What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-02-24 compared with 2025-02-25 · 487 added, 770 removed, 594 unchanged (68% of the section changed)

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the Securities and Exchange Commission (“SEC”).

Risk factors and uncertainties that could cause actual results to differ materially from current

and historical results

Risk factors and uncertainties that could cause actual results to differ materially from

current and historical results

include, but are not limited to:

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for raw materials or purchased components;

relating to the achievement of our strategic growth objectives;

related to the recently signed Strategic

Partnership Agreement;

our ability to develop or acquire and maintain

and protect new products (particularly

technology products) and services and utilize new technologies

that achieve market acceptance with acceptable

transitional challenges associated with acquisitions, dispositions and joint ventures,

including the failure to

achieve anticipated synergies/benefits, as well as significant demands on our operations,

information systems, legal,

regulatory, compliance, financial and human resources functions in connection with acquisitions, dispositions and

joint ventures;

certain provisions in our governing documents that may discourage

third-party acquisitions of us;

adverse changes in supplier rebates or other purchasing incentives;

risks related to the sale of corporate brand

relating to the achievement of our strategic growth objectives, including

anticipated results of restructuring and

value creation initiatives;

risks related to the Strategic Partnership Agreement

with KKR Hawaii Aggregator L.P.

entered into in January 2025;

transitions in senior company leadership;

our ability to develop or acquire and

maintain and protect new products (particularly technology and specialty

products) and services and utilize new

technologies that achieve market acceptance with acceptable margins;

challenges associated with

acquisitions and joint ventures, including the failure to achieve anticipated

synergies/benefits, as well as significant

demands on our operations, information systems, legal, regulatory, compliance, financial and human resources

functions in connection with acquisitions, dispositions and joint ventures;

provisions in our governing

documents that may discourage third-party acquisitions of us;

adverse changes

in supplier rebates or other

purchasing incentives;

risks related to the sale of corporate brand products;

risks related to activist investors;

security risks associated with our

information systems and technology

products and services, such as cyberattacks or other privacy or data security

breaches (including the October 2023

effects of a highly competitive (including, without limitation, competition

from third-party online

commerce sites) and consolidating market;

changes in the health care

security risks associated with our information systems and technology

products and services, such as cyberattacks

or other privacy or data security breaches (including the October 2023 incident);

effects of a highly competitive

(including, without limitation, competition from third-party online commerce sites)

and consolidating market;

political, economic and regulatory influences on the health care

risks from expansion of customer

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corresponding increase in under-insured populations), consumer confidence,

sovereign debt levels, ongoing wars,

fluctuations in energy pricing and the value of the U.S.

dollar as compared to

foreign currencies, and changes to

other economic indicators, international trade agreements;

or outbreak of war, terrorism or public unrest

(including, without limitation, the war in Ukraine, the Israel-Gaza war and other

unrest and threats in the Middle

East and the possibility of a wider European or global conflict);

to laws and policies governing foreign

trade, tariffs and sanctions, or greater restrictions on imports and exports;

chain disruption;

failure to comply with existing and future regulatory requirements,

including relating to health care;

associated with the EU Medical Device Regulation;

failure to comply

with laws and regulations relating to health

care fraud or other laws and regulations;

failure to comply with laws

and regulations relating to the collection,

storage and processing of sensitive personal information or standards in electronic

health records or transmissions;

changes in tax legislation, changes in tax rates and availability of certain tax

risks related to product

liability, intellectual property and other claims;

risks associated with customs policies or legislative import

restrictions;

risks associated with disease outbreaks, epidemics, pandemics

(such as the COVID-19 pandemic), or

similar wide-spread public health concerns and other natural or

man-made disasters;

risks associated with our

global operations;

litigation risks;

new or unanticipated litigation developments

and the status of litigation matters;

our dependence on our senior management, employee hiring and retention,

increases in labor costs or health care

costs, and our relationships with customers, suppliers and manufacturers;

and disruptions in financial markets.

order in which these factors appear should not be construed to indicate their

relative importance or priority.

sovereign debt levels, fluctuations in

energy pricing and the value of the U.S.

dollar as compared to foreign currencies

and changes to other economic

failure to comply with existing and future regulatory

requirements, including relating to health care;

risks associated with the EU Medical Device Regulation;

failure to comply with

laws and regulations relating to

health care fraud or other laws and regulations;

failure to comply with

laws and regulations relating to the

collection, storage and processing of sensitive personal information or standards

in electronic health records or

transmissions;

changes in tax legislation, changes in tax rates and availability

of certain tax deductions;

risks related

to product liability, intellectual property and other claims;

risks associated with customs policies or legislative

import restrictions;

risks associated with disease outbreaks, epidemics,

pandemics (such as the COVID-19

pandemic), or similar wide-spread public health concerns and other

natural or man-made disasters;

risks associated

with our global operations;

the threat or outbreak of war (including, without

limitation, geopolitical wars), terrorism

or public unrest (including, without limitation, the war in Ukraine, the Israel-Gaza

war and other unrest and threats

in the Middle East and the possibility of a wider European or global conflict);

changes to laws and policies

governing foreign trade, tariffs and sanctions or greater restrictions on imports and

exports, including changes to

international trade agreements and the current imposition of (and the

potential for additional) tariffs by the U.S.

numerous countries and retaliatory tariffs;

supply chain disruption;

new or unanticipated litigation

developments and the status of litigation matters;

our dependence on

our senior management (including, without

Index to Financial Statements

limitation, the transition to a new Chief Executive Officer), employee hiring and retention,

increases in labor costs

or health care costs, and our relationships with customers, suppliers and

manufacturers;

and disruptions in financial

The order in which these factors appear should not be construed

to indicate their relative importance or

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control

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page of our website (www.henryschein.com)

and the social media channels identified on the About Media Center page of

and the social media channels identified on the About Media Center page

of our website.

Recent Developments

While the U.S.

economy has experienced inflationary pressures and

strengthening of the U.S.

dollar, their impacts

have not been material to our results of operations.

Though inflation impacts both our revenues and costs, the depth

and breadth of our product portfolio often allows us to offer lower-cost national brand solutions

or corporate brand

alternatives to our more price-sensitive customers who are unwilling to

absorb price increases, thus positioning us

to protect our gross profit.

Segment Reporting

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.

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.

Chief Executive Officer

On January 12, 2026, we announced the appointment of Frederick

Lowery as our new CEO, effective March 2,

2026, at which time Mr.

Lowery will join our Board of Directors.

Lowery succeeds Stanley M.

will remain as our CEO through March 1, 2026, at which time Mr.

Bergman will retire as CEO, but will remain as

Chairman of the Board.

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 year ended December 28, 2024, 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

We have a number of programs underway focused on re-establishing these customers.

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

incurred $9 million and $11 million of

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

We maintain cyber

insurance, subject to certain retentions and policy limitations.

With respect to the October 2023 cyber incident, we

have a $60 million insurance policy, following a $5 million retention.

During the year ended December 28, 2024,

we submitted a claim under this policy for $60 million and received

insurance proceeds of $40 million, with the

remaining $20 million of the claim being under review by our insurance

As previously reported, 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.

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 the cyber incident.

With respect to the October 2023 cyber incident, we had a $60 million insurance policy, following a $5 million

During the years ended December 27, 2025, December 28, 2024

and December 30, 2023, we incurred $0

million, $9 million and $11 million, respectively, of direct expenses related to the cyber incident, mostly consisting

of professional fees.

During the years ended December 27, 2025 and December

28, 2024, we received insurance

proceeds of $20 million and $40 million, respectively, representing insurance recovery of losses related to the cyber

The expenses and insurance recoveries related to the cyber incident

are included in the selling, general

and administrative line in our consolidated statements of income.

Tariffs and Related Economic Conditions

has adopted new and increased tariffs on imports from countries, which

tariffs remain subject to

frequently evolving exemptions and modifications, as well as to court

challenges, including a recent invalidation in

the Supreme Court of many of the tariffs.

Some countries have imposed retaliatory tariffs and other restrictions on

imports from the U.S.

These developments, and anticipated future developments,

have created a volatile

environment for global trade, and new trade policies with individual countries.

It is unclear whether, or the extent

to which, the current tariffs on trade with numerous countries will remain in place,

or change, the exceptions that

may apply, and their timing.

The tariffs did not have a material impact on our results of operations during fiscal

year 2025, although sales of

dental equipment were temporarily impacted by market uncertainty

related to tariffs in the second half of the

Index to Financial Statements

quarter ended June 28, 2025.

It is unclear whether, or the extent to which, the current tariffs on trade with

numerous countries will remain in place, or change, the exceptions that

may apply, and their timing.

One Big Beautiful Bill Act

In the United States, the OBBBA, signed into law on July 4, 2025, includes

a number of provisions that are

expected to result in reductions in the number of Medicaid enrollees, which

will reduce utilization of services and

covered products generally.

There are also several provisions that will reduce federal funding to state

The OBBBA, in combination with tariffs, will likely have an adverse impact on

utilization, Medicaid

payment and cost of production (if foreign components are used).

The OBBBA also includes changes to corporate tax rates, limitations

on certain deductions and modifications to

international tax provisions.

Index to Financial Statements

Executive-Level Overview

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ambulatory surgery centers, as well

as government, institutional health care clinics and other alternate care clinics.

believe that we have a strong

brand identity due to our more than 93 years of experience distributing health

care products.

are headquartered in Melville, New York, employ approximately 25,000 people (of which approximately

13,000 are based outside of the United States) and have operations or affiliates in 33 countries

and territories.

broad global footprint has evolved over time through our organic growth as well

as through contribution from

strategic acquisitions.

as government, institutional health care clinics, home health providers, and

other alternate care clinics.

that we have a strong brand identity due to our more than 94 years of experience

distributing health care products.

are headquartered in Melville, New York, employ more than 25,000 people (of which approximately 13,000 are

based outside of the United States) and have operations or affiliates in 34 countries and

global footprint has evolved over time through our organic growth as well as through

contribution from strategic

acquisitions.

have established strategically located distribution centers around

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supply for our customers’ needs.

While our primary go-to-market strategy is in our capacity as a distributor, we also market and sell our own

corporate brand portfolio of cost-effective, high-quality consumable merchandise products.

also manufacture,

source and sell a range of company-owned manufactured products, primarily implants,

biomaterial products,

endodontics, handpiece and small equipment, hand instrument and repair, restoratives, orthodontics, wound

orthopedics and dental lab products.

have achieved scale in these global businesses primarily through

acquisitions, as manufacturers of these products typically do not utilize

a distribution channel to serve customers.

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;

As a distributor, we market and sell branded products as well as our own corporate brand portfolio of

cost-effective,

high-quality consumable merchandise products.

also manufacture, source and sell a range of company-owned

manufactured products, primarily implants, biomaterial products, endodontics, handpiece

and small equipment,

hand instrument and repair, restoratives, orthodontics, wound care, orthopedics and dental lab products.

achieved scale in these global businesses primarily through acquisitions, as

manufacturers of these products

typically do not utilize a distribution channel to serve customers.

Our reportable segments consist of:

(i) Global Distribution and Value-Added Services;

(ii) Global Specialty

and (iii) Global Technology.

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quality consumable merchandise.

Global Specialty Products includes manufacturing, marketing and sales

Global Specialty Products includes manufacturing, marketing

and sales of dental

implant and biomaterial products;

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is a unified go-to-market

approach that enables practitioners to work synergistically with our supply chain,

equipment sales and service and

approach that enables practitioners to work synergistically with our supply chain, equipment

sales and service and

other value-added services, allowing our customers to leverage the

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Specifically, One Schein provides customers with streamlined access to our comprehensive offering of

national brand products, our corporate brand products and proprietary specialty

products and solutions (including

national brand products, corporate brand products and proprietary specialty products

and solutions (including

implant, orthodontic and endodontic products).

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believe that the trend towards cost containment has

Index to Financial Statements

the potential to favorably affect demand for technology solutions, including software,

which can enhance the

the potential to favorably affect demand for technology solutions, including software, which

can enhance the

efficiency and facilitation of practice management.

Index to Financial Statements

Our operating results in recent years have been significantly affected by strategies

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hospital organizations.

In many cases, purchasing decisions for consolidated groups

are made at a centralized or

In many cases, purchasing decisions for consolidated groups are

made at a centralized or

professional staff level;

however, orders are delivered to the practitioners’ offices.

believe that consolidation within the industry will continue to

result in a number of distributors, particularly

those with limited financial, operating and marketing resources, seeking to

combine with larger companies that can

provide growth opportunities.

This consolidation also may continue to result in distributors seeking

companies that can enhance their current product and service offerings or provide

opportunities to serve a broader

customer base.

Our approach to acquisitions and joint ventures has been to expand our role as

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operations and provide opportunities for us to develop synergies with, and thus strengthen, the acquired

As industry consolidation continues, we believe that we are positioned to

capitalize on this trend, as we believe we

As industry consolidation continues, we believe that we are positioned

to capitalize on this trend, as we believe we

have the ability to support increased sales through our existing infrastructure, although

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treatments, and expanded third-party insurance coverage, partially offset by the effects of unemployment

Index to Financial Statements

insurance coverage.

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This compares with expected total U.S.

population growth

rates of approximately 4%

population growth rates of

approximately 4%

between 2025 and 2035 and approximately 6% between 2025 and 2045.

Index to Financial Statements

According to the U.S.

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approximately $8.6 trillion by 2033, or 20.3% of the nation’s projected gross domestic product.

believe similar demographic changes are also occurring in other

markets we serve outside the U.S.

Our businesses are generally subject to numerous laws and regulations that could

impact our financial performance,

and failure to comply with such laws or regulations could have a material adverse

effect on our business.

and failure to comply with such laws or regulations could have a

material adverse effect on our business.

Business – Governmental Regulations

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Results of Operations

Refer to Item 7:

Management’s Discussion and Analysis of Financial Condition and Results of Operations in

our 2024 Annual Report on Form 10-K for management’s discussion and analysis of financial condition and results

of operations for the fiscal year 2024 compared to fiscal year 2023.

The following tables summarize the significant components of our operating

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Depreciation and amortization

Restructuring and integration costs

Restructuring and related costs

Operating income

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Index to Financial Statements

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 $73 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

Plans of Restructuring and Related Costs

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

Plan”) to integrate our acquisitions, right-size

operations and further increase efficiencies.

We currently expect this plan to be completed at the end of 2027.

During the years ended December 27, 2025 and December 28, 2024, we recorded

restructuring and related charges

associated with the 2024 Plan of $105 million and $73 million, respectively.

The restructuring and related costs for

these periods primarily related to severance and employee-related costs, accelerated

amortization of right-of-use

assets and fixed assets, and other exit costs.

We expect to record restructuring and related charges associated with

the 2024 Plan through the end of 2027;

however, an estimate of the amount of these charges for 2026 through 2027

has not yet been determined.

During the year ended December 27, 2025, in connection with the 2024 Plan,

we recorded a loss of $1 million and

$12 million related to the disposal of businesses in the Global Distribution

-Added Services and Global

Specialty Product segments, respectively, and a net gain related to disposal of a business in the Global Technology

These amounts are included in the $105 million of restructuring and

related charges discussed above.

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

we recorded an impairment of

goodwill and intangible assets of $13 million related to the disposal of a portion

of a business.

This impairment is

included in the $73 million of restructuring charges discussed above and related

to the Global Specialty Products

of a business in the Global

Specialty Products segment.

This impairment is included in the $73 million of restructuring and

related charges

discussed above.

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

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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

costs of $37 million, $80 million,

and $128 million, respectively.

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.

The 2022 Plan was

completed as of July 31, 2024.

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

with our 2022 Plan, we recorded restructuring and related costs of $37 million

and $80 million, respectively, which

primarily related to severance and employee-related costs, accelerated amortization

of right-of-use assets and fixed

assets, and other exit costs.

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

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intangible asset of $12 million related to disposal of a U.S.

This impairment is included in the $80

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,

we vacated one of the buildings at our

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

asset of $34 million.

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

business within the Global Specialty

Products segment and recorded related costs of $49 million, which primarily

consisted of impairment of intangible

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 $128 million of restructuring

charges discussed

The disposal was completed during the first quarter of 2023.

On August 26, 2022, we acquired Midway Dental Supply.

In connection with this acquisition, during the year

ended December 31, 2022, we recorded integration costs of $3 million

related to one-time employee and other

costs, as well as restructuring charges of $9 million, which are included in the

$128 million of restructuring charges

discussed above.

The integration and restructuring costs related to Midway Dental

Supply are recorded in the

Global Distribution and Value-Added Services segment.

the Global Specialty Products segment.

impairment is included in the $80 million of restructuring and related costs discussed

The disposal was

completed during the first quarter of 2024.

Index to Financial Statements

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based on actual values and may not recalculate due to rounding.

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:

Our reportable segments are determined based on how our Chairman

and Chief Executive Officer manages the

business, assesses performance and allocates resources.

We have three reportable segments:

(i) Global Distribution

-Added Services;

Global Specialty Products;

and (iii) Global Technology.

All prior comparative segment information has been recast

to reflect our new segment structure.

(ii) Global Specialty Products;

and (iii) Global

Net sales by reportable segment and by major product or service type were

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Global Technology

Includes infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, dental

implants, gypsum, acrylics, articulators, abrasives, PPE products,

and our own corporate brand of consumable merchandise.

Includes dental chairs, delivery units and lights, digital dental laboratories, X-ray supplies and equipment, equipment repair and

high-tech and digital restoration equipment.

Includes infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, gypsum,

acrylics, articulators, abrasives, PPE products and our own corporate brand of consumable merchandise.

Includes dental chairs, delivery units and lights, digital dental laboratories, X-ray supplies and equipment, equipment repair

services and high-tech and digital restoration equipment.

Consists of financial services on a non-recourse basis, continuing education services for practitioners, consulting and other services.

Includes branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, X-ray

products, equipment, PPE products and vitamins.

Includes branded and generic pharmaceuticals, home solutions products, vaccines, surgical products, diagnostic tests, infection-

control products, X-ray products, equipment, PPE products, and vitamins.

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

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orthopedic products and other health care-related products and services.

Consists of practice management software, e-services, and other products, which are distributed to health care providers.

Consists of the development and distribution of practice management software, e-services and other technology-enabled products

for health care providers.

The components of our sales growth/(decline) were as follows:

Local Currency Growth/(Decline)

Growth/(Decline)

Constant Currency

Growth/(Decline)

Total Constant

Currency Growth

Local Internal

Growth/(Decline)

Global Distribution and Value

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Global net sales for the year ended December 27, 2025 increased 4.0%,

The components of sales growth are

attributable to internal growth of 2.6%,

acquisition growth of 0.9%, and an increase in foreign exchange of 0.5%.

The components of our sales increase are

presented in the table above.

The 0.4% decrease in our internally generated local currency sales was primarily

attributable to the migration to

lower priced products and the challenging economic environment in

certain markets and lower sales of PPE

products and COVID-19 test kits.

For the year ended December 28, 2024, the estimated increase in

generated local currency sales, excluding PPE products and COVID-19

test kits, was 0.3%.

Global Distribution and Value-Added Services Sales

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The components of our sales increase are presented in the table

The 0.2% decrease in internally generated local currency dental sales was primarily

due to the migration to lower

priced dental merchandise products and a challenging economic environment

in certain markets, and lower sales of

PPE products.

The decrease was partially offset by sales growth in traditional equipment and parts and

the United States and sales growth in digital equipment in our international

markets, partially offset by lower sales

of digital equipment in the United States and declines in sales of

traditional equipment in certain international

The growth in traditional equipment benefited from installation

delays during the fourth quarter of 2023

after the cyber incident.

The 1.2% decrease in internally generated local currency medical sales reflects

the conversion of certain

pharmaceutical products to lower priced generics, and lower sales of PPE

COVID-19 test kits and

influenza vaccines, partially offset by strong sales of point-of-care diagnostics including

multi-assay flu/COVID

combination test kits.

The acquisition growth in medical sales was attributable to our expansion

in the Home Solutions market, including

the acquisition of Shield Healthcare during the year ended December

The acquisition growth in value-

added services within dental sales was attributable primarily to an acquisition

of a practice transitions business in

We estimate that sales of PPE products and COVID-19 test kits were approximately $622

million for the year

ended December 28, 2024 as compared to $710 million for the year ended

December 30, 2023 representing an

estimated decrease of $88 million.

The estimated $88 million net decrease in sales of PPE products

test kits represents 5.8% of Global Distribution and Value-Added Services

net sales for the year ended December

28, 2024, and was primarily due to lower glove prices and reduced demand

following the cyber incident.

estimated increase in the segment’s internally generated local currency sales, excluding PPE products and COVID-

19 test kits, was 0.3%.

The 1.6% increase in internally generated local currency dental sales was

primarily due to sales growth in U.S

dental merchandise and international dental merchandise,

as well as growth in traditional dental equipment in the

and growth in traditional and digital dental equipment in international

The 3.1% increase in internally generated local currency medical sales was

attributable to growth of our Home

Solutions business,

dialysis products and pharmaceuticals.

The 2.0% decrease in internally generated local currency value-added services

sales was attributable primarily to

lower sales in our practice transitions business, partially offset by sales growth from our international

Global Specialty Products

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sales increase are presented in the table above.

The internally generated local currency sales were relatively flat due to implant

sales growth in certain international

markets and growth in endodontics sales in the United States and

international markets, offset by a decline in

implant sales in the United States and lower orthodontic sales.

The increase in local currency Global Specialty

Products sales was attributable to the acquisitions of TriMed during the year ended December 28, 2024,

Biotech Dental and S.I.N.

Implant System during the year ended December

Index to Financial Statements

The 3.3% increase in internally generated local currency sales was attributable

to growth in our implant and

biomaterial businesses, and orthopedics, partially offset by a decline in orthodontic

Global Technology

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growth are presented in the table above.

The internally generated local currency increase of 2.4% in Global Technology sales was primarily attributable to a

continued increase in the number of cloud-based users of our practice management

software and an increase in

revenue cycle management solutions and our analytical products.

The internally generated local currency increase of 6.7% in Global Technology sales was primarily attributable to

the adoption of our core practice management solutions, particularly

our cloud-based platforms, as well as an

increase in revenue cycle management solutions.

Index to Financial Statements

Gross profit and gross margin percentages by segment and in total were as follows:

Increase / (Decrease)

Global Distribution and Value

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percentages vary between our segments.

We realize substantially higher gross margin from sales of products that

we develop and manufacture within our Global Specialty Products segment

compared to gross margin from sales of

products that we distribute within our Global Distribution and Value-Added Services segment.

Within our Global

Technology segment, higher gross margins result from us being both the developer and seller of software products

We realize substantially higher gross margin from products we develop

and manufacture within our Global Specialty Products segment compared

to products distributed within our Global

Distribution and Value-Added Services segment.

Within our Global Technology segment, higher gross margins

result from us being both the developer and seller of software products

and services.

Within our Global Distribution and Value

-Added Services segment, gross profit margins may vary between the

periods as a result of the changes in the mix of products sold as well as

changes in our customer mix.

to customer mix, sales to our large-group customers are typically completed at lower gross

margins due to the

higher volumes sold as opposed to the gross margin on sales to office-based practitioners, who normally

lower volumes.

-Added Services segment, gross profit margins may fluctuate between the

periods as a result of the changes in product mix and customer mix.

With respect to customer mix, sales to our

large-group customers are typically completed at lower gross margins as a result of

higher sales volumes, while

sales to office-based practitioners generally carry higher gross margins due to lower volumes.

The increase in Global Distribution and Value-Added Services gross profit for the year ended December 27, 2025

compared to the prior-year-period is due to acquisitions and margin expansion providing a favorable impact

mix of higher-margin products.

The increase in Global Specialty Products gross profit reflects increased

sales volume and higher gross profit from

internally generated sales and gross profit from acquisitions.

The increase in gross margin rates was due to product

The increase in Global Technology gross profit is the result of a higher gross profit from internally generated sales

and gross profit from acquisitions.

The decrease in gross margin rates was due to increased vendor costs and

compared to the prior-year-period is due primarily to increased internally generated sales volume as described

The decrease in gross margin rates was attributable primarily to the impact

of targeted promotional

programs and product mix.

The increase in Global Specialty Products gross profit primarily reflects

increased internally generated sales

volume and gross profit from acquisitions.

The decrease in gross margin rates was due to product mix and pricing.

The increase in Global Technology gross profit is the result primarily of higher internally generated sales.

increase in gross margin rates was due to product mix.

Index to Financial Statements

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depreciation and amortization;

restructuring and integration costs) by segment were as follows:

restructuring and related costs) by segment were as follows:

Increase / (Decrease)

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prior year) consist of (i) acquisition intangible amortization ($179 million vs.

$150 million);

restructuring costs ($110 million vs.

$80 million);

(iii) changes in contingent consideration ($45 million vs.

incident third-party advisory expenses, net of insurance proceeds ($31 million net proceeds vs.

$11 million net expenses);

impairment of capitalized assets ($12 million vs.

$27 million);

(vi) impairment of intangible assets ($0 million vs.

litigation settlements ($6 million vs.

and (viii) costs associated with shareholder advisory matters ($2 million vs.

The net increase in operating expenses is attributable to the following:

$184 million), (ii)

restructuring and related costs ($105 million vs.

$110 million), (iii) change in contingent consideration ($(2) million vs.

million), (iv) litigation settlements ($5 million vs.

$6 million), (v) cyber incident-insurance proceeds, net of

third-party advisory

expenses ($(20) million net proceeds vs.

$(31) million net proceeds), (vi) impairment of intangible assets ($16 million vs.

million), (vii) impairment of capitalized assets ($0 million vs.

$12 million), and (viii) costs associated with shareholder advisory

matters and select value creation consulting costs ($36 million vs.

The net increase in operating expenses was attributable to the following:

Operating Costs

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in the table above.

The decrease in

The increase in

operating costs (excluding acquisitions) during the year ended December 27,

2024 included cost savings from our

restructuring activities and reflected a gain of $19 million related to the remeasurement

to fair value of a previously

held equity investment within our Global Distribution and Value-Added Services segment.

Other Expense, Net

Other expense, net was as follows:

Interest income

Interest expense

Other expense, net

Interest income increased primarily due to increased interest rates.

Interest expense increased primarily due to

increased borrowings and increased interest rates.

Index to Financial Statements

Our effective tax rate was 24.9% for the year ended December 28, 2024, compared to 22.1%

for the prior year

The difference between our effective and federal statutory tax rates primarily relates to state

income taxes and interest expense.

The Organization of Economic Co-Operation and Development (OECD) issued

technical and administrative

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.

Index to Financial Statements

2023 Compared to 2022

Discussion of the results of operations for the year ended December

30, 2023 as compared to December 31, 2022

was included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results

Operations” in the Company’s Form 10-K for the year ended December 30, 2023, as filed with the SEC on

February 28, 2024.

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.

A discussion of the results of operations for the year ended

December 30, 2023 as

compared to December 31, 2022 for net sales and segment adjusted operating

income based on the realigned

segments is presented below.

Percentages for Net Sales;

Gross Profit;

Operating Expenses;

Expense, Net;

and Income Taxes are

based on actual values and may not recalculate due to rounding.

Net sales were as follows:

Increase / (Decrease)

Global Distribution and Value

-Added Services

Global Dental merchandise

Global Dental equipment

-added services

Global Dental

Global Medical

Total Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Includes infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, dental

implants, gypsum, acrylics, articulators, abrasives, PPE products,

and our own corporate brand of consumable merchandise.

Includes dental chairs, delivery units and lights, digital dental laboratories, X-ray supplies and equipment, equipment repair and

high-tech and digital restoration equipment.

Consists of financial services on a non-recourse basis, continuing education services for practitioners, consulting and other services.

Includes branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, X-ray

products, equipment, PPE products and vitamins.

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

and endodontic, orthodontic and

orthopedic products and other health care-related products and services.

Consists of practice management software, e-services, and other products, which are distributed to health care providers.

The components of our sales growth/(decline) were as follows:

Local Currency Growth/(Decline)

Global Distribution and Value

-Added Services

Global Dental Merchandise

Global Dental Equipment

-added services

Global Dental

Global Medical

Total Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Index to Financial Statements

We report our results of operations on a 52 or 53 weeks per fiscal year basis ending on the last Saturday of

The year ended December 30, 2023 consisted of 52 weeks, and

the year ended December 31, 2022

consisted of 53 weeks,

resulting in an extra week of sales.

Global net sales for the year ended December 30, 2023 decreased 2.4%.

The components of our sales decline are

presented in the table above.

The 4.2% decrease in our internally generated local currency sales was primarily

attributable to a decrease in sales

of PPE products and COVID-19 test kits.

For the nine months ended September 30, 2023, the estimated

internally generated local currency sales, excluding PPE products

and COVID-19 test kits, was 3.5%.

a result of the adverse impact of the 2023 cyber incident during the quarter ended

December 30, 2023, our

internally generated local currency sales, excluding sales of PPE products

and COVID-19 test kits, on a full year

basis were flat compared to the prior year.

Global Distribution and Value-Added Services Sales

Global Distribution and Value-Added Services net sales for the year ended December 30, 2023 decreased 3.8%.

The components of our sales decline are presented in the table above.

The 0.6% decrease in internally generated local currency dental sales was attributable

to a decrease in sales of

dental merchandise and dental equipment as a result of the adverse

impact of the 2023 cyber incident.

The 11.0% decrease in internally generated local currency medical sales is primarily attributable

to the impact of

the 2023 cyber incident and to lower sales of PPE products and COVID-19

test kits and other point-of-care

diagnostic products.

The acquisition growth in medical sales was attributable to our expansion

in the Home Solutions market, including

the acquisition of Shield Healthcare during the year ended December

The acquisition growth in value-

added services was attributable primarily to an acquisition of a practice

transitions business in 2023.

The increase in internally generated local currency value-added services

sales is attributable to an increase in our

dental billing solutions, partially offset by the expiration, during the year ended

December 31, 2022, of a modestly

profitable government contract in one of our value-added services businesses.

We estimate that sales of PPE products and COVID-19 test kits were approximately $710

million for the year

ended December 30, 2023

as compared to $1,238 million for the year ended December 31, 2022

representing an

estimated decrease of $528 million.

The estimated $528 million net decrease in sales of PPE products

19 test kits represents 5.0%

of Global Distribution and Value-Added Services net sales for the year ended

December 30, 2023 and was primarily due to lower market prices and loss of

demand during the 2023 cyber

Excluding PPE products and COVID-19 test kits, our internally

generated local currency sales were flat.

Global Specialty Products

Global Specialty Products net sales for the year ended December 30, 2023

increased 4.6%.

The components of

sales increase are presented in the table above.

The decrease in internally generated local currency sales was primarily

attributable to lower sales in our

orthodontics business,

partially impacted by a patent expiration and the October 2023

cyber incident and declines in

certain other health care related consumable merchandise products.

The acquisition growth in Global Specialty Products sales was attributable

to the acquisitions of Biotech Dental and

Implant system during the year ended December 30, 2023.

Index to Financial Statements

Global Technology

Global Technology net sales for the year ended December 30, 2023 increased 9.6%.

The components of our sales

growth are presented in the table above.

During the year ended December 30, 2023, the trend for sales of practice

management software growth remained strong as we continued to

increase the number of cloud-based users.

also experienced increased demand for our revenue cycle management solutions

and our analytical products.

segment of our business was not directly affected by the 2023 cyber

incident in the fourth quarter.

Gross profit and gross margin percentages by reportable segment were as follows:

Increase / (Decrease)

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

As a result of different practices of categorizing costs associated with distribution networks

throughout our

industry, our gross margins may not necessarily be comparable to other distribution companies.

percentages vary between our segments.

We realize substantially higher gross margin from sales of products that

we develop and manufacture within our Global Specialty Products segment

compared to gross margin from sales of

products that we distribute within our Global Distribution and Value-Added Services segment.

Within our Global

Technology segment, higher gross margins result from us being both the developer and seller of software products

and services.

Within our Global Distribution and Value

-Added Services segment, gross profit margins may vary between the

periods as a result of the changes in the mix of products sold as well as

changes in our customer mix.

sales of our corporate brand and certain specialty products achieve

gross profit margins that are higher than average

total gross profit margins of all products.

With respect to customer mix, sales to our large-group customers are

typically completed at lower gross margins due to the higher volumes sold as opposed

to the gross margin on sales

to office-based practitioners, who normally purchase lower volumes.

The decrease in Global Distribution and Value-Added Services gross profit for the year ended December 30, 2023

compared to the prior year was due to the 2023 cyber incident and a

reduction in sales of PPE products and

COVID-19 test kits, partially offset by additional gross profit from acquisitions.

The increase in Global Specialty Products gross profit is primarily attributable

to gross profit from our acquisitions

offset by lower gross profit from our orthodontics business and certain other health

care related consumable

merchandise products.

The increase in gross margin rates was due to a favorable impact of sales mix.

The increase in Global Technology gross profit reflects increased local currency revenues and additional gross

profit from acquisitions.

2025 was attributable to an increase in

Corporate investments in technology supporting the launch of our Global E-Commerce

(www.henryschein.com), depreciation expense,

the impact of certain compensation related costs and timing of

certain non-income tax credits during the year ended December 28, 2024,

partially offset by cost savings from our

restructuring activities, certain changes in estimates and other operating

cost efficiencies.

In addition, during the

year ended December 27, 2025,

our operating costs were impacted by recognition of a benefit related

remeasurement to fair value of previously held equity investments of $29

million within our Global Specialty

Products segment and $9 million within our Global Distribution and Value-Added Services segment.

year ended December 28, 2024,

our operating costs were impacted by recognition of a remeasurement gain

to the remeasurement to fair value of a previously held equity investments of $18

million within our Global

Distribution and Value-Added Services segment.

Index to Financial Statements

Operating Expenses

Operating expenses (consisting of selling, general and administrative

depreciation and amortization,

restructuring and integration costs) by segment were as follows:

Increase / (Decrease)

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Total operating expenses

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

These items may vary independently of business performance.

Note 4 – Segment and Geographic Data

adjustments (current year vs.

prior year) consist of (i) acquisition intangible amortization ($150 million vs.

$126 million);

restructuring costs ($80 million vs.

$131 million);

(iii) cyber incident third-party advisory expenses ($11 million vs.

(iv) impairment of capitalized assets ($27 million vs.

and (v) impairment of intangible assets ($7 million vs.

The net increase in operating expenses is attributable to the following:

Operating Costs

acquisitions)

Global Distribution and Value

-Added Services

Global Specialty Products

Global Technology

Total operating expenses

The increase in operating costs (excluding acquisitions) during the year ended

December 30, 2023 includes

increases in payroll and payroll related costs primarily in our Global

Distribution and Value-Added Services

During the year ended December 30, 2023, our operating expenses

were favorably impacted by the

recognition of a remeasurement gain of $18 million following an acquisition of

a controlling interest of a previously

held equity investment.

Other Expense, Net

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Interest expense increased primarily due to

increased borrowings and increased interest rates.

Index to Financial Statements

increased borrowings.

Our effective tax rate was 23.7% for the year ended December 27, 2025, compared to 24.9%

for the prior year

each year, the difference between our effective and federal statutory tax rates primarily relates to state and foreign

income taxes and interest expense.

The difference between our effective and federal statutory tax rates primarily relates to state

income taxes and interest expense, as well as the tax treatment associated with

the acquisition of a controlling

interest of a previously held non-controlling equity investment.

On July 4, 2025, President Trump signed the reconciliation tax bill, commonly known as the “One Big Beautiful

Bill Act” (OBBBA), into law.

Corporate provisions in the OBBBA include immediate expensing of domestic

research and experimental expenditures, limitations on certain deductions,

and modifications to international tax

The changes resulting from the OBBBA did not have a significant impact

to the total tax provision.

The Organization of Economic Co-Operation and Development (OECD) issued

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our funding structure to reflect any new requirements.

Our acquisition strategy is focused on investments in companies, including

high growth high margin businesses

aligned with our BOLD+1 strategy, that add new customers and sales teams, increase our geographic footprint

(whether entering a new country, such as emerging markets, or building scale where we have already invested in

businesses), and finally, those that enable us to access new products and technologies.

We believe that our cash and cash equivalents, our ability to access private debt markets and public equity markets,

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foreseeable short-term and long-term capital needs.

Our acquisition strategy is focused on investments in companies that

add new customers and sales teams, increase

our geographic footprint (whether entering a new country, such as emerging markets, or building scale where we

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

Net cash provided by operating activities was $712 million for the

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The net change of $136 million was

primarily attributable to changes in working capital accounts (primarily accounts

receivable and inventory), and

higher cash net income.

The residual impacts of the 2023 cyber incident on our working

capital during the year

ended December 28, 2024 included an increase in operating cash flows from

accounts receivable due to improved

collection levels and decreased cash flows from accounts payable and accrued

expenses resulting from previously

delayed payments.

Net cash used in investing activities was $430 million for the year

ended December 28, 2024, compared to net cash

primarily attributable to changes in working capital accounts (primarily

accounts receivable, inventory, and

accounts payable and accrued expenses),

partially offset by an increase in operating income.

Our operating cash

flows during the year ended December 28, 2024 were positively

affected by the residual impacts of the 2023 cyber

incident and included a higher-than-normal level of cash collections.

Our cash collections normalized during the

second half of the year ended December 28, 2024.

Net cash used in investing activities was $400 million for the year ended

December 27, 2025, compared to net cash

used in investing activities of $430 million for the prior year.

The net change of $30 million was primarily

attributable to decreased payments for equity investments and business

acquisitions.

attributable to lower acquisition activity.

Net cash used in financing activities was $188 million for the year

ended December 27, 2025, compared to net cash

provided by financing activities of $701 million for the prior year.

The net change of $1,211 million was primarily

due to decreased net borrowings from debt to finance our investments,

increased acquisitions of noncontrolling

interests in subsidiaries and increased repurchases of common stock.

used in financing activities of $510 million for the prior year.

The net change of $322 million was primarily due to

increased net borrowings from debt,

proceeds received from the issuance of common stock, and a

acquisitions of noncontrolling interests in subsidiaries, partially offset by increased

repurchases of common stock.

Index to Financial Statements

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Accounts receivable days sales outstanding and inventory turns

Our accounts receivable days sales outstanding from operations

increased to 47.3 days as of December 28, 2024

from 46.2 days as of December 30, 2023.

Adjusted for the impact of the cyber incident our days sales outstanding

decreased to 45.7 days as of December 28, 2024.

Our accounts receivable days sales outstanding from operations decreased

to 44.8 days as of December 27, 2025

from 47.3 days as of December 28, 2024, which was primarily attributable

to the impact that the cyber incident had

on the cash collections during the first half of 2024.

During the years ended December 27, 2025 and December 28,

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against our trade receivable reserve.

Our inventory turns from operations increased to 5.0 as of December

Our inventory turns from operations decreased to 4.8 as of December

from 5.0 as of December 28, 2024.

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Operating lease obligations

Transition tax obligations

Finance lease obligations, including interest

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and certain equipment.

Our leases have remaining terms of less than one year to approximately

17 years, some of

Our leases have remaining terms of less than one year to

approximately 23 years, some of

which may include options to extend the leases for up to 10 years.

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common stock.

On May 19, 2025, we executed an accelerated share repurchase program

to repurchase a total of $250 million of

our outstanding common stock based on volume-weighted average

In May 2025, we received 3,122,832

shares at an estimated fair value of $224 million.

In July 2025, we received an additional 368,651 shares at an

estimated fair value of $26 million, representing the final amount of shares

to be received under this accelerated

share repurchase program.

On September 8, 2025, our Board authorized the repurchase of up to

an additional $750 million in shares of our

common stock.

From March 3, 2003 through December 27, 2025, we repurchased $6.0

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share repurchases.

Subject to market conditions and other factors, we plan to continue

to accelerate our share

repurchase activity.

Redeemable Noncontrolling Interests

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for further information.

Unrecognized tax benefits

As more fully disclosed in

Note 15 – Income Taxes

of “Notes to Consolidated Financial Statements,” we cannot

reasonably estimate the timing of future cash flows related to our unrecognized

tax benefits, including accrued

interest, of $108 million and $115 million as of December 28, 2024 and December 30, 2023, respectively.

Index to Financial Statements

Critical Accounting Estimates

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of our consolidated financial

Index to Financial Statements

Inventories and Reserves

Inventories consist primarily of finished goods, raw materials and

work-in-process and are valued at the lower of

work-in-process and are stated at the lower of

cost or net realizable value.

Cost is determined by the weighted average method for merchandise and

for large equipment,

high tech equipment and drop-shipments.

We include product costs, labor, and related fixed

and variable overhead in the cost of inventory

that we manufacture.

In estimating carrying value of inventory, we

consider many factors including the condition and salability of the inventory

by reviewing on-hand quantities,

historical sales, forecasted sales and market and economic trends.

Cost is determined by the weighted average method for merchandise

and actual cost

for large equipment, high-technology equipment and drop-shipments.

Inventory costs for manufactured products

include direct materials, labor, and an allocation of related fixed and variable overhead.

The determination of

inventory carrying values requires management to make significant

estimates and judgments.

In assessing the need

for inventory reserves and evaluating net realizable value, we consider

multiple factors, including inventory

condition, on-hand quantities, historical and forecasted sales, product

life cycles, and prevailing market and

economic conditions.

Business Combinations

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for further discussion of our acquisitions.

Goodwill is subject to impairment analysis at least once annually as

of the first day of our fourth quarter, or if an

Goodwill is subject to impairment assessment at least once annually

as of the first day of our fourth quarter, or if an

event occurs or circumstances change that would more likely than

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carrying value.

We regard our reporting units to be our operating segments or one level below the operating

Goodwill is allocated to such reporting units, for the purposes of

preparing our impairment analyses,

based on a specific identification basis.

We conduct our goodwill impairment testing at the reporting unit level.

We identify our reporting

units by assessing whether two or more components are economically

similar and therefore should be aggregated.

Our reporting units are identified as our operating segments.

Goodwill is allocated to such reporting units for the

purposes of our impairment assessment.

For the year ended December 27, 2025, our reporting structure was:

Global Distribution and Value-Added Services reportable segment, which included the following

operating segments (a) US Distribution Group;

(b) Europe, Middle East,

and Africa Distribution Group;

and (d) Asia-Pacific and Australia

Distribution Group;

Global Specialty Products reportable segment, which included the following

operating segments (a) Global

Oral Reconstruction Group;

and (b) Healthcare Specialty Group;

Global Technology,

which is both a reportable segment and an operating segment.

Index to Financial Statements

Application of the goodwill impairment test requires judgment, including

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There are inherent

uncertainties, however, related to fair value models, the inputs and our judgments in applying them

to this analysis.

uncertainties, however, related to fair value models, the inputs and our judgments in applying them to

this analysis.

The most significant inputs include estimation of detailed future cash flows based

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cost of capital for each reporting unit.

On an annual basis, we prepare financial projections.

These projections are based on input from our leadership and

are presented annually to our Board.

Influences on this year's forecasted financial information and

the fair value

model include:

the impact of planned strategic initiatives, the continued

integration of recent acquisitions and

overall market conditions.

The estimates used to calculate the fair value of a reporting unit change

year based on operating results, market conditions, and other factors.

During the year ended December 28, 2024, we engaged third-party valuation

specialists to determine the relative

fair value of our goodwill related to the revision of our reportable segments.

Our management reviewed and

approved this valuation.

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.

Index to Financial Statements

In connection with our restructuring initiatives, during the year ended

December 28, 2024, we recorded an $11

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 of

For the year ended

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

recorded a $20 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.

Apart from the above impairments identified in connection with

our restructuring initiative, we did not record any

additional impairment during the years ended December 28, 2024, December

30, 2023, and December 31, 2022.

We performed our annual quantitative testing for the remaining goodwill and the fair value of each of our reporting

units sufficiently exceeded the carrying values.

In performing the annual goodwill impairment assessment, we prepare forward-looking

financial projections for

each reporting unit based on input from our leadership and approved operating

These projections incorporate

assumptions related to planned strategic initiatives, the continued integration

of recent acquisitions, and prevailing

macroeconomic and market conditions.

Changes in these assumptions could materially affect the estimated fair

values of the reporting units.

Our third-party valuation specialists provide inputs into our determination

of the discount rate.

dependent on a number of underlying assumptions, including the risk-free rate,

tax rate, equity risk premium, debt

to equity ratio and pre-tax cost of debt.

Long-term growth rates are applied to our estimation of future cash flows.

The long-term growth rates are tied to

growth rates we expect to achieve beyond the years for which we have

forecasted operating results.

consider external benchmarks, and other data points which we believe are

applicable to our industry and the

composition of our global operations.

We performed our annual quantitative goodwill assessment, and the estimated fair value of each of our reporting

units sufficiently exceeded its respective carrying value.

As a result, no goodwill impairments were recorded

during the years ended December 27, 2025, December 28, 2024, and December

For the year ended December 28, 2024, in connection with our restructuring

initiatives, we recorded an $11 million

impairment of goodwill in the Global Specialty Products segment, relating

to the disposal of a portion of a business;

such impairment was calculated based on the relative fair value of goodwill.

Definite-Lived Intangible Assets

Annually or if we identify an impairment indicator,

definite-lived intangible assets such as non-compete

agreements, trademarks, trade names, customer relationships and lists, and

product development are reviewed for

impairment indicators.

If any impairment indicators exist, quantitative testing

is performed on the asset.

Annually or if we identify an impairment indicator, definite-lived intangible assets such as customer

relationships

and lists, trademarks, trade names, product development and non-compete

agreements are reviewed for impairment

If any impairment indicators exist, quantitative testing is performed

on the asset.

The quantitative impairment model is a two-step test under which we

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our Global Distribution and Value-Added Services segment.

The impairment charges included $14 million

primarily related to customer lists and relationships attributable

to lower than anticipated operating margins in these

The remaining impairment charges of $2 million related to trade names

and non-compete agreements.

During the year ended December 28, 2024, we recorded $4 million of

impairment charges related to businesses in

our Global Distribution and Value-Added Services segment.

It included $2 million of a trade name impairment,

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and $1 million related to trade name

Index to Financial Statements

impairment due to business integration in connection with our restructuring

The remaining $1 million

impairment charges related to trade names and non-compete agreements and 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.

impairment charges related to trade names and non-compete agreements.

During the year ended December 30, 2023, we recorded $19 million of

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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 fair values of

the impaired intangible assets, using a discounted estimate of future

During the year ended December 31, 2022, we recorded $49 million of

impairment charges related to businesses in

our Global Distribution and Value-Added Services segment, consisting of a $15 million charge related to the

disposal of an unprofitable business in connection with our restructuring

initiatives, and a $34 million charge

related to customer lists and relationships attributable to customer attrition rates

being higher than expected in

certain other Global 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

The impairment charges for the years ended December 27, 2025, December 28, 2024,

and December 30, 2023 were

measured as the excess of the carrying values over the estimated fair values

of the related intangible assets,

determined using discounted estimates of future cash flows and the

relief-from-royalty method.

Note 16 – Plans of Restructuring and Related Costs

for additional details.

Index to Financial Statements

Redeemable Noncontrolling Interests

10 unchanged sentences

for additional

When determining if the realization of a deferred tax asset is likely to assess

the need to record a valuation

allowance, estimates and judgement are required.

Determining whether a deferred tax asset will be realized requires significant

estimates and judgment to assess

whether a valuation allowance is necessary.

consider all available evidence, both positive and negative,

15 unchanged sentences

The amount recognized is

measured as the largest amount of benefit that has a greater than 50% likelihood of being

realized upon ultimate

measured as the largest amount of benefit that has a greater than 50% likelihood of being realized

upon ultimate

audit settlement.

12 unchanged sentences

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 7. Management’s Discussion and Analysis