What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-07 · 162 added, 291 removed, 325 unchanged (58% of the section changed)

3 unchanged sentences

(In millions, except par value)

September 28, 2024 December 30, 2023

March 29, 2025 December 28, 2024

Current assets:

4 unchanged sentences

Prepaid expenses 152 146

Assets held for sale — 8

Other current assets 22 11

4 unchanged sentences

Other assets 469 429

Noncurrent assets held for sale — 33

Total assets $ 13,651 $ 13,436

5 unchanged sentences

Current portion of long-term debt 116 109

Liabilities held for sale — 8

Total current liabilities 3,492 3,296

2 unchanged sentences

Other long-term liabilities 507 447

Noncurrent liabilities held for sale — 11

Total liabilities 9,035 8,908

2 unchanged sentences

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

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

255.8 issued and 231.3 outstanding as of March 29, 2025, and 254.7 issued and 230.5 outstanding as of December 28, 2024

Additional paid-in capital 3,744 3,748

Retained earnings 2,118 2,003

Accumulated other comprehensive loss ( 111 ) ( 115 )

Accumulated other comprehensive income 43 43

Treasury Stock, 24.5 and 24.2 shares, respectively

6 unchanged sentences

(In millions, except per share data)

13 Weeks Ended 39 Weeks Ended

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

13 Weeks Ended

March 29, 2025 March 30, 2024

Net sales $ 9,351 $ 8,949

6 unchanged sentences

Operating income 224 165

Other expense (income)—net 3 ( 1 ) 5 ( 4 )

Other income—net ( 1 ) ( 1 )

Interest expense—net 77 79

Loss on extinguishment of debt — 21 — 21

Income before income taxes 148 87

3 unchanged sentences

Changes in retirement benefit obligations — 2

Unrecognized gain on interest rate caps — — — 1

Comprehensive income $ 115 $ 84

Net income $ 115 $ 82

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

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

Net income per share

5 unchanged sentences

Basic (Note 10)

241 247 244 237

Diluted (Note 10)

244 249 247 251

See Notes to Consolidated Financial Statements (Unaudited).

4 unchanged sentences

Capital Retained

Earnings Treasury Stock Accumulated Other Comprehensive Loss Total

Earnings Treasury Stock Accumulated Other Comprehensive Income

Shareholders’

10 unchanged sentences

BALANCE—March 29, 2025 255.8 $ 3 $ 3,744 $ 2,118 24.5 $ ( 1,292 ) $ 43 $ 4,616

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

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

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

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

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

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

Net income — — — 198 — — — 198

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

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

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

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

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

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

Net income — — — 148 — — — 148

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

See Notes to Consolidated Financial Statements (Unaudited).

US FOODS HOLDING CORP.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)

(In millions)

Common Stock Additional

9 unchanged sentences

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

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

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

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

1 unchanged sentence

Net income — — — 82 — — — 82

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

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

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

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

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

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

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

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

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

Net income — — — 182 — — — 182

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

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

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

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

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

Net income — — — 95 — — — 95

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

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

See Notes to Consolidated Financial Statements (Unaudited).

3 unchanged sentences

13 Weeks Ended

September 28, 2024 September 30, 2023

March 29, 2025 March 30, 2024

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization 112 105

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

Loss on extinguishment of debt — 21

Amortization of deferred financing costs 8 14

Deferred tax (benefit) provision ( 33 ) 5

Deferred tax provision 8 5

Share-based compensation expense 22 15

Provision for doubtful accounts 9 7

Other non-cash activities 3 3

Changes in operating assets and liabilities:

Increase in receivables ( 174 ) ( 173 )

(Increase) decrease in inventories ( 6 ) 45

Decrease in prepaid expenses and other assets 52 ( 14 )

Decrease (increase) in inventories 120 ( 20 )

Increase in prepaid expenses and other assets ( 13 ) ( 1 )

Increase in accounts payable and cash overdraft liability 190 221

Increase in accrued expenses and other liabilities 15 14

Decrease in accrued expenses and other liabilities ( 1 ) ( 105 )

Net cash provided by operating activities 391 139

1 unchanged sentence

Proceeds from sales of property and equipment 1 1

Proceeds from divestitures 38 —

Purchases of property and equipment ( 84 ) ( 87 )

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

Cash paid for acquisitions ( 85 ) —

Net cash used in investing activities ( 130 ) ( 86 )

1 unchanged sentence

Principal payments on debt and financing leases ( 1,907 ) ( 457 )

Repurchase of Senior Note Debt — ( 1,000 )

Issuance of new Senior Note Debt — 1,000

Principal payments on debt repricing — ( 14 )

1 unchanged sentence

Proceeds from debt borrowings 1,737 426

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

Repurchase of common stock ( 23 ) ( 13 )

2 unchanged sentences

Proceeds from exercise of stock options 1 5

Purchase of interest rate caps — ( 3 )

Tax withholding payments for net share-settled equity awards ( 33 ) ( 20 )

Net cash used in financing activities ( 219 ) ( 55 )

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

Net increase (decrease) in cash, cash equivalents and restricted cash 42 ( 2 )

Cash, cash equivalents and restricted cash—beginning of period 59 269

1 unchanged sentence

Supplemental disclosures of cash flow information:

Conversion of Series A Convertible Preferred Stock $ — $ 534

Interest paid—net of amounts capitalized 92 93

27 unchanged sentences

Recently Issued 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 plans to adopt the provisions of ASU No.

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

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

2 unchanged sentences

The Company plans to adopt the provisions of ASU No.

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

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

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

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

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

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 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

5 unchanged sentences

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

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

Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $ 2.1 billion and $ 1.9 billion as of September 28, 2024 and December 30, 2023, respectively.

The Company did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of March 29, 2025 or December 28, 2024.

Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $ 2.1 billion and $ 2.0 billion as of March 29, 2025 and December 28, 2024, respectively.

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

1 unchanged sentence

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

The Company’s contract assets for these upfront payments were $ 42 million and $ 35 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of September 28, 2024 and December 30, 2023, respectively, and $ 48 million and $ 39 million included in other assets in the Company’s Consolidated Balance Sheets as of September 28, 2024 and December 30, 2023, respectively.

The Company’s contract assets for these upfront payments were $ 52 million and $ 43 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of March 29, 2025 and December 28, 2024, respectively, and $ 52 million and $ 50 million included in other assets in the Company’s Consolidated Balance Sheets as of March 29, 2025 and December 28, 2024, respectively.

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

13 Weeks Ended 39 Weeks Ended

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

13 Weeks Ended

March 29, 2025 March 30, 2024

Meats and seafood $ 3,207 $ 2,976

6 unchanged sentences

Total net sales $ 9,351 $ 8,949

BUSINESS ACQUISITIONS

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

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

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

ACQUISITIONS AND DIVESTITURES

Jake’s Finer Foods Acquisition —On January 10, 2025 , the Company acquired Jake’s Finer Foods, a broadline distributor in Texas, for a purchase price of $ 92 million subject to holdbacks and adjustments (less the amount of cash received).

The acquisition was funded with cash on hand and allows US Foods to further expand its reach into key markets in south Texas.

The Jake’s Finer Foods acquisition, reflected in the Company’s consolidated financial statements commencing from the date of acquisition, did not materially affect the Company’s results of operations or financial position.

The Company is in the process of finalizing working capital adjustments for this acquisition.

The Company recorded goodwill of $ 4 million and intangible assets of $ 5 million for this acquisition.

The intangible assets included $ 78 million related to customer relationships and $ 4 million related to noncompete agreements, which will be amortized on a straight-line basis over an estimated useful life of 15 and 5 years, respectively.

The goodwill recognized from the IWC Food Service acquisition is deductible for tax purposes.

IWC Food Service is integrated into the Company’s foodservice distribution network.

The goodwill recognized from the Jake’s Finer Foods acquisition is not deductible for tax purposes.

Jake’s Finer Foods is integrated into the Company’s foodservice distribution network.

Freshway Divestiture —During the fiscal quarter ended March 29, 2025, the Company completed the sale of the Freshway business for net proceeds of approximately $ 38 million.

The Freshway business processes, repacks, and distributes fresh fruit and vegetables in the eastern half of the U.S.

The Company recognized an immaterial loss included within distribution, selling and administrative costs in the Company’s Consolidated Statements of Comprehensive Income.

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

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

4 unchanged sentences

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

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

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

ALLOWANCE FOR DOUBTFUL ACCOUNTS

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

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

September 28, 2024 September 30, 2023

Balance as of beginning of year $ 18 $ 30

Charged to costs and expenses, net 21 20

Customer accounts written off—net of recoveries ( 19 ) ( 31 )

Balance as of end of period $ 20 $ 19

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

LIFO reserves in the Company’s Consolidated Balance Sheets were $ 554 million and $ 549 million as of March 29, 2025 and December 28, 2024, respectively.

As a result of changes in LIFO reserves, cost of goods increased $ 5 million and $ 45 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

PROPERTY AND EQUIPMENT

2 unchanged sentences

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

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

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

As of March 29, 2025 and December 28, 2024, property and equipment-net included accumulated depreciation of $ 3,345 million and $ 3,303 million, respectively.

Depreciation expense was $ 98 million and $ 93 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

GOODWILL AND OTHER INTANGIBLES

3 unchanged sentences

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

Customer relationships, noncompete agreements and

amortizable trade names are amortized over their estimated useful lives (which range from approximately 3 to 15 years).

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

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

Amortization expense was $ 14 million and $ 12 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

Goodwill and other intangibles—net consisted of the following:

September 28, 2024 December 30,

March 29, 2025 December 28, 2024

Goodwill $ 5,768 $ 5,781

Reclassification to assets held for sale (1)

Total Goodwill

Other intangibles—net

13 unchanged sentences

Total other intangibles—net $ 828 $ 836

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

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

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

Relates to the reclassification of goodwill allocated to the Freshway divestiture in 2024.

Refer to Note 4 Acquisitions and Divestitures for additional information.

The change in goodwill is attributable to the Freshway divestiture, offset by the Jake’s Finer Foods acquisition in the first quarter.

The increase in the gross carrying amount of customer relationships and noncompete agreements is attributable to the Jake’s Finer Foods acquisition.

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

1 unchanged sentence

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

No impairments were recognized for the 39 weeks ended September 28, 2024 and September 30, 2023.

No impairments were recognized for the 13 weeks ended March 29, 2025 and March 30, 2024.

FAIR VALUE MEASUREMENTS

7 unchanged sentences

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

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

September 28, 2024

Level 1 Level 2 Level 3 Total

Money market funds $ 15 $ — $ — $ 15

Interest rate caps — — — —

December 30, 2023

Level 1 Level 2 Level 3 Total

Money market funds $ 208 $ — $ — $ 208

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 for the periods presented above, except as further disclosed in Note 7, Goodwill and Other Intangibles.

3 unchanged sentences

These funds are valued using quoted market prices in active markets and are classified under Level 1 within the fair value hierarchy.

As of March 29, 2025 and December 28, 2024, the fair value of the Company’s Level 1 assets was $ 36 million and zero , respectively.

Derivative Financial Instruments

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

In April 2023, the Company entered into two , two-year rate cap agreements, which will mature on April 30, 2025, with a total notional amount of $ 450 million, which effectively cap the interest rate on approximately 25 % of the current principal amount of the Term Loan Facilities.

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

In April 2023, the Company entered into two , two-year rate cap agreements, which matured on April 30, 2025, with a total notional amount of $ 450 million, which effectively capped the interest rate on approximately 34 % of the current principal amount of the Term Loan Facilities.

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

The Company’s derivative financial instruments are classified as Level 2 assets.

As of March 29, 2025 and December 28, 2024, the fair value of the Company’s Level 2 assets recorded within other current assets was zero for both periods.

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.

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

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

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

The following table presents the effect of the Company’s interest rate caps in the Consolidated Statement of Comprehensive Income for the 13 weeks and 39 weeks ended September 28, 2024:

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

For the 13 weeks ended September 28, 2024

Interest rate caps $ — Interest expense ─ net $ —

For the 39 weeks ended September 28, 2024

Interest rate caps $ — Interest expense ─ net $ —

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

The effective portion of gains and losses on the interest rate caps are initially recorded in other comprehensive loss, net of tax and reclassified from accumulated other comprehensive income (loss), net of tax to interest expense within the Company’s Consolidated Statement of Comprehensive Income during the period in which the hedged transaction affects income.

There was no ineffectiveness attributable to the Company’s interest rate caps during the 13 weeks ended March 29, 2025.

On April 10, 2025, the Company entered into a one-year interest rate cap agreement, which will mature on April 30, 2026, with a total notional amount of $ 450 million, which effectively caps the interest rate on approximately 34 % of the current principal amount of the Term Loan Facilities.

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

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

Other Fair Value Measurements

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

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

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

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

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

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

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

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

The fair value of the Company’s total debt approximated $ 4.8 billion as of both March 29, 2025 and December 28, 2024, as compared to its carrying value of $ 4.8 billion and $ 4.9 billion as of March 29, 2025 and December 28, 2024, respectively.

The fair value of the Company’s senior notes is based upon their quoted market prices on the respective dates and are classified under Level 2 of the fair value hierarchy.

The fair value of all of the Company’s individual senior note issuances approximates carrying value.

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

Total debt consisted of the following:

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

Debt Description Maturity Interest Rate as of March 29, 2025 Carrying Value as of March 29, 2025 Carrying Value as of December 28, 2024

ABL Facility December 7, 2027 5.67 % $ 75 $ 223

2021 Incremental Term Loan Facility (net of $ 1 and $ 0 of unamortized deferred financing costs, respectively)

September 13, 2026 7.36 % 1,101 1,105

2021 Incremental Term Loan Facility (net of $ 2 and $ 3 of unamortized deferred financing costs, respectively)

November 22, 2028 6.07 % 609 610

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

October 3, 2031 6.07 % 717 717

Senior Notes due 2028 (net of $ 3 and $ 4 of unamortized deferred financing costs, respectively)

6 unchanged sentences

January 15, 2032 7.25 % 496 496

Senior Notes due 2033 (net of $ 3 and $ 4 of unamortized deferred financing costs, respectively)

April 15, 2033 5.75 % 497 496

Obligations under financing leases 2025–2037 1.26 %- 8.31 %

4 unchanged sentences

Long-term debt $ 4,689 $ 4,819

As of September 28, 2024, after considering interest rate caps that fixed the variable component of the interest rate on a total notional amount of $ 450 million of the current principal amount of the Term Loan Facilities described below, approximately 31 % of the Company’s total debt bore interest at a floating rate.

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

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

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

The margin under the ABL Facility as of September 28, 2024 was 0.00 % for ABR loans and 1.00 % for Term SOFR loans.

Borrowings under the ABL Facility bear interest at a rate per annum equal to, at the Company’s periodic election, Term Secured Overnight Financing Rate (“Term SOFR”) or Adjusted Borrowing Rate (“ABR”), as described in the ABL facility, plus the following margin and credit spread adjustment:

Borrowing Election

Margin based on USF’s excess availability under the ABL Facility

Credit Spread Adjustment

Margin at March 29, 2025

0.00 % to 0.50 %

1.00 % to 1.50 %

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

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

The Company had outstanding borrowings totaling $ 75 million, and had outstanding letters of credit totaling $ 567 million, under the ABL Facility as of March 29, 2025.

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

There was available capacity of $ 1,647 million under the ABL Facility as of September 28, 2024.

There was available capacity of $ 1,658 million under the ABL Facility as of March 29, 2025.

Subsequent to the fiscal quarter ended March 29, 2025, outstanding letters of credit were reduced by approximately $ 118 million after additional surety bonds were issued in the first quarter of 2025 to secure the Company’s obligations with respect to its insurance program.

Term Loan Facilities

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

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

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

2019 Incremental Term Loan Facility

The 2019 Incremental Term Loan Facility had an outstanding balance of $ 1,101 million, net of $ 8 million of unamortized deferred financing costs as of September 28, 2024.

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

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

2021 Incremental Term Loan Facility

The 2021 Incremental Term Loan Facility had an outstanding balance of $ 719 million, net of $ 2 million of unamortized deferred financing costs as of September 28, 2024.

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

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

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.

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

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

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

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.

The 2021 Incremental Term Loan Facility had an outstanding balance of $ 609 million, net of $ 1 million of unamortized deferred financing costs as of March 29, 2025.

The 2024 Incremental Term Loan Facility had an outstanding balance of $ 717 million, net of $ 8 million of unamortized deferred financing costs as of March 29, 2025.

Borrowings under the Term Loan Credit Agreement bear interest at a rate per annum equal to, at the Company’s periodic election, Term SOFR or ABR, as described in the Term Loan Credit Agreement, plus the following margin:

Borrowing Election

1.75 % 0.00 %

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

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

The Term Loan Credit Agreement may require mandatory repayments if certain assets are sold.

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.

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Unamortized deferred financing costs of $ 3 million as of February 27, 2024 were carried forward and will be amortized through November 22, 2028, the maturity date of the term loan facility.

Senior Notes due 2028

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

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

Senior Notes due 2029

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

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

Senior Notes due 2030

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

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

Senior Notes due 2032

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

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

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 $ 500 million aggregate principal amount of its 5.75 % Unsecured Senior Notes due 2033 (the “Unsecured Senior Notes due 2033”).

Proceeds from the incremental term loans and senior notes, along with cash on hand, were used to repay all of the then outstanding borrowings under the incremental senior secured term loan facility borrowed in September 2019 (the “2019 Incremental Term Loan Facility”).

The 2021 Incremental Term Loan Facility amendment reduced the interest rate margins under the term loan facility to 1.75 % for Term SOFR borrowings and 0.75 % for ABR borrowings.

The Unsecured Senior Notes due 2033 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.

In connection with the repayment of the 2019 Incremental Term Loan Facility during the fourth quarter of fiscal year 2024, 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.

Each of the Company’s outstanding senior notes are redeemable, at USF’s option, in whole or in part, at a price multiplied by the remaining principal, plus accrued and unpaid interest, if any, to but not including the applicable redemption date.

The senior 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.

As of March 29, 2025, the Term Loan Facility, ABL Facility and certain variable rate finance leases, which were approximately 30 % of the Company’s total debt, bore interest at a floating rate.

Debt Covenants

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

The Company had approximately $ 2.3 billion of restricted payment capacity under these covenants, and approximately $ 2.3 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of September 28, 2024.

RESTRUCTURING LIABILITIES

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

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

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

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

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

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

Restructuring Liabilities

Balance as of Balance at December 30, 2023 $ 7

Current period costs 13

Payments, net ( 5 )

Balance at March 30, 2024 15

Current period activity ( 1 )

Payments, net ( 2 )

Balance at June 29, 2024 12

Current period activity 9

Payments, net ( 12 )

Balance at September 28, 2024 $ 9

RETIREMENT PLANS

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

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

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

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

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

See Note 19, Subsequent Events for additional information.

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

13 Weeks Ended 39 Weeks Ended

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

Components of net periodic pension benefit costs (credits):

Service cost $ — $ — $ 1 $ 1

Interest cost 5 10 15 29

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

Amortization of net loss 1 1 4 3

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

Other postretirement benefit costs were de minimis for both the 13 weeks and 39 weeks ended September 28, 2024 and September 30, 2023.

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

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

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

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

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

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

The Company had approximately $ 2.5 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 March 29, 2025.

STOCKHOLDERS’ EQUITY

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

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

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

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

For both the 39 weeks ended September 28, 2024 and September 30, 2023, share-based awards representing less than 1 million underlying common shares were not included in the computation because the effect would have been anti-dilutive.

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

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

For both, the 13 weeks ended March 29, 2025 and March 30, 2024, share-based awards representing 1 million underlying common shares were not included in the computation because the effect would have been anti-dilutive.

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

13 Weeks Ended 39 Weeks Ended

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

13 Weeks Ended

March 29, 2025 March 30, 2024

Net income $ 115 $ 82

Series A Preferred Stock Dividends — — — ( 7 )

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

Weighted-average common shares outstanding—basic 231 245

Effect of dilutive share-based awards 3 3

Effect of dilutive underlying shares of the Series A Preferred Stock (1)

Weighted-average common shares outstanding—diluted 234 248

2 unchanged sentences

$ 0.49 $ 0.33

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

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

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

Share Repurchase Programs

1 unchanged sentence

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

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

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

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

As of March 29, 2025, there was approximately $ 52 million in remaining funds authorized under the Amended Share Repurchase Program.

For the 13 weeks ended March 29, 2025, the Company repurchased 328,000 shares at an aggregate purchase price of approximately $ 23 million under the Amended Share Repurchase Program inclusive of fees, commissions, and the related 1% excise tax.

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.

2 unchanged sentences

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

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS

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

13 Weeks Ended 39 Weeks Ended

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

Accumulated other comprehensive loss components

On May 7, 2025, the Board authorized a new share repurchase program of up to $ 1 billion.

RETIREMENT PLANS

The Company sponsors various retirement plans for eligible employees, and provides certain postretirement health and welfare benefits to eligible retirees and their dependents.

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

The Company made employer matching contributions to the 401(k) plan of $ 22 million and $ 21 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

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

The Company’s contributions to these plans were $ 16 million and $ 15 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

During the fourth quarter of fiscal year 2024, the Company terminated the majority of its defined benefit plan (“Terminating Plan”).

After the Terminating Plan was settled, the net funded status of the remainder of the defined benefit plan (“Ongoing Plan”) was recorded within other long term assets and other long term liabilities as of December 28, 2024.

The Company does not expect to make any material contributions to its defined benefit pension plan in fiscal year 2025.

CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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

13 Weeks Ended

March 29, 2025 March 30, 2024

Accumulated other comprehensive income (loss) components

Retirement benefit obligations:

3 unchanged sentences

Amortization of net loss (2) (3)

Total before income tax

Income tax provision

Current period comprehensive income, net of tax

Balance as of end of period (1)

2 unchanged sentences

Balance at beginning of period (1)

$ 1 $ 1 $ 1 $ —

Change in fair value of interest rate caps — —

Total before income tax — 1 — 1

Income tax provision — — — —

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

Balance at end of period (1)

$ 1 $ 1 $ 1 $ 1

Accumulated other comprehensive loss at end of period (1)

Accumulated other comprehensive income (loss) at end of period (1)

$ 43 $ ( 113 )

1 unchanged sentence

(2) Included in the computation of net periodic benefit costs.

See Note 12, Retirement Plans, for additional information.

(3) Included in other income—net in the Company’s Consolidated Statements of Comprehensive Income.

RELATED PARTY TRANSACTIONS

As of both September 28, 2024 and December 30, 2023, as reported by the administrative agent of the 2019 and 2021 Incremental Term Loan Facilities, investment funds managed by an affiliate of FMR LLC held approximately $ 2 million in aggregate principal amount of the 2021 Incremental Term Loan Facility.

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

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

(3) Included in other income—net in the Company’s Consolidated Statements of Comprehensive Income (Loss).

Included in the retirement benefit obligations balance as of March 29, 2025 is $ 45 million of tax effects, $ 44 million of which represents tax effects on items within accumulated other comprehensive income (loss) related to the Tax Cuts and Jobs Act of 2017 and the presence of a valuation allowance in certain historical periods.

The Company expects the tax effects to remain in accumulated other comprehensive income (loss) until the Retirement Plan ceases to exist.

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

1 unchanged sentence

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

The Company estimated its annual effective income tax rate for the full fiscal year and applied the annual effective income tax rate to the results of the 39 weeks ended September 28, 2024 and September 30, 2023, and then recognized the impact of discrete tax items for purposes of determining its year-to-date tax provision.

For the 13 weeks ended September 28, 2024, the Company’s effective income tax rate of 26 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

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

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

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

For the 39 weeks ended September 28, 2024, the Company’s effective income tax rate of 23 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax benefit of $ 17 million, primarily related to a decrease in an unrecognized tax benefit as a result of the expiration of the statute of limitations in several jurisdictions, a tax benefit of $ 8 million, primarily related to excess tax benefits associated with share-based compensation and a tax expense of $ 3 million, primarily related to adjustments to prior year tax provision estimates.

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

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

The Company estimated its annual effective income tax rate for the full fiscal year and applied the annual effective income tax rate to the results of the 13 weeks ended March 29, 2025 and March 30, 2024, and then recognized the impact of discrete tax items for purposes of determining its year-to-date tax provision.

For the 13 weeks ended March 29, 2025, the Company’s effective income tax rate of 22 % differed from the 21 % federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items.

These discrete tax items included a tax benefit of $ 6 million, primarily related to excess tax benefits associated with share-based compensation.

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

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

COMMITMENTS AND CONTINGENCIES

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

The Company had $ 1,160 million of purchase orders and purchase contract commitments as of September 28, 2024 to be purchased in the remainder of fiscal year 2024 and continuing through fiscal year 2029 and $ 93 million of information technology commitments through 2028 that are not recorded in the Company’s Consolidated Balance Sheets.

The Company had $ 726 million of purchase orders and purchase contract commitments as of March 29, 2025 to be purchased in the remainder of fiscal year 2025 and continuing through fiscal year 2029 and $ 196 million of information technology commitments through 2028 that are not recorded in the Company’s Consolidated Balance Sheets.

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

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

Minimum amounts committed to as of March 29, 2025 totaled approximately $ 0.8 billion.

Minimum amounts committed to by year are as follows:

(In millions)

2027 and thereafter

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

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

Additionally, the Company had electricity forward purchase commitments totaling $ 4 million through July 2026, as of September 28, 2024.

The Company had diesel fuel forward purchase commitments totaling $ 29 million through December 2025 as of March 29, 2025.

Additionally, the Company had electricity forward purchase commitments totaling $ 2 million through July 2026, as of March 29, 2025.

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

4 unchanged sentences

However, the Company, at present, believes that the ultimate outcome of these proceedings will not have a material adverse effect on its consolidated financial position, results of operations or cash flows.

Surety Bonds —As of March 29, 2025, the Company had approximately $ 176 million of surety bonds that were not recorded on the Consolidated Balance Sheets.

The surety bonds are primarily used as security against certain insurance program contractual commitments in the normal course of business.

BUSINESS INFORMATION

The Company’s consolidated results represent the results of its one business segment based on how the Company’s chief operating decision maker, our Chief Executive Officer, views the business for purposes of evaluating performance and making operating decisions.

Single Operating Segment Reporting

The Company operates as one operating segment.

The Company markets, sells, and distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the U.S.

The Company uses a centralized management structure, and its strategies and initiatives are implemented and executed consistently across the organization to maximize value to the organization as a whole.

The Company uses a centralized management structure, and its strategies and initiatives are implemented and executed consistently across the organization.

The Company uses shared resources for sales, procurement, and general and administrative activities across each of its distribution facilities and operations.

2 unchanged sentences

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

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

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

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

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

SUBSEQUENT EVENTS

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

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

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

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

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

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

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

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

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

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

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

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

The Company’s consolidated results represent the results of its one operating segment based on how the Company’s chief operating decision maker (the “CODM”), the Chief Executive Officer (the “CEO”), views the business for purposes of evaluating performance and making operating decisions.

The CODM utilizes the U.S.

GAAP measurement of consolidated net income to assess financial performance and allocate resources.

This financial metric is used by the CODM to make key operating decisions, such as allocation of budget between net sales, cost of goods sold, distribution costs and selling and administrative costs.

The measure of segment assets is reported on the Company’s Consolidated Balance Sheets as total consolidated assets.

In addition, the measure of capital expenditures, depreciation and amortization is reported on the Company’s Consolidated Statements of Cash Flows.

The following table presents selected financial information with respect to the Company’s single operating segment for the 13 weeks ended March 29, 2025 and March 30, 2024:

13 Weeks Ended

March 29, 2025 March 30, 2024

Net sales $ 9,351 $ 8,949

Cost of goods sold 7,737 7,454

Distribution costs 643 634

Selling and administrative costs 742 683

Restructuring activity and asset impairment charges 5 13

Other income—net ( 1 ) ( 1 )

Interest expense—net 77 79

Income tax provision 33 5

Net income $ 115 $ 82

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements