What changed in this filing

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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 168 added, 103 removed, 439 unchanged (38% of the section changed)

3 unchanged sentences

(In millions, except par value)

March 30, 2024 December 30, 2023

June 29, 2024 December 30, 2023

Current assets:

25 unchanged sentences

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

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

254.3 issued and 245.5 outstanding as of June 29, 2024, and 252.9 issued and 245.1 outstanding as of December 30, 2023

Additional paid-in capital

11 unchanged sentences

(In millions, except per share data)

13 Weeks Ended

March 30, 2024 April 1, 2023

13 Weeks Ended 26 Weeks Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Net sales $ 9,709 $ 9,013 $ 18,658 $ 17,555

Cost of goods sold 8,003 7,422 15,457 14,539

1,706 1,591 3,201 3,016

Operating expenses:

Distribution, selling and administrative costs

Restructuring costs and asset impairment charges 13 —

1,354 1,269 2,671 2,507

Restructuring activity and asset impairment charges ( 1 ) — 12 —

Total operating expenses 1,353 1,269 2,683 2,507

Operating income 353 322 518 509

Other income—net ( 1 ) ( 1 )

Other expense (income)—net 3 ( 2 ) 2 ( 3 )

Interest expense—net 81 82 160 163

1 unchanged sentence

Income tax provision 71 60 76 85

198 182 280 264

Other comprehensive income —net of tax:

Changes in retirement benefit obligations

Unrecognized gain on interest rate caps — 1 — 1

Comprehensive income

$ 199 $ 183 $ 283 $ 266

Net income $ 198 $ 182 $ 280 $ 264

8 unchanged sentences

Basic (Note 13)

246 238 245 232

Diluted (Note 13)

248 251 248 251

See Notes to Consolidated Financial Statements (Unaudited).

17 unchanged sentences

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

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

Proceeds from employee share purchase plan 0.2 — 9 — — — — 9

Exercise of stock options 0.1 — 4 — — — — 4

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

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

Common stock repurchased — — — — 0.7 ( 41 ) — ( 41 )

Net income — — — 198 — — — 198

BALANCE—June 29, 2024 254.3 $ 3 $ 3,696 $ 1,789 8.8 $ ( 365 ) $ ( 112 ) $ 5,011

US FOODS HOLDING CORP.

18 unchanged sentences

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 stock 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

See Notes to Consolidated Financial Statements (Unaudited).

3 unchanged sentences

26 Weeks Ended

March 30, 2024 April 1, 2023

June 29, 2024 July 1, 2023

Cash flows from operating activities:

3 unchanged sentences

Amortization of deferred financing costs

Deferred tax provision

Deferred tax (benefit) provision

Share-based compensation expense

3 unchanged sentences

( 181 ) ( 199 )

Increase in inventories—net

(Increase) decrease in prepaid expenses and other assets

Decrease in inventories

Decrease (increase) in prepaid expenses and other assets

Increase in accounts payable and cash overdraft liability

6 unchanged sentences

( 156 ) ( 108 )

Acquisition of businesses—net of cash received ( 214 ) —

Net cash used in investing activities

11 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

( 117 ) ( 379 )

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

Net increase in cash, and cash equivalents and restricted cash 136 168

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

31 unchanged sentences

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.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“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.

19 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 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 did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of June 29, 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 June 29, 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 $ 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 Company’s contract assets for these upfront payments were $ 39 million and $ 35 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of June 29, 2024 and December 30, 2023, respectively, and $ 47 million and $ 39 million included in other assets in the Company’s Consolidated Balance Sheets as of June 29, 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

March 30, 2024 April 1, 2023

13 Weeks Ended 26 Weeks Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Meats and seafood $ 3,329 $ 3,024 $ 6,305 $ 5,850

6 unchanged sentences

Total net sales $ 9,709 $ 9,013 $ 18,658 $ 17,555

BUSINESS ACQUISITIONS

During the fiscal quarter ended June 29, 2024 , the Company acquired IWC Food Service, a broadline distributor in Tennessee, for a purchase price of $ 220 million (less the amount of cash received, which was $ 6 million) for a net purchase price of $ 214 million, subject to adjustments.

The acquisition, which was a stock acquisition, was funded with cash from operations and allows US Foods to further expand its reach into Tennessee and distribution channels to the southeast United States.

The IWC Food Service acquisition, reflected in the Company’s consolidated financial statements commencing from the date of the closing of the acquisition on April 5, 2024, did not materially affect the Company’s results of operations or financial position.

The Company recorded goodwill of $ 81 million and intangible assets of $ 82 million for this acquisition.

The intangible assets included $ 78 million related to customer relationships and $ 4 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 IWC Food Service acquisition is deductible for tax purposes.

IWC Food Service 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 $ 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.

LIFO reserves in the Company’s Consolidated Balance Sheets were $ 532 million and $ 488 million as of June 29, 2024 and December 30, 2023, respectively.

There was no change in cost of goods sold for the 13 weeks ended June 29, 2024 resulting from LIFO reserves .

As a result of changes in LIFO reserves, cost of goods decreased $ 15 million for the 13 weeks ended July 1, 2023, and increased $ 45 million and $ 5 million for the 26 weeks ended June 29, 2024 and July 1, 2023 , respectively.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

2 unchanged sentences

The Company evaluates the collectability of its accounts receivable and determines the appropriate allowance for doubtful accounts based on a combination of factors.

The Company maintains an

allowance for doubtful accounts, which is based upon historical experience, future expected losses, as well as specific customer collection issues that have been identified.

The Company maintains an allowance for doubtful accounts, which is based upon historical experience, future expected losses, as well as specific customer collection issues that have been identified.

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.

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

A summary of the activity in the allowance for doubtful accounts for the 26 weeks ended June 29, 2024 and July 1, 2023 was as follows:

June 29, 2024 July 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 $ 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.

This table excludes the vendor receivable related allowance for doubtful accounts of $ 6 million as of June 29, 2024, $ 5 million as of December 30, 2023, $ 7 million as of July 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 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.

As of June 29, 2024 and December 30, 2023, property and equipment-net included accumulated depreciation of $ 3,298 million and $ 3,219 million, respectively.

Depreciation expense was $ 96 million and $ 84 million for the 13 weeks ended June 29, 2024 and July 1, 2023, respectively, and $ 189 million and $ 171 million for the 26 weeks ended June 29, 2024 and July 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 March 30, 2024 and April 1, 2023, respectively.

Amortization expense was $ 12 million and $ 11 million for the 13 weeks ended June 29, 2024 and July 1, 2023, respectively, and $ 24 million and $ 22 million for the 26 weeks ended June 29, 2024 and July 1, 2023, respectively.

Goodwill and other intangibles—net consisted of the following:

March 30, 2024 December 30, 2023

June 29, 2024 December 30, 2023

Goodwill $ 5,779 $ 5,697

15 unchanged sentences

Total other intangibles—net $ 867 $ 803

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

The increase in goodwill is attributable to both current period acquisition purchase price adjustments and the IWC Food Service acquisition.

The increase in the gross carrying amount of customer relationships is attributable to both prior period acquisition purchase price adjustments and the IWC Food Service acquisition.

The increase in the gross carrying amount of noncompete agreements is attributable to the IWC Food Service acquisition, see Note 4, Business Acquisitions.

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 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

No impairments were recognized for the 26 weeks ended June 29, 2024 and July 1, 2023.

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 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

The Company’s assets and liabilities measured at fair value on a recurring basis as of June 29, 2024 and December 30, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall, were as follows:

June 29, 2024

Level 1 Level 2 Level 3 Total

18 unchanged sentences

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 March 30, 2024:

Balance at March 30, 2024 Balance Sheet Location Fair Value

The following table presents the balance sheet location and fair value of the interest rate caps at June 29, 2024:

Balance at June 29, 2024 Balance Sheet Location Fair Value

Derivatives designed as hedging instruments

Interest rate caps Other current assets $ 1

Interest rate caps Other noncurrent assets $ —

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 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:

There was no ineffectiveness attributable to the Company’s interest rate caps during the 13 weeks and 26 weeks ended June 29, 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 and 26 weeks ended June 29, 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 March 30, 2024

For the 13 weeks ended June 29, 2024

Interest rate caps $ — Interest expense ─ net $ —

For the 26 weeks ended June 29, 2024

Interest rate caps $ — Interest expense ─ net $ —

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

1 unchanged sentence

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 $ 4.7 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.

The fair value of the Company’s total debt approximated $ 4.7 billion as of both June 29, 2024 and December 30, 2023, as compared to its carrying value of $ 4.7 billion as of both June 29, 2024 and December 30, 2023.

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 June 29, 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 $ 0.9 billion as of both June 29, 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 June 29, 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 June 29, 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.

2 unchanged sentences

Total debt consisted of the following:

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

Debt Description Maturity Interest Rate as of June 29, 2024 Carrying Value as of June 29, 2024 Carrying Value as of December 30, 2023

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

17 unchanged sentences

Long-term debt $ 4,589 $ 4,564

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.

As of June 29, 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.

1 unchanged sentence

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 margin under the ABL Facility as of June 29, 2024 was 0.00 % for ABR loans and 1.00 % for Term SOFR loans.

On April 30, 2024, the ABL Facility was amended to provide certain providers of supply chain financings a security interest in certain assets of the Company under the ABL Facility.

As of June 29, 2024, the Company did not have an active supply chain financing program.

The Company had no outstanding borrowings, and had outstanding letters of credit totaling $ 562 million, under the ABL Facility as of June 29, 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 $ 1,758 million under the ABL Facility as of March 30, 2024.

There was available capacity of $ 1,738 million under the ABL Facility as of June 29, 2024.

Term Loan Facilities

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.

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 $ 1,102 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 %.

The 2019 Incremental Term Loan Facility had an outstanding balance of $ 1,100 million, net of $ 9 million of unamortized deferred financing costs as of June 29, 2024.

The 2019 Incremental Term Loan Facility will mature on September 13, 2026.

2021 Incremental Term Loan Facility

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 had an outstanding balance of $ 718 million, net of $ 3 million of unamortized deferred financing costs as of June 29, 2024.

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

3 unchanged sentences

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 December 30, 2023 were carried forward and will be amortized through November 22, 2028, the maturity date of the term loan facility.

Unamortized deferred financing costs of $ 3 million as of August 22, 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.

2 unchanged sentences

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.

Unamortized deferred financing costs of $ 3 million as of February 27, 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

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 had an outstanding balance of $ 496 million, net of the $ 4 million of unamortized deferred financing costs, as of June 29, 2024.

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

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 March 30, 2024.

The Unsecured Senior Notes due 2029 had an outstanding balance of $ 894 million, net of $ 6 million of unamortized deferred financing costs, as of June 29, 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 March 30, 2024.

The Unsecured Senior Notes due 2030 had an outstanding balance of $ 497 million, net of $ 3 million of unamortized deferred financing costs, as of June 29, 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

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 had an outstanding balance of $ 496 million, net of the $ 4 million of unamortized deferred financing costs, as of June 29, 2024.

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

1 unchanged sentence

The agreements governing our indebtedness contain customary covenants.

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.

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.

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.

The Company had approximately $ 2.2 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 June 29, 2024.

RESTRUCTURING LIABILITIES

1 unchanged sentence

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

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

During the 13 weeks and 26 weeks ended June 29, 2024, the Company incurred a net restructuring benefit of $ 1 million and net restructuring costs of $ 12 million, respectively, primarily related to initiatives to improve operational effectiveness and workforce reductions.

During the 26 weeks ended July 1, 2023, the net restructuring costs were de minimis.

Net restructuring liabilities were $ 12 million and $ 7 million as of June 29, 2024 and December 30, 2023, respectively.

The following table summarizes the changes in the restructuring liabilities for the 13 weeks and 26 weeks ended June 29, 2024:

Restructuring Liabilities

Balance as of December 30, 2023 $ 7

2 unchanged sentences

Balance at March 30, 2024 15

Current period activity ( 1 )

Payments, net ( 2 )

Balance at June 29, 2024 $ 12

RETIREMENT PLANS

5 unchanged sentences

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

March 30, 2024 April 1, 2023

Components of net periodic pension benefit credits

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

13 Weeks Ended 26 Weeks Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Components of net periodic pension benefit costs (credits):

$ 1 $ 1 $ 1 $ 1

Interest cost

Expected return on plan assets

( 5 ) ( 12 ) ( 10 ) ( 24 )

Amortization of net loss 1 1 3 2

Net periodic pension benefit credits $ 2 $ ( 1 )

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.

Net periodic pension benefit costs (credits) $ 2 $ ( 1 ) $ 4 $ ( 2 )

Other postretirement benefit costs were de minimis for both the 13 weeks and 26 weeks ended June 29, 2024 and July 1, 2023.

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

The Company does not expect to make significant contributions to its defined benefit pension plan in fiscal year 2024.

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 $ 21 million and $ 17 million for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

The Company made employer matching contributions to the 401(k) plan of $ 21 million and $ 16 million for the 13 weeks ended June 29, 2024 and July 1, 2023, respectively, and $ 42 million and $ 33 million for the 26 weeks ended June 29, 2024 and July 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 $ 15 million and $ 13 million for the 13 weeks ended March 30, 2024 and April 1, 2023, respectively.

The Company’s contributions to these plans were $ 14 million and $ 15 million for the 13 weeks ended June 29, 2024 and July 1, 2023, respectively, and $ 29 million and $ 28 million for the 26 weeks ended June 29, 2024 and July 1, 2023, respectively.

STOCKHOLDERS’ EQUITY

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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 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.

For the 13 weeks ended June 29, 2024, there were no anti dilutive shares excluded from the dilutive share based calculation.

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

For both the 26 weeks ended June 29, 2024 and July 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.

Additionally, Series A Preferred Stock shares were dilutive for the 13 weeks and 26 weeks ended July 1, 2023.

For the 13 weeks and 26 weeks ended June 29, 2024, there are no Series A Preferred Stock outstanding.

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

13 Weeks Ended

March 30, 2024 April 1, 2023

13 Weeks Ended 26 Weeks Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

$ 198 $ 182 $ 280 $ 264

Series A Preferred Stock Dividends

Net income available to common shareholders

$ 198 $ 182 $ 280 $ 257

Weighted-average common shares outstanding—basic

246 238 245 232

Effect of dilutive share-based awards

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Weighted-average common shares outstanding—diluted

248 251 248 251

Net income per share

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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.

As of June 29, 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 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.

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

Prior to June 1, 2024, the Company repurchased $ 340 million of shares of common stock pursuant to such plan.

On June 1, 2024, the Board approved, and on June 5, 2024, the Company announced, a new share repurchase authorization of $ 1 billion of the Company’s common stock, an increase of $ 840 million above the $ 160 million of capacity remaining as of June 1, 2024 under the prior November 2022 authorization.

As of June 29, 2024, there was approximately $ 979 million in remaining funds authorized under the increased repurchase program.

weeks ended June 29, 2024, the Company repurchased 749,387 shares at an aggregate purchase price of approximately $ 41 million under the program, inclusive of $ 1 million of excise taxes, fees and commissions.

For the 26 weeks ended June 29, 2024, the Company repurchased 1,033,375 shares at an aggregate purchase price of approximately $ 54 million under the program, inclusive of $ 1 million of excise taxes, fees and commissions.

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

13 Weeks Ended

March 30, 2024 April 1, 2023

13 Weeks Ended 26 Weeks Ended

June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

Accumulated other comprehensive loss components

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Amortization of net loss (2) (3)

Total before income tax

Income tax provision

Current period comprehensive income, net of tax

3 unchanged sentences

Balance at beginning of period (1)

$ 1 $ — $ 1 $ —

Change in fair value of interest rate caps — 1 — 1

Total before income tax — 1 — 1

Income tax provision — — — —

Current period comprehensive income, net of tax — 1 — 1

Balance at end of period (1)

$ 1 $ 1 $ 1 $ 1

Accumulated other comprehensive loss at end of period (1)

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RELATED PARTY TRANSACTIONS

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.

As of both June 29, 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.

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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 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.

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 26 weeks ended June 29, 2024 and July 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 June 29, 2024, 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.

These discrete tax items included a tax benefit of $ 1 million related to a decrease in an unrecognized tax benefit as a result of the expiration of the statute of limitations in several jurisdictions, and a tax benefit of $ 1 million, primarily related to excess tax benefits associated with share-based compensation.

For the 13 weeks ended July 1, 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.

These discrete tax items included a tax benefit of $ 2 million, primarily related to excess tax benefits associated with share-based compensation and a tax benefit of $ 3 million, primarily related to adjustments to prior year tax provision estimates.

For the 26 weeks ended June 29, 2024, the Company’s effective income tax rate of 21 % was equivalent to 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 $ 16 million, primarily 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 $ 7 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 tax provision estimates.

For the 26 weeks ended July 1, 2023, the Company’s effective income tax rate of 24 % 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 $ 6 million, primarily related to excess tax benefits associated with share-based compensation and a tax benefit of $ 3 million, primarily related to adjustments to prior year tax provision estimates.

COMMITMENTS AND CONTINGENCIES

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 $ 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 had $ 844 million of purchase orders and purchase contract commitments as of June 29, 2024 to be purchased in the remainder of fiscal year 2024 and continuing through fiscal year 2029 and $ 101 million of information technology commitments through 2028 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 as of June 29, 2024 totaled approximately $ 1.5 billion.

Minimum amounts committed to by year are as follows:

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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 $ 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 had diesel fuel forward purchase commitments totaling $ 34 million through December 2025 as of June 29, 2024.

Additionally, the Company had electricity forward purchase commitments totaling $ 5 million through July 2026, as of June 29, 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.

On June 5, 2024, the Company announced it intends to explore the potential sale of its CHEF’STORE wholesale restaurant supply business and, if a sale is completed, then entirely focus on delivered broadline operations.

As of June 29, 2024, the Company was still in the early stages of this sale exploration.

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.

Share Repurchase Program —For the fiscal third quarter through August 7, 2024, the Company repurchased 1,145,670 shares at an aggregate purchase price of approximately $61 million under the program.

At August 7, 2024, there was approximately $918 million in remaining funds authorized under this program.

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