What changed in this filing

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Item 1. Financial Statements

2024-11-07 compared with 2024-08-08 · 151 added, 142 removed, 465 unchanged (39% of the section changed)

3 unchanged sentences

(In millions, except par value)

June 29, 2024 December 30, 2023

September 28, 2024 December 30, 2023

Current assets:

10 unchanged sentences

Other assets 370 376

$ 13,703 $ 13,187

Total assets $ 13,475 $ 13,187

LIABILITIES AND SHAREHOLDERS' EQUITY

12 unchanged sentences

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

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

254.6 issued and 235.4 outstanding as of September 28, 2024, and 252.9 issued and 245.1 outstanding as of December 30, 2023

Additional paid-in capital 3,722 3,663

1 unchanged sentence

Accumulated other comprehensive loss ( 111 ) ( 115 )

( 112 ) ( 115 )

Treasury Stock, 19.2 and 7.8 shares, respectively

2 unchanged sentences

Total liabilities and shareholders' equity $ 13,475 $ 13,187

$ 13,703 $ 13,187

See Notes to Consolidated Financial Statements (Unaudited).

3 unchanged sentences

13 Weeks Ended 39 Weeks Ended

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

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Net sales $ 9,728 $ 9,106 $ 28,386 $ 26,661

Cost of goods sold 8,061 7,564 23,518 22,103

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

Gross profit 1,667 1,542 4,868 4,558

Operating expenses:

Distribution, selling and administrative costs 1,379 1,312 4,050 3,819

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

Restructuring activity and asset impairment charges 9 — 21 —

3 unchanged sentences

Interest expense—net 75 81 235 244

Loss on extinguishment of debt — 21 — 21

Income before income taxes 201 129 557 478

Income tax provision 53 34 129 119

198 182 280 264

Net income 148 95 428 359

Other comprehensive income—net of tax:

2 unchanged sentences

Comprehensive income $ 149 $ 96 $ 432 $ 361

$ 199 $ 183 $ 283 $ 266

Net income $ 148 $ 95 $ 428 $ 359

22 unchanged sentences

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

Proceeds from employee stock purchase plan 0.1 — 5 — — — — 5

Proceeds from employee share purchase plan 0.1 — 5 — — — — 5

Vested restricted stock units, net 0.7 — — — — — — —

13 unchanged sentences

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

Share-based compensation expense — — 16 — — — — 16

Proceeds from employee share purchase plan 0.1 — 5 — — — — 5

Exercise of stock options 0.2 — 5 — — — — 5

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

Common stock repurchased — — — — 10.4 ( 580 ) — ( 580 )

Net income — — — 148 — — — 148

BALANCE—September 28, 2024 254.6 $ 3 $ 3,722 $ 1,937 19.2 $ ( 945 ) $ ( 111 ) $ 4,606

See Notes to Consolidated Financial Statements (Unaudited).

US FOODS HOLDING CORP.

8 unchanged sentences

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

Proceeds from employee stock purchase plan 0.2 — 5 — — — — 5

Proceeds from employee share purchase plan 0.2 — 5 — — — — 5

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

8 unchanged sentences

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

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

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

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

6 unchanged sentences

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 share purchase plan 0.2 — 6 — — — — 6

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

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).

3 unchanged sentences

39 Weeks Ended

June 29, 2024 July 1, 2023

September 28, 2024 September 30, 2023

Cash flows from operating activities:

Net income $ 428 $ 359

Adjustments to reconcile net income to net cash provided by operating activities:

1 unchanged sentence

Gain on disposal of property and equipment—net ( 1 ) ( 5 )

Loss on extinguishment of debt — 21

Amortization of deferred financing costs 8 14

4 unchanged sentences

Increase in receivables ( 282 ) ( 291 )

( 181 ) ( 199 )

Decrease in inventories

Decrease (increase) in prepaid expenses and other assets

(Increase) decrease in inventories ( 6 ) 45

Decrease in prepaid expenses and other assets 52 ( 14 )

Increase in accounts payable and cash overdraft liability 316 434

Decrease in accrued expenses and other liabilities

( 38 ) ( 46 )

Increase in accrued expenses and other liabilities 15 14

Net cash provided by operating activities 891 935

2 unchanged sentences

Purchases of property and equipment ( 236 ) ( 167 )

( 156 ) ( 108 )

Acquisition of businesses—net of cash received ( 214 ) ( 142 )

Net cash used in investing activities ( 447 ) ( 301 )

( 368 ) ( 106 )

Cash flows from financing activities:

Principal payments on debt and financing leases ( 2,470 ) ( 535 )

( 1,568 ) ( 446 )

Repurchase of Senior Note Debt — ( 1,000 )

Issuance of new Senior Note Debt — 1,000

Principal payments on debt repricing ( 14 ) ( 43 )

8 unchanged sentences

Tax withholding payments for net share-settled equity awards ( 20 ) ( 12 )

( 20 ) ( 11 )

Net cash used in financing activities ( 632 ) ( 499 )

( 117 ) ( 379 )

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

Net (decrease) increase in cash, cash equivalents and restricted cash ( 188 ) 135

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

53 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 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 did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of September 28, 2024 or December 30, 2023.

Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $ 2.1 billion and $ 1.9 billion as of September 28, 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 $ 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 Company’s contract assets for these upfront payments were $ 42 million and $ 35 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of September 28, 2024 and December 30, 2023, respectively, and $ 48 million and $ 39 million included in other assets in the Company’s Consolidated Balance Sheets as of September 28, 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

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

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Meats and seafood $ 3,356 $ 3,074 $ 9,661 $ 8,924

20 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 $ 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.

LIFO reserves in the Company’s Consolidated Balance Sheets were $ 555 million and $ 488 million as of September 28, 2024 and December 30, 2023, respectively.

As a result of changes in LIFO reserves, cost of goods increased $ 23 million and $ 37 million for the 13 weeks ended September 28, 2024 and September 30, 2023, respectively and increased $ 68 million and $ 42 million for the 39 weeks ended September 28, 2024 and September 30, 2023 , respectively.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

4 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.

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

A summary of the activity in the allowance for doubtful accounts for the 39 weeks ended September 28, 2024 and September 30, 2023 was as follows:

September 28, 2024 September 30, 2023

Balance as of beginning of year $ 18 $ 30

2 unchanged sentences

Balance as of end of period $ 20 $ 19

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.

This table excludes the vendor receivable related allowance for doubtful accounts of $ 8 million as of September 28, 2024, $ 5 million as of December 30, 2023, $ 7 million as of September 30, 2023 and $ 8 million as of December 31, 2022.

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 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.

As of September 28, 2024 and December 30, 2023, property and equipment-net included accumulated depreciation of $ 3,344 million and $ 3,219 million, respectively.

Depreciation expense was $ 99 million and $ 85 million for the 13 weeks ended September 28, 2024 and September 30, 2023, respectively, and $ 288 million and $ 256 million for the 39 weeks ended September 28, 2024 and September 30, 2023, respectively.

GOODWILL AND OTHER INTANGIBLES

3 unchanged sentences

Customer relationships, noncompete agreements and amortizable trade names are intangible assets with definite lives, and are carried at the acquired fair value less accumulated amortization.

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 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.

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 $ 15 million and $ 12 million for the 13 weeks ended September 28, 2024 and September 30, 2023, respectively, and $ 39 million and $ 34 million for the 39 weeks ended September 28, 2024 and September 30, 2023, respectively.

Goodwill and other intangibles—net consisted of the following:

June 29, 2024 December 30, 2023

September 28, 2024 December 30,

Goodwill $ 5,779 $ 5,697

3 unchanged sentences

Accumulated amortization ( 227 ) ( 189 )

( 212 ) ( 189 )

Net carrying value 572 526

9 unchanged sentences

Total other intangibles—net $ 852 $ 803

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

The increase in goodwill is attributable to prior period acquisition purchase price adjustments and the IWC Food Service acquisition in the second quarter.

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 increase in the gross carrying amount of noncompete agreements is attributable to the IWC Food Service acquisition.

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 26 weeks ended June 29, 2024 and July 1, 2023.

No impairments were recognized for the 39 weeks ended September 28, 2024 and September 30, 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 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

The Company’s assets and liabilities measured at fair value on a recurring basis as of September 28, 2024 and December 30, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall, were as follows:

September 28, 2024

Level 1 Level 2 Level 3 Total

Money market funds $ 15 $ — $ — $ 15

$ 227 $ — $ — $ 227

Interest rate caps — — — —

2 unchanged sentences

Money market funds $ 208 $ — $ — $ 208

$ 208 $ — $ — $ 208

Interest rate caps — 1 — 1

8 unchanged sentences

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

The Company records its interest rate caps within other current assets 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 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

As of September 28, 2024 the fair value of the Company’s interest rate caps recorded within other current assets is $0.

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 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:

There was no ineffectiveness attributable to the Company’s interest rate caps during the 13 weeks and 39 weeks ended September 28, 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 39 weeks ended September 28, 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 June 29, 2024

For the 13 weeks ended September 28, 2024

Interest rate caps $ — Interest expense ─ net $ —

For the 26 weeks ended June 29, 2024

For the 39 weeks ended September 28, 2024

Interest rate caps $ — Interest expense ─ net $ —

2 unchanged sentences

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 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.

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.

The fair value of the Company’s total debt approximated $ 4.8 billion and $ 4.7 billion as of September 28, 2024 and December 30, 2023, respectively, as compared to its carrying value of $ 4.8 billion and $ 4.7 billion as of September 28, 2024 and December 30, 2023, respectively.

The fair value of the Company’s 6.88 % senior unsecured notes due September 15, 2028 (the “Senior Notes due 2028”) was $ 0.5 billion as of both September 28, 2024 and December 30, 2023.

The fair value of the Company’s 4.75 % senior unsecured notes due February 15, 2029 (the “Senior Notes due 2029”) was $ 0.9 billion as of both September 28, 2024 and December 30, 2023.

The fair value of the Company’s 4.63 % senior unsecured notes due June 1, 2030 (the “Senior Notes due 2030”) was $ 0.5 billion as of both September 28, 2024 and December 30, 2023.

The fair value of the Company’s 7.25 % senior unsecured notes due January 15, 2032 (the “Senior Notes due 2032”) was $ 0.5 billion as of both September 28, 2024 and December 30, 2023.

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

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

The fair value of the balance of the Company’s debt is primarily classified under Level 3 of the fair value hierarchy, with fair value estimated based upon a combination of the cash outflows expected under these debt facilities, interest rates that are currently available to the Company for debt with similar terms, and estimates of the Company’s overall credit risk.

Total debt consisted of the following:

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

Debt Description Maturity Interest Rate as of September 28, 2024 Carrying Value as of September 28, 2024 Carrying Value as of December 30, 2023

ABL Facility December 7, 2027 6.30 % $ 75 $ —

3 unchanged sentences

November 22, 2028 7.25 % 719 718

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

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

September 15, 2028 6.88 % 496 495

Unsecured Senior Notes due 2029 (net of $ 6 and $ 6 of unamortized deferred financing costs, respectively)

Senior Notes due 2029 (net of $ 5 and $ 6 of unamortized deferred financing costs, respectively)

February 15, 2029 4.75 % 895 894

Unsecured Senior Notes due 2030 (net of $ 3 and $ 4 of unamortized deferred financing costs, respectively)

Senior Notes due 2030 (net of $ 3 and $ 4 of unamortized deferred financing costs, respectively)

June 1, 2030 4.63 % 497 496

Unsecured Senior Notes due 2032 (net of $ 4 and $ 5 of unamortized deferred financing costs, respectively)

Senior Notes due 2032 (net of $ 4 and $ 5 of unamortized deferred financing costs, respectively)

January 15, 2032 7.25 % 496 495

5 unchanged sentences

Long-term debt $ 4,671 $ 4,564

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.

As of September 28, 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 31 % 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 June 29, 2024 was 0.00 % for ABR loans and 1.00 % for Term SOFR loans.

The margin under the ABL Facility as of September 28, 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.

As of September 28, 2024, the Company did not have any active supply chain financing program participants.

The Company had outstanding borrowings totaling $ 75 million, and had outstanding letters of credit totaling $ 578 million, under the ABL Facility as of September 28, 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 $ 1,738 million under the ABL Facility as of June 29, 2024.

There was available capacity of $ 1,647 million under the ABL Facility as of September 28, 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 $ 1,100 million, net of $ 9 million of unamortized deferred financing costs as of June 29, 2024.

The 2019 Incremental Term Loan Facility had an outstanding balance of $ 1,101 million, net of $ 8 million of unamortized deferred financing costs as of September 28, 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 (ii) a margin of 1.00 %.

1 unchanged sentence

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 June 29, 2024.

The 2021 Incremental Term Loan Facility had an outstanding balance of $ 719 million, net of $ 2 million of unamortized deferred financing costs as of September 28, 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 (ii) a margin of 1.00 %.

10 unchanged sentences

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 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 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 $ 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 $ 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.

Senior Notes due 2028

The Senior Notes due 2028 had an outstanding balance of $ 496 million, net of the $ 4 million of unamortized deferred financing costs, as of September 28, 2024.

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

Senior Notes due 2029

The Senior Notes due 2029 had an outstanding balance of $ 895 million, net of $ 5 million of unamortized deferred financing costs, as of September 28, 2024.

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

Senior Notes due 2030

The Senior Notes due 2030 had an outstanding balance of $ 497 million, net of $ 3 million of unamortized deferred financing costs, as of September 28, 2024.

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

Senior Notes due 2032

The Senior Notes due 2032 had an outstanding balance of $ 496 million, net of the $ 4 million of unamortized deferred financing costs, as of September 28, 2024.

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

Debt Covenants

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 $ 2.2 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.

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 $ 2.3 billion of restricted payment capacity under these covenants, and approximately $ 2.3 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 28, 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 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:

During the 13 weeks and 39 weeks ended September 28, 2024, the Company incurred net restructuring costs of $ 9 million and $ 21 million, respectively, primarily related to initiatives to improve operational effectiveness and workforce reductions.

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.

Net restructuring liabilities were $ 9 million and $ 7 million as of September 28, 2024 and December 30, 2023, respectively.

The following table summarizes the changes in the restructuring liabilities for the 13 weeks and 39 weeks ended September 28, 2024:

Restructuring Liabilities

Balance as of December 30, 2023 $ 7

Balance as of Balance at December 30, 2023 $ 7

Current period costs 13

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Balance at June 29, 2024 12

Current period activity 9

Payments, net ( 12 )

Balance at September 28, 2024 $ 9

RETIREMENT PLANS

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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.

See Note 19, Subsequent Events for additional information.

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

13 Weeks Ended 39 Weeks Ended

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

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Components of net periodic pension benefit costs (credits):

$ 1 $ 1 $ 1 $ 1

Service cost $ — $ — $ 1 $ 1

Interest cost 5 10 15 29

Expected return on plan assets ( 5 ) ( 12 ) ( 15 ) ( 36 )

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

Amortization of net loss 1 1 4 3

Net periodic pension benefit costs (credits) $ 1 $ ( 1 ) $ 5 $ ( 3 )

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

Other postretirement benefit costs were de minimis for both the 13 weeks and 39 weeks ended September 28, 2024 and September 30, 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.

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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 $ 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 made employer matching contributions to the 401(k) plan of $ 21 million and $ 16 million for the 13 weeks ended September 28, 2024 and September 30, 2023, respectively, and $ 63 million and $ 48 million for the 39 weeks ended September 28, 2024 and September 30, 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 $ 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.

The Company’s contributions to these plans were $ 15 million and $ 14 million for the 13 weeks ended September 28, 2024 and September 30, 2023, respectively, and $ 44 million and $ 42 million for the 39 weeks ended September 28, 2024 and September 30, 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 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.

For the 13 weeks ended September 28, 2024, there were no anti-dilutive shares excluded from the dilutive share based calculation.

For the 13 weeks ended September 30, 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 39 weeks ended September 28, 2024 and September 30, 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.

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

For the 13 weeks and 39 weeks ended September 28, 2024, there are no shares of Series A Preferred Stock outstanding.

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

13 Weeks Ended 39 Weeks Ended

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

$ 198 $ 182 $ 280 $ 264

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Net income $ 148 $ 95 $ 428 $ 359

Series A Preferred Stock Dividends — — — ( 7 )

Net income available to common shareholders $ 148 $ 95 $ 428 $ 352

$ 198 $ 182 $ 280 $ 257

Weighted-average common shares outstanding—basic 241 247 244 237

246 238 245 232

Effect of dilutive share-based awards 3 2 3 3

1 unchanged sentence

Weighted-average common shares outstanding—diluted 244 249 247 251

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 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 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.

As of September 28, 2024, there are no shares of Series A Preferred Stock outstanding.

Share Repurchase Programs

On November 2, 2022, our Board of Directors approved a share repurchase program (“Original Share Repurchase Program”) under which the Company was authorized to repurchase up to $ 500 million of its outstanding common stock.

On June 1, 2024, the Board approved, and on June 5, 2024, the Company announced, an increase in the amount of common stock that could be purchased under the Original Share Repurchase Program to $ 1 billion (“Amended Share Repurchase Program”).

As of September 28, 2024, there was approximately $ 398 million in remaining funds authorized under the Amended Share Repurchase Program.

For the 13 weeks ended September 28, 2024, the Company repurchased 10,399,672 shares at an aggregate purchase price of approximately $ 580 million under the Amended Share Repurchase Program, inclusive of $ 6 million of excise taxes, fees and commissions.

For the 39 weeks ended September 28, 2024, the Company repurchased 11,433,047 shares at an aggregate purchase price of approximately $ 634 million under the Amended Share Repurchase Program and the Original Share Repurchase Program, inclusive of $ 7 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.

Under the share repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases, privately negotiated transactions, accelerated share repurchases and Rule 10b5-1 trading plans.

The share repurchase program does not obligate the Company to acquire any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion.

The repurchase authorization does not have an expiration date.

Under the Amended Share Repurchase Program, repurchases can be made from time to time using a variety of methods, including open market purchases, privately negotiated transactions, accelerated share repurchases and Rule 10b5-1 trading plans.

The Amended Share Repurchase Program does not obligate the Company to acquire any particular amount of shares, and the Amended Share Repurchase Program may be suspended or discontinued at any time at the Company’s discretion.

The Amended Share Repurchase Program does not have an expiration date.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

1 unchanged sentence

13 Weeks Ended 39 Weeks Ended

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

September 28, 2024 September 30, 2023 September 28, 2024 September 30, 2023

Accumulated other comprehensive loss components

25 unchanged sentences

RELATED PARTY TRANSACTIONS

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.

As of both September 28, 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 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.

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 28, 2024 and September 30, 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 September 28, 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.

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.

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

For the 39 weeks ended September 28, 2024, 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 $ 17 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 $ 8 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.

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.

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 $ 4 million, primarily related to adjustments to prior year tax provision estimates.

1 unchanged sentence

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 $ 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 had $ 1,160 million of purchase orders and purchase contract commitments as of September 28, 2024 to be purchased in the remainder of fiscal year 2024 and continuing through fiscal year 2029 and $ 93 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 June 29, 2024 totaled approximately $ 1.5 billion.

Minimum amounts committed to as of September 28, 2024 totaled approximately $ 1.2 billion.

Minimum amounts committed to by year are as follows:

1 unchanged sentence

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 $ 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 had diesel fuel forward purchase commitments totaling $ 37 million through December 2025 as of September 28, 2024.

Additionally, the Company had electricity forward purchase commitments totaling $ 4 million through July 2026, as of September 28, 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.

13 unchanged sentences

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.

As of September 28, 2024, the Company is in the process of exploring this sale.

During the 13 weeks ended September 28, 2024, the Company began offering a supplier financing program, in which participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions.

No third parties have signed the supplier finance program agreements as of September 28, 2024.

SUBSEQUENT EVENTS

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.

Senior Notes and Incremental Term Loan Facility —On October 3, 2024, the Company completed a private offering of $ 500 million aggregate principal amount of 5.75 % senior unsecured notes due April 15, 2033 (the “Senior Notes due 2033”).

Additionally, on October 3, 2024, the Company further amended its term loan credit agreement.

The Company issued two new term loan tranches of the term loan credit facility, one for $ 725 million (the “2024 Term Loan Facility”) and one for $ 610 million (the “2021 Term Loan Facility”).

The Company used the proceeds of the Senior Notes due 2033 and the 2024 Term Loan Facility and the 2021 Term Loan Facility, and cash on hand, to pay in full the 2019 Incremental Term Loan Facility and, other than amounts that were rolled on a cashless basis into the 2021 Term Loan Facility, the 2021 Incremental Term Loan Facility.

The Company incurred lender fees and third-party costs of approximately $ 13 million in connection with the issuance of the Senior Notes due 2033.

The Company plans to apply debt modification or extinguishment accounting as applicable.

Pension Plan Termination —In October 2024, the Company began settling its obligations under the Terminating Plan through the purchase of an annuity contract from a highly rated insurance company for $ 414 million.

Additionally, in October 2024, the Company made $ 254 million of lump sum payments directly to eligible participants who elected that payment option.

Given that the annuity contract premium and lump sum payments do not exceed the assets of the Terminating Plan, there will be no cash contributions made by the Company.

Management estimates that the Company will recognize a one-time non-cash pre-tax pension settlement charge of $ 124 million in the fiscal fourth quarter of 2024 related to actuarial losses previously recorded in Accumulated Other Comprehensive Loss.

Share Repurchases —For the fiscal fourth quarter through November 4, 2024, the Company repurchased 2,592,612 shares at an aggregate purchase price of approximately $ 160 million under the Amended Share Repurchase Program.

At November 4, 2024, there was approximately $ 238 million in remaining funds authorized under the Amended Share Repurchase 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