Item 1. CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions,

except share data)

September 28,

December 30,

2024

2023

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

$

Accounts receivable, net of allowance for credit losses of $

and $

(1)

1,660

1,863

Inventories, net

1,754

1,815

Prepaid expenses and other

Total current assets

4,147

4,488

Property and equipment, net

Operating lease right-of-use assets

Goodwill

3,986

3,875

Other intangibles, net

1,100

Investments and other

Total assets

$

10,605

$

10,573

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND

STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

1,026

$

1,020

Bank credit lines

Current maturities of long-term debt

Operating lease liabilities

Accrued expenses:

Payroll and related

Taxes

Other

Total current liabilities

2,929

2,683

Long-term debt (1)

1,906

1,937

Deferred income taxes

Operating lease liabilities

Other liabilities

Total liabilities

5,634

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,

125,154,194

outstanding on September 28, 2024 and

129,247,765

outstanding on December 30, 2023

Additional paid-in capital

-

-

Retained earnings

3,766

3,860

Accumulated other comprehensive loss

(264)

(206)

Total Henry Schein, Inc. stockholders' equity

3,503

3,655

Noncontrolling interests

Total stockholders' equity

4,139

4,289

Total liabilities, redeemable noncontrolling

interests and stockholders' equity

$

10,605

$

10,573

(1)

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

At September 28, 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

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Net sales

$

3,174

$

3,162

$

9,482

$

9,322

Cost of sales

2,181

2,167

6,459

6,386

Gross profit

3,023

2,936

Operating expenses:

Selling, general and administrative

2,296

2,149

Depreciation and amortization

Restructuring costs

Operating income

Other income (expense):

Interest income

Interest expense

(34)

(25)

(96)

(58)

Other, net

(2)

(2)

(1)

(2)

Income before taxes, equity in earnings of affiliates and

noncontrolling interests

Income taxes

(32)

(39)

(97)

(119)

Equity in earnings of affiliates, net of tax

Net income

Less: Net income attributable to noncontrolling interests

-

(6)

(6)

(21)

Net income attributable to Henry Schein, Inc.

$

$

$

$

Earnings per share attributable to Henry Schein, Inc.:

Basic

$

0.79

$

1.06

$

2.32

$

3.04

Diluted

$

0.78

$

1.05

$

2.30

$

3.02

Weighted-average common

shares outstanding:

Basic

126,124,715

130,388,353

127,550,045

130,888,717

Diluted

127,054,934

131,442,135

128,498,494

132,149,172

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(in millions)

(unaudited)

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Net income

$

$

$

$

Other comprehensive income (loss), net of tax:

Foreign currency translation gain (loss)

(45)

(58)

(17)

Unrealized gain (loss) from hedging activities

(18)

(3)

Other comprehensive income (loss), net of tax

(39)

(61)

(15)

Comprehensive income

Comprehensive income attributable to noncontrolling interests:

Net income

-

(6)

(6)

(21)

Foreign currency translation loss (gain)

(12)

Comprehensive income attributable to noncontrolling

interests

(12)

(4)

(3)

(20)

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, June 29, 2024

127,080,545

$

$

-

$

3,803

$

(292)

$

$

4,148

Net income (loss) (excluding $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

(1)

Foreign currency translation gain (excluding gain of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

Unrealized loss from hedging activities,

net of tax benefit of $

-

-

-

-

(18)

-

(18)

Purchase of noncontrolling interests

-

-

(1)

-

-

(1)

(2)

Change in fair value of redeemable securities

-

-

(6)

-

-

-

(6)

Noncontrolling interests and adjustments related to

business acquisitions

-

-

(4)

-

-

(3)

Repurchase and retirement of common stock

(1,954,076)

-

(18)

(119)

-

-

(137)

Stock issued upon exercise of stock options

22,448

-

-

-

-

Stock-based compensation expense

7,655

-

-

-

-

Shares withheld for payroll taxes

(2,403)

-

-

-

-

-

-

Settlement of stock-based compensation awards

-

-

-

-

Transfer of charges in excess of

capital

-

-

(17)

-

-

-

Balance, September 28, 2024

125,154,194

$

$

-

$

3,766

$

(264)

$

$

4,139

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, July 1, 2023

130,576,806

$

$

-

$

3,769

$

(210)

$

$

4,186

Net income (excluding $

attributable to Redeemable

noncontrolling interests)

-

-

-

-

Foreign currency translation loss (excluding loss of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

(43)

-

(43)

Unrealized gain from hedging activities,

net of tax of $

-

-

-

-

-

Distributions to noncontrolling shareholders

-

-

-

-

-

(1)

(1)

Change in fair value of redeemable securities

-

-

-

-

-

Noncontrolling interests and adjustments related to

-

business acquisitions

-

-

(1)

-

-

-

(1)

Repurchases and retirement of common stock

(659,681)

-

(6)

(44)

-

-

(50)

Stock-based compensation expense

23,985

-

-

-

-

Stock issued upon exercise of stock options

3,884

-

-

-

-

-

-

Shares withheld for payroll taxes

(9,183)

-

-

-

-

-

-

Settlement of stock-based compensation awards

-

-

-

-

-

-

Transfer of charges in excess of

capital

-

-

(35)

-

-

-

Balance, September 30, 2023

129,935,883

$

$

-

$

3,897

$

(247)

$

$

4,280

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 gain/(loss) (excluding loss of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

(55)

(54)

Unrealized loss from hedging activities,

net of tax benefit of $

-

-

-

-

(3)

-

(3)

Distributions to noncontrolling shareholders

-

-

-

-

-

(5)

(5)

Purchase of noncontrolling interests

-

-

(7)

-

-

(1)

(8)

Change in fair value of redeemable securities

-

-

(87)

-

-

-

(87)

Noncontrolling interests and adjustments related to

business acquisitions

-

-

(8)

-

-

(7)

Repurchase and retirement of common stock

(4,368,510)

-

(42)

(271)

-

-

(313)

Stock issued upon exercise of stock options

47,688

-

-

-

-

Stock-based compensation expense

337,753

-

-

-

-

Shares withheld for payroll taxes

(110,566)

-

(9)

-

-

-

(9)

Settlement of stock-based compensation awards

-

-

-

-

Transfer of charges in excess of

capital

-

-

(119)

-

-

-

Balance, September 28, 2024

125,154,194

$

$

-

$

3,766

$

(264)

$

$

4,139

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 loss (excluding loss of $

attributable to Redeemable noncontrolling interests)

-

-

-

-

(16)

-

(16)

Unrealized gain from hedging activities,

net of tax of $

-

-

-

-

-

Distributions to noncontrolling shareholders

-

-

-

-

-

(28)

(28)

Change in fair value of redeemable securities

-

-

-

-

-

Noncontrolling interests and adjustments related to

business acquisitions

-

-

-

-

-

(2)

(2)

Repurchases and retirement of common stock

(2,521,695)

-

(26)

(175)

-

-

(201)

Stock-based compensation expense

1,060,883

-

-

-

-

Stock issued upon exercise of stock options

19,744

-

-

-

-

Shares withheld for payroll taxes

(415,048)

-

(32)

-

-

-

(32)

Settlement of stock-based compensation awards

(818)

-

-

-

-

Transfer of charges in excess of

capital

-

-

(4)

-

-

-

Balance, September 30, 2023

129,935,883

$

$

-

$

3,897

$

(247)

$

$

4,280

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

(in millions)

(unaudited)

Nine Months Ended

September 28,

September 30,

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

(41)

(4)

Equity in earnings of affiliates

(12)

(10)

Distributions from equity affiliates

Changes in unrecognized tax benefits

Other

(25)

(11)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

(72)

Inventories

Other current assets

(55)

Accounts payable and accrued expenses

(131)

(170)

Net cash provided by operating activities

Cash flows from investing activities:

Purchases of property and equipment

(112)

(108)

Payments related to equity investments and business acquisitions,

net of cash acquired

(223)

(668)

Proceeds from loan to affiliate

Capitalized software costs

(30)

(30)

Other

(10)

(6)

Net cash used in investing activities

(372)

(808)

Cash flows from financing activities:

Net change in bank credit lines

(98)

Proceeds from issuance of long-term debt

1,158

Principal payments for long-term debt

(193)

(457)

Debt issuance costs

-

(3)

Proceeds from issuance of stock upon exercise of stock options

Payments for repurchases and retirement of common stock

(310)

(200)

Payments for taxes related to shares withheld for employee taxes

(9)

(34)

Distributions to noncontrolling shareholders

(36)

(41)

Acquisitions of noncontrolling interests in subsidiaries

(255)

(19)

Net cash provided by (used in) financing activities

(306)

Effect of exchange rate changes on cash and cash equivalents

(11)

Net change in cash and cash equivalents

(45)

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 nine months ended September 28, 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 credit losses; 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 September 28, 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 nine months ended

September 28, 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 profits 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,

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

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 nine months ended September 28, 2024, we had a

sales decrease in our dental and medical

distribution businesses, which we believe was primarily a result of lower sales

to episodic customers following last

year’s cyber incident.

During the three and nine months ended September 28, 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 nine months ended

September 28, 2024, we received insurance proceeds of $

million and $

million, respectively, 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

Nine Months Ended

September 28, 2024

September 28, 2024

North

America

International

Global

North

America

International

Global

Net sales:

Health care distribution

Dental

$

1,089

$

$

1,852

$

3,321

$

2,369

$

5,690

Medical

1,076

1,101

3,060

3,140

Total health care distribution

2,165

2,953

6,381

2,449

8,830

Technology

and value-added services

Total net sales

$

2,355

$

$

3,174

$

6,946

$

2,536

$

9,482

Three Months Ended

Nine Months Ended

September 30, 2023

September 30, 2023

North

America

International

Global

North

America

International

Global

Net sales:

Health care distribution

Dental

$

1,134

$

$

1,882

$

3,447

$

2,290

$

5,737

Medical

1,044

1,070

2,920

2,991

Total health care distribution

2,178

2,952

6,367

2,361

8,728

Technology

and value-added services

Total net sales

$

2,363

$

$

3,162

$

6,886

$

2,436

$

9,322

Contract Liabilities

At September 28, 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 nine months ended September 28, 2024, we recognized,

in net sales, $

million of the

amount that was previously deferred at December 30, 2023.

During the nine months ended September 30, 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 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

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Net sales:

Health care distribution

(1)

Dental

$

1,852

$

1,882

$

5,690

$

5,737

Medical

1,101

1,070

3,140

2,991

Total health care distribution

2,953

2,952

8,830

8,728

Technology

and value-added services

(2)

Total

$

3,174

$

3,162

$

9,482

$

9,322

(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

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

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 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

Not Applicable

Total

$

Except for in-process research and development (“IPR&D”), intangible assets

acquired as a result of the TriMed

acquisition are being amortized over their estimated useful lives

using the straight-line method of amortization.

The IPR&D is accounted for as an indefinite-lived intangible asset and

is not amortized until completion or

abandonment of the associated research and development efforts.

IPR&D is tested for impairment annually or

periodically if an indicator of impairment exists during the period until completion.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

including but not limited to

pending assessments of accounts receivable, right-of-use lease assets,

accrued liabilities, lease liabilities, income

and non-income based taxes.

During the three months ended September 28, 2024, we did not

record any material

measurement period adjustments.

We expect to finalize these amounts as soon as possible but no later than one

year from the acquisition date.

Pro forma financial information has not been presented because the

impact of the TriMed acquisition during the

three and nine months ended September 28, 2024 was immaterial

to our condensed consolidated financial

statements.

Other 2024 Acquisitions

During the nine months ended September 28, 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, trademarks and tradenames of $

million, product development of

$

million and non-compete agreements of $

million.

Weighted average useful lives for these acquired intangible

assets were

years,

years,

years and

years, respectively.

During the nine months ended September 28, 2024, we completed the accounting

for certain acquisitions that

occurred in fiscal year 2024 and we did not record any material measurement

period adjustments related to these

acquisitions.

The accounting for other acquisitions in fiscal year 2024 has not

been completed in several areas,

including but not limited to pending assessment of accounts receivable,

right-of-use lease assets, lease liabilities,

accrued liabilities and non-income based taxes.

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 not deductible

for tax

purposes.

During the three and nine months ended September 28, 2024, in connection

with an acquisition of a controlling

interest of an affiliate, we recognized a gain of approximately $

million related to the remeasurement to fair value

of our previously held equity investment, using a discounted cash flow

model based on Level 3 inputs, as defined in

Note 7 – Fair Value Measurements

,

which was recorded in selling, general and administrative

in the condensed

consolidated statements of income.

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

not considered 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

)

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:

Final

Allocation

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

(24)

Deferred income taxes

(43)

Other noncurrent liabilities

(7)

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 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

$

Pro forma financial information has not been presented because the impact of

the Shield acquisition was immaterial

to our consolidated financial statements.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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:

Final Allocation

Acquisition consideration:

Cash

$

Total consideration

$

Identifiable assets acquired and liabilities assumed:

Current assets

$

Intangible assets

Other noncurrent assets

Current liabilities

(33)

Long-term debt

(22)

Deferred income taxes

(38)

Other noncurrent liabilities

(27)

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 S.I.N.

The acquired goodwill is not deductible for tax purposes.

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

$

Pro forma financial information has not been presented because the impact

of the S.I.N. acquisition was immaterial

to our consolidated financial statements.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Acquisition of Biotech Dental

On April 5, 2023, we acquired a

% voting equity interest in Biotech Dental, a provider of dental implants,

clear

aligners, individualized prosthetics and innovative digital dental software based

in France, 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).

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.

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:

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.

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

$

Pro forma financial information has not been presented because the

impact of the Biotech Dental acquisition 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 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 nine months ended September 28, 2024, we recorded

an adjustment of

$

million and $

million, respectively, within selling, general and administrative in our condensed consolidated

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

consideration related to a 2023

acquisition.

During the nine months ended September 28, 2024, we completed the accounting

for certain fiscal year 2023

acquisitions.

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.

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 nine months ended September 28, 2024, we

incurred $

million and $

million in acquisition

costs, respectively.

During the three and nine months ended September 30, 2023,

we incurred $

million and $

million in acquisition costs, respectively.

These costs are included in selling, general and administrative

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 September 28, 2024 and December 30, 2023 was

estimated at $

2,653

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.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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.

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.

Intangible Assets

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.

Contingent Consideration

We estimate the fair value of contingent consideration payments as part of the acquisition price and record the

estimated fair value of contingent consideration as a liability on our

condensed consolidated balance sheet.

For

transactions accounted for as business combinations, subsequent changes

in the estimated fair value of contingent

consideration payments are included in selling, general, and administrative

expenses in our condensed consolidated

statements of income.

For transactions involving changes in our ownership in subsidiaries

without a change in our

control, subsequent changes in the estimated fair value of contingent consideration

payments are recognized in

additional paid-in capital in our condensed consolidated balance sheet.

We measure contingent consideration at the

fair value on a recurring basis using significant unobservable inputs classified

as Level 3 of the fair value

hierarchy.

We use various valuation techniques, including the Monte Carlo simulation and probability-weighted

scenarios, to determine the fair value of the contingent consideration liabilities on

the acquisition date and at each

reporting period.

Our fair value measurement inputs include expected operating

performance, discount and risk-

free rates, and credit spread.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

September 28, 2024 and December 30,

2023:

September 28, 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

-

-

Contingent consideration

-

-

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:

September 28,

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 September 28, 2024 the

interest rate on this revolving credit facility was

4.96

% plus

1.18

% for a combined rate of

6.14

%.

As of December

30, 2023 the interest rate on this revolving credit facility 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 September

28, 2024 and December 30, 2023, we had $

million and $

million in borrowings, respectively under this

revolving credit facility.

During the nine months ended September 28, 2024, the

average outstanding balance under

the Revolving Credit Agreement was approximately $

million.

As of September 28, 2024 and December 30,

2023, there were $

million and $

million of letters of credit, respectively, provided to third parties under the

Revolving Credit Agreement.

Other Short-Term Bank Credit

Lines

As of September 28, 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

September 28, 2024 and December 30, 2023, $

million and $

million, respectively, were outstanding.

During

the nine months ended September 28, 2024, the average outstanding balances

under our various other short-term

bank credit lines was approximately $

million.

As of September 28, 2024 and December 30, 2023, borrowings

under other short-term bank credit lines had weighted average interest

rates of

5.94

% 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:

September 28,

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 2031 at interest rates

from

0.00

% to

9.42

% at September 28, 2024 and

from

0.00

% to

9.42

% at December 30, 2023

Finance lease obligations

Total

2,015

2,087

Less current maturities

(109)

(150)

Total long-term debt

$

1,906

$

1,937

Private Placement Facilities

Our private placement facilities provided by

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 September 28, 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 are required to

make quarterly payments of $

million from September 2024 through June 2026, with the remaining

balance due in

July 2026.

Previously, we had been required to make quarterly payments of $

million from September 2023

through June 2024.

As of September 28, 2024, the borrowings outstanding under

this term loan were $

million.

At September 28, 2024, the interest rate under the Term Credit Agreement was

5.10

% plus

1.60

% for a combined

rate of

6.70

%.

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

6.04

% and

5.79

% at

September 28, 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 September 28, 2024 and December 30, 2023, the borrowings

outstanding under this securitization facility

were $

million and $

million, respectively.

At September 28, 2024, the interest rate on borrowings under

this facility was based on the

asset-backed commercial paper rate

of

5.28

% plus

0.75

%, for a combined rate of

6.03

%.

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.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 9 – Income Taxes

For the nine months ended September 28, 2024 our effective tax rate was

25.1

%, compared to

22.5

% 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 and interest expense.

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 September 28, 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 September 28, 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 2020.

The tax years subject to examination by the

IRS include years 2021 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 nine months ended September 28, 2024 and September

30, 2023,

respectively.

The total amount of

accrued interest is included in “other liabilities,” and was $

million as of September 28, 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.

During the three months ended September 28, 2024 and

September 30, 2023,

in connection with our 2022 Plan, we recorded restructuring costs of

$

million and $

million, respectively.

During the nine months ended September 28, 2024 and September 30, 2023,

in connection with our 2022 Plan, 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 exit costs.

We expect to record immaterial charges associated with 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.

During the three and nine months ended September 28,

2024, we recorded restructuring charges associated with the 2024 Plan of $

million which primarily related to

severance and employee-related costs, accelerated amortization of right-of-use

lease assets and fixed assets, and

other lease exit costs.

We expect to record restructuring charges associated with the 2024 Plan during the fourth

quarter of 2024 and in 2025, however an estimate of the amount of these charges has not

yet been determined.

Restructuring costs recorded for the three and nine months ended September

28, 2024 and September 30, 2023, in

connection with the 2022 Plan and 2024 Plan consisted of the following:

Three Months Ended

September 28, 2024

Nine Months Ended

September 28, 2024

Health Care

Distribution

Technology

and Value-

Added Services

Total

Health Care

Distribution

Technology

and Value-

Added Services

Total

2024 Plan

Severance and employee-related costs

$

$

$

$

$

$

Accelerated depreciation and amortization

Exit and other related costs

-

-

Restructuring costs-2024 Plan

$

$

$

$

$

$

2022 Plan

Severance and employee-related costs

$

$

$

$

$

$

Accelerated depreciation and amortization

-

-

Exit and other related costs

Restructuring costs-2022 Plan

$

$

$

$

$

$

Total restructuring

costs

$

$

$

$

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Three Months Ended

September 30, 2023

Nine Months Ended

September 30, 2023

Health Care

Distribution

Technology

and Value-

Added Services

Total

Health Care

Distribution

Technology

and Value-

Added Services

Total

2022 Plan

Severance and employee-related costs

$

$

-

$

$

$

$

Accelerated depreciation and amortization

Exit and other related costs

-

Loss on disposal of a business

-

-

-

-

Total restructuring

costs

$

$

$

$

$

$

The following table summarizes,

by plan year, the activity related to the liabilities associated with our restructuring

initiatives under the 2022 Plan and the 2024 Plan for the nine months

ended September 28, 2024.

The remaining

accrued balance of restructuring costs as of September 28, 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.

2022 Plan

2024 Plan

Total

Balance, December 30, 2023

$

$

-

$

Restructuring costs

Non-cash accelerated depreciation and amortization

(7)

(4)

(11)

Cash payments and other adjustments

(35)

(7)

(42)

Balance, September 28, 2024

$

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

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.

Plaintiffs and the Company entered into a class action settlement

agreement on September 13, 2024, and the court preliminarily approved

the settlement on September 16,

Under the terms of the proposed settlement, all claims in the Cruz-Bermudez

Action will be dismissed, the

Cruz-Bermudez Action will be terminated, the Company will receive

a release of claims from the class, and the

Company will pay $

2.9

million into a fund for class members.

The proposed settlement is subject to the court’s

final approval.

The court has scheduled a fairness hearing on the proposed settlement

for February 14, 2025.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Henry Schein, Inc. and its subsidiary, North American Rescue, LLC (“NAR”), were 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.

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).

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

denied.

Relators’ FCA claims are based on allegations that NAR 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 sought three times the amount of damages to

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

fees and costs, and prejudgment

interest.

Pursuant to a settlement for an immaterial amount, the

court has dismissed the case with prejudice.

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 September 28, 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.

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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 against the pre-determined performance

metrics (in each case as

adjusted).

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 nine months ended September 28, 2024, we did

no

t grant any stock options.

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

expense of $

million,

and $

million for the three and nine months ended September 28, 2024,

respectively.

For the three and nine

months ended September 30, 2023, we recorded pre-tax share-based compensation

expense of $

million, and $

million.

Total unrecognized compensation cost related to unvested awards as of September 28, 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 nine

months ended September 28, 2024 and September 30, 2023.

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

ended September 28, 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

(48,842)

62.71

Forfeited

(10,980)

85.31

Outstanding at end of period

1,018,637

$

71.73

6.8

$

Options exercisable at end of period

887,589

$

69.70

Weighted Average

Weighted Average

Aggregate

Number of

Exercise

Remaining Contractual

Intrinsic

Options

Price

Life (in years)

Value

Expected to vest

131,048

$

85.51

7.5

$

-

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following tables summarize the activity of our unvested RSUs for

the nine months ended September 28, 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

465,339

75.83

329,118

76.70

Vested

(329,115)

63.00

(8,262)

66.53

Forfeited

(87,304)

77.19

(55,976)

79.69

Outstanding at end of period

1,704,313

$

72.92

$

73.22

473,622

$

75.91

$

73.22

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 nine months ended September 28, 2024 and the year

ended December 30, 2023 are presented in the

following table:

September 28,

December 30,

2024

2023

Balance, beginning of period

$

$

Decrease in redeemable noncontrolling interests due to acquisitions of

noncontrolling interests in subsidiaries

(257)

(19)

Increase in redeemable noncontrolling interests due to business acquisitions

Net income attributable to redeemable noncontrolling interests

-

Distributions declared, net of capital contributions

(30)

(19)

Effect of foreign currency translation gain (loss) attributable to

redeemable noncontrolling interests

(4)

Change in fair value of redeemable securities

(11)

Balance, end of period

$

$

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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:

September 28,

December 30,

2024

2023

Attributable to redeemable noncontrolling interests:

Foreign currency translation adjustment

$

(36)

$

(32)

Attributable to noncontrolling interests:

Foreign currency translation adjustment

$

-

$

(1)

Attributable to Henry Schein, Inc.:

Foreign currency translation adjustment

$

(243)

$

(188)

Unrealized gain loss from hedging activities

(16)

(13)

Pension adjustment loss

(5)

(5)

Accumulated other comprehensive loss

$

(264)

$

(206)

Total Accumulated

other comprehensive loss

$

(300)

$

(239)

The following table summarizes the components of comprehensive income, net

of applicable taxes as follows:

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Net income

$

$

$

$

Foreign currency translation gain (loss)

(45)

(58)

(17)

Tax effect

-

-

-

-

Foreign currency translation gain (loss)

(45)

(58)

(17)

Unrealized gain (loss) from hedging activities

(25)

(4)

Tax effect

(3)

(1)

Unrealized gain (loss) from hedging activities

(18)

(3)

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 nine months ended September 28, 2024 and

nine months ended September 30,

2023 was primarily due to changes in foreign currency exchange

rates of the Brazilian Real, British Pound, Euro,

Swiss Franc, Canadian Dollar, and Australian Dollar.

The hedging gain (loss) during the three and nine months ended September

28, 2024, and September 30, 2023 was

attributable to a net investment hedge.

The following table summarizes our total comprehensive income, net of

applicable taxes as follows:

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

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

-

(4)

Comprehensive income

$

$

$

$

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

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Basic

126,124,715

130,388,353

127,550,045

130,888,717

Effect of dilutive securities:

Stock options and restricted stock units

930,219

1,053,782

948,449

1,260,455

Diluted

127,054,934

131,442,135

128,498,494

132,149,172

The number of antidilutive securities that were excluded from the calculation

of diluted weighted average common

shares outstanding are as follows:

Three Months Ended

Nine Months Ended

September 28,

September 30,

September 28,

September 30,

2024

2023

2024

2023

Stock options

412,574

424,005

416,065

426,237

Restricted stock units

17,627

7,362

16,339

15,072

Total anti-dilutive

securities excluded from earnings per

share computation

430,201

431,367

432,404

441,309

Note 16 – Supplemental Cash Flow Information

Cash paid for interest and income taxes was:

Nine Months Ended

September 28,

September 30,

2024

2023

Interest

$

$

Income taxes

For the nine months ended September 28, 2024 and September 30, 2023, we had

$

(4)

million and $

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

nine months ended September 28, 2024, we recorded $

million and $

million, respectively, within selling,

general and administrative in our condensed consolidated statements of income,

in connection with costs related to

this royalty agreement.

During the three and nine months ended September 30, 2023 we recorded

$

million and

$

million, respectively, within selling, general and administrative in our condensed consolidated statements of

income, in connection with costs related to this royalty agreement.

As of September 28, 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 nine months ended September 28, 2024, we

recorded net sales of $

million and

$

million respectively, to such entities.

During the three and nine months ended September 30, 2023, we

recorded net sales of $

million and $

million respectively, to such entities.

During the three and nine months

ended September 28, 2024, we purchased $

million and $

million respectively, from such entities.

During the

three and nine months ended September 30, 2023, we purchased $

million and $

million respectively, from such

entities.

At September 28, 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

six months

to

years.

As

of September 28, 2024, current and non-current liabilities associated with related

party operating leases were $

million and $

million, respectively.

At September 28, 2024, related party leases represented

7.4

% and

8.3

% of

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

At December 30, 2023, current and non-

current liabilities associated with related party operating leases were $

million and $

million, 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.