Henry Schein (HSIC) 10-K risk factor changes: FY2020 vs FY2019

[removed: The] risks [removed: described below] could have a material adverse [removed: effect] [added: impact] on our business, reputation, financial [removed: condition and/or the trading price of our common stock.]

Our business operations could [removed: also] be affected by [removed: additional] factors that are not presently known [removed: to us or that we currently consider not to be material to our operations.]

[removed: You should not consider this list to be] [added: necessarily represent] a complete statement of all risks and uncertainties.

The order in which these factors appear [removed: should] [added: does] not [removed: be construed to indicate their relative importance or priority.][added: necessarily reflect]

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

[removed: Some of our] competitors have greater financial and other resources than we do, which [removed: could allow them to compete more successfully.]

Most of our products are available from several sources and our customers tend to have relationships [removed: with several distributors.]

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

[removed: We] could be subject to charges and financial losses in the [removed: event we fail to satisfy minimum purchase commitments.]

[removed: We may experience competition] from third-party online commerce [removed: sites.][added: sites) and consolidating, and we may not]

[removed: Traditional] [added: traditional] health care supply and distribution relationships are being challenged [removed: by electronic online commerce solutions.]

[removed: The emergence of such potential competition and our inability to anticipate and effectively respond to changes on a] timely basis could have a material adverse effect on our business.

[removed: Because substantially all of the products that we distribute are not manufactured by us, we] [added: We] are dependent upon third parties for the manufacture and supply of substantially all of our [removed: products.][added: products.]

[removed: Our revenues and profitability] depend on our relationships with capable sales personnel as well as [removed: customers, suppliers and manufacturers of the products that we distribute.]

[removed: If we fail to maintain our existing relationships with] such persons or fail to acquire relationships with such key persons in the [removed: future, our business may be materially adversely affected.]

[removed: Our] [added: Our] future success is substantially dependent upon our senior [removed: management.]

Our future success is substantially dependent upon the efforts and abilities of [removed: members of our existing senior management, particularly Stanley M.]

[removed: The loss of the services of] Mr. Bergman could have a material adverse effect on our business.

We have an employment agreement with Mr. [removed: Bergman.]

[removed: Competition for] senior management is intense and we may not be successful in attracting [removed: and retaining key personnel.]

[removed: - timing of the introduction of new products and services by] [added: in] our [removed: suppliers;][added: products or services, or the]

[removed: -] [added: increased] costs associated with our self-insured medical [removed: and dental] insurance [removed: programs;][added: programs.]

[removed: - exposure to product liability and other claims in the] event that the use of the products we sell results in [removed: injury;][added: injury.]

[removed: - increases] [added: Increases] in shipping costs or service issues with our third-party [removed: shippers;][added: shippers]

[removed: -] fluctuations in the value of foreign [removed: currencies;][added: currencies (including, without limitation,]

[removed: Expansion] [added: Expansion] of group purchasing organizations (“GPO”) or provider networks [removed: and the multi-tiered costing structure may place us at a competitive disadvantage.]

The medical products industry is subject to a multi-tiered costing structure, [removed: which can vary by manufacturer and/or product.]

Under this structure, certain institutions can obtain more [removed: favorable prices for medical products than we are able to obtain.]

[removed: The multi-tiered costing structure continues to expand as many large integrated health care providers] and others with significant purchasing power, such as GPOs, demand more favorable pricing terms.

[removed: Additionally,] the formation of provider networks and GPOs may shift purchasing decisions [removed: to entities or persons with whom we do not have a historical relationship.]

[removed: We ship almost all of our orders through third-party] [added: party] delivery services, and typically bear the cost of shipment.

[removed: Accordingly, any significant increase in shipping] rates could have a material adverse effect on our business, financial condition or operating [removed: results.]

[removed: Similarly, strikes] or other service interruptions by those shippers could cause our operating [removed: expenses to rise and materially adversely affect our ability to deliver products on a timely basis.]

[removed: Uncertain] [added: Uncertain] global macro-economic and political conditions could [removed: materially adversely affect our results of operations and financial condition.]

Uncertain global macro-economic and political conditions that affect the economy [removed: and the economic outlook of the United States, Europe and other parts of the world could materially adversely affect our results of operations and financial condition.]

[removed: -] election results;

[removed: -] changes to laws and policies governing foreign trade (including, without [removed: limitation, the United States-Mexico-Canada Agreement (USMCA) and other international trade agreements);]

[removed: -] greater restrictions on imports and exports;

[removed: -] changes in laws and policies governing health care or data privacy;

[removed: -] tariffs and sanctions;

to us or that we currently

consider not to be material to our operations, so you should not consider

the risks disclosed in this section to

The Company believes that the following

results, financial condition and/or

the trading price of our common stock.

their

relative importance or priority.

COMPANY RISKS

liquidity may be negatively impacted by

the effects of disease outbreaks, epidemics, pandemics, or similar wide-spread public

health concerns and other

natural disasters

The COVID-19 pandemic and the responses of governments

to it had, and may again have, a

material adverse effect on our business, results of operations and cash flows and may

result in a material

adverse effect on our financial condition and liquidity.

Our business, results of operations, cash flows, financial condition and

liquidity may be negatively impacted by the

effects of disease outbreaks, epidemics, pandemics, similar wide-spread public health concerns,

and other natural

disasters.

The COVID-19 pandemic has had, and continues to have,

an unprecedented impact on society, worldwide

economic activity, and the health care sector (particularly, the dental market).

As a global healthcare solutions

company, the COVID-19 pandemic and the governmental responses to it had, and may again have, a material

adverse effect on our business, results of operations and cash flows and may result in a

material adverse effect on

our financial condition and liquidity.

In March and April 2020, the dental market was severely impacted by

COVID-19, with many, if not a majority, of practices being closed or open on a limited basis only.

Although dental

practice openings and patient volume recovery in the United States and

many other countries have rebounded faster

than originally anticipated, patient volumes have remained below pre-COVID-19

levels.

Material uncertainty

remains and the potential for additional significant resurgences of COVID-19

Although it is not possible to predict or identify all such risks and uncertainties, they may include, but are not limited to, the factors discussed below.

Competitors could obtain exclusive rights to market particular products, which we would then be unable to market.

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

There has also been increasing consolidation among manufacturers of health care products which could have a material adverse effect on our margins and product availability.

Additionally, in this competitive market, some of our contracts contain minimum purchase commitments.

In the future, we may be unable to compete successfully and competitive pressures may reduce our revenues and profitability.

The continued advancement of online commerce by third parties will require us to cost-effectively adapt to changing technologies, to enhance existing services and to differentiate our business (including with additional value-added services) to address changing demands of consumers and our customers on a timely basis.

We obtain substantially all of our products from third parties.

Generally, we do not have long-term contracts with our suppliers committing them to supply products to us.

Therefore, suppliers may not provide the products we need in the quantities we request.

While there is generally more than one source of supply for most of the categories of products we sell, some key suppliers, in the aggregate, supply a significant portion of the products we sell.

Additionally, because we generally do not control the actual production of the products we sell, we may be subject to delays caused by interruption in production based on conditions outside of our control, including the failure to comply with applicable government requirements.

The failure of manufacturers of products regulated by the FDA or other governmental agencies to meet these requirements could result in product recall, cessation of sales or other market disruptions.

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

There is no guarantee that we would be able to obtain such alternative sources of supply on a timely basis, if at all.

An extended interruption in the supply of our products, especially any high sales volume product, could have a material adverse effect on our results of operations, which most likely would adversely affect the value of our common stock.

Our future revenues and profitability depend on our ability to maintain satisfactory relationships with qualified sales personnel as well as customers, suppliers and manufacturers.

We experience fluctuations in quarterly earnings.

As a result, we may fail to meet or exceed the expectations of securities analysts and investors, which could cause our stock price to decline.

Our business is subject to seasonal and other quarterly fluctuations.

Revenues and profitability generally have been higher in the third and fourth quarters due to the timing of sales of seasonal products (including influenza vaccine, equipment and software products), purchasing patterns of office-based health care practitioners and year-end promotions.

Revenues and profitability generally have been lower in the first quarter, primarily due to increased sales in the prior two quarters.

We expect our historical seasonality of sales to continue in the foreseeable future.

Quarterly results may also be materially adversely affected by a variety of other factors, including:

- timing and amount of sales and marketing expenditures;

- timing of pricing changes offered by our suppliers;

- timing of the release of upgrades and enhancements to our technology-related products and services;

- changes in or availability of supplier contracts or rebate programs;

- supplier rebates based upon attaining certain growth goals;

- changes in the way suppliers introduce or deliver products to market;

- costs of developing new applications and services;

- our ability to correctly identify customer needs and preferences and predict future needs and preferences;

- uncertainties regarding potential significant breaches of data security or disruptions of our information technology systems;

- unexpected regulatory actions, or government regulation generally;

- exclusivity requirements with certain suppliers, which may prohibit us from distributing competitive products manufactured by other suppliers;

- loss of sales representatives;

- costs related to acquisitions and/or integrations of technologies or businesses;

- general market and economic conditions, as well as those specific to the health care industry and related industries;

- our success in establishing or maintaining business relationships;

- unexpected difficulties in developing and manufacturing products;

[removed: Cautionary] [added: Cautionary] Note Regarding Forward-Looking [removed: Statements][added: Statements]

All forward-looking statements made by us are subject to [removed: risks and uncertainties and are not guarantees of future performance.]

The order in which these factors appear should not be construed [removed: to indicate their relative importance or priority.]

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control [removed: or predict.]

Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction [removed: of actual results.]

[removed: Where You] Can Find Important [removed: Information][added: Information]

We may disclose important information through one or more of the following channels: SEC filings, public [removed: conference calls and webcasts, press releases, the investor relations page of our website (www.henryschein.com) and the social media channels identified on the Newsroom page of our website.]

[removed: Recent Developments][added: Recent Developments]

During the fourth quarter of 2019, we sold an equity investment [removed: in Hu-Friedy Mfg.]

[removed: Co., LLC, a] manufacturer of dental instruments and infection prevention solutions.

[removed: Our investment was non-controlling, we] were not involved in running the business and had no representation [removed: on the board of directors.]

[removed: During the fourth] quarter of 2019, we also sold certain other equity investments.

[removed: In aggregate, the sales of these investments] resulted in a pre-tax gain [added: in 2019] of approximately $250.2 million and an after-tax [removed: gain of approximately $186.8 million.]

[removed: This was accomplished by a series of transactions among us, Vets First Choice, Covetrus, Inc. (f/k/a HS Spinco, Inc. “Covetrus”), a wholly owned subsidiary of ours] prior to the Distribution Date, and HS Merger Sub, Inc., a wholly owned subsidiary [removed: of Covetrus (“Merger Sub”).]

On the Distribution Date, we received a tax-free distribution of $1,120 [removed: million from Covetrus pursuant to certain debt financing incurred by Covetrus.]

The proceeds of the Share Sale were paid to Covetrus and [removed: distributed to us.]

After the Share Sale and Animal Health Spin-off, Merger Sub consummated the [removed: Merger whereby it merged with and into Vets First Choice, with Vets First Choice surviving the Merger as a wholly owned subsidiary of Covetrus.]

[removed: After the Separation and the Merger, we no longer beneficially] owned any shares of Covetrus common stock and, following the Distribution [removed: Date, will not consolidate the financial results of Covetrus for the purpose of our financial reporting.]

[removed: Following the Separation and the Merger,] Covetrus was an independent, publicly traded company on the Nasdaq Global Select [removed: Market.]

[removed: Executive-Level Overview][added: Executive-Level Overview]

[removed: We believe we are the world’s largest] provider of health care products and services primarily to office-based dental [removed: and medical practitioners.]

We believe that we have a strong brand identity due to our more than [removed: 87 years of experience distributing health care products.]

We have established strategically located distribution centers to enable us to better serve our customers and [removed: increase our operating efficiency.]

This infrastructure, together with broad product and service offerings at [removed: competitive prices, and a strong commitment to customer service, enables us to be a single source of supply for our customers’ needs.]

Our infrastructure also allows us to provide convenient ordering [removed: and rapid, accurate and complete order fulfillment.]

We conduct our business through two reportable segments: (i) health care distribution and (ii) technology and [removed: value-added services.]

The health care distribution reportable segment aggregates our global dental [removed: and medical operating segments.]

[removed: This segment distributes] [added: Consists of] consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and generic [removed: pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins.]

Our global dental group serves office-based dental practitioners, dental laboratories, schools [removed: and other institutions.]

Our global medical group serves office-based medical practitioners, ambulatory [removed: surgery centers, other alternate-care settings and other institutions.]

Our global technology and value-added services group provides software, [removed: technology and other value-added services to health care practitioners.]

Our technology group offerings include practice management software [removed: systems for dental and medical practitioners.]

[removed: Our value-added practice solutions include financial services on a] non-recourse basis, e-services, practice technology, network and hardware services, as well as continuing education [removed: services for practitioners.]

[removed: *Industry Overview*][added: Industry Overview]

[removed: This trend has benefited] distributors capable of providing a broad array of products and services at low [removed: prices.]

[removed: We believe that the trend towards cost containment has the potential] to favorably affect demand for technology solutions, including software, which can [removed: enhance the efficiency and facilitation of practice management.]

Our current and future results have been and could be impacted by the current [removed: economic environment and uncertainty, particularly impacting overall demand for our products and services.]

[removed: *Industry Consolidation*][added: Industry Consolidation]

The health care products distribution industry, as it relates to office-based health care practitioners, is fragmented [removed: and diverse.]

The purchasing decisions within an office-based health care practice are typically [removed: made by the practitioner or an administrative assistant.]

Management’s Discussion and Analysis of Financial Condition and Results of

Operations

In accordance with the “Safe Harbor” provisions of the Private Securities

Litigation Reform Act of 1995, we

provide the following cautionary remarks regarding important factors

that, among others, could cause future results

to differ materially from the forward-looking statements, expectations and assumptions

expressed or implied

herein.

risks and uncertainties and are not guarantees of

future performance.

These forward-looking statements involve known and unknown risks, uncertainties

and other

factors that may cause our actual results, performance and achievements

or industry results to be materially

different from any future results, performance or achievements expressed or implied by such

forward-looking

statements.

These statements are generally identified by the use of such

terms as “may,” “could,” “expect,”

“intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,”

“to be,” “to make” or other comparable

terms.

Factors that could cause or contribute to such differences include, but are not limited

to, those discussed in

this Annual Report on Form 10-K, and in particular the risks discussed under

the caption “Risk Factors” in Item 1A

of this report and those that may be discussed in other documents we file with

the Securities and Exchange

Commission (SEC).

Forward looking statements include the overall impact of the Novel Coronavirus

Disease 2019

(COVID-19) on the Company, its results of operations, liquidity, and financial condition (including any estimates

of the impact on these items), the rate and consistency with which dental

and other practices resume or maintain

normal operations in the United States and internationally, expectations regarding personal protective equipment

(“PPE”) and COVID-19 related product sales and inventory levels and whether

additional resurgences of the virus

will adversely impact the resumption of normal operations, the impact

of restructuring programs as well as of any

In accordance with the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995, we provide the following cautionary remarks regarding important factors that, among others, could cause future results to differ materially from the forward-looking statements, expectations and assumptions expressed or implied herein.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance and achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

These statements are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this Annual Report on Form 10-K, and in particular the risks discussed under the caption “Risk Factors” in Item 1A of this report and those discussed in other documents we file with the Securities and Exchange Commission (SEC).

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; increased competition by third party commerce sites; 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; risks associated with the Coronavirus; risks associated with the United Kingdom’s withdrawal from the European Union; transitional challenges associated with acquisitions, dispositions and joint ventures, including the failure to achieve anticipated synergies/benefits; financial and tax risks associated with acquisitions, dispositions and joint ventures; litigation risks; new or unanticipated litigation developments and the status of litigation matters; the dependence on our continued product development, technical support and successful marketing in the technology segment; our dependence on third parties for certain technologically advanced components; 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.

On February 7, 2019 (the “Distribution Date”), we completed the separation (the “Separation”) and subsequent merger of our animal health business (the “Henry Schein Animal Health Business”) with Direct Vet Marketing, Inc. (d/b/a Vets First Choice, “Vets First Choice”) (the “Merger”).

In connection with the Separation, we contributed, assigned and transferred to Covetrus certain applicable assets, liabilities and capital stock or other ownership interests relating to the Henry Schein Animal Health Business.

On the Distribution Date and prior to the Animal Health Spin-off, Covetrus issued shares of Covetrus common stock to certain institutional accredited investors (the “Share Sale Investors”) for $361.1 million (the “Share Sale”).

Subsequent to the Share Sale, we distributed, on a pro rata basis, all of the shares of the common stock of Covetrus held by us to our stockholders of record as of the close of business on January 17, 2019 (the “Animal Health Spin-off”).

Immediately following the consummation of the Merger, on a fully diluted basis, (i) approximately 63% of the shares of Covetrus common stock were (a) owned by our stockholders and the Share Sale Investors, and (b) held by certain employees of the Henry Schein Animal Health Business (in the form of certain equity awards), and (ii) approximately 37% of the shares of Covetrus common stock were (a) owned by stockholders of Vets First Choice immediately prior to the Merger, and (b) held by certain employees of Vets First Choice (in the form of certain equity awards).

We serve more than 1 million customers worldwide including dental practitioners and laboratories and physician practices, as well as government, institutional health care clinics and other alternate care clinics.

We are headquartered in Melville, New York, employ more than 19,000 people (of which more than 9,400 are based outside the United States) and have operations or affiliates in 31 countries, including the United States, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, France, Germany, Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, the Netherlands, New Zealand, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, Thailand, United Arab Emirates and the United Kingdom.

It also has accelerated the growth of HMOs, group practices, other managed care accounts and collective buying groups, which, in addition to their emphasis on obtaining products at competitive prices, tend to favor distributors capable of providing specialized management information support.

Our operating results in recent years have been significantly affected by strategies and transactions that we undertook to expand our business, domestically and internationally, in part to address significant changes in the health care industry, including consolidation of health care distribution companies, health care reform, trends toward managed care, cuts in Medicare and collective purchasing arrangements.

The industry ranges from sole practitioners working out of relatively small offices to group practices or service organizations ranging in size from a few practitioners to a large number of practitioners who have combined or otherwise associated their practices.

Due in part to the inability of office-based health care practitioners to store and manage large quantities of supplies in their offices, the distribution of health care supplies and small equipment to office-based health care practitioners has been characterized by frequent, small quantity orders, and a need for rapid, reliable and substantially complete order fulfillment.

As industry consolidation continues, we believe that we are positioned to capitalize on this trend, as we believe we have the ability to support increased sales through our existing infrastructure, although there can be no assurances that we will be able to successfully accomplish this.

We also have invested in expanding our sales/marketing infrastructure to include a focus on building relationships with decision makers who do not reside in the office-based practitioner setting.

As the health care industry continues to change, we continually evaluate possible candidates for merger and joint venture or acquisition and intend to continue to seek opportunities to expand our role as a provider of products and services to the health care industry.

If additional transactions are entered into or consummated, we would incur merger and/or acquisition-related costs, and there can be no assurance that the integration efforts associated with any such transaction would be successful.

The health care products distribution industry continues to experience growth due to the aging population, increased health care awareness, the proliferation of medical technology and testing, new pharmacology treatments and expanded third-party insurance coverage, partially offset by the effects of unemployment on insurance coverage.

The Centers for Medicare and Medicaid Services, or CMS, published “National Health Expenditure Projections 2018-2027” indicating that total national health care spending reached approximately $3.6 trillion in 2018, or 17.7% 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 $6.0 trillion in 2027, approximately 19.4% of the nation’s projected gross domestic product.

*Government*

Certain of our businesses involve the distribution of pharmaceuticals and medical devices, and in this regard we are subject to extensive local, state, federal and foreign governmental laws and regulations applicable to the distribution and sale of pharmaceuticals and medical devices.

Additionally, government and private insurance programs fund a large portion of the total cost of medical care, and there has been an emphasis on efforts to control medical costs, including laws and regulations lowering reimbursement rates for pharmaceuticals, medical devices, and/or medical treatments or services.

Also, many of these laws and regulations are subject to change and may impact our financial performance.

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

Failure to comply with law or regulations could have a material adverse effect on our business.

The United States Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation 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.

The Health Care Reform Law included a 2.3% excise tax on domestic sales of many medical devices by manufacturers and importers that was to begin in 2013 and a fee on branded prescription drugs and biologics.

The fee on branded prescription drugs and biologics was implemented in 2011.

However, subsequent federal laws had suspended the imposition of the medical device excise tax through December 31, 2019, and the Further Consolidated Appropriations Act, 2020, signed into law on December 20, 2019, has permanently repealed the medical device excise tax.

The Health Care Reform Law has also materially expanded the number of individuals in the United States with health insurance.

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 is seeking to repeal and replace the Health Care Reform Law.

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 it, including, without limitation, by permitting the use of less robust plans with lower coverage and eliminating “premium support” for insurers providing policies under the Health Care Reform Law.

On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act (the “Tax Act”), 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, and which also repealed the individual mandate of the Health Care Reform Law.

Further, in December 2019, the Fifth Circuit ruled that the mandate within the Health Care Reform Law requiring that people buy health insurance was unconstitutional, though the ruling will likely be appealed.

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

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

[removed: These hedging activities provide] only limited protection against currency exchange and credit risks.

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

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

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

[removed: *Foreign] [added: Foreign] Currency [removed: Agreements*][added: Agreements]

[removed: The value of certain foreign] currencies [removed: as compared to the U.S. dollar and the value] of [removed: certain underlying functional currencies of] the Company, including its foreign subsidiaries, may affect our financial results.

[removed: Fluctuations in] exchange rates may positively or negatively affect our revenues, gross margins, operating expenses [removed: and retained earnings, all of which are expressed in U.S. dollars.]

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

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

[removed: A 5% increase in the value of the Euro to the USD from December 28, 2019, with all other variables] held constant, would have had an unfavorable effect on the fair value of these forward contracts [removed: by decreasing the value of these instruments by $12.0 million.]

[removed: *Short-Term Investments*][added: Short-Term Investments]

We limit our credit risk with respect to our cash equivalents, short-term investments and derivative instruments, by [removed: monitoring the credit worthiness of the financial institutions who are the counter-parties to such financial instruments.]

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

[removed: *Variable] Interest Rate [removed: Debt*][added: Debt]

As of December [removed: 28, 2019,] [added: 26, 2020,] we had variable interest rate exposure for certain [removed: of our revolving credit facilities and our U.S. trade accounts receivable securitization.]

As of December [removed: 28, 2019,] [added: 26, 2020,] there was $0.0 million outstanding under [removed: this revolving credit]

[removed: During] the [removed: year ended December 28, 2019, the] average outstanding balance under this [removed: revolving credit] [added: securitization] facility was approximately [removed: $147.5 million.]

[removed: 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: $0.4 million.]

[removed: Our U.S trade accounts receivable securitization, which we entered into on April 17, 2013 and which expires] [added: expire] on April 29, 2022, has an interest rate that is based upon the asset-backed [removed: commercial paper rate.]

[removed: As of December 28, 2019, the] commercial paper rate was [removed: 1.90%] [added: 0.22%] plus [removed: 0.75%,] [added: 0.95%,] for a combined rate of [removed: 2.65%.]

[removed: At December 28, 2019 the] outstanding balance was [removed: $100.0] [added: $0.0] million under this securitization facility.

[removed: Based upon our] average outstanding balance for this securitization facility, for each hypothetical increase of 25 basis points, our [removed: interest expense thereunder would have increased by $0.7 million.]

[removed: | | | HENRY SCHEIN, INC. | |][added: Schein, Inc. by approximately $1.3]

[removed: | | | | | | December 28, | | | December 29, | |][added: December 26, 2020.]

[removed: CONSOLIDATED STATEMENTS OF INCOME][added: in our consolidated statement of income, of]

[removed: The VIE is a] [added: our U.S.] trade accounts receivable securitization.

[removed: | | | | Year Ended | | | | | | | |][added: swap for the year ended]

[removed: *Revolving Credit Agreement*][added: this revolving credit]

[removed: On April 18, 2017, we entered into a $750 million] [added: Our] revolving credit [removed: agreement (the “Credit Agreement”),] [added: facility] which [removed: matures in] [added: we entered into on] April [removed: 2022.][added: 18, 2017]

[removed: *U.S. Trade Accounts Receivable Securitization*][added: Our U.S trade accounts receivable securitization, which we entered into]

[removed: Fluctuations in the] [added: The] value of [added: certain] foreign currencies as compared to the U.S. [removed: Dollar may have a significant impact on our comprehensive income.][added: dollar]

[removed: | | | | | | Level 1 | | | Level 2 | | | Level 3 | | | Total |][added: Total]

Quantitative and Qualitative Disclosures About Market Risk

dollar and each other, and changes to the credit markets.

We attempt to minimize these risks by primarily using

These hedging activities provide

Factors that could influence the effectiveness of

instruments and liquidity of the credit

markets.

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

our investments, maintaining a

strong balance sheet and having multiple sources of capital.

and the value of certain underlying functional

Fluctuations in

and retained

earnings, all of which are expressed in U.S. dollars.

Where we deem it prudent, we engage in hedging programs

the impact of foreign currency exchange rate

fluctuations on earnings.

We purchase short-term (i.e., generally 18 months or less) foreign currency forward

contracts to protect against currency exchange risks associated with intercompany

loans due from our international

subsidiaries and the payment of merchandise purchases to foreign

suppliers.

We do not hedge the translation of

exposure, not an economic

exposure.

A hypothetical 5% change in the average value of the U.S. dollar

in 2020 compared to foreign currencies

would have changed our 2020 reported Net income attributable to Henry

million.

As of December 26, 2020, we had forward foreign currency exchange

agreements, which expire through November

16, 2023, which include a mark-to-market loss of $9.9 million as determined

by quoted market prices.

Included in

the forward foreign currency exchange agreements, Henry Schein, Inc.

had EUR/USD forward contracts notionally

totaling an amount of approximately €200 million, with a reported fair value

We purchase short-term (i.e., generally 18 months or less) foreign currency forward contracts to protect against currency exchange risks associated with intercompany loans due from our international subsidiaries and the payment of merchandise purchases to foreign suppliers.

A hypothetical 5% change in the average value of the U.S. dollar in 2019 compared to foreign currencies would have changed our 2019 reported Net income attributable to Henry Schein, Inc. by approximately $6.0 million.

As of December 28, 2019, we had forward foreign currency exchange agreements, which expire through November 16, 2023, which include a mark-to-market loss of $3.9 million as determined by quoted market prices.

Included in the forward foreign currency exchange agreements, Henry Schein, Inc. had EUR/USD forward contracts notionally totaling an amount of €200 million, with a reported fair value of these contracts as a net liability of $0.3 million.

As of December 28, 2019, Henry Schein, Inc. had Euro to Brazilian Real (BRL) cross currency swap contracts notionally totaling an amount of €83.6 million, with a reported fair value of these contracts as a net liability of $1.4 million.

A 5% increase in the value of the Euro to the BRL from December 28, 2019, 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 $4.6 million.

Our revolving credit facility which we entered into on April 18, 2017 and expires on April 18, 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.

During the year ended December 28, 2019, the average outstanding balance under this securitization facility was approximately $274.8 million.

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

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

| | | | |

| | | INDEX TO FINANCIAL STATEMENTS | |

| | | | Page |

| [Report of Independent Registered Public Accounting Firm](#Report1) | | | 85 |

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

| | [Balance Sheets as of December 28, 2019 and December 29, 2018](#BalanceSheets) | | 88 |

| | [Statements of Income for the years ended December 28, 2019,](#IncomeStatement) | | |

| | | [December 29, 2018 and December 30, 2017](#IncomeStatement) | 89 |

| | [Statements of Comprehensive Income for the years ended December 28, 2019,](#CompInc) | | |

| | | [December 29, 2018 and December 30, 2017](#CompInc) | 90 |

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

| | | [December 28, 2019, December 29, 2018 and December 30, 2017](#SE) | 91 |

| | [Statements of Cash Flows for the years ended December 28, 2019,](#CashFlow) | | |

| | | [December 29, 2018 and December 30, 2017](#CashFlow) | 92 |

| | [Notes to Consolidated Financial Statements](#notes2fs) | | 93 |

| | [Note 1 – Significant Accounting Policies](#sap) | | 93 |

| | [Note 2 – Discontinued Operations](#discop) | | 103 |

| | [Note 3 – Property and Equipment, Net](#prop) | | 106 |

| | [Note 4 – Goodwill and Other Intangibles, Net](#gw) | | 107 |

| | [Note 5 – Investments and Other](#inves) | | 108 |

| | [Note 6 – Debt](#debt) | | 109 |

| | [Note 7 – Leases](#lease) | | 113 |

| | [Note 8 – Redeemable Noncontrolling Interests](#RNCI) | | 115 |

| | [Note 9 – Comprehensive Income](#cinc) | | 116 |

| | [Note 10 – Fair Value Measurements](#FV) | | 117 |

| | [Note 11 – Business Acquisitions Divestitures](#Note11) | | 120 |

| | [Note 12 – Plans of Restructuring](#Note12) | | 122 |

| | [Note 13 – Earnings Per Share](#Note13) | | 124 |

| | [Note 14 – Income Taxes](#Note14) | | 125 |

| | [Note 15 – Concentrations of Risk](#Note15) | | 129 |

[removed: General][added: General]

[removed: We] believe we are the world’s largest provider of health care products and services primarily to [removed: office-based dental and medical practitioners.][added: office-]

We [removed: believe that we] have [removed: a strong brand identity due to our] more than [removed: 87] [added: 88] years of experience [added: in] distributing [added: products to] health care [removed: products.][added: practitioners resulting in strong]

We have established over 3.5 million square feet of space in [removed: 29] [added: 28] strategically located distribution centers around the [removed: world to enable us to better serve our customers and increase our operating efficiency.]

[removed: This] infrastructure, together with broad product and service offerings at competitive [removed: prices, and a strong commitment to customer service, enables us to be a single source of supply for our customers’ needs.]

[removed: Our infrastructure also allows us] to provide [removed: convenient ordering] [added: rapid] and [removed: rapid,] accurate [removed: and complete] order fulfillment.

We conduct our business through two reportable segments: (i) health care distribution and (ii) technology and [removed: value-added services.]

The health care distribution reportable segment aggregates our global [removed: dental and medical operating segments.]

[removed: This segment distributes consumable products, small equipment, laboratory products, large equipment, equipment repair services,] [added: Includes] branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control [removed: products and vitamins.][added: products, X-ray products,]

Our global dental group serves office-based dental practitioners, [removed: dental laboratories, schools and other institutions.]

Our global technology and value-added services group provides software, [removed: technology and other value-added services to health care practitioners.]

[removed: Industry][added: Industry]

The [added: global] health care [removed: products] distribution industry, as it relates to office-based health care practitioners, is fragmented and [removed: diverse.]

The purchasing decisions within an office-based health care practice are typically [removed: made by the practitioner or an administrative assistant.]

Supplies and small equipment are generally purchased from [removed: more than one distributor, with one generally serving as the primary supplier.]

[removed: In addition, the physician market] continues to benefit from the shift of procedures and diagnostic [removed: testing from acute care settings to alternate-care sites, particularly physicians’ offices.]

We believe that consolidation within the industry will continue to result in a number of distributors, particularly [removed: those with limited financial, operating and marketing resources, seeking to combine with larger companies that can provide growth opportunities.]

[removed: This consolidation also may continue to result in distributors seeking to acquire] companies that can enhance their current product and service offerings or provide [removed: opportunities to serve a broader customer base.]

[removed: This trend has benefited distributors capable] of providing a broad array of products and services at low prices.

We believe that the trend towards cost containment has the potential to favorably affect [removed: demand for technology solutions, including software, which can enhance the efficiency and facilitation of practice management.]

[removed: Competition][added: Competition]

The distribution and manufacture of health care supplies and equipment is [removed: highly competitive.]

[removed: Many of the health] care [removed: distribution] products we sell are available to our customers from a number of suppliers.

[removed: In addition, our competitors could] obtain exclusive rights from manufacturers to market particular products.

[removed: Manufacturers also could seek to sell] directly to end-users, and thereby eliminate or reduce our role and that of other [removed: distributors.]

[removed: In the dental market, our primary competitors are the Patterson] Dental division of Patterson Companies, Inc. and Benco Dental Supply [removed: Company.]

[removed: In addition, we compete against] a number of other distributors that operate on a national, regional and [removed: local level.]

[removed: Our primary competitors in the medical market are McKesson Corporation] and Medline Industries, Inc., which are national distributors.

[removed: We also compete against a number of regional and local] medical distributors, as well as a number of manufacturers that [removed: sell directly to physicians.]

[removed: Competitive Strengths][added: Competitive Strengths]

[removed: We have] [added: With] more than [removed: 87] [added: 88] years of experience [removed: in] distributing [removed: products to] health care [removed: practitioners resulting in strong awareness] [added: products, we have built a vast set] of [removed: the Henry Schein® brand.][added: small,]

[removed: *A] [added: A] focus on meeting our customers’ unique [removed: needs*.][added: needs]

The key elements of our direct [removed: sales and marketing efforts are:]

[removed: - *Field sales consultants.* We have over 3,650 field sales consultants, including equipment sales specialists,] covering major North American, European and other international [removed: markets.]

[removed: These consultants complement] our direct marketing and telesales efforts and enable us to better market, service [removed: and support the sale of more sophisticated products and equipment.]

[removed: - *Electronic commerce solutions.*] We provide our customers and sales teams with innovative and [removed: competitive Internet, PC and mobile e-commerce solutions.]

[removed: - *Social media.*] Our operating entities and employees engage our customers and [removed: supplier partners through various social media platforms.]

[removed: *Broad] [added: Broad] product and service offerings at competitive [removed: prices.* We offer a broad range of products and services to our customers, at competitive prices, in the following categories:][added: prices.]

[removed: - *Consumable supplies and equipment.*] We offer over 120,000 Stock Keeping Units, or SKUs, to our [removed: customers.]

[removed: - *Technology] [added: Technology] and other value-added products and [removed: services.* We sell practice management software systems to our dental and medical customers.][added: services.]

Business

Henry Schein, Inc. is a solutions company for health care professionals powered

by a network of people and

technology.

We

based dental and medical practitioners, as well as alternate sites of care.

Our philosophy is grounded in our

commitment to help customers operate a more efficient and successful business so

the practitioner can provide

better clinical care.

mid-sized

and large customers in the dental and medical markets, serving more than one

million customers worldwide across

dental practices and laboratories and physician practices, as well as government,

institutional health care clinics and

other alternate care clinics.

We are headquartered in Melville, New York,

employ more than 19,000 people (of which approximately 9,800 are

based outside the United States) and have operations or affiliates in 31 countries and

territories, including the

United States, Australia, Austria, Belgium, Brazil, Canada, Chile, China,

the Czech Republic, France, Germany,

Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, the Netherlands, New

Zealand, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland,

Thailand, United Arab Emirates

and the United Kingdom.

This broad global footprint has evolved over time through our organic success as well

as

through contribution from strategic acquisitions.

Our business extends far beyond our supply chain capabilities across

the globe.

We provide a wide breadth

of products, value-added solutions and support to customers, including

consumables and equipment.

Through

Henry Schein One, we offer dental practice management, patient engagement

and demand creation software

solutions.

We also offer a broad range of financial services for our customers to help them operate and expand their

business operations.

We serve more than 1 million customers worldwide including dental practitioners and laboratories and physician practices, as well as government, institutional health care clinics and other alternate care clinics.

We are headquartered in Melville, New York, employ more than 19,000 people (of which approximately 9,400 are based outside the United States) and have operations or affiliates in 31 countries, including the United States, Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, France, Germany, Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, the Netherlands, New Zealand, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, Thailand, United Arab Emirates and the United Kingdom.

We offer a comprehensive selection of products and services and value-added solutions for operating efficient practices and delivering high quality care.

We operate through a centralized and automated distribution network with a selection of more than 120,000 branded products and Henry Schein private brand products in stock, as well as more than 180,000 additional products available as special order items.

We also offer our customers exclusive, innovative technology solutions, including practice management software and e-commerce solutions, as well as a broad range of financial services.

Our global medical group serves office-based medical practitioners, ambulatory surgery centers, other alternate-care settings and other institutions.

Our technology group offerings include practice management software systems for dental and medical practitioners.

Our value-added practice solutions include financial services on a non-recourse basis, e-services, practice technology, network and hardware services, as well as continuing education services for practitioners.

Spin-Off of Henry Schein Animal Health Business

On February 7, 2019 (the “Distribution Date”), we completed the separation (the “Separation”) and subsequent merger (“Merger”) of our animal health business (the “Henry Schein Animal Health Business”) with Direct Vet Marketing, Inc. (d/b/a Vets First Choice, “Vets First Choice”).

This was accomplished by a series of transactions among us, Vets First Choice, Covetrus, Inc. (f/k/a HS Spinco, Inc. “Covetrus”), a wholly owned subsidiary of ours prior to the Distribution Date, and HS Merger Sub, Inc., a wholly owned subsidiary of Covetrus (“Merger

Sub”).

In connection with the Separation, we contributed, assigned and transferred to Covetrus certain applicable assets, liabilities and capital stock or other ownership interests relating to the Henry Schein Animal Health Business.

On the Distribution Date, we received a tax-free distribution of $1,120 million from Covetrus pursuant to certain debt financing incurred by Covetrus.

On the Distribution Date and prior to the Animal Health Spin-off, Covetrus issued shares of Covetrus common stock to certain institutional accredited investors (the “Share Sale Investors”) for $361.1 million (the “Share Sale”).

The proceeds of the Share Sale were paid to Covetrus and distributed to us.

Subsequent to the Share Sale, we distributed, on a pro rata basis, all of the shares of the common stock of Covetrus held by us to our stockholders of record as of the close of business on January 17, 2019 (the “Animal Health Spin-off”).

After the Share Sale and Animal Health Spin-off, Merger Sub consummated the Merger whereby it merged with and into Vets First Choice, with Vets First Choice surviving the Merger as a wholly owned subsidiary of Covetrus.

Immediately following the consummation of the Merger, on a fully diluted basis, (i) approximately 63% of the shares of Covetrus common stock were (a) owned by our stockholders and the Share Sale Investors, and (b) held by certain employees of the Henry Schein Animal Health Business (in the form of certain equity awards), and (ii) approximately 37% of the shares of Covetrus common stock were (a) owned by stockholders of Vets First Choice immediately prior to the Merger, and (b) held by certain employees of Vets First Choice (in the form of certain equity awards).

After the Separation and the Merger, we no longer beneficially owned any shares of Covetrus common stock and, following the Distribution Date, will not consolidate the financial results of Covetrus for the purpose of our financial reporting.

Following the Separation and the Merger, Covetrus was an independent, publicly traded company on the Nasdaq Global Select Market.

In connection with the completion of the Animal Health Spin-off, we entered into a transition services agreement with Covetrus under which we have agreed to provide certain transition services for up to twenty-four months in areas such as information technology, finance and accounting, human resources, supply chain, and real estate and facility services.

As a result of the Separation, the financial position and results of operations of the Henry Schein Animal Health Business are presented as discontinued operations and have been excluded from continuing operations and segment results for all periods presented.

The industry ranges from sole practitioners working out of relatively small offices to group practices or service organizations ranging in size from a few practitioners to a large number of practitioners who have combined or otherwise associated their practices.

Due in part to the inability of office-based health care practitioners to store and manage large quantities of supplies in their offices, the distribution of health care supplies and small equipment to office-based health care practitioners has been characterized by frequent, small quantity orders, and a need for rapid, reliable and substantially complete order fulfillment.

The health care products distribution industry continues to experience growth due to the aging population, increased health care awareness, the proliferation of medical technology and testing, new pharmacology treatments and expanded third-party insurance coverage, partially offset by the effects of unemployment on insurance coverage.

In recent years, the health care industry has increasingly focused on cost containment.

It also has accelerated the growth of HMOs, group practices, other managed care accounts and collective buying groups, which, in addition to their emphasis on obtaining products at competitive prices, tend to favor distributors capable of providing specialized management information support.

In North America, we compete with other distributors, as well as several manufacturers, of dental and medical products, primarily on the basis of price, breadth of product line, customer service and value-added products and services.

With regard to our dental practice management software, we compete against numerous companies, including Carestream Health, Inc. and the Patterson Dental division of Patterson Companies, Inc. The medical practice management and electronic medical records market is very fragmented and we compete with numerous companies such as the NextGen division of Quality Systems, Inc., eClinicalWorks and Allscripts Healthcare Solutions, Inc.

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., as well as a large number of dental and medical product distributors and manufacturers in Australia, Austria, Belgium, Brazil, Canada, Chile, China, the Czech Republic, France, Germany, Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, the Netherlands, New Zealand, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, Thailand, United Arab Emirates and the United Kingdom.

Significant price reductions by our competitors could result in a similar reduction in our prices.

Any of these competitive pressures may materially adversely affect our operating results.

We are committed to providing customized solutions to our customers that are driven by our understanding of the market and reflect the technology-driven products and services best suited for their practice needs.

*Direct sales and marketing expertise.* Our sales and marketing efforts are designed to establish and solidify customer relationships through personal visits by field sales representatives, frequent direct marketing and telesales contact, emphasizing our broad product lines, including exclusive distribution agreements, competitive prices and ease of order placement.

- *Direct marketing.* During 2019, we distributed approximately 30 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 2,000 inbound and outbound telesales representatives, who facilitate order processing, generate new sales through direct and frequent contact with customers and stay abreast of market developments and the hundreds of new products, services and technologies introduced each year to educate practice personnel.

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, network and hardware services, transition services and training and education programs for practitioners.

As of December 28, 2019, we had an active user base of approximately 83,600 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; and MicroMD® for physician practices.

Our over 2,000 technicians provide installation and repair services for: dental handpieces; dental and medical small equipment; table top sterilizers; and large dental equipment.

[removed: The][added: of the Notes to the]

Legal Proceedings

For a discussion of Legal Proceedings, see

[Note 20 – Commitments and Contingencies](#a60413)

Consolidated Financial Statements included under Item 8.

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 U.S. 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, an unnamed company and the Danaher Defendants to terminate or limit Archer’s distribution rights.

On August 1, 2017, Archer filed an amended complaint, adding Patterson Companies, Inc. (“Patterson”) and Benco Dental Supply Co. (“Benco”) as defendants, and alleging that Henry Schein, Patterson, Benco and Burkhart Dental Supply 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 damages in an amount to be proved at trial, to be trebled with interest and costs, including attorneys’ fees, jointly and severally, as well as injunctive relief.

On October 30, 2017, Archer filed a second amended complaint, 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.

On October 1, 2012, we filed a motion for an order: (i) compelling Archer to arbitrate its claims against us; (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 U.S. Court of Appeals for the Fifth Circuit affirmed the District Court’s order denying the motions to compel arbitration.

On June 25, 2018, the Supreme Court of the United States granted defendants’ petition for writ of certiorari.

On October 29, 2018, the Supreme Court heard oral arguments.

On January 8, 2019, the Supreme Court issued its published decision vacating the judgment of the Fifth Circuit and remanding the case to the Fifth Circuit for further proceedings consistent with the Supreme Court’s opinion.

On April 2, 2019, the District Court stayed the proceeding in the trial court pending resolution by the Fifth Circuit.

The Fifth Circuit heard oral argument on May 1, 2019 on whether the case should be arbitrated.

The Fifth Circuit issued its opinion on August 14, 2019 affirming the District Court’s order denying defendants’ motions to compel arbitration.

Defendants filed a petition for rehearing en banc before the Fifth Circuit.

The Fifth Circuit denied that petition.

On October 1, 2019, the District Court set the case for trial on February 3, 2020, which was subsequently moved to January 29, 2020.

On January 24, 2020 the Supreme Court granted our motion to stay the District Court proceedings, pending the disposition of our petition for writ of certiorari, which was filed on January 31, 2020.

We intend to defend ourselves vigorously against this action.

On August 17, 2017, IQ Dental Supply, Inc. (“IQ Dental”) filed a complaint in the U.S. District Court for the Eastern District of New York, entitled IQ Dental Supply, Inc. v.

Henry Schein, Inc., Patterson Companies, Inc. and Benco Dental Supply Company, Case No. 2:17-cv-4834.

Plaintiff alleged that it is a distributor of dental supplies and equipment, and sells dental products through an online dental distribution platform operated by SourceOne Dental (“SourceOne”).

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

IQ Dental alleged, among other things, that defendants conspired to suppress competition from IQ Dental and SourceOne for the marketing, distribution and sale of dental supplies and equipment in the United States, and that defendants unlawfully agreed with one another to boycott dentists, manufacturers and state dental associations that deal with, or considered dealing with, plaintiff and SourceOne.

Plaintiff claimed 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 made pendant state law claims for tortious interference with prospective business relations, civil conspiracy and aiding and abetting.

Plaintiff sought injunctive relief, compensatory, treble and punitive damages, jointly and severally, and reasonable costs and expenses, including attorneys’ fees and expert fees.

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.

On May 10, 2019, the U.S. Court of Appeals for the Second Circuit affirmed in part and reversed in part the District Court’s dismissal of the complaint, holding that IQ Dental lacks antitrust standing to challenge the alleged boycott of SourceOne and state dental associations, but that it has standing to challenge injury related to the alleged direct boycott of its business.

On June 29, 2019, the Second Circuit denied IQ Dental’s petition for rehearing or rehearing en banc.

On January 8, 2020, Henry Schein and IQ Dental entered into a settlement agreement, pursuant to which Henry Schein paid an amount which is not material.

Henry Schein was dismissed from the case on January 16, 2020.

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 alleged, 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 alleged that defendants conspired in violation of Section 5 of the FTC Act.

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

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: FORM 10-K][added: FORM]

[removed: ☒ ANNUAL REPORT PURSUANT TO] SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended [removed: December 28, 2019]

[removed: ☐ TRANSITION REPORT PURSUANT TO] SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934]

[removed: Commission] [added: Commission] file [removed: number 0-27078][added: number]

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

[removed: (Exact] [added: (Exact] name of registrant as specified in its [removed: charter)][added: charter)]

[removed: | Delaware | 11-3136595 |][added: Delaware]

[removed: | (State or other jurisdiction of | (I.R.S.] [added: (I.R.S.] Employer Identification [removed: No.) |][added: No.)]

[removed: | incorporation] [added: incorporation] or [removed: organization) | |][added: organization)]

[removed: 135] [added: 135] Duryea [removed: Road][added: Road]

[removed: Melville, New York][added: New York]

[removed: (Address] [added: (Address] of principal executive [removed: offices)][added: offices)]

[removed: 11747][added: 11747]

[removed: (Zip Code)][added: (Zip Code)]

[removed: (631) 843-5500][added: 843-5500]

[removed: (Registrant’s] [added: (Registrant’s] telephone number, including area [removed: code)][added: code)]

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) [removed: of the Act:]

[removed: | Title of each class | Trading Symbol(s) |] Name of each exchange on which registered [removed: |]

[removed: |] Common Stock, par value $.01 per share [removed: | HSIC | The Nasdaq Global Select Market |]

[removed: Securities] [added: Securities] registered pursuant to Section [removed: 12(g) of the Act: None]

[removed: YES: ☒ NO: ☐][added: YES]

YES: [removed: ☐ NO: ☒]

[removed: Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934] during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing [removed: requirements for the past 90 days.]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of [removed: Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 [removed: of the Exchange Act).]

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 [removed: quoted on the Nasdaq Global Select Market on June 29, 2019, was approximately $10,236,712,000.]

[removed: As of February 14, 2020, there were 143,390,505] shares of registrant’s Common Stock, par value $.01 per share, outstanding.

[removed: Documents] [added: Documents] Incorporated by [removed: Reference:][added: Reference:]

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 [removed: (December 28, 2019) are incorporated by reference in Part III hereof.]

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

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

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

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

[removed: | | [ITEM 1B.](#Item1B) | | |] [Unresolved Staff [removed: Comments](#Item1B) | | 38 |][added: Comments](#a20069)]

[removed: | | [ITEM 3.](#Item3) | | |] [Legal [removed: Proceedings](#Item3) | | 40 |][added: Proceedings](#a20408)]

[removed: | | [ITEM 4.](#Item4) | | |] [Mine Safety [removed: Disclosures](#Item4) | | 44 |][added: Disclosures](#a20422)]

[removed: | | [ITEM 5.](#Item5) | | |] [Market for Registrant's Common Equity, Related Stockholder [removed: Matters](#Item5) | | |][added: Matters](#a20439)]

Washington,

D.C.

20549

10-K

ANNUAL REPORT PURSUANT TO

December 26, 2020

TRANSITION REPORT PURSUANT TO

1934

0-27078

11-3136595

(State or other jurisdiction of

Melville

of the Act:

Title of each class

Trading Symbol(s)

HSIC

The Nasdaq Global Select Market

12(g) of the Act: None

NO:

NO

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

requirements for the past 90 days.

YES

NO:

Regulation S-T

during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES

NO:

Indicate by check mark whether the registrant is a

large accelerated filer, an

accelerated filer, a non-accelerated filer,

a smaller reporting company,

or an

emerging

growth

company.

See

the

definitions

of

Washington, D.C. 20549

| --- | --- |

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

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

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

Large accelerated filer: ☒ Accelerated filer: ☐ Non-accelerated filer: ☐ Smaller reporting company: ☐ Emerging growth company: ☐

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.

| | | | | | | |

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

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

| | [ITEM 1A.](#Item1A) | | | [Risk Factors](#Item1A) | | 21 |

| | [ITEM 2.](#Item2) | | | [Properties](#Item2) | | 39 |

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

| | [ITEM 9A.](#Item9A) | | | [Controls and Procedures](#Item9A) | | 146 |

| | [ITEM 9B.](#Item9B) | | | [Other Information](#Item9B) | | 150 |

| | [ITEM 11.](#Item11) | | | [Executive Compensation](#Item11) | | 150 |

| | | [ITEM 15.](#Item15) | | [Exhibits, Financial Statement Schedules](#Item15) | | 151 |

| | | [ITEM 16.](#Item16) | | [Form 10-K Summary](#Item16) | | 159 |

| | | | | [Signatures](#Signatures) | | 160 |

We have no unresolved comments from the staff of the SEC that were issued 180 days or more preceding the end of [removed: our 2019 fiscal year.]

Unresolved Staff Comments

our 2020 fiscal year.

[removed: | | | | | Own or | | Approximate | | Lease Expiration |][added: Lease/Own]

[removed: |] Office and Distribution Center [removed: | | Fiumana-Predappio, Italy | | Own | | 183,000 | | N/A |]

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

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

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

[removed: |] Office and Distribution Center [removed: | | Geer, SC | | Lease | | 102,000 | | December 2028 |]

The properties listed in the table above are our principal properties primarily [removed: used by our health care distribution segment.]

We believe that our properties are in good condition, are well maintained and are suitable and adequate to carry on [removed: our business.]

Properties

Own or

Approximate

Lease Expiration

Property

Location

Lease

Square Footage

Date

Corporate Headquarters

Melville, NY

Lease

185,000

July 2036

Corporate Headquarters

Melville, NY

Own

105,000

N/A

Fiumana-Predappio, Italy

Own

183,000

N/A

Tours, France

Own

166,000

N/A

Gillingham, United Kingdom

165,000

June 2033

Lease

161,000

July 2030

Office and Distribution Center

Niagara on the Lake, Canada

Lease

128,000

September 2021

Office and Distribution Center

Bastian, VA

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

| Property | | Location | | Lease | | Square Footage | | Date |

| Corporate Headquarters | | Melville, NY | | Lease | | 185,000 | | June 2020 |

| Corporate Headquarters | | Melville, NY | | Own | | 105,000 | | N/A |

| Office and Distribution Center | | Gillingham, United Kingdom | | Lease/Own | | 165,000 | | June 2033 |

| Office and Distribution Center | | Niagara on the Lake, Canada | | Lease | | 128,000 | | September 2021 |

| Office and Distribution Center | | West Allis, WI | | Lease | | 106,000 | | October 2027 |

| Distribution Center | | Denver, PA | | Lease | | 624,000 | | December 2021 |

| Distribution Center | | Indianapolis, IN | | Lease | | 380,000 | | March 2022 |

| Distribution Center | | Sparks, NV | | Lease | | 370,000 | | December 2021 |

| Distribution Center | | Indianapolis, IN | | Own | | 287,000 | | N/A |

| Distribution Center | | Grapevine, TX | | Lease | | 242,000 | | July 2023 |

| Distribution Center | | Gallin, Germany | | Own | | 215,000 | | N/A |

| Distribution Center | | Jacksonville, FL | | Lease | | 212,000 | | February 2026 |

| Distribution Center | | Heppenheim, Germany | | Lease | | 194,000 | | March 2030 |

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, France, Germany, Hong Kong SAR, Ireland, Israel, Italy, Japan, Liechtenstein, Luxembourg, Malaysia, the Netherlands, New Zealand, Poland, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, Thailand, United Arab Emirates and the United Kingdom.

[removed: PART II][added: PART]

Mine Safety Disclosures

II

Our common stock is traded on the Nasdaq Global Select Market tier of [removed: the Nasdaq Stock Market, or Nasdaq, under the symbol HSIC.]

[removed: Purchases] [added: Purchases] of Equity Securities by the [removed: Issuer][added: Issuer]

[removed: As of December 28, 2019, we had repurchased approximately $3.5 billion of common stock (74,363,289 shares)] under these initiatives, with [removed: $275.0] [added: $201.2] million available for future common stock [removed: share repurchases.]

[removed: | | | | Total | | | | | of Shares | | of Shares |][added: shares)]

[removed: | (2) | The] maximum number of shares that [removed: may yet] [added: could] be purchased under this program [removed: is determined at the end of each month based on the | | | | | | | | | |]

[removed: | |] [added: based on the] closing price of our common stock at that time. [removed: | | | | | | | | | |]

[removed: Dividend Policy][added: Dividend Policy]

We have not declared any cash or stock dividends on our common stock during fiscal years [removed: 2019] [added: 2020] or [removed: 2018.][added: 2019.]

[removed: We] currently do not anticipate declaring any cash or stock dividends on our common [removed: stock in the foreseeable future.]

We intend to retain earnings to finance the expansion of our business and for general corporate purposes, including [removed: our share repurchase program.]

[removed: Stock] [added: Stock] Performance [removed: Graph][added: Graph]

[removed: COMPARISON] [added: COMPARISON] OF 5-YEAR CUMULATIVE TOTAL [removed: RETURN]

[removed: ][added: ]

[removed: | ASSUMES] [added: ASSUMES] $100 INVESTED ON DECEMBER [removed: 27, 2014 | | | | | | | | | | | | | | | | | | |][added: 26, 2015]

[removed: | ASSUMES] [added: ASSUMES] DIVIDENDS [removed: REINVESTED | | | | | | | | | | | | | | | | | | |][added: REINVESTED]

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

[removed: |] Dow Jones U.S. Health [removed: | | | | | | | | | | | | | | | | | | |]

[removed: |] NASDAQ Stock Market [removed: | | | | | | | | | | | | | | | | | | |]

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of

Equity Securities

the Nasdaq Stock Market, or Nasdaq,

under the symbol HSIC.

On February 8, 2021, there were approximately 235 holders of record of our common

stock and the last reported

sales price was $70.78.

Our share repurchase program, announced on March 3, 2003, originally

allowed us to repurchase up to two million

shares pre-stock splits (eight million shares post-stock splits) of our common

stock, which represented

approximately 2.3% of the shares outstanding at the commencement of

the program.

Subsequent additional

increases totaling $3.7 billion, authorized by our Board of Directors,

to the repurchase program provide for a total

of $3.8 billion of shares of our common stock to be repurchased under this program.

As of December 26, 2020,

we had repurchased approximately $3.6 billion of common stock (75,563,289

share repurchases.

As a result of the COVID-19 pandemic, as previously announced, we have

temporarily suspended our share

repurchase program in an effort to preserve cash and exercise caution in this uncertain

period and due to certain

restrictions related to financial covenants in our credit facilities.

During the fiscal quarter ended December 26, 2020, we did not make any

repurchases of our common stock.

The

is determined at the end of each month

The maximum number of shares that could be

repurchased as of October 31, 2020, November 28, 2020, and December

26, 2020 were 3,164,694, 3,159,724 and

3,056,528, respectively.

We

stock in the foreseeable future.

our share repurchase program.

Any declaration of dividends will be at the discretion of our Board of

Directors and

will depend upon the earnings, financial condition, capital requirements,

level of indebtedness, contractual

On February 14, 2020, there were approximately 269 holders of record of our common stock and the last reported sales price was $72.13.

Our share repurchase program, announced on March 3, 2003, originally allowed us to repurchase up to two million shares pre-stock splits (eight million shares post-stock splits) of our common stock, which represented approximately 2.3% of the shares outstanding at the commencement of the program.

As summarized in the table below, subsequent additional increases totaling $3.7 billion, authorized by our Board of Directors, to the repurchase program provide for a total of $3.8 billion of shares of our common stock to be repurchased under this program.

| | Date of | | Amount of Additional | | |

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

| | Authorization | | Repurchases Authorized | | |

| | June 21, 2004 | | $ | 100,000,000 | |

| | October 31, 2005 | | | 100,000,000 | |

| | March 28, 2007 | | | 100,000,000 | |

| | November 16, 2010 | | | 100,000,000 | |

| | August 18, 2011 | | | 200,000,000 | |

| | April 18, 2012 | | | 200,000,000 | |

| | November 12, 2012 | | | 300,000,000 | |

| | December 9, 2013 | | | 300,000,000 | |

| | December 4, 2014 | | | 300,000,000 | |

| | November 30, 2015 | | | 400,000,000 | |

| | October 18, 2016 | | | 400,000,000 | |

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

| | December 12, 2018 | | | 400,000,000 | |

| | October 30, 2019 | | | 400,000,000 | |

The following table summarizes repurchases of our common stock under our stock repurchase program during the fiscal quarter ended December 28, 2019:

| | | | | | | | | Total Number | | Maximum Number |

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

| | | | Number | | Average | | | Purchased as Part | | that May Yet |

| | | | of Shares | | Price Paid | | | of Our Publicly | | Be Purchased Under |

| Fiscal Month | | | Purchased (1) | | Per Share | | | Announced Program | | Our Program (2) |

| 9/29/19 through 11/02/19 | | | \- | | $ | \- | | | | 7,503,954 |

| 11/03/19 through 11/30/19 | | | 795,000 | | | 69.40 | | 795,000 | | 6,093,247 |

| 12/01/19 through 12/28/19 | | | 2,101,656 | | | 68.91 | | 2,101,656 | | 4,130,374 |

| | | | 2,896,656 | | | | | 2,896,656 | | |

| | | | | | | | | | | |

| (1) | All repurchases were executed in the open market under our existing publicly announced authorized program. This table excludes shares withheld from employees to satisfy minimum tax withholding requirements for equity-based transactions. | | | | | | | | | |

Any declaration of dividends will be at the discretion of our Board of Directors and will depend upon the earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends and other factors.

The graph below compares the cumulative total stockholder return on $100 invested, assuming the reinvestment of all dividends, on December 27, 2014, the last trading day before the beginning of our 2015 fiscal year, through the end of our 2019 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.

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

| | | | | | | | | | | | | | | | | | | |

| | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2018 | | | 2019 | |

| Henry Schein, Inc. | | $ | 100.00 | | $ | 114.34 | | $ | 110.43 | | $ | 101.73 | | $ | 113.43 | | $ | 125.14 |

| Care Index | | | 100.00 | | | 105.95 | | | 102.82 | | | 126.30 | | | 132.27 | | | 163.32 |

| Composite Index | | | 100.00 | | | 106.25 | | | 114.75 | | | 148.76 | | | 143.41 | | | 198.30 |

[removed: 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: 28, 2019,] [added: 26, 2020,] set forth below, has been derived from, should be read in [removed: conjunction with and is qualified in its entirety by reference to, our consolidated financial statements and notes thereto.]

The selected financial data presented below should also be read [removed: in conjunction with ITEM 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and ITEM 8, “Financial Statements and Supplementary Data.”]

[removed: | | Years ended | | | | | | | | | | | | | |][added: Years ended]

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

[removed: | | (in] [added: (in] thousands, except per share [removed: data) | | | | | | | | | | | | | |][added: data)]

[removed: | Income] [added: Income] Statement [removed: Data: | | | | | | | | | | | | | | |][added: Data:]

[removed: |] Litigation settlements [removed: | | \- | | | 38,488 | | | 5,325 | | | \- | | | \- |]

[removed: |] Income from continuing operations before taxes, equity [removed: | | | | | | | | | | | | | | |]

[removed: |] Net gain (loss) on sale of equity investments (3) [removed: | | 186,769 | | | \- | | | (17,636) | | | \- | | | \- |]

[removed: |] Less: Net income attributable to noncontrolling interests [removed: | | (24,770) | | | (19,724) | | | (25,304) | | | (19,651) | | | (19,705) |]

[removed: |] Less: Net (income) loss attributable to noncontrolling [removed: | | | | | | | | | | | | | | |]

[removed: |] interests from discontinued operations [removed: | | 366 | | | (6,521) | | | (27,690) | | | (29,966) | | | (24,664) |]

[removed: | Amounts] [added: Amounts] attributable to Henry Schein, [removed: Inc.: | | | | | | | | | | | | | | |][added: Inc.:]

[removed: | Earnings] [added: Earnings] (loss) per share attributable [removed: to | | | | | | | | | | | | | | |][added: to]

[removed: | Henry] [added: Henry] Schein, [removed: Inc.: | | | | | | | | | | | | | | |][added: Inc.:]

[removed: |] From continuing operations: [removed: | | | | | | | | | | | | | | |]

[removed: |] From discontinued operations: [removed: | | | | | | | | | | | | | | |]

[removed: |] Earnings per share attributable to Henry Schein, Inc.: [removed: | | | | | | | | | | | | | | |]

[removed: |] Weighted-average common shares outstanding: [removed: | | | | | | | | | | | | | | |]

[removed: | | | Years ended | | | | | | | | | | | | | |][added: Years ended]

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

[removed: | | | (in thousands) | | | | | | | | | | | | | |][added: (in thousands)]

[removed: | Net] [added: Net] Sales by Market [removed: Data: | | | | | | | | | | | | | | | |][added: Data:]

[removed: |] Health care distribution (4): [removed: | | | | | | | | | | | | | | | |]

[removed: |] Corporate TSA revenues (6) [removed: | | | 81,267 | | | \- | | | \- | | | \- | | | \- |]

[removed: | | | | (in thousands) | | | | | | | | | | | | |][added: (in thousands)]

[removed: | Balance] [added: Balance] Sheet [removed: Data: | | | | | | | | | | | | | | | |][added: Data:]

[removed: | (4) |] Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and [removed: generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products and vitamins. |]

[removed: | (5) |] Consists of practice management software and other value-added products, which are distributed primarily to health care providers, [removed: and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other services. |]

[removed: | (6) |] Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in [removed: connection with the Animal Health Spin-off, which we expect to continue through August 2020. |]

Selected Financial Data

The following selected financial data, with respect to our financial position

and results of operations for each of the

conjunction with and is qualified in its entirety by reference to, our consolidated

financial statements and notes

thereto.

in conjunction with

[ITEM 7](#a22363)

[Management's Discussion and Analysis of Financial Condition](#a22363)

[and Results of Operations](#a22363)

” and

[ITEM 8](#a35443)

[Financial Statements and Supplementary Data](#a35443)

.”

December 29,

December 30,

December 31,

2020

2019

2018

2017

2016

Net sales

10,119,141

9,985,803

9,417,603

8,883,438

8,218,885

Gross profit

2,814,343

3,090,886

2,910,747

2,746,662

2,605,907

Selling, general and administrative expenses

2,246,947

2,357,920

2,217,273

2,071,576

1,975,445

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

| | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |

| Net sales | $ | 9,985,803 | | $ | 9,417,603 | | $ | 8,883,438 | | $ | 8,218,885 | | $ | 7,650,755 |

| Gross profit | | 3,090,886 | | | 2,910,747 | | | 2,746,662 | | | 2,605,907 | | | 2,476,068 |

| Selling, general and administrative expenses | | 2,357,920 | | | 2,217,273 | | | 2,071,576 | | | 1,975,445 | | | 1,869,351 |

| Restructuring costs (1) | | 14,705 | | | 54,367 | | | \- | | | 38,621 | | | 26,587 |

| Operating income | | 718,261 | | | 600,619 | | | 669,761 | | | 591,841 | | | 580,130 |

| Other expense, net | | (37,954) | | | (63,783) | | | (39,967) | | | (18,705) | | | (17,904) |

| in earnings of affiliates and noncontrolling interests | | 680,307 | | | 536,836 | | | 629,794 | | | 573,136 | | | 562,226 |

| Income taxes (2) | | (159,515) | | | (107,432) | | | (308,975) | | | (169,311) | | | (170,113) |

| Equity in earnings of affiliates | | 17,900 | | | 21,037 | | | 15,293 | | | 17,110 | | | 13,300 |

| Net income from continuing operations | | 725,461 | | | 450,441 | | | 318,476 | | | 420,935 | | | 405,413 |

| Income (loss) from discontinued operations | | (6,323) | | | 111,685 | | | 140,817 | | | 135,460 | | | 118,014 |

| Net income | | 719,138 | | | 562,126 | | | 459,293 | | | 556,395 | | | 523,427 |

| Net income attributable to Henry Schein, Inc. | $ | 694,734 | | $ | 535,881 | | $ | 406,299 | | $ | 506,778 | | $ | 479,058 |

| Continuing operations | | 700,691 | | | 430,717 | | | 293,172 | | | 401,284 | | | 385,708 |

| Discontinued operations | | (5,957) | | | 105,164 | | | 113,127 | | | 105,494 | | | 93,350 |

| | | | | | | | | | | | | | | |

| Basic | $ | 4.74 | | $ | 2.82 | | $ | 1.87 | | $ | 2.48 | | $ | 2.33 |

| Diluted | | 4.69 | | | 2.80 | | | 1.85 | | | 2.45 | | | 2.29 |

| Basic | $ | (0.04) | | $ | 0.69 | | $ | 0.72 | | $ | 0.65 | | $ | 0.56 |

| Diluted | | (0.04) | | | 0.68 | | | 0.72 | | | 0.64 | | | 0.55 |

| Basic | $ | 4.70 | | $ | 3.51 | | $ | 2.59 | | $ | 3.14 | | $ | 2.89 |

| Diluted | | 4.65 | | | 3.49 | | | 2.57 | | | 3.10 | | | 2.85 |

| Basic | | 147,817 | | | 152,656 | | | 156,787 | | | 161,641 | | | 165,687 |

| Diluted | | 149,257 | | | 153,707 | | | 158,208 | | | 163,723 | | | 168,250 |

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

| | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |

| Dental | | $ | 6,415,865 | | $ | 6,347,998 | | $ | 6,047,811 | | $ | 5,554,296 | | $ | 5,275,405 |

| Medical | | | 2,973,586 | | | 2,661,166 | | | 2,497,994 | | | 2,337,661 | | | 2,072,915 |

| Total health care distribution | | | 9,389,451 | | | 9,009,164 | | | 8,545,805 | | | 7,891,957 | | | 7,348,320 |

| Technology and value-added services (5) | | | 515,085 | | | 408,439 | | | 337,633 | | | 326,928 | | | 302,435 |

| Total excluding Corporate TSA revenues | | | 9,904,536 | | | 9,417,603 | | | 8,883,438 | | | 8,218,885 | | | 7,650,755 |

| Total | | $ | 9,985,803 | | $ | 9,417,603 | | $ | 8,883,438 | | $ | 8,218,885 | | $ | 7,650,755 |

| | | As of | | | | | | | | | | | | | |

| Total assets | | $ | 7,151,101 | | $ | 8,500,527 | | $ | 7,863,995 | | $ | 6,811,763 | | $ | 6,580,775 |

| Long-term debt | | | 622,908 | | | 980,344 | | | 884,227 | | | 689,626 | | | 439,830 |

| Redeemable noncontrolling interests | | | 287,258 | | | 219,724 | | | 465,584 | | | 285,567 | | | 266,435 |

| Stockholders' equity | | | 3,630,137 | | | 3,541,788 | | | 2,824,410 | | | 2,800,804 | | | 2,886,814 |

| | | | | | | | | | | | | | | | |

INDEX TO FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

Page

[Report of Independent Registered Public Accounting Firm](#a35900)

[Consolidated Financial Statements](#a36139)

[:](#a36139)

[Balance Sheets as of December 26, 2020 and December 28, 2019](#a36137)

[Statements of Income for the years ended December 26, 2020,](#a36709)

[December 28, 2019 and December 29, 2018](#a36709)

[Statements of Comprehensive Income for the years ended December 26, 2020,](#a37466)

[December 28, 2019 and December 29, 2018](#a37466)

[Statements of Changes in Stockholders’ Equity for the years ended](#a37758)

[December 26, 2020, December 28, 2019 and December 29, 2018](#a37758)

[Statements of Cash Flows for the years ended December 26, 2020,](#a39900)

[December 28, 2019 and December 29, 2018](#a39900)

[Notes to Consolidated Financial Statements](#a40851)

[Note 1 – Significant Accounting Policies](#a40851)

[Note 2 – Discontinued Operations](#a44671)

[Note 3 – Property and Equipment, Net](#a46453)

[Note 4 – Goodwill and Other Intangibles, Net](#a46697)

[Note 5 – Investments and Other](#a47238)

[Note 6 – Debt](#a47439)

[Note 7 – Leases](#a48578)

[Note 8 – Redeemable Noncontrolling Interests](#a49382)

[Note 9 – Comprehensive Income](#a49627)

[Note 10 – Fair Value Measurements](#a50336)

[Note 11 – Business Acquisitions Divestitures](#a51075)

[Note 12 – Plans of Restructuring](#a51428)

[Note 13 – Earnings Per Share](#a52176)

[Note 14 – Income Taxes](#a52272)

[Note 15 – Concentrations of Risk](#a56757)

[Note 16 – Derivatives and Hedging Activities](#a56917)

[Note 17 – Revenue from Contracts with Customers](#a57076)

[Note 18 – Segment and Geographic Data](#a57491)

[Note 19 – Employee Benefit Plans](#a58941)

[Note 20 – Commitments and Contingencies](#a60413)

[Note 21 – Quarterly Information (Unaudited)](#a65156)

[Note 22 – Supplemental Cash Flow Information](#a65787)

[Note 23 – Related Party Transactions](#a66055)

[Schedule II - Valuation and Qualifying Accounts for the years ended December 26, 2020,](#a70121)

Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure

[removed: Evaluation] [added: Evaluation] of Disclosure Controls and [removed: Procedures][added: Procedures]

[removed: Changes] [added: Changes] in Internal Control over Financial [removed: Reporting][added: Reporting]

[removed: All continued acquisitions 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 [removed: our internal control over financial reporting.]

[removed: Management’s] [added: Management’s] Report on Internal Control over Financial [removed: Reporting][added: Reporting]

Our management is responsible for establishing and maintaining adequate [removed: internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).]

[removed: Our internal control system is designed to provide] reasonable assurance to our management and Board of Directors regarding the [removed: preparation and fair presentation of published financial statements.]

[removed: Based on our] evaluation under the COSO Framework, our management concluded that our [removed: internal control over financial reporting was effective at a reasonable assurance level as of December 28, 2019.]

[removed: The effectiveness of our internal control over financial reporting as of December 28, 2019 has been independently] audited by BDO USA, LLP, an independent registered public accounting firm, and their attestation is included [removed: herein.]

[removed: Limitations] [added: Limitations] of the Effectiveness of Internal [removed: Control][added: Control]

A control system, no matter how well conceived and operated, can provide [removed: only reasonable, not absolute, assurance that the objectives of the internal control system are met.]

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

[removed: In] [added: The effectiveness of] our [removed: opinion, the Company maintained, in all material respects, effective] internal control over financial reporting as of December [removed: 28, 2019, based on the COSO criteria*.*][added: 26,]

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: Our responsibility is to express an opinion on the Company’s] internal control over financial reporting based on [removed: our audit.][added: the]

[removed: We believe] that our audit provides a reasonable basis for our opinion.

[removed: Definition] [added: Definition] and Limitations of Internal Control over Financial [removed: Reporting][added: Reporting]

New [removed: York, NY][added: York]

[removed: February 20, 2020][added: 2020,]

Controls and Procedures

Under the supervision and with the participation of management, including

our principal executive officer and

principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and

procedures as of the end of the period covered by this annual report as

such term is defined in Rules 13a-15(e) and

15d-15(e) promulgated under the Securities Exchange Act of 1934,

as amended (the “Exchange Act”).

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 26,

2020 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.

The combination of acquisitions and continued acquisition integrations undertaken

during the quarter and carried

over from prior quarters as well as changes to the operating methods of some

of our internal controls over financial

reporting due to the COVID-19 pandemic, when considered in the aggregate,

represents a material change in our

internal control over financial reporting.

During the quarter ended December 26, 2020,

we completed the acquisition of a dental business in North America

with approximate aggregate annual revenues of approximately $20

million.

In addition, post-acquisition integration

related activities continued for our global dental and North American

medical businesses acquired during prior

quarters, representing aggregate annual revenues of approximately $370 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.

All acquisitions and continued acquisition integrations involve necessary

Under the supervision and with the participation of management, including our principal executive officer and principal financial officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this annual report as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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 28, 2019 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.

The combination of acquisitions, 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 28, 2019, post-acquisition integration related activities continued for our global dental and North American technology and medical businesses acquired during prior quarters, representing aggregate annual revenues of approximately $539 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 28, 2019, post-implementation system improvement activities continued for a new equipment system implemented during prior quarters for our U.S. dental business representing approximate aggregate annual revenues of $912 million, as well as an upgrade of an existing ERP system at a dental business in North America having approximate aggregate annual revenues of $58 million.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013), updated and reissued by the Committee of Sponsoring Organizations, or the COSO Framework.

Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

We have audited Henry Schein, Inc.’s (the “Company’s”) internal control over financial reporting as of December 28, 2019, based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 28, 2019 and December 29, 2018, 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 28, 2019, and the related notes and schedule and our report dated February 20, 2020 expressed an unqualified opinion thereon.

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 over Financial Reporting”.

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.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

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.

[removed: PART III][added: PART]

Other Information

III

We have adopted a Code of Ethics that applies to our Chief Executive Officer, Chief Financial Officer, Chief [removed: Accounting Officer and Controller.]

[removed: We intend to disclose on our Web] site any amendment to, or waiver of, a provision of the Code [removed: of Ethics.]

Directors, Executive Officers and Corporate Governance

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 2021 Proxy Statement to be

filed pursuant to Regulation 14A and to the Section entitled “Information

about our Executive Officers” 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 2020 Proxy Statement filed

pursuant to Regulation 14A on April 7, 2020.

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 “Delinquent

Section 16(a) Reports” in our

definitive 2021 Proxy Statement to be filed pursuant to Regulation 14A,

to the extent responsive disclosure is

required.

Accounting Officer and Controller.

We make available free of charge through our Internet website,

[www.henryschein.com](https://www.sec.gov/Archives/edgar/data/1000228/000100022821000019/www.henryschein.com)

, under the “About Henry Schein--Corporate Governance Highlights”

caption, our Code of

Ethics.

We intend to disclose on our Web

of Ethics.

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 2020 Proxy Statement to be filed pursuant to Regulation 14A and to the Section entitled “Information about our Executive Officers” 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 2019 Proxy Statement filed pursuant to Regulation 14A on April 9, 2019.

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 “Delinquent Section 16(a) Reports” in our definitive 2020 Proxy Statement to be filed pursuant to Regulation 14A, to the extent responsive disclosure is required.

We make available free of charge through our Internet website, [www.henryschein.com](https://www.sec.gov/Archives/edgar/data/1000228/000100022820000018/www.henryschein.com), under the “About Henry Schein--Corporate Governance” caption, our Code of Ethics.

Executive Compensation

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 2021 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 2020 Proxy Statement to be filed pursuant to Regulation 14A.

[removed: All active] plans have been approved by our stockholders.

Descriptions of these plans appear in the notes to our consolidated [removed: financial statements.]

The following table summarizes information relating to these plans as [removed: of December 28, 2019:]

[removed: | | | | | Weighted- Average | | | Number] [added: Number] of [removed: Common |][added: Common]

[removed: | | | | | Exercise] [added: Exercise] Price [removed: of | | | Shares Available for |][added: of]

[removed: |] Plans Approved by Stockholders [removed: | | | | $ | \- | | 6,407,767 |]

[removed: |] Plans Not Approved by Stockholders [removed: | | | | | \- | | \- |]

Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder

Matters

All active

financial statements.

of December 26, 2020:

Shares to be Issued Upon

Weighted-

Average

Number of Common

Exercise of Outstanding

Shares Available

for

Plan Category

Options and Rights

Outstanding Options

Future Issuances

\-

\-

6,077,548

\-

\-

\-

Total

\-

\-

6,077,548

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

2021 Proxy Statement to be filed

pursuant to Regulation 14A.

| | | | | | | | |

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

| Plan Category | | | | Outstanding Options | | | Future Issuances |

| | Total | | | $ | \- | | 6,407,767 |

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 2020 Proxy Statement to be filed pursuant to Regulation 14A.

Certain Relationships and Related Transactions, and Director Independence

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 2021 Proxy Statement

to be filed pursuant to Regulation

14A.

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 2020 Proxy Statement to be filed pursuant to Regulation 14A.

[removed: PART IV][added: PART]

Principal Accounting Fees and Services

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 2021 Proxy

Statement to be filed pursuant to Regulation 14A.

IV

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 2020 Proxy Statement to be filed pursuant to Regulation 14A.

[removed: (a) List] [added: List] of Documents Filed as a Part of This [removed: Report:][added: Report:]

[removed: | 1. |] Financial Statements: [removed: |]

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

[removed: | 2. |] Financial Statement Schedules: [removed: |]

[removed: | |] Schedule II – Valuation of Qualifying Accounts [removed: |]

[removed: | |] No other schedules are required. [removed: |]

[removed: | 3. |] Index to Exhibits: [removed: |]

[removed: | |] See exhibits listed under Item 15(b) below. [removed: |]

[removed: (b) Exhibits][added: Exhibits]

[removed: [2.1](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex21.htm) [Contribution and Distribution Agreement, dated as of April 20, 2018, by and among us, HS Spinco,] [added: [Spinco,] Inc., Direct Vet Marketing, Inc. and Shareholder Representative Services [removed: LLC.][added: LLC.](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex21.htm)]

[removed: (Incorporated] [added: [(Incorporated] by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on April [removed: 23, 2018 (film no. 18767875).)*](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex21.htm)][added: 23,](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex21.htm)]

[removed: [2.2](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex22.htm) [Agreement and Plan of Merger, dated as of April 20, 2018, by and among us, HS Spinco, Inc, HS] [added: [HS] Merger Sub, Inc., Direct Vet Marketing, Inc. and Shareholder Representative Services [removed: LLC.][added: LLC.](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex22.htm)]

[removed: (Incorporated] [added: [(Incorporated] by reference to Exhibit 2.2 to our Current Report on Form 8-K filed on April [removed: 23, 2018 (film no. 18767875).)*](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex22.htm)][added: 23,](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex22.htm)]

[removed: [2.3](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_3.htm) [Letter Agreement, Amendment No. 1 to Contribution and Distribution Agreement and Amendment No. 1 to Agreement and Plan of Merger, dated as of September 14, 2018, by and among us, HS Spinco, Inc., HS Merger Sub, Inc., Direct Vet Marketing, Inc. and Shareholder Representative Services LLC.( Incorporated by reference to Exhibit 2.3 to our Annual Report on] [added: [on] Form 10-K for the fiscal year ended December 29, 2018 filed on February 20, 2019.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_3.htm)

[removed: [2.4](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm) [Letter Agreement and Amendment No. 2 to Contribution and Distribution Agreement, dated as of] [added: [of] November 30, 2018, by and among us, HS Spinco, Inc., Direct Vet Marketing, Inc. [removed: and Shareholder Representative Services LLC.][added: and](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm)]

[removed: (Incorporated by reference to Exhibit 2.4 to our Annual] [added: [Annual] Report on Form 10-K for the fiscal year ended December 29, 2018 filed on [removed: February 20, 2019.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm)][added: February](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm)]

[removed: [2.5](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_5.htm) [Letter Agreement and Amendment No. 3 to Contribution and Distribution Agreement and Amendment No. 2 to Agreement and Plan of Merger, dated as of December 25, 2018, by and among us, HS Spinco, Inc., HS Merger Sub, Inc., Direct Vet Marketing, Inc. and Shareholder Representative Services LLC.(Incorporated by reference to Exhibit 2.5 to our Annual Report on Form] [added: [Form] 10-K for the fiscal year ended December 29, 2018 filed on February 20, 2019.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_5.htm)

[removed: [2.6](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm) [Letter Agreement and Amendment No. 4 to Contribution and Distribution Agreement, dated as of January 15, 2019, by and among us, HS Spinco, Inc., Direct Vet Marketing, Inc. and Shareholder Representative Services LLC.(Incorporated by reference to Exhibit 2.6 to our Annual] [added: [Annual] Report on Form 10-K for the fiscal year ended December 29, 2018 filed on [removed: February 20, 2019.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm)][added: February](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm)]

[removed: [3.1](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex31.htm) [Second Amended and Restated Certificate of Incorporation of Henry Schein, Inc. (Incorporated by] [added: [by] reference to Exhibit 3.1 to our Current Report on Form 8-K filed on June 1, 2018.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex31.htm)

[removed: [3.2](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex32.htm)] [Second Amended and Restated By-Laws of Henry Schein, Inc. (Incorporated by reference [removed: to Exhibit 3.2 to our Current Report on Form 8-K filed on June 1, 2018.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex32.htm)][added: to](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex32.htm)]

[removed: [4.1](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex43.htm)] [Second Amended and Restated Multicurrency Master Note Purchase Agreement dated as [removed: of June 29, 2018, by and among us, Metropolitan Life Insurance Company, MetLife Investment Advisors Company, LLC and each MetLife affiliate which becomes party thereto.][added: of](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex43.htm)]

[removed: (Incorporated by] [added: [by] reference to Exhibit 4.3 to our Current Report on Form 8-K filed on July 2, 2018.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex43.htm)

[removed: [4.2](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex42.htm)] [Second Amended and Restated Master Note Facility dated as of June 29, 2018, by and [removed: among us, NYL Investors LLC and each New York Life affiliate which becomes party thereto.][added: among](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex42.htm)]

[removed: (Incorporated] [added: [(Incorporated] by reference to Exhibit 4.2 to our Current Report on Form 8-K filed on July [removed: 2, 2018.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex42.htm)][added: 2,](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex42.htm)]

[removed: [4.3](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex41.htm)] [Second Amended and Restated Multicurrency Private Shelf Agreement dated as of June [removed: 29, 2018, by and among us, PGIM, Inc. and each Prudential affiliate which becomes party thereto.][added: 29,](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex41.htm)]

[removed: (Incorporated] [added: [(Incorporated] by reference to Exhibit 4.1 to our Current Report on Form 8-K filed on July [removed: 2, 2018.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex41.htm)][added: 2,](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex41.htm)]

[removed: [4.4](https://www.sec.gov/Archives/edgar/data/1000228/000100022820000018/d848607dex44.htm) [Description of Securities.+](https://www.sec.gov/Archives/edgar/data/1000228/000100022820000018/d848607dex44.htm)][added: [4.7](http://www.sec.gov/Archives/edgar/data/1000228/000100022820000018/d848607dex44.htm)]

[removed: 10.1] [Henry Schein, Inc. 2013 Stock Incentive Plan, as amended and restated effective as of May [removed: 14, 2013.][added: 14,](http://www.sec.gov/Archives/edgar/data/1000228/000119312513224319/d542871dex102.htm)]

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

[removed: [10.2](http://www.sec.gov/Archives/edgar/data/1000228/000100022815000017/exhibit101_1q15.htm) [Form of 2015 Restricted Stock Agreement for time-based restricted stock awards pursuant] [added: [pursuant] to the Henry Schein, Inc. 2013 Stock Incentive Plan (as amended and restated [removed: effective as of May 14, 2013).][added: effective](http://www.sec.gov/Archives/edgar/data/1000228/000100022818000022/exhibit104.htm)]

[removed: (Incorporated by reference] [added: [reference] to Exhibit 10.1 to our Quarterly Report on Form 10-Q for the fiscal quarter [removed: ended March 28, 2015 filed on May 4, 2015.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022815000017/exhibit101_1q15.htm)][added: ended](http://www.sec.gov/Archives/edgar/data/1000228/000100022815000029/exhibit101_2q15.htm)]

[removed: [10.3](http://www.sec.gov/Archives/edgar/data/1000228/000100022815000017/exhibit103_1q15.htm) [Form of 2015 Restricted Stock Unit Agreement for time-based restricted stock awards] [added: [awards] pursuant to the Henry Schein, Inc. 2013 Stock Incentive Plan (as amended and [removed: restated effective as of May 14, 2013).][added: restated](http://www.sec.gov/Archives/edgar/data/1000228/000100022818000022/exhibit105.htm)]

[removed: (Incorporated by reference to Exhibit 10.3 to] [added: [to] our Quarterly Report on Form 10-Q for the fiscal quarter ended March [removed: 28, 2015] [added: 31, 2018] filed on [removed: May 4, 2015.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022815000017/exhibit103_1q15.htm)][added: May](http://www.sec.gov/Archives/edgar/data/1000228/000100022818000022/exhibit106.htm)]

[removed: [10.](http://www.sec.gov/Archives/edgar/data/1000228/000100022816000066/exhibit_101.htm)4 [Form of 2016 Restricted Stock Agreement for time-based restricted stock awards pursuant] [added: [pursuant] to the Henry Schein, Inc. 2013 Stock Incentive Plan (as amended and restated [removed: effective as of May 14, 2013).][added: effective](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000030/exhibit101.htm)]

[removed: (Incorporated by reference to Exhibit 10.1 to] [added: [to] our Quarterly Report on Form 10-Q for the fiscal quarter ended March [removed: 26, 2016] [added: 28, 2020] filed on [removed: May 3, 2016.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022816000066/exhibit_101.htm)][added: May](http://www.sec.gov/Archives/edgar/data/1000228/000100022820000034/d889896dex103.htm)]

[removed: [10.](http://www.sec.gov/Archives/edgar/data/1000228/000100022816000066/exhibit_102.htm)5 [Form of 2016 Restricted Stock Agreement for performance-based restricted stock awards] [added: [awards] pursuant to the Henry Schein, Inc. 2013 Stock Incentive Plan (as amended and [removed: restated effective as of May 14, 2013).][added: restated](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000030/exhibit102.htm)]

[removed: (Incorporated by] [added: [by] reference to Exhibit [removed: 10.2] [added: 10.4] to our Quarterly Report on Form 10-Q for the fiscal quarter [removed: ended March 26, 2016 filed on May 3, 2016.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022816000066/exhibit_102.htm)][added: ended](http://www.sec.gov/Archives/edgar/data/1000228/000100022820000034/d889896dex104.htm)]

[removed: [10.6](http://www.sec.gov/Archives/edgar/data/1000228/000100022816000066/exhibit_103.htm) [Form of 2016 Restricted Stock Unit Agreement for time-based restricted stock awards pursuant to] [added: [to] the Henry Schein, Inc. 2013 Stock Incentive Plan (as amended and restated effective as [removed: of May 14, 2013).][added: of](http://www.sec.gov/Archives/edgar/data/1000228/000100022817000025/exhibit102.htm)]

[removed: (Incorporated by reference] [added: [reference] to Exhibit [removed: 10.3] [added: 10.7] to our Quarterly Report on Form 10-Q for the fiscal quarter [removed: ended March 26, 2016 filed on May 3, 2016.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022816000066/exhibit_103.htm)][added: ended](http://www.sec.gov/Archives/edgar/data/1000228/000100022820000055/d26627dex107.htm)]

[removed: [10.7](http://www.sec.gov/Archives/edgar/data/1000228/000100022816000066/exhibit_104.htm) [Form of 2016 Restricted Stock Unit Agreement for performance-based restricted stock awards pursuant to the Henry] [added: [Henry] Schein, Inc. 2013 Stock Incentive Plan (as [removed: amended] [added: Amended] and [removed: restated effective] [added: Restated] as of May 14, [removed: 2013).][added: 2013).](http://www.sec.gov/Archives/edgar/data/1000228/000119312519217405/d770264dex102.htm)]

Exhibits, Financial Statement Schedules

(a)

1.

are listed on the index on

Page 69.

2.

3.

(b)

[2.1](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex21.htm)

[Contribution and Distribution Agreement, dated as of April 20, 2018, by and among us, HS](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex21.htm)

[2018 (film no. 18767875).)*](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex21.htm)

[2.2](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex22.htm)

[Agreement and Plan of Merger, dated as of April 20, 2018, by and among us, HS Spinco, Inc,](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex22.htm)

[2018 (film no. 18767875).)*](http://www.sec.gov/Archives/edgar/data/1000228/000119312518125791/d567106dex22.htm)

[2.3](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_3.htm)

[Letter Agreement, Amendment No. 1 to Contribution and Distribution Agreement and](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_3.htm)

[Amendment No. 1 to Agreement and Plan of Merger, dated as of September 14, 2018, by and](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_3.htm)

[among us, HS Spinco, Inc., HS Merger Sub, Inc., Direct Vet Marketing, Inc. and Shareholder](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_3.htm)

[Representative Services LLC.( Incorporated by reference to Exhibit 2.3 to our Annual Report](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_3.htm)

[2.4](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm)

[Letter Agreement and Amendment No. 2 to Contribution and Distribution Agreement, dated as](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm)

[Shareholder Representative Services LLC.

(Incorporated by reference to Exhibit 2.4 to our](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm)

[20, 2019.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_4.htm)

[2.5](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_5.htm)

[Letter Agreement and Amendment No. 3 to Contribution and Distribution Agreement and](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_5.htm)

[Amendment No. 2 to Agreement and Plan of Merger, dated as of December 25, 2018, by and](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_5.htm)

[among us, HS Spinco, Inc., HS Merger Sub, Inc., Direct Vet Marketing, Inc. and Shareholder](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_5.htm)

[Representative Services LLC.(Incorporated by reference to Exhibit 2.5 to our Annual Report on](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_5.htm)

[2.6](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm)

[Letter Agreement and Amendment No. 4 to Contribution and Distribution Agreement, dated as](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm)

[of January 15, 2019, by and among us, HS Spinco, Inc., Direct Vet Marketing, Inc. and](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm)

[Shareholder Representative Services LLC.(Incorporated by reference to Exhibit 2.6 to our](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm)

[20, 2019.)](http://www.sec.gov/Archives/edgar/data/1000228/000100022819000015/exhibit2_6.htm)

[3.1](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex31.htm)

[3.2](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex32.htm)

[Exhibit 3.2 to our Current Report on Form 8-K filed on June 1, 2018.)](http://www.sec.gov/Archives/edgar/data/1000228/000119312518181713/d586703dex32.htm)

[4.1](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex43.htm)

[June 29, 2018, by and among us, Metropolitan Life Insurance Company, MetLife Investment](http://www.sec.gov/Archives/edgar/data/1000228/000119312518211389/d671414dex43.htm)

[Advisors Company, LLC and each MetLife affiliate which becomes party thereto.

| --- | --- |

| | Page 84. |

| | |

[10.19](http://www.sec.gov/Archives/edgar/data/1000228/000112528201500134/b311123_def14a.txt) [2001 Henry Schein, Inc. Section 162(m) Cash Bonus Plan effective as of June 6, 2001.

[10.24](http://www.sec.gov/Archives/edgar/data/1000228/000119312517191223/d398572dex101.htm) [Amendment Number Five to the Henry Schein, Inc. Section 162(m) Cash Bonus Plan, dated May 31, 2017.

Bergman pursuant to the Henry Schein, Inc. 2013 Stock Incentive Plan (as amended and restated as of May 14, 2013).

[10.45](http://www.sec.gov/Archives/edgar/data/1000228/000119312518169501/d591807dex101.htm) [Promissory Note in favor of JPMorgan Chase Bank, N.A. dated as of May 21, 2018.

| 104 | The cover page of Henry Schein, Inc.’s Annual Report on Form 10-K for the year ended December 28, 2019, formatted in Inline XBRL (included within Exhibit 101 attachments).+ |

[removed: SIGNATURES][added: SIGNATURES]

Pursuant to the requirements of [removed: Section 13 or 15(d) of] the Securities Exchange Act of 1934, [removed: the Registrant has duly caused] this [removed: report to be signed on its behalf by the undersigned, thereunto duly authorized.]

[removed: | |] Henry Schein, Inc. [removed: |]

[removed: | |] By: /s/ STANLEY M. [removed: BERGMAN |]

[removed: | |] Stanley M. [removed: Bergman |]

[removed: | |] Chairman and Chief Executive Officer [removed: |]

[removed: | /s/ STANLEY M. BERGMAN | |] Chairman, Chief Executive Officer [removed: | | February 20, 2020 |]

[removed: | Stanley M. Bergman | |] and Director (principal executive officer) [removed: | | |]

[removed: | Steven Paladino | | Officer] and Director (principal financial and [removed: | | |][added: accounting officer)]

[removed: | James] [added: /s/ JAMES] P. [removed: Breslawski | | | | |]

[removed: | Gerald] [added: /s/ GERALD] A. [removed: Benjamin | | | | |]

[removed: | Mark] [added: /s/ MARK] E. [removed: Mlotek | | | | |]

[removed: | Barry] [added: /s/ BARRY] J. [removed: Alperin | | | | |]

[removed: | /s/ PAUL BRONS | | Director | | February 20, 2020 |][added: Paul Brons]

[removed: | Paul Brons | | | | |][added: /s/ PAUL]

[removed: |] /s/ SHIRA GOODMAN [removed: | | Director | | February 20, 2020 |]

[removed: |] Shira Goodman [removed: | | | | |]

[removed: | Joseph] [added: /s/ JOSEPH] L. [removed: Herring | | | | |]

[removed: | Kurt] [added: /s/ KURT] P. [removed: Kuehn | | | | |]

[removed: | Philip] [added: /s/ PHILIP] A. [removed: Laskawy | | | | |]

[removed: | Anne] [added: /s/ ANNE] H. [removed: Margulies | | | | |]

[removed: |] /s/ CAROL RAPHAEL [removed: | | Director | | February 20, 2020 |]

[removed: |] Carol Raphael [removed: | | | | |]

[removed: | /s/ E.] DIANNE REKOW [removed: | | Director | | February 20, 2020 |]

[removed: | E.] Dianne Rekow, [removed: DDS, Ph.D. | | | | |]

[removed: Schedule II][added: Schedule II]

[removed: Valuation] and Qualifying [removed: Accounts][added: Accounts]

[removed: (in thousands)][added: (in thousands)]

[removed: | | | | | | | | Additions (Reductions) | | | | | | | | | | |][added: Additions (Reductions)]

[removed: | | | | | | | | | | | Charged | | | | | | | |][added: Charged]

[removed: | Year] ended December 28, 2019: [removed: | | | | | | | | | | | | | | | | | |]

[removed: | |] Allowance for doubtful accounts [removed: | | | | | | | | | | | | | | | | |]

[removed: | Year] ended December 29, 2018: [removed: | | | | | | | | | | | | | | | | | |]

[removed: | Year] ended December [removed: 30, 2017: | | | | | | | | | | | | | | | | | |][added: 26, 2020:]

[removed: | (1) |] Represents amounts charged to bad debt expense. [removed: | | | | | | | | | | | | | | | | |]

[removed: | (2) |] Amounts charged (credited) to other accounts primarily relate to provision for late fees and the impact [removed: of foreign currency exchange rates. | | | | | | | | | | | | | | | | |]

[removed: | (3) |] Deductions primarily consist of fully reserved accounts receivable that have been written off. [removed: | | | | | | | | | | | | | | | | |]

Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange

Act of 1934, the Registrant has duly

caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

BERGMAN

Bergman