What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-13 compared with 2024-02-15 · 323 added, 329 removed, 1170 unchanged (36% of the section changed)

4 unchanged sentences

Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023

Consolidated Statements of Comprehensive Income for the Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022

Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended December 30, 2023, December 31, 2022 and January 1, 2022

Consolidated Statements of Cash Flows for the Fiscal Years Ended December 30, 2023, December 31, 2022, and January 1, 2022

Consolidated Statements of Comprehensive Income for the Fiscal Years Ended December 28 , 2024, December 30, 2023 and December 31, 2022

Consolidated Statements of Shareholders’ Equity for the Fiscal Years Ended December 28, 2024, December 30, 2023 and December 31, 2022

Consolidated Statements of Cash Flows for the Fiscal Years Ended December 2 8, 2024, December 30, 2023 and December 31, 2022

Notes to Consolidated Financial Statements

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We have audited the accompanying consolidated balance sheets of US Foods Holding Corp.

and subsidiaries (the “Company”) as of December 30, 2023 and December 31, 2022, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows, for each of the three fiscal years in the period ended December 30, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 30, 2023 and December 31, 2022, and the results of its operations and its cash flows for each of the three fiscal years in the period ended December 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

and subsidiaries (the “Company”) as of December 28, 2024 and December 30, 2023, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows, for each of the three years in the period ended December 28, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2024 and December 30, 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 28, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 28, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 13, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

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The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Vendor Consideration - Refer to Note 2 to the financial statements.

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Consideration earned under these incentives is estimated during the year based on purchasing activity, as obligations under the program are fulfilled primarily as products are purchased.

Consideration is typically received in the form of invoice deductions to be applied against the amounts owed to the Company’s vendors, or less often in the form of cash payments.

Consideration is typically received in the form of invoice reductions to be applied against the amounts owed to the Company’s vendors, or less often in the form of cash payments.

The purchase-based incentives are recorded as a reduction to inventory as they are earned based on inventory purchases.

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• We tested the design and operating effectiveness of controls over the calculation of the amount recorded and the accuracy of the agreement information input in the system utilized to calculate the amount of vendor consideration recorded.

• We selected a sample of vendor consideration recorded and (1) confirmed the amount recorded directly with the vendors or (2) recalculated vendor consideration amounts recorded by the Company using the terms of the executed vendor agreement.

• We selected a sample of inventory on hand and evaluated whether the related vendor consideration was properly recognized in the promotional allowance invoice register during the period ended December 30, 2023.

• We selected samples of vendor consideration recorded and (1) confirmed the amount recorded directly with the vendors or (2) recalculated vendor consideration amounts recorded by the Company using the terms of the executed vendor agreement.

• We selected a sample of inventory on hand and evaluated whether the related vendor consideration was properly recognized at and during the period ended December 28, 2024.

• We selected a sample of deductions made on payments to vendors after period end and evaluated whether the vendor consideration was properly recorded at December 28, 2024.

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Other assets 429 376

$ 13,187 $ 12,773

LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ EQUITY

Noncurrent assets held for sale 33 —

Total assets $ 13,436 $ 13,187

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

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Current portion of long-term debt 109 110

Liabilities held for sale 8 —

Total current liabilities 3,296 3,112

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Other long-term liabilities 447 469

Noncurrent liabilities held for sale 11 —

Total liabilities 8,908 8,438

Commitments and contingencies (Note 21)

Mezzanine equity:

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

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

Shareholders' equity:

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

253 and 225 issued and outstanding as of

December 30, 2023 and December 31, 2022, respectively

254.7 issued and 230.5 outstanding as of December 28, 2024, and 252.9 issued and 245.1 outstanding as of December 30, 2023, respectively

Additional paid-in capital 3,748 3,663

Retained earnings 2,003 1,509

Accumulated other comprehensive loss

( 115 ) ( 73 )

Accumulated other comprehensive income (loss) 43 ( 115 )

Treasury Stock, 24.2 and 7.8 shares, respectively

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Total shareholders’ equity 4,528 4,749

Total liabilities, mezzanine equity and shareholders’ equity

$ 13,187 $ 12,773

Total liabilities and shareholders’ equity $ 13,436 $ 13,187

See Notes to Consolidated Financial Statements.

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Fiscal Years Ended

December 30, 2023 December 31, 2022 January 1, 2022

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

Net sales $ 37,877 $ 35,597 $ 34,057

Cost of goods sold 31,343 29,449 28,565

6,148 5,492 4,655

Gross profit 6,534 6,148 5,492

Operating expenses:

Distribution, selling and administrative costs 5,412 5,117 4,886

5,117 4,886 4,220

Restructuring costs and asset impairment charges

Restructuring activity and asset impairment charges 23 14 12

Total operating expenses 5,435 5,131 4,898

5,131 4,898 4,231

Operating income 1,099 1,017 594

Other income—net ( 6 ) ( 22 ) ( 26 )

Other expense (income)—net 6 ( 6 ) ( 22 )

Interest expense—net 315 324 255

Loss on extinguishment of debt 10 21 —

Recognition of net actuarial loss for pension settlement

Income before income taxes 644 678 361

Income tax provision 150 172 96

Net income 494 506 265

Other comprehensive income—net of tax:

Changes in retirement benefit obligations 158 ( 43 ) ( 54 )

( 43 ) ( 54 ) 10

Loss on pension settlement ( 124 ) — —

Interest rate hedge activity — 1 —

Comprehensive income $ 528 $ 464 $ 211

$ 464 $ 211 $ 179

Net income $ 494 $ 506 $ 265

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Number of Treasury Shares Treasury Stock Accumulated Other

Comprehensive Loss Total

Comprehensive Income (Loss)

Shareholders’

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Share-based compensation expense — — 45 — — — — 45

— — 48 — — — — 48

Proceeds from employee stock purchase plan 0.8 — 22 — — — — 22

0.7 — 20 — — — — 20

Vested restricted stock units, net 0.8 — — — — — — —

Exercise of stock options 0.6 — 15 — — — — 15

0.6 — 15 — — — — 15

Tax withholding payments for net share-settled equity awards — — ( 16 ) — — — — ( 16 )

— — ( 14 ) — — — — ( 14 )

Series A convertible preferred stock dividends — — — ( 37 ) — — — ( 37 )

Changes in retirement benefit obligations, net of income tax — — — — — — ( 54 ) ( 54 )

— — — — — — 10 10

Interest rate hedge activity, net of income tax

— — — — — — 5 5

— — — 164 — — — 164

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

Common stock repurchased — — — — 0.4 ( 14 ) — ( 14 )

Net income — — — 265 — — — 265

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

Share-based compensation expense — — 56 — — — — 56

— — 45 — — — — 45

Proceeds from employee stock purchase plan 0.7 — 24 — — — — 24

0.8 — 22 — — — — 22

Vested restricted stock units, net 0.8 — — — — — — —

Exercise of stock options 1.2 — 25 — — — — 25

0.6 — 15 — — — — 15

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

— — ( 16 ) — — — — ( 16 )

Series A convertible preferred stock conversion to common stock 25.0 1 534 — — — — 535

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

Changes in retirement benefit obligations, net of income tax — — — — — — ( 43 ) ( 43 )

— — — — — — ( 54 ) ( 54 )

Interest rate hedge activity, net of income tax — — — — — — 1 1

Common stock repurchased — — — — 7.4 ( 294 ) — ( 294 )

— — — — 0.4 ( 14 ) — ( 14 )

— — — 265 — — — 265

Excise tax on common stock repurchases — — — — — ( 3 ) — ( 3 )

Net income — — — 506 — — — 506

BALANCE—December 30, 2023 252.9 $ 3 $ 3,663 $ 1,509 7.8 $ ( 311 ) $ ( 115 ) $ 4,749

Share-based compensation expense — — 63 — — — — 63

— — 56 — — — — 56

Proceeds from employee stock purchase plan

0.7 — 24 — — — — 24

Proceeds from employee share purchase plan 0.4 — 28 — — — — 28

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

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

1.2 — 25 — — — — 25

Tax withholding payments for net share-settled equity awards — — ( 21 ) — — — — ( 21 )

— — ( 12 ) — — — — ( 12 )

Series A convertible preferred stock conversion to common stock 25.0 1 534 — — — — 535

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

Changes in retirement benefit obligations, net of income tax — — — — — — 158 158

— — — — — — ( 43 ) ( 43 )

Interest rate hedge activity, net of income tax — — — — — — 1 1

Common stock repurchased — — — — 16.4 ( 958 ) — ( 958 )

— — — — 7.4 ( 294 ) — ( 294 )

Excise tax on common stock repurchases — — — — — ( 3 ) — ( 3 )

— — — 506 — — — 506

Net income — — — 494 — — — 494

BALANCE—December 28, 2024 254.7 $ 3 $ 3,748 $ 2,003 24.2 $ ( 1,269 ) $ 43 $ 4,528

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Fiscal Years Ended

December 30, 2023 December 31, 2022 January 1, 2022

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

Cash flows from operating activities:

$ 506 $ 265 $ 164

Net income $ 494 $ 506 $ 265

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

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Gain on disposal of property and equipment—net ( 1 ) ( 6 ) ( 5 )

( 6 ) ( 5 ) ( 1 )

Tangible asset impairment charges — 1 10

Intangible asset impairment charges — — 7

Loss on extinguishment of debt 10 21 —

Loss on pension settlement 124 — —

Amortization of deferred financing costs 9 17 12

Deferred tax provision

Deferred tax (benefit) provision ( 10 ) 9 17

Share-based compensation expense 63 56 45

Provision (benefit) for doubtful accounts

Provision for doubtful accounts 29 24 6

Changes in operating assets and liabilities, net of business acquisitions:

Increase in receivables ( 140 ) ( 157 ) ( 240 )

( 157 ) ( 240 ) ( 386 )

Decrease (increase) in inventories

61 70 ( 413 )

(Increase) decrease in prepaid expenses and other assets

( 67 ) ( 24 ) 4

(Increase) decrease in inventories ( 16 ) 61 70

Decrease (increase) in prepaid expenses and other assets 38 ( 67 ) ( 24 )

Increase in accounts payable and cash overdraft liability 170 200 193

Increase in accrued expenses and other liabilities

(Decrease) increase in accrued expenses and other liabilities ( 34 ) 80 44

Net cash provided by operating activities 1,174 1,140 765

1,140 765 419

Cash flows from investing activities:

Acquisition of businesses—net of cash received ( 214 ) ( 196 ) —

Proceeds from sales of divested assets

Proceeds from sales of property and equipment 3 10 10

Purchases of property and equipment ( 341 ) ( 309 ) ( 265 )

( 309 ) ( 265 ) ( 274 )

Net cash used in investing activities ( 552 ) ( 495 ) ( 255 )

( 495 ) ( 255 ) ( 262 )

Cash flows from financing activities:

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Issuance of new Senior Note Debt 500 1,000 —

Principal payments on debt refinancing ( 1,217 ) — —

Proceeds from Term Loan Issuance 725 — —

Principal payments on debt repricing ( 14 ) ( 43 ) —

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Proceeds from debt borrowings 4,896 456 1,207

456 1,207 2,305

Principal payments on debt and financing leases ( 4,796 ) ( 766 ) ( 1,620 )

( 766 ) ( 1,620 ) ( 3,105 )

Dividends paid on Series A convertible preferred stock — ( 7 ) ( 37 )

Debt financing costs and fees ( 13 ) ( 11 ) ( 4 )

( 11 ) ( 4 ) ( 30 )

Repurchase of common stock ( 948 ) ( 294 ) ( 14 )

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Tax withholding payments for net share-settled equity awards ( 21 ) ( 12 ) ( 16 )

( 12 ) ( 16 ) ( 14 )

Net cash used in financing activities ( 831 ) ( 587 ) ( 447 )

( 587 ) ( 447 ) ( 837 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 209 ) 58 63

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Interest paid—net of amounts capitalized 284 294 243

Income taxes paid (received)—net

Income taxes paid—net 181 161 68

Property and equipment purchases included in accounts payable 47 39 36

Property and equipment transferred to assets held for sale — — 11

Leased assets obtained in exchange for financing lease liabilities 145 125 207

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Cashless exercise of stock options 5 2 1

Paid-in-kind Series A convertible preferred stock dividends

Cash and cash equivalents presentation:

Cash and cash equivalents $ 59 $ 269 $ 211

Assets held for sale 1 — —

Total cash and cash equivalents $ 60 $ 269 $ 211

See Notes to Consolidated Financial Statements.

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When a 53-week fiscal year occurs, the Company reports the additional week in the fiscal fourth quarter.

The fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, referred to herein as fiscal years 2023, 2022 and 2021, respectively, were 52-week fiscal years.

The fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022, referred to herein as fiscal years 2024, 2023 and 2022, respectively, were 52-week fiscal years.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Accounts Receivable —Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest.

Receivables are presented net of the allowance for doubtful accounts in the Company’s accompanying Consolidated Balance Sheets.

Receivables are presented net of the allowance for credit losses in the Company’s accompanying Consolidated Balance Sheets.

The Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information.

Collections and payments from customers are continuously monitored.

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 evaluates the collectability of its accounts receivable and determines the appropriate allowance for credit losses based on a combination of factors.

The Company maintains an allowance for credit losses, 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.

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As of December 28, 2024 and December 30, 2023, LIFO reserves in the Company’s Consolidated Balance Sheets were $ 549 million and $ 488 million, respectively.

As a result of changes in LIFO reserves, cost of goods sold decreased $ 1 million in 2023, and increased $ 147 million and $ 165 million in fiscal years 2022 and 2021, respectively.

As a result of changes in LIFO reserves, cost of goods sold increased $ 61 million in 2024, decreased $ 1 million in 2023, and increased $ 147 million in 2022.

Held for Sale —Assets and liabilities to be disposed of by sale ("disposal groups") are reclassified into assets and liabilities held for sale on the Company’s Consolidated Balance Sheets.

The reclassification occurs when all the held for sale criteria have been met.

Disposal groups are measured at the lower of carrying value or fair value less costs to sell.

Assets held for sale are not depreciated or amortized.

The Company assesses the recoverability of its disposal groups each reporting period it remains classified as held for sale and if its carrying value exceeds its fair value, less an estimated cost to sell, an impairment charge is recorded for the excess.

Property and Equipment —Property and equipment are stated at cost.

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If the carrying value exceeds the fair value, an impairment charge is recorded for the excess.

The Company also assesses the recoverability of its vacant land and closed facilities actively marketed for sale.

If an asset’s carrying value exceeds its fair value, less an estimated cost to sell, an impairment charge is recorded for the excess.

Assets held for sale are not depreciated.

Impairments resulting from restructuring activities are recorded as a component of restructuring costs and asset impairment charges in the Company’s Consolidated Statements of Comprehensive Income, and a reduction of the asset’s carrying value in the Company’s Consolidated Balance Sheets.

Goodwill and Other Intangible Assets —Goodwill includes the cost of acquired businesses in excess of the fair value of the tangible and other intangible net assets acquired.

Other intangible assets include customer relationships, noncompete agreements, amortizable trade names, the brand names comprising the Company’s portfolio of exclusive brands, and trademarks.

Brand names and trademarks are indefinite-lived intangible assets and, accordingly, are not subject to amortization, but are subject to impairment assessments as described below.

Other intangible assets include customer relationships, noncompete agreements, amortizable trade names, the brand names, which are non-amortizing but subject to impairment assessments as described below.

The Company assesses goodwill and other intangible assets with indefinite lives for impairment annually, or more frequently if events occur that indicate an asset may be impaired.

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Fair value of each option is estimated as of the date of grant using a Black-Scholes option-pricing model.

The fair value of time-based and other performance based awards is the closing price per share for the Company’s common stock as reported on

the New York Stock Exchange.

The fair value of time-based and other performance based awards is the closing price per share for the Company’s common stock as reported on the New York Stock Exchange.

The fair value of the market performance based awards is estimated using a Monte-Carlo simulation.

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Concentration Risks —Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash equivalents and accounts receivable.

The Company’s cash equivalents are invested primarily in money market funds at major financial institutions.

The Company’s cash equivalents are held in bank accounts or invested primarily in money market funds at major financial institutions.

The account balances at these institutions may exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage, and as a result, there may be a concentration of risk related to amounts invested in excess of FDIC insurance coverage.

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RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued and Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

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.

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

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

The Company adopted the provisions of ASU No.

2023-07 at the beginning of the fourth quarter of fiscal year 2024 and applied them retrospectively.

Refer to Note 23, Business Information for additional information.

Recently Issued Accounting Pronouncements

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

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The Company plans to adopt the provisions of ASU No.

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

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature.

As a result, convertible debt will be accounted for as a single liability measured at its amortized cost.

Additionally, the new guidance requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share.

This guidance is effective for fiscal years beginning after December 15, 2021.

The Company adopted the provisions of ASU No.

2020-06 at the beginning of the first quarter of fiscal year 2022, with no impact on the Company’s financial position, results of operations, cash flows or diluted earnings per share reporting.

In October 2021, the FASB issued ASU No.

2021-08 Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which amends Accounting Standards Codification (“ASC”) 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-9, Revenue from Contracts with Customers (Topic 606) .

The guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, and is to be applied prospectively to business combinations occurring on or after adoption of the new guidance.

The Company adopted the provisions of ASU No.

2021-08 at the beginning of the first quarter of fiscal year 2022, with no impact on the Company’s financial position, results of operations or cash flows.

In December 2022, the FASB issued ASU No.

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

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

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

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

2023-09 in its annual reporting in fiscal year 2025 and does not expect the provisions of the new standard to materially affect our financial position, results of operation or cash flows.

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

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

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

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

In November 2024, the FASB issued ASU No 2024-03 Income Statement—Reporting Comprehensive Income—“ Expense Disaggregation Disclosures:

Disaggregation of Income Statement Expenses” , which requires disclosure of disaggregated information about certain income statement expense line items within the footnotes to the financial statements.

This guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

The Company is currently evaluating the impact that this standard will have on the Company’s consolidated financial statements.

REVENUE RECOGNITION

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

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

Customer receivables, which are included in accounts receivable, less allowances for credit losses in the Company’s Consolidated Balance Sheets, were $ 2.0 billion and $ 1.9 billion as of December 28, 2024 and December 30, 2023, respectively.

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

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The Company’s contract assets for these upfront payments were $ 43 million and $ 35 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023, respectively, and $ 50 million and $ 39 million included in other assets in the Company’s Consolidated Balance Sheets as of December 28, 2024 and December 30, 2023, respectively.

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

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

2024 2023 2022

7 unchanged sentences

Total Net sales $ 37,877 $ 35,597 $ 34,057

BUSINESS ACQUISITIONS

ACQUISITIONS AND HELD FOR SALE

IWC Food Service —On April 4, 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.

Jake’s Finer Foods Acquisition —Subsequent to fiscal year end 2024, on January 10, 2025, the Company completed the acquisition of Jake’s Finer Foods for approximately $ 92 million.

The acquisition will allow US Foods to further expand its reach into key markets in south Texas.

The acquisition was an asset 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.

Saladino’s Acquisition —On December 1, 2023, the Company acquired Saladino’s, a broadline distributor in California for a purchase price of $ 56 million.

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

Acquisition and integration costs, which included Saladino’s and Renzi Foodservice as well as previous acquisitions, included in distribution, selling and administrative costs in the Company’s Consolidated Statements of Comprehensive Income were $ 6 million, $ 16 million and $ 15 million during fiscal years 2023, 2022 and 2021, respectively.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

A summary of the activity in the allowance for doubtful accounts for the last three fiscal years is as follows:

Acquisition and integration costs, which included IWC Food Service, Saladino’s and Renzi Foodservice as well as previous acquisitions, included in distribution, selling and administrative costs in the Company’s Consolidated Statements of Comprehensive Income were $ 7 million, $ 6 million and $ 16 million during fiscal years 2024, 2023 and 2022, respectively.

Held for Sale

Freshway Planned Divestiture —During the fourth quarter of fiscal year 2024, the Company reached the decision to sell its Freshway business, which processes, repacks, and distributes fresh fruit and vegetables in the eastern half of the U.S.

The Company determined the associated assets met the held for sale accounting criteria as of December 28, 2024.

The sale of the Freshway business does not represent a strategic shift that will have a major effect on the Company’s operations and financial results and, therefore, did not qualify for presentation as discontinued operations.

As the Freshway business met the criteria to be classified as held for sale, the Company is required to record their assets and liabilities at the lower of carrying value or fair value less any costs to sell based on the agreed-upon sale price and present the related assets and liabilities as separate line items in the Consolidated Balance Sheets.

As the carrying values did not exceed fair value less any costs to sell, the related assets and liabilities were recorded at their carrying values.

On November 8, 2024, the Company entered into a definitive agreement to sell the Freshway business.

The transaction is subject to customary closing conditions.

Assets and liabilities held for sale consisted of the following:

December 28, 2024

Cash and cash equivalents $ 1

Accounts receivable, net 5

Inventories, net 2

Total current assets 8

Property and equipment, net 18

Total assets held for sale $ 41

Accounts payable $ 6

Accrued expenses 2

Total current liabilities 8

Long term debt 2

Other long term liabilities 9

Total liabilities held for sale $ 19

Planned divestiture costs, included in distribution, selling and administrative costs in the Company’s Consolidated Statements of Comprehensive Income were $ 11 million in 2024.

There were no planned divestiture costs during fiscal years 2023 and 2022.

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

As of December 28, 2024, the Company is in the process of exploring this sale which has not met held for sale criteria in the current year.

Subsequent to fiscal year end 2024, on January 31, 2025, the Company completed the divestiture of Freshway.

The Company is in the process of determining the gain or loss on sale for this transaction but does not believe that the gain or loss on sale is material to the Company’s consolidated financials.

ALLOWANCE FOR CREDIT LOSSES

A summary of the activity in the allowance for credit losses for the last three fiscal years is as follows:

2024 2023 2022

5 unchanged sentences

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

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

ASSETS HELD FOR SALE

The Company classifies its vacant land and closed facilities as assets held for sale at the time management commits to a plan to sell the asset, the asset is actively marketed and available for immediate sale, and the sale is expected to be completed within one year.

Due to market conditions, certain assets may be classified as assets held for sale for more than one year as the Company continues to actively market the assets.

During fiscal year 2023, one facility previously held for sale was sold for aggregate cash proceeds of $ 2 million which approximated the carrying value.

During fiscal year 2022, no excess facilities or vacant land previously held for future use were transferred to assets held for sale.

The Company sold vacant land for cash proceeds of $ 5 million, resulting in a gain on sale of $ 2 million, which was included in distribution, selling and administrative costs in the Company’s Consolidated Statements of Comprehensive Income.

The Company also sold one excess facility for aggregate cash proceeds of $ 1 million which approximated the carrying value.

The changes in assets held for sale for fiscal years 2023 and 2022 were as follows:

Balance as of beginning of year $ 2 $ 8

Assets sold ( 2 ) ( 6 )

Balance as of end of the year $ — $ 2

This table excludes the vendor receivable related allowance for credit losses of $ 7 million and $ 5 million as of December 28, 2024 and December 30, 2023, respectively.

PROPERTY AND EQUIPMENT

9 unchanged sentences

Property and equipment—net $ 2,398 $ 2,280

During fiscal year 2024, the Company reclassified $ 18 million of property, plant, and equipment to assets held for sale related to the planned Freshway divestiture.

Refer to Note 5, Acquisitions and Held for Sale for additional information.

Transportation equipment included $ 641 million and $ 594 million of financing lease assets as of December 28, 2024 and December 30, 2023, respectively.

Office equipment, furniture and software included $ 5 million of financing lease assets as of both December 30, 2023 and December 31, 2022.

Buildings and building improvements included $ 148 million and $ 78 million of financing lease assets as of December 30, 2023 and December 31, 2022, respectively.

Office equipment, furniture and software included $ 7 million and $5 million of financing lease assets as of December 28, 2024 and December 30, 2023, respectively.

Buildings and building improvements included $ 148 million of financing lease assets as of both December 28, 2024 and December 30, 2023.

Accumulated amortization of financing lease assets was $ 300 million and $ 297 million as of December 28, 2024 and December 30, 2023, respectively.

Interest capitalized was not material in both fiscal years 2023 and 2022.

Interest capitalized was immaterial for fiscal years 2024 and 2023.

Depreciation and amortization expense of property and equipment, including amortization of financing lease assets, was $ 384 million, $ 349 million and $ 327 million for fiscal years 2024, 2023 and 2022, respectively.

6 unchanged sentences

Amortization expense was $ 54 million, $ 46 million and $ 45 million for fiscal years 2024, 2023 and 2022, respectively.

The weighted-average remaining useful life of all definite lived intangibles was approximately twelve years as of December 30, 2023.

The weighted-average remaining useful life of all definite lived intangibles was approximately eleven years as of December 28, 2024.

Amortization of these definite lived intangible assets is estimated to be $ 55 million for each of fiscal years 2025, 2026, 2027, 2028 and 2029, and $ 292 million in the aggregate thereafter.

2 unchanged sentences

Goodwill $ 5,781 $ 5,697

Reclassification to assets held for sale (1)

Total Goodwill

$ 5,766 $ 5,697

Other intangibles—net

2 unchanged sentences

Accumulated amortization ( 241 ) ( 189 )

( 189 ) ( 144 )

Net carrying value 557 526

9 unchanged sentences

Total other intangibles—net $ 836 $ 803

The increases in goodwill and the gross carrying amounts of customer relationships and noncompete agreements are attributable to the Renzi Foodservice and the Saladino’s acquisitions.

See Note 5, Business Acquisitions.

Relates to the reclassification of goodwill allocated to the planned Freshway divestiture.

Refer to Note 5, Acquisitions and Held for Sale for additional information.

The increase in goodwill is attributable to prior period acquisition purchase price adjustments and the IWC Food Service acquisition in the second quarter of fiscal year 2024.

The increase in the gross carrying amounts 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 5, Acquisitions and Held for Sale.

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.

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Based upon the Company’s fiscal year 2024 annual impairment analysis, the Company concluded the fair value of its brand names and trademarks exceeded its carrying value.

During fiscal year 2021, the Company implemented rebranding initiatives related to the integration of a trade name acquired as part of an earlier acquisition.

As a result of the rebranding initiatives, the Company recognized an impairment charge of $ 7 million, which was included in restructuring costs and asset impairment charges in the Company’s Consolidated Statements of Comprehensive Income.

The remaining carrying value of the acquired trade name of $ 3 million was reclassified to trade names—amortizable and will be amortized with an estimated remaining useful life of 10 years.

No other impairments were noted as part of the annual impairment assessment for fiscal year 2021.

Due to the many variables inherent in estimating fair value and the relative size of the recorded indefinite-lived intangible assets, differences in assumptions may have a material effect on the results of the Company’s impairment analysis in future periods.

12 unchanged sentences

Money market funds $ — $ — $ — $ —

$ 208 $ — $ — $ 208

Interest rate caps — — — —

2 unchanged sentences

Money market funds $ 208 $ — $ — $ 208

$ 139 $ — $ — $ 139

Interest rate caps — 1 — 1

There were no significant assets or liabilities on the Company’s Consolidated Balance Sheets measured at fair value on a nonrecurring basis, except as further disclosed in Note 8, Goodwill and Other Intangibles.

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

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

The 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 December 30, 2023:

Balance at December 30, 2023 Balance Sheet Location Fair Value

Derivatives designed as hedging instruments

Interest Rate Caps Other current assets $ 1

Interest Rate Caps Other noncurrent assets $ —

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

As of December 30, 2023, the fair value of the Company’s interest rate caps recorded within other current assets is $ 1 million.

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 hedges during the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022, respectively.

The following table presents the effect of the Company’s interest rate caps in its Consolidated Statements of Comprehensive Income for the fiscal years ended December 30, 2023, December 31, 2022 and January 1, 2022:

Derivatives in Cash Flow Hedging Relationships Amount of Gain Recognized in Accumulated

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,

There was no ineffectiveness attributable to the Company’s interest rate hedges during the fiscal years ended December 30, 2024, December 30, 2023 and December 31, 2022, respectively.

The following table presents the effect of the Company’s interest rate caps in its Consolidated Statements of Comprehensive Income for the fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022:

Derivatives in Cash Flow Hedging Relationships Amount of Gain Recognized in Accumulated 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,

For the fiscal year ended December 28, 2024

4 unchanged sentences

$ 1 Interest expense—net $ —

For the fiscal year ended January 1, 2022

For the fiscal year ended December 31, 2022

Interest rate swaps

4 unchanged sentences

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

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

The Secured Senior Notes due 2025 were redeemed in the third quarter of 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 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 and $ 0.5 billion as of December 28, 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 December 28, 2024 and December 30, 2023, respectively.

The fair value of the Company’s 4.630 % unsecured senior notes due June 1, 2030 (the “Unsecured Senior Notes due 2030”) was $ 0.5 billion and $ 0.5 billion as of December 28, 2024 and December 30, 2023, respectively.

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 December 30, 2023.

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

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

The fair value of the Company’s new October 2024 note offering of 5.75 % unsecured senior notes due April 15, 2033 (the “Unsecured Senior Notes due 2033”) was $ 0.5 billion as of December 28, 2024.

The fair value of the Unsecured Senior Notes dues 2028, the Unsecured Senior Notes due 2029, the Unsecured Senior Notes due 2030, the Unsecured Senior Notes due 2032 and the Unsecured Senior Notes due 2033 is based upon their closing 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, the Unsecured Senior Notes due 2032 and the Unsecured Senior Notes due 2033 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.

2 unchanged sentences

ABL Facility December 7, 2027 6.11 % $ 223 $ —

2019 Incremental Term Loan Facility (net of $ 11 and $ 19 of unamortized deferred financing

costs, respectively)

2019 Incremental Term Loan Facility (net of $ 0 and $ 11 of unamortized deferred financing costs, respectively) (1)

September 13, 2026 — % — 1,105

1 unchanged sentence

November 22, 2028 6.32 % 610 718

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

respectively) (1)

April 15, 2025 6.25 % — 993

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

2024 Incremental Term Loan Facility (net of $ 8 of unamortized deferred financing costs)

October 3, 2031 6.32 % 717 —

Unsecured Senior Notes due 2028 (net of $ 4 and $5 unamortized deferred financing costs, respectively) (1)

September 15, 2028 6.88 % 496 495

3 unchanged sentences

June 1, 2030 4.63 % 497 496

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

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

January 15, 2032 7.25 % 496 495

Unsecured Senior Notes due 2033 (net of $ 4 of unamortized deferred financing costs)

April 15, 2033 5.75 % 496 —

Obligations under financing leases (3)

2025–2040 1.26 % - 8.31 %

Other debt January 1, 2031 5.75 % 8 8

3 unchanged sentences

Long-term debt $ 4,819 $ 4,564

(1) The Secured Senior Notes due 2025 were paid in full on September 25, 2023, with the proceeds from the issuance of the Unsecured Senior Notes due 2028 and the Unsecured Senior Notes due 2032, as well as cash on hand, as further discussed below

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

(1) The 2019 Incremental Term Loan Facility was repaid on October 3, 2024, with the proceeds from the amended 2021 Incremental Term Loan Facility, issuance of the 2024 Incremental Term Loan Facility, and the issuance of the Unsecured Senior Notes due 2033, as well as cash on hand, as further discussed below.

(2) The 2021 Incremental Term Loan Facility was refinanced on October 3, 2024 as further discussed below.

(3) Obligations under financing leases excludes financing leases classified as held for sale in relation to the planned Freshway divestiture.

Refer to Note 5, Acquisitions and Held for Sale for additional information.

As of December 28, 2024, the current principal of the Term Loan Facilities, variable rate leases and ABL debt outstanding as described below, represents approximately 32 % of the Company’s total debt that bore interest at a floating rate.

Principal payments to be made on outstanding debt, exclusive of deferred financing costs, as of December 28, 2024, were as follows:

Thereafter 2,274

On December 7, 2022, USF entered into an amendment to its asset based senior secured revolving credit facility (the “ABL Facility”).

On December 7, 2022, the Company entered into an amendment to its asset based senior secured revolving credit facility (the “ABL Facility”).

Pursuant to this amendment, the total aggregate amount of commitments under the ABL facility was increased from $ 1,990 million to $ 2,300 million.

The amendment also replaced the London Interbank Offered Rate (“LIBOR”) interest rate benchmark with a forward-looking term rate based on the Term Secured Overnight Financing Rate (“Term SOFR”) as administered by the Federal Reserve Bank of New York, as determined in accordance with the ABL Facility.

T he amendment also replaced the London Interbank Offered Rate (“LIBOR”) interest rate benchmark with a forward-looking term rate based on the Term Secured Overnight Financing Rate (“Term SOFR”) as administered by the Federal Reserve Bank of New York, as determined in accordance with the ABL Facility.

Extensions of credit under the ABL Facility are subject to availability under a borrowing base comprised of various percentages of the value of eligible accounts receivable, inventory, transportation equipment and certain unrestricted cash and cash equivalents, which, along with other assets, also serve as collateral for borrowings under the ABL Facility.

The ABL Facility is scheduled to mature on December 7, 2027, subject to a springing maturity date in the event that more than $ 300 million of aggregate principal amount of earlier maturing indebtedness under USF’s Term Loan Credit Agreement or any of USF’s Unsecured Senior Notes due 2029 or Unsecured Senior Notes due 2030 (the “Senior Notes”) (described below) remains outstanding on a date that is sixty

(60) days prior to such earlier maturity date for such indebtedness under the Term Loan Credit Agreement or any of such Senior Notes.

Borrowings under the ABL Facility bear interest, at USF’s periodic election, at a rate equal to the sum of an alternative base rate (“ABR”), as described under 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 a 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 ABL Facility is scheduled to mature on December 7, 2027, subject to a springing maturity date in the event that more than $ 300 million of aggregate principal amount of earlier maturing indebtedness under the Company’s Term Loan Credit Agreement or any of USF’s Unsecured Senior Notes due 2029 or Unsecured Senior Notes due 2030 (the “Senior Notes”) (described below) remains outstanding on a date that is sixty (60) days prior to such earlier maturity date for such indebtedness under the Term Loan Credit Agreement or any of such Senior Notes.

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 under 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 a 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 December 28, 2024, was 0.00% for ABR loans and 1.00% for SOFR loans.

1 unchanged sentence

The weighted-average interest rate on outstanding borrowings for the ABL Facility was 6.59 % and 8.27 % for fiscal years 2024 and 2023, respectively.

The Company incurred $ 4 million of third party costs in connection with the ABL Facility amendment which were capitalized as deferred financing costs recorded in other assets in the Company’s Consolidated Balance Sheet.

In December 2022, the Company incurred $ 4 million of third party costs in connection with the ABL Facility amendment which were capitalized as deferred financing costs recorded in other assets in the Company’s Consolidated Balance Sheet.

These deferred financing costs, along with $ 3 million of unamortized deferred financing costs related to the former asset based senior secured revolving credit facility, will be amortized through December 7, 2027, the ABL Facility maturity date.

USF had no outstanding borrowings, and had outstanding letters of credit totaling $ 567 million, under the ABL Facility as of December 30, 2023.

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

The Company had $ 223 million outstanding borrowings, and had outstanding letters of credit totaling $ 592 million, under the ABL Facility as of December 28, 2024.

The outstanding letters of credit are entered into in favor of certain commercial insurers to secure obligations with respect to our insurance programs and certain real estate leases.

1 unchanged sentence

Term Loan Facilities

The Amended and Restated Term Loan Credit Agreement, dated as of June 27, 2016 (as amended, the “Term Loan Credit Agreement”), provides USF with an incremental senior secured term loan borrowed in September 2019 (the “2019 Incremental Term Loan Facility”), an incremental senior secured term loan borrowed in November 2021 (the “2021 Incremental Term Loan Facility”) and the right to request additional incremental senior secured term loan commitments.

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

The Amended and Restated Term Loan Credit Agreement, dated as of June 27, 2016 (as amended, the “Term Loan Credit Agreement”), provides the Company with an incremental senior secured term loan borrowed in October 2024 (the “2024 Incremental Term Loan Facility”), an incremental senior secured term loan borrowed in November 2021 (the “2021 Incremental Term Loan Facility”) and the right to request additional incremental senior secured term loan commitments.

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.

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

2019 Incremental Term Loan Facility

The 2019 Incremental Term Loan Facility had an outstanding balance of $ 1,105 million, net of $ 11 million of unamortized deferred financing costs, as of December 30, 2023.

During fiscal year 2023 the Company voluntarily prepaid $ 120 million of the 2019 Incremental Term Loan Facility.

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 is scheduled to mature on September 13, 2026.

Borrowings under the 2019 Incremental Term Loan Facility may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of SOFR-based borrowings.

The 2019 Incremental Term Loan Facility may require mandatory repayments if certain assets are sold.

On October 3, 2024, the Company repaid all of the then outstanding borrowings under the 2019 Incremental Term Loan Facility using proceeds from the amended 2021 Incremental Term Loan Facility, issuance of the 2024 Incremental Term Loan Facility, and issuance of the Unsecured Senior Notes due 2033.

See 2024 refinancing activities below for details on accounting considerations.

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 December 30, 2023.

The 2021 Incremental Term Loan Facility had an outstanding balance of $ 610 million, with no unamortized deferred financing costs, as of December 28, 2024.

During fiscal year 2023, the Company voluntarily prepaid $ 65 million of the 2021 Incremental Term Loan Facility.

Borrowings under the 2021 Incremental Term Loan Facility bear interest at a rate per annum equal to, at USF’s option, either the sum of (i) Term SOFR plus (ii) a credit spread adjustment of (a) 0.11448 % for a one-month term, (b) 0.26161 % for a three-month term, or (c) 0.42826 % for a six month term, (with the sum of Term SOFR and the foregoing credit spread adjustment subject to a Term SOFR “floor” of 0.00 %) plus (iii) a margin of 2.50 %, or the sum of (i) an ABR, as described in the 2019 Incremental Term Loan Facility plus a margin of 1.50 %.

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

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 subject to a Term SOFR “floor” of 0.00 % plus a margin of 1.75 %, or (ii) an ABR, as described in the Term Loan Credit Agreement plus a margin of 0.75 %.

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

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

1 unchanged sentence

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 the maturity date of the term loan facility.

There were no unamortized deferred financing costs at December 28, 2024 to be carried forward and amortized through the maturity date of the term loan facility.

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

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

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

On October 3, 2024, the 2021 Incremental Term Loan Facility was further amended to reduce the interest rate margins under the term loan facility to 1.75 % for Term SOFR borrowings and 0.75 % for ABR borrowings.

See 2024 refinancing activities below for details on accounting considerations.

The 2021 Incremental Term Loan Facility is scheduled to mature on November 22, 2028.

Borrowings under the 2021 Incremental Term Loan Facility may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of SOFR-based borrowings The 2021 Incremental Term Loan Facility may require mandatory repayments if certain assets are sold.

2024 Incremental Term Loan Facility

The 2024 Incremental Term Loan Facility had an outstanding balance of $ 717 million, net of $ 8 million of unamortized deferred financing costs, as of December 28, 2024.

Borrowings under the 2024 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 subject to a Term SOFR “floor” of 0.00 % plus a margin of 1.75 %, or (ii) an ABR, as described in the Term Loan Credit Agreement plus a margin of 0.75 %.

Secured Senior Notes due 2025

3 unchanged sentences

Unsecured Senior Notes due 2028

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

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

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

6 unchanged sentences

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

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

The Unsecured Senior Notes due 2029 bear interest at a rate of 4.75 % per annum and

will mature on February 15, 2029.

On or after February 15, 2024, the Unsecured Senior Notes due 2029 are redeemable, at USF’s option, in whole or in part at a price of 102.375 % of the remaining principal, plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date.

6 unchanged sentences

Unsecured Senior Notes due 2032

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

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

related fees and expenses.

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

Lender fees and third-party costs of $ 4 million in connection with the issuance of the Unsecured Senior Notes due 2032 were capitalized as deferred financing costs.

3 unchanged sentences

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

Unsecured Senior Notes due 2033

On October 3, 2024, the Company completed its offering of $ 500 million aggregate principal amount of its 5.750 % Senior Unsecured Notes due 2033 (the “Unsecured Senior Notes due 2033”).

The Unsecured Senior Notes due 2033 bear interest at a rate of 5.750 % per year payable semi-annually in arrears on April 15 and October 15 of each year, commencing on April 15, 2025.

The Notes are unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly-owned domestic subsidiaries that provide guarantees under the Company’s senior secured term loan credit facilities.

Financing Leases

9 unchanged sentences

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

USF had approximately $ 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 December 30, 2023.

The Company had approximately $ 2.4 billion of restricted payment capacity under these covenants, and approximately $ 2.1 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 December 28, 2024.

The agreements governing our indebtedness also contain customary events of default.

6 unchanged sentences

2024 Refinancing Activities

In February 2021, USF completed a private offering of the Unsecured Senior Notes due 2029 and used the proceeds, together with cash on hand, to redeem all of the Company’s then outstanding 5.875 % Unsecured Senior Notes due 2024 (the “Unsecured Senior Notes due 2024”), and repay all of the then outstanding borrowings under the 2020 Incremental Term Loan Facility.

In connection with the repayment of the Unsecured Senior Notes due 2024 and the 2020 Incremental Term Loan Facility, the Company applied debt extinguishment accounting and recorded $ 23 million in the Company’s Consolidated Statements of Comprehensive Income, consisting of a $ 14 million write-off of pre-existing unamortized deferred financing costs related to the redeemed facilities and a $ 9 million early redemption premium related to the Unsecured Senior Notes due 2024.

In November 2021, USF entered into the 2021 Incremental Term Loan Facility and completed a private offering of Unsecured Senior Notes due 2030 and used the proceeds and cash on hand, to repay all of the then outstanding borrowings under the Initial Term Loan Facility.

In connection with the repayment of the Initial Term Loan Facility, the Company applied debt extinguishment accounting and recorded $ 2 million in the Company’s Consolidated Statements of Comprehensive Income, primarily consisting of a write-off of pre-existing unamortized deferred financing costs related to the Initial Term Loan Facility.

On October 3, 2024, the Company amended the 2021 Incremental Term Loan Facility, entered into the 2024 Incremental Term Loan Facility, and completed a private offering of Unsecured Senior Notes due 2033.

Proceeds from the incremental term loans and senior note, along with cash on hand, were used to repay all of the then outstanding borrowings under the 2019 Incremental Term Loan Facility.

In connection with the repayment of the 2019 Incremental Term Loan Facility, the Company applied debt extinguishment accounting and recorded $ 10 million in the Company’s Consolidated Statements of Comprehensive Income, primarily consisting of a write-off of pre-existing unamortized deferred financing costs related to the incremental Term Loan Facility.

Lender fees and third-party costs of $ 10 million related to the 2021 Incremental Term Loan amendment, issuance of the 2024 Incremental Term Loan Facility and the Unsecured Senior Notes due 2033 were capitalized as deferred financing costs.

ACCRUED EXPENSES AND OTHER LONG-TERM LIABILITIES

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Total Other long-term liabilities $ 447 $ 469

During fiscal year 2024, the Company reclassified $ 2 million of accrued expenses and other current liabilities and $ 9 million of other long-term liabilities to assets held for sale related to the planned Freshway divestiture.

Refer to Note 5, Acquisitions and Held for Sale for additional information.

Self-Insured Liabilities — The Company is self-insured for general liability, fleet liability and workers’ compensation claims.

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Severance and Related Costs Facility Closing Costs Total

Balance as of January 2, 2021 $ 1 $ 1 $ 2

Balance at January 1, 2022 $ 3 $ — $ 3

Current period costs (benefits) 3 — 3

Payments, net ( 3 ) — ( 3 )

( 3 ) — ( 3 )

Balance as of January 1, 2022 3 — 3

Balance as of Balance at December 31, 2022 3 — 3

Current period costs 11 3 14

Payments, net ( 7 ) ( 3 ) ( 10 )

( 3 ) — ( 3 )

Balance as of December 31, 2022 3 — 3

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

Current period costs 22 — 22

Payments, net ( 23 ) — ( 23 )

( 7 ) ( 3 ) ( 10 )

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

Balance as of Balance at December 28, 2024 $ 6 $ — $ 6

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

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2024 Activities

During fiscal year 2023, the Company incurred restructuring costs of $ 14 million for severance and related costs associated with work force reductions and office closures.

During fiscal year 2024, the Company incurred net restructuring costs of $ 22 million primarily related to initiatives to improve operational effectiveness and workforce reductions.

2023 Activities

During fiscal year 2022, the Company incurred restructuring costs of $ 3 million for severance and related costs associated with support office work force reductions.

During fiscal year 2023, the Company incurred net restructuring costs of $ 14 million for severance and related costs associated with work force reductions and office closures.

2022 Activities

During fiscal year 2021, the Company incurred net restructuring costs of $ 4 million for severance and related costs associated with the closure of an excess facility and initiatives to improve operational effectiveness.

See Note 9, Goodwill and Other Intangibles, for discussion related to asset impairment charges incurred during fiscal years 2022 and 2021.

During fiscal year 2022, the Company incurred net restructuring costs of $ 3 million for severance and related costs associated with support office work force reductions.

CONVERTIBLE PREFERRED STOCK

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

See Note 15, Related Party

Transactions.

See Note 14, Related Party Transactions.

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

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Balance, January 1, 2022 532,281 534

Shares issued as paid in kind dividend - Series A Preferred Stock

Balance, January 1, 2022 532,281 534

Shares issued as paid in kind dividend - Series A Preferred Stock

Balance, December 31, 2022 532,281 534

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Balance December 30, 2023 — —

There was no activity for fiscal year 2024.

RELATED PARTY TRANSACTIONS

As of 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 December 28, 2024, as reported by the administrative agent of the 2021 and 2024 Incremental Term Loan Facilities, investment funds managed by an affiliate of FMR LLC held approximately $ 5 million in aggregate principal amount of the 2021 and 2024 Incremental Term Loan Facility.

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

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

KKR Capital Markets LLC (“KKR Capital Markets”), an affiliate of KKR, received an aggregate of $ 2 million for debt advisory services rendered in connection with the Company’s 2021 debt refinancing activities.

As reported by the administrative agent of the Initial Term Loan Facility and the 2019 Incremental Term Loan Facility (the “Term Loan Agent”), investment funds managed by an affiliate of KKR held approximately $ 15 million in aggregate principal amount of the 2019 Incremental Term Loan Facility as of December 31, 2022.

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

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

SHARE-BASED COMPENSATION, COMMON STOCK ISSUANCES AND COMMON STOCK

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In addition, the Company sponsors an employee stock purchase plan to provide eligible employees with the opportunity to acquire shares of our common stock at a discount of 15 % of the fair market value of the common stock on the date of purchase, and as such, the plan is considered compensatory for federal income tax purposes.

The Company recorded $ 4 million of share-based compensation expense for fiscal years 2023, 2022 and 2021, respectively, associated with the employee stock purchase plan.

The Company recorded $ 5 million, $ 4 million and $ 4 million of share-based compensation expense for fiscal years 2024, 2023 and 2022, respectively, associated with the employee stock purchase plan.

Stock Options —Certain directors, executive officers and other eligible employees have been granted time-based stock options (the “Time-Based Options”) and performance-based options (the “Performance Options” and, together with the Time-Based Options, the “Options”) to purchase shares of our common stock.

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The Performance Options generally vest and become exercisable ratably over a period o f three years , from the date of the grant, provided that the Company achieves a predetermined financial performance condition established by the Compensation and Human Capital Committee of our Board of Directors for the respective award tranche.

Based on the Company’s performance relative to the award agreements, no share-based compensation expense was recorded in fiscal year 2023, 2022 and 2021 related to the Performance Options.

As all Performance Options granted have fully vested, no share-based compensation expense was recorded in fiscal year 2024, 2023 and 2022 related to the Performance Options.

The Options are nonqualified, with exercise prices equal to the estimated fair value of a share of common stock as of the date of the grant.

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The fair value of each Option is estimated as of the date of grant using a Black-Scholes option-pricing model.

The weighted-average assumptions for Options granted in fiscal year 2021 are included in the following table.

No options were granted in fiscal year 2022 and 2023.

Expected volatility 53.0 %

Expected dividends —

Risk-free interest rate 1.1 %

Expected term (in years) 6.1

Expected volatility is calculated leveraging the historical volatility of public companies similar to US Foods.

The assumed dividend yield is zero because the Company has not historically paid dividends.

The risk-free interest rate is the implied zero-coupon yield for U.S.

Treasury securities having a maturity approximately equal to the expected term, as of the grant date.

Due to a lack of relevant historical data, the simplified approach was used to determine the expected term of the options.

The summary of Options outstanding and changes during fiscal year 2024 are presented below:

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Vested and exercisable as of December 28, 2024 1,643,562 79,828 1,723,390 $ 9.58 $ 25.52 4.3

The weighted-average grant date fair value of Options granted for fiscal year 2021 was $ 18.59 .

During fiscal years 2024, 2023 and 2022, Options were exercised with total intrinsic values of $ 24 million, $ 22 million and $ 13 million, respectively, representing the excess of fair value over the exercise price.

There was $ 1 million of total unrecognized compensation costs related to unvested Options expected to vest as of December 30, 2023, which is expected to be recognized over a weighted-average period of one year .

Restricted Stock Awards —Certain executive officers have been granted restricted stock awards (“RSAs”), some of which vest ratably over a three-year period from the date of grant (the “Time-Based RSA”) and others of which vest to the extent certain performance conditions are met (the “Performance RSAs”).

The Company recorded no share-based compensation expense for the Time-Based RSAs in fiscal year 2023, de minimis expense for 2022, and $ 1 million for 2021.

The Performance RSAs were granted assuming the maximum level of performance and vest on the third anniversary of the grant date if specific performance conditions over a three-year performance period are achieved.

The number of shares eligible to vest on the vesting date range from zero to 200 % of the target award amount, based on the achievement of the performance conditions.

The fair value of the Performance RSAs is measured using the fair market value of our common stock on the date of grant and recognized over the three-year vesting period for the portion of the award that is expected to vest.

Compensation expense for the Performance RSAs is remeasured as of the end of each reporting period, based on management’s evaluation of whether, and to what extent, it is probable that performance conditions will be met.

The Company recorded no share-based compensation expense for the Performance-Based RSAs in fiscal year 2023, de minimis expense for 2022, and $ 1 million for 2021.

There were no RSAs granted in fiscal years 2023, 2022 and 2021.

There was no unrecognized compensation expense related to the RSAs as of December 30, 2023.

There was no unrecognized compensation expense related to unvested Options expected to vest as of December 28, 2024.

Restricted Stock Units —Certain directors, executive officers and other eligible employees have been granted time-based restricted stock units (the “Time-Based RSUs”), performance-based restricted stock units (the “Performance RSUs”) and market performance-based restricted stock units (the “Market Performance RSUs” and collectively with the Time-Based RSUs and Performance RSUs, the “RSUs”).

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The Company recognized $ 20 million, $ 11 million and $ 4 million of share-based compensation expense in fiscal years 2024, 2023 and 2022, respectively, for the Performance RSUs.

During fiscal year 2021, the Company granted Market Performance RSUs to certain executive officers and other eligible employees.

During fiscal years 2021 and 2023, the Company granted Market Performance RSUs to certain executive officers and other eligible employees.

These Market Performance RSUs awards vest at the end of a four-year performance period contingent on our achievement of certain total shareholder return performance (“TSR”) targets during the performance period.

The grant date fair value of the Market Performance RSUs was estimated using a Monte-Carlo simulation.

The Company recognized $ 2 million, $ 1 million and $ 3 million of share-based compensation expense in fiscal years 2023, 2022 and 2021, respectively, for the Market Performance RSUs.

The Company recognized de minimis share-based compensation expense for 2024, $ 2 million and $ 1 million of expense in fiscal years, 2023 and 2022, respectively, for the Market Performance RSUs.

A summary of RSUs outstanding and changes during fiscal year 2024 is presented below.

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Unvested as of December 30, 2023 2,187,628 852,375 320,400 3,360,403 $ 35.82

1,441,470 604,074 168,162 2,213,706 $ 35.71

( 1,088,926 ) — — ( 1,088,926 ) $ 24.78

( 337,853 ) ( 143,475 ) ( 57,089 ) ( 538,417 ) $ 36.07

Granted 909,702 499,416 — 1,409,118 $ 54.03

Vested ( 1,029,172 ) — ( 9,516 ) ( 1,038,688 ) $ 35.82

Forfeited ( 222,250 ) ( 140,823 ) — ( 363,073 ) $ 41.14

Unvested as of December 28, 2024 1,845,908 1,210,968 310,884 3,367,760 $ 42.94

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As of December 28, 2024, there was $ 78 million of unrecognized compensation cost related to the RSUs that is expected to be recognized over a weighted-average period of two years .

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.

For the year ended

December 30, 2023, the Company repurchased 7,396,224 shares at an aggregate purchase price of approximately $ 294 million under the program.

Additionally, during the year ended December 30, 2023, the Company recorded $ 3 million of excise tax associated with common stock repurchases.

At December 30, 2023, there was approximately $ 192 million in remaining funds authorized under this program.

Share Repurchase Program —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 inclusive of any remaining funds authorized under the Original Share Repurchase Program (“Amended Share Repurchase Program”).

For the year ended December 28, 2024, the Company repurchased 16,400,895 shares at an aggregate purchase price of approximately $ 958 million under the Amended Share Repurchase Program and the Original Share Repurchase Program, inclusive of approximately $ 10 million of fees, commissions, and related 1% excise tax.

At December 28, 2024, there was approximately $ 75 million in remaining funds authorized under the Amended Share Repurchase Program.

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.

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 repurchase program may be suspended or discontinued at any time at the Company’s discretion.

The repurchase authorization does not have an expiration date.

During the first quarter of fiscal year 2025 through February 10, 2025, the Company repurchased 328,000 shares at an aggregate purchase price of approximately $ 23 million under the Amended Share Repurchase Program.

At February 10, 2025, there was approximately $ 52 million in remaining funds authorized under the Amended Share Repurchase Program.

The Company leases certain distribution and warehouse facilities, office facilities, fleet vehicles, and office and warehouse equipment.

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Rental payments are calculated at the applicable reference rate plus a margin.

As of December 28, 2024, the Company had entered into four additional finance and operating leases related to warehouse leases for distribution centers and will commence upon building completion, with expected commencement dates ranging from 2025 to 2027 with terms of up to 15 years.

The following table presents the location of the ROU assets and lease liabilities in the Company’s Consolidated Balance Sheets:

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Other assets $ 271 $ 290

Financing (2)

Property and equipment-net (1)

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Other long-term liabilities 248 265

Financing (2)

Long-term debt 389 367

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(1) Financing lease assets are recorded net of accumulated amortization of $ 300 million and $ 297 million as of December 28, 2024 and December 30, 2023, respectively.

(2) Excludes leases classified as held for sale in relation to the planned Freshway divestiture.

Refer to Note 5, Acquisitions and Held for Sale for additional information.

The following table presents the location of lease costs in fiscal years 2024, 2023 and 2022 in the Company’s Consolidated Statements of Comprehensive Income:

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Financing cash flows from financing leases 124 111 73

Lease Term and Discount Rate December 30, 2023 December 31, 2022 January 1, 2022

Lease Term and Discount Rate December 28, 2024 December 30, 2023 December 31, 2022

Weighted-average remaining lease term (years):

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RETIREMENT PLANS

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

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

Company Sponsored Defined Benefit Plans — The Company sponsors the US Foods Consolidated Defined Benefit Retirement Plan (the “Retirement Plan”), a qualified defined benefit retirement plan, that pays benefits to eligible employees at the time of retirement, using actuarial formulas based upon a participant’s years of credited service and compensation.

Only certain union associates are eligible to participate and continue to accrue benefits under the plan per the collective bargaining

Only certain union associates are eligible to participate and continue to accrue benefits under the plan per the collective bargaining agreements.

The plan is closed and frozen to all other employees.

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

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

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

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.”During the fourth quarter of fiscal year 2024, the Company remeasured and settled all benefits related to the Terminating Plan.

In the fourth quarter of fiscal year 2024, the Company settled its obligations under the Terminating Plan by providing $ 254 million in lump sum payments to eligible participants who elected to receive them and through the purchase of annuity contracts from a highly rated insurance company for $ 414 million.

The settlement of the Terminating Plan resulted in excess plan assets of approximately $ 63 million which will be transferred to the Ongoing Plan.

The cost of the settlement of the Terminating Plan is a nonrecurring charge to pension expense of approximately $ 124 million to recognize deferred costs previously held in accumulated other comprehensive income.

No cash contributions were required in the current fiscal year to support the Terminating Plan transaction.

As a result of the planned termination, the net funded status of the Terminating Plan is recorded within accrued expenses and other current liabilities in the Consolidated Balance Sheet as of December 20, 2024.

After the Terminating Plan was settled, the net funded status of the Ongoing Plan is recorded within other long term assets and other long term liabilities as of December 28, 2024

The components of net periodic pension benefit costs (credits) for the Retirement Plan the last three fiscal years were as follows:

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The Company did not make a significant contribution to the Retirement Plan in fiscal years 2024, 2023 and 2022.

There have been no non-cash settlement costs incurred in fiscal years 2023, 2022, and 2021.

With the exception of the $ 124 million cost in fiscal year 2024 related to the plan termination settlement, there have been no non-cash settlement costs incurred in fiscal years 2024, 2023, and 2022.

Changes in plan assets and benefit obligations recorded in accumulated other comprehensive loss for pension benefits for the last three fiscal years were as follows:

2024 2023 2022

Changes recognized in accumulated other comprehensive loss:

Actuarial (loss) gain

Changes recognized in accumulated other comprehensive income (loss):

Actuarial gain (loss)

$ 82 $ ( 58 ) $ ( 73 )

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Projected benefit obligation as of end of year

777 720 1,016

Change in plan assets:

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Fair value of plan assets as of end of year

760 753 1,103

Net funded status $ 63 $ ( 17 ) $ 33

The net funded status of the Ongoing Plan for fiscal year 2024 increased from a net liability of $ 17 million to a net asset of $ 63 million, as a result of settling the Terminating Plan.

The net funded status of the Retirement Plan for fiscal year 2023 decreased from a net asset of $ 33 million to a net liability of $ 17 million, as a result of market conditions, adjustments related to the Terminating Plan and actuarial losses.

The net funded status of the Retirement Plan for fiscal year 2022 decreased from a net asset of $ 87 million to a net asset of $ 33 million, primarily due to negative investment returns on assets, offset by an increase in the discount rate.

The fiscal year 2024 pension benefits actuarial gain of $ 74 million was primarily due to terminating plan adjustments.

The fiscal year 2023 pension benefits actuarial loss of $ 58 million was primarily due to a decrease in the discount rate and Terminating Plan adjustments.

The fiscal year 2022 pension benefits actuarial gain of $ 274 million was primarily due to an increase in the discount rate.

The fiscal year 2021 pension benefits actuarial gain of $ 30 million was primarily due to an increase in the discount rate.

The funded status of the Other Post Retirement Plans for the last three fiscal years was as follows:

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The Company applies the practical expedient under ASU No.

2015-4 to measure defined benefit retirement obligations and related plan assets as of the month-end that is closest to its fiscal year-end.

2015-04 “Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets” to measure defined benefit retirement obligations and related plan assets as of the month-end that is closest to its fiscal year-end.

The mortality assumptions used to determine the pension benefit obligation as of December 31, 2024 and December 31, 2023 are based on the Pri-2012 base mortality table with the MP-2020 mortality improvement scale published by the Society of Actuaries.

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equities) and 30 % fixed income securities (U.S.

Treasuries, STRIPs, and investment grade corporate bonds) was targeted during the Company’s fiscal year 2023.

Treasuries, STRIPs, and investment grade corporate

bonds) was targeted during the Company’s fiscal year 2024.

The actual mix of assets in the Trust as of December 28, 2024 consisted of 18 % equity securities and 82 % fixed income securities.

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government securities representing government bonds with long-term maturities.

Estimated future benefit payments, under Company sponsored plans as of December 30, 2023, were as follows:

Estimated future benefit payments, under Company sponsored plans as of December 28, 2024, are as follows:

Pension Benefits

What changed 10-K

Item 8. Financial Statements and Supplementary Data