance-based restricted stock units (“RSUs”)

with the exception of our 2021 plan year

in which non-qualified stock options were issued in place of performance-based

RSUs and in 2022, when we

granted time-based and performance-based RSUs, as well as non-qualified

stock options.

Starting with our 2023

plan year, we returned to granting our employees equity-based awards solely in the form of

time-based and

performance-based RSUs.

Our non-employee directors receive equity-based awards solely in the form

As of December 28, 2024, there were

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performance-based RSUs based on our closing stock price at time of grant.

Each of the Plans provide for certain adjustments to the performance

measurement in connection with awards under

Each of the Plans provide for certain adjustments to the performance measurement

in connection with awards under

With respect to the performance-based RSUs granted under our 2024 Stock Incentive Plan, such

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transactions referred to above),

restructuring costs, if any, certain litigation settlements or payments, if any, changes in accounting principles or in

applicable laws or regulations, changes in income tax rates in certain

markets, foreign exchange fluctuations, the

financial impact either positive or negative, of the difference in projected earnings

generated by COVID-19 test kits

(solely with respect to performance-based RSUs granted in the 2022 and

2023 plan years) and impairment charges

(solely with respect to performance-based RSUs granted in the 2023 plan

year), and unforeseen events or

circumstances affecting us.

restructuring costs, if any, amortization expense recorded for acquisition-related intangible assets (solely with

respect to performance-based RSUs granted in the 2023 and 2024 plan years),

certain litigation settlements or

payments, if any, changes in accounting principles or in applicable laws or regulations, changes in income tax rates

in certain markets, foreign exchange fluctuations, the financial impact

either positive or negative, of the difference

in projected earnings generated by COVID-19 test kits (solely with respect

to performance-based RSUs granted in

the 2022 and 2023 plan years) and impairment charges (solely with respect to performance-based

RSUs granted in

the 2023 and 2024 plan years), and unforeseen events or circumstances

affecting us.

Over the performance period, the number of RSUs that will ultimately vest

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cost recognized as an

expense is based on our actual performance metrics as defined under

the 2020 Stock Incentive Plan.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

expense is based on our actual performance against the pre-determined performance

metrics (in each case as

Stock options are awards that allow the recipient to purchase shares of our

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closing stock price on the

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

date of grant.

Stock options issued in 2021 and 2022 vest one-third per year based

on the recipient’s continued

Stock options issued in 2021 and 2022 vest

per year based on the recipient’s continued

service, subject to the terms and conditions of the 2020 Stock Incentive Plan,

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t grant any stock options.

In addition to equity-based awards granted in fiscal 2021 under the long-term

incentive program, the Compensation

Committee granted a Special Pandemic Recognition Award under the 2020 Stock Incentive Plan to recipients of

performance-based RSUs under the 2018 long-term incentive program.

The payout under the performance-based

restricted stock units granted under the fiscal 2018 long-term incentive program

(the “2018 LTIP”) was negatively

impacted by the global COVID-19 pandemic.

Given the significance of the impact of the pandemic on our

year EPS goal under such equity awards and the contributions made by our

employees (including those who

received such awards), on March 3, 2021, the Compensation Committee granted

a Special Pandemic Recognition

Award to recipients of performance-based restricted stock units under the 2018 LTIP who were employed by us on

the grant date of the Special Pandemic Recognition Award.

These time-based RSU awards vested

% on the first

anniversary of the grant date and

% on the second anniversary of the grant date, based on the recipient’s

continued service and subject to the terms and conditions of the 2020 Stock Incentive

Plan, and were recorded as

compensation expense using a graded vesting method.

The combination of the

% payout based on actual

performance of the 2018 LTIP and the one-time Special Pandemic Recognition Award granted in 2021 generated a

cumulative payout of

% of each recipient’s original number of performance-based restricted stock units awarded

in 2018 if the recipient satisfied the

-year vesting schedule commencing on the grant date.

Our consolidated statements of income reflect pre-tax share-based compensation

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and December 31, 2022,

respectively.

Total unrecognized compensation cost related to unvested awards as of December 28, 2024 was $

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during the years ended December 28, 2024, December 30, 2023 and December

Certain stock-based compensation is required to be settled in cash.

During the year ended December 30, 2023, we

recorded a liability of $

million for stock-based compensation to be settled in cash.

31, 2022, respectively.

record deferred income tax assets for awards that will result in

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December 28, 2024, December 30, 2023 and December 31, 2022.

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

The following weighted-average assumptions were used in determining

15 unchanged sentences

permitted under Staff Accounting Bulletin Topic 14.

Index to Financial Statements

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

The following table summarizes the stock option activity for the year

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Life (in years)

or expected to vest

Expected to vest

The following tables summarize the activity of our unvested RSUs for

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Outstanding at end of period

The total intrinsic value per share of RSUs that vested was $

during the years ended

December 30, 2023, December 31, 2022 and December 25, 2021, respectively.

The fair value of time and performance RSUs that vested was $

million and $

million, respectively, for the year

ended December 28, 2024;

million and $

million, respectively, for the year ended December 30, 2023;

million and $

million, respectively, for the year ended December 31, 2022.

Index to Financial Statements

HENRY SCHEIN, INC.

20 unchanged sentences

Interest cost

Past service cost

Actuarial gain (loss)

Benefits paid

Past service cost (credit)

Actuarial gain

Participant contributions

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Unfunded status at end of period

Includes regular benefit payments and amounts transferred in by new

participants.

The majority of our defined benefit plans are unfunded, with the exception

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December 28, 2024 and December 30, 2023, respectively.

At December 28, 2024 and December 30, 2023 the

accumulated benefit obligations were $

million and $

million, respectively.

Index to Financial Statements

HENRY SCHEIN, INC.

15 unchanged sentences

Amortization of prior service credit

Recognized net actuarial loss

Net periodic pension cost

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Pension increase rate

Index to Financial Statements

HENRY SCHEIN, INC.

52 unchanged sentences

Deferred Compensation Plan

During 2011, we began to offer DCP to a select group of management or highly compensated employees of

Company and certain subsidiaries.

This plan allows for the elective deferral of base salary, bonus and/or

commission compensation by eligible employees.

The amounts (credited)/charged to operations during the years

ended December 30, 2023, December 31, 2022 and December 25, 2021

were approximately $

offer DCP to a select group of management or highly compensated employees

of the Company and certain

subsidiaries.

This plan allows for the elective deferral of base salary, bonus and/or commission compensation by

eligible employees.

The amounts (credited)/charged to operations during the years ended December

December 30, 2023 and December 31, 2022 were approximately $

million and $

million, respectively.

The charges are included in selling, general and administrative within our

consolidated statements of income.

respectively.

The charges are included in selling, general and administrative within our consolidated

statements of

Note 13 – Derivatives and Hedging Activities

for additional

for additional information.

Index to Financial Statements

HENRY SCHEIN, INC.

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Increase in redeemable noncontrolling interests due to business

Net income attributable to redeemable noncontrolling interests

Net income (loss) attributable to redeemable noncontrolling interests

Distributions declared, net of capital contributions

Effect of foreign currency translation gain (loss)

attributable to

Effect of foreign currency translation gain (loss) attributable

redeemable noncontrolling interests

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other comprehensive loss

Index to Financial Statements

HENRY SCHEIN, INC.

19 unchanged sentences

2023 and December 31, 2022 was

primarily due to changes in foreign currency exchange rates of the Euro,

Brazilian Real, British Pound, Swiss

Franc, and Canadian Dollar.

primarily due to changes in foreign currency exchange rates of the Brazilian

Real, Euro, British Pound, Canadian

Dollar, Australian Dollar,

Swiss Franc, and New Zealand Dollar.

The hedging gain (loss) during the years ended December 28, 2024, December

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noncontrolling interests

Comprehensive income attributable to

Comprehensive income (loss) attributable to

Redeemable noncontrolling interests

Comprehensive income

Index to Financial Statements

HENRY SCHEIN, INC.

33 unchanged sentences

interest rate swap agreements.

There was approximately $

million of debt assumed as part of the acquisitions for the year ended

Debt assumed during the year ended December 30, 2023 primarily

relates to the acquisitions of Biotech

Dental and S.I.N.

For the year ended December 30, 2023, there was approximately $

million of debt assumed as part of the

acquisitions of Biotech Dental and S.I.N.

Index to Financial Statements

HENRY SCHEIN, INC.

11 unchanged sentences

ended December 28, 2024, December 30, 2023 and December 31, 2022, we recorded

million, respectively, in connection with costs related to this royalty agreement.

As of December 30, 2023 and

December 31, 2022, Henry Schein One, LLC had a net payable balance

to Internet Brands of $

million, respectively, within selling, general and administrative in our consolidated statements of income, in

connection with costs related to this royalty agreement.

As of December 28, 2024 and December 30, 2023, Henry

Schein One, LLC had a net payable balance to Internet Brands of $

million and $

million, respectively, comprised of amounts related to results of operations and the royalty agreement.

components of this payable are recorded within accrued expenses:

other, respectively, within our consolidated

balance sheets.

million, respectively,

comprised of amounts related to results of operations and the royalty agreement.

The components of this payable

are recorded within accrued expenses:

other within our consolidated balance sheets.

have interests in entities that we account for under the equity accounting

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for further information.

Note 25 – Subsequent Event

On January 29, 2025, Henry Schein, Inc.

announced a strategic investment

by funds affiliated with KKR, a leading

global investment firm.

In addition to KKR’s current holdings, KKR will make an additional $

investment in the Company’s common stock.

As a result, KKR will own approximately

% of the Company’s

KKR will also have the ability to purchase additional shares via

open market purchases up to a total equity

% of the outstanding common shares of the Company.

In addition, under the agreement

between Henry Schein and KKR,

independent directors will join our Board of Directors.

Upon consummation

of this strategic investment,

we will issue new shares of common stock to funds affiliated with KKR for an

investment of $

million, at approximately $

As part of the agreement, KKR has also agreed to

customary voting and other provisions.

Consummation of these transactions is subject to customary closing

conditions, including the expiration or termination of any waiting

period under the Hart-Scott-Rodino Act and

certain foreign regulatory approvals.

Index to Financial Statements

Changes in and Disagreements with Accountants on Accounting and

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data