{"url_path":"/sec/hsic/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-24","source_url":"https://www.sec.gov/Archives/edgar/data/1000228/0001000228-26-000013-index.html","accession_number":"0001000228-26-000013","cik":"0001000228","ticker":"HSIC","issuer_name":"HENRY SCHEIN INC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1000228/0001000228-26-000013-index.html","primary_entity_key":"0001000228","primary_entity_name":"HENRY SCHEIN INC"},"word_count":28282,"has_tables":false,"body_markdown":"ITEM 8.\n\nFinancial Statements and Supplementary Data\n\nINDEX TO FINANCIAL STATEMENTS\n\nHENRY SCHEIN, INC.\n\nPage\n\nNumber\n\n[Report of Independent Registered Public Accounting Firm](#a34359)\n\n(BDO USA, P.C.;\n\nNew York,\n\nNew York;\n\nPCAOB\n\nID#\n\n243\n\n)\n\n70\n\n[Consolidated Financial Statements](#a34558)\n\n[:](#a34558)\n\n[Balance Sheets as of December 27, 2025 and December 28, 2024](#a34556)\n\n72\n\n[Statements of Income for the years ended December 27, 2025,](#a35191)\n\n[December 28, 2024 and December 30, 2023](#a35191)\n\n73\n\n[Statements of Comprehensive Income for the years ended December 27, 2025,](#a35656)\n\n[December 28, 2024 and December 30, 2023](#a35656)\n\n74\n\n[Statements of Changes in Stockholders’ Equity for the years ended](#a35931)\n\n[December 27, 2025, December 28, 2024 and December 30, 2023](#a35931)\n\n75\n\n[Statements of Cash Flows for the years ended December 27, 2025,](#a37614)\n\n[December 28, 2024 and December 30, 2023](#a37614)\n\n76\n\n[Notes to Consolidated Financial Statements](#a38445)\n\n77\n\n[Note 1 – Basis of Presentation and Significant Accounting Policies](#a38445)\n\n77\n\n[Note 2 – Cyber Incident](#a41813)\n\n89\n\n[Note 3 – Net Sales from Contracts with Customers](#a41883)\n\n89\n\n[Note 4 – Segment and Geographic Data](#a42154)\n\n90\n\n[Note 5 – Business Acquisitions](#a43451)\n\n93\n\n[Note 6 – Inventories, Net](#a44915)\n\n101\n\n[Note 7 – Property and Equipment, Net](#a44994)\n\n101\n\n[Note 8 – Leases](#a45248)\n\n102\n\n[Note 9 – Goodwill and Other Intangibles, Net](#a46109)\n\n104\n\n[Note 10 – Investments and Other](#a46864)\n\n106\n\n[Note 11 – Fair Value Measurements](#a47085)\n\n107\n\n[Note 12 – Concentrations of Risk](#a48036)\n\n110\n\n[Note 13 – Derivatives and Hedging Activities](#a48148)\n\n111\n\n[Note 14 – Debt](#a48838)\n\n113\n\n[Note 15 – Income Taxes](#a49832)\n\n117\n\n[Note 16 – Plans of Restructuring and Related Costs](#a52963)\n\n122\n\n[Note 17 – Commitments and Contingencies](#a54117)\n\n124\n\n[Note 18 – Stock-Based Compensation](#a54298)\n\n125\n\n[Note 19 – Employee Benefit Plans](#a55067)\n\n128\n\n[Note 20 – Redeemable Noncontrolling Interests](#a55881)\n\n131\n\n[Note 21 – Comprehensive Income](#a56087)\n\n131\n\n[Note 22 – Earnings Per Share](#a56732)\n\n133\n\n[Note 23 – Supplemental Cash Flow Information](#a56906)\n\n134\n\n[Note 24 – Related Party Transactions](#a57215)\n\n135\n\n[Note 25 – KKR Investment and Accelerated Share Repurchase Program](#a58049)\n\n136\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\n70\n\nReport of Independent Registered Public Accounting Firm\n\nShareholders and Board of Directors\n\nHenry Schein, Inc.\n\nMelville, New York\n\nOpinion on the Consolidated Financial Statements\n\nWe\n\nhave\n\naudited\n\nthe\n\naccompanying\n\nconsolidated\n\nbalance\n\nsheets\n\nof\n\nHenry\n\nSchein,\n\nInc.\n\n(the\n\n“Company”)\n\nas\n\nof\n\nDecember\n\n27,\n\n2025\n\nand\n\nDecember\n\n28,\n\n2024,\n\nthe\n\nrelated\n\nconsolidated\n\nstatements\n\nof\n\nincome\n\nand\n\ncomprehensive\n\nincome, changes in\n\nstockholders’ equity,\n\nand cash\n\nflows for\n\neach of\n\nthe three\n\nyears in\n\nthe period\n\nended December\n\n27, 2025, and\n\nthe related notes\n\n(collectively referred to\n\nas the\n\n“consolidated financial statements”).\n\nIn our opinion,\n\nthe consolidated financial statements present fairly, in all material respects, the financial position of the Company at\n\nDecember 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the three\n\nyears in\n\nthe period\n\nended December\n\n27, 2025,\n\nin conformity\n\nwith accounting\n\nprinciples generally\n\naccepted in\n\nthe\n\nUnited States of America.\n\nWe\n\nalso\n\nhave\n\naudited,\n\nin\n\naccordance\n\nwith\n\nthe\n\nstandards\n\nof\n\nthe\n\nPublic\n\nCompany\n\nAccounting\n\nOversight\n\nBoard\n\n(United States) (PCAOB),\n\nthe Company's internal\n\ncontrol over financial reporting\n\nas of December\n\n27, 2025, based\n\non criteria\n\nestablished in\n\nInternal Control\n\n– Integrated\n\nFramework (2013)\n\nissued by\n\nthe Committee\n\nof Sponsoring\n\nOrganizations\n\nof\n\nthe\n\nTreadway\n\nCommission\n\n(COSO)\n\nand\n\nour\n\nreport\n\ndated\n\nFebruary\n\n24,\n\n2026\n\nexpressed\n\nan\n\nunqualified opinion thereon.\n\nBasis for Opinion\n\nThese consolidated financial statements are\n\nthe responsibility of the\n\nCompany’s management. Our\n\nresponsibility is\n\nto\n\nexpress\n\nan\n\nopinion\n\non\n\nthe\n\nCompany’s\n\nconsolidated\n\nfinancial\n\nstatements\n\nbased\n\non\n\nour\n\naudits.\n\nWe\n\nare\n\na\n\npublic\n\naccounting\n\nfirm\n\nregistered with\n\nthe\n\nPublic\n\nCompany Accounting\n\nOversight Board\n\n(United\n\nStates)\n\n(PCAOB)\n\nand\n\nare required to be independent with\n\nrespect to the Company in accordance\n\nwith the U.S. federal securities laws and\n\nthe applicable rules and regulations of the Securities and Exchange Commission\n\nand the PCAOB.\n\nWe\n\nconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and\n\nperform\n\nthe\n\naudit\n\nto\n\nobtain\n\nreasonable\n\nassurance\n\nabout\n\nwhether\n\nthe\n\nconsolidated\n\nfinancial\n\nstatements\n\nare\n\nfree\n\nof\n\nmaterial misstatement, whether due to error or fraud.\n\nOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial\n\nstatements, whether\n\ndue to\n\nerror or\n\nfraud, and\n\nperforming procedures\n\nthat respond\n\nto those\n\nrisks. Such\n\nprocedures\n\nincluded examining,\n\non a\n\ntest basis,\n\nevidence regarding\n\nthe amounts\n\nand disclosures\n\nin the\n\nconsolidated financial\n\nstatements.\n\nOur audits\n\nalso included\n\nevaluating the\n\naccounting principles\n\nused\n\nand significant\n\nestimates made\n\nby\n\nmanagement, as well as evaluating the overall presentation of the consolidated financial statements. We believe that\n\nour audits provide a reasonable basis for our opinion.\n\nCritical Audit Matter\n\nThe critical\n\naudit matter\n\ncommunicated below is\n\na matter\n\narising from\n\nthe current period\n\naudit of\n\nthe consolidated\n\nfinancial statements\n\nthat was\n\ncommunicated or\n\nrequired to\n\nbe communicated to\n\nthe Audit\n\nCommittee and that:\n\n(1)\n\nrelates\n\nto\n\naccounts\n\nor\n\ndisclosures\n\nthat\n\nare\n\nmaterial\n\nto\n\nthe\n\nconsolidated\n\nfinancial\n\nstatements\n\nand\n\n(2)\n\ninvolved\n\nour\n\nespecially challenging, subjective,\n\nor complex\n\njudgments. The\n\ncommunication of the\n\ncritical audit\n\nmatter does\n\nnot\n\nalter\n\nin\n\nany\n\nway\n\nour\n\nopinion\n\non\n\nthe\n\nconsolidated\n\nfinancial\n\nstatements,\n\ntaken\n\nas\n\na\n\nwhole,\n\nand\n\nwe\n\nare\n\nnot,\n\nby\n\ncommunicating the\n\ncritical audit\n\nmatter below,\n\nproviding a\n\nseparate opinion\n\non the\n\ncritical audit\n\nmatter or\n\non the\n\naccounts or disclosures to which it relates.\n\nBusiness Acquisition - Valuation of Acquired Intangible Assets\n\nAs described in Notes 1 and 5 of the consolidated financial statements,\n\nthe Company acquired entities within the\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\n71\n\nGlobal Distribution and Value-Added Services, Global Specialty Products and Global Technology segments during\n\nthe year ended December 27, 2025 for total consideration of $392\n\nmillion.\n\nThe purchase price was allocated to the\n\nassets acquired and liabilities assumed based on their respective\n\nfair values on the date of acquisition.\n\nThe\n\nCompany estimated the fair value of identifiable intangible assets using\n\nthe relief-from-royalty method and the\n\nmulti-period excess earnings method which required the Company\n\nto make significant estimates and assumptions,\n\nincluding discount rates and projected revenue growth rates.\n\nWe identified the revenue growth rates for certain periods and the discount rates used in estimating the fair value of\n\ncertain trade name and customer relationships as a critical audit\n\nmatter.\n\nThe principal considerations for our\n\ndetermination were the subjective judgement required by management\n\nin formulating the revenue growth rates and\n\nassessing the appropriateness of the discount rates used in developing\n\nthe fair value of the applicable acquired\n\nidentifiable intangible assets. Auditing these considerations involved\n\nespecially subjective and challenging auditor\n\njudgement due to the nature and extent of audit effort required to address these\n\nmatters, including the extent of\n\nspecialized skill or knowledge needed.\n\nThe primary procedures we performed to address\n\nthis critical audit matter included:\n\n●\n\nEvaluating the reasonableness of\n\nthe revenue growth rates\n\nused in estimating the\n\nfair value of\n\ncertain trade\n\nname\n\nand\n\ncustomer\n\nrelationships\n\nby:\n\n(i)\n\nreviewing\n\nthe\n\nhistorical\n\nperformance\n\nof\n\nthe\n\nacquired\n\nentity\n\nutilizing its audited\n\nfinancial statements, and (ii)\n\nassessing the revenue projections against\n\nindustry metrics\n\nfor certain periods.\n\n●\n\nUtilizing\n\nspecialists with\n\nskill\n\nand\n\nknowledge in\n\nvaluation to\n\nevaluate the\n\nreasonableness of\n\nthe\n\ndiscount\n\nrates\n\nused\n\nin\n\nestimating\n\nthe\n\nfair\n\nvalue\n\nof\n\ncertain\n\ntrade\n\nname\n\nand\n\ncustomer\n\nrelationships\n\nby\n\nassessing\n\nthe\n\nsource information\n\nunderlying the\n\ndetermination of\n\nthe discount\n\nrates, developing\n\na range\n\nof independent\n\nestimates for the discount rates, and comparing those to the discount\n\nrates selected by the Company.\n\n/s/\n\nBDO USA, P.C.\n\nWe have served as the Company's auditor since 1984.\n\nNew York, New York\n\nFebruary 24, 2026\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nSee accompanying notes.\n\n72\n\nHENRY SCHEIN, INC.\n\nCONSOLIDATED BALANCE SHEETS\n\n(in millions, except share data)\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nASSETS\n\nCurrent assets:\n\nCash and cash equivalents\n\n$\n\n156\n\n$\n\n122\n\nAccounts receivable, net of allowance for credit losses of $\n\n90\n\nand $\n\n78\n\n(1)\n\n1,651\n\n1,482\n\nInventories, net\n\n2,002\n\n1,810\n\nPrepaid expenses and other\n\n655\n\n569\n\nTotal current assets\n\n4,464\n\n3,983\n\nProperty and equipment, net\n\n621\n\n531\n\nOperating lease right-of-use assets\n\n301\n\n293\n\nGoodwill\n\n4,213\n\n3,887\n\nOther intangibles, net\n\n1,018\n\n1,023\n\nInvestments and other\n\n598\n\n501\n\nTotal assets\n\n$\n\n11,215\n\n$\n\n10,218\n\nLIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND\n\nSTOCKHOLDERS' EQUITY\n\nCurrent liabilities:\n\nAccounts payable\n\n$\n\n1,154\n\n$\n\n962\n\nBank credit lines\n\n764\n\n650\n\nCurrent maturities of long-term debt\n\n33\n\n56\n\nOperating lease liabilities\n\n78\n\n75\n\nAccrued expenses:\n\nPayroll and related\n\n340\n\n303\n\nTaxes\n\n179\n\n139\n\nOther\n\n680\n\n618\n\nTotal current liabilities\n\n3,228\n\n2,803\n\nLong-term debt (1)\n\n2,310\n\n1,830\n\nDeferred income taxes\n\n146\n\n102\n\nOperating lease liabilities\n\n251\n\n259\n\nOther liabilities\n\n486\n\n387\n\nTotal liabilities\n\n6,421\n\n5,381\n\nRedeemable noncontrolling interests\n\n895\n\n806\n\nCommitments and contingencies\n\n(nil)\n\n(nil)\n\nStockholders' equity:\n\nPreferred stock, $\n\n0.01\n\npar value,\n\n1,000,000\n\nshares authorized,\n\nnone\n\noutstanding\n\n-\n\n-\n\nCommon stock, $\n\n0.01\n\npar value,\n\n480,000,000\n\nshares authorized,\n\n115,771,149\n\nissued and outstanding on December 27, 2025 and\n\n124,155,884\n\nissued and outstanding on December 28, 2024\n\n1\n\n1\n\nAdditional paid-in capital\n\n177\n\n-\n\nRetained earnings\n\n3,293\n\n3,771\n\nAccumulated other comprehensive loss\n\n(226)\n\n(379)\n\nTotal Henry Schein, Inc. stockholders' equity\n\n3,245\n\n3,393\n\nNoncontrolling interests\n\n654\n\n638\n\nTotal stockholders' equity\n\n3,899\n\n4,031\n\nTotal liabilities, redeemable noncontrolling\n\ninterests and stockholders' equity\n\n$\n\n11,215\n\n$\n\n10,218\n\n(1)\n\nAmounts presented include balances held by our consolidated variable interest entity (“VIE”).\n\nAt December 27, 2025 and\n\nDecember 28, 2024, includes trade accounts receivable of $\n\n491\n\nmillion and $\n\n241\n\nmillion, respectively, and long-term debt of $\n\n390\n\nmillion and $\n\n150\n\nmillion, respectively.\n\nSee\n\n[Note 1 – Basis of Presentation and Significant Accounting Policies](#a38445)\n\nfor further\n\ninformation.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nSee accompanying notes.\n\n73\n\nHENRY SCHEIN, INC.\n\nCONSOLIDATED STATEMENTS\n\nOF INCOME\n\n(in millions, except share and per share data)\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nNet sales\n\n$\n\n13,184\n\n$\n\n12,673\n\n$\n\n12,339\n\nCost of sales\n\n9,079\n\n8,657\n\n8,479\n\nGross profit\n\n4,105\n\n4,016\n\n3,860\n\nOperating expenses:\n\nSelling, general and administrative\n\n3,084\n\n3,034\n\n2,956\n\nDepreciation and amortization\n\n263\n\n251\n\n209\n\nRestructuring and related costs\n\n105\n\n110\n\n80\n\nOperating income\n\n653\n\n621\n\n615\n\nOther income (expense):\n\nInterest income\n\n33\n\n24\n\n17\n\nInterest expense\n\n(150)\n\n(131)\n\n(87)\n\nOther, net\n\n(3)\n\n(1)\n\n(3)\n\nIncome before taxes, equity in earnings of affiliates and\n\nnoncontrolling interests\n\n533\n\n513\n\n542\n\nIncome taxes\n\n(126)\n\n(128)\n\n(120)\n\nEquity in earnings of affiliates, net of tax\n\n12\n\n13\n\n14\n\nNet income\n\n419\n\n398\n\n436\n\nLess: Net income attributable to noncontrolling interests\n\n(21)\n\n(8)\n\n(20)\n\nNet income attributable to Henry Schein, Inc.\n\n$\n\n398\n\n$\n\n390\n\n$\n\n416\n\nEarnings per share attributable to Henry Schein, Inc.:\n\nBasic\n\n$\n\n3.29\n\n$\n\n3.07\n\n$\n\n3.18\n\nDiluted\n\n$\n\n3.27\n\n$\n\n3.05\n\n$\n\n3.16\n\nWeighted-average common\n\nshares outstanding:\n\nBasic\n\n120,813,977\n\n126,788,997\n\n130,618,990\n\nDiluted\n\n121,717,876\n\n127,779,228\n\n131,748,171\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nSee accompanying notes.\n\n74\n\nHENRY SCHEIN, INC.\n\nCONSOLIDATED STATEMENTS\n\nOF COMPREHENSIVE INCOME\n\n(in millions)\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nNet income\n\n$\n\n419\n\n$\n\n398\n\n$\n\n436\n\nOther comprehensive income, net of tax:\n\nForeign currency translation gain (loss)\n\n207\n\n(207)\n\n53\n\nUnrealized gain (loss) from hedging activities\n\n(24)\n\n13\n\n(18)\n\nPension adjustment gain (loss)\n\n2\n\n(3)\n\n(3)\n\nOther comprehensive income (loss), net of tax\n\n185\n\n(197)\n\n32\n\nComprehensive income\n\n604\n\n201\n\n468\n\nComprehensive income attributable to noncontrolling interests:\n\nNet income\n\n(21)\n\n(8)\n\n(20)\n\nForeign currency translation loss (gain)\n\n(32)\n\n24\n\n(5)\n\nComprehensive loss (income) attributable to noncontrolling interests\n\n(53)\n\n16\n\n(25)\n\nComprehensive income attributable to Henry Schein, Inc.\n\n$\n\n551\n\n$\n\n217\n\n$\n\n443\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nSee accompanying notes.\n\n75\n\nHENRY SCHEIN, INC.\n\nCONSOLIDATED STATEMENTS\n\nOF CHANGES IN STOCKHOLDERS' EQUITY\n\n(in millions, except share data)\n\nAccumulated\n\nCommon Stock\n\nAdditional\n\nOther\n\nTotal\n\n$.01 Par Value\n\nPaid-in\n\nRetained\n\nComprehensive\n\nNoncontrolling\n\nStockholders'\n\nShares\n\nAmount\n\nCapital\n\nEarnings\n\nIncome (Loss)\n\nInterests\n\nEquity\n\nBalance, December 31, 2022\n\n131,792,817\n\n$\n\n1\n\n$\n\n-\n\n$\n\n3,678\n\n$\n\n(233)\n\n$\n\n649\n\n$\n\n4,095\n\nNet income (excluding $\n\n6\n\nattributable to Redeemable\n\nnoncontrolling interests)\n\n-\n\n-\n\n-\n\n416\n\n-\n\n14\n\n430\n\nForeign currency translation gain (excluding gain of $\n\n5\n\nattributable to Redeemable noncontrolling interests)\n\n-\n\n-\n\n-\n\n-\n\n48\n\n-\n\n48\n\nUnrealized loss from hedging activities,\n\nincluding tax benefit of $\n\n7\n\n-\n\n-\n\n-\n\n-\n\n(18)\n\n-\n\n(18)\n\nPension adjustment loss, including tax benefit of $\n\n0\n\n-\n\n-\n\n-\n\n-\n\n(3)\n\n-\n\n(3)\n\nDistributions to noncontrolling shareholders\n\n-\n\n-\n\n-\n\n-\n\n-\n\n(27)\n\n(27)\n\nChange in fair value of redeemable securities\n\n-\n\n-\n\n11\n\n-\n\n-\n\n-\n\n11\n\nNoncontrolling interests and adjustments related to\n\nbusiness acquisitions\n\n-\n\n-\n\n-\n\n-\n\n-\n\n(2)\n\n(2)\n\nRepurchase and retirement of common stock\n\n(3,214,136)\n\n-\n\n(33)\n\n(219)\n\n-\n\n-\n\n(252)\n\nStock issued upon exercise of stock options\n\n21,068\n\n-\n\n1\n\n-\n\n-\n\n-\n\n1\n\nStock-based compensation expense\n\n1,065,319\n\n-\n\n39\n\n-\n\n-\n\n-\n\n39\n\nShares withheld for payroll taxes\n\n(416,605)\n\n-\n\n(34)\n\n-\n\n-\n\n-\n\n(34)\n\nSettlement of stock-based compensation awards\n\n(698)\n\n-\n\n1\n\n-\n\n-\n\n-\n\n1\n\nTransfer of charges in excess of\n\ncapital\n\n-\n\n-\n\n15\n\n(15)\n\n-\n\n-\n\n-\n\nBalance, December 30, 2023\n\n129,247,765\n\n1\n\n-\n\n3,860\n\n(206)\n\n634\n\n4,289\n\nNet income (excluding loss of $\n\n1\n\nattributable to Redeemable\n\nnoncontrolling interests)\n\n-\n\n-\n\n-\n\n390\n\n-\n\n9\n\n399\n\nForeign currency translation loss (excluding loss of $\n\n24\n\nattributable to Redeemable noncontrolling interests)\n\n-\n\n-\n\n-\n\n-\n\n(183)\n\n-\n\n(183)\n\nUnrealized gain from hedging activities,\n\nincluding tax of $\n\n5\n\n-\n\n-\n\n-\n\n-\n\n13\n\n-\n\n13\n\nPension adjustment loss, including tax benefit of $\n\n2\n\n-\n\n-\n\n-\n\n-\n\n(3)\n\n-\n\n(3)\n\nDistributions to noncontrolling shareholders\n\n-\n\n-\n\n-\n\n-\n\n-\n\n(6)\n\n(6)\n\nPurchase of noncontrolling interests\n\n-\n\n-\n\n(7)\n\n-\n\n-\n\n(1)\n\n(8)\n\nChange in fair value of redeemable securities\n\n-\n\n-\n\n(119)\n\n-\n\n-\n\n-\n\n(119)\n\nNoncontrolling interests and adjustments related to\n\nbusiness acquisitions\n\n-\n\n(1)\n\n-\n\n-\n\n2\n\n1\n\nRepurchase and retirement of common stock\n\n(5,419,649)\n\n-\n\n(52)\n\n(336)\n\n-\n\n-\n\n(388)\n\nStock issued upon exercise of stock options\n\n98,755\n\n-\n\n6\n\n-\n\n-\n\n-\n\n6\n\nStock-based compensation expense\n\n340,722\n\n-\n\n39\n\n-\n\n-\n\n-\n\n39\n\nShares withheld for payroll taxes\n\n(111,815)\n\n-\n\n(9)\n\n-\n\n-\n\n-\n\n(9)\n\nSettlement of stock-based compensation awards\n\n106\n\n-\n\n-\n\n-\n\n-\n\n-\n\n-\n\nTransfer of charges in excess of\n\ncapital\n\n-\n\n-\n\n143\n\n(143)\n\n-\n\n-\n\n-\n\nBalance, December 28, 2024\n\n124,155,884\n\n1\n\n-\n\n3,771\n\n(379)\n\n638\n\n4,031\n\nNet income (excluding loss of $\n\n5\n\nattributable to Redeemable\n\nnoncontrolling interests)\n\n-\n\n-\n\n-\n\n398\n\n-\n\n26\n\n424\n\nForeign currency translation gain (excluding gain of $\n\n30\n\nattributable to Redeemable noncontrolling interests)\n\n-\n\n-\n\n-\n\n-\n\n175\n\n2\n\n177\n\nUnrealized loss from hedging activities,\n\nincluding tax benefit of $\n\n9\n\n-\n\n-\n\n-\n\n-\n\n(24)\n\n-\n\n(24)\n\nPension adjustment gain, net of tax of $\n\n3\n\n-\n\n-\n\n-\n\n-\n\n2\n\n-\n\n2\n\nNet distributions to noncontrolling shareholders\n\n-\n\n-\n\n-\n\n-\n\n-\n\n(11)\n\n(11)\n\nPurchase of noncontrolling interests\n\n-\n\n-\n\n(1)\n\n-\n\n-\n\n(1)\n\n(2)\n\nChange in fair value of redeemable securities\n\n-\n\n-\n\n(72)\n\n-\n\n-\n\n-\n\n(72)\n\nNoncontrolling interests and adjustments related to\n\nbusiness acquisitions and contingent consideration\n\n-\n\n-\n\n(46)\n\n-\n\n-\n\n-\n\n(46)\n\nIssuance of common stock\n\n3,285,151\n\n-\n\n250\n\n-\n\n-\n\n-\n\n250\n\nRepurchase and retirement of common stock\n\n(12,062,174)\n\n-\n\n(94)\n\n(762)\n\n-\n\n-\n\n(856)\n\nStock issued upon exercise of stock options\n\n24,172\n\n-\n\n2\n\n-\n\n-\n\n-\n\n2\n\nStock-based compensation expense\n\n578,536\n\n-\n\n39\n\n-\n\n-\n\n-\n\n39\n\nShares withheld for payroll taxes\n\n(203,951)\n\n-\n\n(15)\n\n-\n\n-\n\n-\n\n(15)\n\nSettlement of stock-based compensation awards\n\n(6,469)\n\n-\n\n-\n\n-\n\n-\n\n-\n\n-\n\nTransfer of charges in excess of\n\ncapital\n\n-\n\n-\n\n114\n\n(114)\n\n-\n\n-\n\n-\n\nBalance, December 27, 2025\n\n115,771,149\n\n$\n\n1\n\n$\n\n177\n\n$\n\n3,293\n\n$\n\n(226)\n\n$\n\n654\n\n$\n\n3,899\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nSee accompanying notes.\n\n76\n\nHENRY SCHEIN, INC.\n\nCONSOLIDATED STATEMENTS\n\nOF CASH FLOWS\n\n(in millions)\n\nYears Ended\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nCash flows from operating activities:\n\nNet income\n\n$\n\n419\n\n$\n\n398\n\n$\n\n436\n\nAdjustments to reconcile net income to net cash provided by operating activities:\n\nDepreciation and amortization\n\n311\n\n297\n\n248\n\nImpairment charge on intangible assets\n\n16\n\n-\n\n7\n\nImpairment of capitalized software\n\n-\n\n12\n\n27\n\nNon-cash restructuring and related charges\n\n8\n\n32\n\n27\n\nStock-based compensation expense\n\n39\n\n39\n\n39\n\nProvision for losses on trade and other accounts receivable\n\n16\n\n14\n\n18\n\nProvision for (benefit from) deferred income taxes\n\n5\n\n(61)\n\n(20)\n\nEquity in earnings of affiliates\n\n(12)\n\n(13)\n\n(14)\n\nDistributions from equity affiliates\n\n11\n\n12\n\n15\n\nChanges in unrecognized tax benefits\n\n4\n\n5\n\n10\n\nOther\n\n(57)\n\n(27)\n\n(3)\n\nChanges in operating assets and liabilities, net of acquisitions:\n\nAccounts receivable\n\n(124)\n\n315\n\n(327)\n\nInventories\n\n(95)\n\n(59)\n\n231\n\nOther current assets\n\n(45)\n\n47\n\n(138)\n\nAccounts payable and accrued expenses\n\n216\n\n(163)\n\n(56)\n\nNet cash provided by operating activities\n\n712\n\n848\n\n500\n\nCash flows from investing activities:\n\nPurchases of property and equipment\n\n(139)\n\n(148)\n\n(147)\n\nPayments related to equity investments and business acquisitions,\n\nnet of cash acquired\n\n(199)\n\n(230)\n\n(955)\n\nProceeds from loan to affiliate\n\n3\n\n4\n\n6\n\nSettlements for net investment hedges\n\n-\n\n-\n\n22\n\nCapitalized software costs\n\n(52)\n\n(39)\n\n(40)\n\nOther\n\n(13)\n\n(17)\n\n(21)\n\nNet cash used in investing activities\n\n(400)\n\n(430)\n\n(1,135)\n\nCash flows from financing activities:\n\nNet change in bank credit lines\n\n108\n\n387\n\n153\n\nProceeds from issuance of long-term debt\n\n489\n\n120\n\n1,368\n\nPrincipal payments for long-term debt\n\n(44)\n\n(318)\n\n(468)\n\nDebt issuance costs\n\n(2)\n\n-\n\n(3)\n\nIssuance of common stock\n\n250\n\n-\n\n-\n\nProceeds from issuance of stock upon exercise of stock options\n\n2\n\n6\n\n1\n\nPayments for repurchases and retirement of common stock\n\n(850)\n\n(385)\n\n(250)\n\nPayments for taxes related to shares withheld for employee taxes\n\n(15)\n\n(9)\n\n(34)\n\nDistributions to noncontrolling shareholders\n\n(30)\n\n(54)\n\n(47)\n\nPayments for contingent consideration\n\n(19)\n\n(2)\n\n-\n\nAcquisitions of noncontrolling interests in subsidiaries\n\n(77)\n\n(255)\n\n(19)\n\nNet cash provided by (used in) financing activities\n\n(188)\n\n(510)\n\n701\n\nEffect of exchange rate changes on cash and cash equivalents\n\n(90)\n\n43\n\n(12)\n\nNet change in cash and cash equivalents\n\n34\n\n(49)\n\n54\n\nCash and cash equivalents, beginning of period\n\n122\n\n171\n\n117\n\nCash and cash equivalents, end of period\n\n$\n\n156\n\n$\n\n122\n\n$\n\n171\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n77\n\nNote 1 – Basis of Presentation and Significant Accounting Policies\n\nNature of Operations\n\nWe distribute health care products and value-added services primarily to office-based dental and medical\n\npractitioners, across dental practices, laboratories, physician practices,\n\nand ambulatory surgery centers, as well as\n\ngovernment, institutional health care clinics, home health providers, and alternate\n\ncare clinics.\n\nWe also provide\n\nsoftware and technology services to health care practitioners.\n\nOur dental businesses serve office-based dental\n\npractitioners, dental laboratories, schools, government and other institutions.\n\nOur medical businesses serve\n\nphysician offices, urgent care centers, ambulatory care sites, emergency medical technicians, dialysis centers,\n\nhome\n\nhealth, federal and state governments and large enterprises, such as group practices\n\nand integrated delivery\n\nnetworks, among other providers across a wide range of specialties.\n\nWe have significant operations in the United States, Germany, France, Canada, and Brazil.\n\nWe also have\n\nmeaningful market presence in several other European countries and the Asia-Pacific\n\nregion.\n\nBasis of Presentation\n\nOur consolidated financial statements include the accounts of Henry\n\nSchein, Inc. and all of our controlled\n\nsubsidiaries and VIE.\n\nAll intercompany accounts and transactions are eliminated\n\nin consolidation.\n\nInvestments in\n\nunconsolidated affiliates for which we have the ability to influence the operating or\n\nfinancial decisions are\n\naccounted for under the equity method.\n\nCertain prior period amounts have been reclassified to conform\n\nto the\n\ncurrent period presentation.\n\nThese reclassifications, individually and in the aggregate, did not\n\nhave a material\n\nimpact on our consolidated financial condition, results of operations\n\nor cash flows.\n\nThe primary beneficiary of a VIE is required to consolidate the assets and\n\nliabilities of the VIE.\n\nWe are deemed to\n\nbe the primary beneficiary of the VIE when we have the power to direct activities\n\nthat most significantly affect its\n\neconomic performance and have the obligation to absorb the majority\n\nof its losses or the right to receive benefits\n\nthat could potentially be significant to the VIE.\n\nIn determining whether we are the primary beneficiary, we\n\nconsider factors such as ownership interest, debt investments, management\n\nrepresentation, authority to control\n\ndecisions, and contractual and substantive participating rights of each party.\n\nFor this VIE, related to our U.S. trade\n\naccounts receivable securitization as discussed in\n\n[Note 14 – Debt](#a48838)\n\n,\n\nthe trade accounts receivable transferred to the\n\nVIE are pledged as collateral to the related debt.\n\nThe VIE’s creditors have recourse to us for losses on these trade\n\naccounts receivable.\n\nAt December 27, 2025 and December 28, 2024, certain trade\n\naccounts receivable that can\n\nonly be used to settle obligations of this VIE were $\n\n491\n\nmillion and $\n\n241\n\nmillion, respectively, and the liabilities of\n\nthis VIE where the creditors have recourse to us were $\n\n390\n\nmillion and $\n\n150\n\nmillion, respectively.\n\nFair Value\n\nMeasurements\n\nFair value is defined as the price that would be received to sell an asset or\n\npaid to transfer a liability in an orderly\n\ntransaction between market participants at the measurement date.\n\nThe fair value hierarchy distinguishes between\n\n(1) market participant assumptions developed based on market data obtained\n\nfrom independent sources (observable\n\ninputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best\n\ninformation available in the circumstances (unobservable inputs).\n\nThe fair value hierarchy consists of three broad levels, which gives the\n\nhighest priority to unadjusted quoted prices\n\nin active markets for identical assets or liabilities (Level 1) and the lowest priority\n\nto unobservable inputs (Level 3).\n\nThe three levels of the fair value hierarchy are described as follows:\n\n•\n\nLevel 1— Unadjusted quoted prices in active markets for identical assets\n\nor liabilities that are accessible at the\n\nmeasurement date.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n78\n\n•\n\nLevel 2— Inputs other than quoted prices included within Level 1 that are\n\nobservable for the asset or liability,\n\neither directly or indirectly.\n\nLevel 2 inputs include: quoted prices for similar assets or liabilities\n\nin active markets;\n\nquoted prices for identical or similar assets or liabilities in markets\n\nthat are not active; inputs other than quoted\n\nprices that are observable for the asset or liability; and inputs that are\n\nderived principally from or corroborated by\n\nobservable market data by correlation or other means.\n\n•\n\nLevel 3— Inputs that are unobservable for the asset or liability.\n\nSee\n\n[Note 11 – Fair Value Measurements](#a47085)\n\nfor additional information.\n\nUse of Estimates\n\nThe preparation of consolidated financial statements in conformity with\n\naccounting principles generally accepted in\n\nthe United States requires us to make estimates and assumptions that\n\naffect the reported amounts of assets and\n\nliabilities and disclosure of contingent assets and liabilities at the date of\n\nthe financial statements and the reported\n\namounts of revenues and expenses during the reporting period.\n\nActual results could differ from those estimates.\n\nOur consolidated financial statements reflect estimates and assumptions\n\nmade by us that affect, among other things,\n\nour goodwill, long-lived asset and definite-lived intangible asset valuation;\n\ninventory valuation; equity investment\n\nvaluation; assessment of the annual effective tax rate; valuation of deferred income\n\ntaxes and income tax\n\ncontingencies; the allowance for credit losses; fair value of contingent\n\nconsideration; hedging activity; supplier\n\nrebates; measurement of compensation cost for certain share-based\n\nperformance awards and cash bonus plans; and\n\npension plan assumptions.\n\nFiscal Year\n\nWe report our results of operations and cash flows on a\n\n52\n\nor\n\n53\n\nweeks per fiscal year basis ending on the last\n\nSaturday of December.\n\nThe years ended December 27, 2025, December 28, 2024 and December\n\n30, 2023\n\nconsisted of\n\n52\n\nweeks.\n\nRevenue Recognition\n\nRevenue is recognized when a customer obtains control of promised goods\n\nor services in an amount that reflects the\n\nconsideration that we expect to receive for those goods or services.\n\nTo recognize revenue, we:\n\n•\n\nidentify the contract(s) with a customer;\n\n•\n\nidentify the performance obligations in the contract;\n\n•\n\ndetermine the transaction price;\n\n•\n\nallocate the transaction price to the performance obligations in the contract;\n\nand\n\n•\n\nrecognize revenue when, or as, we satisfy a performance obligation.\n\nWe generate revenue from the sale of dental and medical consumable products, equipment, and services such as\n\nequipment repair and financial services (Global Distribution and Value-Added Services revenues), company-\n\nmanufactured specialty products (Global Specialty Products revenue), and software\n\nproducts and related services\n\n(Global Technology revenues).\n\nProvisions for discounts, rebates to customers, customer\n\nreturns and other contra\n\nrevenue adjustments are included in the transaction price at contract\n\ninception by estimating the most likely amount\n\nbased upon historical data and estimates and are provided for in the\n\nperiod in which the related sales are\n\nrecognized.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n79\n\nRevenue derived from the sale of consumable products and company-manufactured\n\nspecialty products is\n\nrecognized at the point in time when control transfers to the customer, (e.g. when legal title and risks and\n\nrewards\n\nof ownership transfer to the customer, we have no post-shipment obligations, and we have an enforceable\n\nright to\n\npayment).\n\nSales of consumable products typically entail high-volume, low-dollar\n\norders shipped using third-party\n\ncommon carriers.\n\nRevenue derived from the sale of equipment is recognized when control\n\ntransfers to the customer.\n\nThis occurs\n\nwhen the equipment is delivered.\n\nSuch sales typically entail scheduled deliveries of large equipment primarily\n\nby\n\nequipment service technicians.\n\nMost equipment requires minimal installation, which is\n\ntypically completed at the\n\ntime of delivery.\n\nOur merchandise and equipment products generally carry standard warranty\n\nterms provided by the manufacturer;\n\nhowever, in instances where we provide a warranty on company-manufactured products or labor services,\n\nthe\n\nwarranty costs are accrued in accordance with Accounting Standards Codification\n\n(“ASC”) Topic 460 Guarantees.\n\nAt December 27, 2025 and December 28, 2024, we had accrued approximately\n\n$\n\n8\n\nmillion and $\n\n8\n\nmillion,\n\nrespectively, for warranty costs.\n\nRevenue derived from the sale of software products is recognized when\n\nproducts are delivered to customers or\n\nmade available electronically.\n\nSuch software is generally installed by customers and does\n\nnot require extensive\n\ntraining.\n\nRevenue derived from post-contract customer support for software,\n\nincluding annual support and/or\n\ntraining, is generally recognized over time using time elapsed as the input method\n\nthat best depicts the transfer of\n\ncontrol to the customer.\n\nRevenue derived from software sold on a Software-as-a-Service\n\nbasis is recognized ratably\n\nover the subscription period as control is transferred to the customer.\n\nRevenue derived from other sources, including freight charges, equipment repairs\n\nand financial services, is\n\nrecognized when the related product revenue is recognized or when\n\nthe services are provided.\n\nWe apply the\n\npractical expedient to treat shipping and handling activities performed after\n\nthe customer obtains control as\n\nfulfillment activities, rather than a separate performance obligation in the\n\ncontract.\n\nSales, value-add and other taxes we collect concurrent with revenue-producing\n\nactivities are excluded from\n\nrevenue.\n\nSome of our revenue is derived from bundled arrangements that include\n\nmultiple distinct performance obligations,\n\nwhich are accounted for separately.\n\nWhen we sell software products together with related services (i.e.,\n\ntraining\n\nand technical support), we allocate the transaction price to each\n\ndistinct performance obligation based on the\n\nestimated standalone selling price for each performance obligation.\n\nBundled arrangements that include elements\n\nthat are not considered software consist primarily of equipment and the related\n\ninstallation service.\n\nWe allocate\n\nrevenue for such arrangements based on the relative selling prices of the goods\n\nor services.\n\nIf an observable selling\n\nprice is not available (i.e., because we or others do not sell the goods or\n\nservices separately), we use one of the\n\nfollowing techniques to estimate the standalone selling price: adjusted\n\nmarket approach; cost-plus-margin\n\napproach; or the residual method.\n\nThere is no specific hierarchy for the use of these methods, but\n\nthe estimated\n\nselling price reflects our best estimate of what the selling prices of each deliverable\n\nwould be if it were sold\n\nregularly on a standalone basis taking into consideration the cost structure\n\nof our business, technical skill required,\n\ncustomer location and other market conditions.\n\nSee\n\n[Note 3 – Net Sales from Contracts with Customers](#a41883)\n\nfor additional disclosures of disaggregated net sales and\n\n[Note 4 – Segment and Geographic Data](#a42154)\n\nfor disclosures of net sales by segment and geographic data.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n80\n\nSales Returns\n\nSales returns are recognized as a reduction of revenue by the amount\n\nof expected returns and are recorded as refund\n\nliability within accrued expenses-other within our consolidated balance sheets.\n\nWe estimate the sales return\n\nliability based on historical data for specific products, adjusted as necessary\n\nfor new products.\n\nThe allowance for\n\nreturns is presented gross as a refund liability and we record a right of\n\nreturn asset (and a corresponding adjustment\n\nto cost of sales) for any products that we expect to be returned and resaleable.\n\nCost of Sales\n\nThe primary components of cost of sales include the cost of the product\n\n(net of purchase discounts, supplier\n\nchargebacks and rebates) and inbound and outbound freight charges.\n\nCosts related to purchasing, receiving, inspections, warehousing,\n\ninternal inventory transfers and other costs of our\n\ndistribution network are included in selling, general and administrative\n\nexpenses along with other operating costs.\n\nTotal distribution network costs were $\n\n107\n\nmillion, $\n\n105\n\nmillion and $\n\n105\n\nmillion for the years ended December\n\n27, 2025, December 28, 2024 and December 30, 2023, respectively.\n\nSupplier Rebates\n\nSupplier rebates are included as a reduction of cost of sales and are recognized\n\nover the period they are earned.\n\nThe\n\nfactors we consider in estimating supplier rebate accruals include forecasted\n\ninventory purchases,\n\nsales, supplier\n\nrebate contract terms, which generally provide for increasing rebates based\n\non either increased purchase or sales\n\nvolumes.\n\nDirect Shipping and Handling Costs\n\nFreight and other direct shipping costs are included in cost of sales.\n\nDirect handling costs, which represent\n\nprimarily direct compensation costs of employees who pick, pack and otherwise\n\nprepare, if necessary, merchandise\n\nfor shipment to our customers are reflected in selling, general and administrative\n\nexpenses.\n\nDirect handling costs\n\nwere $\n\n105\n\nmillion, $\n\n106\n\nmillion and $\n\n98\n\nmillion for the years ended December 27, 2025, December 28, 2024\n\nand\n\nDecember 30, 2023, respectively.\n\nAdvertising and Promotional Costs\n\nWe expense advertising and promotional costs as incurred.\n\nTotal advertising and promotional expenses were $\n\n46\n\nmillion, $\n\n43\n\nmillion and $\n\n47\n\nmillion for the years ended December 27, 2025, December 28, 2024 and\n\nDecember\n\n30, 2023, respectively.\n\nStock-Based Compensation Costs\n\nWe\n\nmeasure stock-based compensation at the grant date, based on the estimated\n\nfair value of the award, and\n\nrecognize the cost (net of estimated forfeitures) as compensation expense on\n\na straight-line basis over the requisite\n\nservice period for certain time-based restricted stock units with cliff vesting and on a accelerated\n\nbasis for the\n\noption awards and certain time-based restricted stock units with graded\n\nvesting.\n\nFor performance-based awards, at\n\neach reporting date, we reassess whether achievement of the performance condition\n\nis probable and accrue\n\ncompensation expense when achievement of the performance condition is\n\nprobable.\n\nOur stock-based compensation\n\nexpense is reflected in selling, general and administrative expenses.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n81\n\nEmployment Benefit Plans and other Postretirement Benefit Plans\n\nSome of our employees in our international markets participate\n\nin various noncontributory defined benefit plans.\n\nWe recognize the funded status, measured as the difference between the fair value of plan assets and the projected\n\nbenefit obligation.\n\nEach unfunded plan is recognized as a liability and each funded\n\nplan is recognized as either an\n\nasset or liability based on its funded status.\n\nWe measure our plan assets and liabilities at the end of our fiscal year.\n\nNet periodic pension costs and valuations are dependent on assumptions\n\nused by third-party actuaries in calculating\n\nthose amounts.\n\nThese assumptions include discount rates, expected return on plan\n\nassets, rate of future\n\ncompensation levels, retirement rates, mortality rates, and other factors.\n\nWe record the service cost component of\n\nnet pension cost in selling, general and administrative expenses within\n\nour consolidated statements of income.\n\nGains and losses that result from changes in actuarial assumptions or\n\nfrom actual experience that differs from\n\nactuarial assumptions are recognized in and then amortized from accumulated\n\nother comprehensive income (loss).\n\nCash and Cash Equivalents\n\nWe consider all highly liquid short-term investments with an original maturity of three months or less to be cash\n\nequivalents.\n\nDue to the short-term maturity of such investments,\n\nthe carrying amounts are a reasonable estimate of\n\nfair value.\n\nOutstanding checks in excess of funds on deposit of $\n\n25\n\nmillion and $\n\n33\n\nmillion, primarily related to\n\npayments for inventory, were classified as accounts payable as of December 27, 2025 and December 28, 2024.\n\nAccounts Receivable and Allowance for Credit Losses\n\nAccounts receivable are generally recognized when revenues are recognized.\n\nIn accordance with the “expected\n\ncredit loss” model, the carrying amount of accounts receivable is reduced\n\nby a valuation allowance that reflects our\n\nbest estimate of the amounts that we do not expect to collect.\n\nIn addition to reviewing delinquent accounts\n\nreceivable, we consider many factors in estimating our reserve, including\n\ntypes of customers and their credit\n\nworthiness, experience and historical data adjusted for current conditions\n\nand reasonable supportable forecasts.\n\nWe\n\nrecord allowances for credit losses based upon a specific review of all\n\nsignificant outstanding invoices.\n\nFor\n\nthose invoices not specifically reviewed, provisions are provided at differing rates,\n\nbased upon the age of the\n\nreceivable, the collection history associated with the geographic region\n\nthat the receivable was recorded in, current\n\neconomic trends and reasonable supportable forecasts.\n\nWe\n\nwrite off accounts receivable and charge it against its\n\nrecorded allowance when we deem it uncollectible.\n\nOur net accounts receivable balance was $\n\n1,651\n\nmillion, $\n\n1,482\n\nmillion, and $\n\n1,863\n\nmillion, at December 27, 2025,\n\nDecember 28, 2024 and December 30, 2023, respectively.\n\nThe following table presents our allowances for credit losses:\n\nAs of\n\nDescription\n\nDecember 27,\n\n2025\n\nDecember 28,\n\n2024\n\nDecember 30,\n\n2023\n\nBalance at beginning of year\n\n$\n\n78\n\n$\n\n83\n\n$\n\n65\n\nProvision for credit losses\n\n20\n\n14\n\n17\n\nAdjustments to existing allowances for late fees, foreign currency\n\nexchange rates, and write-offs\n\n(8)\n\n(19)\n\n1\n\nBalance at end of year\n\n$\n\n90\n\n$\n\n78\n\n$\n\n83\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n82\n\nContract Assets\n\nContract assets include amounts related to any conditional right to consideration\n\nfor work completed but not billed\n\nas of the reporting date.\n\nContract assets are transferred to accounts receivable when the\n\nright becomes\n\nunconditional.\n\nThe contract assets primarily relate to our bundled arrangements for the\n\nsale of equipment and\n\nconsumables and sales of term software licenses.\n\nCurrent contract assets are included in prepaid expenses and\n\nother and the non-current contract assets are included in investments and other\n\nwithin our consolidated balance\n\nsheets.\n\nCurrent and non-current contract asset balances as of December 27,\n\n2025 and December 28, 2024 were not\n\nmaterial.\n\nContract Liabilities\n\nContract liabilities are comprised of advance payments and upfront payments\n\nfor service arrangements provided\n\nover time that are accounted for as deferred revenue amounts.\n\nContract liabilities are transferred to revenue once\n\nthe performance obligation has been satisfied.\n\nCurrent contract liabilities are included in accrued expenses: other\n\nand the non-current contract liabilities are included in other liabilities\n\nwithin our consolidated balance sheets.\n\nDuring the years ended December 27, 2025, December 28, 2024, and December\n\n30, 2023, we recognized\n\nsubstantially all of the current contract liability amounts that were previously\n\ndeferred at the beginning of each\n\nyear.\n\nThe following table presents our contract liabilities:\n\nAs of\n\nDescription\n\nDecember 27,\n\n2025\n\nDecember 28,\n\n2024\n\nDecember 30,\n\n2023\n\nCurrent contract liabilities\n\n$\n\n81\n\n$\n\n81\n\n$\n\n89\n\nNon-current contract liabilities\n\n9\n\n8\n\n9\n\nTotal contract\n\nliabilities\n\n$\n\n90\n\n$\n\n89\n\n$\n\n98\n\nInventories and Reserves\n\nInventories consist primarily of finished goods, raw materials and\n\nwork-in-process and are stated at the lower of\n\ncost or net realizable value.\n\nCost is determined by the weighted average method for merchandise\n\nand actual cost\n\nfor large equipment, high-technology equipment and drop-shipments.\n\nInventory costs for manufactured products\n\ninclude direct materials, labor, and an allocation of related fixed and variable overhead.\n\nThe determination of\n\ninventory carrying values requires management to make significant\n\nestimates and judgments.\n\nIn assessing the need\n\nfor inventory reserves and evaluating net realizable value, we consider\n\nmultiple factors, including inventory\n\ncondition, on-hand quantities, historical and forecasted sales, product\n\nlife cycles, and prevailing market and\n\neconomic conditions.\n\nProperty and Equipment\n\nProperty and equipment are stated at cost, net of accumulated depreciation or\n\namortization.\n\nDepreciation is\n\ncomputed under the straight-line method using estimated useful lives\n\n(See\n\n[Note 7 – Property and Equipment, Net](#a44994)\n\nfor estimated useful lives).\n\nAmortization of leasehold improvements is computed using the straight-line\n\nmethod\n\nover the lesser of the useful life of the assets or the remaining lease term.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n83\n\nCapitalized Software Development Costs\n\nCapitalized software costs consist of costs to purchase and develop\n\nsoftware for internal use and for sale or use by\n\ncustomers.\n\nFor software to be used solely to meet internal needs, we capitalize\n\ncosts incurred during the\n\napplication development stage and include such costs within property\n\nand equipment, net within our consolidated\n\nbalance sheets.\n\nFor software to be sold, leased, or marketed to external users, we capitalize\n\nsoftware development\n\ncosts when technological feasibility is reached, and for cloud-based applications\n\nused to deliver our services we\n\ncapitalize costs incurred during the application development stage,\n\nand include such costs within investments and\n\nother within our consolidated balance sheets.\n\nLeases\n\nWe\n\ndetermine if an arrangement contains a lease at inception.\n\nAn arrangement contains a lease if it implicitly or\n\nexplicitly identifies an asset to be used and conveys the right to control\n\nthe use of the identified asset in exchange\n\nfor consideration.\n\nAs a lessee, we include operating leases in operating lease right-of-use\n\n(“ROU”) assets,\n\noperating lease liabilities, and non-current operating lease liabilities in\n\nour consolidated balance sheets.\n\nFinance\n\nleases are included in property and equipment, current maturities of\n\nlong-term debt, and long-term debt in our\n\nconsolidated balance sheets.\n\nROU assets represent our right to use an underlying asset for the lease\n\nterm and lease liabilities represent our\n\nobligation to make lease payments arising from the lease.\n\nOperating lease ROU assets and liabilities are recognized\n\nupon commencement of the lease based on the present value of the lease payments\n\nover the lease term.\n\nAs most of\n\nour leases do not provide an implicit interest rate, we generally use our incremental\n\nborrowing rate based on the\n\nestimated rate of interest for fully collateralized and fully amortizing borrowings\n\nover a similar term of the lease\n\npayments at commencement date to determine the present value of\n\nlease payments.\n\nWhen readily determinable, we\n\nuse the implicit rate.\n\nOur lease terms may include options to extend or terminate the lease when it is reasonably\n\ncertain that we will exercise that option.\n\nLease expense for lease payments is recognized on a straight-line basis\n\nover the lease term.\n\nExpenses associated with operating leases and finance leases\n\nare included in selling, general\n\nand administrative and interest expense, respectively within our consolidated\n\nstatement of income.\n\nShort-term\n\nleases with a term of 12 months or less are not capitalized.\n\nWe\n\nhave lease agreements with lease and non-lease components, which are\n\ngenerally accounted for as a single\n\nlease component, except non-lease components for leases of vehicles, which\n\nare accounted for separately.\n\nWhen a\n\nvehicle lease contains both lease and non-lease components, we allocate the\n\ntransaction price based on the relative\n\nstandalone selling price.\n\nBusiness Acquisitions\n\nWe account for business acquisitions under the acquisition method of accounting, under which the net assets of\n\nacquired businesses are recorded at their fair value at the acquisition\n\ndate and our consolidated financial statements\n\ninclude the acquired businesses’ results of operations from that date.\n\nCertain prior owners of acquired subsidiaries are eligible to receive additional\n\npurchase price cash consideration, or\n\nwe may be entitled to recoup a portion of purchase price cash consideration\n\nif certain financial targets or negotiated\n\ngoals are met.\n\nWe have accrued liabilities for the estimated fair value of additional purchase price consideration at\n\nthe time of the acquisition, using the income approach, including a probability-weighted\n\ndiscounted cash flow\n\nmethod or an option pricing method, where applicable.\n\nAny adjustments to these accrual amounts are recorded in\n\nselling, general and administrative within our consolidated statements of\n\nincome.\n\nWhile we use our best estimates and assumptions to accurately value\n\nconsideration transferred, assets acquired and\n\nliabilities assumed at the acquisition date, our estimates are inherently uncertain\n\nand subject to refinement.\n\nAs a\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n84\n\nresult, within\n\n12 months\n\nfollowing the date of acquisition, or the measurement period, we\n\nmay record adjustments\n\nto consideration transferred, assets acquired and liabilities assumed with\n\nthe corresponding offset to goodwill\n\nwithin our consolidated balance sheets.\n\nAt the end of the measurement period or final determination of\n\nthe values\n\nof such assets acquired or liabilities assumed, whichever comes first,\n\nany subsequent adjustments are recognized in\n\nour consolidated statements of operations.\n\nGoodwill\n\nAny excess of acquisition consideration over the fair value of identifiable\n\nnet assets acquired is recorded as\n\ngoodwill.\n\nGoodwill is an asset representing the future economic benefits\n\narising from other assets acquired in a\n\nbusiness combination that are not individually identified and separately\n\nrecognized, such as future customers and\n\ntechnology, as well as the assembled workforce.\n\nGoodwill is subject to impairment analysis at least once annually as\n\nof the first day of our fourth quarter, or if an\n\nevent occurs or circumstances change that would more likely than\n\nnot reduce a reporting unit’s fair value below\n\ncarrying value.\n\nWe conduct our goodwill impairment testing at the reporting unit level.\n\nWe identify our reporting\n\nunits by assessing whether two or more components are economically\n\nsimilar and therefore should be aggregated.\n\nOur reporting units are identified as our operating segments.\n\nGoodwill is allocated to such reporting units for the\n\npurposes of our impairment analyses.\n\nFor the year ended December 27, 2025, our reporting structure was:\n\n(i)\n\nGlobal Distribution and Value-Added Services reportable segment, which included the following\n\noperating segments (a) US Distribution Group; (b) Europe, Middle East,\n\nand Africa Distribution Group;\n\n(c) Americas Non-US Distribution Group; and (d) Asia-Pacific and Australia\n\nDistribution Group;\n\n(ii)\n\nGlobal Specialty Products reportable segment, which included the following\n\noperating segments (a) Global\n\nOral Reconstruction Group; and (b) Healthcare Specialty Group;\n\nand\n\n(iii)\n\nGlobal Technology,\n\nwhich is both a reportable segment and an operating segment.\n\nApplication of the goodwill impairment test requires judgment, including\n\nthe identification of reporting units,\n\nassignment of assets and liabilities that are considered shared services\n\nto the reporting units, and ultimately the\n\ndetermination of the fair value of each reporting unit.\n\nThe fair value of each reporting unit is calculated by\n\napplying the discounted cash flow methodology and confirming with\n\na market approach.\n\nThere are inherent\n\nuncertainties, however, related to fair value models, the inputs and our judgments in applying them\n\nto this analysis.\n\nThe most significant inputs include estimation of detailed future cash flows\n\nbased on budget expectations, and\n\ndetermination of comparable companies to develop a weighted average\n\ncost of capital for each reporting unit.\n\nIn January 2025, we performed a geographical realignment within\n\nthe Global Distribution and Value-Added\n\nServices reportable segment intended to provide increased transparency\n\ninto the performance of our global\n\ndistribution businesses and to reflect evolving management oversight\n\nand decision-making.\n\nAs a result of the\n\nrealignment and the change in reporting units, we reallocated goodwill to each\n\nof our new reporting units using a\n\nrelative fair value approach.\n\nThe relative fair values of the new reporting units were determined based on\n\na\n\nquantitative valuation analysis that considered projected cash flows,\n\nmarket assumptions, and other relevant\n\nvaluation inputs.\n\nReporting units under the former and new structures\n\nof the Global Distribution and Value-Added\n\nServices reportable segment were tested for impairment as of January 1,\n\n2025, and it was determined that the fair\n\nvalues of our reporting units more likely than not exceeded their carrying\n\nvalues, resulting in no impairment as of\n\nJanuary 1, 2025 under both structures.\n\nIn connection with our restructuring initiatives, during the year ended\n\nDecember 28, 2024, we recorded an $\n\n11\n\nmillion impairment of goodwill in the Global Specialty Products segment,\n\nrelating to the disposal of a portion of a\n\nbusiness; such impairment was calculated based on the relative fair value\n\nof goodwill.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n85\n\nIntangible Assets\n\nIn connection with our business acquisitions, we recognize assets acquired\n\nand liabilities assumed based on fair\n\nvalue estimates as of the date of acquisition.\n\nThe estimated fair value of identifiable intangible assets\n\n(i.e.,\n\ncustomer relationships and lists, trademarks and trade names, product development\n\nand non-compete agreements) is\n\nbased on critical judgments and assumptions derived from analysis of\n\nmarket conditions, including discount rates,\n\nprojected revenue growth rates (which are based on historical trends\n\nand assessment of financial projections),\n\nestimated customer attrition and projected cash flows.\n\nWe have calculated the value of these intangible assets using\n\nthe multi-period excess earnings method, the relief-from-royalty method,\n\nand the with and without method, where\n\napplicable.\n\nThese assumptions are forward-looking and could be affected by future economic\n\nand market\n\nconditions.\n\nIntangible assets, other than goodwill, are evaluated for impairment whenever\n\nevents or changes in circumstances\n\nindicate that the carrying amount of the assets may not be recoverable\n\nthrough the undiscounted future cash flows\n\nexpected to be derived from such asset or asset group.\n\nDefinite and indefinite-lived intangible assets primarily consist of customer\n\nrelationships, customer lists,\n\ntrademarks, trade names, product development and non-compete agreements.\n\nFor long-lived assets used in\n\noperations, impairment losses are only recorded if the asset or asset groups\n\ncarrying amount is not recoverable\n\nthrough its undiscounted future cash flows.\n\nWe measure the impairment loss based on the difference between the\n\ncarrying amount and the estimated fair value.\n\nWhen an impairment exists, the related assets are written down to\n\nfair value.\n\nDuring the years ended December 27, 2025, December 28, 2024\n\nand December 30, 2023, we recorded total\n\nimpairment charges within the selling, general and administrative line of our consolidated statements\n\nof income on\n\nintangible assets of $\n\n16\n\nmillion, $\n\n0\n\nmillion and $\n\n7\n\nmillion, respectively, as more fully discussed in\n\n[Note 9 –](#a46109)\n\n[Goodwill and Other Intangibles, Net](#a46109)\n\n[.](#a46109)\n\nDuring the years ended December 27, 2025, December 28, 2024\n\nand\n\nDecember 30, 2023, we recorded impairment charges, within the restructuring and related\n\ncosts line of our\n\nconsolidated statements of income, of $\n\n0\n\nmillion, $\n\n14\n\n, million, and $\n\n12\n\nmillion, respectively.\n\nSee\n\n[Note 16 – Plans](#a52963)\n\n[of Restructuring and Related Costs](#a52963)\n\nfor additional information.\n\nIncome Taxes\n\nWe account for income taxes under an asset and liability approach that requires the recognition of deferred income\n\ntax assets and liabilities for the expected future tax consequences of events\n\nthat have been recognized in our\n\nfinancial statements or tax returns.\n\nIn estimating future tax consequences, we generally consider all expected\n\nfuture\n\nevents other than expected enactments of changes in tax laws or rates.\n\nThe effect on deferred income tax assets and\n\nliabilities of a change in tax rates is recognized as income or expense in\n\nthe period that includes the enactment date.\n\nWe file a consolidated U.S. federal income tax return with our 80% or greater owned U.S. subsidiaries.\n\nRedeemable Noncontrolling Interests\n\nSome minority stockholders in certain of our consolidated subsidiaries have\n\nthe right, at certain times, to require us\n\nto acquire their ownership interest in those entities at fair value.\n\nTheir interests in these subsidiaries are classified\n\noutside permanent equity on our consolidated balance sheets and are\n\ncarried at the estimated redemption amounts.\n\nThe redemption amounts have been estimated based on recent transactions\n\nand/or implied multiples of earnings\n\nand, if such earnings and cash flows are not achieved, the value of the\n\nredeemable noncontrolling interests might be\n\nimpacted.\n\nChanges in the estimated redemption amounts of the noncontrolling\n\ninterests subject to put options are\n\nreflected at each reporting period with a corresponding adjustment\n\nto Additional paid-in capital.\n\nFuture reductions\n\nin the carrying amounts are subject to a “floor” amount that is equal\n\nto the fair value of the redeemable\n\nnoncontrolling interests at the time they were originally recorded.\n\nThe recorded value of the redeemable\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n86\n\nnoncontrolling interests cannot go below the floor level.\n\nAdjustments to the carrying amount of noncontrolling\n\ninterests to reflect a fair value redemption feature do not impact the\n\ncalculation of earnings per share.\n\nOur net\n\nincome is reduced by the portion of the subsidiaries’ net income\n\nthat is attributable to redeemable noncontrolling\n\ninterests.\n\nNoncontrolling Interests\n\nNoncontrolling interest represents the ownership interests of certain\n\nminority owners of our consolidated\n\nsubsidiaries.\n\nOur net income is reduced by the portion of the subsidiaries’\n\nnet income that is attributable to\n\nnoncontrolling interests.\n\nComprehensive Income\n\nComprehensive income includes certain gains and losses that, under accounting\n\nprinciples generally accepted in the\n\nUnited States, are excluded from net income as such amounts are recorded\n\ndirectly as an adjustment to\n\nstockholders’ equity.\n\nOur comprehensive income is primarily comprised of net income,\n\nforeign currency\n\ntranslation gain (loss), unrealized gain (loss) from hedging activities\n\nand unrealized pension adjustment gain (loss).\n\nRisk Management and Derivative Financial Instruments\n\nWe use derivative instruments to minimize our exposure to fluctuations in foreign currency exchange rates, interest\n\nrates, and our unfunded non-qualified supplemental retirement plan (“SERP”)\n\nand our deferred compensation plan\n\n(“DCP”).\n\nOur objective is to manage the impact that foreign currency\n\nexchange rate fluctuations could have on\n\nrecognized asset and liability fair values, earnings and cash flows, as well\n\nas our net investments in foreign\n\nsubsidiaries, the interest rate risk on variable rate debt, and the returns on\n\nour SERP and DCP.\n\nOur risk\n\nmanagement policy requires that derivative contracts used as hedges be\n\neffective at reducing the risks associated\n\nwith the exposure being hedged and be designated hedges at inception\n\nof the contracts.\n\nWe do not enter into\n\nderivative instruments for speculative purposes.\n\nOur derivative instruments primarily include foreign currency\n\nforward contracts, total return swaps, and interest rate swaps.\n\nForeign currency forward agreements related to forecasted inventory\n\npurchase commitments with foreign suppliers,\n\nforeign currency swaps related to foreign currency denominated debt, and\n\ninterest rate swaps related to variable rate\n\ndebt are designated as cash flow hedges.\n\nFor derivatives that are designated and qualify as cash flow hedges,\n\nthe\n\nchanges in the fair value of the derivatives are recorded as a\n\ncomponent of Accumulated other comprehensive\n\nincome in stockholders’ equity and subsequently reclassified into\n\nearnings in the period(s) during which the hedged\n\ntransactions affect earnings.\n\nWe classify the cash flows related to our hedging activities in the same category in our\n\nconsolidated statements of cash flows as the cash flows related\n\nto the hedged item.\n\nForeign currency forward contracts related to our euro-denominated\n\nforeign operations are designated as net\n\ninvestment hedges.\n\nFor derivatives that are designated and qualify as net investment\n\nhedges, changes in the fair\n\nvalue of the derivatives are recorded in the foreign currency translation gain\n\n(loss) component of Accumulated\n\nother comprehensive income in stockholders’ equity until the net\n\ninvestment is sold or substantially liquidated.\n\nInterest swap agreements are entered into for the purpose of hedging\n\nthe cash flow of our variable interest rate term\n\nloan.\n\nOur foreign currency forward agreements related to foreign currency\n\nbalance sheet exposure provide economic\n\nhedges but are not designated as hedges for accounting purposes.\n\nFor agreements not designated as hedges, changes in the value of the derivative,\n\nalong with the transaction gain or\n\nloss on the hedged item, are recorded in other, net, within our consolidated statements of income.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n87\n\nTotal return swaps are entered into for the purpose of economically hedging our SERP and DCP.\n\nThese swaps are\n\nexpected to be renewed on an annual basis.\n\nChanges in the fair values of these total return swaps are recorded in\n\nselling, general, and administrative expenses within our consolidated\n\nstatements of income and offset recognized\n\nchanges in the fair values of our SERP and DCP liabilities.\n\nForeign Currency Translation\n\nand Transactions\n\nThe financial position and results of operations of our foreign subsidiaries\n\nare determined using local currencies as\n\nthe functional currencies.\n\nAssets and liabilities of foreign subsidiaries are translated at the exchange\n\nrate in effect at\n\neach year-end.\n\nIncome statement accounts are translated at the average rate\n\nof exchange prevailing during the year.\n\nTranslation adjustments arising from the use of differing exchange rates from period to period are included\n\nin\n\nAccumulated other comprehensive income in stockholders’ equity.\n\nGains and losses resulting from foreign\n\ncurrency transactions are included in earnings.\n\nAccounting Pronouncements Recently Adopted\n\nDuring the year ended December 27, 2025, we adopted Accounting Standards Update\n\n(“ASU”) 2023-09, “\n\nIncome\n\nTaxes (Topic\n\n740): Improvements to Income Tax Disclosures\n\n,” which requires public business entities to disclose\n\nadditional information in specified categories with respect to\n\nthe reconciliation of the effective tax rate to the\n\nstatutory rate for federal, state and foreign income taxes.\n\nIt also requires greater detail about individual reconciling\n\nitems in the rate reconciliation to the extent the impact of those items\n\nexceeds a specified threshold.\n\nIn addition to\n\nnew disclosures associated with the rate reconciliation, this ASU requires\n\ninformation pertaining to taxes paid (net\n\nof refunds received) to be disaggregated for federal, state and foreign\n\ntaxes and further disaggregated for specific\n\njurisdictions to the extent the related amounts exceed a quantitative threshold.\n\nThis ASU also describes items that\n\nneed to be disaggregated based on their nature, which is determined by\n\nreference to the item’s fundamental or\n\nessential characteristics, such as the transaction or event that triggered\n\nthe establishment of the reconciling item and\n\nthe activity with which the reconciling item is associated.\n\nThis ASU eliminates the historic requirement that\n\nentities disclose information concerning unrecognized tax benefits having\n\na reasonable possibility of significantly\n\nincreasing or decreasing in the 12 months following the reporting date.\n\nWe adopted this ASU on a prospective\n\nbasis, which resulted in the required additional disclosures included\n\nin\n\n[Note 15 – Income Taxes](#a49832)\n\n[.](#a49832)\n\nDuring the year ended December 28, 2024, we adopted ASU 2023-07, “\n\nSegment Reporting (Topic 280):\n\nImprovements to Reportable Segments\n\n” (“Topic 280”),\n\nwhich aims to improve financial reporting by requiring\n\ndisclosure of incremental segment information on an annual and\n\ninterim basis for all public entities to enable\n\ninvestors to develop more decision-useful financial analyses.\n\nThe amendments in Topic 280 do not change how a\n\npublic entity identifies its operating segments, aggregates those operating\n\nsegments, or applies the quantitative\n\nthresholds to determine its reportable segments.\n\nWe adopted Topic\n\n280 on a retrospective basis, which resulted in\n\nthe required additional disclosures included in our consolidated\n\nfinancial statements.\n\nRecently Issued Accounting Pronouncements\n\nIn December 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-11, “\n\nInterim Reporting\n\n(Topic 270): Narrow\n\n-Scope Improvements\n\n,” which is intended to improve navigability of the guidance\n\nin Topic\n\n270, Interim Reporting, and clarify when it applies.\n\nThe ASU also addresses the form and content of such financial\n\nstatements and interim disclosure requirements, and establishes a principle\n\nunder which an entity must disclose\n\nevents since the end of the last annual reporting period that have a\n\nmaterial impact on the entity.\n\nThis ASU is\n\neffective for annual reporting periods beginning after December 15, 2027, and interim\n\nreporting periods within\n\nthose annual reporting periods, with early adoption permitted.\n\nWe are currently evaluating the impact that ASU\n\n2025-11 will have on our consolidated financial statements and related disclosures.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n88\n\nIn December 2025, the FASB issued ASU 2025-10, “\n\nGovernment Grants (Topic 832) - Accounting for Government\n\nGrants Received by Business Entities,\n\n” which establishes guidance on the recognition, measurement, and\n\npresentation of government grants received by business entities.\n\nThis ASU is effective for annual reporting periods\n\nbeginning after December 15, 2028, and interim reporting periods within\n\nthose annual reporting periods, with early\n\nadoption permitted.\n\nWe are currently evaluating the impact that ASU 2025-10 will have on our consolidated\n\nfinancial statements and related disclosures.\n\nIn November 2025, the FASB issued ASU 2025-09, “\n\nDerivatives and Hedging (Topic 815): Hedge Accounting\n\nImprovements,\n\n” which is intended to more closely align financial reporting with\n\nthe economics of entities’ risk\n\nmanagement activities, including expanded eligibility of forecasted\n\ntransactions, additional flexibility in measuring\n\nhedge effectiveness, and clarifications related to hedging non-financial items.\n\nThis ASU is effective for annual\n\nreporting periods beginning June 1, 2027, and interim reporting\n\nperiods within those annual reporting periods, with\n\nearly adoption permitted, and should be applied prospectively.\n\nWe are currently evaluating the impact that ASU\n\n2025-09 will have on our consolidated financial statements and related\n\ndisclosures.\n\nIn September 2025, the FASB issued ASU 2025-06, “\n\nIntangibles - Goodwill and Other - Internal-Use Software\n\n(Subtopic 350-40): Targeted Improvements\n\nto the Accounting for Internal-Use Software\n\n,” which removes all\n\nreferences to software development project stages.\n\nThe ASU requires entities to begin capitalizing software costs\n\nwhen management authorizes and commits to funding the software project,\n\nand it is probable that the project will\n\nbe completed and the software will be used for its intended purpose.\n\nThis ASU is effective for annual reporting\n\nperiods beginning after December 15, 2027, and interim reporting periods\n\nwithin those annual reporting periods,\n\nwith early adoption permitted.\n\nUpon adoption, the guidance can be applied prospectively, retrospectively, or with a\n\nmodified transition approach.\n\nWe are currently evaluating the impact that ASU 2025-06 will have on our\n\nconsolidated financial statements.\n\nIn July 2025, the FASB issued ASU 2025-05, “\n\nFinancial Instruments - Credit Losses (Subtopic 326): Measurement\n\nof Credit Losses for Accounts Receivable and Contract Assets,\n\n” which introduces a practical expedient permitting\n\nan entity to assume that conditions at the balance sheet date remain unchanged\n\nthroughout the remaining life of the\n\nasset when estimating expected credit losses on current accounts\n\nreceivable and current contract asset under Topic\n\n606 on revenue from contracts with customers. This ASU is effective for annual\n\nreporting periods beginning after\n\nDecember 15, 2025, with early adoption permitted.\n\nWe do not expect ASU 2025-05 to have a material impact on\n\nour consolidated financial statements.\n\nIn November 2024, the FASB issued ASU 2024-03, “\n\nIncome Statement - Reporting Comprehensive Income -\n\nExpense Disaggregation Disclosure (Subtopic 220-40)\n\n:\n\nDisaggregation of Income Statement Expenses\n\n,” which\n\nrequires additional disclosure about the specific expense categories in\n\nthe notes to financial statements at interim\n\nand annual reporting periods.\n\nThe amendments in this ASU do not change or remove current\n\nexpense disclosure\n\nrequirements, but affect where this information appears in the notes to financial statements.\n\nThis ASU is effective\n\nfor annual reporting periods beginning after December 15, 2026, and\n\ninterim reporting periods beginning after\n\nDecember 15, 2027, with early adoption permitted.\n\nUpon adoption, the guidance can be applied prospectively\n\nor\n\nretrospectively.\n\nWe are currently evaluating the impact that ASU 2024-03 will have on our consolidated financial\n\nstatements.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n89\n\nNote 2 – Cyber Incident\n\nIn October 2023 Henry Schein experienced a cyber incident that primarily\n\naffected the operations of our North\n\nAmerican and European dental and medical distribution businesses.\n\nHenry Schein One, our practice management\n\nsoftware, revenue cycle management and patient relationship management\n\nsolutions business, was not affected, and\n\nour manufacturing businesses were mostly unaffected.\n\nOn November 22, 2023, we experienced a disruption of our\n\necommerce platform and related applications, which was remediated.\n\nWith respect to the October 2023 cyber incident, we had a $\n\n60\n\nmillion insurance policy, following a $\n\n5\n\nmillion\n\nretention.\n\nDuring the years ended December 27, 2025, December 28, 2024\n\nand December 30, 2023, we incurred $\n\n0\n\nmillion, $\n\n9\n\nmillion and $\n\n11\n\nmillion, respectively, of expenses related to the cyber incident, mostly consisting of\n\nprofessional fees.\n\nDuring the year ended December 28, 2024, we received insurance\n\nproceeds of $\n\n40\n\nmillion,\n\nrepresenting a partial insurance recovery of losses related to the cyber incident.\n\nDuring the year ended December\n\n27, 2025, we received insurance proceeds of $\n\n20\n\nmillion under this policy, representing insurance recovery of\n\nlosses related to the cyber incident.\n\nThe expenses and insurance recoveries related to the cyber\n\nincident are\n\nincluded in the selling, general and administrative line in our consolidated\n\nstatements of income.\n\nNote 3 – Net Sales from Contracts with Customers\n\nNet sales are recognized in accordance with policies disclosed\n\nin\n\n[Note 1 – Basis of Presentation and Significant](#a38445)\n\n[Accounting Policies](#a38445)\n\n[.](#a38445)\n\nDisaggregation of Net Sales\n\nThe following table disaggregates our net sales by reportable segment:\n\nYears\n\nEnded\n\nDecember 27,\n\n2025\n\nDecember 28,\n\n2024\n\nDecember 30,\n\n2023\n\nNet Sales:\n\nGlobal Distribution and Value\n\n-Added Services\n\nGlobal Dental merchandise\n\n$\n\n4,831\n\n$\n\n4,723\n\n$\n\n4,783\n\nGlobal Dental equipment\n\n1,799\n\n1,723\n\n1,675\n\nGlobal Value\n\n-added services\n\n238\n\n233\n\n191\n\nGlobal Dental\n\n6,868\n\n6,679\n\n6,649\n\nGlobal Medical\n\n4,270\n\n4,081\n\n3,912\n\nTotal Global Distribution\n\nand Value\n\n-Added Services\n\n11,138\n\n10,760\n\n10,561\n\nGlobal Specialty Products\n\n1,544\n\n1,446\n\n1,331\n\nGlobal Technology\n\n675\n\n630\n\n602\n\nEliminations\n\n(173)\n\n(163)\n\n(155)\n\nTotal\n\n$\n\n13,184\n\n$\n\n12,673\n\n$\n\n12,339\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n90\n\nNote 4 – Segment and Geographic Data\n\nWe conduct our business through\n\nthree\n\nreportable segments: (i) Global Distribution and Value-Added Services; (ii)\n\nGlobal Specialty Products; and (iii) Global Technology.\n\nWe aggregate operating segments into these reportable segments based on economic similarities, the nature of their\n\nproducts, customer base and methods of distribution.\n\nGlobal Distribution and Value-Added Services includes distribution to the global dental and medical markets of\n\nnational brand and corporate brand merchandise, as well as equipment and related\n\ntechnical services.\n\nThis segment\n\nalso includes value-added services such as financial services, continuing\n\neducation services, consulting and other\n\nservices.\n\nThis segment also markets and sells under our own corporate brand\n\na portfolio of cost-effective, high-\n\nquality consumable merchandise.\n\nGlobal Specialty Products includes manufacturing, marketing\n\nand sales of dental\n\nimplant and biomaterial products; and endodontic, orthodontic and orthopedic\n\nproducts and other health care-\n\nrelated products and services.\n\nGlobal Technology includes development and distribution of practice management\n\nsoftware, e-services and other products, which are distributed to health\n\ncare providers.\n\nOur organizational structure also includes Corporate, which consists primarily of\n\nincome and expenses associated\n\nwith support functions and projects.\n\nOur chief operating decision maker (“CODM”) is our Chairman\n\nand Chief Executive Officer.\n\nOur CODM uses\n\nadjusted operating income as the profitability metric for purposes of making\n\ndecisions about allocation of resources\n\nto each segment and assessing performance of each segment.\n\nAdjusted operating income provides a measure of our\n\nunderlying segment results that is in line with our approach to risk and performance\n\nmanagement.\n\nWe define\n\nadjusted operating income as operating income adjusted to exclude\n\n(a) direct cybersecurity costs and related\n\ninsurance recovery proceeds, (b) amortization of acquisition intangibles,\n\n(c) organizational restructuring and related\n\nexpenses, (d) impairment of intangible assets, (e) changes in fair value\n\nof contingent consideration, (f) litigation\n\nsettlements, and (g) costs associated with shareholder advisory\n\nmatters and select value creation consulting costs.\n\nThese adjustments are either: (i) non-cash or non-recurring in nature; (ii) not\n\nallocable or controlled by the segment;\n\nor (iii) not tied to the operational performance of the segment.\n\nAssets by segment are not a measure used to assess\n\nthe performance of the Company by CODM and thus are not reported\n\nin our disclosures.\n\nThe accounting policies of the reportable segments are generally\n\nthe same as those described in\n\n[Note 1 – Basis of](#a38445)\n\n[Presentation and Significant Accounting Policies](#a38445)\n\n.\n\nSales and transfers between reportable segments are eliminated\n\nin consolidation.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n91\n\nSegment adjusted operating income is presented in the following\n\ntable to reconcile to operating income as\n\npresented on the consolidated statement of operations.\n\nThe reconciliation from operating income to income before\n\ntaxes and equity in earnings of affiliates is presented on our consolidated statements\n\nof income.\n\nYears Ended\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nGross Sales:\n\nGlobal Distribution and Value\n\n-Added Services\n\n(1)\n\n$\n\n11,138\n\n$\n\n10,760\n\n$\n\n10,561\n\nGlobal Specialty Products\n\n(2)\n\n1,544\n\n1,446\n\n1,331\n\nGlobal Technology\n\n(3)\n\n675\n\n630\n\n602\n\nTotal Gross Sales\n\n13,357\n\n12,836\n\n12,494\n\nLess: Eliminations:\n\nGlobal Distribution and Value\n\n-Added Services\n\n(18)\n\n(31)\n\n(36)\n\nGlobal Specialty Products\n\n(155)\n\n(132)\n\n(119)\n\nGlobal Technology\n\n-\n\n-\n\n-\n\nTotal Eliminations\n\n(173)\n\n(163)\n\n(155)\n\nNet Sales:\n\nGlobal Distribution and Value\n\n-Added Services\n\n11,120\n\n10,729\n\n10,525\n\nGlobal Specialty Products\n\n1,389\n\n1,314\n\n1,212\n\nGlobal Technology\n\n675\n\n630\n\n602\n\nTotal Net Sales\n\n$\n\n13,184\n\n$\n\n12,673\n\n$\n\n12,339\n\nSegment Cost of Sales:\n\n(4)\n\nGlobal Distribution and Value\n\n-Added Services\n\n$\n\n8,352\n\n$\n\n7,984\n\n$\n\n7,862\n\nGlobal Specialty Products\n\n697\n\n644\n\n611\n\nGlobal Technology\n\n218\n\n206\n\n185\n\nSegment Operating Expenses:\n\n(5)\n\nGlobal Distribution and Value\n\n-Added Services\n\n$\n\n2,106\n\n$\n\n2,080\n\n$\n\n2,034\n\nGlobal Specialty Products\n\n605\n\n624\n\n545\n\nGlobal Technology\n\n277\n\n272\n\n275\n\nOperating Income:\n\nGlobal Distribution and Value\n\n-Added Services\n\n$\n\n680\n\n$\n\n696\n\n$\n\n665\n\nGlobal Specialty Products\n\n242\n\n178\n\n175\n\nGlobal Technology\n\n180\n\n152\n\n142\n\nTotal Segment Operating Income\n\n1,102\n\n1,026\n\n982\n\nCorporate, net\n\n(130)\n\n(77)\n\n(92)\n\nAdjustments\n\n(6)\n\n(319)\n\n(328)\n\n(275)\n\nTotal Operating Income\n\n$\n\n653\n\n$\n\n621\n\n$\n\n615\n\nYears Ended\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nDepreciation and Amortization:\n\nGlobal Distribution and Value\n\n-Added Services\n\n$\n\n27\n\n$\n\n25\n\n$\n\n26\n\nGlobal Specialty Products\n\n36\n\n29\n\n23\n\nGlobal Technology\n\n36\n\n35\n\n31\n\nTotal Segment Depreciation and Amortization\n\n99\n\n89\n\n80\n\nCorporate\n\n33\n\n24\n\n18\n\nAcquisition intangible amortization within adjustments\n\n(6)\n\n179\n\n184\n\n150\n\nTotal Depreciation and Amortization\n\n$\n\n311\n\n$\n\n297\n\n$\n\n248\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n92\n\n(1)\n\nGlobal Distribution and Value\n\n-Added Services: Includes distribution of infection-control products, handpieces, preventatives,\n\nimpression materials, composites, anesthetics, teeth, gypsum, acrylics, articulators, abrasives, PPE products, branded and generic\n\npharmaceuticals, vaccines, surgical products, diagnostic tests, dental chairs, delivery units and lights, digital dental laboratories, X-\n\nray supplies and equipment, high-tech and digital restoration equipment, equipment repair services, financial services on a non-\n\nrecourse basis, continuing education services for practitioners, consulting and other services.\n\nThis segment also markets and sells\n\nunder our own corporate brand a portfolio of cost-effective, high-quality consumable merchandise.\n\n(2)\n\nGlobal Specialty Products: Includes manufacturing, marketing and sales of dental implant and biomaterial products; and\n\nendodontic, orthodontic and orthopedic products and other health care-related products and services.\n\n(3)\n\nGlobal Technology: Includes development and distribution of practice management software, e-services and other products, which\n\nare distributed to health care providers.\n\n(4)\n\nCost of goods sold in our Global Distribution and Value-Added Services segment and our Global Specialty Products segment\n\nincludes product cost and inbound and outbound freight charges.\n\nCost of goods sold in our Global Technology segment consists\n\nprimarily of software development and third-party provider costs, including technology use and hosting fees.\n\n(5)\n\nSignificant segment operating expenses for our reportable segments and Corporate include primarily compensation costs, and to a\n\nlesser extent, rent, depreciation and maintenance costs related to operating our facilities.\n\n(6)\n\nAdjustments represent items excluded from segment operating income to enable comparison of financial results between periods.\n\nThe following table presents a breakdown of such adjustments:\n\nYears Ended\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nAdjustments:\n\nRestructuring and related costs\n\n$\n\n(105)\n\n$\n\n(110)\n\n$\n\n(80)\n\nAcquisition intangible amortization\n\n(179)\n\n(184)\n\n(150)\n\nCyber incident-insurance proceeds, net of third-party advisory\n\nexpenses\n\n20\n\n31\n\n(11)\n\nChange in contingent consideration\n\n2\n\n(45)\n\n-\n\nLitigation settlements\n\n(5)\n\n(6)\n\n-\n\nImpairment of capitalized assets\n\n-\n\n(12)\n\n(27)\n\nImpairment of intangible assets\n\n(16)\n\n-\n\n(7)\n\nCosts associated with shareholder advisory matters and select value\n\ncreation consulting costs\n\n(36)\n\n(2)\n\n-\n\nTotal adjustments\n\n$\n\n(319)\n\n$\n\n(328)\n\n$\n\n(275)\n\nThe following table presents information about our operations by geographic\n\narea as of and for the years ended\n\nDecember 27, 2025, December 28, 2024 and December 30, 2023.\n\nNet sales by geographic area are based on the\n\nrespective locations of our subsidiaries.\n\nNo country, except for the United States, generated net sales greater than\n\n10\n\n% of consolidated net sales.\n\nThere were no material amounts of sales or transfers among geographic\n\nareas and\n\nthere were no material amounts of export sales.\n\n2025\n\n2024\n\n2023\n\nNet Sales\n\nLong-Lived\n\nAssets\n\nNet Sales\n\nLong-Lived\n\nAssets\n\nNet Sales\n\nLong-Lived\n\nAssets\n\nUnited States\n\n$\n\n9,096\n\n$\n\n4,033\n\n$\n\n8,825\n\n$\n\n3,683\n\n$\n\n8,662\n\n$\n\n3,479\n\nOther\n\n4,088\n\n2,120\n\n3,848\n\n2,051\n\n3,677\n\n2,135\n\nConsolidated total\n\n$\n\n13,184\n\n$\n\n6,153\n\n$\n\n12,673\n\n$\n\n5,734\n\n$\n\n12,339\n\n$\n\n5,614\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n93\n\nNote 5 – Business Acquisitions\n\nOur acquisition strategy is focused on investments in companies, including\n\nhigh growth high margin businesses\n\naligned with our BOLD+1 strategy, that add new customers and sales teams, increase our geographic footprint\n\n(whether entering a new country, such as emerging markets, or building scale where we have already invested in\n\nbusinesses), and finally, those that enable us to access new products and technologies.\n\n2025 Acquisitions\n\nDuring the year ended December 27, 2025, we acquired companies within\n\nthe Global Distribution and Value-\n\nAdded Services,\n\nGlobal Specialty Products and Global Technology segments.\n\nOur acquired ownership interest in\n\nthese companies range from\n\n60\n\n% to\n\n100\n\n%.\n\nThe following table aggregates the preliminary estimated fair value, as of\n\nthe date of the acquisition, of\n\nconsideration paid and net assets acquired for acquisitions during the year ended\n\nDecember 27, 2025:\n\nPreliminary\n\nAllocation as of\n\nDecember 27, 2025\n\nAcquisition consideration:\n\nCash\n\n$\n\n194\n\nDeferred consideration\n\n3\n\nEstimated fair value of contingent consideration payable\n\n19\n\nFair value of previously held equity method investments\n\n91\n\nRedeemable noncontrolling interests\n\n85\n\nTotal consideration\n\n$\n\n392\n\nIdentifiable assets acquired and liabilities assumed:\n\nCurrent assets\n\n$\n\n59\n\nIntangible assets\n\n150\n\nOther noncurrent assets\n\n42\n\nCurrent liabilities\n\n(26)\n\nLong-term debt\n\n(1)\n\nDeferred income taxes\n\n(23)\n\nOther noncurrent liabilities\n\n(8)\n\nTotal identifiable\n\nnet assets\n\n193\n\nGoodwill\n\n199\n\nTotal net assets acquired\n\n$\n\n392\n\nThe accounting for acquisitions in the year ended December 27, 2025 has not been\n\ncompleted in several areas,\n\nincluding, but not limited to, pending assessment of certain assets,\n\nprimarily including identifiable intangibles and\n\ncertain equity method investments, and certain liabilities, primarily\n\nincluding deferred income taxes.\n\nDuring the\n\nyear ended December 27, 2025, we did not record any material measurement\n\nperiod adjustments.\n\nGoodwill is a result of the synergies and cross-selling opportunities that these acquisitions\n\nare expected to provide\n\nfor us, as well as the expected growth potential.\n\nThe majority of the acquired goodwill is not deductible\n\nfor tax\n\npurposes.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n94\n\nThe following table summarizes the intangible assets acquired during the year\n\nended December 27, 2025:\n\n2025\n\nWeighted Average\n\nUseful\n\nLives (in years)\n\nCustomer relationships and lists\n\n$\n\n98\n\n11\n\nTrademarks / Tradenames\n\n32\n\n7\n\nProduct development\n\n18\n\n10\n\nNon-compete agreements\n\n2\n\n5\n\nTotal\n\n$\n\n150\n\nDuring the year ended December 27, 2025, in connection with acquisitions\n\nof controlling interests of affiliates, we\n\nrecognized gains of approximately $\n\n38\n\nmillion, related to the remeasurement to fair value of our previously held\n\nequity investments.\n\nSuch gains were calculated using a discounted cash flow model\n\nbased on Level 3 inputs, as\n\ndefined in\n\n[Note 11 – Fair Value Measurements](#a47085)\n\n,\n\nwhich was recorded in\n\nselling, general and administrative\n\nin the\n\nconsolidated statements of income.\n\nThe impact of these acquisitions, individually and in the aggregate, was\n\nnot considered material to our consolidated\n\nfinancial statements.\n\nPro forma financial information since the acquisition date has not been presented\n\nbecause the impact of these\n\nacquisitions was immaterial to our consolidated financial statements.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n95\n\n2024 Acquisitions\n\nAcquisition of TriMed\n\nOn April 1, 2024, we acquired a\n\n60\n\n% voting equity interest in TriMed Inc. (“TriMed”), a global developer of\n\nsolutions for the orthopedic treatment of lower and upper extremities, headquartered\n\nin California,\n\nfor consideration\n\nof $\n\n315\n\nmillion.\n\nThis acquisition is reported in our Global Specialty Products segment.\n\nThe following table\n\naggregates the final fair value, as of the date of the acquisition, of consideration\n\npaid and net assets acquired in the\n\nTriMed acquisition:\n\nFinal Allocation\n\nAcquisition consideration:\n\nCash\n\n$\n\n141\n\nDeferred consideration\n\n21\n\nRedeemable noncontrolling interests\n\n153\n\nTotal consideration\n\n$\n\n315\n\nIdentifiable assets acquired and liabilities assumed:\n\nCurrent assets\n\n$\n\n35\n\nIntangible assets\n\n221\n\nOther noncurrent assets\n\n10\n\nCurrent liabilities\n\n(7)\n\nDeferred income taxes\n\n(62)\n\nOther noncurrent liabilities\n\n(6)\n\nTotal identifiable\n\nnet assets\n\n191\n\nGoodwill\n\n124\n\nTotal net assets acquired\n\n$\n\n315\n\nGoodwill is a result of synergies that are expected to originate from the acquisition as well as\n\nthe expected growth\n\npotential of TriMed.\n\nThe acquired goodwill is not deductible for tax purposes.\n\nThe intangible assets acquired consisted of product development of $\n\n204\n\nmillion, trademarks and tradenames of $\n\n9\n\nmillion, and in-process research and development of $\n\n8\n\nmillion.\n\nWeighted average useful lives for these acquired\n\nintangible assets were\n\n9\n\nyears,\n\n7\n\nyears and indefinite-lived, respectively.\n\nExcept for in-process research and\n\ndevelopment (“IPR&D”), intangible assets acquired as a result of the TriMed acquisition are being\n\namortized over\n\ntheir estimated useful lives using the straight-line method of amortization.\n\nIPR&D is accounted for as an\n\nindefinite-lived intangible asset and is not amortized until completion or\n\nabandonment of the associated research\n\nand development efforts.\n\nIPR&D is tested for impairment annually or periodically if\n\nan indicator of impairment\n\nexists during the period until completion.\n\nPro forma financial information and TriMed’s revenue and earnings since the acquisition date have not been\n\npresented because the impact of the TriMed acquisition was immaterial to our consolidated\n\nfinancial statements.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n96\n\nOther 2024 Acquisitions\n\nDuring the year ended December 28, 2024, we acquired companies within\n\nthe Global Distribution and Value-\n\nAdded Services and Global Specialty Products segments.\n\nOur acquired ownership interest in these companies\n\nrange from\n\n51\n\n% to\n\n100\n\n%.\n\nTotal consideration for these acquisitions was $\n\n113\n\nmillion (including cash paid of $\n\n62\n\nmillion, fair value of previously held equity investment of $\n\n30\n\nmillion, noncontrolling interest of $\n\n18\n\nmillion,\n\nestimated fair value of contingent consideration payable of $\n\n2\n\nmillion, and deferred consideration of $\n\n1\n\nmillion).\n\nNet assets acquired primarily consisted of $\n\n60\n\nmillion of goodwill and $\n\n64\n\nmillion of intangible assets.\n\nThe\n\nintangible assets acquired consisted of customer relationships and lists of\n\n$\n\n33\n\nmillion, trademarks and tradenames\n\nof $\n\n24\n\nmillion, product development of $\n\n5\n\nmillion and non-compete agreements of $\n\n2\n\nmillion.\n\nWeighted average\n\nuseful lives for these acquired intangible assets were\n\n11 years\n\n,\n\n7 years\n\n,\n\n9 years\n\nand\n\n5 years\n\n, respectively.\n\nWe completed the accounting for all other acquisitions that occurred during the year ended December 28, 2024 and\n\nwe did not record any material measurement period adjustments\n\nrelated to these acquisitions during the year ended\n\nDecember 27, 2025.\n\nGoodwill is a result of the synergies and cross-selling opportunities that these acquisitions\n\nare expected to provide\n\nfor us, as well as the expected growth potential.\n\nThe majority of the acquired goodwill is not deductible\n\nfor tax\n\npurposes.\n\nDuring the year ended December 28, 2024, in connection with the acquisition\n\nof a controlling interest of an\n\naffiliate, we recognized a gain of approximately $\n\n19\n\nmillion related to the remeasurement to fair value of our\n\npreviously held equity investment, using a discounted cash flow model based\n\non Level 3 inputs, as defined in\n\n[Note](#a47085)\n\n[11 – Fair Value Measurements](#a47085)\n\n,\n\nwhich was recorded in\n\nselling, general and administrative\n\nin the consolidated\n\nstatements of income.\n\nPro forma financial information for our 2024 acquisitions has not been\n\npresented because the impact of the\n\nacquisitions was immaterial to our consolidated financial statements.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n97\n\n2023 Acquisitions\n\nAcquisition of Shield Healthcare\n\nOn October 2, 2023, we acquired a\n\n90\n\n% voting equity interest in Shield Healthcare, Inc. (“Shield”), a\n\nsupplier of\n\nhomecare medical products delivered directly to patients in their homes,\n\nfor consideration of $\n\n348\n\nmillion.\n\nThis\n\nacquisition is reported in our Global Distribution and Value-Added Services segment.\n\nShield expands our existing\n\nmedical business by delivering a diverse range of products, including\n\nitems such as incontinence, urology, ostomy,\n\nenteral nutrition, advanced wound care and diabetes supplies.\n\nAdditionally, Shield offers continuous glucose\n\nmonitoring devices directly to patients in their homes.\n\nThe following table aggregates the final fair value, as of the date of the acquisition,\n\nof consideration paid and net\n\nassets acquired in the Shield acquisition:\n\nFinal Allocation\n\nAcquisition consideration:\n\nCash\n\n$\n\n289\n\nDeferred consideration\n\n22\n\nRedeemable noncontrolling interests\n\n37\n\nTotal consideration\n\n$\n\n348\n\nIdentifiable assets acquired and liabilities assumed:\n\nCurrent assets\n\n$\n\n41\n\nIntangible assets\n\n166\n\nOther noncurrent assets\n\n16\n\nCurrent liabilities\n\n(24)\n\nDeferred income taxes\n\n(43)\n\nOther noncurrent liabilities\n\n(7)\n\nTotal identifiable\n\nnet assets\n\n149\n\nGoodwill\n\n199\n\nTotal net assets acquired\n\n$\n\n348\n\nGoodwill is a result of synergies that are expected to originate from the acquisition as well as\n\nthe expected growth\n\npotential of Shield.\n\nThe acquired goodwill is not deductible for tax purposes.\n\nThe following table summarizes the identifiable intangible assets acquired\n\nas part of the acquisition of Shield:\n\n2023\n\nWeighted Average\n\nUseful\n\nLives (in years)\n\nCustomer relationships and lists\n\n$\n\n156\n\n12\n\nTrademarks / Tradenames\n\n10\n\n5\n\nTotal\n\n$\n\n166\n\nPro forma financial information and Shield’s revenue and earnings from the acquisition date have\n\nnot been presented because the impact of the Shield acquisition was\n\nimmaterial to our consolidated financial\n\nstatements.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n98\n\nAcquisition of S.I.N. Implant System\n\nOn July 5, 2023, we acquired a\n\n100\n\n% voting equity interest in S.I.N. Implant System (“S.I.N.”) for consideration\n\nof\n\n$\n\n329\n\nmillion.\n\nThis acquisition is reported in our Global Specialty Products segment.\n\nBased in São Paulo, S.I.N.\n\nmanufactures an extensive line of products to perform dental implant procedures\n\nand is focused on advancing the\n\ndevelopment of value-priced dental implants.\n\nIn 2023, S.I.N. expanded the distribution of its products into the\n\nUnited States and other international markets.\n\nThe following table aggregates the final fair value, as of the date of acquisition,\n\nof consideration paid and net assets\n\nacquired in the S.I.N. acquisition:\n\nFinal Allocation\n\nAcquisition consideration:\n\nCash\n\n$\n\n329\n\nTotal consideration\n\n$\n\n329\n\nIdentifiable assets acquired and liabilities assumed:\n\nCurrent assets\n\n$\n\n73\n\nIntangible assets\n\n87\n\nOther noncurrent assets\n\n48\n\nCurrent liabilities\n\n(33)\n\nLong-term debt\n\n(22)\n\nDeferred income taxes\n\n(38)\n\nOther noncurrent liabilities\n\n(27)\n\nTotal identifiable\n\nnet assets\n\n88\n\nGoodwill\n\n241\n\nTotal net assets acquired\n\n$\n\n329\n\nGoodwill is a result of synergies that are expected to originate from the acquisition as well as\n\nthe expected growth\n\npotential of S.I.N.\n\nThe acquired goodwill is not deductible for tax purposes.\n\nThe following table summarizes the identifiable intangible assets acquired\n\nas part of the acquisition of S.I.N.:\n\n2023\n\nWeighted Average\n\nUseful\n\nLives (in years)\n\nCustomer relationships and lists\n\n$\n\n38\n\n7\n\nProduct development\n\n36\n\n8\n\nTrademarks / Tradenames\n\n13\n\n10\n\nTotal\n\n$\n\n87\n\nPro forma financial information and S.I.N.’s revenue and earnings from the acquisition date have not been\n\npresented because the impact of the S.I.N. acquisition was immaterial\n\nto our consolidated financial statements.\n\nAcquisition of Biotech Dental\n\nOn April 5, 2023, we acquired a\n\n57\n\n% voting equity interest in Biotech Dental, a provider of dental implants,\n\nclear\n\naligners, individualized prosthetics and innovative digital dental software based\n\nin France, for preliminary\n\nconsideration of $\n\n423\n\nmillion.\n\nThis acquisition is reported in our Global Specialty Products\n\nsegment.\n\nBiotech\n\nDental has several important solutions for dental practices and dental\n\nlabs, including Nemotec, a comprehensive,\n\nintegrated suite of planning and diagnostic software using open architecture\n\nthat connects disparate medical devices\n\nto create a digital view of the patient, offering greater diagnostic accuracy and an\n\nimproved patient experience.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n99\n\nThe following table aggregates the final fair value, as of the date of acquisition,\n\nof consideration paid and net assets\n\nacquired in the Biotech Dental acquisition:\n\nFinal Allocation\n\nAcquisition consideration:\n\nCash\n\n$\n\n216\n\nFair value of contributed equity share in a controlled subsidiary\n\n25\n\nRedeemable noncontrolling interests\n\n182\n\nTotal consideration\n\n$\n\n423\n\nIdentifiable assets acquired and liabilities assumed:\n\nCurrent assets\n\n$\n\n74\n\nIntangible assets\n\n189\n\nOther noncurrent assets\n\n69\n\nCurrent liabilities\n\n(60)\n\nLong-term debt\n\n(73)\n\nDeferred income taxes\n\n(53)\n\nOther noncurrent liabilities\n\n(20)\n\nTotal identifiable\n\nnet assets\n\n126\n\nGoodwill\n\n297\n\nTotal net assets acquired\n\n$\n\n423\n\nGoodwill is a result of synergies that are expected to originate from the acquisition as well as\n\nthe expected growth\n\npotential of Biotech Dental.\n\nThe acquired goodwill is not deductible for tax purposes.\n\nThe following table summarizes the identifiable intangible assets acquired\n\nas part of the acquisition of Biotech\n\nDental:\n\n2023\n\nWeighted Average\n\nUseful\n\nLives (in years)\n\nProduct development\n\n$\n\n124\n\n10\n\nCustomer relationships and lists\n\n47\n\n9\n\nTrademarks / Tradenames\n\n18\n\n7\n\nTotal\n\n$\n\n189\n\nPro forma financial information and Biotech’s revenues and earnings from the acquisition date have not been\n\npresented because the impact of the Biotech Dental acquisition was immaterial\n\nto our consolidated financial\n\nstatements.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n100\n\nOther 2023 Acquisitions\n\nDuring the year ended December 30, 2023, in addition to those noted above,\n\nwe acquired companies within the\n\nGlobal Distribution and Value-Added Services, Global Specialty Products, and Global Technology segments for\n\ntotal consideration of $\n\n284\n\nmillion.\n\nOur acquired ownership interest ranged between\n\n51\n\n% to\n\n100\n\n%.\n\nDuring the\n\nyear ended December 30, 2023, in connection with the acquisition of\n\na controlling interest of an affiliate, we\n\nrecognized a gain of approximately $\n\n18\n\nmillion related to the remeasurement to fair value of our previously\n\nheld\n\nequity investment, using a discounted cash flow model based on Level\n\n3 inputs, as defined in\n\n[Note 11 – Fair Value](#a47085)\n\n[Measurements](#a47085)\n\n[.](#a47085)\n\nGoodwill of $\n\n171\n\nmillion from these acquisitions is a result of the synergies and cross-selling opportunities\n\nthat\n\nthese acquisitions are expected to provide for us, as well as the expected\n\ngrowth potential.\n\nThe majority of the\n\nacquired goodwill is deductible for tax purposes.\n\nIntangible assets of $\n\n116\n\nmillion, consisting of $\n\n79\n\nmillion of\n\ncustomer relationships and lists, $\n\n8\n\nmillion of trademarks and tradenames, $\n\n7\n\nmillion of product development, and\n\nother of $\n\n22\n\nmillion are being amortized over their weighted average useful lives that\n\nrange from\n\ntwo years\n\nto\n\nten\n\nyears\n\n.\n\nPro forma financial information for our 2023 acquisitions has not been\n\npresented because the impact of the\n\nacquisitions was immaterial to our consolidated financial statements.\n\nAcquisition Costs\n\nDuring the years ended December 27, 2025, December 28, 2024\n\nand December 30, 2023 we incurred $\n\n6\n\nmillion, $\n\n6\n\nmillion and $\n\n22\n\nmillion in acquisition costs, respectively.\n\nThese costs are included in selling, general and\n\nadministrative in our consolidated statements of income.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n101\n\nNote 6 – Inventories, Net\n\nInventories, net consisted of the following as of:\n\nDescription\n\nDecember 27,\n\n2025\n\nDecember 28,\n\n2024\n\nFinished goods\n\n$\n\n1,889\n\n$\n\n1,710\n\nRaw materials\n\n70\n\n61\n\nWork-in process\n\n43\n\n39\n\nInventories, net\n\n$\n\n2,002\n\n$\n\n1,810\n\nOur inventory reserve was $\n\n131\n\nmillion and $\n\n132\n\nmillion as of December 27, 2025 and December 28, 2024,\n\nrespectively.\n\nNote 7 – Property and Equipment, Net\n\nProperty and equipment, including related estimated useful lives, consisted\n\nof the following as of:\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nLand\n\n$\n\n22\n\n$\n\n20\n\nBuildings and permanent improvements\n\n187\n\n164\n\nLeasehold improvements\n\n125\n\n109\n\nMachinery and warehouse equipment\n\n307\n\n257\n\nFurniture, fixtures and other\n\n137\n\n128\n\nComputer equipment and software\n\n602\n\n523\n\n1,380\n\n1,201\n\nLess accumulated depreciation and amortization\n\n(759)\n\n(670)\n\nProperty and equipment, net\n\n$\n\n621\n\n$\n\n531\n\nEstimated Useful\n\nLives (in years)\n\nBuildings and permanent improvements\n\n40\n\nMachinery and warehouse equipment\n\n5\n\n-\n\n15\n\nFurniture, fixtures and other\n\n3\n\n-\n\n10\n\nComputer equipment and software\n\n3\n\n-\n\n10\n\nLeasehold improvements are amortized on a straight-line basis over\n\nthe lesser of the useful life of the assets or the\n\nremaining lease term.\n\nProperty and equipment related depreciation expense for the years\n\nended December 27, 2025, December 28, 2024\n\nand December 30, 2023, was $\n\n101\n\nmillion, $\n\n83\n\nmillion and $\n\n70\n\nmillion, respectively.\n\nPlease see\n\n[Note 8 – Leases](#a45248)\n\nfor finance lease amounts included in property and equipment, net within our\n\nconsolidated balance sheets.\n\nDuring the year ended December 30, 2023 we recorded a $\n\n27\n\nmillion impairment of capitalized software, related to\n\nthe Global Distribution and Value-Added Services segment.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n102\n\nNote 8 – Leases\n\nWe have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles\n\nand certain equipment.\n\nOur leases have remaining terms of less than one year to\n\napproximately\n\n23\n\nyears, some of\n\nwhich may include options to extend the leases for up to\n\n10\n\nyears.\n\nThe components of lease expense were as\n\nfollows:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nOperating lease cost:\n\n$\n\n94\n\n$\n\n107\n\n$\n\n99\n\nVariable\n\nlease cost\n\n11\n\n12\n\n12\n\nShort-term lease cost\n\n10\n\n11\n\n10\n\nTotal operating lease cost\n\n(1)\n\n115\n\n130\n\n121\n\nFinance lease cost\n\n3\n\n4\n\n5\n\nTotal lease cost\n\n$\n\n118\n\n$\n\n134\n\n$\n\n126\n\n(1)\n\nTotal operating lease cost for the years ended December 27, 2025, December 28, 2024 and December 30, 2023, included costs of $\n\n3\n\nmillion, $\n\n17\n\nmillion and $\n\n11\n\nmillion, respectively, related to facility leases recorded in restructuring and related costs within our\n\nconsolidated statements of income.\n\nFurther, for the year ended December 27, 2025 we recognized a gain of $\n\n4\n\nmillion on early lease termination\n\nrelated to facility leases which was recorded in restructuring and related costs\n\nwithin our consolidated statement of\n\nincome.\n\nFor the years ended December 28, 2024 and December\n\n30, 2023, we recognized a net impairment of\n\noperating lease right-of-use assets of $\n\n0\n\nmillion and $\n\n3\n\nmillion respectively, related to facility leases recorded in\n\nrestructuring and related costs within our consolidated statement of\n\nincome.\n\nSupplemental balance sheet information related to leases is as follows:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nOperating Leases:\n\nOperating lease right-of-use assets\n\n$\n\n301\n\n$\n\n293\n\nCurrent operating lease liabilities\n\n78\n\n75\n\nNon-current operating lease liabilities\n\n251\n\n259\n\nTotal operating lease liabilities\n\n$\n\n329\n\n$\n\n334\n\nFinance Leases:\n\nProperty and equipment, at cost\n\n$\n\n14\n\n$\n\n16\n\nAccumulated depreciation\n\n(7)\n\n(9)\n\nProperty and equipment, net of accumulated depreciation\n\n$\n\n7\n\n$\n\n7\n\nCurrent maturities of long-term debt\n\n$\n\n3\n\n$\n\n3\n\nLong-term debt\n\n4\n\n$\n\n3\n\nTotal finance\n\nlease liabilities\n\n$\n\n7\n\n$\n\n6\n\nWeighted Average\n\nRemaining Lease Term in\n\nYears:\n\nOperating leases\n\n5.6\n\n5.9\n\nFinance leases\n\n2.9\n\n2.7\n\nWeighted Average\n\nDiscount Rate:\n\nOperating leases\n\n4.5\n\n%\n\n4.2\n\n%\n\nFinance leases\n\n4.5\n\n%\n\n4.4\n\n%\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n103\n\nSupplemental cash flow information related to leases is as follows:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nCash paid for amounts included in the measurement of lease liabilities:\n\nOperating cash flows for operating leases\n\n$\n\n99\n\n$\n\n94\n\nFinancing cash flows for finance leases\n\n3\n\n4\n\nRight-of-use assets obtained in exchange for lease obligations:\n\nOperating leases\n\n$\n\n71\n\n$\n\n76\n\nFinance leases\n\n3\n\n2\n\nMaturities of lease liabilities are as follows:\n\nDecember 27, 2025\n\nOperating\n\nFinance\n\nLeases\n\nLeases\n\n2026\n\n$\n\n91\n\n$\n\n3\n\n2027\n\n74\n\n2\n\n2028\n\n59\n\n1\n\n2029\n\n47\n\n1\n\n2030\n\n37\n\n-\n\nThereafter\n\n63\n\n-\n\nTotal future\n\nlease payments\n\n371\n\n7\n\nLess imputed interest\n\n42\n\n-\n\nTotal\n\n$\n\n329\n\n$\n\n7\n\nAs of December 27, 2025, we have additional operating leases that have\n\nnot yet commenced with total lease\n\npayments of $\n\n23\n\nmillion for buildings and vehicles.\n\nThese operating leases will commence after December 27,\n\n2025, with lease terms of less than one year to\n\nten years\n\n.\n\nCertain of our facilities related to our acquisitions are leased from\n\nemployees and minority shareholders.\n\nThese\n\nleases are classified as operating leases and have a remaining lease term\n\nranging from less than a year to\n\n12 years\n\n.\n\nAs of December 27, 2025, current and non-current liabilities associated\n\nwith related party operating leases were $\n\n5\n\nmillion and $\n\n22\n\nmillion, respectively.\n\nAt December 27, 2025, related party leases represented\n\n6.6\n\n% and\n\n8.7\n\n% of\n\nthe total current and non-current operating lease liabilities, respectively.\n\nAs of December 28, 2024, current and\n\nnon-current liabilities associated with related party operating leases were\n\n$\n\n6\n\nmillion and $\n\n20\n\nmillion, respectively.\n\nAt December 28, 2024 related party leases represented\n\n7.6\n\n% and\n\n7.8\n\n% of the total current and non-current\n\noperating lease liabilities, respectively.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n104\n\nNote 9 – Goodwill and Other Intangibles, Net\n\nChanges in the carrying amounts\n\nof goodwill for the years ended December 27, 2025 and December\n\n28, 2024 were\n\nas follows:\n\nGlobal\n\nDistribution and\n\nValue-Added\n\nServices\n\nGlobal Specialty\n\nProducts\n\nGlobal\n\nTechnology\n\nTotal\n\nBalance as of December 30, 2023\n\n$\n\n2,007\n\n$\n\n1,077\n\n$\n\n791\n\n$\n\n3,875\n\nAdjustments to goodwill:\n\nAcquisitions\n\n41\n\n107\n\n-\n\n148\n\nImpairment\n\n-\n\n(11)\n\n(2)\n\n(13)\n\nForeign currency translation\n\n(39)\n\n(80)\n\n(4)\n\n(123)\n\nBalance as of December 28, 2024\n\n2,009\n\n1,093\n\n785\n\n3,887\n\nAdjustments to goodwill:\n\nAcquisitions\n\n49\n\n124\n\n26\n\n199\n\nDisposal\n\n(1)\n\n-\n\n(2)\n\n(3)\n\nForeign currency translation\n\n49\n\n74\n\n7\n\n130\n\nBalance as of December 27, 2025\n\n$\n\n2,106\n\n$\n\n1,291\n\n$\n\n816\n\n$\n\n4,213\n\nIn January 2025, we performed a geographical realignment within\n\nthe Global Distribution and Value-Added\n\nServices reportable segment intended to provide increased transparency\n\ninto the performance of our global\n\ndistribution businesses and to reflect evolving management oversight\n\nand decision-making.\n\nAs a result of the\n\nrealignment and the change in reporting units, we reallocated goodwill\n\nto each of our new reporting units using a\n\nrelative fair value approach.\n\nThe relative fair values of the new reporting units were determined based on\n\na\n\nquantitative valuation analysis that considered projected cash flows,\n\nmarket assumptions, and other relevant\n\nvaluation inputs.\n\nReporting units under the former and new structures of\n\nthe Global Distribution and Value-Added\n\nServices reportable segment were tested for impairment as of January 1,\n\n2025, and it was determined that the fair\n\nvalues of our reporting units more likely than not exceeded their carrying\n\nvalues, resulting in no impairment as of\n\nJanuary 1, 2025 under both structures.\n\nIn connection with our restructuring initiatives, during the year ended\n\nDecember 28, 2024, we recorded an $\n\n11\n\nmillion impairment of goodwill in the Global Specialty Products segment,\n\nrelating to the disposal of a portion of a\n\nbusiness; such impairment was calculated based on the relative fair value\n\nof goodwill.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n105\n\nOther intangible assets consisted of the following:\n\nDecember 27, 2025\n\nAccumulated\n\nWeighted Average\n\nCost\n\nAmortization\n\nNet\n\nLife (in years)\n\nCustomer relationships and lists\n\n$\n\n971\n\n$\n\n(408)\n\n$\n\n563\n\n10\n\nTrademarks / Tradenames\n\n205\n\n(96)\n\n109\n\n8\n\nProduct development\n\n438\n\n(120)\n\n318\n\n9\n\nNon-compete agreements\n\n18\n\n(5)\n\n13\n\n5\n\nOther\n\n24\n\n(9)\n\n15\n\n15\n\nTotal\n\n$\n\n1,656\n\n$\n\n(638)\n\n$\n\n1,018\n\nDecember 28, 2024\n\nAccumulated\n\nWeighted Average\n\nCost\n\nAmortization\n\nNet\n\nLife (in years)\n\nCustomer relationships and lists\n\n$\n\n915\n\n$\n\n(356)\n\n$\n\n559\n\n10\n\nTrademarks / Tradenames\n\n188\n\n(89)\n\n99\n\n8\n\nProduct development\n\n403\n\n(71)\n\n332\n\n9\n\nNon-compete agreements\n\n21\n\n(6)\n\n15\n\n4\n\nOther\n\n28\n\n(10)\n\n18\n\n15\n\nTotal\n\n$\n\n1,555\n\n$\n\n(532)\n\n$\n\n1,023\n\nTrademarks, trade names, customer lists and customer relationships were established through\n\nbusiness acquisitions\n\nand are amortized on a straight-line basis over their respective asset life.\n\nNon-compete agreements represent\n\namounts paid primarily to prior owners of acquired businesses and certain\n\nsales persons, in exchange for placing\n\nrestrictions on their ability to pose a competitive risk to us.\n\nSuch amounts are amortized, on a straight-line basis\n\nover the respective non-compete period, which generally commences upon\n\ntermination of employment or\n\nseparation from us.\n\nAmortization expense, excluding impairment charges, related to definite-lived intangible assets\n\nfor the years ended\n\nDecember 27, 2025, December 28, 2024 and December 30, 2023, was $\n\n180\n\nmillion, $\n\n185\n\nmillion and $\n\n152\n\nmillion,\n\nrespectively.\n\nDuring the year ended December 27, 2025, we recorded $\n\n16\n\nmillion of impairment charges related to businesses in\n\nour Global Distribution and Value-Added Services segment.\n\nThe impairment charges included $\n\n14\n\nmillion\n\nprimarily related to customer lists and relationships attributable\n\nto lower than anticipated operating margins in these\n\nbusinesses.\n\nThe remaining impairment charges of $\n\n2\n\nmillion related to trade names and non-compete agreements.\n\nDuring the year ended December 28, 2024, we recorded $\n\n4\n\nmillion of impairment charges related to businesses in\n\nour Global Distribution and Value-Added Services segment.\n\nIt included $\n\n2\n\nmillion of a trade name impairment,\n\ncalculated using the relative fair value, related to a disposal of a business, and\n\n$\n\n1\n\nmillion related to trade name\n\nimpairment due to business integration in connection with our restructuring\n\ninitiatives.\n\nThe remaining $\n\n1\n\nmillion\n\nimpairment charges related to trade names and non-compete agreements.\n\nDuring the year ended December 30, 2023, we recorded $\n\n19\n\nmillion of impairment charges related to businesses in\n\nour Global Distribution and Value-Added Services segment, consisting of $\n\n7\n\nmillion primarily related to customer\n\nlists and relationships attributable to lower than anticipated operating\n\nmargins in certain businesses, and a $\n\n12\n\nmillion charge related to the planned exit of a business in connection with our restructuring\n\ninitiatives.\n\nThe impairment charges for the years ended December 27, 2025, December 28, 2024,\n\nand December 30, 2023 were\n\nmeasured as the excess of the carrying values over the estimated fair values\n\nof the related intangible assets,\n\ndetermined using discounted estimates of future cash flows and the\n\nrelief-from-royalty method.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n106\n\nPlease see\n\n[Note 16 – Plans of Restructuring and Related Costs](#a52963)\n\nfor additional details.\n\nThe above intangible asset impairment charges were recorded within selling, general\n\nand administrative expenses\n\nand in restructuring and related costs in our consolidated statement of\n\nincome.\n\nThe annual amortization expense expected to be recorded for existing\n\nintangibles assets for the years 2026 through\n\n2030 is $\n\n172\n\nmillion, $\n\n159\n\nmillion, $\n\n142\n\nmillion, $\n\n128\n\nmillion and $\n\n118\n\nmillion.\n\nNote 10 – Investments and Other\n\nInvestments and other consisted of the following:\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nInvestments in unconsolidated affiliates\n\n$\n\n174\n\n$\n\n170\n\nNon-current deferred foreign, state and local income taxes\n\n92\n\n47\n\nNotes receivable\n\n(1)\n\n56\n\n63\n\nCapitalized costs for software and cloud based applications for external use\n\n112\n\n90\n\nSecurity deposits\n\n4\n\n4\n\nAcquisition-related indemnification assets\n\n39\n\n39\n\nNon-current pension assets\n\n11\n\n9\n\nNon-current inventory\n\n38\n\n27\n\nOther\n\n72\n\n52\n\nTotal\n\n$\n\n598\n\n$\n\n501\n\n(1)\n\nLong-term notes receivable carry interest rates ranging from\n\n3.0\n\n% to\n\n11.8\n\n% and are due in varying installments through\n\nMay 31, 2031\n\n.\n\nAmortization expense, related to capitalized costs for software to be sold,\n\nleased or marketed to external users, and\n\nfor cloud-based applications used to deliver our services, for the years\n\nended December 27, 2025, December 28,\n\n2024 and December 30, 2023, was $\n\n30\n\nmillion, $\n\n29\n\nmillion and $\n\n26\n\nmillion, respectively, and is included in the\n\nselling, general and administrative line within our consolidated statements\n\nof income.\n\nDuring the year ended December 28, 2024 we recorded a $\n\n12\n\nmillion impairment of capitalized software costs,\n\nrelated to the Global Technology segment.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n107\n\nNote 11 – Fair Value\n\nMeasurements\n\nThe following section describes the fair values of our financial instruments\n\nand the methodologies that we used to\n\nmeasure their fair values.\n\nInvestments and notes receivable\n\nThere are no quoted market prices available for investments in unconsolidated\n\naffiliates and notes receivable.\n\nCertain of our notes receivable contain variable interest rates.\n\nWe believe the carrying amounts of the notes\n\nreceivable are a reasonable estimate of fair value based on the interest rates\n\nin the applicable markets.\n\nOur notes\n\nreceivable fair value is based on Level 3 inputs within the fair value\n\nhierarchy.\n\nDebt\n\nThe fair value of our debt (including bank credit lines, current maturities\n\nof long-term debt and long-term debt) is\n\nbased on Level 3 inputs within the fair value hierarchy, and as of December 27, 2025 and December 28, 2024 was\n\nestimated at $\n\n3,107\n\nmillion and $\n\n2,536\n\nmillion, respectively.\n\nFactors that we considered when estimating the fair\n\nvalue of our debt include market conditions, such as interest rates and credit\n\nspreads.\n\nDerivative contracts\n\nDerivative contracts are valued using quoted market prices and\n\nsignificant other observable inputs.\n\nOur derivative\n\ninstruments primarily include foreign currency forward contracts, interest\n\nrate swaps and total return swaps.\n\nThe fair values for the majority of our foreign currency derivative contracts\n\nare obtained by comparing our contract\n\nrate to a published forward price of the underlying market rates, which\n\nare based on market rates for comparable\n\ntransactions that are classified within Level 2 of the fair value hierarchy.\n\nThe fair value of the interest rate swap, which is classified within Level 2\n\nof the fair value hierarchy, is determined\n\nby comparing our contract rate to a forward market rate as of the\n\nvaluation date.\n\nThe fair value of total return swaps is determined by valuing the underlying\n\nexchange traded funds of the swap\n\nusing market-on-close pricing by industry providers as of the valuation\n\ndate that are classified within Level 2 of the\n\nfair value hierarchy.\n\nRedeemable noncontrolling interests\n\nThe values for redeemable noncontrolling interests are based on recent\n\ntransactions and/or implied multiples of\n\nearnings that are classified within Level 3 of the fair value hierarchy.\n\nSee\n\n[Note 20 – Redeemable Noncontrolling](#a55881)\n\n[Interests for additional information](#a55881)\n\n[.](#a55881)\n\nIntangible Assets\n\nAssets measured on a non-recurring basis at fair value include intangibles.\n\nInputs for measuring intangibles are\n\nclassified as Level 3 within the fair value hierarchy.\n\nSee\n\n[Note 1 – Basis of Presentation and Significant Accounting](#a38445)\n\n[Policies](#a38445)\n\nand\n\n[Note 9 – Goodwill and Other Intangibles, Net](#a46109)\n\nfor additional information.\n\nDefined Benefit Plans\n\nAssets of our defined benefit plans are measured on a recurring basis\n\nand are classified as Level 1 within the fair\n\nvalue hierarchy.\n\nSee\n\n[Note 19 – Employee Benefit Plans](#a55067)\n\nfor additional information.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n108\n\nContingent Consideration\n\nWe estimate the fair value of contingent consideration payments as part of the acquisition price and record the\n\nestimated fair value of contingent consideration as a liability on our\n\nconsolidated balance sheet.\n\nFor transactions\n\naccounted for as business combinations, subsequent changes in the\n\nestimated fair value of contingent consideration\n\npayments are included in selling, general and administrative expenses\n\nin our consolidated statements of income\n\n(see\n\n[Note 5 – Business Acquisitions](#a43451)\n\n).\n\nFor transactions involving changes in our ownership in consolidated\n\nsubsidiaries\n\nwithout a change in our control, subsequent changes in the estimated fair\n\nvalue of contingent consideration\n\npayments are recognized in additional paid-in capital in our consolidated\n\nbalance sheet.\n\nWe measure contingent\n\nconsideration at the fair value on a recurring basis using significant unobservable\n\ninputs classified as Level 3 of the\n\nfair value hierarchy.\n\nWe use various valuation techniques, including the Monte Carlo simulation and probability-\n\nweighted scenarios, to determine the fair value of the contingent consideration\n\nliabilities on the acquisition date and\n\nat each reporting period.\n\nOur fair value measurement inputs include expected operating\n\nperformance, discount and\n\nrisk-free rates, and credit spread.\n\nContingent consideration is remeasured to fair value at each reporting\n\nperiod.\n\nDuring the year ended December 27,\n\n2025, we updated the fair value of contingent consideration in connection\n\nwith 2025 and 2023 business\n\nacquisitions, which resulted in expense of $\n\n9\n\nmillion and income of $\n\n11\n\nmillion, respectively.\n\nDuring the year\n\nended December 28, 2024, we updated the fair value of contingent\n\nconsideration in connection with 2023 and 2022\n\nbusiness acquisitions, which resulted in expense of $\n\n38\n\nmillion and $\n\n7\n\nmillion, respectively.\n\nThese changes were\n\nrecorded in selling, general and administrative in the consolidated\n\nstatements of income.\n\nDuring the year ended\n\nDecember 27, 2025, we also updated the fair value of contingent consideration\n\nrelated to changes in ownership.\n\nThese changes were recorded within additional paid-in-capital in the consolidated\n\nbalance sheets.\n\nThe components of the change in the fair value of contingent consideration\n\nfor the year ended December 27, 2025\n\nand December 28, 2024 are presented in the following table:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nBalance, beginning of period\n\n$\n\n30\n\n$\n\n6\n\nIncrease in contingent consideration due to business acquisitions and acquisitions of\n\nnoncontrolling interests in subsidiaries\n\n103\n\n10\n\nDecrease in contingent consideration due to payments\n\n(19)\n\n(31)\n\nChange in fair value of contingent consideration in connection with business acquisitions\n\n(2)\n\n45\n\nChange in fair value of contingent consideration in connection with changes in ownership in\n\nconsolidated subsidiaries\n\n(15)\n\n-\n\nBalance, end of period\n\n$\n\n97\n\n$\n\n30\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n109\n\nThe following table presents our assets and liabilities that are measured and\n\nrecognized at fair value on a recurring\n\nbasis classified under the appropriate level of the fair value hierarchy as of\n\nDecember 27, 2025 and December 28,\n\n2024:\n\nDecember 27, 2025\n\nLevel 1\n\nLevel 2\n\nLevel 3\n\nTotal\n\nAssets:\n\nDerivative contracts designated as hedges\n\n$\n\n-\n\n$\n\n1\n\n$\n\n-\n\n$\n\n1\n\nDerivative contracts undesignated\n\n-\n\n1\n\n-\n\n1\n\nTotal return\n\nswap\n\n-\n\n1\n\n-\n\n1\n\nTotal assets\n\n$\n\n-\n\n$\n\n3\n\n$\n\n-\n\n$\n\n3\n\nLiabilities:\n\nDerivative contracts designated as hedges\n\n$\n\n-\n\n$\n\n23\n\n$\n\n-\n\n$\n\n23\n\nDerivative contracts undesignated\n\n-\n\n2\n\n-\n\n2\n\nContingent consideration\n\n-\n\n-\n\n97\n\n97\n\nTotal liabilities\n\n$\n\n-\n\n$\n\n25\n\n$\n\n97\n\n$\n\n122\n\nRedeemable noncontrolling interests\n\n$\n\n-\n\n$\n\n-\n\n$\n\n895\n\n$\n\n895\n\nDecember 28, 2024\n\nLevel 1\n\nLevel 2\n\nLevel 3\n\nTotal\n\nAssets:\n\nDerivative contracts designated as hedges\n\n$\n\n-\n\n$\n\n10\n\n$\n\n-\n\n$\n\n10\n\nDerivative contracts undesignated\n\n-\n\n7\n\n-\n\n7\n\nTotal assets\n\n$\n\n-\n\n$\n\n17\n\n$\n\n-\n\n$\n\n17\n\nLiabilities:\n\nDerivative contracts designated as hedges\n\n$\n\n-\n\n$\n\n5\n\n$\n\n-\n\n$\n\n5\n\nDerivative contracts undesignated\n\n-\n\n4\n\n-\n\n4\n\nTotal return\n\nswap\n\n-\n\n3\n\n-\n\n3\n\nContingent consideration\n\n-\n\n-\n\n30\n\n30\n\nTotal liabilities\n\n$\n\n-\n\n$\n\n12\n\n$\n\n30\n\n$\n\n42\n\nRedeemable noncontrolling interests\n\n$\n\n-\n\n$\n\n-\n\n$\n\n806\n\n$\n\n806\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n110\n\nNote 12 – Concentrations of Risk\n\nCertain financial instruments potentially subject us to concentrations of\n\ncredit risk.\n\nThese financial instruments\n\nconsist primarily of cash equivalents, trade receivables, long-term investments,\n\nnotes receivable and derivative\n\ninstruments.\n\nIn all cases, our maximum exposure to loss from credit\n\nrisk equals the gross fair value of the financial\n\ninstruments.\n\nWe routinely maintain cash balances at financial institutions in excess of insured amounts.\n\nWe have\n\nnot experienced any loss in such accounts and we manage this risk through\n\nmaintaining cash deposits and other\n\nhighly liquid investments in high quality financial institutions.\n\nWe continuously assess the need for reserves for\n\nsuch losses, which have been within our expectations.\n\nWe do not require collateral or other security to support\n\nfinancial instruments subject to credit risk, except for long-term notes receivable.\n\nWe limit credit risk with respect to our cash equivalents, short-term and long-term investments and derivative\n\ninstruments, by monitoring the credit worthiness of the financial institutions\n\nwho are the counter-parties to such\n\nfinancial instruments.\n\nAs a risk management policy, we limit the amount of credit exposure by diversifying and\n\nutilizing numerous investment grade counterparties.\n\nWith respect to our trade receivables, credit risk is somewhat limited due to a relatively large customer base\n\nand its\n\ndispersion across different types of health care professionals and geographic areas.\n\nNo single customer accounted\n\nfor more than\n\n2\n\n% of our net sales in each of the years ended December 27, 2025,\n\nDecember 28, 2024 or December\n\n30, 2023.\n\nWith respect to our sources of supply, our top 10 Global Distribution and Value\n\n-Added Services\n\nsuppliers and our single largest supplier accounted for approximately\n\n24\n\n% and\n\n4\n\n%, respectively, of our aggregate\n\npurchases for the year ended December 27, 2025 and approximately\n\n25\n\n% and\n\n4\n\n%, respectively, of our aggregate\n\npurchases for the year ended December 28, 2024.\n\nOur long-term notes receivable primarily represent strategic financing arrangements\n\nwith certain affiliates.\n\nGenerally, these notes are secured by certain assets of the counterparty; however, in most cases our security is\n\nsubordinate to the rights of other commercial financial institutions.\n\nWhile we have exposure to credit loss in the\n\nevent of non-performance by these counterparties, we conduct ongoing assessments\n\nof their financial and\n\noperational performance.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n111\n\nNote 13 – Derivatives and Hedging Activities\n\nWe are exposed to market risks and changes in foreign currency exchange rates against the U.S. dollar and each\n\nother, and changes to the credit risk of the derivative counterparties.\n\nWe attempt to minimize these risks using\n\nforeign currency forward contracts and by maintaining counter-party credit limits.\n\nOur hedging activities provide\n\nonly limited protection against currency exchange and credit risks.\n\nFactors that could influence the effectiveness of\n\nour hedging programs include currency markets and availability of hedging\n\ninstruments and liquidity of the credit\n\nmarkets.\n\nAll foreign currency forward contracts that we enter are for the sole\n\npurpose of hedging an existing or\n\nanticipated currency exposure.\n\nWe do not enter into foreign currency forward contracts for speculative purposes\n\nand we manage our credit risks by diversifying our counterparties,\n\nmaintaining a strong balance sheet and having\n\nmultiple sources of capital.\n\nOur derivative instruments primarily include foreign currency forward contracts,\n\ntotal\n\nreturn swaps, and interest rate swaps.\n\nDuring 2019 we entered foreign currency forward contracts that we\n\ndesignated as net investment hedges to hedge a\n\nportion of our euro-denominated foreign operations.\n\nThese net investment hedges offset changes in the U.S. dollar\n\nvalue of our investments in certain euro-functional currency subsidiaries due\n\nto fluctuating foreign exchange rates.\n\nGains and losses related to these net investment hedges are recorded\n\nin accumulated other comprehensive loss\n\nwithin our consolidated balance sheets.\n\nAmounts excluded from the assessment of hedge effectiveness are\n\nincluded\n\nin interest expense within our consolidated statements of income.\n\nThe aggregate notional value of these net\n\ninvestment hedges, which matured on\n\nNovember 16, 2023\n\n, was approximately €\n\n200\n\nmillion.\n\nOn November 3,\n\n2023 we entered into new foreign currency forward contracts to\n\nhedge a portion of our euro-denominated foreign\n\noperations which are designated as net investment hedges.\n\nThe aggregate notional value of this net investment\n\nhedge, which matures on\n\nNovember 3, 2028\n\n, is approximately €\n\n300\n\nmillion.\n\nDuring the years ended December 27,\n\n2025, December 28, 2024, and December 30, 2023, we recorded an\n\nincrease/(decrease) of $\n\n(33)\n\nmillion, $\n\n10\n\nmillion, and $\n\n(32)\n\nmillion, respectively, within other comprehensive income related to these foreign currency\n\nforward contracts.\n\nSee\n\n[Note 11 – Fair Value Measurements](#a47085)\n\nfor additional information.\n\nOn\n\nMarch 20, 2020\n\n, we entered a total return swap to economically hedge our unfunded\n\nnon-qualified SERP and\n\nour DCP.\n\nThis swap will offset changes in our SERP and DCP liabilities.\n\nAt the swap’s inception, the notional\n\nvalue of the investments in these plans was $\n\n43\n\nmillion.\n\nAt December 27, 2025, the notional value of the\n\ninvestments in these plans was $\n\n117\n\nmillion.\n\nAt December 27, 2025, the financing blended rate for this swap\n\nwas\n\nbased on the Secured Overnight Financing Rate (“SOFR”) of\n\n3.79\n\n% plus\n\n0.75\n\n%, for a combined rate of\n\n4.54\n\n%.\n\nFor\n\nthe years ended December 27, 2025, December 28, 2024,\n\nand December 30, 2023, we recorded within selling,\n\ngeneral and administrative expenses in our consolidated statement of income,\n\na gain of $\n\n11\n\nmillion,\n\n8\n\nmillion, and\n\n$\n\n10\n\nmillion, respectively, net of transaction costs, related to this undesignated swap.\n\nSee\n\n[Note 19 – Employee](#a55067)\n\n[Benefit Plans](#a55067)\n\nfor additional information.\n\nOn July 11, 2023, we entered into interest rate swap agreements to hedge the cash flow of our variable\n\nrate $\n\n750\n\nmillion floating debt term loan facility, with\n\nthree years\n\nmaturity, effectively changing the floating rate portion of\n\nour obligation to a fixed rate.\n\nUnder the terms of the interest rate swap agreements, we receive variable\n\ninterest\n\npayments based on the one-month Term SOFR rate and pay interest at a fixed rate.\n\nAs of December 27, 2025, the\n\nnotional value of the interest rate swap agreements was $\n\n675\n\nmillion.\n\nFor the years ended December 27, 2025 and\n\nDecember 28, 2024, we recorded, within accumulated other comprehensive\n\nloss within our consolidated balance\n\nsheets, a loss of $\n\n3\n\nmillion and $\n\n3\n\nmillion, respectively, related to the change in the fair value of these interest rate\n\nswap agreements, since we have designated these swap agreements as cash\n\nflow hedges.\n\nFluctuations in the value of certain foreign currencies as compared\n\nto the U.S. dollar may positively or negatively\n\naffect our revenues, gross margins, operating expenses and retained earnings, all of which are expressed\n\nin U.S.\n\ndollars.\n\nWhere we deem it prudent, we engage in hedging programs using primarily\n\nforeign currency forward\n\ncontracts aimed at limiting the impact of foreign currency exchange\n\nrate fluctuations on earnings.\n\nWe purchase\n\nshort-term (i.e., generally 18 months or less) foreign currency forward contracts\n\nto protect against currency\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n112\n\nexchange risks associated with intercompany loans due from our international\n\nsubsidiaries and the payment of\n\nmerchandise purchases to our foreign suppliers.\n\nWe do not hedge the translation of foreign currency profits into\n\nU.S. dollars, as we consider foreign currency translation to be an accounting\n\nexposure, not an economic\n\nexposure.\n\nAmounts related to our hedging activities are recorded in prepaid\n\nexpenses and other and/or accrued\n\nexpenses: other within our consolidated balance sheets.\n\nThe following table summarizes the terms and fair value of our outstanding derivative\n\nfinancial instruments as of\n\nDecember 27, 2025 and December 28, 2024:\n\nDecember 27, 2025\n\nNotional\n\nAmount\n\nClassification\n\nFair\n\nValue\n\nMaturity Date\n\nDerivatives used in cash flow hedges:\n\nForeign currency forward contracts\n\n$\n\n98\n\nPrepaid expenses and other\n\n$\n\n-\n\nDecember 24, 2026\n\nInterest rate swaps\n\n675\n\nAccrued expenses, other\n\n(3)\n\nJuly 13, 2026\n\nDerivatives used in net investment hedges:\n\nForeign currency forward contracts\n\n365\n\nAccrued expenses, other\n\n(19)\n\nNovember 3, 2028\n\nUndesignated hedging relationships:\n\nTotal return\n\nswaps\n\n116\n\nPrepaid expenses and other\n\n1\n\nDecember 30, 2025\n\nTotal\n\n$\n\n1,254\n\n$\n\n(21)\n\nDecember 28, 2024\n\nNotional\n\nAmount\n\nClassification\n\nFair\n\nValue\n\nMaturity Date\n\nDerivatives used in cash flow hedges:\n\nForeign currency forward contracts\n\n$\n\n84\n\nPrepaid expenses and other\n\n$\n\n-\n\nOctober 30, 2025\n\nInterest rate swaps\n\n713\n\nAccrued expenses, other\n\n(3)\n\nJuly 13, 2026\n\nDerivatives used in net investment hedges:\n\nForeign currency forward contracts\n\n336\n\nPrepaid expenses and other\n\n9\n\nNovember 3, 2028\n\nUndesignated hedging relationships:\n\nTotal return\n\nswaps\n\n106\n\nAccrued expenses, other\n\n(3)\n\nDecember 30, 2024\n\nTotal\n\n$\n\n1,239\n\n$\n\n3\n\nThe following table summarizes the effect of cash flow hedges and net investment hedges\n\non our consolidated\n\nstatements of income for the years ended December 27, 2025, December\n\n28, 2024 and December 30, 2023:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nDerivatives used in cash flow hedges:\n\nForeign currency forward contracts\n\n$\n\n-\n\n$\n\n-\n\n$\n\n(1)\n\nInterest rate swaps\n\n-\n\n6\n\n(7)\n\nDerivatives used in net investment hedges:\n\nForeign currency forward contracts\n\n(24)\n\n7\n\n(10)\n\nTotal\n\n$\n\n(24)\n\n$\n\n13\n\n$\n\n(18)\n\nThe amount of gains or losses reclassified from accumulated other comprehensive\n\nloss into income were not\n\nmaterial for the years ended December 27, 2025, December 28, 2024,\n\nand December 30, 2023.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n113\n\nNote 14 – Debt\n\nBank Credit Lines\n\nBank credit lines consisted of the following:\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nRevolving credit agreement\n\n$\n\n100\n\n$\n\n-\n\nOther short-term bank credit lines\n\n664\n\n650\n\nTotal\n\n$\n\n764\n\n$\n\n650\n\nRevolving Credit Agreement\n\nOn\n\nAugust 20, 2021\n\n, we entered into a $\n\n1.0\n\nbillion revolving credit agreement (the “Revolving Credit Agreement”)\n\nwhich was amended and restated on\n\nJuly 11, 2023\n\nto extend the maturity date to\n\nJuly 11, 2028\n\nand update the\n\ninterest rate provisions to reflect the current market approach for a\n\nmulticurrency facility.\n\nOn June 6, 2025, we\n\namended and restated the Revolving Credit Agreement to, among other\n\nthings, modify certain financial definitions\n\nand covenants.\n\nThe interest rate on this revolving credit facility is based on Term Secured Overnight Financing\n\nRate (“\n\nTerm SOFR\n\n”) plus a spread based on our leverage ratio at the end\n\nof each financial reporting quarter.\n\nAs of\n\nDecember 27, 2025 the interest rate on this revolving credit facility\n\nwas\n\n3.78\n\n% plus\n\n1.08\n\n% for a combined rate of\n\n4.86\n\n%.\n\nAs of December 28, 2024 the interest rate on this revolving\n\ncredit facility was\n\n4.45\n\n% plus\n\n1.18\n\n% for a\n\ncombined rate of\n\n5.63\n\n%.\n\nThe Revolving Credit Agreement requires, among other things, that we\n\nmaintain certain maximum leverage ratios.\n\nAdditionally, the Revolving Credit Agreement contains customary representations, warranties and affirmative\n\ncovenants as well as customary negative covenants, subject to negotiated\n\nexceptions, on liens, indebtedness,\n\nsignificant corporate changes (including mergers), dispositions and certain restrictive\n\nagreements.\n\nAs of December\n\n27, 2025 and December 28, 2024, we had $\n\n100\n\nmillion and $\n\n0\n\nmillion in borrowings, respectively, under this\n\nrevolving credit facility.\n\nDuring the year ended December 27, 2025, the average outstanding balance\n\nunder the\n\nRevolving Credit Agreement was approximately $\n\n203\n\nmillion.\n\nAs of December 27, 2025 and December 28, 2024,\n\nthere were $\n\n10\n\nmillion and $\n\n11\n\nmillion of letters of credit, respectively, provided to third parties under the\n\nRevolving Credit Agreement.\n\nOther Short-Term Bank Credit\n\nLines\n\nAs of December 27, 2025 and December 28, 2024, we had various other\n\nshort-term bank credit lines available, in\n\nvarious currencies, with a maximum borrowing capacity of $\n\n787\n\nmillion and $\n\n790\n\nmillion, respectively.\n\nAs of\n\nDecember 27, 2025 and December 28, 2024, $\n\n664\n\nmillion and $\n\n650\n\nmillion, respectively, were outstanding.\n\nDuring the year ended December 27, 2025, the average outstanding balances\n\nunder our various other short-term\n\nbank credit lines was approximately $\n\n680\n\nmillion.\n\nAs of December 27, 2025 and December 28, 2024, borrowings\n\nunder other short-term bank credit lines had weighted average interest\n\nrates of\n\n4.68\n\n% and\n\n5.35\n\n%, respectively.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n114\n\nLong-term debt\n\nLong-term debt consisted of the following:\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nPrivate placement facilities\n\n$\n\n1,149\n\n$\n\n975\n\nTerm loan\n\n749\n\n712\n\nU.S. trade accounts receivable securitization\n\n390\n\n150\n\nVarious\n\ncollateralized and uncollateralized loans payable with interest,\n\nin varying installments through 2031 at interest rates\n\nfrom\n\n0.00\n\n% to\n\n6.75\n\n% at December 27, 2025 and\n\nfrom\n\n0.00\n\n% to\n\n9.42\n\n% at December 28, 2024\n\n48\n\n43\n\nFinance lease obligations\n\n7\n\n6\n\nTotal\n\n2,343\n\n1,886\n\nLess current maturities\n\n(33)\n\n(56)\n\nTotal long-term debt\n\n$\n\n2,310\n\n$\n\n1,830\n\nAs of December 27, 2025,\n\nthe aggregate amounts of long-term debt, including finance lease obligations\n\nand net of\n\ndeferred debt issuance costs, maturing in each of the next five years\n\nand thereafter are as follows:\n\n2026\n\n$\n\n33\n\n2027\n\n534\n\n2028\n\n221\n\n2029\n\n143\n\n2030\n\n810\n\nThereafter\n\n602\n\nTotal\n\n$\n\n2,343\n\nPrivate Placement Facilities\n\nOur private placement facilities provided by\n\nfour\n\ninsurance companies have a total facility amount of $\n\n1.5\n\nbillion,\n\nand are available on an uncommitted basis at fixed rate economic terms\n\nto be agreed upon at the time of issuance,\n\nfrom time to time through\n\nDecember 19, 2028\n\n.\n\nThe facilities allow us to issue senior promissory notes to the\n\nlenders at a fixed rate based on an agreed upon spread over applicable treasury\n\nnotes at the time of issuance.\n\nThe\n\nterm of each possible issuance will be selected by us and can range from\n\nfive\n\nto\n\n15 years\n\n(with an average life no\n\nlonger than\n\n12 years\n\n).\n\nThe proceeds of any issuances under the facilities will be used for\n\ngeneral corporate\n\npurposes, including working capital and capital expenditures, to refinance\n\nexisting indebtedness, and/or to fund\n\npotential acquisitions.\n\nOn December 19, 2025, we amended and restated our private placement\n\nfacilities to, among\n\nother things, (i) extend the scheduled facility termination dates to\n\nDecember 19, 2028\n\nand (ii) modify certain\n\nfinancial definitions and covenants.\n\nThe agreements provide, among other things, that we\n\nmaintain certain\n\nmaximum leverage ratios, and contain restrictions relating to subsidiary\n\nindebtedness, liens, affiliate transactions,\n\ndisposal of assets and certain changes in ownership.\n\nThese facilities contain make-whole provisions in the event\n\nthat we pay off the facilities prior to the applicable due dates.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n115\n\nThe components of our private placement facility borrowings as of December\n\n27, 2025, which have a weighted\n\naverage interest rate of\n\n3.93\n\n% are presented in the following table:\n\nAmount of\n\nDate of\n\nBorrowing\n\nBorrowing\n\nBorrowing\n\nOutstanding\n\nRate\n\nDue Date\n\nJune 16, 2017\n\n$\n\n100\n\n3.42\n\n%\n\nJune 16, 2027\n\nSeptember 15, 2017\n\n100\n\n3.52\n\nSeptember 15, 2029\n\nJanuary 2, 2018\n\n100\n\n3.32\n\nJanuary 2, 2028\n\nSeptember 2, 2020\n\n100\n\n2.35\n\nSeptember 2, 2030\n\nJune 2, 2021\n\n100\n\n2.48\n\nJune 2, 2031\n\nJune 2, 2021\n\n100\n\n2.58\n\nJune 2, 2033\n\nMay 4, 2023\n\n75\n\n4.79\n\nMay 4, 2028\n\nMay 4, 2023\n\n75\n\n4.84\n\nMay 4, 2030\n\nMay 4, 2023\n\n75\n\n4.96\n\nMay 4, 2033\n\nMay 4, 2023\n\n150\n\n4.94\n\nMay 4, 2033\n\nDecember 15, 2025\n\n100\n\n5.23\n\nDecember 15, 2032\n\nDecember 15, 2025\n\n75\n\n5.28\n\nDecember 15, 2032\n\nLess: Deferred debt issuance costs\n\n(1)\n\nTotal\n\n$\n\n1,149\n\nThe components of our private placement facility borrowings as of December\n\n28, 2024, which have a weighted\n\naverage interest rate of\n\n3.70\n\n% are presented in the following table:\n\nAmount of\n\nDate of\n\nBorrowing\n\nBorrowing\n\nBorrowing\n\nOutstanding\n\nRate\n\nDue Date\n\nJune 16, 2017\n\n$\n\n100\n\n3.42\n\n%\n\nJune 16, 2027\n\nSeptember 15, 2017\n\n100\n\n3.52\n\nSeptember 15, 2029\n\nJanuary 2, 2018\n\n100\n\n3.32\n\nJanuary 2, 2028\n\nSeptember 2, 2020\n\n100\n\n2.35\n\nSeptember 2, 2030\n\nJune 2, 2021\n\n100\n\n2.48\n\nJune 2, 2031\n\nJune 2, 2021\n\n100\n\n2.58\n\nJune 2, 2033\n\nMay 4, 2023\n\n75\n\n4.79\n\nMay 4, 2028\n\nMay 4, 2023\n\n75\n\n4.84\n\nMay 4, 2030\n\nMay 4, 2023\n\n75\n\n4.96\n\nMay 4, 2033\n\nMay 4, 2023\n\n150\n\n4.94\n\nMay 4, 2033\n\nTotal\n\n$\n\n975\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n116\n\nTerm Loan\n\nOn July 11, 2023, we entered into a\n\nthree-year\n\n$\n\n750\n\nmillion term loan credit agreement (the “Term Credit\n\nAgreement”), which was originally scheduled to mature on\n\nJuly 11, 2026\n\n.\n\nOn June 6, 2025, this agreement was\n\namended and restated to, among other things, (i) extend the maturity date\n\nto\n\nJune 6, 2030\n\n, and (ii) modify certain\n\nfinancial definitions and covenants.\n\nThe interest rate on this term loan is based on the\n\nTerm SOFR\n\nplus a spread\n\nbased on our leverage ratio at the end of each financial reporting quarter.\n\nBeginning in June 2026 and continuing\n\nthrough June 2027, we are required to make quarterly payments of $\n\n5\n\nmillion.\n\nIn September 2027, the quarterly\n\npayment amount increases to $\n\n9\n\nmillion, continuing through June 2030 with the remaining balance due\n\nJune 6,\n\n2030.\n\nAs of December 27, 2025, the borrowings outstanding under this\n\nterm loan were $\n\n749\n\nmillion.\n\nAt December\n\n27, 2025, the interest rate under the Term Credit Agreement was\n\n3.76\n\n% plus\n\n1.25\n\n% for a combined rate of\n\n5.01\n\n%.\n\nAs of December 28, 2024, the borrowings outstanding under this term\n\nloan were $\n\n712\n\nmillion.\n\nAt December 28,\n\n2024, the interest rate under the Term Credit Agreement was\n\n4.45\n\n% plus\n\n1.60\n\n% for a combined rate of\n\n6.05\n\n%.\n\nHowever, at December 28, 2024, we had a hedge in place creating an effective fixed rate of\n\n6.04\n\n%.\n\nAfter renewing\n\nthe Term Credit Agreement in June of 2025, our hedged portion of the Term Credit Agreement is now\n\napproximately\n\n90\n\n% of the notional total.\n\nAs of December 27, 2025, the effective fixed rate was\n\n5.69\n\n% and the\n\nfloating rate was\n\n5.01\n\n%, resulting in a weighted average rate of\n\n5.62\n\n%.\n\nThe Term Credit Agreement requires,\n\namong other things, that we maintain certain maximum leverage ratios.\n\nAdditionally, the Term\n\nCredit Agreement\n\ncontains customary representations, warranties and affirmative covenants as well\n\nas customary negative covenants,\n\nsubject to negotiated exceptions, on liens, indebtedness, significant corporate\n\nchanges (including mergers),\n\ndispositions and certain restrictive agreements.\n\nU.S. Trade Accounts Receivable Securitization\n\nWe have a facility agreement based on our U.S. trade accounts receivable that is structured as an asset-backed\n\nsecuritization program with pricing committed for up to\n\nthree years\n\n.\n\nOn December 6, 2024, we extended the\n\nexpiration date of this facility agreement to\n\nDecember 6, 2027\n\n(the previous maturity date was\n\nDecember 15, 2025\n\n).\n\nThis facility agreement has a purchase limit of $\n\n450\n\nmillion with\n\ntwo\n\nbanks as agents.\n\nAs of December 27, 2025 and December 28, 2024, the borrowings outstanding\n\nunder this securitization facility\n\nwere $\n\n390\n\nmillion and $\n\n150\n\nmillion, respectively.\n\nAt December 27, 2025, the interest rate on borrowings under\n\nthis facility was based on the\n\nasset-backed commercial paper rate\n\nof\n\n4.06\n\n% plus\n\n0.75\n\n%, for a combined rate of\n\n4.81\n\n%.\n\nAt December 28, 2024, the interest rate on borrowings under\n\nthis facility was based on the asset-backed\n\ncommercial paper rate of\n\n4.73\n\n% plus\n\n0.75\n\n%, for a combined rate of\n\n5.48\n\n%.\n\nIf our accounts receivable collection pattern changes due to customers\n\neither paying late or not making payments,\n\nour ability to borrow under this facility may be reduced.\n\nWe are required to pay a commitment fee of\n\n30\n\nto\n\n35\n\nbasis points depending upon program utilization.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n117\n\nNote 15 – Income Taxes\n\nIncome before taxes and equity in earnings of affiliates was as follows:\n\nYears\n\nended\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nDomestic\n\n$\n\n384\n\n$\n\n338\n\n$\n\n424\n\nForeign\n\n149\n\n175\n\n118\n\nTotal\n\n$\n\n533\n\n$\n\n513\n\n$\n\n542\n\nThe provisions for income taxes were as follows:\n\nYears\n\nended\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nCurrent income tax expense:\n\nU.S. Federal\n\n$\n\n42\n\n$\n\n100\n\n$\n\n72\n\nState and local\n\n15\n\n33\n\n28\n\nForeign\n\n64\n\n56\n\n40\n\nTotal current\n\n121\n\n189\n\n140\n\nDeferred income tax expense (benefit):\n\nU.S. Federal\n\n33\n\n(29)\n\n9\n\nState and local\n\n3\n\n(12)\n\n(3)\n\nForeign\n\n(31)\n\n(20)\n\n(26)\n\nTotal deferred\n\n5\n\n(61)\n\n(20)\n\nTotal provision\n\n$\n\n126\n\n$\n\n128\n\n$\n\n120\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n118\n\nThe tax effects of temporary differences that give rise to our deferred income tax asset (liability) were\n\nas follows:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nDeferred income tax asset:\n\nNet operating losses\n\n$\n\n105\n\n$\n\n91\n\nOther carryforwards\n\n52\n\n37\n\nInventory, premium\n\ncoupon redemptions and accounts receivable\n\nvaluation allowances\n\n38\n\n37\n\nOperating lease liability\n\n75\n\n76\n\nCapitalization of research and development costs\n\n10\n\n27\n\nOther asset\n\n62\n\n49\n\nTotal deferred income\n\ntax asset\n\n342\n\n317\n\nValuation\n\nallowance for deferred tax assets\n\n(1)\n\n(53)\n\n(38)\n\nNet deferred income tax asset\n\n289\n\n279\n\nDeferred income tax liability\n\nIntangibles amortization\n\n(266)\n\n(260)\n\nOperating lease right-of-use asset\n\n(70)\n\n(67)\n\nProperty and equipment\n\n(7)\n\n(7)\n\nTotal deferred tax\n\nliability\n\n(343)\n\n(334)\n\nNet deferred income tax asset (liability)\n\n$\n\n(54)\n\n$\n\n(55)\n\n(1)\n\nPrimarily relates to operating losses, the benefits of which are uncertain.\n\nAny future reductions of such valuation allowances will be\n\nreflected as a reduction of income tax expense.\n\nThe assessment of the amount of value assigned to our deferred tax assets under\n\nthe applicable accounting rules is\n\njudgmental.\n\nWe\n\nare required to consider all available positive and negative evidence\n\nin evaluating the likelihood\n\nthat we will be able to realize the benefit of our deferred tax assets in the future.\n\nSuch evidence includes reversals\n\nof deferred tax liabilities and projected future taxable income.\n\nSince this evaluation requires consideration of\n\nevents that may occur some years into the future, there is an element of\n\njudgment involved.\n\nRealization of our\n\ndeferred tax assets is dependent on generating sufficient taxable income in future periods.\n\nWe\n\nbelieve that it is\n\nmore likely than not that future taxable income will be sufficient to allow us to recover\n\nsubstantially all of the value\n\nassigned to our deferred tax assets.\n\nHowever, if future events cause us to conclude that it is not more likely than\n\nnot that we will be able to recover the value assigned to our deferred tax assets, we\n\nwill be required to adjust our\n\nvaluation allowance accordingly.\n\nAs of December 27, 2025, we had federal, state and foreign net operating\n\nloss carryforwards of approximately $\n\n86\n\nmillion, $\n\n62\n\nmillion and $\n\n366\n\nmillion, respectively.\n\nThe federal, state and foreign net operating loss carryforwards\n\nwill begin to expire in various years from 2026 through 2045.\n\nThe amounts of federal, state and foreign net\n\noperating losses that can be carried-forward indefinitely are $\n\n86\n\nmillion, $\n\n21\n\nmillion and $\n\n358\n\nmillion,\n\nrespectively.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n119\n\nThe effective income tax rate for the year ended December 27, 2025 differs from the statutory federal\n\nincome tax\n\nrate as follows:\n\nYear\n\nended December 27, 2025\n\n$\n\n%\n\nIncome tax provision at federal statutory rate\n\n$\n\n112\n\n21.0\n\n%\n\nState income tax provision, net of federal income tax effect\n\n(1)\n\n10\n\n2.0\n\nForeign Tax effects\n\nCayman Islands:\n\nForeign partnership loss\n\n8\n\n1.5\n\nOther\n\n(1)\n\n(0.1)\n\nOther foreign jurisdictions:\n\nEquity investment remeasurement gain\n\n(6)\n\n(1.1)\n\nNotional interest deduction\n\n(6)\n\n(1.1)\n\nOther\n\n19\n\n3.5\n\nEffects of changes in tax laws or rates enacted in current period\n\n-\n\n-\n\nCross-border tax laws\n\n1\n\n0.1\n\nTax credits\n\n(2)\n\n(0.4)\n\nChanges in valuation allowance\n\n3\n\n0.6\n\nNontaxable and nondeductible items\n\n3\n\n0.5\n\nWorldwide changes\n\nin unrecognized tax benefits\n\n4\n\n0.7\n\nOther adjustments:\n\nPreviously held non-controlling equity investment\n\n(9)\n\n(1.7)\n\nOther\n\n(10)\n\n(1.8)\n\nEffective tax rate\n\n$\n\n126\n\n23.7\n\n%\n\n(1)\n\nState taxes in California, Illinois, Massachusetts, New Jersey, and New York\n\nmake up the majority (greater than 50%) of the tax effect\n\nin this category.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n120\n\nAs previously disclosed for the years ended December 28, 2024 and December\n\n20, 2023, prior to the adoption of\n\nASU 2023-09, the tax provisions differ from the amount computed using the federal\n\nstatutory income tax rate as\n\nfollows:\n\nYears\n\nended\n\nDecember 28,\n\nDecember 30,\n\n2024\n\n2023\n\nIncome tax provision at federal statutory rate\n\n$\n\n108\n\n$\n\n114\n\nState income tax provision, net of federal income tax effect\n\n11\n\n15\n\nForeign income tax provision\n\n10\n\n5\n\nPass-through noncontrolling interest\n\n1\n\n(8)\n\nValuation\n\nallowance\n\n6\n\n(3)\n\nUnrecognized tax benefits and audit settlements\n\n5\n\n9\n\nInterest expense related to loans\n\n(14)\n\n(13)\n\nEffect of cross border tax laws\n\n12\n\n7\n\nOther\n\n(11)\n\n(6)\n\nTotal income\n\ntax provision\n\n$\n\n128\n\n$\n\n120\n\nFor the year ended December 27, 2025 our effective tax rate was\n\n23.7\n\n%, compared to\n\n24.9\n\n% for the prior year\n\nperiod.\n\nIn 2023, our effective tax rate was\n\n22.1\n\n%.\n\nThe difference between our effective and federal statutory tax\n\nrates primarily relates to state and foreign income taxes and interest expense,\n\nas well as the tax treatment associated\n\nwith the acquisition of a controlling interest of a previously held non-controlling\n\nequity investment.\n\nOn July 4, 2025, President Trump signed the reconciliation tax bill, commonly known as the “One Big Beautiful\n\nBill Act” (OBBBA), into law.\n\nCorporate provisions in the OBBBA include immediate expensing of domestic\n\nresearch and experimental expenditures, limitations on certain deductions\n\nand modifications to international tax\n\nprovisions.\n\nThe changes resulting from the OBBBA did not have a significant impact\n\nto the total tax provision.\n\nThe OECD issued technical and administrative guidance on Pillar Two rules in December 2021, which provides for\n\na global minimum tax rate on the earnings of large multinational businesses on a country-by-country\n\nbasis.\n\nEffective January 1, 2024, the minimum global tax rate is 15% for various jurisdictions pursuant\n\nto the Pillar Two\n\nrules.\n\nFuture tax reform resulting from these developments may result\n\nin changes to long-standing tax principles,\n\nwhich may adversely impact our effective tax rate going forward or result in higher cash\n\ntax liabilities.\n\nAs of\n\nDecember 27, 2025, the impact of the Pillar Two rules to our financial statements was immaterial.\n\nDue to the one-time transition tax and the imposition of the GILTI provisions, all previously unremitted earnings\n\nwill no longer be subject to U.S. federal income tax; however, there could be U.S., state and/or foreign withholding\n\ntaxes upon distribution of such unremitted earnings.\n\nDetermination of the amount of unrecognized deferred tax\n\nliability with respect to such earnings is not practicable.\n\nASC Topic 740 prescribes the accounting for uncertainty in income taxes recognized in accordance with other\n\nprovisions contained within its guidance.\n\nThis topic prescribes a recognition threshold and a measurement\n\nattribute\n\nfor the financial statement recognition and measurement of tax positions taken or\n\nexpected to be taken in a tax\n\nreturn.\n\nFor those benefits to be recognized, a tax position must be\n\nmore likely than not to be sustained upon\n\nexamination by the taxing authorities.\n\nThe amount recognized is measured as the largest amount of benefit that has\n\na greater than 50% likelihood of being realized upon ultimate audit settlement.\n\nIn the normal course of business,\n\nour tax returns are subject to examination by various taxing authorities.\n\nSuch examinations may result in future tax\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n121\n\nand interest assessments by these taxing authorities for uncertain tax positions\n\ntaken in respect of certain tax\n\nmatters.\n\nThe total amount of unrecognized tax benefits, which are included in “other\n\nliabilities” within our consolidated\n\nbalance sheets, as of December 27, 2025 and December 28, 2024 was $\n\n112\n\nmillion and $\n\n108\n\nmillion, respectively,\n\nof which $\n\n104\n\nmillion and $\n\n100\n\nmillion, respectively, would affect the effective tax rate if recognized.\n\nAll tax returns audited by the IRS are officially closed through 2021.\n\nThe tax years subject to examination by the\n\nIRS include years 2022 and forward.\n\nIn addition, limited positions reported in the 2017 tax year are subject\n\nto IRS\n\nexamination.\n\nThe amount of tax interest expense included as a component of the provision\n\nfor taxes was $\n\n4\n\nmillion, $\n\n2\n\nmillion\n\nand $\n\n4\n\nmillion during the years ended December 27, 2025, December 28, 2024\n\nand December 30, 2023,\n\nrespectively.\n\nThe total amount of accrued interest is included in other liabilities\n\nwithin our consolidated balance\n\nsheets, and was $\n\n22\n\nmillion as of December 27, 2025 and $\n\n18\n\nmillion as of December 28, 2024.\n\nThe amount of\n\npenalties accrued for during the periods presented was not material to our\n\nconsolidated financial statements.\n\nThe following table provides a reconciliation of unrecognized tax benefits:\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nBalance, beginning of period\n\n$\n\n89\n\n$\n\n98\n\n$\n\n82\n\nAdditions based on current year tax positions\n\n5\n\n5\n\n9\n\nAdditions based on prior year tax positions\n\n5\n\n10\n\n26\n\nReductions based on prior year tax positions\n\n(2)\n\n(14)\n\n(2)\n\nReductions resulting from settlements with taxing authorities\n\n-\n\n-\n\n(3)\n\nReductions resulting from lapse in statutes of limitations\n\n(7)\n\n(10)\n\n(14)\n\nBalance, end of period\n\n$\n\n90\n\n$\n\n89\n\n$\n\n98\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n122\n\nNote 16 – Plans of Restructuring and Related Costs\n\nOn August 6, 2024, we committed to a restructuring plan (the “2024\n\nPlan”) to integrate our acquisitions, right-size\n\noperations and further increase efficiencies.\n\nWe currently expect this plan to be completed at the end of 2027.\n\nDuring the years ended December 27, 2025 and December 28, 2024, we recorded\n\nrestructuring and related charges\n\nassociated with the 2024 Plan of $\n\n105\n\nmillion and $\n\n73\n\nmillion, respectively.\n\nThe restructuring and related costs for\n\nthese periods primarily related to severance and employee-related costs, accelerated\n\namortization of right-of-use\n\nassets and fixed assets, and other exit costs.\n\nWe expect to record restructuring and related charges associated with\n\nthe 2024 Plan through the end of 2027; however, an estimate of the amount of these charges for 2026 through 2027\n\nhas not yet been determined.\n\nDuring the year ended December 27, 2025, in connection with the 2024 Plan,\n\nwe recorded a loss of $\n\n1\n\nmillion and\n\n$\n\n12\n\nmillion related to the disposal of businesses in the Global Distribution and Value-Added Services and Global\n\nSpecialty Product segments, respectively, and a net gain related to disposal of a business in the Global Technology\n\nsegment.\n\nThese amounts are included in the $\n\n105\n\nmillion of restructuring and related charges discussed above.\n\nDuring the year ended December 28, 2024, in connection with the 2024 Plan,\n\nwe recorded an impairment of\n\ngoodwill and intangible assets of $\n\n13\n\nmillion related to the disposal of a portion of a business in the Global\n\nSpecialty Products segment.\n\nThis impairment is included in the $\n\n73\n\nmillion of restructuring and related charges\n\ndiscussed above.\n\nOn August 1, 2022, we committed to a restructuring plan (the “2022\n\nPlan”) focused on funding the priorities of the\n\nBOLD+1 strategic plan, streamlining operations and other initiatives to\n\nincrease efficiency.\n\nThe 2022 Plan was\n\ncompleted as of July 31, 2024.\n\nDuring the years ended December 28, 2024 and December 30, 2023, in\n\nconnection\n\nwith our 2022 Plan, we recorded restructuring and related costs of $\n\n37\n\nmillion and $\n\n80\n\nmillion, respectively, which\n\nprimarily related to severance and employee-related costs, accelerated amortization\n\nof right-of-use assets and fixed\n\nassets, and other exit costs.\n\nDuring the year ended December 30, 2023, in connection with the 2022 Plan,\n\nwe recorded an impairment of an\n\nintangible asset of $\n\n12\n\nmillion related to disposal of a U.S. business in the Global Specialty Products\n\nsegment.\n\nThis\n\nimpairment is included in the $\n\n80\n\nmillion of restructuring and related costs discussed above.\n\nThe disposal was\n\ncompleted during the first quarter of 2024.\n\nRestructuring and related costs recorded for the fiscal years ended 2025,\n\n2024 and 2023 in connection with the\n\n2024 Plan and 2022 Plan, respectively, consisted of the following:\n\nYear Ended\n\nDecember 27, 2025\n\nGlobal Distribution\n\nand Value-Added\n\nServices\n\nGlobal\n\nSpecialty\n\nProducts\n\nGlobal\n\nTechnology\n\nCorporate\n\nTotal\n\n2024 Plan\n\nSeverance and employee-related costs\n\n$\n\n40\n\n$\n\n22\n\n$\n\n4\n\n$\n\n20\n\n$\n\n86\n\nImpairment and accelerated depreciation and\n\namortization of right-of-use lease assets and other\n\nlong-lived assets\n\n(3)\n\n6\n\n(1)\n\n-\n\n2\n\nExit and other related costs\n\n5\n\n4\n\n-\n\n-\n\n9\n\nLoss/(Gain) on disposal of a business\n\n1\n\n12\n\n(5)\n\n-\n\n8\n\nRestructuring and related costs-2024 Plan\n\n$\n\n43\n\n$\n\n44\n\n$\n\n(2)\n\n$\n\n20\n\n$\n\n105\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n123\n\nYear Ended\n\nDecember 28, 2024\n\nGlobal Distribution\n\nand Value-Added\n\nServices\n\nGlobal\n\nSpecialty\n\nProducts\n\nGlobal\n\nTechnology\n\nCorporate\n\nTotal\n\n2024 Plan\n\nSeverance and employee-related costs\n\n$\n\n31\n\n$\n\n5\n\n$\n\n6\n\n$\n\n2\n\n$\n\n44\n\nImpairment and accelerated depreciation and\n\namortization of right-of-use lease assets and other\n\nlong-lived assets\n\n5\n\n3\n\n4\n\n-\n\n12\n\nExit and other related costs\n\n2\n\n-\n\n-\n\n-\n\n2\n\nLoss on disposal of a business\n\n-\n\n15\n\n-\n\n-\n\n15\n\nRestructuring and related costs-2024 Plan\n\n$\n\n38\n\n$\n\n23\n\n$\n\n10\n\n$\n\n2\n\n$\n\n73\n\n2022 Plan\n\nSeverance and employee-related costs\n\n$\n\n18\n\n$\n\n5\n\n$\n\n1\n\n$\n\n-\n\n$\n\n24\n\nAccelerated depreciation and amortization\n\n10\n\n-\n\n-\n\n(3)\n\n7\n\nExit and other related costs\n\n2\n\n2\n\n-\n\n2\n\n6\n\nLoss on disposal of a business\n\n-\n\n-\n\n-\n\n-\n\n-\n\nRestructuring and related costs-2022 Plan\n\n$\n\n30\n\n$\n\n7\n\n$\n\n1\n\n$\n\n(1)\n\n$\n\n37\n\nTotal restructuring and related costs\n\n$\n\n68\n\n$\n\n30\n\n$\n\n11\n\n$\n\n1\n\n$\n\n110\n\nYear Ended\n\nDecember 30, 2023\n\nGlobal Distribution\n\nand Value-Added\n\nServices\n\nGlobal\n\nSpecialty\n\nProducts\n\nGlobal\n\nTechnology\n\nCorporate\n\nTotal\n\n2022 Plan\n\nSeverance and employee-related costs\n\n$\n\n29\n\n$\n\n5\n\n$\n\n5\n\n$\n\n7\n\n$\n\n46\n\nImpairment and accelerated depreciation and\n\namortization of right-of-use lease assets and other\n\nlong-lived assets\n\n13\n\n-\n\n2\n\n-\n\n15\n\nExit and other related costs\n\n3\n\n1\n\n-\n\n2\n\n6\n\nLoss on disposal of a business\n\n-\n\n13\n\n-\n\n-\n\n13\n\nRestructuring and related costs-2022 Plan\n\n$\n\n45\n\n$\n\n19\n\n$\n\n7\n\n$\n\n9\n\n$\n\n80\n\nThe following table summarizes, by plan year, the activity related to the liabilities associated with\n\nour restructuring\n\ninitiatives under the 2022 Plan and the 2024 Plan for the year ended December\n\n27, 2025.\n\nThe remaining accrued\n\nbalance of restructuring and related costs as of December 27, 2025, which\n\nprimarily relates to severance and\n\nemployee-related costs, is included in accrued expenses: other within\n\nour consolidated balance sheets.\n\nLiabilities\n\nrelated to exited leased facilities are recorded within our current and non-current\n\noperating lease liabilities within\n\nour consolidated balance sheets.\n\n2022 Plan\n\n2024 Plan\n\nTotal\n\nBalance, December 30, 2023\n\n$\n\n23\n\n$\n\n-\n\n$\n\n23\n\nRestructuring and related costs\n\n37\n\n73\n\n110\n\nNon-cash impairment, accelerated depreciation and\n\namortization\n\n(7)\n\n(12)\n\n(19)\n\nNon-cash impairment on disposal of a business\n\n-\n\n(13)\n\n(13)\n\nCash payments and other adjustments\n\n(41)\n\n(20)\n\n(61)\n\nBalance, December 28, 2024\n\n12\n\n28\n\n40\n\nRestructuring and related costs\n\n-\n\n105\n\n105\n\nNon-cash impairment, accelerated depreciation and\n\namortization\n\n-\n\n(2)\n\n(2)\n\nNon-cash charges related to disposal of a business\n\n-\n\n(6)\n\n(6)\n\nCash payments and other adjustments\n\n(11)\n\n(77)\n\n(88)\n\nBalance, December 27, 2025\n\n$\n\n1\n\n$\n\n48\n\n$\n\n49\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n124\n\nNote 17 – Commitments and Contingencies\n\nPurchase Commitments\n\nIn our Global Distribution and Value-Added Services business, we sometimes enter into long-term purchase\n\ncommitments to ensure the availability of products for distribution.\n\nFuture minimum annual payments for\n\ninventory purchase commitments as of December 27, 2025 were:\n\n2026\n\n$\n\n8\n\n2027\n\n1\n\n2028\n\n-\n\n2029\n\n-\n\n2030\n\n-\n\nThereafter\n\n-\n\nTotal minimum\n\ninventory purchase commitment payments\n\n$\n\n9\n\nEmployment, Consulting and Non-Compete Agreements\n\nWe have employment, consulting and non-compete agreements that have varying base aggregate annual payments\n\nfor the years 2026 through 2030 and thereafter of approximately $\n\n13\n\nmillion, $\n\n3\n\nmillion, $\n\n0\n\nmillion, $\n\n0\n\nmillion, $\n\n0\n\nmillion, and $\n\n0\n\nmillion, respectively.\n\nWe also have lifetime consulting agreements that provide for current\n\ncompensation of\n\nfour-hundred thousand\n\ndollars per year, with small scheduled increases every fifth year with the\n\nnext increase in 2027.\n\nIn addition, some agreements have provisions for additional\n\nincentives and compensation.\n\nLegal Proceedings\n\nHenry Schein, Inc. was named as a defendant in multiple opioid related\n\nlawsuits (currently less than ten (\n\n10\n\n); one or\n\nmore of Henry Schein, Inc.’s subsidiaries was also named as a defendant in a number of those cases).\n\nGenerally,\n\nthe lawsuits allege that the manufacturers of prescription opioid drugs\n\nengaged in a false advertising campaign to\n\nexpand the market for such drugs and their own market share and that\n\nthe entities in the supply chain (including\n\nHenry Schein, Inc. and its subsidiaries) reaped financial rewards by refusing\n\nor otherwise failing to monitor\n\nappropriately and restrict the improper distribution of those drugs.\n\nThe actions that remain have been consolidated\n\nwithin the MultiDistrict Litigation (“MDL”) proceeding In Re National\n\nPrescription Opiate Litigation (MDL No.\n\n2804; Case No. 17-md-2804) and are currently stayed.\n\nOf Henry Schein’s 2025 net sales of approximately $\n\n13.2\n\nbillion, sales of opioids represented less than\n\nfour\n\n-tenths of 1 percent.\n\nOpioids represent a negligible part of our\n\nbusiness.\n\nWe intend to defend ourselves vigorously against these actions.\n\nFrom time to time, we may become a party to other legal proceedings,\n\nincluding, without limitation, product\n\nliability claims, employment matters, commercial disputes, governmental\n\ninquiries and investigations (which may\n\nin some cases involve our entering into settlement arrangements or consent\n\ndecrees), and other matters arising out\n\nof the ordinary course of our business.\n\nWhile the results of any legal proceeding cannot be predicted with certainty,\n\nin our opinion none of these other pending matters are currently\n\nanticipated to have a material adverse effect on our\n\nconsolidated financial position, liquidity or results of operations.\n\nAs of December 27, 2025, we had accrued our best estimate of potential\n\nlosses relating to claims that were probable\n\nto result in liability and for which we were able to reasonably estimate\n\na loss.\n\nThis accrued amount, as well as\n\nrelated expenses, was not material to our financial position, results of operations\n\nor cash flows.\n\nOur method for\n\ndetermining estimated losses considers currently available\n\nfacts, presently enacted laws and regulations and other\n\nfactors, including probable recoveries from third parties.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n125\n\nNote 18 – Stock-Based Compensation\n\nStock-based awards are provided to certain employees under our 2024 Stock Incentive\n\nPlan (formerly known as our\n\n2020 Stock Incentive Plan) and to non-employee directors under our 2023 Non-Employee\n\nDirector Stock Incentive\n\nPlan (together, the “Plans”).\n\nThe Plans are administered by the Compensation Committee of the Board\n\n(the\n\n“Compensation Committee”).\n\nHistorically, equity-based awards to our employees have been granted solely in the\n\nform of time-based and performance-based restricted stock units (“RSUs”)\n\nwith the exception of our 2021 plan year\n\nin which non-qualified stock options were issued in place of performance-based\n\nRSUs and in 2022, when we\n\ngranted time-based and performance-based RSUs, as well as non-qualified\n\nstock options.\n\nOur non-employee\n\ndirectors receive equity-based awards solely in the form of time-based RSUs with\n\n12\n\n-month cliff vesting.\n\nStarting with our 2023 plan year, we returned to granting our employees equity-based awards solely in\n\nthe form of\n\ntime-based RSUs (which vest solely based on the recipient’s continued service over time) and performance-based\n\nRSUs (which vest based on achieving specified performance\n\nmeasurements and the recipient’s continued service\n\nover time).\n\nIn our 2025 plan year, stock awards issued to our Chief Executive Officer were allocated\n\n35\n\n% to time-based RSU\n\nawards with\n\nfour-year\n\ncliff vesting and\n\n65\n\n% to performance-based RSU awards with\n\nthree-year\n\ncliff vesting.\n\nIn our\n\n2025 plan year, stock awards issued to members of our Executive Management Committee were allocated\n\n50\n\n% to\n\ntime-based RSU awards with\n\nfour-year\n\ncliff vesting and\n\n50\n\n% to performance-based RSU awards with\n\nthree-year\n\ncliff vesting.\n\nIn our 2025 plan year, stock awards issued to our eligible vice-presidents were allocated\n\n80\n\n% to time-based RSU\n\nawards and\n\n20\n\n% to performance-based RSU awards with\n\nthree-year\n\ncliff vesting.\n\nOur vice-president level time-\n\nbased awards will vest\n\n50\n\n% on the third anniversary of the grant date with the remaining\n\n50\n\n% vesting on the fourth\n\nanniversary of the grant date.\n\nIn our 2025 plan year, we began granting only time-based RSU awards to our eligible director level employees.\n\nOur director level time-based RSU awards will vest\n\n50\n\n% on the third anniversary of the grant date with the\n\nremaining\n\n50\n\n% vesting on the fourth anniversary of the grant date.\n\nFor the performance-based RSUs and the time-based RSUs with cliff vesting (issued\n\nin 2022-2024 plan years), we\n\nrecognize the cost as compensation expense on a straight-line basis.\n\nFor the time-based RSUs with graded vesting\n\n(issued in the 2025 plan year), we recognize the cost as compensation\n\nexpense on an accelerated basis.\n\nAs of December 27, 2025, there were\n\n75,742,657\n\nshares authorized and\n\n9,081,164\n\nshares available to be granted\n\nunder the 2025 Stock Incentive Plan and\n\n2,075,000\n\nshares authorized and\n\n324,753\n\nshares available to be granted\n\nunder the 2023 Non-Employee Director Stock Incentive Plan.\n\nFor all RSUs, we estimate the fair value based on our closing stock\n\nprice on the grant date.\n\nWith respect to\n\nperformance-based RSUs, the number of shares that ultimately vest and\n\nare received by the recipient is based upon\n\nour performance as measured against specified targets over a specified period, as\n\ndetermined by the Compensation\n\nCommittee.\n\nAlthough there is no guarantee that performance targets will be achieved, we\n\nestimate the fair value of\n\nperformance-based RSUs based on our closing stock price at time of grant.\n\nEach of the Plans provide for certain adjustments to the performance\n\nmeasurement in connection with awards under\n\nthe Plans.\n\nWith respect to the performance-based RSUs granted under our 2024 Stock Incentive Plan, such\n\nperformance measurement adjustments relate to significant events, including,\n\nwithout limitation, acquisitions,\n\ndivestitures, new business ventures, changes in fair value of contingent\n\nconsideration (solely with respect to\n\nperformance-based RSUs granted in the 2024 and 2025 plan years),\n\ncertain capital transactions (including share\n\nrepurchases), differences in budgeted average outstanding shares (other\n\nthan those resulting from capital\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n126\n\ntransactions referred to above), restructuring and related costs, amortization\n\nexpense recorded for acquisition-\n\nrelated intangible assets, certain litigation settlements or payments,\n\nchanges in accounting principles or in\n\napplicable laws or regulations, changes in income tax rates in certain\n\nmarkets, foreign exchange fluctuations, the\n\nfinancial impact either positive or negative, of the difference in projected earnings\n\ngenerated by COVID-19 test kits\n\n(solely with respect to performance-based RSUs granted in the 2023 plan\n\nyear), intangibles impairment charges and\n\ncosts related to shareholder advisory matters (solely with respect to performance-based\n\nRSUs granted in the 2025\n\nplan year).\n\nOver the performance period, the number of performance-based RSUs that will\n\nultimately vest and be issued and\n\nthe related compensation expense is adjusted upward or downward based upon\n\nour estimation of achieving such\n\nperformance targets.\n\nThe ultimate number of shares delivered to recipients and\n\nthe related compensation cost\n\nrecognized as an expense is based on our actual performance against\n\nthe pre-determined performance metrics (in\n\neach case as adjusted).\n\nStock options are awards that allow the recipient to purchase shares of our\n\ncommon stock after vesting at a fixed\n\nprice set at the time of grant.\n\nStock options were granted at an exercise price equal to our\n\nclosing stock price on the\n\ndate of grant.\n\nStock options issued in 2021 and 2022 vest one-third per year based\n\non the recipient’s continued\n\nservice, subject to the terms and conditions of the 2020 Stock Incentive Plan,\n\nare fully vested\n\nthree years\n\nfrom the\n\ngrant date and have a contractual term of\n\nten years\n\nfrom the grant date, subject to earlier termination of term and\n\nterm acceleration upon certain events.\n\nCompensation expense for stock options is recognized on\n\nan accelerated\n\nbasis.\n\nWe estimate grant date fair value of stock options using the Black-Scholes valuation model.\n\nDuring the year\n\nended December 27, 2025, we did\n\nno\n\nt grant any stock options.\n\nOur consolidated statements of income reflect pre-tax share-based compensation\n\nexpense of $\n\n39\n\nmillion, $\n\n39\n\nmillion and $\n\n39\n\nmillion for the years ended December 27, 2025, December 28, 2024\n\nand December 30, 2023,\n\nrespectively.\n\nTotal unrecognized compensation cost related to unvested awards as of December 27, 2025 was $\n\n63\n\nmillion, which\n\nis expected to be recognized over a weighted-average period of approximately\n\n2.5\n\nyears.\n\nThe weighted-average grant date fair value of stock-based awards granted\n\nwas $\n\n75.78\n\n, $\n\n75.12\n\nand $\n\n76.43\n\nper share\n\nduring the years ended December 27, 2025, December 28, 2024 and December\n\n30, 2023, respectively.\n\nWe\n\nrecord deferred income tax assets for awards that will result in\n\nfuture income tax deductions based on the\n\namount of compensation cost recognized and our statutory tax rate in the\n\njurisdiction in which we will receive a\n\ndeduction.\n\nOur consolidated statements of cash flows present our stock-based compensation\n\nexpense as a reconciling\n\nadjustment between net income and net cash provided by operating\n\nactivities for all periods presented.\n\nThere were\n\nno cash benefits associated with tax deductions in excess of recognized\n\ncompensation for the years ended\n\nDecember 27, 2025, December 28, 2024 and December 30, 2023.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n127\n\nThe following table summarizes the stock option activity for the year\n\nended December 27, 2025:\n\nStock Options\n\nWeighted Average\n\nAggregate\n\nWeighted Average\n\nRemaining Contractual\n\nIntrinsic\n\nShares\n\nExercise Price\n\nLife (in years)\n\nValue\n\nOutstanding at beginning of year\n\n963,491\n\n$\n\n72.16\n\nGranted\n\n-\n\n-\n\nExercised\n\n(24,945)\n\n62.71\n\nForfeited\n\n(15,831)\n\n81.75\n\nOutstanding at end of year\n\n922,715\n\n$\n\n72.26\n\n5.6\n\n$\n\n7\n\nOptions exercisable at end of year\n\n922,715\n\n$\n\n72.26\n\n5.6\n\n$\n\n7\n\nThe following tables summarize the activity of our unvested RSUs for\n\nthe year ended December 27, 2025:\n\nTime-Based Restricted Stock Units\n\nPerformance-Based Restricted Stock Units\n\nWeighted Average\n\nWeighted Average\n\nGrant Date Fair\n\nGrant Date Fair\n\nShares/Units\n\nValue Per Share\n\nShares/Units\n\nValue Per Share\n\nOutstanding at beginning of period\n\n1,685,550\n\n$\n\n72.90\n\n389,111\n\n$\n\n75.98\n\nGranted\n\n592,716\n\n75.18\n\n251,287\n\n75.30\n\nPerformance adjustment\n\nn/a\n\nn/a\n\n(31,313)\n\n76.20\n\nVested\n\n(564,037)\n\n66.54\n\n(14,499)\n\n84.04\n\nForfeited\n\n(107,687)\n\n77.10\n\n(206,626)\n\n77.33\n\nOutstanding at end of period\n\n1,606,542\n\n$\n\n75.69\n\n387,960\n\n$\n\n75.89\n\nThe fair value of time and performance RSUs that vested was $\n\n38\n\nmillion and $\n\n1\n\nmillion, respectively, for the year\n\nended December 27, 2025; $\n\n21\n\nmillion and $\n\n1\n\nmillion, respectively, for the year ended December 28, 2024; and\n\n$\n\n27\n\nmillion and $\n\n38\n\nmillion, respectively, for the year ended December 30, 2023.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n128\n\nNote 19 – Employee Benefit Plans\n\nDefined benefit plans\n\nCertain of our employees in our international markets participate\n\nin various noncontributory defined benefit plans.\n\nThese plans are managed to provide pension benefits to covered employees\n\nin accordance with local regulations\n\nand practices.\n\nOur net unfunded liability for these plans are recorded\n\nin accrued expenses: other; and other\n\nliabilities within our consolidated balance sheets.\n\nThe following table presents the changes in projected benefit\n\nobligations, plan assets, and the funded status of our defined benefit\n\npension plans:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nObligation and funded status:\n\nChange in benefit obligation\n\nProjected benefit obligation, beginning of period\n\n$\n\n129\n\n$\n\n125\n\nService costs\n\n4\n\n4\n\nInterest cost\n\n3\n\n3\n\nPast service cost (credit)\n\n-\n\n(1)\n\nActuarial gain (loss)\n\n(2)\n\n6\n\nBenefits paid\n\n1\n\n-\n\nParticipant contributions\n\n2\n\n2\n\nSettlements and curtailments\n\n(7)\n\n(1)\n\nEffect of foreign currency translation\n\n16\n\n(9)\n\nProjected benefit obligation, end of period\n\n$\n\n146\n\n$\n\n129\n\nChange in plan assets\n\nFair value of plan assets at beginning of period\n\n$\n\n90\n\n$\n\n86\n\nActual return on plan assets\n\n1\n\n3\n\nEmployer contributions\n\n3\n\n3\n\nPlan participant contributions\n\n2\n\n2\n\nExpected return on plan assets\n\n3\n\n3\n\nBenefit received\n\n4\n\n1\n\nSettlements\n\n(6)\n\n(2)\n\nEffect of foreign currency translation\n\n9\n\n(6)\n\nFair value of plan assets at end of period\n\n$\n\n106\n\n$\n\n90\n\nUnfunded status at end of period\n\n$\n\n40\n\n$\n\n39\n\nThe majority of our defined benefit plans are unfunded, with the exception\n\nof one plan in one country where the\n\namount of assets exceeds the projected benefit obligation by approximately\n\n$\n\n8\n\nmillion and $\n\n8\n\nmillion as of\n\nDecember 27, 2025 and December 28, 2024, respectively.\n\nAt December 27, 2025 and December 28, 2024 the\n\naccumulated benefit obligations were $\n\n142\n\nmillion and $\n\n125\n\nmillion, respectively.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n129\n\nThe following table provides the amounts recognized in our consolidated\n\nbalance sheets for our defined benefit\n\npension plans:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\n2025\n\n2024\n\nNon-current assets\n\n$\n\n37\n\n$\n\n28\n\nCurrent liabilities\n\n(1)\n\n(1)\n\nNon-current liabilities\n\n(76)\n\n(68)\n\nAccumulated other comprehensive loss, pre-tax\n\n8\n\n10\n\nThe following table provides the components of net periodic pension cost\n\nfor our defined benefit plans:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nService cost\n\n$\n\n4\n\n$\n\n4\n\n$\n\n3\n\nInterest cost\n\n3\n\n3\n\n3\n\nExpected return on plan assets\n\n(3)\n\n(3)\n\n(3)\n\nEmployee contributions\n\n(1)\n\n(1)\n\n(1)\n\nSettlements\n\n(1)\n\n-\n\n-\n\nNet periodic pension cost\n\n$\n\n2\n\n$\n\n3\n\n$\n\n2\n\nThe following tables present the weighted-average actuarial assumptions\n\nused to determine our pension benefit\n\nobligation and our net periodic pension cost for the periods presented:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nPension Benefit Obligation\n\n2025\n\n2024\n\nWeighted average\n\ndiscount rate\n\n2.75\n\n%\n\n2.23\n\n%\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\nNet Periodic Pension Cost\n\n2025\n\n2024\n\n2023\n\nDiscount rate-pension benefit\n\n2.05\n\n%\n\n1.70\n\n%\n\n1.50\n\n%\n\nExpected return on plan assets\n\n0.92\n\n%\n\n1.13\n\n%\n\n0.51\n\n%\n\nRate of compensation increase\n\n2.00\n\n%\n\n1.98\n\n%\n\n1.64\n\n%\n\nPension increase rate\n\n0.74\n\n%\n\n0.63\n\n%\n\n0.80\n\n%\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n130\n\nThe following table presents the estimated pension benefit payments that\n\nare payable to the plan’s participants as of\n\nDecember 27, 2025:\n\nYear\n\n2026\n\n$\n\n8\n\n2027\n\n9\n\n2028\n\n9\n\n2029\n\n7\n\n2030\n\n8\n\n2031 to 2035\n\n52\n\nTotal\n\n$\n\n93\n\n401(k) Plans\n\nWe offer\n\nqualified 401(k) plans to substantially all domestic full-time employees.\n\nAs determined by our Board,\n\nmatching contributions to these plans generally do not exceed\n\n100\n\n% of the participants’ contributions up to\n\n5\n\n% of\n\ntheir base compensation, subject to applicable legal limits.\n\nMatching contributions are made in cash and are\n\nallocated consistent with the participants’ investment elections on file, subject\n\nto a\n\n20\n\n% allocation limit to the\n\nHenry Schein Stock Fund.\n\nForfeitures attributable to participants whose employment terminates\n\nprior to becoming\n\nfully vested are reallocated as part of our ongoing matching contributions\n\nand to offset administrative expenses of\n\nthe 401(k) plans.\n\nAssets of the 401(k) and other defined contribution plans are held\n\nin self-directed accounts enabling participants to\n\nchoose from various investment fund options.\n\nMatching contributions related to these plans charged to operations\n\nduring the years ended December 27, 2025, December 28, 2024 and December\n\n30, 2023 amounted to $\n\n42\n\nmillion,\n\n$\n\n48\n\nmillion and $\n\n50\n\nmillion, respectively.\n\nWithin our consolidated statements of income, $\n\n36\n\nmillion, $\n\n40\n\nmillion,\n\nand $\n\n42\n\nmillion, is included in selling, general and administrative; and $\n\n6\n\nmillion, $\n\n8\n\nmillion, and $\n\n8\n\nmillion is\n\nincluded in cost of goods sold for the years ended December 27, 2025, December\n\n28, 2024, and December 30,\n\n2023, respectively.\n\nSupplemental Executive Retirement Plan\n\nWe offer\n\nan unfunded, non-qualified SERP to eligible employees.\n\nThis plan generally covers officers and certain\n\nhighly compensated employees after they have reached the maximum\n\nIRS allowed pre-tax 401(k) contribution\n\nlimit.\n\nOur contributions to this plan are equal to the 401(k) employee-elected\n\ncontribution percentage applied to\n\nbase compensation for the portion of the year in which such employees are\n\nnot eligible to make pre-tax\n\ncontributions to the 401(k) plan.\n\nThe amounts charged to operations during the years ended December 27, 2025,\n\nDecember 28, 2024 and December 30, 2023 amounted to $\n\n3\n\nmillion, $\n\n2\n\nmillion and $\n\n3\n\nmillion, respectively.\n\nThe\n\ncharges are included in selling, general and administrative within our consolidated\n\nstatements of income.\n\nPlease\n\nsee\n\n[Note 13 – Derivatives and Hedging Activities](#a48148)\n\nfor additional information.\n\nDeferred Compensation Plan\n\nWe\n\noffer DCP to a select group of management or highly compensated employees\n\nof the Company and certain\n\nsubsidiaries.\n\nThis plan allows for the elective deferral of base salary, bonus and/or commission compensation by\n\neligible employees.\n\nThe amounts charged to operations during the years ended December\n\n27, 2025, December 28,\n\n2024 and December 30, 2023 were approximately $\n\n12\n\nmillion, $\n\n12\n\nmillion and $\n\n12\n\nmillion, respectively.\n\nThe\n\ncharges are included in selling, general and administrative within our consolidated\n\nstatements of income.\n\nPlease\n\nsee\n\n[Note 13 – Derivatives and Hedging Activities](#a48148)\n\nfor additional information.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n131\n\nNote 20 – Redeemable Noncontrolling Interests\n\nSome minority stockholders in certain of our subsidiaries have the right,\n\nat certain times, to require us to acquire\n\ntheir ownership interest in those entities at fair value.\n\nASC Topic 480-10 is applicable for noncontrolling interests\n\nwhere we are or may be required to purchase all or a portion of the\n\noutstanding interest in a consolidated subsidiary\n\nfrom the noncontrolling interest holder under the terms of a put option contained\n\nin contractual agreements.\n\nThe\n\ncomponents of the change in the redeemable noncontrolling interests for the\n\nyears ended December 27, 2025,\n\nDecember 28, 2024 and December 30, 2023, are presented in the following table:\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nBalance, beginning of period\n\n$\n\n806\n\n$\n\n864\n\n$\n\n576\n\nDecrease in redeemable noncontrolling interests due to acquisitions of\n\nnoncontrolling interests in subsidiaries\n\n(76)\n\n(273)\n\n(19)\n\nIncrease in redeemable noncontrolling interests due to business\n\nacquisitions\n\n86\n\n171\n\n326\n\nNet income (loss) attributable to redeemable noncontrolling interests\n\n(5)\n\n(1)\n\n6\n\nDistributions declared, net of capital contributions\n\n(18)\n\n(50)\n\n(19)\n\nEffect of foreign currency translation gain (loss) attributable\n\nto\n\nredeemable noncontrolling interests\n\n30\n\n(24)\n\n5\n\nChange in fair value of redeemable securities\n\n72\n\n119\n\n(11)\n\nBalance, end of period\n\n$\n\n895\n\n$\n\n806\n\n$\n\n864\n\nNote 21 – Comprehensive Income\n\nComprehensive income includes certain gains and losses that, under U.S.\n\nGAAP,\n\nare excluded from net income and\n\nare recorded directly to stockholders’ equity.\n\nThe following table summarizes our Accumulated other comprehensive loss, net\n\nof applicable taxes as of:\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nAttributable to redeemable noncontrolling interests:\n\nForeign currency translation adjustment\n\n$\n\n(26)\n\n$\n\n(56)\n\n$\n\n(32)\n\nAttributable to noncontrolling interests:\n\nForeign currency translation adjustment\n\n$\n\n1\n\n$\n\n(1)\n\n$\n\n(1)\n\nAttributable to Henry Schein, Inc.:\n\nForeign currency translation adjustment\n\n$\n\n(196)\n\n$\n\n(371)\n\n$\n\n(188)\n\nUnrealized gain loss from hedging activities\n\n(24)\n\n-\n\n(13)\n\nPension adjustment loss\n\n(6)\n\n(8)\n\n(5)\n\nAccumulated other comprehensive loss\n\n$\n\n(226)\n\n$\n\n(379)\n\n$\n\n(206)\n\nTotal Accumulated\n\nother comprehensive loss\n\n$\n\n(251)\n\n$\n\n(436)\n\n$\n\n(239)\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n132\n\nThe following table summarizes the components of comprehensive income, net\n\nof applicable taxes as follows:\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nNet income\n\n$\n\n419\n\n$\n\n398\n\n$\n\n436\n\nForeign currency translation gain (loss)\n\n207\n\n(207)\n\n53\n\nTax effect\n\n-\n\n-\n\n-\n\nForeign currency translation gain (loss)\n\n207\n\n(207)\n\n53\n\nUnrealized gain (loss) from hedging activities\n\n(33)\n\n18\n\n(25)\n\nTax effect\n\n9\n\n(5)\n\n7\n\nUnrealized gain (loss) from hedging activities\n\n(24)\n\n13\n\n(18)\n\nPension adjustment gain (loss)\n\n5\n\n(5)\n\n(3)\n\nTax effect\n\n(3)\n\n2\n\n-\n\nPension adjustment gain (loss)\n\n2\n\n(3)\n\n(3)\n\nComprehensive income\n\n$\n\n604\n\n$\n\n201\n\n$\n\n468\n\nOur financial statements are denominated in U.S. Dollars.\n\nFluctuations in the value of foreign currencies as\n\ncompared to the U.S. Dollar may have a significant impact on our\n\ncomprehensive income.\n\nThe foreign currency\n\ntranslation gain (loss) during the years ended December 27, 2025, December 28,\n\n2024 and December 30, 2023 was\n\nprimarily due to changes in foreign currency exchange rates of the Brazilian\n\nReal, British Pound, Euro, Swiss\n\nFranc, Israel Shekel, Canadian Dollar, Australian Dollar, and New Zealand Dollar.\n\nThe hedging gain (loss) during the years ended December 27, 2025, December\n\n28, 2024, and December 30, 2023\n\nwas attributable to a net investment hedge.\n\nSee\n\n[Note 13 – Derivatives and Hedging Activities](#a48148)\n\nfor further\n\ninformation.\n\nThe following table summarizes our total comprehensive income, net of\n\napplicable taxes as follows:\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nComprehensive income attributable to\n\nHenry Schein, Inc.\n\n$\n\n551\n\n$\n\n217\n\n$\n\n443\n\nComprehensive income attributable to\n\nnoncontrolling interests\n\n28\n\n9\n\n14\n\nComprehensive income (loss) attributable to\n\nRedeemable noncontrolling interests\n\n25\n\n(25)\n\n11\n\nComprehensive income\n\n$\n\n604\n\n$\n\n201\n\n$\n\n468\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n133\n\nNote 22 – Earnings Per Share\n\nBasic earnings per share is computed by dividing net income attributable\n\nto Henry Schein, Inc. by the weighted-\n\naverage number of common shares outstanding for the period.\n\nOur diluted earnings per share is computed similarly\n\nto basic earnings per share, except that it reflects the effect of common shares issuable\n\nfor unvested RSUs and upon\n\nexercise of stock options using the treasury stock method in periods\n\nin which they have a dilutive effect.\n\nA reconciliation of shares used in calculating earnings per basic and\n\ndiluted share follows:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nBasic\n\n120,813,977\n\n126,788,997\n\n130,618,990\n\nEffect of dilutive securities:\n\nStock options and restricted stock units\n\n903,899\n\n990,231\n\n1,129,181\n\nDiluted\n\n121,717,876\n\n127,779,228\n\n131,748,171\n\nThe number of antidilutive securities that were excluded from the calculation\n\nof diluted weighted average common\n\nshares outstanding are as follows:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nStock options\n\n396,052\n\n406,676\n\n424,695\n\nRestricted stock units\n\n6,200\n\n9,287\n\n15,040\n\nTotal anti-dilutive\n\nsecurities excluded from earnings per share\n\ncomputation\n\n402,252\n\n415,963\n\n439,735\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n134\n\nNote 23 – Supplemental Cash Flow Information\n\nCash paid for interest and income taxes was:\n\nYears\n\nEnded\n\nDecember 27,\n\nDecember 28,\n\nDecember 30,\n\n2025\n\n2024\n\n2023\n\nCash paid for interest\n\n$\n\n151\n\n$\n\n132\n\n$\n\n84\n\nCash paid for income taxes, net of refunds:\n\nU.S. Federal\n\n$\n\n67\n\nU.S. State and local\n\n15\n\nForeign:\n\nSwitzerland\n\n8\n\nOther\n\n38\n\nTotal\n\n$\n\n128\n\nYears\n\nEnded\n\nDecember 28,\n\nDecember 30,\n\n2024\n\n2023\n\nCash paid during the period for income taxes (prior to ASU 2023-09)\n\n$\n\n144\n\n$\n\n218\n\nFor the years ended December 27, 2025, December 28, 2024 and December\n\n30, 2023, we had $\n\n(33)\n\nmillion, $\n\n18\n\nmillion and $\n\n(25)\n\nmillion of non-cash net unrealized gains (losses) related to hedging activities,\n\nrespectively.\n\nSee\n\n[Note 13 – Derivatives and Hedging Activities](#a48148)\n\nfor additional information related to our total return swap and\n\nour\n\ninterest rate swap agreements.\n\nThere was approximately $\n\n3\n\nmillion, $\n\n0\n\nmillion and $\n\n143\n\nmillion of debt assumed as a part of the acquisitions for\n\nthe years ended December 27, 2025, December 28, 2024 and December 30, 2023,\n\nrespectively.\n\nDebt assumed\n\nduring the year ended December 30, 2023 primarily relates to the acquisitions\n\nof Biotech Dental and S.I.N.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n135\n\nNote 24 – Related Party Transactions\n\nDuring 2018, we entered into a joint venture with Internet Brands to create Henry\n\nSchein One, LLC.\n\nInternet\n\nBrands initially held a\n\n26\n\n% noncontrolling interest, which has since increased to a\n\n33.6\n\n% noncontrolling interest in\n\nHenry Schein One, LLC, and a freestanding and separately exercisable right\n\nto put its noncontrolling interest to\n\nHenry Schein, Inc. for fair value following the fifth anniversary of the effective date of the\n\nformation of the joint\n\nventure.\n\nOn January 29, 2025, Henry Schein, Inc. signed a Memorandum of Understanding\n\nwith Internet Brands to\n\nextend the time-based trigger for the exercise of our call option to July 1, 2032\n\nand to pause the exercise by Internet\n\nBrands of its put option for a period of\n\nfour years\n\n, to January 29, 2029.\n\nIn connection with the formation of Henry Schein One, LLC we entered\n\ninto a\n\nten-year\n\nroyalty agreement with\n\nInternet Brands whereby we will pay Internet Brands approximately $\n\n31\n\nmillion annually for the use of their\n\nintellectual property.\n\nDuring the years ended December 27, 2025, December 28, 2024 and December\n\n30, 2023,\n\nwe\n\nrecorded $\n\n31\n\nmillion, $\n\n31\n\nmillion and $\n\n31\n\nmillion, respectively, within selling, general and administrative in our\n\nconsolidated statements of income,\n\nin connection with costs related to this royalty agreement.\n\nAs of December 27,\n\n2025 and December 28, 2024, Henry Schein One, LLC had a net payable balance\n\nto Internet Brands of $\n\n9\n\nmillion\n\nand $\n\n1\n\nmillion, respectively, comprised of amounts related to results of operations and the royalty agreement.\n\nThe\n\ncomponents of this payable are recorded within accrued expenses: other within\n\nour consolidated balance sheets.\n\nWe\n\nhave interests in entities that we account for under the equity accounting\n\nmethod.\n\nIn our normal course of\n\nbusiness, during the years ended December 27, 2025, December 28, 2024\n\nand December 30, 2023, we recorded net\n\nsales of $\n\n56\n\nmillion, $\n\n52\n\nmillion, and $\n\n47\n\nmillion respectively, to such entities.\n\nDuring the years ended December\n\n27, 2025, December 28, 2024 and December 30, 2023, we purchased\n\n$\n\n19\n\nmillion, $\n\n10\n\nmillion and $\n\n10\n\nmillion\n\nrespectively, from such entities.\n\nAt December 27, 2025 and December 28, 2024, we had an aggregate\n\n$\n\n39\n\nmillion\n\nand $\n\n35\n\nmillion, respectively, due from our equity affiliates, and $\n\n6\n\nmillion and $\n\n6\n\nmillion, respectively, due to our\n\nequity affiliates.\n\nCertain of our facilities related to our acquisitions are leased from employees\n\nand minority shareholders.\n\nPlease see\n\n[Note 8 – Leases](#a45248)\n\nfor further information.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\nHENRY SCHEIN, INC.\n\nNOTES TO CONSOLIDATED\n\nFINANCIAL STATEMENTS\n\n(in millions, except share and per share data)\n\n136\n\nNote 25 – KKR Investment and Accelerated Share Repurchase Program\n\nOn January 29, 2025, Henry Schein, Inc. announced a strategic investment\n\nby funds affiliated with KKR, a leading\n\nglobal investment firm, and entered into a Strategic Partnership Agreement\n\nwith KKR (the “Agreement”).\n\nOn May\n\n16, 2025, we issued\n\n3,285,151\n\nshares of common stock to funds affiliated with KKR for an investment of $\n\n250\n\nmillion, at approximately $\n\n76.10\n\nper share.\n\nIn addition, under the Agreement,\n\ntwo\n\nindependent directors have\n\njoined our Board of Directors.\n\nOn May 19, 2025, we executed an accelerated share repurchase program\n\nto repurchase a total of $\n\n250\n\nmillion of\n\nour outstanding common stock based on volume-weighted average prices.\n\nIn May 2025 we received\n\n3,122,832\n\nshares at an estimated fair value of $\n\n224\n\nmillion.\n\nIn July 2025, we received an additional\n\n368,651\n\nshares at an\n\nestimated fair value of $\n\n26\n\nmillion, representing the final amount of shares to be received under\n\nthis accelerated\n\nshare repurchase program.\n\nOn November 4, 2025, the Company and KKR entered into an amendment\n\nto the Agreement that increased the\n\nbeneficial ownership limit from\n\n14.9\n\n% to\n\n19.9\n\n% of the outstanding shares of the Company’s common stock that\n\nKKR is permitted to acquire during the standstill period.\n\nThe standstill provisions, including the increased\n\nownership limit, continue in effect for a period of six months following the later\n\nof the expiration of the term of the\n\nAgreement and the date on which no KKR director appointed pursuant\n\nto the Agreement is serving on the Board of\n\nDirectors.\n\n[Table of Contents](#a296)\n\n[Index to Financial Statements](#a33909)\n\n137"}