Henry Schein (HSIC) 10-K risk factor changes: FY2018 vs FY2016

The health care products distribution industry is highly competitive and [removed: consolidating] [added: consolidating,] and we may not be able to compete successfully.

Manufacturers also could increase their efforts to sell directly to end-users and thereby eliminate or reduce our role and [removed: that] [added: the roles] of other distributors.

Industry consolidation among health care product distributors, price competition, the unavailability of products, whether due to our inability to gain access to products or to interruptions in supply from manufacturers, or the emergence of new [removed: competitors] [added: competitors,] also could increase competition.

In the event that any of our third-party suppliers were to become unable or unwilling to continue to provide the products in [added: our] required volumes, we would need to identify and obtain acceptable replacement sources on a timely basis.

Bergman, Chairman and Chief Executive [removed: Officer, among others.][added: Officer.]

| • | | exclusivity requirements with certain [removed: suppliers] [added: suppliers, which] may prohibit us from distributing competitive products manufactured by other suppliers; |

| • | | product demand and [removed: availability] [added: availability,] or [added: product] recalls by manufacturers; |

| • | | the adoption or repeal of legislation; [removed: and] |

| • | | changes in accounting [removed: principles.] [added: principles; and] |

This may threaten our ability to compete effectively, which [removed: would] [added: could] in turn negatively impact our financial results.

Although we are seeking to obtain similar terms from [removed: manufacturers,] [added: manufacturers to] obtain access to lower prices demanded by GPO contracts or other contracts, and [added: to] develop relationships with provider networks and new GPOs, we cannot assure that such terms will be obtained or contracts will be executed.

#### Shipping is a significant expense in the operation of our business. We ship almost all of our orders through third-party delivery services, and typically bear the cost of shipment. Accordingly, any significant increase in shipping rates could have a material adverse effect on our [added: business, financial condition or] operating results. Similarly, strikes or other service interruptions by those shippers could cause our operating expenses to rise and materially adversely affect our ability to deliver products on a timely basis.

| • | | the United Kingdom’s vote to leave the European Union (generally referred to as Brexit) and any other similar referenda or actions by other European Union member countries (during [removed: 2016,] [added: 2017,] approximately 7% of our consolidated net sales were invoiced to customers in the [removed: U.K.] [added: United Kingdom] and approximately [removed: 26%] [added: 25%] of our consolidated net sales were invoiced to customers in Europe overall, including the U.K.); |

| • | | changes in laws and policies governing health [removed: care, including, without limitation possible repeal of the United States Health Care Reform Law;] [added: care;] |

| • | | changes in regulatory and tax regulations; [added: including without limitation, the Tax Cuts and Reform Act;] |

| • | | the threat or outbreak of [added: war,] terrorism or public unrest; and |

| • | | changes in laws and policies governing manufacturing, development and investment in territories and countries where we do [removed: business] [added: business.] |

If customers’ cash flow or operating and financial performance [removed: deteriorates,] [added: deteriorate,] or if they are unable to make scheduled payments or obtain credit, they may not be able to pay, or may delay payment to us.

A variety of factors may have a significant impact on the market price of our common stock, [removed: including:][added: including, but not limited to:]

Both our profitability and the profitability of our customers may be materially adversely affected by laws and regulations reducing reimbursement rates for pharmaceuticals and/or medical treatments or services, [removed: changing] [added: changes to] the methodology by which reimbursement levels are determined and, in the case of animal health practitioners, changes in the use of feed additives (including, without limitation, antibiotics and growth promotants) used in the production of animal products due to trade restrictions, animal welfare and/or government regulations; and changes in customer buying habits (including customers purchasing animal health pharmaceuticals outside the veterinarians’ offices).

The [removed: United States Patient Protection and Affordable Care Act as amended by the] Health Care [removed: and Education Reconciliation Act, each enacted in March 2010, generally known as the Health Care] Reform [removed: Law,] [added: Law] significantly expand health insurance coverage to uninsured Americans and changes the way health care is financed by both governmental and private payers.

However, with respect to the medical device excise tax, a two-year moratorium was imposed under the Consolidated Appropriations Act, 2016, suspending the imposition of the tax on device sales during the period beginning January 1, 2016 and ending on December 31, [removed: 2017.][added: 2017, and on January 22, 2018 an additional two-year moratorium was imposed under Public Law No. 115-120, suspending the imposition of the tax on device sales during the period beginning January 1, 2018 and ending on December 31, 2019.]

[removed: The Health Care] Reform Law has faced ongoing legal challenges, including litigation seeking to invalidate some of or all of the law or the manner in which it has been implemented.

In addition, the President [removed: and the majorities in both houses of Congress have stated their intention] [added: is seeking] to repeal [added: and replace] the Health Care Reform Law.

Another notable Medicare health care reform initiative, the [removed: MACRA,] [added: Medicare Access and CHIP Reauthorization Act of 2015,] enacted on April 16, [removed: 2015,] [added: 2015 (“MACRA”),] establishes a new payment framework, called the Quality Payment Program, which modifies certain Medicare payments to “eligible clinicians,” including physicians, dentists and other practitioners.

MIPS generally will consolidate three current [removed: programs;] [added: programs:] the physician quality reporting system, the value-based payment modifier, and the Medicare EHR program into a single program in which Medicare reimbursement to eligible clinicians will include both positive and negative payment adjustments that take into account quality, resource use, clinical practice improvement and meaningful use of certified EHR technology.

[removed: The] [added: A] final rule was published in the Federal Register on November 4, 2016 and [removed: announced some flexibilities that will allow] [added: allows] eligible Medicare clinicians to pick their pace of participation for the first performance period that began January 1, 2017.

A Health Care Reform Law provision, generally referred to as the Physician Payment Sunshine [removed: Act] [added: Act,] or Open Payments Program, imposes reporting and disclosure requirements for drug and device manufacturers with regard to payments or other transfers of value made to certain practitioners (including physicians, dentists and teaching hospitals), and for such manufacturers and for group purchasing organizations, with regard to certain ownership interests held by physicians in the reporting entity.

Our business is subject to requirements under various local, state, federal and international laws and regulations [added: applicable to the distribution of pharmaceuticals and medical devices, and human cells, tissue and cellular and tissue-based products, also known as HCT/P products, and animal feed and supplements.]

There can be no assurance that current [added: and future] government regulations will not adversely affect our business.

While we believe that we are substantially compliant with applicable fraud and abuse and other laws and regulations, and believe we have adequate compliance programs and controls in place to ensure substantial compliance, if it is determined that we have not complied with these laws, we are potentially subject to penalties including warning letters, civil and criminal penalties, mandatory recall of product, seizure of product and injunction, consent [removed: decrees,] [added: decrees] and suspension or limitation of product sale and distribution.

Also, violations of the federal False Claims Act can result in treble damages, and, in accordance with [removed: an interim] [added: a] final rule published by the Department of Justice on [removed: June 30, 2016,] [added: February 3, 2017,] which substantially increased [added: the] maximum [added: and minimum] civil penalties for False Claims Act violations, the amounts for civil penalties assessed after [removed: August 1, 2016,] [added: February 3, 2017,] whose associated violations occurred after November 2, 2015, were increased from [removed: $11,000 per claim for pre-November 2, 2011 violations to up] [added: a minimum per-claim penalty of $10,781] to [added: $10,957, and from a maximum per-claim penalty of] $21,563 [removed: per claim.][added: to $21,916.]

We also are subject to certain United States and foreign laws and regulations concerning the conduct of our foreign operations, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act, the German Anti-Corruption Law and other anti-bribery laws, anti-corruption [removed: laws,] [added: laws] and laws pertaining to the accuracy of our internal books and records, which have been the focus of increasing enforcement activity globally in recent years.

On November 14, 2016, CMS published a final rule that will impact Medicare and Medicaid EHR incentive programs [removed: through revisions to the objectives and measures for eligible hospitals, critical access hospitals, and dual-eligible]

[removed: In many cases in which we have been sued in] connection with products manufactured by others, the manufacturer of the product provides us with indemnification.

[added: Perceived or actual security vulnerabilities in our] products [added: or services, or the perceived or actual failure by us or our customers who use our products] to comply with applicable legal requirements, may not only cause us significant reputational harm, but may also lead to claims against us by our customers and/or governmental agencies and involve fines and penalties, costs for remediation, and substantial defense and settlement expenses.

[added: These incentive plans also authorize the committee] under the plans to provide for accelerated vesting of other types of equity awards in connection with a change in control at grant or thereafter, and certain other awards made under these incentive plans (such as restricted stock/unit awards) accelerate upon a change in control or upon certain termination events in connection with a change in control.

Further, certain agreements between us and our executive officers provide for increased severance payments and certain benefits if those executive officers are terminated without cause by us or if they terminate for good [removed: reason] [added: reason,] in each [removed: case,] [added: case] within two years after a change in control or within ninety days prior to the effective date of the change in control or after the first public announcement of the pendency of the change in control.

| | | |

| • | | litigation or regulatory judgments, expenses or settlements. |

| • | | the effect of inflation on our ability to procure products and our ability to increase prices over time; |

| | | |

The Health Care

Repeal and replace legislation has been passed in the House of Representatives, but did not obtain the necessary votes in the Senate.

Subsequently, the President has affirmed his intention to repeal and replace the Health Care Reform Law and has taken a number of administrative actions to materially weaken the Health Care Law.

On December 22, 2017, the President signed the Tax Cuts and Jobs Act into law, which contains a broad range of tax reform provisions that impact the individual and corporate tax rates, international tax provisions, income tax add-back provisions and deductions.

The tax reform law also repealed the individual mandate of the Health Care Reform Law.

A final rule updating certain Quality Payment Program regulations was published on November 16, 2017, which is effective as of January 1, 2018.

The FDA has become increasingly active in addressing the regulation of computer software intended for use in health care settings, and has developed and continues to develop policies on regulating clinical decision support tools and other types of software as medical devices.

Certain of our businesses involve the development and sale of software and related products to support physician and dental practice management, and it is possible that the FDA or foreign government authorities could determine that one or more of our products is a medical device, which could subject us or one or more of our businesses to substantial additional requirements with respect to these products.

In addition, the European Parliament and the Council of the European Union have adopted the GDPR, effective from May 25, 2018, which increases privacy rights for individuals in Europe, extends the scope or responsibilities for data controllers and data processors and imposes increased requirements and potential penalties on companies offering goods or services to Data Subjects or monitoring the behavior of such individuals (including by companies based outside of Europe).

Noncompliance can result in penalties of up to the greater of EUR 20 million, or 4% of global company revenues.

Individual member states may impose additional requirements and penalties as they relate to certain things such as employee personal data.

Among other things, the GDPR requires with respect to data concerning Data Subjects, company accountability, consents from Data Subjects or other acceptable legal basis needed to process the personal data, prompt breach notifications within 72 hours, fairness and transparency in how the personal data is stored, used or otherwise processed, and data integrity and security, and provides rights to Data Subjects relating to modification, erasure and transporting of the personal data.

While we expect to have substantially compliant programs and controls in place to comply with the GDPR requirements, our compliance with the new regulation is likely to impose additional costs on us, and we cannot predict whether the interpretations of the requirements, or changes in our practices in response to new requirements or interpretations of the requirements, could have a material adverse effect on our business.

We also sell products and services that health care providers, such as physicians and dentists, use to store and manage patient medical or dental records.

These customers are subject to laws, regulations and industry standards, such as HIPAA and the Payment Card Industry Data Security Standards, which require that they protect the privacy and security of those records, and our products may be used as part of these customers’ comprehensive data security programs, including in connection with their efforts to comply with applicable privacy and security laws.

Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our products to comply with applicable legal or contractual requirements, may not only cause us significant reputational harm, but may also lead to claims against us by our customers and/or governmental agencies and involve substantial fines, penalties and other liabilities and expenses and costs for remediation.

In order to maintain certification of our EHR products, we must satisfy these changing governmental criteria.

Certain of our businesses involve the manufacture and sale of certified EHR systems and other products linked to incentive programs.

CMS and ONC establish criteria for certified EHR systems and these criteria have been subject to change.

In order to maintain certification of our EHR products, we must satisfy these changing governmental criteria.

If any of our EHR systems do not meet these standards, yet have been relied upon by health care providers to receive federal incentive payments, as noted above, we are exposed to risk under federal health care fraud and abuse laws, such as the False Claims Act.

For example, on May 31, 2017, the U.S. Department of Justice announced a $155 million settlement and 5-year corporate integrity agreement involving a vendor of certified EHR systems, based on allegations that the vendor, by misrepresenting capabilities to the certifying body, caused its health care provider customers to submit false Medicare and Medicaid claims for meaningful use payments in violation of the False Claims Act.

While we believe we are substantially in compliance with such certifications and with applicable fraud and abuse laws and regulations and we have adequate compliance programs and controls in place to ensure substantial compliance, we cannot predict whether changes in applicable law, or interpretation of laws, or changes in our practices in response to changes in applicable law or interpretation of laws, could have a material adverse effect on our business.

Moreover, in order to satisfy our customers, our products may need to incorporate increasingly complex reporting functionality.

Although we believe we are positioned to accomplish this, the effort may involve increased costs, and our failure to implement product modifications, or otherwise satisfy applicable standards, could have a material adverse effect on our business.

Moreover in order to satisfy our customers, our products may need to incorporate increasingly complex reporting functionality.

Although we believe we are positioned to accomplish this, the effort may involve increased costs, and our failure to implement product modifications, or otherwise satisfy applicable standards, could have a material adverse effect on our business.

through revisions to the objectives and measures for eligible hospitals, critical access hospitals, and dual-eligible hospitals.

The use of certified EHR technology will continue as a feature of MACRA’s MIPS programs, and in connection with this, Medicare EHR program payment adjustments to eligible professionals will sunset at the end of 2018 and MIPS payment adjustments will begin on January 1, 2019.

The first performance period for MIPS began January 1, 2017, and will afford eligible clinicians different reporting options linked to the amount of data reported and the duration of the reporting period, with positive payment adjustments generally linked to more robust reporting.

Additionally, as electronic medical devices are increasingly connected to each other and to other technology, the ability of these connected systems safely and effectively to exchange and use exchanged information becomes increasingly important.

On September 6, 2017, the FDA issued guidance to assist industry in identifying specific considerations related to the ability of electronic medical devices to safely and effectively exchange and use exchanged information.

As a medical device manufacturer, we must manage risks including those associated with an electronic interface that is incorporated into a medical device.

There may be additional legislative or regulatory initiatives in the future impacting health care.

In addition, our reputation could be adversely affected by negative publicity surrounding such events regardless of whether or not claims against us are successful.

In many cases in which we have been sued in

| --- | --- | --- |

applicable to the distribution of pharmaceuticals and medical devices, and human cells, tissue and cellular and tissue-based products, also known as HCT/P products, and animal feed and supplements.

hospitals.

In addition, under MACRA, which establishes MIPS, over the next few years the EHR program is expected to become part of a more comprehensive federal quality measurement and incentive program, apparently with modified applicable requirements, and CMS has indicated that it may even supplant certain Stage 3 rules with more streamlined MIPS approaches.

Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our

These incentive plans also authorize the committee

Risk factors and uncertainties that could cause actual results to differ materially from current and historical results include, but are not limited to: effects of a highly competitive and consolidating market; our dependence on third parties for the manufacture and supply of our products; our dependence upon sales personnel, customers, suppliers and manufacturers; our dependence on our senior management; fluctuations in quarterly earnings; risks from expansion of customer purchasing power and multi-tiered costing structures; increases in shipping costs for our products or other service issues with our third-party shippers; general global macro-economic conditions; risks associated with currency fluctuations; risks associated with political and economic uncertainty; disruptions in financial markets; volatility of the market price of our common stock; changes in the health care industry; implementation of health care laws; failure to comply with regulatory requirements and data privacy laws; risks associated with our global operations; transitional challenges associated with acquisitions and joint ventures, including the failure to achieve anticipated synergies; financial risks associated with acquisitions and joint ventures; litigation risks; [added: new or unanticipated litigation developments;] the dependence on our continued product development, technical support and successful marketing in the technology segment; [added: our dependence on third parties for certain technologically advanced components;] increased competition by third party online commerce sites; risks from disruption to our information systems; cyberattacks or other privacy or data security breaches; certain provisions in our governing documents that may discourage third-party acquisitions of us; and changes in tax legislation.

We believe that we have a strong brand identity due to our more than [removed: 84] [added: 85] years of experience distributing health care products.

We are headquartered in Melville, New York, employ more than [removed: 21,000] [added: 22,000] people (of which more than [removed: 10,500] [added: 11,400] are based outside the United States) and have operations or affiliates in [removed: 33] [added: 34] countries, including the United States, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong SAR, [removed: Iceland,] Ireland, Israel, Italy, Japan, [added: Liechtenstein,] Luxembourg, Malaysia, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, South Africa, Spain, Sweden, Switzerland, [removed: Thailand] [added: Thailand, United Arab Emirates] and the United Kingdom.

This industry, which encompasses the dental, animal health and medical markets, was estimated to produce revenues of approximately $45 billion in [removed: 2016] [added: 2017] in the global markets.

According to the U.S. Census Bureau’s International Data Base, in [removed: 2015] [added: 2017] there were more than six million Americans aged 85 years or older, the segment of the population most in need of long-term care and elder-care

The population aged 65 to 84 years is projected to increase over [removed: 65%] [added: 50%] during the same time period.

The Centers for Medicare and Medicaid Services, or CMS, published “National Health Expenditure Projections [removed: 2015-2025”] [added: 2016-2025”] indicating that total national health care spending reached approximately [removed: $3.2] [added: $3.4] trillion in [removed: 2015,] [added: 2016,] or [removed: 17.8%] [added: 18.1%] of the nation’s gross domestic product, the benchmark measure for annual production of goods and services in the United States.

Health care spending is projected to reach approximately [removed: $5.6] [added: $5.5] trillion in 2025, approximately [removed: 20.1%] [added: 19.9%] of the nation’s gross domestic product.

In addition, our businesses are generally subject to numerous other laws and regulations that could impact our financial performance, including securities, antitrust, [added: anti-bribery and anti-kickback, customer interaction transparency,] data privacy, data security and other laws and regulations.

The United States [removed: Health Care Reform Law adopted through the March 2010 enactment of the] Patient Protection and Affordable Care Act [removed: and] [added: as amended by] the Health Care and Education Reconciliation [removed: Act] [added: Act, each enacted in March 2010 (the “Health Care Reform Law”)] increased federal oversight of private health insurance plans and included a number of provisions designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage.

However, with respect to the medical device excise tax, a two-year moratorium was imposed under the Consolidated Appropriations Act, 2016, suspending the imposition of the tax on device sales during the period beginning January 1, 2016 and ending on December 31, [removed: 2017.][added: 2017, and on January 22, 2018 an additional two-year moratorium was imposed under Public Law No. 115-120, suspending the imposition of the tax on device sales during the period beginning January 1, 2018 and ending on December 31, 2019.]

In addition, the President [removed: and the majorities in both houses of Congress have stated their intention] [added: is seeking] to repeal [added: and replace] the Health Care Reform Law.

[removed: The Centers for Medicare and Medicaid Services (“CMS”)] [added: CMS] publishes information from these reports on a publicly available website, including amounts transferred and physician, dentist and teaching hospital identities.

[removed: The] [added: A] final rule was published in the Federal Register on November 4, 2016 and [removed: allow] [added: allows] eligible Medicare clinicians to pick their pace of participation for the first performance period that began January 1, 2017.

Also, violations of the federal False Claims Act can result in treble damages, and, in accordance with [removed: an interim] [added: a] final rule published by the Department of Justice on [removed: June 30, 2016,] [added: February 3, 2017,] which substantially increased [added: the] maximum [added: and minimum] civil penalties for False Claims Act violations, the amounts for civil penalties assessed after [removed: August 1, 2016,] [added: February 3, 2017,] whose associated violations occurred after November 2, 2015, were increased from [removed: $11,000 per claim for pre-November 2, 2011 violations up] [added: a minimum per-claim penalty of $10,781] to [added: $10,957, and from a maximum per-claim penalty of] $21,563 [removed: per claim.][added: to $21,916.]

[removed: We are also subject to] foreign government regulation of such products.

These customers are subject to [removed: laws] [added: laws, regulations] and [removed: regulations,] [added: industry standards,] such as [removed: HIPAA,] [added: HIPAA and the Payment Card Industry Data Security Standards,] which require that they protect the privacy and security of those records, and our products may be used as part of these customers’ comprehensive data security programs, including in connection with their efforts to comply with applicable privacy and security laws.

[removed: Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our products to comply with applicable legal or contractual requirements, may not only] cause us significant reputational harm, but may also lead to claims against us by our customers and/or governmental agencies and involve substantial fines, penalties and other liabilities and expenses and costs for remediation.

Although we believe we are positioned to accomplish this, the effort may involve increased costs, and our failure to implement product modifications, or otherwise satisfy applicable standards, could have a material adverse effect on our [removed: business.]

The following tables summarize the significant components of our operating results and cash flows for each of the three years ended December [added: 30, 2017, December] 31, [removed: 2016,] [added: 2016 and] December 26, 2015 [removed: and December 27, 2014] (in thousands):

| | | | | December [removed: 31,] [added: 30,] | | | December [removed: 26,] [added: 31,] | | | December [removed: 27,] [added: 26,] | |

| | | | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | |

| Net sales [removed: ..............................................................................................................................................................................] [added: .............................................................................................................................................................................] | | | | $ | [removed: 11,571,668] [added: 12,461,543] | | $ | [removed: 10,629,719] [added: 11,571,668] | | $ | [removed: 10,371,390] [added: 10,629,719] |

| | Restructuring costs [removed: ............................................................................................................................................................] [added: ...........................................................................................................................................................] | | | | [removed: 45,891] [added: \-] | | | [removed: 34,931] [added: 45,891] | | | [removed: \-] [added: 34,931] |

| | | Operating income .......................................................................................................................................................... | | $ | [removed: 771,574] [added: 859,369] | | $ | [removed: 733,972] [added: 771,574] | | $ | [removed: 715,142] [added: 733,972] |

| Other expense, net ................................................................................................................................................................. | | | | $ | [removed: (15,739)] [added: (36,521)] | | $ | [removed: (13,214)] [added: (15,739)] | | $ | [removed: (5,830)] [added: (13,214)] |

| Net income [removed: ..........................................................................................................................................................................] [added: ...........................................................................................................................................................................] | | | | | [removed: 556,395] [added: 459,293] | | | [removed: 523,427] [added: 556,395] | | | [removed: 505,436] [added: 523,427] |

| Net income attributable to Henry Schein, Inc. [removed: ............................................................................................................................] [added: ..............................................................................................................................] | | | | | [removed: 506,778] [added: 406,299] | | | [removed: 479,058] [added: 506,778] | | | [removed: 466,077] [added: 479,058] |

| Net cash provided by operating activities ................................................................................................................................... | | | | $ | [removed: 615,461] [added: 545,515] | | $ | [removed: 586,841] [added: 642,576] | | $ | [removed: 592,504] [added: 615,500] |

| Net cash used in investing activities [removed: ..........................................................................................................................................] [added: .........................................................................................................................................] | | | | | [removed: (316,422)] [added: (342,276)] | | | [removed: (260,031)] [added: (316,422)] | | | [removed: (516,639)] [added: (260,031)] |

The total costs associated with the actions [removed: to date] for this restructuring [removed: include] [added: included] $34.9 million pre-tax, which was recorded in fiscal [removed: 2015] [added: 2015,] and $45.9 million pre-tax, which [removed: has been] [added: was] recorded in fiscal 2016.

As of December 31, 2016 our restructuring activities are complete and we [removed: do] [added: did] not [removed: expect to] incur any additional restructuring charges in fiscal 2017.

| | Animal health [removed: ..................................................................................................................................................................................] [added: .................................................................................................................................................................................] | | | | 3,253,095 | | 28.1 | | | | 2,921,624 | | 27.5 | | | | 331,471 | | 11.3 | |

| | Medical [removed: .........................................................................................................................................................................................] [added: ........................................................................................................................................................................................] | | | | 2,337,661 | | 20.2 | | | | 2,072,915 | | 19.5 | | | | 264,746 | | 12.8 | |

| Technology and value-added services [removed: (2).......................................................................................................................................................] [added: (2) ......................................................................................................................................................] | | | | | 425,613 | | 3.7 | | | | 358,773 | | 3.4 | | | | 66,840 | | 18.6 | |

| | | Total [removed: .........................................................................................................................................................................................] [added: ........................................................................................................................................................................................] | | $ | 11,571,668 | | 100.0 | % | | $ | 10,629,719 | | 100.0 | % | | $ | 941,949 | | 8.9 | |

| (1) | | Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded [removed: and] | | | | | | | | | | | | | | | | | | |

| | | [added: and] generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. | | | | | | | | | | | | | | | | | | |

When excluding the effects of this change, internally generated revenue grew by [removed: 7.9%.][added: 6.0%.]

| Health care distribution [removed: ........................................................................................................................................................................] [added: .......................................................................................................................................................................] | | | $ | [removed: 2,953,140] [added: 2,953,136] | | 26.5 | % | | $ | [removed: 2,768,676] [added: 2,768,627] | | 27.0 | % | | $ | [removed: 184,464] [added: 184,509] | | 6.7 | % |

Repeal and replace legislation has been passed in the House of Representatives, but did not obtain the necessary votes in the Senate.

Subsequently, the President has affirmed his intention to repeal and replace the Health Care Reform Law and has taken a number of administrative actions to materially weaken the Health Care Reform Law.

On December 22, 2017, the President signed the Tax Cuts and Jobs Act into law, which contains a broad range of tax reform provisions that impact the individual and corporate tax rates, international tax provisions, income tax add-back provisions and deductions.

The tax reform law also repealed the individual mandate of the Health Care Reform Law.

A final rule updating certain Quality Payment Program regulations was published on November 16, 2017, which became effective as of January 1, 2018.

We are also subject to

In addition, the European Parliament and the Council of the European Union have adopted a new pan-European General Data Protection Regulation (“GDPR”), effective from May 25, 2018, which increases privacy rights for individuals in Europe, extends the scope of responsibilities for data controllers and data processors and imposes increased requirements and potential penalties on companies offering goods or services to individuals who are located in Europe (“Data Subjects”) or monitoring the behavior of such individuals (including by companies based outside of Europe).

Noncompliance can result in penalties of up to the greater of EUR 20 million, or 4% of global company revenues.

Individual member states may impose additional requirements and penalties as they relate to certain things such as employee personal data.

Among other things, the GDPR requires with respect to data concerning Data Subjects, company accountability, consents from Data Subjects or other acceptable legal basis needed to process the personal data, prompt breach notifications within 72 hours, fairness and transparency in how the personal data is stored, used or otherwise processed, and data integrity and security, and provides rights to Data Subjects relating to modification, erasure and transporting of the personal data.

While we expect to have substantially compliant programs and controls in place to comply with the GDPR requirements, our compliance with the new regulation is likely to impose additional costs on us, and we cannot predict whether the interpretations of the requirements, or changes in our practices in response to new requirements or interpretations of the requirements, could have a material adverse effect on our business.

Perceived or actual security vulnerabilities in our products or services, or the perceived or actual failure by us or our customers who use our products to comply with applicable legal or contractual requirements, may not only

Certain of our businesses involve the manufacture and sale of certified EHR systems and other products linked to incentive programs.

CMS and ONC establish criteria for certified EHR systems, and these criteria have been subject to change.

In order to maintain certification of our EHR products, we must satisfy these changing governmental criteria.

If any of our EHR systems do not meet these standards, yet have been relied upon by health care providers to receive federal incentive payments, as noted above, we are exposed to risk under federal health care fraud and abuse laws, such as the False Claims Act.

For example, on May 31, 2017, the U.S. Department of Justice announced a $155 million settlement and 5-year corporate integrity agreement involving a vendor of certified EHR systems, based on allegations that the vendor, by misrepresenting capabilities to the certifying body, caused its health care provider customers to submit false Medicare and Medicaid claims for meaningful use payments in violation of the False Claims Act.

While we believe we are substantially in compliance with such certifications and with applicable fraud and abuse laws and regulations, and we have adequate compliance programs and controls in place to ensure substantial compliance, we cannot predict whether changes in applicable law, or interpretation of laws, or changes in our practices in response to changes in applicable law or interpretation of laws, could have a material adverse effect on our business.

business.

Additionally, as electronic medical devices are increasingly connected to each other and to other technology, the ability of these connected systems safely and effectively to exchange and use exchanged information becomes increasingly important.

On September 6, 2017, the FDA issued guidance to assist industry in identifying specific considerations related to the ability of electronic medical devices to safely and effectively exchange and use exchanged information.

As a medical device manufacturer, we must manage risks including those associated with an electronic interface that is incorporated into a medical device.

| Cost of sales ........................................................................................................................................................................ | | | | | 9,062,440 | | | 8,345,195 | | | 7,622,765 |

| | Gross profit ...................................................................................................................................................................... | | | | 3,399,103 | | | 3,226,473 | | | 3,006,954 |

| | Selling, general and administrative ........................................................................................................................................ | | | | 2,539,734 | | | 2,409,008 | | | 2,238,051 |

| Net cash used in financing activities ......................................................................................................................................... | | | | | (112,551) | | | (327,344) | | | (348,030) |

2017 Compared to 2016

| | | | | 2017 | | | Total | | | 2016 | | | Total | | | $ | | | % | |

| | Dental .......................................................................................................................................................................................... | | | $ | 6,048,813 | | 48.5 | % | | $ | 5,555,299 | | 48.0 | % | | $ | 493,514 | | 8.9 | % |

| | Animal health ................................................................................................................................................................................. | | | | 3,476,635 | | 27.9 | | | | 3,253,095 | | 28.1 | | | | 223,540 | | 6.9 | |

| | Medical ........................................................................................................................................................................................ | | | | 2,497,994 | | 20.1 | | | | 2,337,661 | | 20.2 | | | | 160,333 | | 6.9 | |

| | | Total health care distribution ............................................................................................................................................................ | | | 12,023,442 | | 96.5 | | | | 11,146,055 | | 96.3 | | | | 877,387 | | 7.9 | |

| Technology and value-added services (2)...................................................................................................................................................... | | | | | 438,101 | | 3.5 | | | | 425,613 | | 3.7 | | | | 12,488 | | 2.9 | |

| | | Total ........................................................................................................................................................................................ | | $ | 12,461,543 | | 100.0 | % | | $ | 11,571,668 | | 100.0 | % | | $ | 889,875 | | 7.7 | |

The fiscal year ended December 30, 2017 consisted of 52 weeks as compared to the fiscal year ended December 31, 2016, which consisted of 53 weeks.

The growth in internally generated animal health revenue is affected by the revenue for certain products being recognized on a gross basis in 2017 that had been recognized on an agency basis in the prior year.

| | | | 2017 | | | Margin % | | | 2016 | | | Margin % | | | $ | | | % | |

| Health care distribution ....................................................................................................................................................................... | | | $ | 3,112,436 | | 25.9 | % | | $ | 2,953,136 | | 26.5 | % | | $ | 159,300 | | 5.4 | % |

| Technology and value-added services ...................................................................................................................................................... | | | | 286,667 | | 65.4 | | | | 273,337 | | 64.2 | | | | 13,330 | | 4.9 | |

| | Total ........................................................................................................................................................................................ | | $ | 3,399,103 | | 27.3 | | | $ | 3,226,473 | | 27.9 | | | $ | 172,630 | | 5.4 | |

In addition, our businesses that involve physician and dental practice management products include electronic information technology systems that store and process personal health, clinical, financial and other sensitive information of individuals.

These information technology systems may be vulnerable to breakdown, wrongful intrusions, data breaches and malicious attack, which could require us to expend significant resources to eliminate these problems and address related security concerns, and could involve claims against us by private parties and/or governmental agencies.

For example, we are directly or indirectly subject to numerous federal, state, local and foreign laws and regulations that protect the privacy and security of such information, such as the privacy and security provisions of the federal Health Insurance Portability and Accountability Act of 1996, as amended, and implementing regulations (“HIPAA”).

HIPAA requires, among other things, the implementation of various recordkeeping, operational, notice and other practices intended to safeguard that information, limit its use to allowed purposes and notify individuals in the event of privacy and security breaches.

Failure to comply with these laws and regulations can result in substantial penalties and other liabilities.

| Cost of sales ........................................................................................................................................................................ | | | | | 8,337,699 | | | 7,617,460 | | | 7,460,075 |

| | Gross profit ...................................................................................................................................................................... | | | | 3,233,969 | | | 3,012,259 | | | 2,911,315 |

| | Selling, general and administrative ....................................................................................................................................... | | | | 2,416,504 | | | 2,243,356 | | | 2,196,173 |

| Net cash used in financing activities ......................................................................................................................................... | | | | | (300,229) | | | (319,371) | | | (154,647) |

| Technology and value-added services ....................................................................................................................................................... | | | | 280,829 | | 66.0 | | | | 243,583 | | 67.9 | | | | 37,246 | | 15.3 | |

| | Total ......................................................................................................................................................................................... | | $ | 3,233,969 | | 27.9 | | | $ | 3,012,259 | | 28.3 | | | $ | 221,710 | | 7.4 | |

| Technology and value-added services ...................................................................................................................................................... | | | | 159,552 | | 37.5 | | | | 135,143 | | 37.7 | | | | 24,409 | | 18.1 | |

| | Total ........................................................................................................................................................................................ | | $ | 2,416,504 | | 20.9 | | | $ | 2,243,356 | | 21.1 | | | $ | 173,148 | | 7.7 | |

of additional operating costs.

The remaining difference between our effective tax rate and the federal statutory tax rate for both periods primarily relates to state and foreign income taxes and interest expense.

2015 Compared to 2014

| | | | | 2015 | | | Total | | | 2014 | | | Total | | | $ | | | % | |

| | Dental .......................................................................................................................................................................................... | | | $ | 5,276,407 | | 49.6 | % | | $ | 5,381,215 | | 51.9 | % | | $ | (104,808) | | (1.9) | % |

| | Animal health .................................................................................................................................................................................. | | | | 2,921,624 | | 27.5 | | | | 2,898,612 | | 27.9 | | | | 23,012 | | 0.8 | |

| | Medical ......................................................................................................................................................................................... | | | | 2,072,915 | | 19.5 | | | | 1,742,685 | | 16.8 | | | | 330,230 | | 18.9 | |

| | | Total health care distribution ............................................................................................................................................................... | | | 10,270,946 | | 96.6 | | | | 10,022,512 | | 96.6 | | | | 248,434 | | 2.5 | |

| Technology and value-added services (2) ...................................................................................................................................................... | | | | | 358,773 | | 3.4 | | | | 348,878 | | 3.4 | | | | 9,895 | | 2.8 | |

| | | Total ......................................................................................................................................................................................... | | $ | 10,629,719 | | 100.0 | % | | $ | 10,371,390 | | 100.0 | % | | $ | 258,329 | | 2.5 | |

The growth in internally generated animal health revenue is affected by certain products switching between agency sales and standard sales, as well as changes to our veterinary diagnostics manufacturer relationships.

| | | | 2015 | | | Margin % | | | 2014 | | | Margin % | | | $ | | | % | |

| Health care distribution ........................................................................................................................................................................ | | | $ | 2,768,676 | | 27.0 | % | | $ | 2,680,190 | | 26.7 | % | | $ | 88,486 | | 3.3 | % |

| Technology and value-added services ....................................................................................................................................................... | | | | 243,583 | | 67.9 | | | | 231,125 | | 66.2 | | | | 12,458 | | 5.4 | |

| | Total ......................................................................................................................................................................................... | | $ | 3,012,259 | | 28.3 | | | $ | 2,911,315 | | 28.1 | | | $ | 100,944 | | 3.5 | |

The offsetting decrease of $10.1 million in our health care distribution segment gross profit was primarily attributable to the effects of foreign exchange.

| | | | 2015 | | | Net Sales | | | 2014 | | | Net Sales | | | $ | | | % | |

| Health care distribution ........................................................................................................................................................................ | | | $ | 2,108,213 | | 20.5 | % | | $ | 2,068,419 | | 20.6 | % | | $ | 39,794 | | 1.9 | % |

| Technology and value-added services ....................................................................................................................................................... | | | | 135,143 | | 37.7 | | | | 127,754 | | 36.6 | | | | 7,389 | | 5.8 | |

| | Total ......................................................................................................................................................................................... | | $ | 2,243,356 | | 21.1 | | | $ | 2,196,173 | | 21.2 | | | $ | 47,183 | | 2.1 | |

The $7.4 million increase in selling, general and administrative expenses within our technology and value-added services segment for the year ended December 26, 2015 as compared to the prior year period was attributable to $1.3 million of additional costs from acquired companies and $6.1 million of additional operating costs.

| | | | 2015 | | | 2014 | | | $ | | | % | |

| Interest income ........................................................................................................................................................................ | | | $ | 12,935 | | $ | 13,655 | | $ | (720) | | (5.3) | % |

| Interest expense ....................................................................................................................................................................... | | | | (26,008) | | | (24,057) | | | (1,951) | | (8.1) | |

| Other, net .............................................................................................................................................................................. | | | | (141) | | | 4,572 | | | (4,713) | | (103.1) | |

| | Other expense, net ............................................................................................................................................................. | | $ | (13,214) | | $ | (5,830) | | $ | (7,384) | | (126.7) | |

Interest expense increased $2.0 million primarily due to increased borrowings under our private placement facilities and our bank credit lines.

A hypothetical 5% change in the average value of the U.S. dollar in [removed: 2016] [added: 2017] compared to foreign currencies would have changed our [removed: 2016] [added: 2017] reported Net income attributable to Henry Schein, Inc. by approximately [removed: $6.3] [added: $7.3] million.

As of December [removed: 31, 2016,] [added: 30, 2017,] we had [added: forward] foreign currency exchange agreements, which expire through [removed: May 31, 2017,] [added: June 27, 2018,] which include a mark-to-market [removed: gain] [added: loss] of [removed: $0.3] [added: $1.0] million as determined by quoted market prices.

As of December [removed: 31, 2016,] [added: 30, 2017,] we had variable interest rate exposure for certain of our revolving credit facilities and our U.S. trade accounts receivable securitization.

Our revolving credit facility which we entered into on [removed: September 22, 2014] [added: April 18, 2017] and expires [removed: on September 22, 2019,] [added: in April 2022,] has an interest rate that is based on the U.S. Dollar LIBOR plus a spread based on our leverage ratio at the end of each financial reporting quarter.

As of December [removed: 31, 2016,] [added: 30, 2017,] there was [removed: $65.0] [added: $320.0] million outstanding under this revolving credit facility.

During the year ended December [removed: 31, 2016,] [added: 30, 2017,] the average outstanding balance under this revolving credit facility was approximately [removed: $214.0] [added: $324.6] million.

Based upon our average outstanding balance for this revolving credit facility, for each hypothetical increase of 25 basis points, our interest expense thereunder would have increased by [removed: $0.5] [added: $0.8] million.

Our U.S trade accounts receivable securitization, which we entered into on April 17, 2013 and which expires on April 29, [removed: 2019,] [added: 2020,] has an interest rate that is based upon the asset-backed commercial paper rate of [removed: 101] [added: 153] basis points plus 75 basis points.

As of December [removed: 31, 2016,] [added: 30, 2017,] we had an outstanding balance of $350.0 million under this securitization facility.

During the year ended December [removed: 31, 2016,] [added: 30, 2017,] the average outstanding balance under this securitization facility was approximately [removed: $322.0] [added: $349.6] million.

[removed: Based upon our average outstanding balance for this] securitization facility, for each hypothetical increase of 25 basis points, our interest expense thereunder would have increased by [removed: $0.8] [added: $0.9] million.

As of December 30, 2017, Henry Schein, Inc. had Euro to Brazilian Real (BRL) cross currency swap contracts notionally totaling an amount of €78 million, with a reported fair value of these contracts as a net asset of $10.7 million.

A 5% increase in the value of the Euro to the BRL from December 30, 2017, with all other variables held constant, would have had a favorable effect on the fair value of these swap contracts by increasing the value of these instruments by $4.8 million.

Based upon our average outstanding balance for this

We are exposed to market risks as well as changes in foreign currency exchange rates as measured against the U.S. dollar and each other, and changes to the credit markets.

We attempt to minimize these risks by primarily using foreign currency forward contracts and by maintaining counter-party credit limits.

These hedging activities provide only limited protection against currency exchange and credit risks.

Factors that could influence the effectiveness of our hedging programs include currency markets and availability of hedging instruments and liquidity of the credit markets.

All foreign currency forward contracts that we enter into are components of hedging programs and are entered into for the sole purpose of hedging an existing or anticipated currency exposure.

We do not enter into such contracts for speculative purposes and we manage our credit risks by diversifying our investments, maintaining a strong balance sheet and having multiple sources of capital.

Where we deem it prudent, we engage in hedging programs using primarily foreign currency forward contracts aimed at limiting the impact of foreign currency exchange rate fluctuations on earnings.

We do not hedge the translation of foreign currency profits into U.S. dollars, as we regard this as an accounting exposure, not an economic exposure.

A hypothetical 5% change in the value of the U.S. dollar would change the notional value of our foreign currency exchange agreements by $3.5 million.

As a risk management policy, we limit the amount of credit exposure by diversifying and utilizing numerous investment grade counter-parties.

| Item 8. Financial Statements and Supplementary Data | | | |

| --- | --- | --- | --- |

| | | | |

| | | INDEX TO FINANCIAL STATEMENTS | |

| | | HENRY SCHEIN, INC. | |

| | | | Page |

| [Report of Independent Registered Public Accounting Firm](#Report1).......................................................................... | | | 69 |

| [Consolidated Financial Statements](#FinancialStatements2): | | | |

| | [Balance Sheets as of December 31, 2016 and December 26, 2015](#BalanceSheets)......................................................... | | 70 |

| | [Statements of Income for the years ended December 31, 2016,](#IncomeStatement) | | |

| | | [December 26, 2015 and December 27, 2014](#IncomeStatement).............................................................................. | 71 |

| | [Statements of Comprehensive Income for the years ended December 31, 2016,](#CompInc) | | |

| | | [December 26, 2015 and December 27, 2014](#CompInc).............................................................................. | 72 |

| | [Statements of Changes in Stockholders’ Equity for the years ended](#SE) | | |

| | | [December 31, 2016, December 26, 2015 and December 27, 2014](#SE).................................................. | 73 |

| | [Statements of Cash Flows for the years ended December 31, 2016,](#CashFlow) | | |

| | | [December 26, 2015 and December 27, 2014](#CashFlow).............................................................................. | 74 |

| | [Notes to Consolidated Financial Statements](#Notes2FS)...................................................................................... | | 75 |

| [Report of Independent Registered Public Accounting Firm](#Report).......................................................................... | | | 119 |

| [Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2016,](#Sched2) | | | |

| | [December 26, 2015 and December 27, 2014](#Sched2)...................................................................................... | | 120 |

| All other schedules are omitted because the required information is either inapplicable or is included in the consolidated financial statements or the notes thereto. | | | |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Henry Schein, Inc.

Melville, NY

We have audited the accompanying consolidated balance sheets of Henry Schein, Inc. as of December 31, 2016 and December 26, 2015 and the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2016.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).

We believe that we have a strong brand identity due to our more than [removed: 84] [added: 85] years of experience distributing health care products.

We are headquartered in Melville, New York, employ more than [removed: 21,000] [added: 22,000] people (of which more than [removed: 10,500] [added: 11,400] are based outside the United States) and have operations or affiliates in [removed: 33] [added: 34] countries, including the United States, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong SAR, [removed: Iceland,] Ireland, Israel, Italy, Japan, [added: Liechtenstein,] Luxembourg, Malaysia, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, South Africa, Spain, Sweden, Switzerland, [removed: Thailand] [added: Thailand, United Arab Emirates] and the United Kingdom.

We have established over 4.5 million square feet of space in [removed: 62] [added: 63] strategically located distribution centers around the world to enable us to better serve our customers and increase our operating efficiency.

This industry, which encompasses the dental, animal health and medical markets, was estimated to produce revenues of approximately $45 billion in [removed: 2016] [added: 2017] in the global markets.

We also face significant competition internationally, where we compete on the basis of price and customer service against several large competitors, including the GACD Group, Pluradent AG & Co., Lifco AB, Planmeca Oy, Billericay Dental Supply Co. Ltd., National Veterinary Services Limited (Patterson Veterinary division of Patterson Companies, Inc.), Centaur Services Limited (MWI Animal Health division of AmerisourceBergen) and Alcyon SA, as well as a large number of dental, animal health and medical product distributors and manufacturers in Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong SAR, [removed: Iceland,] Ireland, Israel, Italy, Japan, [added: Liechtenstein,] Luxembourg, Malaysia, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, South Africa, Spain, Sweden, Switzerland, [removed: Thailand] [added: Thailand, United Arab Emirates] and the United Kingdom.

We have more than [removed: 84] [added: 85] years of experience in distributing products to health care practitioners resulting in strong awareness of the Henry Schein® brand.

| | • | | _Field sales consultants_. We have [removed: approximately 3,800] [added: over 4,200] field sales consultants, including equipment sales specialists, covering major North American, European and other international markets. These consultants complement our direct marketing and telesales efforts and enable us to better market, service and support the sale of more sophisticated products and equipment. |

| | • | | _Direct marketing_. During [removed: 2016,] [added: 2017,] we distributed approximately [removed: 34] [added: 35] million pieces of direct marketing material, including catalogs, flyers, order stuffers and other promotional materials to existing and potential office-based health care customers. |

| | • | | _Telesales_. We support our direct marketing effort with approximately [removed: 2,200] [added: 2,300] inbound and outbound telesales representatives, who facilitate order [removed: processing and] [added: processing,] generate new sales through direct and frequent contact with [removed: customers.] [added: customers and stay abreast of market developments and the hundreds of new products, services and technologies introduced each year to educate practice personnel.] |

| | • | | _Consumable supplies and equipment_. We offer over 120,000 Stock Keeping Units, or SKUs, to our customers. Of the SKUs offered, approximately [removed: 51,000] [added: 49,000] are offered to our dental customers, approximately [removed: 12,000] [added: 14,000] to our animal health customers and approximately [removed: 55,000] [added: 48,000] to our medical customers. We offer over 180,000 additional SKUs to our customers in the form of special order items. |

| | • | | _Technology and other value-added products and services_. We sell practice management software systems to our dental, animal health and medical customers. Our practice management solutions provide practitioners with electronic medical records, patient treatment history, billing, accounts receivable analyses and management, appointment calendars, electronic claims processing and word processing programs. [added: We have over 700 technical representatives supporting customers using our practice management solutions.] As of December [removed: 31, 2016,] [added: 30, 2017,] we had an active user base of [removed: more than 95,000] [added: almost 97,000] practices, including users of Dentrix® Dental Systems, Dentrix® Enterprise, Dentrix® Dental VisionTM, Dentrix Ascend®, Easy Dental®, OasisTM, Evolution® and EXACT®, Gesden®, Julie®Software, Power Practice® Px, AxiUmTM, EndoVision®, PerioVision®, OMSVision® and Viive® for dental practices; Advantage+TM, AVImark®, DVM Manager®, InfinityTM, Triple Crown®, Vetstreet®, VisionVPMTM, Robovet®, and [removed: RxWorks®] [added: RxWorks®, and eVetPracticeTM] for animal health practices; and MicroMD® for physician practices. |

| | • | | _Repair services_. We have over 200 equipment sales and service centers worldwide that provide a variety of repair, installation and technical services for our health care customers. Our [added: over 2,000] technicians provide installation and repair services for: dental handpieces; dental, animal health and medical small equipment; table top sterilizers; and large dental equipment. |

| | | _Commitment to superior customer service_. We maintain a strong commitment to providing superior customer service. We frequently monitor our customer service through customer surveys, focus groups and statistical reports. Our customer service policy primarily focuses on: | [added: | | |]

| | [added: | |] • | | _Exceptional order fulfillment_. We ship an average of approximately [removed: 174,000] [added: 190,000] cartons daily. Approximately 99% of items ordered are shipped without back ordering and are shipped on the same business day the order is received. |

| | | _Cost-effective purchasing_. We believe that cost-effective purchasing is a key element to maintaining and enhancing our position as a competitive-pricing provider of health care products. We continuously evaluate our purchase requirements and suppliers’ offerings and prices in order to obtain products at the lowest possible cost. In [removed: 2016,] [added: 2017,] our top 10 health care distribution suppliers and our single largest supplier accounted for approximately 34% and [removed: 6%,] [added: 5%,] respectively, of our aggregate purchases. |

| | | | | | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | |

| | Dental products (1) [removed: ...........................................................................................................................................................] [added: ............................................................................................................................................................] | | | | [removed: 48.0] [added: 48.5] | % | | [removed: 49.6] [added: 48.0] | % | | [removed: 51.9] [added: 49.6] | % |

| | Animal health products (2) [removed: .................................................................................................................................................] [added: ..................................................................................................................................................] | | | | [removed: 28.1] [added: 27.9] | | | [removed: 27.5] [added: 28.1] | | | [removed: 27.9] [added: 27.5] | |

| | Medical products (3) [removed: .........................................................................................................................................................] [added: ..........................................................................................................................................................] | | | | [removed: 20.2] [added: 20.1] | | | [removed: 19.5] [added: 20.2] | | | [removed: 16.8] [added: 19.5] | |

| | Total health care distribution [removed: ...........................................................................................................................................] [added: ..............................................................................................................................................] | | | | [removed: 96.3] [added: 96.5] | | | [removed: 96.6] [added: 96.3] | | | 96.6 | |

| | | | other value-added products (4) [removed: ................................................................................................................................] [added: .................................................................................................................................] | | [removed: 3.7] [added: 3.5] | | | [removed: 3.4] [added: 3.7] | | | 3.4 | |

| Total [removed: ......................................................................................................................................................................................] [added: .......................................................................................................................................................................................] | | | | | 100.0 | % | | 100.0 | % | | 100.0 | % |

Between [removed: 2016] [added: 2017] and [removed: 2026,] [added: 2027,] the 45 and older population is expected to grow by approximately 12%.

Between [removed: 2016] [added: 2017] and [removed: 2036,] [added: 2037,] this age group is expected to grow by approximately [removed: 25%.][added: 24%.]

This compares with expected total U.S. population growth rates of approximately 8% between [removed: 2016] [added: 2017] and [removed: 2026] [added: 2027] and approximately 15% between [removed: 2016] [added: 2017] and [removed: 2036.][added: 2037.]

[removed: There] [added: In the medical market, there] continues to be a migration of procedures from acute-care settings to physicians’ offices, a trend that we believe provides additional opportunities for us.

| | • | | the adoption or repeal of legislation; [removed: and] |

| | • | | changes in accounting [removed: principles.] [added: principles; and] |

[removed: The UDI regulations require “labelers” to include unique device identifiers (“UDIs”), with] a content and format prescribed by the FDA and issued under a system operated by an FDA-accredited issuing agency, on the labels and packages of medical devices, and to directly mark certain devices with UDIs.

[added: The UDI] regulations also require labelers to submit certain information concerning UDI-labeled devices to the FDA, much of which information is publicly available on an FDA database, the Global Unique Device Identification Database.

[removed: Some of these laws, referred to as] “false claims laws,” prohibit the submission or causing the submission of false or fraudulent claims for reimbursement to federal, state and other health care payers and programs.

[removed: kickback] [added: Other laws, referred to as “anti-kickback] laws,” prohibit soliciting, offering, receiving or paying remuneration in order to induce the referral of a patient or ordering, purchasing, leasing or arranging for or recommending ordering, purchasing or leasing, of items or services that are paid for by federal, state and other health care payers and programs.

[removed: Also,] [added: Also] violations of the federal False Claims Act can result in treble damages, and, in accordance with [removed: an interim] [added: a] final rule published by the Department [added: of] Justice on [removed: June 30, 2016,] [added: February 3, 2017,] which substantially increased [added: the] maximum [added: and minimum] civil penalties for False Claims Act violations, the amounts for civil penalties assessed after [removed: August 1, 2016,] [added: February 3, 2017,] whose associated violations occurred after November 2, 2015, were increased from [removed: $11,000 per claim for pre-November 2, 2011 violations to up] [added: a minimum per-claim penalty of $10,781] to [added: $10,957, and from a maximum per-claim penalty of] $21,563 [removed: per claim.][added: to $21,916.]

The [added: United States Patient Protection and Affordable Care Act as amended by the] Health Care [added: and Education Reconciliation Act, each enacted in March 2010 (the “Health Care] Reform [removed: Law] [added: Law”),] significantly strengthened the federal False Claims Act and the federal Anti-Kickback Law provisions, which could lead to the possibility of increased whistleblower or relator suits, and among other things made clear that a federal Anti-Kickback Law violation can be a basis for federal False Claims Act liability.

The [removed: United States] Health Care Reform Law [removed: adopted through the March 2010 enactment of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act] increased federal oversight of private health insurance plans and included a number of provisions designed to reduce Medicare expenditures and the cost of health care generally, to reduce fraud and abuse, and to provide access to increased health coverage.

The Health Care Reform Law requirements include a 2.3% excise tax on domestic sales of many medical devices by manufacturers and importers that began in 2013 and a fee on branded prescription drugs and biologics [removed: that was implemented in 2011, both of which may affect sales.]

However, with respect to the medical device excise tax, a [removed: two-year] [added: two year] moratorium was imposed under the Consolidated Appropriations Act, 2016, suspending the [added: imposition of the tax on device sales during the period beginning January 1, 2016 and ending on December 31, 2017, and on January 22, 2018 an additional two-year moratorium was imposed under Public Law No. 115-120, suspending the imposition of the tax on device sales during the period beginning January 1, 2018 and ending on December 31, 2019.]

In addition, the President [removed: and majorities in both houses of Congress have stated their intention] [added: is seeking] to repeal [added: and replace] the Health Care Reform Law.

[removed: The] [added: A] final rule was published in the Federal Register on November 4, 2016 and [removed: announced some flexibilities that allow] [added: allows] eligible Medicare clinicians to pick their pace of participation for the first performance period that began January 1, 2017.

These customers are subject to [removed: laws] [added: laws, regulations] and [removed: regulations,] [added: industry standards,] such as [removed: HIPAA,] [added: HIPAA and the Payment Card Industry Data Security Standards,] which require that they protect the privacy and security of those records, and our products may be used as part of these customers’ comprehensive data security programs, including in connection with their efforts to comply with applicable privacy and security laws.

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| | | | |

| | • | | litigation or regulatory judgements, expenses or settlements. |

The UDI regulations require “labelers” to include unique device identifiers (“UDIs”), with

Some of these laws, referred to as

that was implemented in 2011, both of which may affect sales.

Repeal and replace legislation has been passed in the House of Representatives, but did not obtain the necessary votes in the Senate.

Subsequently, the President has affirmed his intention to repeal and replace the Health Care Reform Law and has taken a number of administrative actions to materially weaken the Health Care Reform Law.

On December 22, 2017, the President signed the Tax Cuts and Jobs Act into law, which contains a broad range of tax reform provisions that impact the individual and corporate tax rates, international tax provisions, income tax add-back provisions and deductions.

The tax reform law also repealed the individual mandate of the Health Care Reform Law.

A final rule updating certain Quality Payment Program regulations was published on November 16, 2017, which became effective as of January 1, 2018.

In addition, the European Parliament and the Council of the European Union have adopted a new pan-European General Data Protection Regulation (“GDPR”), effective from May 25, 2018, which increases privacy rights for individuals in Europe, extends the scope of responsibilities for data controllers and data processors and imposes increased requirements and potential penalties on companies offering goods or services to individuals who are located in Europe (“Data Subjects”) or monitoring the behavior of such individuals (including by companies based outside of Europe).

Noncompliance can result in penalties of up to the greater of EUR 20 million, or 4% of global company revenues.

Individual member states may impose additional requirements and penalties as they relate to certain things such as employee personal data.

Among other things, the GDPR requires with respect to data concerning Data Subjects, company accountability, consents from Data Subjects or other acceptable legal basis needed to process the personal data, prompt breach notifications within 72 hours, fairness and transparency in how the personal data is stored, used or otherwise processed, and data integrity and security, and provides rights to Data Subjects relating to modification, erasure and transporting of the personal data.

While we expect to have substantially compliant programs and controls in place to comply with the GDPR requirements, our compliance with the new regulation is likely to impose additional costs on us, and we cannot predict whether the interpretations of the requirements, or changes in our practices in response to new requirements or interpretations of the requirements, could have a material adverse effect on our business.

technology in accordance with applicable and evolving requirements.

In order to maintain certification of our EHR products, we must satisfy these changing governmental criteria.

Certain of our businesses involve the manufacture and sale of certified EHR systems and other products linked to incentive programs.

CMS and ONC establish criteria for certified EHR systems, and these criteria have been subject to change.

In order to maintain certification of our EHR products, we must satisfy these changing governmental criteria.

If any of our EHR systems do not meet these standards, yet have been relied upon by health care providers to receive federal incentive payments, as noted above, we are exposed to risk under federal health care fraud and abuse laws, such as the False Claims Act.

For example, on May 31, 2017, the U.S. Department of Justice announced a $155 million settlement and 5-year corporate integrity agreement involving a vendor of certified EHR systems, based on allegations that the vendor, by misrepresenting capabilities to the certifying body, caused its health care provider customers to submit false Medicare and Medicaid claims for meaningful use payments in violation of the False Claims Act.

While we believe we are substantially in compliance with such certifications and with applicable fraud and abuse laws and regulations, and we have adequate compliance programs and controls in place to ensure substantial compliance, we cannot predict whether changes in applicable law, or interpretation of laws, or changes in our practices in response to changes in applicable law or interpretation of laws, could have a material adverse effect on our business.

Failure to abide by electronic health data transmission

Additionally, as electronic medical devices are increasingly connected to each other and to other technology, the ability of these connected systems safely and effectively to exchange and use exchanged information becomes increasingly important.

On September 6, 2017, the FDA issued guidance to assist industry in identifying specific considerations related to the ability of electronic medical devices to safely and effectively exchange and use exchanged information.

As a medical device manufacturer, we must manage risks including those associated with an electronic interface that is incorporated into a medical device.

E-Commerce

Electronic commerce solutions have become an integral part of traditional health care supply and distribution relationships.

Our distribution business is characterized by rapid technological developments and intense competition.

The continuing advancement of online commerce requires us to cost-effectively adapt to changing technologies, to enhance existing services and to develop and introduce a variety of new services to address the changing demands of consumers and our customers on a timely basis, particularly in response to competitive offerings.

Through our proprietary, technologically based suite of products, we offer customers a variety of competitive alternatives.

We believe that our tradition of reliable service, our name recognition and large customer base built on solid customer relationships, position us well to participate in this significant aspect of the distribution business.

We continue to explore ways and means to improve and expand our Internet presence and capabilities, including our online commerce offerings and our use of various social media outlets.

## Other Executive Management

The following table sets forth certain information regarding other Executive Management:

| Name | | Age | | Position |

| --- | --- | --- | --- | --- |

| --- | --- | --- | --- |

| --- | --- | --- |

The UDI

Other laws, referred to as “anti-

imposition of the tax on device sales during the period beginning January 1, 2016 and ending on December 31, 2017.

governmental criteria.

| Bridget A. Ross ................................................................................................................................................................ | | 52 | | President, Global Medical Group |

Bridget A.

Ross has been our President, Global Medical Group since February 2017.

Before joining us, Ms. Ross was Vice President of Commercial Operations, North America for Johnson & Johnson’s Medical Devices Group.

During her 28-year career at Johnson & Johnson, Ms. Ross held roles including Global President of Acclarent, Inc. and Global President for Ethicon’s Women’s Health & Urology, both Johnson & Johnson Medical Device companies.

[removed: In September 2015, Henry Schein,] [added: On August 17, 2017, IQ Dental Supply,] Inc. [removed: was served with] [added: (“IQ Dental”) filed] a [removed: summons and] complaint in [removed: an action commenced in] the United States District Court for the Eastern District of New York, entitled [removed: SourceOne Dental,] [added: IQ Dental Supply,] Inc. v.

[removed: Patterson Companies, Inc.,] Henry Schein, [added: Inc., Patterson Companies,] Inc. and Benco Dental Supply Company, [removed: Civil Action] [added: Case] No. [removed: 15-cv-05440-JMA-GRB.][added: 2:17-cv-4834.]

Plaintiff alleges [removed: that, through its website,] [added: that] it [removed: markets and sells] [added: is a distributor of] dental supplies and [removed: equipment to dentists.][added: equipment, and sells dental products through an online dental distribution platform operated by SourceOne Dental (“SourceOne”).]

[removed: Plaintiff] [added: IQ Dental] alleges, among other things, that defendants conspired to [removed: eliminate plaintiff as a viable competitor and to exclude plaintiff] [added: suppress competition] from [removed: the market] [added: IQ Dental and SourceOne] for the marketing, distribution and sale of dental supplies and equipment in the United [removed: States] [added: States,] and that defendants unlawfully agreed with one another to boycott dentists, manufacturers and state dental associations that deal with, or considered dealing with, [removed: plaintiff.][added: plaintiff and SourceOne.]

[removed: Plaintiff seeks equitable relief, compensatory and] [added: compensatory,] treble [added: and punitive] damages, jointly and severally, [removed: punitive damages, interest,] and reasonable costs and expenses, including attorneys’ fees and expert fees.

We intend to defend ourselves vigorously against [removed: the] [added: this] action.

Beginning in January 2016, class action complaints were filed against Patterson Companies, [removed: Inc.,] [added: Inc. (“Patterson”),] Benco Dental Supply Co. [added: (“Benco”)] and Henry Schein, Inc. Each of these complaints allege, among other things, that defendants conspired to fix prices, allocate customers and foreclose competitors by boycotting manufacturers, state dental associations and others that deal with defendants’ competitors.

Subject to certain exclusions, these classes seek to represent all persons who purchased dental supplies or equipment in the United States directly from any of the defendants or Burkhart Dental Supply Co. [added: (“Burkhart”)] since August 31, 2008.

As of December [removed: 31, 2016,] [added: 30, 2017,] we had accrued our best estimate of potential losses relating to claims that were probable to result in liability and for which we were able to reasonably estimate a loss.

On August 31, 2012, Archer and White Sales, Inc. (“Archer”) filed a complaint against Henry Schein, Inc. as well as Danaher Corporation and its subsidiaries Instrumentarium Dental, Inc., Dental Equipment, LLC, Kavo Dental Technologies, LLC and Dental Imaging Technologies Corporation (collectively, the “Danaher Defendants”) in the United States District Court for the Eastern District of Texas, Civil Action No. 2:12-CV-00572-JRG, styled as an antitrust action under Section 1 of the Sherman Act, and the Texas Free Enterprise Antitrust Act.

Archer alleges a conspiracy between Henry Schein, Inc., an unnamed company and the Danaher Defendants to terminate or limit Archer’s distribution rights.

On October 1, 2012, Henry Schein filed a motion for an order: (i) compelling Archer to arbitrate its claims against Henry Schein; (2) staying all proceedings pending arbitration; and (3) joining the Danaher Defendants’ motion to arbitrate and stay.

On May 28, 2013, the Magistrate Judge granted the motions to arbitrate and stayed proceedings pending arbitration.

On June 10, 2013, Archer moved for reconsideration before the District Court judge.

On December 7, 2016, the District Court Judge granted Archer’s motion for reconsideration and lifted the stay.

Defendants appealed the District Court’s order.

On December 21, 2017, the United States Court of Appeals for the Fifth Circuit affirmed the District Court’s order denying the motions to compel arbitration.

On February 12, 2018, defendants filed an Application for Stay of Proceedings in the District Court in the Supreme Court of the United States, seeking to stay proceedings in the District Court pending a decision on defendants’ forthcoming petition for writ of certiorari.

On August 1, 2017, Archer filed an amended complaint, adding Patterson and Benco as defendants, and alleging that Henry Schein, Inc., Patterson, Benco and Burkhart conspired to fix prices and refused to compete with each other for sales of dental equipment to dental professionals and agreed to enlist their common suppliers, the Danaher Defendants, to join a price-fixing conspiracy and boycott by reducing the distribution territory of, and eventually terminating, their price-cutting competing distributor Archer.

Archer seeks injunctive relief, and damages in an amount to be proved at trial, to be trebled with interest and costs, including attorneys’ fees, jointly and severally.

On October 30, 2017, Archer filed a second amended complaint under seal, to add additional allegations that it believes support its claims.

The named parties and causes of action are the same as the August 1, 2017 amended complaint.

Trial is currently scheduled for May 2018.

SourceOne had previously brought an antitrust lawsuit against the Company, Patterson and Benco which the Company settled in the second quarter of 2017 and which is described in the Company’s prior filings with the SEC.

Plaintiff claims that this alleged conduct constitutes unreasonable restraint of trade in violation of Section 1 of the Sherman Act, New York’s Donnelly Act and the New Jersey Antitrust Act, and also makes pendant state law claims for tortious interference with prospective business relations, civil conspiracy and aiding and abetting.

Plaintiff seeks injunctive relief,

On December 21, 2017, the District Court granted the defendants’ motion to dismiss.

On January 19, 2018, IQ Dental appealed the District Court’s order.

We intend to vigorously defend ourselves against this action.

On February 12, 2018, the United States Federal Trade Commission (“FTC”) filed a complaint against Benco Dental Supply Co., Henry Schein, Inc. and Patterson Companies, Inc. The FTC alleges, among other things, that defendants violated U.S. antitrust laws by conspiring, and entering into an agreement, to refuse to provide discounts to or otherwise serve buying groups representing dental practitioners.

The FTC alleges that defendants conspired in violation of Section 5 of the FTC Act.

The complaint seeks equitable relief only and does not seek monetary damages.

We deny the allegation that we conspired to refuse to provide discounts to or otherwise serve dental buying groups and intend to defend ourselves vigorously against this action.

The Company believes this matter will not have a material adverse effect on our financial condition or results of operations.

Plaintiff asserts the following claims: (i) unreasonable restraint of trade in violation of state and federal antitrust laws; (ii) tortious interference with prospective business relations; (iii) civil conspiracy; and (iv) aiding and abetting the other defendants’ ongoing tortious and anticompetitive conduct.

10-K 1 [removed: the10k_2016.htm] [added: the10k_2017.htm] THE [removed: 2016] [added: 2017] ANNUAL 10-K REPORT

For the fiscal year ended December [removed: 31, 2016][added: 30, 2017]

[removed: ] [added: ] HENRY SCHEIN, INC.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [added: company or emerging growth] company.

See the definitions of “large accelerated filer,” “accelerated [removed: filer” and] [added: filer,”] “smaller reporting [added: company,” and “emerging growth] company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer: X Accelerated filer: __ Non-accelerated filer: __ Smaller reporting company: __ [added: Emerging growth company: __]

The aggregate market value of the registrant’s voting stock held by non-affiliates of the registrant, computed by reference to the closing sales price as quoted on the NASDAQ Global Select Market on [removed: June 25, 2016,] [added: July 1, 2017,] was approximately [removed: $13,826,764,000.][added: $14,360,474,000.]

As of February [removed: 16, 2017,] [added: 15, 2018,] there were [removed: 79,196,697] [added: 153,694,200] shares of registrant’s Common Stock, par value $.01 per share, outstanding.

Portions of the Registrant’s definitive proxy statement to be filed pursuant to Regulation 14A not later than 120 days after the end of the fiscal year (December [removed: 31, 2016)] [added: 30, 2017)] are incorporated by reference in Part III hereof.

| TABLE OF CONTENTS | | | | | | | [added: |]

| | | | | | | [added: |] Page |

| | | | | | | [added: |] Number |

| [PART I.](#Part1) | | | | | | | [added: |]

| | [ITEM 1.](#Item1) | | | [removed: [Business](#Item1)...........................................................................................................................................................................................................................................] [added: [Business](#Item1).............................................................................................................................................................................] | | [added: |] 3 |

| | [ITEM 1A.](#Item1A) | | | [Risk [removed: Factors](#Item1A).....................................................................................................................................................................................................................................] [added: Factors](#Item1A).........................................................................................................................................................................] | | [removed: 20] | [added: 21 |]

| | [ITEM 1B.](#Item1B) | | | [Unresolved Staff [removed: Comments](#Item1B)............................................................................................................................................................................................................] [added: Comments](#Item1B)....................................................................................................................................................] | | [removed: 33] | [added: 36 |]

| | [ITEM 2.](#Item2) | | | [removed: [Properties](#Item2).........................................................................................................................................................................................................................................] [added: [Properties](#Item2)............................................................................................................................................................................] | | [removed: 34] | [added: 37 |]

| | [ITEM 3.](#Item3) | | | [Legal [removed: Proceedings](#Item3)............................................................................................................................................................................................................................] [added: Proceedings](#Item3).................................................................................................................................................................] | | [removed: 35] | [added: 38 |]

| | [ITEM 4.](#Item4) | | | [Mine Safety [removed: Disclosures](#Item4)..................................................................................................................................................................................................................] [added: Disclosures](#Item4)........................................................................................................................................................] | | [removed: 35] | [added: 39 |]

| [PART II](#Part2) | | | | | | | [added: |]

| | [ITEM 5.](#Item5) | | | [Market for Registrant's Common Equity, Related Stockholder Matters](#Item5) | | | [added: |]

| | | | | | [added: |] [and Issuer Purchases of Equity [removed: Securities](#Item5)..................................................................................................................................................................................] [added: Securities](#Item5).............................................................................................................................] | [removed: 36] [added: 40] |

| | [ITEM 6.](#Item6) | | | [Selected Financial [removed: Data](#Item6)....................................................................................................................................................................................................................] [added: Data](#Item6)..........................................................................................................................................................] | | [removed: 39] | [added: 43 |]

| | [ITEM 7.](#Item7) | | | [Management's Discussion and Analysis of Financial Condition](#Item7) | | | [added: |]

| | | | | | [added: |] [and Results of [removed: Operations](#Item7)..........................................................................................................................................................................................................] [added: Operations](#Item7)..................................................................................................................................................] | [removed: 41] [added: 45] |

| | [ITEM 7A.](#Item7A) | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#Item7A)..........................................................................................................................................................] [added: Risk](#Item7A).........................................................................................................] | | [removed: 67] | [added: 75 |]

| | [ITEM 8.](#Item8) | | | [Financial Statements and Supplementary [removed: Data](#Item8).................................................................................................................................................................................] [added: Data](#Item8)............................................................................................................................] | | [removed: 68] | [added: 77 |]

| | [ITEM 9.](#Item9) | | | [Changes in and Disagreements With Accountants on Accounting](#Item9) | | | [added: |]

| | | | | | [added: |] [and Financial [removed: Disclosure](#Item9)............................................................................................................................................................................................................] [added: Disclosure](#Item9)....................................................................................................................................................] | [removed: 112] [added: 123] |

| | [ITEM 9A.](#Item9A) | | | [Controls and [removed: Procedures](#Item9A)..................................................................................................................................................................................................................] [added: Procedures](#Item9A)........................................................................................................................................................] | | [removed: 112] | [added: 123 |]

| | [ITEM 9B.](#Item9B) | | | [Other [removed: Information](#Item9B)............................................................................................................................................................................................................................] [added: Information](#Item9B).................................................................................................................................................................] | | [removed: 115] | [added: 127 |]

| [PART III](#Part3) | | | | | | | [added: |]

| | [ITEM 10.](#Item10) | | | [Directors, Executive Officers and Corporate [removed: Governance](#Item10)................................................................................................................................................................] [added: Governance](#Item10)...............................................................................................................] | | [removed: 115] | [added: 127 |]

| | [ITEM 11.](#Item11) | | | [Executive [removed: Compensation](#Item11)..................................................................................................................................................................................................................] [added: Compensation](#Item11)........................................................................................................................................................] | | [removed: 115] | [added: 127 |]

| | [ITEM 12.](#Item12) | | | [Security Ownership of Certain Beneficial Owners and Management](#Item12) | | | [added: |]

| | | | | | [added: |] [and Related Stockholder [removed: Matters](#Item12)................................................................................................................................................................................................] [added: Matters](#Item12).........................................................................................................................................] | [removed: 116] [added: 128] |

| | [ITEM 13.](#Item13) | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#Item13)...................................................................................................................................] [added: Independence](#Item13)....................................................................................] | | [removed: 116] | [added: 128 |]

| | [ITEM 14.](#Item14) | | | [Principal Accountant Fees and [removed: Services](#Item14)...........................................................................................................................................................................................] [added: Services](#Item14)....................................................................................................................................] | | [removed: 116] | [added: 128 |]

| [PART [removed: IV](#Part4)] [added: IV.](#Part4)] | | | | | | | [added: |]

| | | [ITEM 15.](#Item15) | | [removed: [Exhibits, Financial] [added: | [Exhibits,Financial] Statement [removed: Schedules](#Item15)..........................................................................................................................................................................................] [added: Schedules](#Item15)....................................................................................................................................] | | [removed: 117] [added: 129] |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| | | | | | | | |

| | | | | | | | |

| | | | | | | | |

| | | | | | | | |

| | | | | | [Signatures](#Signatures)........................................................................................................................................................................... | | 137 |

| | | | | | | | |

| | | | | | | | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | [Signatures](#Signatures)........................................................................................................................................................................................................................................ | | 118 |

| | | | | [Exhibit Index](#Exhibit).................................................................................................................................................................................................................................... | | 121 |

We have no unresolved comments from the staff of the SEC that were issued 180 days or more preceding the end of our [removed: 2016] [added: 2017] fiscal year.

| Corporate Headquarters [removed: ..................................................................................................................................................] [added: .................................................................................................................................................] | | Melville, NY | | Lease | | 185,000 | | June 2020 |

| Corporate Headquarters [removed: ..................................................................................................................................................] [added: .................................................................................................................................................] | | Melville, NY | | Own | | 105,000 | | N/A |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | [removed: Reno, NV] [added: Plymouth, MA] | | Lease | | [removed: 236,000] [added: 223,000] | | December [removed: 2020] [added: 2019] |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | Lyssach, Switzerland | | Lease | | [removed: 180,000] [added: 147,000] | | June 2021 |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | [removed: Plymouth, MA] [added: Langeskov, Denmark] | | Lease | | [removed: 180,000] [added: 157,000] | | December [removed: 2017] [added: 2022] |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | Tours, France | | Own | | 166,000 | | N/A |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | Gillingham, United Kingdom | | Lease/Own | | 165,000 | | June 2033 |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | Eastern Creek, New South Wales, Australia | | Lease | | 161,000 | | July 2030 |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | Niagara on the Lake, Canada | | Lease | | 128,000 | | September 2021 |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | Bastian, VA | | Own | | 108,000 | | N/A |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | West Allis, WI | | Lease | | 106,000 | | October 2027 |

| Office and Distribution Center [removed: ...........................................................................................................................................] [added: .........................................................................................................................................] | | Cuijk, Netherlands | | Lease | | [removed: 101,000] [added: 146,000] | | May 2022 |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Denver, PA | | Lease | | 624,000 | | December 2021 |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Indianapolis, IN | | Lease | | 380,000 | | March 2022 |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Sparks, NV | | Lease | | 370,000 | | December 2021 |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Indianapolis, IN | | Own | | 287,000 | | N/A |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Grapevine, TX | | Lease | | 242,000 | | July 2018 |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Gallin, Germany | | Own | | 215,000 | | N/A |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Jacksonville, FL | | Lease | | 212,000 | | February 2019 |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Heppenheim, Germany | | Lease | | 194,000 | | March 2030 |

| Distribution Center [removed: ........................................................................................................................................................] [added: ......................................................................................................................................................] | | Fort Worth, TX | | Lease | | 120,000 | | May 2021 |

In addition, we lease numerous other distribution, office, showroom, manufacturing and sales space in locations including the United States, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong SAR, [removed: Iceland,] Ireland, Israel, Italy, Japan, [added: Liechtenstein,] Luxembourg, Malaysia, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, South Africa, Spain, Sweden, Switzerland, [removed: Thailand] [added: Thailand, United Arab Emirates] and the United Kingdom.

| Office and Distribution Center ......................................................................................................................................... | | Fiumana-Predappio, Italy | | Own | | 183,000 | | N/A |

| Office and Distribution Center ........................................................................................................................................... | | Langeskov, Denmark | | Lease | | 157,000 | | August 2021 |

The following table sets forth, for the periods indicated, the high and low reported sales prices of our common stock as reported on NASDAQ for each quarterly period in fiscal [removed: 2016] [added: 2017] and [removed: 2015:][added: 2016:]

On February [removed: 16, 2017,] [added: 15, 2018,] there were approximately [removed: 450] [added: 467] holders of record of our common stock and the last reported sales price was [removed: $167.25.][added: $68.38.]

As summarized in the table below, subsequent additional increases totaling [removed: $2.4] [added: $2.8] billion, authorized by our Board of Directors, to the repurchase program provide for a total of [removed: $2.5] [added: $2.9] billion of shares of our common stock to be repurchased under this program.

As of December [removed: 31, 2016,] [added: 30, 2017,] we had repurchased approximately [removed: $2.2] [added: $2.7] billion of common stock [removed: (24,903,293] [added: (55,670,990] shares) under these initiatives, with [removed: $250] [added: $200.0] million available for future common stock share repurchases.

The following table summarizes repurchases of our common stock under our stock repurchase program during the fiscal quarter ended December [removed: 31, 2016:][added: 30, 2017:]

We have not declared any cash or stock dividends on our common stock during fiscal years [removed: 2016] [added: 2017] or [removed: 2015.][added: 2016.]

The graph below compares the cumulative total stockholder return on $100 invested, assuming the reinvestment of all dividends, on December [removed: 31, 2011,] [added: 29, 2012,] the last trading day before the beginning of our [removed: 2012] [added: 2013] fiscal year, through the end of our [removed: 2016] [added: 2017] fiscal year with the cumulative total return on $100 invested for the same period in the Dow Jones U.S. Health Care Index and the NASDAQ Stock Market Composite Index.

[removed: ][added: ]

| ASSUMES $100 INVESTED ON DECEMBER [removed: 31, 2011] [added: 29, 2012] | | | | | | | | | | | | | | | | | | |

| | | December [removed: 31, | | | December] 29, | | | December 28, | | | December 27, | | | December 26, | | | December 31, | | [added: | December 30, | |]

| | | [removed: 2011 | | |] 2012 | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | [added: | 2017 | |]

On August 16, 2017, we announced that our Board of Directors approved a two-for-one stock split of our common stock.

Each Henry Schein, Inc. stockholder of record at the close of business on September 1, 2017 received a distribution of one additional share for every share held.

Trading began on a split-adjusted basis on September 15, 2017.

The effects of the stock split on share and per share amounts have been retroactively reflected for all periods presented in this form 10-K.

| Fiscal 2017: | | | | | | |

| 1st Quarter ................................................................................................................................................................... | | $ | 88.25 | | $ | 75.51 |

| 2nd Quarter .................................................................................................................................................................. | | | 93.50 | | | 83.11 |

| 3rd Quarter ................................................................................................................................................................... | | | 93.14 | | | 78.56 |

| 4th Quarter ................................................................................................................................................................... | | | 84.88 | | | 65.28 |

| 1st Quarter ................................................................................................................................................................... | | $ | 85.12 | | $ | 71.32 |

| 2nd Quarter .................................................................................................................................................................. | | | 90.49 | | | 82.58 |

| 3rd Quarter ................................................................................................................................................................... | | | 91.50 | | | 79.27 |

| 4th Quarter ................................................................................................................................................................... | | | 82.24 | | | 73.12 |

| | September 15, 2017 | | | 400,000,000 | |

| 10/01/17 through 11/04/17 | | | | | $ | \- | | | | 5,473,914 |

| 11/05/17 through 12/02/17 | | | 1,821,631 | | | 68.62 | | 1,821,631 | | 4,245,684 |

| 12/03/17 through 12/30/17 | | | 1,417,543 | | | 70.54 | | 1,417,543 | | 2,862,051 |

| | | | 3,239,174 | | | | | 3,239,174 | | |

| Henry Schein, Inc. ................................................................................................................................................................ | | $ | 100.00 | | $ | 143.12 | | $ | 171.81 | | $ | 196.47 | | $ | 189.74 | | $ | 174.79 |

| Care Index ....................................................................................................................................................................... | | | 100.00 | | | 143.42 | | | 182.80 | | | 193.68 | | | 187.95 | | | 230.88 |

| Composite Index ................................................................................................................................................................ | | | 100.00 | | | 142.22 | | | 166.42 | | | 176.82 | | | 190.97 | | | 247.56 |

| 1st Quarter .................................................................................................................................................................. | | $ | 170.24 | | $ | 142.64 |

| 2nd Quarter ................................................................................................................................................................. | | | 180.98 | | | 165.16 |

| 3rd Quarter .................................................................................................................................................................. | | | 183.00 | | | 158.53 |

| 4th Quarter .................................................................................................................................................................. | | | 164.48 | | | 146.23 |

| Fiscal 2015: | | | | | | |

| 1st Quarter .................................................................................................................................................................. | | $ | 143.89 | | $ | 133.77 |

| 2nd Quarter ................................................................................................................................................................. | | | 146.45 | | | 135.80 |

| 3rd Quarter .................................................................................................................................................................. | | | 149.95 | | | 126.17 |

| 4th Quarter .................................................................................................................................................................. | | | 160.00 | | | 127.16 |

| 09/25/16 through 10/29/16 | | | 310,311 | | $ | 153.44 | | 310,311 | | 2,695,108 |

| 10/30/16 through 11/26/16 | | | 971,031 | | | 156.95 | | 971,031 | | 1,653,658 |

| 11/27/16 through 12/31/16 | | | | | | \- | | | | 1,647,881 |

| | | | 1,281,342 | | | | | 1,281,342 | | |

| Henry Schein, Inc. ................................................................................................................................................................ | | $ | 100.00 | | $ | 124.10 | | $ | 177.60 | | $ | 213.24 | | $ | 243.81 | | $ | 235.46 |

| Care Index ....................................................................................................................................................................... | | | 100.00 | | | 117.81 | | | 168.96 | | | 215.35 | | | 228.17 | | | 221.41 |

| Composite Index ................................................................................................................................................................ | | | 100.00 | | | 115.15 | | | 163.76 | | | 191.63 | | | 203.61 | | | 219.89 |

The following selected financial data, with respect to our financial position and results of operations for each of the five fiscal years in the period ended December [removed: 31, 2016,] [added: 30, 2017,] set forth below, has been derived from, should be read in conjunction with and is qualified in its entirety by reference to, our consolidated financial statements and notes thereto.

| | | December [removed: 31,] [added: 30,] | | | December [removed: 26,] [added: 31,] | | | December [removed: 27,] [added: 26,] | | | December [removed: 28,] [added: 27,] | | | December [removed: 29,] [added: 28,] | |

| | | [added: 2017 | | |] 2016 | | | 2015 | | | 2014 | | | 2013 | | [removed: | 2012 | |]

| Net sales .................................................................................................................................................................................. | | $ | [removed: 11,571,668] [added: 12,461,543] | | $ | [removed: 10,629,719] [added: 11,571,668] | | $ | [removed: 10,371,390] [added: 10,629,719] | | $ | [removed: 9,560,647] [added: 10,371,390] | | $ | [removed: 8,939,967] [added: 9,560,647] |

| Restructuring costs (1) .................................................................................................................................................................. | | | [removed: 45,891] [added: \-] | | | [removed: 34,931] [added: 45,891] | | | [removed: \-] [added: 34,931] | | | \- | | | [removed: 15,192] [added: \-] |

| Operating income ........................................................................................................................................................................ | | | [added: 859,369 | | |] 771,574 | | | 733,972 | | | 715,142 | | | 677,054 | [removed: | | 618,961 |]

| Other expense, net (2) .................................................................................................................................................................. | | | [added: (36,521) | | |] (15,739) | | | (13,214) | | | (5,830) | | | (12,360) | [removed: | | (14,773) |]

| of affiliates ........................................................................................................................................................................... | | | [added: 822,848 | | |] 755,835 | | | 720,758 | | | 709,312 | | | 664,694 | [removed: | | 604,188 |]

| Income taxes (3) [removed: ........................................................................................................................................................................] [added: .........................................................................................................................................................................] | | | [added: (362,506) | | |] (217,958) | | | (211,391) | | | (215,610) | | | (190,891) | [removed: | | (187,858) |]

| Equity in earnings of affiliates [removed: .........................................................................................................................................................] [added: ..........................................................................................................................................................] | | | [added: 16,587 | | |] 18,518 | | | 14,060 | | | 11,734 | | | 10,194 | [removed: | | 7,058 |]

| Loss on sale of equity investment (4) [removed: ................................................................................................................................................] [added: .................................................................................................................................................] | | | [removed: \-] [added: (17,636)] | | | \- | | | \- | | | [removed: (12,535)] [added: \-] | | | [removed: \-] [added: (12,535)] |

| Net income ............................................................................................................................................................................... | | | [added: 459,293 | | |] 556,395 | | | 523,427 | | | 505,436 | | | 471,462 | [removed: | | 423,388 |]

| noncontrolling interests .............................................................................................................................................................. | | | [added: (52,994) | | |] (49,617) | | | (44,369) | | | (39,359) | | | (39,908) | [removed: | | (35,312) |]

| Net income attributable to Henry Schein, Inc. ........................................................................................................................................ | | $ | [removed: 506,778] [added: 406,299] | | $ | [removed: 479,058] [added: 506,778] | | $ | [removed: 466,077] [added: 479,058] | | $ | [removed: 431,554] [added: 466,077] | | $ | [removed: 388,076] [added: 431,554] |

| [removed: Henry] [added: Henry] Schein, [removed: Inc.:] [added: Inc.: (6)] | | | | | | | | | | | | | | | |

| Health care distribution [removed: (5):] [added: (7):] | | | | | | | | | | | | | | | |

| Dental [removed: ..................................................................................................................................................................................] [added: .................................................................................................................................................................................] | ....................................................................................................................................................................................................... | $ | [removed: 5,555,299] [added: 6,048,813] | | $ | [removed: 5,276,407] [added: 5,555,299] | | $ | [removed: 5,381,215] [added: 5,276,407] | | $ | [removed: 4,997,972] [added: 5,381,215] | | $ | [removed: 4,774,482] [added: 4,997,972] |

| Animal health ......................................................................................................................................................................... | ....................................................................................................................................................................................................... | | [added: 3,476,635 | | |] 3,253,095 | | | 2,921,624 | | | 2,898,612 | | | 2,599,461 | [removed: | | 2,321,151 |]

| Medical ................................................................................................................................................................................ | ....................................................................................................................................................................................................... | | [added: 2,497,994 | | |] 2,337,661 | | | 2,072,915 | | | 1,742,685 | | | 1,643,167 | [removed: | | 1,560,921 |]

| Total health care distribution [removed: ......................................................................................................................................................] [added: .....................................................................................................................................................] | ....................................................................................................................................................................................................... | | [added: 12,023,442 | | |] 11,146,055 | | | 10,270,946 | | | 10,022,512 | | | 9,240,600 | [removed: | | 8,656,554 |]

| Technology and value-added services [removed: (6) ...........................................................................................................................................] [added: (8) .............................................................................................................................................] | ....................................................................................................................................................................................................... | | [added: 438,101 | | |] 425,613 | | | 358,773 | | | 348,878 | | | 320,047 | [removed: | | 283,413 |]

| Total [removed: .................................................................................................................................................................................] [added: ................................................................................................................................................................................] | ....................................................................................................................................................................................................... | $ | [removed: 11,571,668] [added: 12,461,543] | | $ | [removed: 10,629,719] [added: 11,571,668] | | $ | [removed: 10,371,390] [added: 10,629,719] | | $ | [removed: 9,560,647] [added: 10,371,390] | | $ | [removed: 8,939,967] [added: 9,560,647] |

| Total assets .............................................................................................................................................................................. | ....................................................................................................................................................................................................... | $ | [removed: 6,730,396] [added: 7,811,235] | | $ | [removed: 6,504,740] [added: 6,760,396] | | $ | [removed: 6,138,807] [added: 6,534,740] | | $ | [removed: 5,624,636] [added: 6,138,807] | | $ | [removed: 5,333,997] [added: 5,624,636] |

| Long-term debt [removed: ..........................................................................................................................................................................] [added: .........................................................................................................................................................................] | ....................................................................................................................................................................................................... | | [added: 907,756 | | |] 715,457 | | | 463,752 | | | 542,776 | | | 450,233 | [removed: | | 488,121 |]

| Redeemable noncontrolling interests ................................................................................................................................................. | ....................................................................................................................................................................................................... | | [added: 832,138 | | |] 607,636 | | | 542,194 | | | 564,527 | | | 497,539 | [removed: | | 435,175 |]

| Stockholders' equity .................................................................................................................................................................... | ....................................................................................................................................................................................................... | | [added: 2,824,410 | | |] 2,800,804 | | | 2,886,814 | | | 2,816,445 | | | 2,788,001 | [removed: | | 2,615,864 |]

| (1) | Restructuring costs for the year ended December 31, 2016 consist primarily of severance costs, including severance pay and benefits of $40.7 million, facility closing costs of $3.6 million and other costs of $1.6 million. Restructuring costs for the year ended December 26, 2015 consist primarily of severance costs, including severance pay and benefits of $26.7 million, facility closing costs of $5.7 million and other costs of $2.5 million. [removed: Restructuring costs for the year ended December 29, 2012 consist primarily of severance costs, including severance pay and benefits of $12.8 million and facility closing costs of $2.4 million.] See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Plans of Restructuring” herein and the consolidated financial statements and related notes contained in ITEM 8. |

| (3) | In [added: 2017 there was an estimated one-time-charge of $140 million related to the transition tax on deemed repatriated foreign earnings and a one-time charge of $3.0 million for the revaluation of deferred taxes associated with U.S. tax reform legislation. In] 2015, there was a $6.3 million income tax benefit related to a favorable response to a tax petition, which allowed us to conclude that it is was more likely than not that certain unrecognized tax benefits, which had been previously reserved, would be realized. In 2013, there was a $13.4 million reduction of our valuation allowance related to certain deferred tax assets related to tax loss carryforwards originating outside the United States. |

| (4) | Represents a [added: 2017] loss on divestiture of [added: an equity ownership in E4D Technologies and] a [added: 2013 loss on divestiture of a] noncontrolling interest in a dental wholesale distributor in the Middle [removed: East in 2013.] [added: East.] |

| [removed: (5)] [added: (7)] | Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. |

| [removed: (6)] [added: (8)] | Consists of practice management software and other value-added products, which are distributed primarily to health care providers, and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. |

| Gross profit ............................................................................................................................................................................... | | | 3,399,103 | | | 3,226,473 | | | 3,006,954 | | | 2,910,820 | | | 2,655,247 |

| Selling, general and administrative expenses (5)...................................................................................................................................... | | | 2,539,734 | | | 2,409,008 | | | 2,238,051 | | | 2,195,678 | | | 1,978,193 |

| Basic ................................................................................................................................................................................... | | $ | 2.59 | | $ | 3.14 | | $ | 2.89 | | $ | 2.77 | | $ | 2.51 |

| Diluted ................................................................................................................................................................................. | | | 2.57 | | | 3.10 | | | 2.85 | | | 2.72 | | | 2.46 |

| Basic ................................................................................................................................................................................... | | | 156,787 | | | 161,641 | | | 165,687 | | | 168,531 | | | 171,852 |

| Diluted ................................................................................................................................................................................. | | | 158,208 | | | 163,723 | | | 168,250 | | | 171,480 | | | 175,244 |

| | | December 30, | | | December 31, | | | December 26, | | | December 27, | | | December 28, | |

| | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |

| | | December 30, | | | December 31, | | | December 26, | | | December 27, | | | December 28, | |

| | | 2017 | | | 2016 | | | 2015 | | | 2014 | | | 2013 | |

| (5) | Includes a pre-tax charge of $5,325 related to a litigation settlement in 2017. |

| (6) | On August 16, 2017, we announced that our Board of Directors approved a two-for-one stock split of our common stock. Each Henry Schein, Inc. stockholder of record at the close of business on September 1, 2017 received a distribution of one additional share for every share held. Trading began on a split-adjusted basis on September 15, 2017. The effects of the stock split on share and per share amounts have been retroactively reflected for all periods presented in this Form 10-K. |

| | |

| | |

| Gross profit .............................................................................................................................................................................. | | | 3,233,969 | | | 3,012,259 | | | 2,911,315 | | | 2,656,014 | | | 2,507,513 |

| Selling, general and administrative expenses ......................................................................................................................................... | | | 2,416,504 | | | 2,243,356 | | | 2,196,173 | | | 1,978,960 | | | 1,873,360 |

| Basic ................................................................................................................................................................................... | | $ | 6.27 | | $ | 5.78 | | $ | 5.53 | | $ | 5.02 | | $ | 4.44 |

| Diluted ................................................................................................................................................................................. | | | 6.19 | | | 5.69 | | | 5.44 | | | 4.93 | | | 4.32 |

| Basic ................................................................................................................................................................................... | | | 80,820 | | | 82,844 | | | 84,265 | | | 85,926 | | | 87,499 |

| Diluted ................................................................................................................................................................................. | | | 81,862 | | | 84,125 | | | 85,740 | | | 87,622 | | | 89,823 |

| | | | |

| --- | --- | --- | --- |

| | | INDEX TO FINANCIAL STATEMENTS | |

| | | HENRY SCHEIN, INC. | |

| | | | Page |

| | | | |

| [Report of Independent Registered Public Accounting Firm](#Report1).................................................................................................... | | | 78 |

| | | | |

| [Consolidated Financial Statements](#FinancialStatements2): | | | |

| | | | |

| | [Balance Sheets as of December 30, 2017 and December 31, 2016](#BalanceSheets)........................................................................................ | | 79 |

| | | | |

| | [Statements of Income for the years ended December 30, 2017,](#IncomeStatement) | | |

| | | [December 31, 2016 and December 26, 2015](#IncomeStatement)........................................................................................................... | 80 |

| | | | |

| | [Statements of Comprehensive Income for the years ended December 30, 2017,](#CompInc) | | |

| | | [December 31, 2016 and December 26, 2015](#CompInc)........................................................................................................... | 81 |

| | | | |

| | [Statements of Changes in Stockholders’ Equity for the years ended](#SE) | | |

| | | [December 30, 2017, December 31, 2016 and December 26, 2015](#SE)................................................................................. | 82 |

| | | | |

| | [Statements of Cash Flows for the years ended December 30, 2017,](#CashFlow) | | |

| | | [December 31, 2016 and December 26, 2015](#CashFlow)........................................................................................................... | 83 |

| | | | |

| | [Notes to Consolidated Financial Statements](#Notes2FS)................................................................................................................. | | 84 |

| | [Note 1 - Significant Accounting Policies](#Notes2FS).............................................................................................................. | | 84 |

| | [Note 2 - Property and Equipment, Net](#Note2) ................................................................................................................. | | 92 |

| | [Note 3 - Goodwill and Other Intangibles, Net](#Note3) ........................................................................................................ | | 93 |

| | [Note 4 - Investments and Other](#Note4) ......................................................................................................................... | | 94 |

| | [Note 5 - Debt](#Note5).................................................................................................................................................. | | 94 |

| | [Note 6 - Redeemable Noncontrolling Interests](#Note6)....................................................................................................... | | 97 |

| | [Note 7 - Comprehensive Income](#Note7) ........................................................................................................................ | | 98 |

| | [Note 8 - Fair Value Measurements](#Note8)....................................................................................................................... | | 100 |

| | [Note 9 - Business Acquisitions and Divestiture](#Note9).................................................................................................... | | 102 |

| | [Note 10 - Plans of Restructuring](#Note10)......................................................................................................................... | | 104 |

| | [Note 11 - Earnings Per Share](#Note11).............................................................................................................................. | | 105 |

| | [Note 12 - Income Taxes](#Note12)..................................................................................................................................... | | 105 |

| | [Note 13 - Concentrations of Risk](#Note13) ....................................................................................................................... | | 109 |

| | [Note 14 - Derivatives and Hedging Activities](#Note14)........................................................................................................ | | 110 |

| | [Note 15 - Segment and Geographic Data](#Note15)............................................................................................................... | | 111 |

Based on this evaluation, our management, including our principal executive officer and principal financial officer, concluded that our disclosure controls and procedures were effective as of December [removed: 31, 2016] [added: 30, 2017] to ensure that all material information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to them as appropriate to allow timely decisions regarding required disclosure and that all such information is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Based on our evaluation under the COSO Framework, our management concluded that our internal control over financial reporting was effective at a reasonable assurance level as of December [removed: 31, 2016.][added: 30, 2017.]

The effectiveness of our internal control over financial reporting as of December [removed: 31, 2016] [added: 30, 2017] has been independently audited by BDO USA, LLP, an independent registered public accounting firm, and their attestation is included herein.

[added: Stockholders and] Board of Directors [removed: and Stockholders]

We have audited Henry [removed: Schein,] [added: Schein] Inc.’s [added: (the “Company’s”)] internal control over financial reporting as of December [removed: 31, 2016,] [added: 30, 2017,] based on criteria established in _Internal Control – Integrated Framework (2013)_ issued by the Committee of Sponsoring Organizations of the Treadway Commission (the [removed: COSO criteria).][added: “COSO criteria”).]

[removed: Henry Schein, Inc.’s] [added: The Company’s] management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A, Management’s Report on Internal Control [removed: Over] [added: over] Financial [removed: Reporting”.][added: Reporting.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.]

[removed: Our responsibility is to express an opinion] [added: Opinion] on [removed: the company’s internal control] [added: Internal Control] over [removed: financial reporting based on our audit.][added: Financial Reporting]

[removed: Also, projections of any evaluation of effectiveness to future periods are subject to the risk that] controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, [removed: Henry Schein, Inc.] [added: the Company] maintained, in all material respects, effective internal control over financial reporting as of December [removed: 31, 2016,] [added: 30, 2017,] based on the COSO [removed: criteria.][added: criteria_._]

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (“PCAOB”),] the consolidated balance sheets of [removed: Henry Schein, Inc.] [added: the Company] as of December [removed: 31, 2016] [added: 30, 2017] and December [removed: 26, 2015, and] [added: 31, 2016,] the related consolidated statements of income, comprehensive income, [removed: changes in] stockholders’ equity, and cash flows for each of the three years in the period ended December [removed: 31, 2016] [added: 30, 2017,] and [added: the related notes and schedule and] our report dated February 21, [removed: 2017,] [added: 2018] expressed an unqualified opinion thereon.

The combination of continued acquisition integrations and systems implementations undertaken during the quarter and carried over from prior quarters, when considered in the aggregate, represents a material change in our internal control over financial reporting.

During the quarter ended December 30, 2017, we completed the acquisition of a US dental business with approximate aggregate annual revenues of $16 million.

In addition, post-acquisition integration related activities continued for our global dental and animal health businesses acquired during prior quarters, representing aggregate annual revenues of approximately $511 million.

These acquisitions, the majority of which utilize separate information and financial accounting systems, have been included in our consolidated financial statements since their respective dates of acquisition.

Also, during the quarter ended December 30, 2017, we continued the phased implementation of a new equipment system for our U.S. dental business to centers representing approximate aggregate annual revenues of $159 million.

Additionally, we completed the implementation of a new ERP system at a dental business in Italy having approximate aggregate annual revenues of $49 million.

Finally, our U.S. medical business continued the phased implementation of a new sales commission application which now covers approximately $84 million of annual sales commission expense.

All acquisition integrations and systems implementations involved necessary and appropriate change-management controls that are considered in our annual assessment of the design and operating effectiveness of our internal control over financial reporting.

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB.

Definition and Limitations of Internal Control over Financial Reporting

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that

February 21, 2018

There have been no changes in our internal control over financial reporting that occurred during the quarter ended December 31, 2016, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).

February 21, 2017

Information required by this item regarding our directors and executive officers and our corporate governance is hereby incorporated by reference to the Section entitled “Election of Directors,” with respect to directors, and the first paragraph of the Section entitled “Corporate Governance - Board of Directors Meetings and Committees - Audit Committee,” with respect to corporate governance, in each case in our definitive [removed: 2017] [added: 2018] Proxy Statement to be filed pursuant to Regulation 14A and to the Section entitled “Executive Officers of the Registrant” in Part I of this report, with respect to executive officers.

There have been no changes to the procedures by which stockholders may recommend nominees to our Board of Directors since our last disclosure of such procedures, which appeared in our definitive [removed: 2016] [added: 2017] Proxy Statement filed pursuant to Regulation 14A on April [removed: 11, 2016.][added: 10, 2017.]

Information required by this item concerning compliance with Section 16(a) of the Securities Exchange Act of 1934 is hereby incorporated by reference to the Section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive [removed: 2017] [added: 2018] Proxy Statement to be filed pursuant to Regulation 14A.

The information required by this item is hereby incorporated by reference to the Sections entitled “Compensation Discussion and Analysis,” “Compensation Committee Report” (which information shall be deemed furnished in this Annual Report on Form 10-K), “Executive and Director Compensation” and “Compensation Committee Interlocks and Insider Participation” in our definitive [removed: 2017] [added: 2018] Proxy Statement to be filed pursuant to Regulation 14A.

The following table summarizes information relating to these plans as of December [removed: 31, 2016:][added: 30, 2017:]

The other information required by this item is hereby incorporated by reference to the Section entitled “Security Ownership of Certain Beneficial Owners and Management” in our definitive [removed: 2017] [added: 2018] Proxy Statement to be filed pursuant to Regulation 14A.

| Plans Approved by Stockholders ....................................................................................................................................................... | | | 155,516 | | $ | 29.65 | | 7,696,304 |

| | Total ....................................................................................................................................................................................... | | 155,516 | | $ | 29.65 | | 7,696,304 |

| Plans Approved by Stockholders ....................................................................................................................................................... | | | 176,475 | | $ | 57.19 | | 4,819,337 |

| | Total ....................................................................................................................................................................................... | | 176,475 | | $ | 57.19 | | 4,819,337 |

The information required by this item is hereby incorporated by reference to the Section entitled “Certain Relationships and Related Transactions” and “Corporate Governance – Board of Directors Meetings and Committees – Independent Directors” in our definitive [removed: 2017] [added: 2018] Proxy Statement to be filed pursuant to Regulation 14A.

The information required by this item is hereby incorporated by reference to the Section entitled “Independent Registered Public Accounting Firm Fees and Pre-Approval Policies and Procedures” in our definitive [removed: 2017] [added: 2018] Proxy Statement to be filed pursuant to Regulation 14A.

| | Our Consolidated Financial Statements filed as a part of this report are listed on the index on [removed: page 68.] |

[removed: | 3. | Exhibits: |][added: (b) Exhibits]

(a) List of Documents Filed as a Part of This Report:

| | Page 77. |

| | Schedule II – Valuation of Qualifying Accounts |

| 3. | Index to Exhibits: |

| | See exhibits listed under Item 15(b) below. |

| | |

3.1 [Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated November 2, 1995.

(Incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the fiscal year ended December 30, 2006 filed on February 28, 2007.)](http://www.sec.gov/Archives/edgar/data/1000228/000095012307002886/y30969exv3w1.htm)

3.2 [Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated November 12, 1997.

(Incorporated by reference to Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year ended December 30, 2006 filed on February 28, 2007.)](http://www.sec.gov/Archives/edgar/data/1000228/000095012307002886/y30969exv3w2.htm)

3.3 [Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated June 16, 1998.

(Incorporated by reference to Exhibit 3.3 to our Registration Statement on Form S-3, Reg.

No. 333-59793 filed on July 24, 1998.)](http://www.sec.gov/Archives/edgar/data/1000228/0000889812-98-001795.txt)

3.4 [Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated May 25, 2005.

(Incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended June 25, 2005 filed on August 4, 2005.)](http://www.sec.gov/Archives/edgar/data/1000228/000095012305009366/y11335exv3w1.htm)

3.5 [Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated May 15, 2012.

(Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on May 16, 2012.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312512236772/d353926dex31.htm)

3.6 [Amended and Restated By-laws of Henry Schein, Inc., as amended (Incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended July 1, 2017 filed on August 8, 2017.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022817000049/exhibit31.htm)

4.1 [Amended and Restated Master Note Purchase Agreement dated September 15, 2017, by and among us, Metropolitan Life Insurance Company, MetLife Investment Advisors Company, LLC and each MetLife affiliate which becomes party thereto.

(Incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed on September 18, 2017.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312517286814/d451923dex43.htm)

4.2 [Amended and Restated Master Note Facility dated September 15, 2017, by and among us, NYL Investors LLC and each New York Life affiliate which becomes party thereto.

(Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on September 18, 2017.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312517286814/d451923dex42.htm)

4.3 [Amended and Restated Private Shelf Agreement dated September 15, 2017, by and among us, PGIM, Inc. and each Prudential affiliate which becomes party thereto.

(Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on September 18, 2017.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312517286814/d451923dex41.htm)

10.1 [Henry Schein, Inc. 1994 Stock Incentive Plan, as amended and restated effective as of March 27, 2007.

(Incorporated by reference to Appendix A to our definitive 2007 Proxy Statement on Schedule 14A filed on April 10, 2007.)](http://www.sec.gov/Archives/edgar/data/1000228/000095012307005242/y33040def14a.htm)

10.2 [Amendment Number One to the Henry Schein, Inc. 1994 Stock Incentive Plan, effective as of January 1, 2005.

(Incorporated by reference to Exhibit 10.2 to our Annual Report on Form 10-K for the fiscal year ended December 27, 2008 filed on February 24, 2009.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022809000011/exhibit10_22008.htm)

10.3 [Amendment Number Two to the Henry Schein, Inc. 1994 Stock Incentive Plan, effective as of May 28, 2009.

(Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended June 27, 2009 filed on August 4, 2009.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022809000030/exhibit10_12q09.htm)

10.4 [Amendment Number Three to the Henry Schein, Inc. 1994 Stock Incentive Plan, effective as of February 23, 2010.

(Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 27, 2010 filed on May 4, 2010.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022810000021/exhibit10_1.htm)

10.5 [Amendment Number Four to the Henry Schein, Inc. 1994 Stock Incentive Plan, effective as of May 18, 2011.

(Incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q for the fiscal quarter ended June 25, 2011 filed on August 2, 2011.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022811000049/exhibit10_22q11.htm)

10.6 [Amendment Number Five to the Henry Schein, Inc. 1994 Stock Incentive Plan, effective as of May 18, 2011.

(Incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q for the fiscal quarter ended June 25, 2011 filed on August 2, 2011.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022811000049/exhibit10_32q11.htm)

10.7 [Henry Schein, Inc. 2013 Stock Incentive Plan, as amended and restated effective as of May 14, 2013.

(Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on May 16, 2013.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312513224319/d542871dex102.htm)

10.8 [Form of Restricted Stock Agreement for time-based restricted stock awards pursuant to the Henry Schein, Inc. 2013 Stock Incentive Plan (as amended and restated effective as of May 14, 2013).

(Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 29, 2014 filed on May 6, 2014.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022814000017/exhibit101_1q14.htm)

| | Schedule II |

| | The exhibits required by Item 601 of Regulation S-K and filed herewith are listed in the Exhibit |

| | List immediately preceding the exhibits. |

| /s/ STANLEY M. BERGMAN | | Chairman, Chief Executive Officer | | February 21, [removed: 2017] [added: 2018] |

| /s/ STEVEN PALADINO | | Executive Vice President, Chief Financial | | February 21, [removed: 2017] [added: 2018] |

| /s/ JAMES P. BRESLAWSKI | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ GERALD A. BENJAMIN | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ MARK E. MLOTEK | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ BARRY J. ALPERIN | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ LAWRENCE S. BACOW, PH. D. | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ PAUL BRONS | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ JOSEPH L. HERRING | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ DONALD J. KABAT | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ KURT P. KUEHN | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ PHILIP A. LASKAWY | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ CAROL RAPHAEL | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ E. DIANNE REKOW | | Director | | February 21, [removed: 2017] [added: 2018] |

| /s/ BRADLEY T. SHEARES, PH. D. | | Director | | February 21, [removed: 2017] [added: 2018] |

| | | sales returns and other [removed: .........................................................................................................................................] [added: ........................................................................................................................................] | | $ | 77,008 | | $ | 2,647 | | $ | 16,909 | | $ | (6,235) | | $ | 90,329 |

| | | sales returns and other [removed: .........................................................................................................................................] [added: ........................................................................................................................................] | | $ | 80,671 | | $ | 3,184 | | $ | 1,124 | | $ | (7,971) | | $ | 77,008 |

| Year ended December [removed: 27, 2014:] [added: 30, 2017:] | | | | | | | | | | | | | | | | | |

| | February 21, 2018 |

| | | sales returns and other ........................................................................................................................................ | | $ | 90,329 | | $ | 9,370 | | $ | 13,599 | | $ | (6,706) | | $ | 106,592 |

| | February 21, 2017 |

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Henry Schein, Inc.

Melville, NY

The audits referred to in our report dated February 21, 2017 relating to the consolidated financial statements of Henry Schein, Inc., which is contained in Item 8 of this Form 10­K also included the audit of the financial statement schedule listed in the accompanying index.

This financial statement schedule is the responsibility of the Company's management.

Our responsibility is to express an opinion on the financial statement schedule based on our audits.

In our opinion such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ BDO USA, LLP

New York, NY

February 21, 2017

| | | sales returns and other ......................................................................................................................................... | | $ | 78,298 | | $ | 4,619 | | $ | 5,828 | | $ | (8,074) | | $ | 80,671 |

Exhibits

3.1 Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated November 2, 1995.

(Incorporated by reference to Exhibit 3.1 to our Annual Report on Form 10-K for the fiscal year ended December 30, 2006 filed on February 28, 2007.)

3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated November 12, 1997.

(Incorporated by reference to Exhibit 3.2 to our Annual Report on Form 10-K for the fiscal year ended December 30, 2006 filed on February 28, 2007.)

3.3 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated June 16, 1998.

(Incorporated by reference to Exhibit 3.3 to our Registration Statement on Form S-3, Reg.

No. 333-59793 filed on July 24, 1998.)

3.4 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated May 25, 2005.

(Incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended June 25, 2005 filed on August 4, 2005.)

3.5 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Henry Schein, Inc. dated May 15, 2012.

(Incorporated by reference to Exhibit 3.1 of our Current Report on Form 8-K filed on May 16, 2012.)

3.6 Amended and Restated By-Laws.

(Incorporated by reference to Exhibit 3.2 to our Registration Statement on Form S-1, Reg.

No. 33-96528 filed on October 10, 1995.)

3.7 Amendments to the Amended and Restated By-Laws adopted July 15, 1997.

(Incorporated by reference to Exhibit 3.3 to our Registration Statement on Form S-4, Reg.

No. 33-36081 filed on September 22, 1997.)

3.8 Amendment to the Amended and Restated By-Laws adopted on May 15, 2012.

(Incorporated by reference to Exhibit 3.2 of our Current Report on Form 8-K filed on May 16, 2012.)

4.1 Master Note Facility, dated as of April 27, 2012, by and among us, Metropolitan Life Insurance Company, Metlife Investment Advisors Company, LLC and each MetLife affiliate which becomes party thereto.

(Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on April 30, 2012.)

4.2 Letter Agreement dated as of September 22, 2014 amending the Master Note Purchase Agreement, dated as of April 27, 2012, by and among us, Metropolitan Life Insurance Company, MetLife Investment Management, LLC (f/k/a MetLife Investment Advisors Company, LLC) and each MetLife affiliate which becomes party thereto.

(Incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed on September 26, 2014.)

4.3 Master Note Facility, dated as of August 9, 2010, by and among us, New York Life Investment Management LLC and each New York Life affiliate which becomes party thereto.

(Incorporated by reference to Exhibit 4.1 to our Quarterly Report on Form 10-Q for the fiscal quarter ended March 26, 2011 filed on May 3, 2011.)*

4.4 First Amendment to Master Note Facility, dated as of February 14, 2012, by and among us, New York Life Investment Management LLC and each New York Life affiliate which becomes party thereto.