What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2023-11-09 · 148 added, 228 removed, 394 unchanged (49% of the section changed)

3 unchanged sentences

(In millions, except par value)

September 30, 2023 December 31, 2022

March 30, 2024 December 30, 2023

Current assets:

4 unchanged sentences

Prepaid expenses

Assets held for sale

Other current assets

5 unchanged sentences

$ 13,390 $ 13,187

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

9 unchanged sentences

Commitments and contingencies (Note 16)

Mezzanine equity:

Series A convertible preferred stock, $ 0.01 par value— 25 shares authorized;

0 and 0.5 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Shareholders’ equity:

Common stock, $ 0.01 par value— 600 shares authorized;

252.5 issued and 246.3 outstanding as of September 30, 2023, and 225.2 issued and 224.8 outstanding as of December 31, 2022

253.9 issued and 245.8 outstanding as of March 30, 2024, and 252.9 issued and 245.1 outstanding as of December 30, 2023

Additional paid-in capital

5 unchanged sentences

Total shareholders’ equity

Total liabilities, mezzanine equity and shareholders’ equity

Total liabilities and shareholders’ equity

$ 13,390 $ 13,187

3 unchanged sentences

(In millions, except per share data)

13 Weeks Ended 39 Weeks Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

13 Weeks Ended

March 30, 2024 April 1, 2023

Net sales $ 8,949 $ 8,542

Cost of goods sold 7,454 7,117

1,542 1,460 4,558 4,038

Operating expenses:

Distribution, selling and administrative costs

1,312 1,246 3,819 3,640

Restructuring costs and asset impairment charges 13 —

Total operating expenses 1,330 1,238

1,312 1,246 3,819 3,640

Operating income 165 187

1 unchanged sentence

Interest expense—net 79 81

Loss on extinguishment of debt 21 — 21 —

Income before income taxes 87 107

Income tax provision 5 25

95 109 359 172

Other comprehensive income —net of tax:

Changes in retirement benefit obligations

Unrecognized gain on interest rate caps — — 1 —

Comprehensive income

$ 96 $ 109 $ 361 $ 172

Net income $ 82 $ 82

8 unchanged sentences

Basic (Note 12)

247 225 237 224

Diluted (Note 12)

249 251 251 226

See Notes to Consolidated Financial Statements (Unaudited).

13 unchanged sentences

Tax withholding payments for net share-settled equity awards — — ( 20 ) — — — — ( 20 )

Series A convertible preferred stock conversion to common stock 7.6 — 161 — — — — 161

Series A convertible preferred stock dividends — — — ( 7 ) — — — ( 7 )

Changes in retirement benefit obligations, net of income tax — — — — — — 2 2

1 unchanged sentence

Net Income — — — 82 — — — 82

BALANCE—April 1, 2023 233.9 $ 2 $ 3,212 $ 1,085 1.3 $ ( 48 ) $ ( 72 ) $ 4,179

Share-based compensation expense — — 14 — — — — 14

Proceeds from employee share purchase plan 0.2 — 8 — — — — 8

Exercise of stock options 0.7 — 15 — — — — 15

Vested restricted stock units—net 0.1 — — — — — — —

Series A convertible preferred stock conversion to common stock 17.4 1 372 — — — — 373

Unrecognized gain on interest rate caps, net of income tax — — — — — — 1 1

Common stock repurchased — — — — 4.2 ( 166 ) — ( 166 )

Excise tax on common stock repurchases — — — — — ( 2 ) — ( 2 )

Net income — — — 182 — — — 182

BALANCE—July 1, 2023 252.3 $ 3 $ 3,621 $ 1,267 5.5 $ ( 216 ) $ ( 71 ) $ 4,604

Share-based compensation expense — — 15 — — — — 15

Proceeds from employee stock purchase plan 0.2 — 6 — — — — 6

Changes in retirement benefit obligations, net of income tax — — — — — — 1 1

Unrecognized gain on interest rate caps, net of income tax — — — — — — — —

Common stock repurchased — — — — 0.7 ( 29 ) — ( 29 )

Net Income — — — 95 — — — 95

BALANCE—September 30, 2023 252.5 $ 3 $ 3,642 $ 1,362 6.2 $ ( 245 ) $ ( 70 ) $ 4,692

See Notes to Consolidated Financial Statements (Unaudited).

BALANCE—March 30, 2024 253.9 $ 3 $ 3,668 $ 1,591 8.1 $ ( 324 ) $ ( 113 ) $ 4,825

US FOODS HOLDING CORP.

6 unchanged sentences

Shares Amount Shares Amount

BALANCE—January 1, 2022 223.0 $ 2 $ 2,970 $ 782 — $ — $ ( 19 ) $ 3,735

BALANCE—December 31, 2022 225.2 $ 2 $ 3,036 $ 1,010 0.4 $ ( 14 ) $ ( 73 ) $ 3,961

Share-based compensation expense — — 14 — — — — 14

1 unchanged sentence

Vested restricted stock units, net 0.6 — — — — — — —

Restricted Shares, net ( 0.2 ) — — — — — — —

Exercise of stock options 0.3 — 7 — — — — 7

Tax withholding payments for net share-settled equity awards — — ( 11 ) — — — — ( 11 )

Series A convertible preferred stock dividends — — — ( 9 ) — — — ( 9 )

Net Loss — — — ( 7 ) — — — ( 7 )

BALANCE—April 2, 2022 223.8 $ 2 $ 2,973 $ 766 — $ — $ ( 19 ) $ 3,722

Share-based compensation expense — — 9 — — — — 9

Proceeds from employee stock purchase plan 0.2 — 7 — — — — 7

Exercise of stock options 0.3 — 5 — — — — 5

Series A convertible preferred stock dividends — — — ( 9 ) — — — ( 9 )

Net Income — — — 70 — — — 70

BALANCE—July 2, 2022 224.3 $ 2 $ 2,994 $ 827 — $ — $ ( 19 ) $ 3,804

Share-based compensation expense — — 13 — — — — 13

Proceeds from employee stock purchase plan — — 5 — — — — 5

Exercise of stock options 0.5 — 5 — — — — 5

Series A convertible preferred stock conversion to common stock 7.6 — 161 — — — — 161

Series A convertible preferred stock dividends — — — ( 7 ) — — — ( 7 )

Changes in retirement benefit obligations, net of income tax — — — — — — 1 1

Common stock repurchased — — — — 0.9 ( 34 ) — ( 34 )

Net Income — — — 82 — — — 82

BALANCE—October 1, 2022 224.8 $ 2 $ 3,017 $ 927 $ — $ — $ ( 19 ) $ 3,927

BALANCE—April 1, 2023 233.9 $ 2 $ 3,212 $ 1,085 1.3 $ ( 48 ) $ ( 72 ) $ 4,179

See Notes to Consolidated Financial Statements (Unaudited).

3 unchanged sentences

13 Weeks Ended

September 30, 2023 October 1, 2022

March 30, 2024 April 1, 2023

Cash flows from operating activities:

2 unchanged sentences

Gain on disposal of property and equipment—net

Loss on extinguishment of debt 21 —

Amortization of deferred financing costs

5 unchanged sentences

( 173 ) ( 197 )

Decrease (increase) in inventories—net

Increase in inventories—net

(Increase) decrease in prepaid expenses and other assets

Increase in accounts payable and cash overdraft liability

Increase in accrued expenses and other liabilities

Decrease in accrued expenses and other liabilities

( 105 ) ( 53 )

Net cash provided by operating activities

3 unchanged sentences

( 87 ) ( 61 )

Acquisition of broadline operations ( 142 ) —

Net cash used in investing activities

3 unchanged sentences

( 457 ) ( 111 )

Repurchase of Senior Note Debt ( 1,000 ) —

Issuance of new Senior Note Debt 1,000 —

Principal payments on debt repricing ( 14 ) —

6 unchanged sentences

Proceeds from exercise of stock options

Purchase of interest rate caps ( 3 ) —

Tax withholding payments for net share-settled equity awards

2 unchanged sentences

( 55 ) ( 138 )

Net increase in cash, and cash equivalents and restricted cash 135 218

Net (decrease) increase in cash, and cash equivalents and restricted cash ( 2 ) 81

Cash, cash equivalents and restricted cash—beginning of period 269 211

26 unchanged sentences

The Company believes that the disclosures included in this Quarterly Report are adequate to make the information presented not misleading.

These interim consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in the 2022 Annual Report.

These interim consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (the “2023 Annual Report”).

The consolidated interim financial statements reflect all adjustments (consisting of normal recurring items) necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods presented.

1 unchanged sentence

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In December 2022, the FASB issued ASU 2022-06 “Reference Rate Reform” (“Topic 848”) “Deferral of the Sunset Date of Topic 848”, which deferred the sunset date of Topic 848 from December 31, 2022 to December 31, 2024.

Topic 848 provides optional expedients and exceptions for applying GAAP to contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates.

The standard was effective upon issuance and the Company may apply the optional expedients and elections in Topic 848 prospectively through December 31, 2024.

For the Company, the provisions of this ASU were effective upon issuance and did not have a material impact on the Company’s consolidated financial statements.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (“Topic 280”) “Improvements to Reportable Segment Disclosures Topic 280,” which enhances the transparency of segment disclosures primarily related to conclusions on consolidated net income as a measure of segment profit or loss that is most consistent with U.S.

This guidance also applies to single reportable segment entities.

This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

This guidance is effective on a retrospective basis unless it is impracticable to do so and early adoption is permitted.

The Company plans to adopt the provisions of ASU No.

2023-07 at the beginning of the fourth quarter of fiscal year 2024 and does not expect the provisions of the new standard to materially affect our financial position, results of operation or cash flows.

In December 2023, the FASB issued ASU No 2023-09 Income Taxes (“Topic 740”) “Improvements to Income Tax Disclosures Topic 740”, which enhances the transparency of income tax disclosures primarily related to rate reconciliation and income taxes paid information.

This guidance is effective for fiscal years beginning after December 15, 2024.

This guidance is effective on a prospective basis, though retrospective application is permitted.

The Company plans to adopt the provisions of ASU No.

2023-09 at the beginning of the first quarter of fiscal year 2025 and does not expect the provisions of the new standard to materially affect our financial position, results of operation or cash flows.

In March 2024, the SEC adopted amendments to its rules under the Securities Act and Exchanges Act The Enhancement and Standardization of Climate-Related Disclosures for Investors (“SEC Climate Rule”), which enhances the transparency of climate-related disclosures primarily related to climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, business strategy, results of operations, or financial condition.

The SEC has been the subject of various lawsuits since adopting these amendments, and has voluntarily stayed these standards pending further developments on the legal front.

Under the currently issued SEC Climate Rule, these amendments would be effective for large accelerated filers for fiscal year 2025.

The Company is continuing to monitor developments associated with these standards and has begun to assess the impacts they may have on the Company’s financial position, results of operation and cash flows.

REVENUE RECOGNITION

5 unchanged sentences

Shipping and handling costs are treated as fulfillment costs and included in distribution, selling and administrative costs.

The Company did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of September 30, 2023 or December 31, 2022.

Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $ 1.9 billion and $ 1.7 billion as of September 30, 2023 and December 31, 2022, respectively.

The Company did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of March 30, 2024 or December 30, 2023.

Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $ 2.0 billion and $ 1.9 billion as of March 30, 2024 and December 30, 2023, respectively.

The Company has certain customer contracts under which incentives are paid upfront to its customers.

1 unchanged sentence

These incentive payments are capitalized in prepaid expenses and other assets and amortized as a reduction of revenue over the life of the contract or as goods or services are transferred to the customer.

The Company’s contract assets for these upfront payments were $ 31 million and $ 29 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, respectively, and $ 35 million and $ 31 million included in other assets in the Company’s Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022, respectively.

The Company’s contract assets for these upfront payments were $ 40 million and $ 35 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of March 30, 2024 and December 30, 2023, respectively, and $ 43 million and $ 39 million included in other assets in the Company’s Consolidated Balance Sheets as of March 30, 2024 and December 30, 2023, respectively.

The following table presents the disaggregation of revenue for each of the Company’s principal product categories:

13 Weeks Ended 39 Weeks Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

13 Weeks Ended

March 30, 2024 April 1, 2023

Meats and seafood $ 2,976 $ 2,826

6 unchanged sentences

Total net sales $ 8,949 $ 8,542

BUSINESS ACQUISITIONS

During the fiscal quarter ended September 30, 2023, the Company acquired Renzi Foodservice, a broadline distributor in New York, for a purchase price of $ 142 million.

The acquisition, which was funded with cash from operations, allows US Foods to further expand its reach into central upstate New York.

The Renzi Foodservice acquisition, reflected in the Company’s consolidated financial statements commencing from the date of acquisition on July 7, 2023, did not materially affect the Company’s results of operations or financial position.

The Company recorded goodwill of $ 60 million and intangible assets of $ 57 million for this acquisition.

The intangible assets included $ 54 million related to customer relationships and $ 3 million related to noncompete agreements, which will be amortized on a straight-line basis over an estimated useful life of 15 and 5 years, respectively.

The goodwill recognized from the Renzi Foodservice acquisition is deductible for tax purposes.

Renzi Foodservice is integrated into the Company’s foodservice distribution network.

The Company’s inventories, consisting mainly of food and other food-related products, are primarily considered finished goods.

4 unchanged sentences

This “links” current costs to original costs in the base year when the Company adopted LIFO.

LIFO reserves in the Company’s Consolidated Balance Sheets were $ 530 million and $ 489 million as of September 30, 2023 and December 31, 2022, respectively.

As a result of changes in LIFO reserves, cost of goods sold increased $ 37 million and $ 6 million for the 13 weeks ended September 30, 2023 and October 1, 2022, respectively, and increased $ 42 million and $ 143 million for the 39 weeks ended September 30, 2023 and October 1, 2022, respectively.

LIFO reserves in the Company’s Consolidated Balance Sheets were $ 533 million and $ 488 million as of March 30, 2024 and December 30, 2023, respectively.

As a result of changes in LIFO reserves, cost of goods sold increased $ 45 million and $ 20 million for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

5 unchanged sentences

The Company uses specific criteria to determine uncollectible receivables to be written off, including bankruptcy, accounts referred to outside parties for collection, and accounts past due over specified periods.

Activity in the allowance for doubtful accounts for the 13 weeks ended September 30, 2023 includes $ 4 million charged to costs and expenses, as well as $ 17 million of customer accounts written off - net of recoveries.

For the 13 weeks ended September 30, 2023, the customer accounts written off - net of recoveries is primarily due to a one-time write-off for one large national customer whose outstanding amount due had previously been reserved.

Activity for the 13 weeks ended October 1, 2022 was de minimis.

A summary of the activity in the allowance for doubtful accounts for the 39 weeks ended September 30, 2023 and October 1, 2022 was as follows:

September 30, 2023 October 1, 2022

A summary of the activity in the allowance for doubtful accounts for the 13 weeks ended March 30, 2024 and April 1, 2023 was as follows:

March 30, 2024 April 1, 2023

Balance as of beginning of year $ 18 $ 30

2 unchanged sentences

Balance as of end of period

This table excludes the vendor receivable related allowance for doubtful accounts of $ 7 million as of September 30, 2023, $ 8 million as of December 31, 2022, $ 10 million as of October 1, 2022 and $ 7 million as of January 1, 2022, respectively.

This table excludes the vendor receivable related allowance for doubtful accounts of $ 6 million as of March 30, 2024, $ 5 million as of December 30, 2023, $ 8 million as of April 1, 2023 and $ 8 million as of December 31, 2022, respectively.

PROPERTY AND EQUIPMENT

2 unchanged sentences

Property and equipment under financing leases and leasehold improvements are amortized on a straight-line basis over the shorter of the remaining terms of the related leases or the estimated useful lives of the assets, if reasonably assured the Company will purchase the assets at the end of the lease terms.

As of September 30, 2023 and December 31, 2022, property and equipment-net included accumulated depreciation of $ 3,200 million and $ 2,981 million, respectively.

Depreciation expense was $ 85 million and $ 81 million for the 13 weeks ended September 30, 2023 and October 1, 2022 and $ 256 million and $ 240 million for the 39 weeks ended September 30, 2023 and October 1, 2022, respectively.

As of March 30, 2024 and December 30, 2023, property and equipment-net included accumulated depreciation of $ 3,224 million and $ 3,219 million, respectively.

Depreciation expense was $ 93 million and $ 87 million for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

GOODWILL AND OTHER INTANGIBLES

4 unchanged sentences

Customer relationships, noncompete agreements and amortizable trade names are amortized over their estimated useful lives (which range from approximately 3 to 15 years).

Amortization expense was $ 12 million and $ 11 million for the 13 weeks ended September 30, 2023 and October 1, 2022, respectively, and $ 34 million and $ 33 million for the 39 weeks ended September 30, 2023 and October 1, 2022, respectively.

Amortization expense was $ 12 million and $ 11 million for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

Goodwill and other intangibles—net consisted of the following:

September 30, 2023 December 31, 2022

March 30, 2024 December 30, 2023

Goodwill $ 5,697 $ 5,697

15 unchanged sentences

Total other intangibles—net $ 796 $ 803

The increases in goodwill and the gross carrying amounts of customer relationships and noncompete agreements are attributable to the Renzi Foodservice acquisition, see Note 4, Business Acquisitions.

The increase in the gross carrying amount of customer relationships is attributable to acquisition purchase price adjustments.

The Company assesses for impairment of intangible assets with definite lives only if events occur that indicate that the carrying amount of an intangible asset may not be recoverable.

1 unchanged sentence

For goodwill and indefinite-lived intangible assets, the Company’s policy is to assess for impairment as of the beginning of each fiscal third quarter.

No impairments were recognized for the 39 weeks ended September 30, 2023 and October 1, 2022, respectively.

No impairments were recognized for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

FAIR VALUE MEASUREMENTS

7 unchanged sentences

There were no transfers between fair value levels in any of the periods presented below.

The Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall, were as follows:

September 30, 2023

The Company’s assets and liabilities measured at fair value on a recurring basis as of March 30, 2024 and December 30, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall, were as follows:

March 30, 2024

Level 1 Level 2 Level 3 Total

2 unchanged sentences

Interest rate caps

$ — $ 3 $ — $ 3

December 30, 2023

2 unchanged sentences

$ 208 $ — $ — $ 208

Interest rate caps

There were no significant assets or liabilities on the Company’s Consolidated Balance Sheets measured at fair value on a nonrecurring basis for the periods presented above, except as further disclosed in Note 7, Goodwill and Other Intangibles.

5 unchanged sentences

The Company has in the past, and may in the future, use interest rate hedges, designated as cash flow hedges, to manage its exposure to interest rate movements in connection with its variable-rate de bt.

In April 2023, the Company entered into two two-year rate cap agreements, which will mature on April 30, 2025, with a total notional amount of $ 450 million, which will effectively cap the interest rate on approximately 24 % of the current principal amount of the Term Loan Facilities.

In April 2023, the Company entered into two , two-year rate cap agreements, which will mature on April 30, 2025, with a total notional amount of $ 450 million, which effectively cap the interest rate on approximately 24 % of the current principal amount of the Term Loan Facilities.

The Company’s maximum exposure to the variable component of the interest rate on the Term Loan Facilities will be 5 % on the notional amount covered by the interest rate cap.

The Company had no outstanding interest rate hedge agreements as of December 31, 2022.

The Company records its interest rate caps in the Consolidated Balance Sheet at fair value, based on projections of cash flows and future interest rates.

The determination of fair value includes the consideration of any credit valuation adjustments necessary, giving consideration to the creditworthiness of the respective counterparties or the Company, as appropriate.

The following table presents the balance sheet location and fair value of the interest rate caps at September 30, 2023:

Balance at September 30, 2023 Balance Sheet Location Fair Value

The following table presents the balance sheet location and fair value of the interest rate caps at March 30, 2024:

Balance at March 30, 2024 Balance Sheet Location Fair Value

Derivatives designed as hedging instruments

2 unchanged sentences

The effective portion of gains and losses on the interest rate caps are initially recorded in other comprehensive loss and reclassified to interest expense during the period in which the hedged transaction affects income.

There was no ineffectiveness attributable to the Company’s interest rate caps during the 13 weeks and 39 weeks ended September 30, 2023.

The following

table presents the effect of the Company’s interest rate caps in the Consolidated Statement of Comprehensive Income for the 13 weeks and 39 weeks ended September 30, 2023:

There was no ineffectiveness attributable to the Company’s interest rate caps during the 13 weeks ended March 30, 2024.

The following table presents the

effect of the Company’s interest rate caps in the Consolidated Statement of Comprehensive Income for the 13 weeks ended March 30, 2024:

Derivatives in Cash Flow Hedging Relationships Amount of Gain Recognized in Other Comprehensive Loss, net of tax Location of Amounts Reclassified from Accumulated Other Comprehensive Loss Amount of Gain Reclassified from Accumulated Other Comprehensive Loss to Income, net of tax

For the 13 weeks ended September 30, 2023

Interest Rate Caps $ — Interest expense ─ net $ —

For the 39 weeks ended September 30, 2023

For the 13 weeks ended March 30, 2024

Interest Rate Caps $ — Interest expense ─ net $ —

During the next twelve months, the Company estimates that an immaterial amount will be reclassified from accumulated other comprehensive loss to income.

During the next twelve months, the Company estimates $ 1 million will be reclassified from accumulated other comprehensive loss to income.

Other Fair Value Measurements

The carrying value of cash, accounts receivable, vendor receivables, cash overdraft liability and accounts payable approximate their fair values due to their short-term maturities.

The fair value of the Company’s total debt approximated $ 4.5 billion and $ 4.6 billion as of September 30, 2023 and December 31, 2022, respectively, as compared to its carrying value of $ 4.7 billion and $ 4.8 billion as of September 30, 2023 and December 31, 2022 respectively.

The fair value of the Company’s 6.25 % senior secured notes due April 15, 2025 (the “Secured Senior Notes due 2025”) was $ 1.0 billion as of December 31, 2022.

The fair value of the Company’s 6.875 % senior unsecured notes due September 15, 2028 (the “Unsecured Senior Notes due 2028”) was $ 0.5 billion as of September 30, 2023.

The fair value of the Company’s 4.75 % unsecured senior notes due February 15, 2029 (the “Unsecured Senior Notes due 2029”) was $ 0.8 billion as of both September 30, 2023 and December 31, 2022.

The fair value of the Company’s 4.625 % unsecured senior notes due June 1, 2030 (the “Unsecured Senior Notes due 2030”) was $ 0.4 billion as of both September 30, 2023 and December 31, 2022.

The fair value of the Company’s 7.250 % senior unsecured notes due January 15, 2032 (the “Unsecured Senior Notes due 2032”) was $ 0.5 billion as of September 30, 2023.

Fair value of the Unsecured Senior Notes dues 2028, the Unsecured Senior Notes due 2029, the Unsecured Senior Notes due 2030 and the Unsecured Senior Notes due 2032 is based upon their closing market prices on the respective dates.

The fair value of the Company’s total debt approximated $ 4.7 billion and $ 4.7 billion as of March 30, 2024 and December 30, 2023, respectively, as compared to its carrying value of $ 4.8 billion and $ 4.6 billion as of March 30, 2024 and December 30, 2023 respectively.

The fair value of the Company’s 6.88 % senior unsecured notes due September 15, 2028 (the “Unsecured Senior Notes due 2028”) was $ 0.5 billion as of both March 30, 2024 and December 30, 2023.

The fair value of the Company’s 4.75 % unsecured senior notes due February 15, 2029 (the “Unsecured Senior Notes due 2029”) was $ 0.8 billion and $ 0.9 billion as of March 30, 2024 and December 30, 2023.

The fair value of the Company’s 4.63 % unsecured senior notes due June 1, 2030 (the “Unsecured Senior Notes due 2030”) was $ 0.5 billion as of both March 30, 2024 and December 30, 2023.

The fair value of the Company’s 7.25 % senior unsecured notes due January 15, 2032 (the “Unsecured Senior Notes due 2032”) was $ 0.5 billion as of both March 30, 2024 and December 30, 2023.

Fair value of the Unsecured Senior Notes due 2028, the Unsecured Senior Notes due 2029, the Unsecured Senior Notes due 2030 and the Unsecured Senior Notes due 2032 is based upon their quoted market prices on the respective dates.

The fair value of the Unsecured Senior Notes due 2028, the Unsecured Senior Notes due 2029, the Unsecured Senior Notes due 2030 and the Unsecured Senior Notes due 2032 is classified under Level 2 of the fair value hierarchy.

1 unchanged sentence

Total debt consisted of the following:

Debt Description Maturity Interest Rate as of September 30, 2023 Carrying Value as of September 30, 2023 Carrying Value as of December 31, 2022

Debt Description Maturity Interest Rate as of March 30, 2024 Carrying Value as of March 30, 2024 Carrying Value as of December 30, 2023

ABL Facility December 7, 2027 8.50 % $ — $ —

3 unchanged sentences

November 22, 2028 7.33 % 719 718

Secured Senior Notes due 2025 (net of $ 0 and $ 7 of unamortized deferred financing costs, respectively) (1)

April 15, 2025 6.25 % — 993

Unsecured Senior Notes due 2028 (net of $ 5 unamortized deferred financing costs) (1)

Unsecured Senior Notes due 2028 (net of $ 4 and $ 5 of unamortized deferred financing costs, respectively)

September 15, 2028 6.88 % 496 495

3 unchanged sentences

June 1, 2030 4.63 % 496 496

Unsecured Senior Notes due 2032 (net of $ 5 of unamortized deferred financing costs) (1)

Unsecured Senior Notes due 2032 (net of $ 5 and $ 5 of unamortized deferred financing costs, respectively)

January 15, 2032 7.25 % 495 495

5 unchanged sentences

Long-term debt $ 4,585 $ 4,564

(1) The Secured Senior Notes due 2025 were paid in full on September 25, 2023, with the proceeds from the issuance of the

Unsecured Senior Notes due 2028 and the Unsecured Senior Notes due 2032, as well as cash on hand, as further discussed below.

As of September 30, 2023, after considering interest rate caps that fixed the variable component of the interest rate on a total notional amount of $ 450 million of the current principal amount of the Term Loan Facilities described below, approximately 30 % of the Company’s total debt bore interest at a floating rate.

USF’s asset based senior secured revolving credit facility (the “ABL Facility”) provides USF with loan commitments having a maximum aggregate principal amount of $ 2,300 million.

As of March 30, 2024, after considering interest rate caps that fixed the variable component of the interest rate on a total notional amount of $ 450 million of the current principal amount of the Term Loan Facilities described below, approximately 30 % of the Company’s total debt bore interest at a floating rate.

The Company’s asset based senior secured revolving credit facility (the “ABL Facility”) provides the Company with loan commitments having a maximum aggregate principal amount of $ 2,300 million.

The ABL Facility is scheduled to mature on December 7, 2027.

Borrowings under the ABL Facility bear interest, at USF’s periodic election, at a rate equal to the sum of an alternative base rate (“ABR”), as described in the ABL Facility, plus a margin ranging from 0.00 % to 0.50 % based on USF’s excess availability under the ABL Facility, or the sum of the Term Secured Overnight Financing Rate (“Term SOFR”) plus a margin ranging from 1.00 % to 1.50 %, based on USF’s excess availability under the ABL Facility, and a credit spread adjustment of 0.10 %.

The margin under the ABL Facility as of September 30, 2023 was 0.00 % for ABR loans and 1.00 % for Term SOFR loans.

USF had no outstanding borrowings, and had outstanding letters of credit totaling $ 487 million, under the ABL Facility as of September 30, 2023.

Borrowings under the ABL Facility bear interest, at the Company’s periodic election, at a rate equal to the sum of an alternative base rate (“ABR”), as described in the ABL Facility, plus a margin ranging from 0.00 % to 0.50 % based on USF’s excess availability under the ABL Facility, or the sum of the Term Secured Overnight Financing Rate (“Term SOFR”) plus a margin ranging from 1.00 % to 1.50 %, based on USF’s excess availability under the ABL Facility, and a credit spread adjustment of 0.10 %.

The margin under the ABL Facility as of March 30, 2024 was 0.00 % for ABR loans and 1.00 % for Term SOFR loans.

The Company had no outstanding borrowings, and had outstanding letters of credit totaling $ 542 million, under the ABL Facility as of March 30, 2024.

The outstanding letters of credit primarily relate to securing USF’s obligations with respect to its insurance program and certain real estate leases.

There was available capacity of $ 1,813 million under the ABL Facility as of September 30, 2023.

There was available capacity of $ 1,758 million under the ABL Facility as of March 30, 2024.

Term Loan Facilities

Under its term loan credit agreement, USF has entered into an incremental senior secured term loan facility borrowed in September 2019 (the “2019 Incremental Term Loan Facility”) and an incremental senior secured term loan facility borrowed in November 2021 (the “2021 Incremental Term Loan Facility”).

On June 1, 2023, USF entered into an amendment to its term loan credit agreement to replace the LIBOR-based interest rate option included in the term loan credit agreement with an

interest rate option based upon Term SOFR.

The Company’s maximum exposure to the variable component of the interest rate on the Term Loan Facilities will be 5 % on the notional amount covered by the interest rate caps described above.

Under its term loan credit agreement, the Company has entered into an incremental senior secured term loan facility borrowed in September 2019 (the “2019 Incremental Term Loan Facility”) and an incremental senior secured term loan facility borrowed in November 2021 (the “2021 Incremental Term Loan Facility”).

On June 1, 2023, the Company entered into an amendment to its term loan credit agreement to replace the LIBOR-based interest rate option included in the term loan credit agreement with an interest rate option based upon Term SOFR.

USF’s maximum exposure to the variable component of the interest rate on the Term Loan Facilities will be 5 % on the notional amount covered by the interest rate caps described above.

2019 Incremental Term Loan Facility

The 2019 Incremental Term Loan Facility had an outstanding balance of $ 1,108 million, net of $ 12 million of unamortized deferred financing costs as of September 30, 2023.

During the 13 weeks and 39 weeks ended September 30, 2023 the Company voluntarily prepaid $ 60 million and $ 120 million, respectively, of the 2019 Incremental Term Loan Facility.

The 2019 Incremental Term Loan Facility had an outstanding balance of $ 1,102 million, net of $ 10 million of unamortized deferred financing costs as of March 30, 2024.

Borrowings under the 2019 Incremental Term Loan Facility bear interest at a rate per annum equal to, at USF’s option, either the sum of (i) Term SOFR plus (ii) a credit spread adjustment of (a) 0.11448 % for a one-month term, (b) 0.26161 % for a three-month term, or (c) 0.42826 % for a six month term, (with the sum of Term SOFR and the foregoing credit spread adjustment subject to a Term SOFR “floor” of 0.00 %) plus (iii) a margin of 2.00 %, or the sum of (i) an ABR, as described in the 2019 Incremental Term Loan Facility plus a margin of 1.00 %.

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2021 Incremental Term Loan Facility

The 2021 Incremental Term Loan Facility had an outstanding balance of $ 718 million, net of $ 3 million of unamortized deferred financing costs as of September 30, 2023.

During the 39 weeks ended September 30, 2023 the Company voluntarily prepaid $ 65 million of the 2021 Incremental Term Loan Facility.

Borrowings under the 2021 Incremental Term Loan Facility bear interest at a rate per annum equal to, at USF’s option, either the sum of (i) Term SOFR plus (ii) a credit spread adjustment of (a) 0.11448 % for a one-month term, (b) 0.26161 % for a three-month term, or (c) 0.42826 % for a six month term, (with the sum of Term SOFR and the foregoing credit spread adjustment subject to a Term SOFR “floor” of 0.00 %) plus (iii) a margin of 2.50 %, or the sum of (i) an ABR, as described in the 2021 Incremental Term Loan Facility, plus a margin of 1.50 %.

The 2021 Incremental Term Loan Facility had an outstanding balance of $ 719 million, net of $ 3 million of unamortized deferred financing costs as of March 30, 2024.

Borrowings under the 2021 Incremental Term Loan Facility bear interest at a rate per annum equal to, at USF’s option, either the sum of (i) Term SOFR (with the Term SOFR subject to a “floor” of 0.00 %) plus (ii) a margin of 2.00 % or the sum of (i) an ABR, as described in the 2021 Incremental Term Loan Facility, plus a margin of 1.00 %.

The 2021 Incremental Term Loan Facility will mature on November 22, 2028.

On August 22, 2023, the 2021 Incremental Term Loan Facility was further amended to lower the interest rate margins under the term loan facility to 2.50 % for Term SOFR borrowings and 1.50 % for ABR borrowings.

On August 22, 2023, the 2021 Incremental Term Loan Facility was amended to reduce the interest rate margins under the term loan facility to 2.50 % for Term SOFR borrowings and 1.50 % for ABR borrowings.

The Company applied modification accounting to the majority of the continuing lenders as the terms were not substantially different from the terms that applied to those lenders prior to the amendment.

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The Company recorded $ 1 million of third-party costs and a write-off of $ 1 million of unamortized deferred financing costs, related to the August 22, 2023 amendment in interest expense.

Unamortized deferred financing costs of $ 3 million at September 30, 2023 were carried forward and will be amortized through November 22, 2028, the maturity date of the term loan facility.

Secured Senior Notes due 2025

On September 25, 2023, the Company redeemed all of the then outstanding Secured Senior Notes due 2025, using proceeds from the issuance of the Unsecured Senior Notes due 2028 and the Unsecured Senior Notes due 2032, along with cash on hand, as discussed below.

As a result of the early redemption of the Secured Senior Notes due 2025, the Company incurred a $ 16 million prepayment premium, as well as wrote-off deferred financing fees of $ 5 million.

The total loss on extinguishment of debt of $ 21 million is presented separately in the Company’s Consolidated Statements of Comprehensive Income.

Unamortized deferred financing costs of $ 3 million at December 30, 2023 were carried forward and will be amortized through November 22, 2028, the maturity date of the term loan facility.

On February 27, 2024, the 2021 Incremental Term Loan Facility was further amended to reduce the interest rate margins under the term loan facility to 2.00 % for Term SOFR borrowings and 1.00 % for ABR borrowings and eliminate the credit spread adjustment.

For the remaining lenders, the Company applied debt extinguishment accounting.

The Company recorded $ 1 million of third-party costs related to the February 27, 2024 amendment in interest expense.

Unamortized deferred financing costs of $ 3 million at March 30, 2024 were carried forward and will be amortized through November 22, 2028, the maturity date of the term loan facility.

Unsecured Senior Notes due 2028

On September 25, 2023, USF completed a private offering of $ 500 million aggregate principal amount of Unsecured Senior Notes due 2028.

USF used the proceeds of the Unsecured Senior Notes due 2028, together with the proceeds of the Unsecured Senior Notes due 2032 and cash on hand, to redeem all of the then outstanding Secured Senior Notes due 2025, and to pay related fees and expenses.

Lender fees and third-party costs of $ 5 million in connection with the issuance of the Unsecured Senior Notes due 2028 were capitalized as deferred financing costs.

The Unsecured Senior Notes due 2028 had an outstanding balance of $ 495 million, net of the $ 5 million of unamortized deferred financing costs, as of September 30, 2023.

The Unsecured Senior Notes due 2028 had an outstanding balance of $ 496 million, net of the $ 4 million of unamortized deferred financing costs, as of March 30, 2024.

The Unsecured Senior Notes due 2028 bear interest at a rate of 6.88 % per annum and will mature on September 15, 2028.

On or after September 15, 2025, the Unsecured Senior Notes due 2028 are redeemable, at USF’s option, in whole or in part at a price of 103.438 % of the remaining principal, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date.

On or after September 15, 2026 and September 15, 2027, the optional redemption price for the Unsecured Senior Notes due 2028 declines to 101.719 % and 100.00 %, respectively, of the remaining principal amount, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date.

Unsecured Senior Notes due 2029

The Unsecured Senior Notes due 2029 had an outstanding balance of $ 894 million, net of $ 6 million of unamortized deferred financing costs, as of September 30, 2023.

The Unsecured Senior Notes due 2029 had an outstanding balance of $ 894 million, net of $ 6 million of unamortized deferred financing costs, as of March 30, 2024.

The Unsecured Senior Notes due 2029 bear interest at a rate of 4.75 % per annum and will mature on February 15, 2029.

Unsecured Senior Notes due 2030

The Unsecured Senior Notes due 2030 had an outstanding balance of $ 496 million, net of $ 4 million of unamortized deferred financing costs, as of September 30, 2023.

The Unsecured Senior Notes due 2030 had an outstanding balance of $ 496 million, net of $ 4 million of unamortized deferred financing costs, as of March 30, 2024.

The Unsecured Senior Notes due 2030 bear interest at a rate of 4.63 % per annum and will mature on June 1, 2030.

Unsecured Senior Notes due 2032

On September 25, 2023, USF completed a private offering of $ 500 million aggregate principal amount of Unsecured Senior Notes due 2032.

USF used the proceeds of the Unsecured Senior Notes due 2032, together with the proceeds of the Unsecured Senior Notes due 2028 and cash on hand, to redeem all of the then outstanding Secured Senior Notes due 2025, and to pay related fees and expenses.

Lender fees and third-party costs of $ 5 million in connection with the issuance of the Unsecured Senior Notes due 2032 were capitalized as deferred financing costs.

The Unsecured Senior Notes due 2032 had an outstanding balance of $ 495 million, net of the $ 5 million of unamortized deferred financing costs, as of September 30, 2023.

The Unsecured Senior Notes due 2032 had an outstanding balance of $ 495 million, net of the $ 5 million of unamortized deferred financing costs, as of March 30, 2024.

The Unsecured Senior Notes due 2032 bear interest at a rate of 7.25 % per annum and will mature on January 15, 2032.

On or after September 15, 2026, the Unsecured Senior Notes due 2032 are redeemable, at USF’s option, in whole or in part at a price of 103.625 % of the remaining principal, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date.

On or after September 15, 2027 and September 15, 2028, the optional redemption price for the Unsecured Senior Notes due 2032 declines to 101.813 % and 100.00 %, respectively, of the remaining principal amount, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date.

Debt Covenants

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These include, among other things, covenants that restrict our ability to incur certain additional indebtedness, create or permit liens on assets, pay dividends, or engage in mergers or consolidations.

USF had approximately $ 1.9 billion of restricted payment capacity under these covenants, and approximately $ 2.8 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of September 30, 2023.

The Company had approximately $ 2.0 billion of restricted payment capacity under these covenants, and approximately $ 2.8 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of March 30, 2024.

RESTRUCTURING LIABILITIES

From time to time, the Company may implement initiatives or close or consolidate facilities in an effort to reduce costs and improve operating effectiveness.

From time to time, the Company may implement initiatives, close or consolidate facilities in an effort to reduce costs and improve operating effectiveness.

In connection with these activities, the Company may incur various costs including severance and other employee-related separation costs.

During the 13 weeks and 39 weeks ended September 30, 2023, the Company incurred net restructuring costs of $ 3 million primarily related to initiatives to improve operational effectiveness.

During both the 13 weeks and 39 weeks ended October 1, 2022, the net restructuring costs were de minimis.

Net restructuring liabilities were $ 3 million as of September 30, 2023 and December 31, 2022.

During the 13 weeks ended March 30, 2024, the Company incurred net restructuring costs of $ 13 million primarily related to initiatives to improve operational effectiveness and workforce reductions.

During the 13 weeks ended April 1, 2023, the net restructuring costs were de minimis.

Net restructuring liabilities were $ 15 million and $ 7 million as of March 30, 2024 and December 30, 2023, respectively.

The following table summarizes the changes in the restructuring liabilities for the 13 weeks ended March 30, 2024:

Severance and Related Costs Facility Closing Costs Total

Balance as of December 30, 2023 $ 7 $ — $ 7

Current period costs 13 — 13

Payments, net ( 5 ) — ( 5 )

Balance at March 30, 2024 $ 15 $ — $ 15

RETIREMENT PLANS

The Company sponsors a defined benefit pension plan and a 401(k) savings plan for eligible employees, and provides certain postretirement health and welfare benefits to eligible retirees and their dependents.

The Company sponsors a defined benefit pension plan (the “Retirement Plan”) and a 401(k) savings plan for eligible employees, and provides certain postretirement health and welfare benefits to eligible retirees and their dependents.

In the quarter ending July 1, 2023, the Company issued a notice of intent to terminate the majority of the Retirement Plan.

This was previously approved by the Company’s Board of Directors.

Effective December 30, 2023, the Retirement Plan was split into the Retirement Plan that is continuing, the “Ongoing Plan”, and the portion of the Retirement Plan that is terminating, the “Terminating Plan.” The Company has commenced the plan termination process for the Terminating Plan and expects all benefits to be settled during 2024, either through a lump-sum payment to participants or the purchase of an annuity offering on behalf of the participants.

As the amount of the settlement depends on a number of factors determined as of the Terminating Plan liquidation date, including the annuity pricing, interest rate environment and asset experience, we are currently unable to determine the ultimate cost of the settlement of the Terminating Plan at this time.

The Company does not expect to make significant contributions to the Retirement Plan in fiscal year 2024 for the cost of settlement of the Terminating Plan.

The components of net periodic pension benefit credits for Company sponsored defined benefit plans were as follows:

13 Weeks Ended 39 Weeks Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

13 Weeks Ended

March 30, 2024 April 1, 2023

Components of net periodic pension benefit credits

$ — $ 1 $ 1 $ 2

Interest cost

Expected return on plan assets

( 12 ) ( 12 ) ( 36 ) ( 38 )

Amortization of net loss 2 1

Net periodic pension benefit credits $ 2 $ ( 1 )

Other postretirement benefit costs were de minimis for both the 13 weeks and 39 weeks ended September 30, 2023 and October 1, 2022.

Other postretirement benefit costs were de minimis for both the 13 weeks ended March 30, 2024 and April 1, 2023.

The service cost component of net periodic benefit credits is included in distribution, selling and administrative costs, while the other components of net periodic benefit credits are included in other income—net in the Company’s Consolidated Statements of Comprehensive Income.

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Certain employees are eligible to participate in the Company’s 401(k) plan.

The Company made employer matching contributions to the 401(k) plan of $ 16 million and $ 14 million for the 13 weeks ended September 30, 2023 and October 1, 2022, respectively, and $ 48 million and $ 44 million for the 39 weeks ended September 30, 2023 and October 1, 2022, respectively.

The Company made employer matching contributions to the 401(k) plan of $ 21 million and $ 17 million for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

The Company is also required to contribute to various multiemployer pension plans under the terms of collective bargaining agreements that cover certain of its union-represented employees.

The Company’s contributions to these plans were $ 14 million and $ 12 million for the 13 weeks ended September 30, 2023 and October 1, 2022, respectively, and $ 42 million and $ 36 million for the 39 weeks ended September 30, 2023 and October 1, 2022, respectively.

The Company’s contributions to these plans were $ 15 million and $ 13 million for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

STOCKHOLDERS’ EQUITY

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Diluted EPS is computed using the weighted average number of shares of common stock, plus the effect of potentially dilutive securities.

The Company applies the treasury method to calculate the dilution impact of share-based awards—stock options, non-vested restricted shares with forfeitable dividend rights, restricted stock units, and employee stock purchase plan deferrals.

The Company applied the treasury method to calculate the dilution impact of share-based awards—stock options, non-vested restricted shares with forfeitable dividend rights, restricted stock units, and employee stock purchase plan deferrals.

The Company applies the if-converted method to calculate the dilution impact of the Series A convertible preferred stock (the “Series A Preferred Stock”), if dilutive in the period.

For the 13 weeks ended September 30, 2023 and October 1, 2022, share-based awards representing less than 1 million and 3 million underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive.

For the 39 weeks ended September 30, 2023 and October 1, 2022, share-based awards representing less than 1 million and 3 million underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive.

Additionally, for the 13 weeks and 39 weeks ended October 1, 2022, Series A Preferred Stock representing 25 million of underlying common shares were not included in the computation because the effect would have been anti-dilutive.

The Series A Preferred Stock shares were dilutive for the 39 weeks ended September 30, 2023.

For both, the 13 weeks ended March 30, 2024 and April 1, 2023, share-based awards representing 1 million underlying common shares, were not included in the computation because the effect would have been anti-dilutive.

The Series A Preferred Stock shares were dilutive for the 13 weeks ended April 1, 2023.

For the 13 weeks ended March 30, 2024, there are no Series A Preferred Stock outstanding.

The following table sets forth the computation of basic and diluted EPS:

13 Weeks Ended 39 Weeks Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

$ 95 $ 109 $ 359 $ 172

13 Weeks Ended

March 30, 2024 April 1, 2023

Series A Preferred Stock Dividends

— ( 9 ) ( 7 ) ( 27 )

Net income available to common shareholders

$ 95 $ 100 $ 352 $ 145

Weighted-average common shares outstanding—basic

247 225 237 224

Effect of dilutive share-based awards

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Weighted-average common shares outstanding—diluted

249 251 251 226

Net income per share

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$ 0.33 $ 0.32

(1) Under the if-converted method, outstanding shares of the Series A Preferred Stock are converted to common shares for inclusion in the calculation of the weighted-average common shares outstanding—diluted.

Once converted, there would be no preferred stock outstanding and therefore no Series A Preferred Stock dividend.

As of September 30, 2023, the 11 million shares represent the weighted average impact of these shares during the 39 weeks ended September 30, 2023.

See Note 14, Convertible Preferred Stock, for details on the Series A Preferred Stock.

(1) Under the if-converted method, outstanding shares of the Series A Preferred Stock were treated as if converted to common shares for inclusion in the calculation of the weighted-average common shares outstanding—diluted.

Under this approach, if converted, there would be no preferred stock outstanding and therefore no Series A Preferred Stock dividend.

As of March 30, 2024, there are no Series A Preferred Stock outstanding.

Share Repurchase Program

On November 2, 2022, our Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $ 500 million of its outstanding common stock.

During the 13 weeks ended September 30, 2023 the Company repurchased 726,690 shares at an aggregate purchase price of approximately $ 29 million under the program.

During the 39 weeks ended September 30, 2023, the Company repurchased 5,824,151 shares at an aggregate purchase price of approximately $ 229 million under the program.

Additionally, during the 39 weeks ended September 30, 2023, the Company recorded $ 2 million of excise tax associated with common stock repurchases.

At September 30, 2023, there was approximately $ 257 million in remaining funds authorized under this program.

During the 13 weeks ended March 30, 2024, the Company repurchased 283,988 shares at an aggregate purchase price of approximately $ 13 million under the program.

At March 30, 2024, there was approximately $ 179 million in remaining funds authorized under this program.

Additionally, during the 13 weeks ended March 30, 2024, the Company recorded de minimis excise tax associated with common stock repurchases.

The size and timing of any repurchases will depend on a number of factors, including share price, general business and market conditions and other factors.

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The repurchase authorization does not have an expiration date.

CONVERTIBLE PREFERRED STOCK

On May 6, 2020, pursuant to the terms of an Investment Agreement with KKR Fresh Aggregator L.P., a Delaware limited partnership, which agreement was joined on February 25, 2021 by permitted transferee KKR Fresh Holdings L.P., a Delaware limited partnership (“KKR”), the Company issued and sold 500,000 shares of the Company’s Series A Preferred Stock, par value $ 0.01 per share, to KKR Fresh Aggregator L.P.

for an aggregate purchase price of $ 500 million, or $ 1,000 per share (the “Issuance”).

The Company used the net proceeds from the Issuance for working capital and general corporate purposes.

As of December 31, 2022, the Company had outstanding a total of 532,281 shares of Series A Preferred Stock.

The Series A Preferred Stock had a carrying value of $ 534 million as of December 31, 2022.

On March 10, 2023, KKR converted 161,237 shares of Series A Preferred Stock into 7,600,037 shares of the Company’s common stock.

Pursuant to the terms of conversion of the Series A Preferred Stock set forth in the Certificate of Designations for the Series A Preferred Stock, each such share is convertible at the option of the holder at any time into a number of shares of Common Stock equal to (A) the sum of the liquidation preference for such share ($1,000) and the accrued and unpaid dividends with regard to such share divided by (B) the applicable conversion price ($ 21.50 , subject to certain adjustments).

The issuance of the 7,600,037 shares of Common Stock was exempt from registration under Section 3(a)(9) under the Securities Act of 1933, as amended, as the Series A Preferred Stock was exchanged for Common Stock by an existing security holder and no commission or other remuneration was paid.

On March 31, 2023, the Company paid cash dividends of $ 7 million on the remaining outstanding shares of the Series A Preferred Stock.

On May 26, 2023 KKR converted the remaining 371,044 shares of Series A Preferred Stock and completed a secondary offering of 17,425,053 shares of the Company’s common stock.

Upon completion of this transaction, KKR has relinquished their seat on the Company’s Board of Directors and is no longer considered a related party.

See Note 16, Related Party Transactions, for information regarding KKR’s holdings.

In connection with the May 26, 2023 conversion, the Company repurchased $ 150 million of common stock.

See Note 13, Stockholder’s Equity, for information on the Company’s share repurchase program.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents changes in accumulated other comprehensive loss by component for the periods presented:

13 Weeks Ended 39 Weeks Ended

September 30, 2023 October 1, 2022 September 30, 2023 October 1, 2022

13 Weeks Ended

March 30, 2024 April 1, 2023

Accumulated other comprehensive loss components

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Balance at beginning of period (1)

$ 1 $ — $ — $ —

Change in fair value of interest rate caps — —

Balance at end of period (1)

$ 1 $ — $ 1 $ —

Accumulated other comprehensive loss at end of period (1)

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RELATED PARTY TRANSACTIONS

As of December 31, 2022, FMR LLC held approximately 11 % of the Company’s outstanding common stock based solely on information provided in its most recent amendment to its Schedule 13G filed with the SEC.

As of September 30, 2023 and December 31, 2022, as reported by the administrative agent of the 2019 and 2021 Incremental Term Loan Facilities, investment funds managed by an affiliate of FMR LLC held approximately $ 2 million in aggregate principal amount of the 2021 Incremental Term Loan Facility.

As December 31, 2022, FMR LLC held approximately $ 17 million in aggregate principal amount of the 2019 Incremental Term Loan Facility.

As of both March 30, 2024 and December 30, 2023, as reported by the administrative agent of the 2019 and 2021 Incremental Term Loan Facilities, investment funds managed by an affiliate of FMR LLC held approximately $ 2 million in aggregate principal amount of the 2021 Incremental Term Loan Facility.

Certain FMR LLC affiliates also provide administrative and trustee services for the Company’s 401(k) Plan and provide administrative services for other Company sponsored employee benefit plans.

Fees earned by FMR LLC affiliates are not material to the Company’s consolidated financial statements.

As of May 26, 2023, KKR converted all outstanding Series A Preferred Stock holdings, relinquished their seat on the Company’s Board of Directors and is no longer considered a related party.

See Note 14, Convertible Preferred Stock, for details on the Series A Preferred Stock.

The determination of the Company’s overall effective income tax rate requires the use of estimates.

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federal and various state jurisdictions based on enacted tax law, permanent differences between book and tax items, tax credits and the Company’s change in relative income in each jurisdiction.

The Company estimated its annual effective income tax rate for the full fiscal year and applied the annual effective income tax rate to the results of the 39 weeks ended September 30, 2023 and October 1, 2022, and then recognized the impact of discrete tax items for purposes of determining its year-to-date tax provision.

For the 13 weeks ended September 30, 2023, the Company’s effective income tax rate of 27 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

The discrete tax items were not material individually or in the aggregate.

For the 13 weeks ended October 1, 2022, the Company’s effective income tax rate of 29 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax expense of $ 2 million, primarily related to share-based compensation.

For the 39 weeks ended September 30, 2023, the Company’s effective income tax rate of 25 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

discrete tax items included a tax benefit of $ 6 million, primarily related to excess tax benefits associated with share-based compensation and a tax benefit of $ 4 million, primarily related to adjustments to prior year tax provision estimates.

For the 39 weeks ended October 1, 2022, the Company’s effective income tax rate of 26 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

The Company estimated its annual effective income tax rate for the full fiscal year and applied the annual effective income tax rate to the results of the 13 weeks ended March 30, 2024 and April 1, 2023, and then recognized the impact of discrete tax items for purposes of determining its year-to-date tax provision.

For the 13 weeks ended March 30, 2024, the Company’s effective income tax rate of 6 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax benefit of $ 15 million related to a decrease in an unrecognized tax benefit as a result of the expiration of the statute of limitations in several jurisdictions, a tax benefit of $ 6 million, primarily related to excess tax benefits associated with share-based compensation and a tax expense of $ 3 million, primarily related to adjustments to prior year provision estimates.

For the 13 weeks ended April 1, 2023, the Company’s effective income tax rate of 23 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax benefit of $ 4 million, primarily related to excess tax benefits associated with share-based compensation.

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Purchase Commitments—The Company enters into purchase orders with vendors and other parties in the ordinary course of business and has a limited number of purchase contracts with certain vendors that require it to buy a predetermined volume of products.

The Company had $ 896 million of purchase orders and purchase contract commitments as of September 30, 2023 to be purchased in the remainder of fiscal year 2023 and $ 30 million of information technology commitments through September 2025 that are not recorded in the Company’s Consolidated Balance Sheets.

The Company had $ 1,285 million of purchase orders and purchase contract commitments as of March 30, 2024 to be

purchased in the remainder of fiscal year 2024 and continuing through fiscal year 2028 and $ 134 million of information technology commitments through 2027 that are not recorded in the Company’s Consolidated Balance Sheets.

The Company has entered into various minimum volume purchase agreements at various pricing terms.

Minimum amounts committed to as of March 30, 2024 totaled approximately $ 1.80 billion.

Minimum amounts committed to by year are as follows:

(In millions)

To minimize fuel price risk, the Company enters into forward purchase commitments for a portion of its projected diesel fuel requirements.

The Company had diesel fuel forward purchase commitments totaling $ 11 million through December 2023, as of September 30, 2023.

Additionally, the Company had electricity forward purchase commitments totaling $ 7 million through July 2025, as of September 30, 2023.

The Company had diesel fuel forward purchase commitments totaling $ 24 million through December 2024 as of March 30, 2024.

Additionally, the Company had electricity forward purchase commitments totaling $ 5 million through July 2025, as of March 30, 2024.

The Company does not measure its forward purchase commitments for fuel and electricity at fair value, as the amounts under contract meet the physical delivery criteria in the normal purchase exception.

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Capital projects, whether for cost savings or generating incremental revenue, are evaluated based on estimated economic returns to the organization as a whole.

SUBSEQUENT EVENTS

IWC Food Service Acquisition - On April 5, 2024, the Company completed the acquisition of IWC Food Service for approximately $ 220 million.

The acquisition will allow US Foods to further expand its reach into Tennessee and distribution channels to the southeast United States.

The acquisition was a stock acquisition funded with cash on hand.

The Company is in the process of measuring the acquired assets and assumed liabilities as of the acquisition date.

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-Q

Item 1. Financial Statements