Item 1. CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions,

except share data)

June 29,

December 30,

2024

2023

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

$

Accounts receivable, net of allowance for credit losses of $

and $

(1)

1,559

1,863

Inventories, net of reserves of $

and $

1,657

1,815

Prepaid expenses and other

Total current assets

3,941

4,488

Property and equipment, net

Operating lease right-of-use assets

Goodwill

3,905

3,875

Other intangibles, net

1,081

Investments and other

Total assets

$

10,251

$

10,573

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND

STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

$

1,020

Bank credit lines

Current maturities of long-term debt

Operating lease liabilities

Accrued expenses:

Payroll and related

Taxes

Other

Total current liabilities

2,549

2,683

Long-term debt (1)

1,891

1,937

Deferred income taxes

Operating lease liabilities

Other liabilities

Total liabilities

5,247

5,420

Redeemable noncontrolling interests

Commitments and contingencies

(nil)

(nil)

Stockholders' equity:

Preferred stock, $

0.01

par value,

1,000,000

shares authorized,

none

outstanding

-

-

Common stock, $

0.01

par value,

480,000,000

shares authorized,

127,080,545

outstanding on June 29, 2024 and

129,247,765

outstanding on December 30, 2023

Additional paid-in capital

-

-

Retained earnings

3,803

3,860

Accumulated other comprehensive loss

(292)

(206)

Total Henry Schein, Inc. stockholders' equity

3,512

3,655

Noncontrolling interests

Total stockholders' equity

4,148

4,289

Total liabilities, redeemable noncontrolling

interests and stockholders' equity

$

10,251

$

10,573

(1)

Amounts presented include balances held by our consolidated variable interest entity (“VIE”).

At June 29, 2024 and December 30,

2023, includes trade accounts receivable of $

million and $

million, respectively, and long-term debt of $

million and

$

million, respectively.

See

Note 1 – Basis of Presentation

for further information.

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF INCOME

(in millions,

except share and per share data)

(unaudited)

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Net sales

$

3,136

$

3,100

$

6,308

$

6,160

Cost of sales

2,118

2,125

4,278

4,219

Gross profit

1,018

2,030

1,941

Operating expenses:

Selling, general and administrative

1,572

1,424

Depreciation and amortization

Restructuring costs

Operating income

Other income (expense):

Interest income

Interest expense

(32)

(19)

(62)

(33)

Other, net

(1)

-

Income before taxes, equity in earnings of affiliates and

noncontrolling interests

Income taxes

(33)

(41)

(65)

(80)

Equity in earnings of affiliates, net of tax

Net income

Less: Net income attributable to noncontrolling interests

(1)

(8)

(6)

(15)

Net income attributable to Henry Schein, Inc.

$

$

$

$

Earnings per share attributable to Henry Schein, Inc.:

Basic

$

0.81

$

1.07

$

1.53

$

1.99

Diluted

$

0.80

$

1.06

$

1.52

$

1.97

Weighted-average common

shares outstanding:

Basic

127,784,380

130,905,899

128,252,628

131,136,450

Diluted

128,646,506

131,873,174

129,206,780

132,465,749

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(in millions)

(unaudited)

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Net income

$

$

$

$

Other comprehensive income, net of tax:

Foreign currency translation gain (loss)

(62)

(116)

Unrealized gain (loss) from hedging activities

(1)

(4)

Other comprehensive income (loss), net of tax

(58)

(101)

Comprehensive income

Comprehensive income attributable to noncontrolling interests:

Net income

(1)

(8)

(6)

(15)

Foreign currency translation loss (gain)

(1)

Comprehensive (income) loss attributable to noncontrolling

interests

(7)

(16)

Comprehensive income attributable to Henry Schein, Inc.

$

$

$

$

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN

STOCKHOLDERS’ EQUITY

(in millions, except share data)

(unaudited)

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Shares

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, March 30, 2024

128,480,909

$

$

-

$

3,838

$

(239)

$

$

4,237

Net income (excluding loss of $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

Foreign currency translation loss (excluding loss of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

(57)

-

(57)

Unrealized gain from hedging activities,

net of tax of $

-

-

-

-

-

Distributions to noncontrolling shareholders

-

-

-

-

-

(5)

(5)

Change in fair value of redeemable securities

-

-

(39)

-

-

-

(39)

Noncontrolling interests and adjustments related to

business acquisitions

-

-

(11)

-

-

-

(11)

Repurchase and retirement of common stock

(1,415,706)

-

(14)

(87)

-

-

(101)

Stock issued upon exercise of stock options

4,301

-

-

-

-

Stock-based compensation expense

15,339

-

-

-

-

Shares withheld for payroll taxes

(4,298)

-

(1)

-

-

-

(1)

Transfer of charges in excess of

capital

-

-

(52)

-

-

-

Balance, June 29, 2024

127,080,545

$

$

-

$

3,803

$

(292)

$

$

4,148

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Shares

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, April 1, 2023

131,196,783

$

$

-

$

3,684

$

(213)

$

$

4,127

Net income (excluding $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

Foreign currency translation gain (excluding loss of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

-

Unrealized loss from hedging activities,

including tax benefit of $

-

-

-

-

(1)

-

(1)

Distributions to noncontrolling shareholders

-

-

-

-

-

(27)

(27)

Change in fair value of redeemable securities

-

-

(17)

-

-

-

(17)

Noncontrolling interests and adjustments related to

business acquisitions

-

-

-

-

(5)

(4)

Repurchase and retirement of common stock

(638,095)

-

(7)

(44)

-

-

(51)

Stock-based compensation expense

20,598

-

-

-

-

Stock issued upon exercise of stock options

5,081

-

-

-

-

-

-

Shares withheld for payroll taxes

(6,671)

-

(3)

-

-

-

(3)

Settlement of stock-based compensation awards

(890)

-

-

-

-

Transfer of charges in excess of

capital

-

-

(11)

-

-

-

Balance, July 1, 2023

130,576,806

$

$

-

$

3,769

$

(210)

$

$

4,186

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN

STOCKHOLDERS' EQUITY

(in millions, except share data)

(unaudited)

Accumulated

Common Stock

Additional

Other

Total

$.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Shares

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 30, 2023

129,247,765

$

$

-

$

3,860

$

(206)

$

$

4,289

Net income (excluding loss of $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

Foreign currency translation loss (excluding loss of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

(101)

-

(101)

Unrealized gain from hedging activities,

net of tax of $

-

-

-

-

-

Distributions to noncontrolling shareholders

-

-

-

-

-

(5)

(5)

Change in fair value of redeemable securities

-

-

(81)

-

-

-

(81)

Noncontrolling interests and adjustments related to

business acquisitions

-

-

(10)

-

-

-

(10)

Repurchase and retirement of common stock

(2,414,434)

-

(24)

(152)

-

-

(176)

Stock issued upon exercise of stock options

25,240

-

-

-

-

Stock-based compensation expense

330,098

-

-

-

-

Shares withheld for payroll taxes

(108,163)

-

(9)

-

-

-

(9)

Settlement of stock-based compensation awards

-

-

-

-

-

-

Transfer of charges in excess of

capital

-

-

(102)

-

-

-

Balance, June 29, 2024

127,080,545

$

$

-

$

3,803

$

(292)

$

$

4,148

Accumulated

Common Stock

Additional

Other

Total

$.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Shares

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 31, 2022

131,792,817

$

$

-

$

3,678

$

(233)

$

$

4,095

Net income (excluding $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

Foreign currency translation gain (excluding gain of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

-

Unrealized loss from hedging activities,

including tax benefit of $

-

-

-

-

(4)

-

(4)

Distributions to noncontrolling shareholders

-

-

-

-

-

(27)

(27)

Change in fair value of redeemable securities

-

-

(14)

-

-

-

(14)

Noncontrolling interests and adjustments related to

business acquisitions

-

-

-

-

(2)

(1)

Repurchase and retirement of common stock

(1,862,014)

-

(20)

(131)

-

-

(151)

Stock-based compensation expense

1,036,898

-

-

-

-

Stock issued upon exercise of stock options

15,860

-

-

-

-

Shares withheld for payroll taxes

(405,865)

-

(32)

-

-

-

(32)

Settlement of stock-based compensation awards

(890)

-

-

-

-

Transfer of charges in excess of

capital

-

-

(39)

-

-

-

Balance, July 1, 2023

130,576,806

$

$

-

$

3,769

$

(210)

$

$

4,186

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

(in millions)

(unaudited)

Six Months Ended

June 29,

July 1,

2024

2023

Cash flows from operating activities:

Net income

$

$

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

Depreciation and amortization

Non-cash restructuring charges

Stock-based compensation expense

Provision for losses on trade and other accounts receivable

Benefit from deferred income taxes

(19)

(3)

Equity in earnings of affiliates

(9)

(7)

Distributions from equity affiliates

Changes in unrecognized tax benefits

Other

(9)

(9)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

Inventories

Other current assets

(1)

Accounts payable and accrued expenses

(292)

(295)

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property and equipment

(78)

(68)

Payments related to equity investments and business acquisitions,

net of cash acquired

(181)

(251)

Proceeds from loan to affiliate

Capitalized software costs

(20)

(20)

Other

(5)

(4)

Net cash used in investing activities

(281)

(340)

Cash flows from financing activities:

Net change in bank credit lines

Proceeds from issuance of long-term debt

Principal payments for long-term debt

(177)

(366)

Proceeds from issuance of stock upon exercise of stock options

Payments for repurchases and retirement of common stock

(175)

(150)

Payments for taxes related to shares withheld for employee taxes

(8)

(33)

Distributions to noncontrolling shareholders

(28)

(6)

Acquisitions of noncontrolling interests in subsidiaries

(211)

(13)

Net cash provided by (used in) financing activities

(265)

Effect of exchange rate changes on cash and cash equivalents

-

Net change in cash and cash equivalents

(33)

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 1 – Basis of Presentation

Our condensed consolidated financial statements include the accounts of Henry

Schein, Inc., and all of our

controlled subsidiaries (“we”, “us” and “our”).

All intercompany accounts and transactions are eliminated in

consolidation.

Investments in unconsolidated affiliates for which we have the ability to influence

the operating or

financial decisions are accounted for under the equity method.

Certain prior period amounts have been reclassified

to conform to the current period presentation.

These reclassifications, individually and in the aggregate, did

not

have a material impact on our condensed consolidated financial condition,

results of operations or cash flows.

Our accompanying unaudited condensed consolidated financial statements

have been prepared in accordance with

accounting principles generally accepted in the United States

(“U.S. GAAP”) for interim financial information and

with the instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, they do not include all of the

information and footnote disclosures required by U.S. GAAP for complete

financial statements.

The unaudited interim condensed consolidated financial statements should be

read in conjunction with the audited

consolidated financial statements and notes to the consolidated financial

statements contained in our Annual Report

on Form 10-K for the year ended December 30, 2023 and with the information

contained in our other publicly-

available filings with the Securities and Exchange Commission.

The condensed consolidated financial statements

reflect all adjustments considered necessary for a fair presentation of

the consolidated results of operations and

financial position for the interim periods presented.

All such adjustments are of a normal recurring nature.

The preparation of financial statements in conformity with accounting principles

generally accepted in the United

States requires us to make estimates and assumptions that affect the reported amounts of

assets and liabilities and

disclosure of contingent assets and liabilities at the date of the financial

statements and the reported amounts of

revenues and expenses during the reporting period.

Actual results could differ from those estimates.

The results of

operations for the three and six months ended June 29, 2024 are not necessarily

indicative of the results to be

expected for any other interim period or for the year ending December

28, 2024.

Our condensed consolidated financial statements reflect estimates and

assumptions made by us that affect, among

other things, our goodwill, long-lived asset and definite-lived intangible

asset valuation; inventory valuation; equity

investment valuation; assessment of the annual effective tax rate; valuation of

deferred income taxes and income

tax contingencies; the allowance for doubtful accounts; hedging activity;

supplier rebates; measurement of

compensation cost for certain share-based performance awards and cash bonus

plans; and pension plan

assumptions.

We consolidate the results of operations and financial position of a trade accounts receivable securitization which

we consider a VIE because we are its primary beneficiary, as we have the power to direct activities that most

significantly affect its economic performance and have the obligation to absorb the

majority of its losses or

benefits.

For this VIE, the trade accounts receivable transferred

to the VIE are pledged as collateral to the related

debt.

The VIE’s creditors have recourse to us for losses on these trade accounts receivable.

At June 29, 2024 and

December 30, 2023, certain trade accounts receivable that can only be used

to settle obligations of this VIE were

$

million and $

million, respectively, and the liabilities of this VIE where the creditors have recourse to us

were $

million and $

million, respectively.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 2 – Significant Accounting Policies and Recently Issued Accounting

Standards

Significant Accounting Policies

There have been no material changes in our significant accounting policies during

the three and six months ended

June 29, 2024, as compared to the significant accounting policies described

in Item 8 of our Annual Report on

Form 10-K for the year ended December 30, 2023.

Recently Issued Accounting Standards

In March 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

(“ASU”) 2024-01, “

Compensation - Stock Compensation (Topic 718): Scope Application of Profits Interest and

Similar Awards,

” which clarifies how to determine whether a profit interest and

similar awards should be accounted

for as a share-based payment arrangement under Topic 718 or within the scope of other guidance.

The ASU

provides an illustrative example with multiple fact patterns and amends

the structure of paragraph 718-10-15-3 of

Topic 718 to improve its clarity and operability.

The guidance in ASU 2024-01 applies to all entities that

issue

profits interest awards as compensation to employees or nonemployees

in exchange for goods or services.

Entities

can apply the amendments either retrospectively to all periods presented

in the financial statements or prospectively

to profits interest awards granted or modified on or after the date

of adoption.

If prospective application is elected,

an entity must disclose the nature of and reason for the change in accounting principle

that resulted from the

adoption of the ASU.

This ASU is effective for fiscal years beginning after December 15, 2024,

including interim

periods within those fiscal years.

We do not expect that the requirements of ASU 2024 – 01 will have a material

impact on our consolidated financial statements.

In December 2023, FASB issued ASU 2023-09, “

Income Taxes (Topic

740): Improvements to Income Tax

Disclosures

,” which requires public business entities to disclose additional

information in specified categories with

respect to the reconciliation of the effective tax rate to the statutory rate for federal, state and

foreign income taxes.

It also requires greater detail about individual reconciling items in

the rate reconciliation to the extent the impact of

those items exceeds a specified threshold.

In addition to new disclosures associated with the rate reconciliation,

the

ASU requires information pertaining to taxes paid (net of refunds received)

to be disaggregated for federal, state

and foreign taxes and further disaggregated for specific jurisdictions

to the extent the related amounts exceed a

quantitative threshold.

The ASU also describes items that need to be disaggregated

based on their nature, which is

determined by reference to the item’s fundamental or essential characteristics, such as the transaction or event

that

triggered the establishment of the reconciling item and the activity with which

the reconciling item is associated.

The ASU eliminates the historic requirement that entities disclose information

concerning unrecognized tax

benefits having a reasonable possibility of significantly increasing

or decreasing in the 12 months following the

reporting date.

This ASU is effective for annual periods beginning after December 15, 2024.

Early adoption is

permitted for annual financial statements that have not yet been

issued or made available for issuance.

This ASU

should be applied on a prospective basis; however, retrospective application is permitted.

We are currently

evaluating the impact that ASU 2023-09 will have on our consolidated

financial statements.

In November 2023, the FASB issued ASU 2023-07, “

Segment Reporting (Topic 280): Improvements to Reportable

Segments

,” which aims to improve financial reporting by requiring disclosure

of incremental segment information

on an annual and interim basis for all public entities to enable investors to

develop more decision-useful financial

analyses.

Currently, Topic

280 requires that a public entity disclose certain information about its

reportable

segments.

For example, a public entity is required to report a measure of

segment profit or loss that the chief

operating decision maker uses to assess segment performance and

make decisions about allocating resources.

Topic 280 also requires other specified segment items and amounts, such as depreciation, amortization and

depletion expense, to be disclosed under certain circumstances.

The amendments in this ASU do not change or

remove those disclosure requirements and do not change how a public

entity identifies its operating segments,

aggregates those operating segments or applies the quantitative thresholds

to determine its reportable segments.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim

periods within fiscal years

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

beginning after December 15, 2024.

Early adoption is permitted.

We are currently evaluating the impact that ASU

2023- 07 will have on our consolidated financial statements.

Note 3 – Cyber Incident

In October 2023 Henry Schein experienced a cyber incident that primarily

affected the operations of our North

American and European dental and medical distribution businesses.

Henry Schein One, our practice management

software, revenue cycle management and patient relationship management

solutions business, was not affected, and

our manufacturing businesses were mostly unaffected.

On November 22, 2023, we experienced a disruption of our

ecommerce platform and related applications, which was remediated.

During the three and six months ended June 29, 2024, we continued to

experience a residual impact of the cyber

events noted above relating primarily to decreased sales to episodic customers

(customers that had generally

registered a less continuous level of demand pre-incident).

During the three and six months ended June 29, 2024, we incurred $

million and $

million, respectively, of

expenses directly related to the cyber incident, mostly consisting of professional

fees.

We maintain cyber

insurance, subject to certain retentions and policy limitations.

With respect to the October 2023 cyber incident, we

have a $

million insurance policy, following a $

million retention.

During the three and six months ended June

29, 2024, we received insurance proceeds of $

million, representing a partial insurance recovery of losses

related

to the cyber incident.

The expenses and insurance recoveries related to the cyber

incident are included in the

selling, general and administrative line in our condensed consolidated

statements of income.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 4 – Net Sales from Contracts with Customers

Net sales are recognized in accordance with policies disclosed in Item

8 of our Annual Report on Form 10-K for

the year ended December 30, 2023.

Disaggregation of Net Sales

The following table disaggregates our net sales by reportable and operating segment

and geographic area:

Three Months Ended

Six Months Ended

June 29, 2024

June 29, 2024

North

America

International

Global

North

America

International

Global

Net sales:

Health care distribution

Dental

$

1,129

$

$

1,924

$

2,232

$

1,606

$

3,838

Medical

1,984

2,039

Total health care distribution

2,099

2,922

4,216

1,661

5,877

Technology

and value-added services

Total net sales

$

2,285

$

$

3,136

$

4,591

$

1,717

$

6,308

Three Months Ended

Six Months Ended

July 1, 2023

July 1, 2023

North

America

International

Global

North

America

International

Global

Net sales:

Health care distribution

Dental

$

1,169

$

$

1,957

$

2,313

$

1,542

$

3,855

Medical

1,876

1,921

Total health care distribution

2,094

2,907

4,189

1,587

5,776

Technology

and value-added services

Total net sales

$

2,262

$

$

3,100

$

4,523

$

1,637

$

6,160

Contract Liabilities

At June 29, 2024,

December 30, 2023,

and December 31, 2022, the current and non-current contract

liabilities were

$

million and $

million; $

million and $

million; and $

million and $

million, respectively.

During the

six months ended June 29, 2024, we recognized, in net sales, $

million of the amount that was previously

deferred at December 30, 2023.

During the six months ended July 1, 2023, we recognized in net sales

$

million

of the amount that was previously deferred at December 31, 2022.

Current contract liabilities are included in

accrued expenses: other and the non-current contract liabilities are

included in other liabilities within our

consolidated balance sheets.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 5

–

Segment Data

We conduct our business through

two

reportable segments: (i) health care distribution and (ii) technology and

value-added services.

These segments offer different products and services to the same customer base.

Our global

dental businesses serve office-based dental practitioners, dental laboratories, schools, government

and other

institutions.

Our medical businesses serve physician offices, urgent care centers, ambulatory care sites,

emergency

medical technicians, dialysis centers, home health, federal and state governments

and large enterprises, such as

group practices, and integrated delivery networks, among other providers

across a wide range of specialties.

Our

dental and medical groups serve practitioners in

countries worldwide.

The health care distribution reportable segment aggregates our global dental

and medical operating segments.

This

segment distributes consumable products, dental specialty products (including

implant, orthodontic and endodontic

products),

small equipment, laboratory products, large equipment, equipment repair

services, branded and generic

pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, personal

protective

equipment (“PPE”) products, vitamins and orthopedic implants.

Our global technology and value-added services reportable segment provides

software, technology and other value-

added services to health care practitioners.

Our technology offerings include practice management software

systems for dental and medical practitioners.

Our value-added practice solutions include practice consultancy,

education, revenue cycle management and financial services on a non-recourse

basis, e-services, continuing

education services for practitioners,

practice technology, network and hardware services, and other services.

The following tables present information about our reportable and operating

segments:

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Net sales:

Health care distribution

(1)

Dental

$

1,924

$

1,957

$

3,838

$

3,855

Medical

2,039

1,921

Total health care distribution

2,922

2,907

5,877

5,776

Technology

and value-added services

(2)

Total

$

3,136

$

3,100

$

6,308

$

6,160

(1)

Consists of consumable products, dental specialty products (including implant, orthodontic and endodontic products), small

equipment, laboratory products, large equipment, equipment repair services, branded and generic pharmaceuticals, vaccines, surgical

products, diagnostic tests, infection-control products, PPE products, vitamins and orthopedic implants.

(2)

Consists of practice management software and other value-added products, which are distributed primarily to health care providers,

practice consultancy, education, revenue cycle management and financial services on a non-recourse basis, e-services, continuing

education services for practitioners, practice technology, network and hardware services, and other services.

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Operating Income:

Health care distribution

$

$

$

$

Technology

and value-added services

Total

$

$

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 6

–

Business Acquisitions

Our acquisition strategy is focused on investments in companies that

add new customers and sales teams, increase

our geographic footprint (whether entering a new country, such as emerging markets, or building scale where we

have already invested in businesses), and finally, those that enable us to access new products and technologies.

Acquisition of TriMed

On April 1, 2024, we acquired a

% voting equity interest in TriMed Inc. (“TriMed”), a global developer of

solutions for the orthopedic treatment of lower and upper extremities, headquartered

in California.

The following table aggregates

the preliminary estimated fair value, as of the date of acquisition, of

consideration

paid and net assets acquired in the TriMed acquisition:

2024

Acquisition consideration:

Cash

$

Deferred consideration

Redeemable noncontrolling interests

Total consideration

$

Identifiable assets acquired and liabilities assumed:

Current assets

$

Intangible assets

Other noncurrent assets

Current liabilities

(9)

Deferred income taxes

(62)

Other noncurrent liabilities

(6)

Total identifiable

net assets

Goodwill

Total net assets acquired

$

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of TriMed.

The acquired goodwill is not deductible for tax purposes.

The following table summarizes the

preliminary identifiable intangible assets acquired as part of the acquisition

of TriMed:

2024

Weighted Average

Useful

Lives (in years)

Product development

$

Trademarks / Tradenames

In process research & development

-

Total

$

The accounting for the acquisition of TriMed has not been completed in several areas,

including but not limited to

pending assessments of accounts receivable, inventory, intangible assets, right-of-use lease assets, accrued

liabilities, income and non-income based taxes and valuation of redeemable

noncontrolling interests.

To assist

management in the allocation, we engaged valuation specialists to

prepare appraisals.

We will finalize the amounts

recognized as the information necessary to complete the analysis

is obtained.

We expect to finalize these amounts

as soon as possible but no later than one year from the acquisition date.

The pro forma financial information has not been presented because the

impact of the TriMed acquisition during

the three and six months ended June 29, 2024 was immaterial to our

condensed consolidated financial statements.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Other 2024 Acquisitions

During the six months ended June 29, 2024, we acquired companies

within the health care distribution and

technology and value-added services segments.

Our acquired ownership interest in these companies range from

% to

%.

Total consideration for these acquisitions was $

million.

Net assets acquired primarily consisted

of $

million of goodwill and $

million of intangible assets.

The intangible assets acquired consisted of

customer relationships and lists of $

million, product development of $

million, non-compete agreements of $

million and trademarks and tradenames of $

million.

Weighted average useful lives for these acquired intangible

assets were

years,

years,

years and

years, respectively.

Goodwill is a result of the synergies and cross-selling opportunities that these acquisitions

are expected to provide

for us, as well as the expected growth potential.

Approximately half of the acquired goodwill is deductible

for tax

purposes.

The impact of these acquisitions, individually and in the aggregate, was

not considered material to our condensed

consolidated financial statements.

2023 Acquisitions

Acquisition of Shield Healthcare

On October 2, 2023 we acquired a

% voting equity interest in Shield Healthcare, Inc. (“Shield”), a supplier

of

homecare medical products delivered directly to patients in their homes,

for consideration of $

million

(including cash paid of $

million, deferred consideration of $

million and redeemable noncontrolling interests

of $

million).

Shield expands our existing medical business by delivering

a diverse range of products, including

items such as incontinence, urology, ostomy, enteral nutrition, advanced wound care and diabetes supplies.

Additionally, Shield offers continuous glucose monitoring devices directly to patients in their homes.

During the quarter ended June 29, 2024, we completed the accounting for our

acquisition of Shield.

The following

table aggregates the final fair value, as of the date of the acquisition, of consideration

paid and net assets acquired

in the Shield acquisition, including measurement period adjustments recorded

through June 29, 2024:

Preliminary

Allocation as of

December 30, 2023

Measurement

Period

Adjustments

Final Allocation

Acquisition consideration:

Cash

$

$

$

Deferred consideration

(21)

Redeemable noncontrolling interests

-

Total consideration

$

$

(18)

$

Identifiable assets acquired and liabilities assumed:

Current assets

$

$

-

$

Intangible assets

-

Other noncurrent assets

Current liabilities

(24)

-

(24)

Deferred income taxes

(41)

(2)

(43)

Other noncurrent liabilities

(7)

-

(7)

Total identifiable

net assets

-

Goodwill

(18)

Total net assets acquired

$

$

(18)

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of Shield.

The acquired goodwill is not deductible for tax purposes.

The following table summarizes the identifiable intangible assets acquired

as part of the acquisition of Shield:

2023

Weighted Average

Useful Lives

(in years)

Customer relationships and lists

$

Trademarks / Tradenames

Total

$

The pro forma financial information has not been presented because the impact

of the Shield acquisition was

immaterial to our consolidated financial statements.

Acquisition of S.I.N. Implant System

On July 5, 2023, we acquired a

% voting equity interest in S.I.N. Implant System (“S.I.N.”) for consideration of

$

million.

Based in São Paulo, S.I.N. manufactures an extensive line of products

to perform dental implant

procedures and is focused on advancing the development of value-priced dental

implants.

In 2023, S.I.N. expanded

the distribution of its products into the United States and other international

markets

.

During the quarter ended June 29, 2024, we completed the accounting for our

acquisition of S.I.N.

The following

table aggregates the final fair value, as of the date of acquisition, of consideration

paid and net assets acquired in

the S.I.N. acquisition, including measurement period adjustments:

Preliminary

Allocation as of

December 30, 2023

Measurement

Period

Adjustments

Final

Allocation

Acquisition consideration:

Cash

$

$

-

$

Total consideration

$

$

-

$

Identifiable assets acquired and liabilities assumed:

Current assets

$

$

$

Intangible assets

-

Other noncurrent assets

Current liabilities

(33)

-

(33)

Long-term debt

(22)

-

(22)

Deferred income taxes

(35)

(3)

(38)

Other noncurrent liabilities

(27)

-

(27)

Total identifiable

net assets

Goodwill

(5)

Total net assets acquired

$

$

-

$

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of S.I.N.

The acquired goodwill is not deductible for tax purposes.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes the identifiable intangible assets acquired

as part of the acquisition of S.I.N.:

2023

Weighted Average

Useful Lives

(in years)

Customer relationships and lists

$

Product development

Trademarks / Tradenames

Total

$

The pro forma financial information has not been presented because the impact

of the S.I.N. acquisition was

immaterial to our consolidated financial statements.

Acquisition of Biotech Dental

On April 5, 2023, we acquired a

% voting equity interest, for preliminary consideration of $

million

(including cash paid of $

million, $

million of contributed equity share in a controlled subsidiary, and

redeemable noncontrolling interests of $

million) in Biotech Dental (“Biotech Dental”), which is a provider of

dental implants, clear aligners, individualized prosthetics and innovative

digital dental software based in

France.

Biotech Dental has several important solutions for dental practices

and dental labs, including Nemotec, a

comprehensive, integrated suite of planning and diagnostic software

using open architecture that connects disparate

medical devices to create a digital view of the patient, offering greater diagnostic

accuracy and an improved patient

experience.

The integration of Biotech Dental’s software with Henry Schein One’s industry-leading practice

management software solutions will help customers streamline their

clinical as well as administrative workflow for

the ultimate benefit of patients.

During the quarter ended March 30, 2024, we completed the accounting

for our acquisition of Biotech Dental.

The

following table aggregates the final fair value, as of the date of acquisition,

of consideration paid and net assets

acquired in the Biotech Dental acquisition, including measurement period

adjustments:

Final Allocation

Acquisition consideration:

Cash

$

Fair value of contributed equity share in a controlled subsidiary

Redeemable noncontrolling interests

Total consideration

$

Identifiable assets acquired and liabilities assumed:

Current assets

$

Intangible assets

Other noncurrent assets

Current liabilities

(60)

Long-term debt

(73)

Deferred income taxes

(53)

Other noncurrent liabilities

(20)

Total identifiable

net assets

Goodwill

Total net assets acquired

$

Goodwill is a result of synergies that are expected to originate from the acquisition as well as

the expected growth

potential of Biotech Dental.

The acquired goodwill is not deductible for tax purposes.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes the identifiable intangible assets acquired

as part of the acquisition of Biotech

Dental:

2023

Weighted Average

Useful

Lives (in years)

Product development

$

Customer relationships and lists

Trademarks / Tradenames

Total

$

The pro forma financial information has not been presented because the

impact of the Biotech Dental acquisition

was immaterial to our condensed consolidated financial statements.

Other 2023 Acquisitions

During the year ended December 30, 2023, in addition to those noted above,

we acquired companies within the

health care distribution and technology and value-added services segments.

Our acquired ownership interest ranged

between

% to

%.

During the three and six months ended June 29, 2024, we

recorded an adjustment of $

million and $

million, respectively, within the selling, general and administrative line in our condensed

consolidated statements of income, representing a change in the fair value

of contingent consideration related to a

2023 acquisition.

During the six months ended June 29, 2024 we completed the accounting

for certain acquisitions that occurred in

the year ended December 30, 2023.

In relation to these acquisitions, we did not record material

adjustments in our

condensed consolidated financial statements relating to changes in estimated

values of assets acquired, liabilities

assumed and contingent consideration assets and liabilities.

Goodwill is a result of the synergies and cross-selling opportunities that these acquisitions

are expected to provide

for us, as well as the expected growth potential.

The majority of the acquired goodwill is deductible for

tax

purposes.

The pro forma financial information for our 2023 acquisitions has not been

presented because the impact of the

acquisitions was immaterial to our condensed consolidated

financial statements.

Acquisition Costs

During the three and six months ended June 29, 2024 we incurred $

million and $

million in acquisition costs,

respectively.

During the three and six months ended July 1, 2023 we

incurred $

million and $

million in

acquisition costs, respectively.

These costs are included in the selling, general and administrative

line in our

condensed consolidated statements of income.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 7 – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or

paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

The fair value hierarchy distinguishes between

(1) market participant assumptions developed based on market data obtained

from independent sources (observable

inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best

information available in the circumstances (unobservable inputs).

The fair value hierarchy consists of three broad levels, which gives the

highest priority to unadjusted quoted prices

in active markets for identical assets or liabilities (Level 1) and the lowest priority

to unobservable inputs (Level 3).

The three levels of the fair value hierarchy are described as follows:

Level 1— Unadjusted quoted prices in active markets for identical assets

or liabilities that are accessible at the

measurement date.

Level 2— Inputs other than quoted prices included within Level 1 that are

observable for the asset or liability,

either directly or indirectly.

Level 2 inputs include: quoted prices for similar assets or liabilities

in active markets;

quoted prices for identical or similar assets or liabilities in markets

that are not active; inputs other than quoted

prices that are observable for the asset or liability; and inputs that are

derived principally from or corroborated by

observable market data by correlation or other means.

Level 3— Inputs that are unobservable for the asset or liability.

The following section describes the fair values of our financial instruments

and the methodologies that we used to

measure their fair values.

Investments and notes receivable

There are no quoted market prices available for investments in unconsolidated

affiliates and notes receivable.

Certain of our notes receivable contain variable interest rates.

We believe the carrying amounts are a reasonable

estimate of fair value based on the interest rates in the applicable

markets.

Our investments and notes receivable

fair value is based on Level 3 inputs within the fair value hierarchy.

Debt

The fair value of our debt (including bank credit lines, current maturities

of long-term debt and long-term debt) is

based on Level 3 inputs within the fair value hierarchy, and as of June 29, 2024 and December 30, 2023 was

estimated at $

2,502

million and $

2,351

million, respectively.

Factors that we considered when estimating the fair

value of our debt include market conditions, such as interest rates and credit

spreads.

Derivative contracts

Derivative contracts are valued using quoted market prices and

significant other observable inputs.

Our derivative

instruments primarily include foreign currency forward agreements, forecasted

inventory purchase commitments,

foreign currency forward contracts, interest rate swaps and total return swaps.

The fair values for the majority of our foreign currency derivative contracts

are obtained by comparing our contract

rate to a published forward price of the underlying market rates, which

are based on market rates for comparable

transactions that are classified within Level 2 of the fair value hierarchy.

The fair value of the interest rate swap, which is classified within Level 2

of the fair value hierarchy, is determined

by comparing our contract rate to a forward market rate as of the

valuation date.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The fair value of total return swaps is determined by valuing the underlying

exchange traded funds of the swap

using market-on-close pricing by industry providers as of the valuation

date that are classified within Level 2 of the

fair value hierarchy.

Redeemable noncontrolling interests

The values for redeemable noncontrolling interests are based on recent

transactions and/or implied multiples of

earnings that are classified within Level 3 of the fair value hierarchy.

See

Note 13 – Redeemable Noncontrolling

Interests

for additional information.

Assets measured on a non-recurring basis at fair value include intangibles.

Inputs for measuring intangibles are

classified as Level 3 within the fair value hierarchy.

The following table presents our assets and liabilities that are measured and

recognized at fair value on a recurring

basis classified under the appropriate level of the fair value hierarchy as of

June 29, 2024 and December 30, 2023:

June 29, 2024

Level 1

Level 2

Level 3

Total

Assets:

Derivative contracts designated as hedges

$

-

$

$

-

$

Derivative contracts undesignated

-

-

Total return

swap

-

-

Total assets

$

-

$

$

-

$

Liabilities:

Derivative contracts designated as hedges

$

-

$

$

-

$

Derivative contracts undesignated

-

-

Total liabilities

$

-

$

$

-

$

Redeemable noncontrolling interests

$

-

$

-

$

$

December 30, 2023

Level 1

Level 2

Level 3

Total

Assets:

Derivative contracts designated as hedges

$

-

$

$

-

$

Derivative contracts undesignated

-

-

Total return

swap

-

-

Total assets

$

-

$

$

-

$

Liabilities:

Derivative contracts designated as hedges

$

-

$

$

-

$

Derivative contracts undesignated

-

-

Total liabilities

$

-

$

$

-

$

Redeemable noncontrolling interests

$

-

$

-

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 8 – Debt

Bank Credit Lines

Bank credit lines consisted of the following:

June 29,

December 30,

2024

2023

Revolving credit agreement

$

-

$

Other short-term bank credit lines

Total

$

$

Revolving Credit Agreement

On

August 20, 2021

, we entered into a $

1.0

billion revolving credit agreement (the “Revolving Credit Agreement”)

which was subsequently amended and restated on

July 11, 2023

to extend the maturity date to

July 11, 2028

and

update the interest rate provisions to reflect the current market approach

for a multicurrency facility.

The interest

rate on this revolving credit facility is based on Term Secured Overnight Financing Rate (“Term SOFR”) plus a

spread based on our leverage ratio at the end of each financial reporting

quarter.

As of June 29, 2024 the interest

rate on this revolving credit agreement was

5.33

% plus

1.10

% for a combined rate of

6.43

%.

As of December 30,

2023 the interest rate on this revolving credit agreement was

5.36

% plus

1.00

% for a combined rate of

6.36

%.

The Revolving Credit Agreement requires, among other things, that we

maintain certain maximum leverage ratios.

Additionally, the Revolving Credit Agreement contains customary representations, warranties and affirmative

covenants as well as customary negative covenants, subject to negotiated

exceptions, on liens, indebtedness,

significant corporate changes (including mergers), dispositions and certain restrictive

agreements.

As of June 29,

2024 and December 30, 2023, we had $

million and $

million in borrowings, respectively under this revolving

credit facility.

During the six months ended June 29, 2024, the average outstanding

balance under the Revolving

Credit Agreement was approximately $

million.

As of June 29, 2024 and December 30, 2023, there were

$

million and $

million of letters of credit, respectively, provided to third parties under this Revolving Credit

Agreement.

Other Short-Term Bank Credit

Lines

As of June 29, 2024 and December 30, 2023, we had various other short-term

bank credit lines available, in various

currencies, with a maximum borrowing capacity of $

million and $

million, respectively.

As of June 29,

2024 and December 30, 2023, $

million and $

million, respectively, were outstanding.

During the six months

ended June 29, 2024, the average outstanding balances under our various

other short-term bank credit lines was

approximately $

million.

At June 29, 2024 and December 30, 2023, borrowings under other

short-term bank

credit lines had weighted average interest rates of

6.15

% and

6.02

%, respectively.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Long-term debt

Long-term debt consisted of the following:

June 29,

December 30,

2024

2023

Private placement facilities

$

1,024

$

1,074

Term loan

U.S. trade accounts receivable securitization

Various

collateralized and uncollateralized loans payable with interest,

in varying installments through 2030 at interest rates

from

0.00

% to

9.42

% at June 29, 2024 and

from

0.00

% to

9.42

% at December 30, 2023

Finance lease obligations

Total

1,997

2,087

Less current maturities

(106)

(150)

Total long-term debt

$

1,891

$

1,937

Private Placement Facilities

Our private placement facilities include

four

insurance companies, have a total facility amount of $

1.5

billion, and

are available on an uncommitted basis at fixed rate economic

terms to be agreed upon at the time of issuance, from

time to time through

October 20, 2026

.

The facilities allow us to issue senior promissory notes to the

lenders at a

fixed rate based on an agreed upon spread over applicable treasury notes

at the time of issuance.

The term of each

possible issuance will be selected by us and can range from

five

to

15 years

(with an average life no longer than

years).

The proceeds of any issuances under the facilities will be used

for general corporate purposes, including

working capital and capital expenditures, to refinance existing indebtedness,

and/or to fund potential acquisitions.

The agreements provide, among other things, that we maintain

certain maximum leverage ratios, and contain

restrictions relating to subsidiary indebtedness, liens, affiliate transactions, disposal

of assets and certain changes in

ownership.

These facilities contain make-whole provisions in the event that we

pay off the facilities prior to the

applicable due dates.

The components of our private placement facility borrowings, which

have a weighted average interest rate of

3.66

%, as of June 29, 2024 are presented in the following table:

Amount of

Date of

Borrowing

Borrowing

Borrowing

Outstanding

Rate

Due Date

December 24, 2012

$

3.00

%

December 24, 2024

June 16, 2017

3.42

June 16, 2027

September 15, 2017

3.52

September 15, 2029

January 2, 2018

3.32

January 2, 2028

September 2, 2020

2.35

September 2, 2030

June 2, 2021

2.48

June 2, 2031

June 2, 2021

2.58

June 2, 2033

May 4, 2023

4.79

May 4, 2028

May 4, 2023

4.84

May 4, 2030

May 4, 2023

4.96

May 4, 2033

May 4, 2023

4.94

May 4, 2033

Less: Deferred debt issuance costs

(1)

Total

$

1,024

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Term Loan

On July 11, 2023, we entered into a

three-year

$

million term loan credit agreement (the “Term Credit

Agreement”).

The interest rate on this term loan is based on the Term SOFR plus a spread based on our leverage

ratio at the end of each financial reporting quarter.

This term loan matures on July 11, 2026.

We have been

required to make quarterly payments of $

million from September 2023 through June 2024 and are required to

make quarterly payments of $

million from September 2024 through June 2026, with the remaining

balance due in

July 2026.

As of June 29, 2024, the borrowings outstanding under this

term loan were $

million.

At June 29,

2024, the interest rate under the Term Credit Agreement was

5.33

% plus

1.47

% for a combined rate of

6.80

%.

As

of December 30, 2023, the borrowings outstanding under this term

loan were $

million.

At December 30, 2023,

the interest rate under the Term Credit Agreement was

5.36

% plus

1.35

% for a combined rate of

6.71

%.

However,

we have a hedge in place that ultimately creates an effective fixed rate of

5.91

% and

5.79

% at June 29, 2024 and

December 30, 2023,

respectively.

The Term Credit Agreement requires, among other things, that we maintain

certain maximum leverage ratios.

Additionally, the Term

Credit Agreement contains customary representations,

warranties and affirmative covenants as well as customary negative covenants, subject

to negotiated exceptions, on

liens, indebtedness, significant corporate changes (including mergers), dispositions

and certain restrictive

agreements.

U.S. Trade Accounts Receivable Securitization

We have a facility agreement based on our U.S. trade accounts receivable that is structured as an asset-backed

securitization program with pricing committed for up to

three years

.

This facility agreement has a purchase limit of

$

million with

two

banks as agents, and expires on

December 15, 2025

.

As of June 29, 2024 and December 30, 2023, the borrowings outstanding

under this securitization facility were

$

million and $

million, respectively.

At June 29, 2024, the interest rate on borrowings under

this facility

was based on the asset-backed commercial paper rate of

5.49

% plus

0.75

%, for a combined rate of

6.24

%.

At

December 30, 2023, the interest rate on borrowings under this facility was

based on the asset-backed commercial

paper rate of

5.67

% plus

0.75

%, for a combined rate of

6.42

%.

If our accounts receivable collection pattern changes due to customers

either paying late or not making payments,

our ability to borrow under this facility may be reduced.

We are required to pay a commitment fee of

to

basis points depending upon program utilization.

On May 17, 2024, we amended this facility to temporarily adjust certain covenant

levels.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 9 – Income Taxes

For the six months ended June 29, 2024 our effective tax rate was

25.2

%, compared to

22.8

% for the prior year

period.

The difference between our effective tax rate and the federal statutory tax rate primarily

relates to state and

foreign income taxes.

The Organization of Economic Co-Operation and Development (OECD) issued

technical and administrative

guidance on Pillar Two rules in December 2021, which provides for a global minimum tax rate on the earnings of

large multinational businesses on a country-by-country basis.

Effective January 1, 2024, the minimum global tax

rate is 15% for various jurisdictions pursuant to the Pillar Two rules.

As of June 29, 2024, the impact of the Pillar

Two rules to our financial statements was immaterial.

As we operate in jurisdictions which have adopted Pillar

Two,

we are continuing to analyze the implications to effectively manage the impact

for 2024 and beyond.

Future

tax reform resulting from these developments may result in changes to

long-standing tax principles, which may

adversely impact our effective tax rate going forward or result in higher cash tax liabilities.

The total amount of unrecognized tax benefits, which are included in

“other liabilities” within our condensed

consolidated balance sheets, as of June 29, 2024 and December 30, 2023, was

$

million and $

million,

respectively, of which $

million and $

million, respectively, would affect the effective tax rate if recognized.

It is possible that the amount of unrecognized tax benefits will

change in the next 12 months, which may result in a

material impact on our condensed consolidated statements of income.

All tax returns audited by the IRS are officially closed through 2019.

The tax years subject to examination by the

IRS include years 2020 and forward.

In addition, limited positions reported in the 2017 tax year are subject

to IRS

examination.

The amount of tax interest expense included as a component of the provision

for taxes was $

million and $

million for the six months ended June 29, 2024 and July 1, 2023, respectively.

The total amount of accrued interest

is included in “other liabilities,” and was $

million as of June 29, 2024 and $

million as of December 30, 2023.

The amount of penalties accrued for during the periods presented was not

material to our condensed consolidated

financial statements.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 10 – Plans of Restructuring

On August 1, 2022, we committed to a restructuring plan (the “2022 Plan”)

focused on funding the priorities of the

BOLD+1 strategic plan, streamlining operations and other initiatives to

increase efficiency.

The 2022 Plan has

been completed as of July 31, 2024.

We expect to record restructuring charges of $

million related to the 2022

Plan during the remainder of 2024.

On August 6, 2024, we committed to a new restructuring plan (the “2024

Plan”) to integrate recent acquisitions,

right-size operations and further increase efficiencies.

We expect to record restructuring charges associated with

the 2024 Plan during the second half of 2024 and in 2025, however an

estimate of the amount of these charges has

not yet been determined.

During the three months ended June 29, 2024, and July 1, 2023, in connection

with our 2022 Plan, we recorded

restructuring costs of $

million and $

million, respectively.

During the six months ended June 29, 2024, and

July 1, 2023, we recorded restructuring costs of $

million and $

million, respectively.

The restructuring costs

for these periods primarily related to severance and employee-related

costs, accelerated amortization of right-of-use

lease assets and fixed assets, and other lease exit costs.

Restructuring costs recorded for the three and six months ended June

29, 2024 and July 1, 2023, consisted of the

following:

Three Months Ended

June 29, 2024

Six Months Ended

June 29, 2024

Health Care

Distribution

Technology

and Value-

Added Services

Total

Health Care

Distribution

Technology

and Value-

Added Services

Total

Severance and employee-related costs

$

$

$

$

$

$

Accelerated depreciation and amortization

-

-

Exit and other related costs

-

-

Total restructuring

costs

$

$

$

$

$

$

Three Months Ended

July 1, 2023

Six Months Ended

July 1, 2023

Health Care

Distribution

Technology

and Value-

Added Services

Total

Health Care

Distribution

Technology

and Value-

Added Services

Total

Severance and employee-related costs

$

$

$

$

$

$

Accelerated depreciation and amortization

Exit and other related costs

-

Loss on disposal of a business

-

-

-

-

Total restructuring

costs

$

$

$

$

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes,

by reportable segment, the activity related to the liabilities associated

with our

restructuring initiatives

for the six months ended June 29, 2024.

The remaining accrued balance of restructuring

costs as of June 29, 2024, which primarily relates to severance and employee-related

costs, is included in accrued

expenses: other within our condensed consolidated balance sheets.

Liabilities related to exited leased facilities are

recorded within our current and non-current operating lease liabilities within

our condensed consolidated balance

sheets.

Technology

and

Health Care

Value-Added

Distribution

Services

Total

Balance, December 30, 2023

$

$

$

Restructuring costs

Non-cash accelerated depreciation and amortization

(6)

-

(6)

Cash payments and other adjustments

(18)

(3)

(21)

Balance, June 29, 2024

$

$

-

$

Note 11 – Legal Proceedings

Henry Schein, Inc. has been named as a defendant in multiple opioid

related lawsuits (currently less than one-

hundred and seventy-five (

); one or more of Henry Schein, Inc.’s subsidiaries is also named as a defendant in a

number of those cases).

Generally, the lawsuits allege that the manufacturers of prescription opioid drugs engaged

in a false advertising campaign to expand the market for such drugs and

their own market share and that the entities

in the supply chain (including Henry Schein, Inc. and its subsidiaries) reaped

financial rewards by refusing or

otherwise failing to monitor appropriately and restrict the improper distribution

of those drugs.

These actions

consist of some that have been consolidated within the MultiDistrict Litigation

(“MDL”) proceeding In Re National

Prescription Opiate Litigation (MDL No. 2804; Case No. 17-md-2804)

and are currently stayed, and others which

remain pending in state courts and are proceeding independently and outside

of the MDL.

At this time, the

following case is set for trial: the action filed by Florida Health Sciences Center, Inc. (and

other hospitals located

throughout the State of Florida) in Florida state court, which is currently

scheduled for a jury trial in September

Of Henry Schein’s 2023 net sales of approximately $

12.3

billion, sales of opioids represented less than

four

-

tenths of 1 percent.

Opioids represent a negligible part of our business.

We intend to defend ourselves vigorously

against these actions.

In August 2022, Henry Schein received a Grand Jury Subpoena from the United

States Attorney’s Office for the

Western District of Virginia,

seeking documents in connection with an investigation of possible

violations of the

Federal Food, Drug & Cosmetic Act by Butler Animal Health Supply, LLC (“Butler”), a former subsidiary of

Henry Schein.

The investigation relates to the sale of veterinary prescription drugs

to certain customers.

In

October 2022, Henry Schein received a second Grand Jury Subpoena

from the United States Attorney’s Office for

the Western District of Virginia.

The October 2022 Subpoena seeks documents relating to payments Henry

Schein

received from Butler or Covetrus, Inc. (“Covetrus”).

Butler was spun off into a separate company and became a

subsidiary of Covetrus in 2019 and is no longer owned by Henry Schein.

We are cooperating with the

investigation.

On January 18, 2024, a putative class action was filed against the Company

in the U.S. District Court for the

Eastern District of New York (“EDNY”), Case No. 24-cv-387 (the “Cruz-Bermudez Action”), based on the

October 2023 cyber incident described in

Note 3 – Cyber Incident

.

On January 26, 2024, a second putative class

action was filed against the Company based on the cyber incident, also

in the EDNY,

Case No. 24-cv-550 (the

“Depperschmidt Action”).

On February 12, 2024, the Depperschmidt Action was voluntarily dismissed

without

prejudice.

On February 16, 2024, an amended complaint was filed in

the Cruz-Bermudez Action with additional

plaintiffs’ counsel from the Depperschmidt Action and an additional new plaintiff.

Plaintiffs in the Cruz-Bermudez Action seek to represent a class of all individuals

whose personally identifying

information and personal health information was compromised by

the incident.

Plaintiffs generally claim to have

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

been harmed by alleged actions and/or omissions by the Company

in connection with the incident and that the

Company made deceptive public statements regarding privacy and data protection.

Plaintiffs assert a variety of

claims seeking monetary damages, injunctive relief, costs and attorneys’

fees, and other related relief.

On March

22, 2024, plaintiffs voluntarily withdrew two of their five causes of action.

On April 8, 2024, the court denied the

Company’s motion to dismiss the remaining claims.

The case remains pending.

On June 6, 2024, plaintiffs and the Company informed the court that they had agreed

to a term sheet for a class

action settlement of the Cruz-Bermudez Action.

The settlement agreement is subject to the parties’ finalization

and

the court’s approval.

The final settlement terms enumerated in a settlement agreement,

including the settlement

amount, will depend in part on the outcome of Henry Schein’s review of the data impacted in the cyber incident

to

determine the final class size total.

The court stayed the Cruz-Bermudez Action through September 13,

2024 and

ordered plaintiffs to move for preliminary approval of the proposed settlement by

that date.

We expect any

settlement will be for an immaterial amount.

Henry Schein, Inc. and its subsidiary, North American Rescue, LLC (“NAR”), have been named as defendants

in a

qui tam lawsuit brought under the federal False Claims Act (“FCA”), in

an action entitled

Russ and Murphy ex rel.

United States v. North American Rescue, LLC et al.

; Case No. 21-cv-04238, filed in the United States District

Court

for the Eastern District of Pennsylvania.

The case was filed under seal in 2021 by two relators (Corey

Russ and

Chris Murphy) who worked for one of NAR’s competitors.

Relators also name C-A-T Resources, LLC (“CAT-R”)

as a defendant.

CAT

-R manufactures one of the products at issue in the case (the

combat application tourniquet, or

“CAT”).

After the Department of Justice declined to intervene, the case was unsealed,

and Relators filed their first

amended complaint in November 2023.

In response to motions to dismiss filed by Henry Schein, NAR

and CAT-

R, Relators requested and obtained leave to file their Second Amended

Complaint on April 24, 2024.

Relators’

FCA claims are based on allegations that NAR and Henry Schein made false

representations and certifications in

connection with, and sold and submitted false claims for payment to the federal

government for, various medical

products that Relators contend violated certain “Buy American”

laws (e.g., the Berry Amendment and Trade

Agreements Act of 1979) and/or were not properly sterilized as noted

on the products’ packaging, and thus

misbranded.

These products include the CAT,

syringes, compressed gauze, tracheostomy kits, hypothermia

blankets, eye, ear, nose and throat kits, and trauma dressing.

Relators allege Henry Schein controlled and

supervised NAR’s alleged misconduct for a period of time.

Relators seek three times the amount of damages to be

proved at trial, statutory civil penalties, reasonable expenses, attorneys’

fees and costs, and prejudgment

interest.

On July 26, 2024, the court ruled on motions to dismiss

filed by Henry Schein, NAR and CAT-R.

The

court dismissed the claims against Henry Schein (without prejudice) and Henry

Schein is no longer in the case.

The motions to dismiss filed by NAR and CAT-R were denied.

We intend to defend ourselves vigorously against

this action.

From time to time, we may become a party to other legal proceedings,

including, without limitation, product

liability claims, employment matters, commercial disputes, governmental

inquiries and investigations (which may

in some cases involve our entering into settlement arrangements or consent

decrees), and other matters arising out

of the ordinary course of our business.

While the results of any legal proceeding cannot be predicted with certainty,

in our opinion none of these other pending matters are currently

anticipated to have a material adverse effect on our

consolidated financial position, liquidity or results of operations.

As of June 29, 2024, we had accrued our best estimate of potential

losses relating to claims that were probable to

result in liability and for which we were able to reasonably estimate a

loss.

This accrued amount, as well as related

expenses, was not material to our financial position, results of operations

or cash flows.

Our method for

determining estimated losses considers currently available

facts, presently enacted laws and regulations and other

factors, including probable recoveries from third parties.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 12 – Stock-Based Compensation

Stock-based awards are provided to certain employees under our 2024 Stock Incentive

Plan (formerly known as our

2020 Stock Incentive Plan) and to non-employee directors under our 2023 Non-Employee

Director Stock Incentive

Plan (together, the “Plans”).

The Plans are administered by the Compensation Committee of the Board

of Directors

(the “Compensation Committee”).

Historically, equity-based awards to our employees have been granted solely in

the form of time-based and performance-based restricted stock units (“RSUs”) with

the exception of our 2021 plan

year in which non-qualified stock options were issued in place of performance-based

RSUs and in 2022, when we

granted time-based and performance-based RSUs, as well as non-qualified

stock options.

Starting with our 2023

plan year,

we returned to granting our employees equity-based awards

solely in the form of time-based and

performance-based RSUs.

Our non-employee directors receive equity-based awards solely in the form

of time-

based RSUs.

RSUs are stock-based awards granted to recipients with specified vesting provisions.

In the case of RSUs, common

stock is delivered on or following satisfaction of vesting conditions.

We issue RSUs to employees that primarily

vest (i) solely based on the recipient’s continued service over time, primarily with

four

-year cliff vesting and/or (ii)

based on achieving specified performance measurements and the recipient’s continued service over time, primarily

with

three

-year cliff vesting.

RSUs granted to our non-employee directors primarily include

-month cliff vesting.

For these RSUs, we recognize the cost as compensation expense on a straight-line

basis.

For all RSUs, we estimate the fair value based on our closing stock

price on the grant date.

With respect to

performance-based RSUs, the number of shares that ultimately vest and

are received by the recipient is based upon

our performance as measured against specified targets over a specified period, as

determined by the Compensation

Committee.

Although there is no guarantee that performance targets will be achieved, we

estimate the fair value of

performance-based RSUs based on our closing stock price at time of grant.

Each of the Plans provide for certain adjustments to the performance

measurement in connection with awards under

the Plans.

With respect to the performance-based RSUs granted under our 2024 Stock Incentive Plan, such

performance measurement adjustments relate to significant events, including,

without limitation, acquisitions,

divestitures, new business ventures, certain capital transactions (including share

repurchases), differences in

budgeted average outstanding shares (other than those resulting from capital

transactions referred to above),

restructuring costs, if any, amortization expense recorded for acquisition-related intangible assets (solely with

respect to performance-based RSUs granted in the 2023 and 2024 plan years),

certain litigation settlements or

payments, if any, changes in accounting principles or in applicable laws or regulations, changes in income tax rates

in certain markets, foreign exchange fluctuations, the financial impact

either positive or negative, of the difference

in projected earnings generated by COVID-19 test kits (solely with respect

to performance-based RSUs granted in

the 2022 and 2023 plan years) and impairment charges (solely with respect to performance-based

RSUs granted in

the 2023 and 2024 plan years), and unforeseen events or circumstances

affecting us.

Over the performance period, the number of RSUs that will ultimately vest

and be issued and the related

compensation expense is adjusted upward or downward based upon our

estimation of achieving such performance

targets.

The ultimate number of shares delivered to recipients and the related compensation

cost recognized as an

expense is based on our actual performance metrics as defined under

the 2024 Stock Incentive Plan.

Stock options are awards that allow the recipient to purchase shares of our

common stock after vesting at a fixed

price set at the time of grant.

Stock options were granted at an exercise price equal to our

closing stock price on the

date of grant.

Stock options issued in 2021 and 2022 vest

one-third

per year based on the recipient’s continued

service, subject to the terms and conditions of the 2020 Stock Incentive Plan,

are fully vested

three years

from the

grant date and have a contractual term of

ten years

from the grant date, subject to earlier termination of term and

term acceleration upon certain events.

Compensation expense for stock options is recognized using

a graded

vesting method.

We estimate grant date fair value of stock options using the Black-Scholes valuation model.

During the six months ended June 29, 2024, we did

no

t grant any stock options.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Our condensed consolidated statements of income reflect pre-tax share-based compensation

expense of $

million,

and $

million for the three and six months ended June 29, 2024, respectively.

For the three and six months ended

July 1, 2023, we recorded pre-tax share-based compensation expense of $

million, and $

million.

Total unrecognized compensation cost related to unvested awards as of June 29, 2024 was $

million, which is

expected to be recognized over a weighted-average period of approximately

2.6

years.

Our condensed consolidated statements of cash flows present our

stock-based compensation expense as a

reconciling adjustment between net income and net cash provided by operating

activities for all periods presented.

There were no cash benefits associated with tax deductions in excess of

recognized compensation for the six

months ended June 29, 2024 and July 1, 2023.

We have not declared cash dividends on our stock in the past and we do not anticipate declaring cash dividends in

the foreseeable future.

The expected stock price volatility is based on implied volatilities

from traded options on

our stock, historical volatility of our stock and other factors.

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant that most closely aligns to the expected life of options.

The

six

-

year expected life of the options was determined using the simplified

method for estimating the expected term as

permitted under Staff Accounting Bulletin Topic 14.

The following table summarizes the stock option activity for the six months

ended June 29, 2024:

Stock Options

Weighted Average

Weighted Average

Aggregate

Exercise

Remaining Contractual

Intrinsic

Shares

Price

Life (in years)

Value

Outstanding at beginning of period

1,078,459

$

71.46

Granted

-

-

Exercised

(44,750)

62.71

Forfeited

(4,608)

84.60

Outstanding at end of period

1,029,101

$

71.78

7.1

$

Options exercisable at end of period

889,060

$

69.71

Weighted Average

Weighted Average

Aggregate

Number of

Exercise

Remaining Contractual

Intrinsic

Options

Price

Life (in years)

Value

Expected to vest

140,041

$

84.94

7.7

$

-

The following tables summarize the activity of our unvested RSUs for

the six months ended June 29, 2024:

Time-Based Restricted Stock Units

Performance-Based Restricted Stock Units

Weighted

Weighted

Average

Intrinsic

Average

Intrinsic

Grant Date Fair

Value

Grant Date Fair

Value

Shares/Units

Value Per Share

Per Share

Shares/Units

Value Per Share

Per Share

Outstanding at beginning of period

1,655,393

$

70.34

208,742

$

78.02

Granted

461,798

75.88

408,681

76.31

Vested

(321,460)

62.79

(8,262)

66.53

Forfeited

(59,283)

77.31

(35,527)

80.55

Outstanding at end of period

1,736,448

$

72.99

$

64.10

573,634

$

75.78

$

64.10

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 13 – Redeemable Noncontrolling Interests

Some minority stockholders in certain of our subsidiaries have the right,

at certain times, to require us to acquire

their ownership interest in those entities at fair value.

Accounting Standards Codification Topic 480-10 is

applicable for noncontrolling interests where we are or may be required

to purchase all or a portion of the

outstanding interest in a consolidated subsidiary from the noncontrolling

interest holder under the terms of a put

option contained in contractual agreements.

The components of the change in the redeemable noncontrolling

interests for the six months ended June 29, 2024 and the year ended December

30, 2023 are presented in the

following table:

June 29,

December 30,

2024

2023

Balance, beginning of period

$

$

Decrease in redeemable noncontrolling interests due to acquisitions of

noncontrolling interests in subsidiaries

(205)

(19)

Increase in redeemable noncontrolling interests due to business acquisitions

Net income (loss) attributable to redeemable noncontrolling interests

(1)

Distributions declared, net of capital contributions

(22)

(19)

Effect of foreign currency translation gain (loss) attributable to

redeemable noncontrolling interests

(15)

Change in fair value of redeemable securities

(11)

Balance, end of period

$

$

Note 14 – Comprehensive Income

Comprehensive income includes certain gains and losses that, under U.S. GAAP, are excluded from net income and

are recorded directly to stockholders’ equity.

The following table summarizes our Accumulated other comprehensive loss, net of

applicable taxes as of:

June 29,

December 30,

2024

2023

Attributable to redeemable noncontrolling interests:

Foreign currency translation adjustment

$

(47)

$

(32)

Attributable to noncontrolling interests:

Foreign currency translation adjustment

$

(1)

$

(1)

Attributable to Henry Schein, Inc.:

Foreign currency translation adjustment

$

(289)

$

(188)

Unrealized gain (loss) from hedging activities

(13)

Pension adjustment loss

(5)

(5)

Accumulated other comprehensive loss

$

(292)

$

(206)

Total Accumulated

other comprehensive loss

$

(340)

$

(239)

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes the components of comprehensive income, net

of applicable taxes as follows:

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Net income

$

$

$

$

Foreign currency translation gain (loss)

(62)

(116)

Tax effect

-

-

-

-

Foreign currency translation gain (loss)

(62)

(116)

Unrealized gain (loss) from hedging activities

(2)

(6)

Tax effect

(2)

(6)

Unrealized gain (loss) from hedging activities

(1)

(4)

Comprehensive income

$

$

$

$

Our financial statements are denominated in U.S. Dollars.

Fluctuations in the value of foreign currencies as

compared to the U.S. Dollar may have a significant impact on our

comprehensive income.

The foreign currency

translation gain (loss) during the six months ended June 29, 2024 and six

months ended July 1, 2023 was primarily

due to changes in foreign currency exchange rates of the Brazilian Real, Euro,

British Pound, Canadian Dollar,

Australian Dollar and Swiss Franc.

The hedging gain (loss) during the three and six months ended June 29, 2024,

and July 1, 2023 was attributable to a

net investment hedge.

The following table summarizes our total comprehensive income, net of

applicable taxes as follows:

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Comprehensive income attributable to

Henry Schein, Inc.

$

$

$

$

Comprehensive income attributable to

noncontrolling interests

Comprehensive income (loss) attributable to

Redeemable noncontrolling interests

(8)

(16)

Comprehensive income

$

$

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 15

–

Earnings Per Share

Basic earnings per share is computed by dividing net income attributable

to Henry Schein, Inc. by the weighted-

average number of common shares outstanding for the period.

Our diluted earnings per share is computed similarly

to basic earnings per share, except that it reflects the effect of common shares issuable

for unvested RSUs and upon

exercise of stock options using the treasury stock method in periods

in which they have a dilutive effect.

A reconciliation of shares used in calculating earnings per basic and

diluted share follows:

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Basic

127,784,380

130,905,899

128,252,628

131,136,450

Effect of dilutive securities:

Stock options and restricted stock units

862,126

967,275

954,152

1,329,299

Diluted

128,646,506

131,873,174

129,206,780

132,465,749

The number of antidilutive securities that were excluded from the calculation

of diluted weighted average common

shares outstanding are as follows:

Three Months Ended

Six Months Ended

June 29,

July 1,

June 29,

July 1,

2024

2023

2024

2023

Stock options

416,790

426,002

417,819

427,355

Restricted stock units

792,247

19,405

495,077

19,405

Total anti-dilutive

securities excluded from earnings per

share computation

1,209,037

445,407

912,896

446,760

Note 16 – Supplemental Cash Flow Information

Cash paid for interest and income taxes was:

Six Months Ended

June 29,

July 1,

2024

2023

Interest

$

$

Income taxes

For the six months ended June 29, 2024 and July 1, 2023, we had

$

million and $

(6)

million of non-cash net

unrealized gains (losses) related to hedging activities, respectively.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 17 – Related Party Transactions

In connection with the formation of Henry Schein One, LLC, our joint venture

with Internet Brands, which was

formed on July 1, 2018, we entered into a

ten-year

royalty agreement with Internet Brands whereby we will pay

Internet Brands approximately $

million annually for the use of their intellectual property.

During the three and

six months ended June 29, 2024, we recorded $

million and $

million, respectively, in connection with costs

related to this royalty agreement.

During the three and six months ended July 1, 2023, we recorded $

million and

$

million, respectively, in connection with costs related to this royalty agreement.

As of June 29, 2024 and

December 30, 2023, Henry Schein One, LLC had a net payable balance

to Internet Brands of $

million and $

million, respectively, comprised of amounts related to results of operations and the royalty agreement.

The

components of this payable are recorded within accrued expenses: other within

our condensed consolidated balance

sheets.

We have interests in entities that we account for under the equity accounting method.

In our normal course of

business, during the three and six months ended June 29, 2024, we recorded net

sales of $

million and $

million respectively, to such entities.

During the three and six months ended July 1, 2023, we recorded net sales of

$

million and $

million respectively, to such entities.

During the three and six months ended June 29, 2024,

we purchased $

million and $

million respectively, from such entities.

During the three and six months ended

July 1, 2023, we purchased $

million and $

million respectively, from such entities.

At June 29, 2024 and

December 30, 2023, we had an aggregate $

million and $

million, respectively, due from our equity affiliates,

and $

million and $

million, respectively, due to our equity affiliates.

Certain of our facilities related to our acquisitions are leased from employees

and minority shareholders.

These

leases are classified as operating leases and have a remaining lease term

ranging from

two months

to

years.

As

of June 29, 2024, current and non-current liabilities associated with related

party operating leases were $

million

and $

million, respectively.

At June 29, 2024 related party leases represented

7.5

% and

8.6

% of the total current

and non-current operating lease liabilities, respectively.

At December 30, 2023 related party leases represented

6.3

% and

7.4

% of the total current and non-current operating lease liabilities, respectively.