usfd-20250329

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 29, 2025

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

Commission File No. 001-37786

US FOODS HOLDING CORP.

(Exact name of registrant as specified in its charter)

Delaware

26-0347906

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

9399 W. Higgins Road, Suite 100

Rosemont, IL 60018

(847) 720-8000

(Address, including Zip Code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

USFD

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

231,350,016 shares of the registrant’s common stock were outstanding as of May 2, 2025.

Forward-Looking Statements

Statements in this Quarterly Report (“Quarterly Report”) which are not historical in nature are “forward-looking statements” within the meaning of the federal securities laws. These statements often include words such as “believe,” “expect,” “project,” “anticipate,” “intend,” “plan,” “outlook,” “estimate,” “target,” “seek,” “will,” “may,” “would,” “should,” “could,” “forecast,” “mission,” “strive,” “more,” “goal,” or similar expressions (although not all forward-looking statements may contain such words) and are based upon various assumptions and our experience in the industry, as well as historical trends, current conditions, and expected future developments. However, you should understand that these statements are not guarantees of performance or results, and there are a number of risks, uncertainties, and other important factors that could cause our actual results to differ materially from those expressed in the forward-looking statements, including, among others:


• Economic factors affecting consumer confidence and discretionary spending and reducing the consumption of food prepared away from home;
• competition;
• reliance on third-party suppliers and interruption of product supply or increases in product costs;
• changes in our relationships with customers and group purchasing organizations;
• our ability to increase or maintain the highest margin portions of our business;
• achievement of expected benefits from cost savings initiatives;
• fluctuations in fuel costs;
• changes in consumer eating habits;
• cost and pricing structures;
• the impact of climate change or measures implemented to address climate change;
• impairment charges for goodwill, indefinite-lived intangible assets or other long-lived assets;
• changes to or failure to comply with applicable governmental regulations;
• product recalls and product liability claims;
• our reputation in the industry;
• labor relations and increased labor costs and continued access to qualified and diverse labor;
• our level of indebtedness and restrictions under agreements governing our indebtedness;
• interest rate increases;
• disruption of existing technologies and implementation of new technologies;
• cybersecurity incidents and other technology disruptions;
• risks associated with intellectual property, including potential infringement;
• effective integration of acquired businesses;
• the impact of activist shareholders;
• changes in tax laws and regulations and resolution of tax disputes;
• limitations related to our governing documents;
• risks to the health and safety of our associates and others;
• adverse judgments or settlements resulting from litigation;
• extreme weather conditions, natural disasters and other catastrophic events, including pandemics and the rapid spread of contagious illnesses; and
• management of retirement benefits and pension obligations.

For a detailed discussion of these and other risks, uncertainties and factors, see Part I, Item 1A— “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024 filed February 13, 2025.

In light of these risks, uncertainties, and other important factors, the forward-looking statements in this Quarterly Report might not prove to be accurate, and you should not place undue reliance on them. All forward-looking statements attributable to us, or others acting on our behalf, are expressly qualified in their entirety by the cautionary statements above and contained elsewhere in this Quarterly Report. All of these statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise, except as required by law.

Comparisons of results between current and prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should be viewed only as historical data.


	TABLE OF CONTENTS
		Page No.
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of March 2 9 , 202 5 and December 28 , 202 4	1
	Consolidated Statements of Comprehensive Income for the 13 weeks ended March 29 , 202 5 and March 30, 202 4	2
	Consolidated Statements of Shareholders’ Equity for the 13 weeks ended March 29 , 202 5 and March 30, 202 4	3
	Consolidated Statements of Cash Flows for the 13 weeks ended March 2 9 , 202 5 and March 30, 202 4	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	24

Part II. Other Information
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3.	Defaults Upon Senior Securities	25
Item 4.	Mine Safety Disclosures	25
Item 5.	Other Information	25
Item 6.	Exhibits	26

Signatures		27

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


US FOODS HOLDING CORP.
CONSOLIDATED BALANCE SHEETS
(In millions, except par value)

	March 29, 2025		December 28, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	101	$	59
Accounts receivable, less allowances of $27 and $24	2,078		1,957
Vendor receivables, less allowances of $8 and $7	220		167
Inventories—net	1,518		1,626
Prepaid expenses	152		146
Assets held for sale	—		8
Other current assets	22		11
Total current assets	4,091		3,974
Property and equipment—net	2,495		2,398
Goodwill	5,768		5,766
Other intangibles—net	828		836
Other assets	469		429
Noncurrent assets held for sale	—		33
Total assets	$	13,651	$	13,436
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft liability	$	206	$	216
Accounts payable	2,423		2,231
Accrued expenses and other current liabilities	747		732
Current portion of long-term debt	116		109
Liabilities held for sale	—		8
Total current liabilities	3,492		3,296
Long-term debt	4,689		4,819
Deferred tax liabilities	347		335
Other long-term liabilities	507		447
Noncurrent liabilities held for sale	—		11
Total liabilities	9,035		8,908
Commitments and contingencies (Note 14)
Shareholders’ equity:
Common stock, $0.01 par value—600 shares authorized; 255.8 issued and 231.3 outstanding as of March 29, 2025, and 254.7 issued and 230.5 outstanding as of December 28, 2024	3		3
Additional paid-in capital	3,744		3,748
Retained earnings	2,118		2,003
Accumulated other comprehensive income	43		43
Treasury Stock, 24.5 and 24.2 shares, respectively	(1,292)		(1,269)
Total shareholders’ equity	4,616		4,528
Total liabilities and shareholders' equity	$	13,651	$	13,436

See Notes to Consolidated Financial Statements (Unaudited).


US FOODS HOLDING CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In millions, except per share data)

	13 Weeks Ended
		March 29, 2025		March 30, 2024
Net sales		$	9,351	$	8,949
Cost of goods sold		7,737		7,454
Gross profit		1,614		1,495
Operating expenses:
Distribution, selling and administrative costs		1,385		1,317
Restructuring activity and asset impairment charges		5		13
Total operating expenses		1,390		1,330
Operating income		224		165
Other income—net		(1)		(1)
Interest expense—net		77		79

Income before income taxes		148		87
Income tax provision		33		5
Net income		115		82
Other comprehensive income—net of tax:
Changes in retirement benefit obligations		—		2

Comprehensive income		$	115	$	84
Net income		$	115	$	82



Net income per share
Basic (Note 10)		$	0.50	$	0.33
Diluted (Note 10)		$	0.49	$	0.33
Weighted-average common shares outstanding
Basic (Note 10)		231		245
Diluted (Note 10)		234		248

See Notes to Consolidated Financial Statements (Unaudited).


US FOODS HOLDING CORP.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(In millions)
	Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Income		Total Shareholders’ Equity
	Shares	Amount						Shares	Amount
BALANCE—December 28, 2024	254.7	$	3	$	3,748	$	2,003	24.2	$	(1,269)	$	43	$	4,528
Share-based compensation expense	—	—		22		—		—	—		—		22
Proceeds from employee share purchase plan	0.1	—		6		—		—	—		—		6
Vested restricted stock units, net	1.0	—		—		—		—	—		—		—
Exercise of stock options	—	—		1		—		—	—		—		1
Tax withholding payments for net share-settled equity awards	—	—		(33)		—		—	—		—		(33)


Changes in retirement benefit obligations, net of income tax	—	—		—		—		—	—		—		—

Common stock repurchased	—	—		—		—		0.3	(23)		—		(23)

Net income	—	—		—		115		—	—		—		115
BALANCE—March 29, 2025	255.8	$	3	$	3,744	$	2,118	24.5	$	(1,292)	$	43	$	4,616





	Common Stock			Additional Paid-In Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Amount						Shares	Amount
BALANCE—December 30, 2023	252.9	$	3	$	3,663	$	1,509	7.8	$	(311)	$	(115)	$	4,749
Share-based compensation expense	—	—		15		—		—	—		—		15
Proceeds from employee share purchase plan	0.1	—		5		—		—	—		—		5
Vested restricted stock units, net	0.7	—		—		—		—	—		—		—
Exercise of stock options	0.2	—		5		—		—	—		—		5
Tax withholding payments for net share-settled equity awards	—	—		(20)		—		—	—		—		(20)


Changes in retirement benefit obligations, net of income tax	—	—		—		—		—	—		2		2
Common stock repurchased	—	—		—		—		0.3	(13)		—		(13)
Net income	—	—		—		82		—	—		—		82
BALANCE—March 30, 2024	253.9	$	3	$	3,668	$	1,591	8.1	$	(324)	$	(113)	$	4,825

See Notes to Consolidated Financial Statements (Unaudited).


US FOODS HOLDING CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)	13 Weeks Ended
	March 29, 2025		March 30, 2024
Cash flows from operating activities:
Net income	$	115	$	82
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	112		105





Deferred tax provision	8		5
Share-based compensation expense	22		15
Provision for doubtful accounts	9		7
Other non-cash activities	3		3
Changes in operating assets and liabilities:
Increase in receivables	(174)		(173)
Decrease (increase) in inventories	120		(20)
Increase in prepaid expenses and other assets	(13)		(1)
Increase in accounts payable and cash overdraft liability	190		221
Decrease in accrued expenses and other liabilities	(1)		(105)
Net cash provided by operating activities	391		139
Cash flows from investing activities:
Proceeds from sales of property and equipment	1		1
Proceeds from divestitures	38		—
Purchases of property and equipment	(84)		(87)
Cash paid for acquisitions	(85)		—
Net cash used in investing activities	(130)		(86)
Cash flows from financing activities:
Principal payments on debt and financing leases	(1,907)		(457)


Principal payments on debt repricing	—		(14)
Proceeds from debt repricing	—		14
Proceeds from debt borrowings	1,737		426

Repurchase of common stock	(23)		(13)
Debt financing costs and fees	—		(1)
Proceeds from employee stock purchase plan	6		5
Proceeds from exercise of stock options	1		5

Tax withholding payments for net share-settled equity awards	(33)		(20)
Net cash used in financing activities	(219)		(55)
Net increase (decrease) in cash, cash equivalents and restricted cash	42		(2)
Cash, cash equivalents and restricted cash—beginning of period	59		269
Cash, cash equivalents and restricted cash—end of period	$	101	$	267
Supplemental disclosures of cash flow information:

Interest paid—net of amounts capitalized	92		93
Income taxes paid—net	4		5
Property and equipment purchases included in accounts payable	41		20
Leased assets obtained in exchange for financing lease liabilities	45		56
Leased assets obtained in exchange for operating lease liabilities	48		7
Cashless exercise of stock options	—		4

See Notes to Consolidated Financial Statements (Unaudited).

US FOODS HOLDING CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(Amounts in tables in millions, except per share data, unless otherwise noted)

1. OVERVIEW AND BASIS OF PRESENTATION

US Foods Holding Corp., a Delaware corporation, and its consolidated subsidiaries are referred to in these consolidated financial statements and notes as “we,” “our,” “us,” the “Company,” or “US Foods.” US Foods Holding Corp. conducts all of its operations through its wholly owned subsidiary US Foods, Inc. (“USF”) and its subsidiaries. All of the Company’s indebtedness, as further described in Note 9, Debt, is a direct obligation of USF and its subsidiaries.

Business Description—The Company, through USF, operates in one business segment in which it markets, sells and distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States (“U.S.”). These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities and retail locations.

Basis of Presentation—The Company operates on a 52- or 53-week fiscal year, with all periods ending on a Saturday. When a 53-week fiscal year occurs, the Company reports the additional week in the fiscal fourth quarter. Fiscal years 2025 and 2024 are both 52-week fiscal years.

The consolidated financial statements included in this Quarterly Report have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements and notes prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures included in this Quarterly Report are adequate to make the information presented not misleading. These interim consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in the Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (the “2024 Annual Report”).

The consolidated interim financial statements reflect all adjustments (consisting of normal recurring items) necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for interim periods are not necessarily indicative of the results that might be achieved for any other interim period or the full fiscal year.

2. RECENT ACCOUNTING PRONOUNCEMENTS

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No 2023-09 Income Taxes (“Topic 740”) “Improvements to Income Tax Disclosures Topic 740”, which enhances the transparency of income tax disclosures primarily related to rate reconciliation and income taxes paid information. This guidance is effective for fiscal years beginning after December 15, 2024. This guidance is effective on a prospective basis, though retrospective application is permitted. The Company plans to adopt the provisions of ASU No. 2023-09 in its annual reporting in fiscal year 2025 and does not expect the provisions of the new standard to materially affect our financial position, results of operation or cash flows.

In November 2024, the FASB issued ASU No 2024-03 Income Statement—Reporting Comprehensive Income—“Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses”, which requires disclosure of disaggregated information about certain income statement expense line items within the footnotes to the financial statements. This guidance is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact that this standard will have on the Company’s consolidated financial statements.

3. REVENUE RECOGNITION

The Company recognizes revenue when the performance obligation is satisfied, which occurs when a customer obtains control of the promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services. The Company generates substantially all of its revenue from the distribution and sale of food and food-related products and recognizes revenue when title and risk of loss passes to the customer and the customer accepts the goods, which occurs at delivery. Customer sales incentives, such as volume-based rebates or discounts, are treated as a reduction of revenue at the time the revenue is recognized. Sales taxes invoiced to customers and remitted to governmental authorities are excluded from net sales. Shipping and handling costs are treated as fulfillment costs and included in distribution, selling and administrative costs.

The Company did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of March 29, 2025 or December 28, 2024. Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $2.1 billion and $2.0 billion as of March 29, 2025 and December 28, 2024, respectively.

The Company has certain customer contracts under which incentives are paid upfront to its customers. These payments have become industry practice and are not related to financing any customer’s business, nor are these payments associated with any distinct good or service to be received from any customer. These incentive payments are capitalized in prepaid expenses and other assets and amortized as a reduction of revenue over the life of the contract or as goods or services are transferred to the customer. The Company’s contract assets for these upfront payments were $52 million and $43 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of March 29, 2025 and December 28, 2024, respectively, and $52 million and $50 million included in other assets in the Company’s Consolidated Balance Sheets as of March 29, 2025 and December 28, 2024, respectively.

The following table presents the disaggregation of revenue for each of the Company’s principal product categories:


	13 Weeks Ended
		March 29, 2025		March 30, 2024
Meats and seafood		$	3,207	$	2,976
Dry grocery products		1,616		1,614
Refrigerated and frozen grocery products		1,602		1,551
Dairy		1,057		927
Equipment, disposables and supplies		861		864
Beverage products		548		509
Produce		460		508
Total net sales		$	9,351	$	8,949

4. ACQUISITIONS AND DIVESTITURES

Acquisitions

Jake’s Finer Foods Acquisition—On January 10, 2025, the Company acquired Jake’s Finer Foods, a broadline distributor in Texas, for a purchase price of $92 million subject to holdbacks and adjustments (less the amount of cash received). The acquisition was funded with cash on hand and allows US Foods to further expand its reach into key markets in south Texas. The Jake’s Finer Foods acquisition, reflected in the Company’s consolidated financial statements commencing from the date of acquisition, did not materially affect the Company’s results of operations or financial position. The Company is in the process of finalizing working capital adjustments for this acquisition. The Company recorded goodwill of $4 million and intangible assets of $5 million for this acquisition. The goodwill recognized from the Jake’s Finer Foods acquisition is not deductible for tax purposes. Jake’s Finer Foods is integrated into the Company’s foodservice distribution network.

Divestitures

Freshway Divestiture—During the fiscal quarter ended March 29, 2025, the Company completed the sale of the Freshway business for net proceeds of approximately $38 million. The Freshway business processes, repacks, and distributes fresh fruit and vegetables in the eastern half of the U.S. The Company recognized an immaterial loss included within distribution, selling and administrative costs in the Company’s Consolidated Statements of Comprehensive Income. The sale of the Freshway business did not represent a strategic shift that had a major effect on the Company’s operations and financial results and, therefore, did not qualify for presentation as discontinued operations.

5. INVENTORIES

The Company’s inventories, consisting mainly of food and other food-related products, are primarily considered finished goods. Inventory costs include the purchase price of the product, freight costs to deliver it to the Company’s distribution and retail facilities, and depreciation and labor related to processing facilities and equipment and are net of certain cash or non-cash consideration received from vendors. The Company assesses the need for valuation allowances for slow-moving, excess and obsolete inventories by estimating the net recoverable value of such goods based upon inventory category, inventory age, specifically identified items, and overall economic conditions.

The Company records inventories at the lower of cost or market primarily using the last-in, first-out (“LIFO”) method. For our LIFO based inventories, the base year values of beginning and ending inventories are determined using the inventory price index computation method. This “links” current costs to original costs in the base year when the Company adopted LIFO. LIFO reserves in the Company’s Consolidated Balance Sheets were $554 million and $549 million as of March 29, 2025 and December 28, 2024, respectively. As a result of changes in LIFO reserves, cost of goods increased $5 million and $45 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

6. PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 40 years. Property and equipment under financing leases and leasehold improvements are amortized on a straight-line basis over the shorter of the remaining terms of the related leases or the estimated useful lives of the assets, if reasonably assured the Company will purchase the assets at the end of the lease terms. As of March 29, 2025 and December 28, 2024, property and equipment-net included accumulated depreciation of $3,345 million and $3,303 million, respectively. Depreciation expense was $98 million and $93 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

7. GOODWILL AND OTHER INTANGIBLES

Goodwill includes the cost of acquired businesses in excess of the fair value of the tangible and other intangible net assets acquired. Other intangible assets include customer relationships, noncompete agreements, amortizable trade names, the brand names comprising the Company’s portfolio of exclusive brands, and trademarks. Brand names and trademarks are indefinite-lived intangible assets and, accordingly, are not subject to amortization, but are subject to impairment assessments as described below.

Customer relationships, noncompete agreements and amortizable trade names are intangible assets with definite lives, and are carried at the acquired fair value less accumulated amortization. Customer relationships, noncompete agreements and amortizable trade names are amortized over their estimated useful lives (which range from 3 to 15 years). Amortization expense was $14 million and $12 million for the 13 weeks ended March 29, 2025 and March 30, 2024, respectively.

Goodwill and other intangibles—net consisted of the following:


	March 29, 2025		December 28, 2024
Goodwill	$	5,768	$	5,781
Reclassification to assets held for sale(1)	—		(15)
Total Goodwill	5,768		5,766
Other intangibles—net
Customer relationships—amortizable:
Gross carrying amount	$	803	$	798
Accumulated amortization	(255)		(241)
Net carrying value	548		557
Trade names—amortizable:
Gross carrying amount	4		4
Accumulated amortization	(2)		(2)
Net carrying value	2		2
Noncompete agreements—amortizable:
Gross carrying amount	9		8
Accumulated amortization	(2)		(2)
Net carrying value	7		6
Brand names and trademarks—not amortizing	271		271
Total other intangibles—net	$	828	$	836

1. Relates to the reclassification of goodwill allocated to the Freshway divestiture in 2024. Refer to Note 4 Acquisitions and Divestitures for additional information.

The change in goodwill is attributable to the Freshway divestiture, offset by the Jake’s Finer Foods acquisition in the first quarter. The increase in the gross carrying amount of customer relationships and noncompete agreements is attributable to the Jake’s Finer Foods acquisition.

The Company assesses for impairment of intangible assets with definite lives only if events occur that indicate that the carrying amount of an intangible asset may not be recoverable. The Company assesses goodwill and other intangible assets with indefinite lives for impairment annually, or more frequently if events occur that indicate an asset may be impaired. For goodwill and indefinite-lived intangible assets, the Company’s policy is to assess for impairment as of the beginning of each fiscal third quarter. No impairments were recognized for the 13 weeks ended March 29, 2025 and March 30, 2024.

8. FAIR VALUE MEASUREMENTS

Certain assets and liabilities are carried at fair value under GAAP, under which fair value is a market-based measurement, not an entity-specific measurement. The Company’s fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

•Level 1—observable inputs, such as quoted prices in active markets

•Level 2—observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active or inactive markets that are observable either directly or indirectly, or other inputs that are observable or can be corroborated by observable market data

•Level 3—unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions

Any transfers of assets or liabilities between Level 1, Level 2, and Level 3 of the fair value hierarchy will be recognized as of the end of the reporting period in which the transfer occurs. There were no transfers between fair value levels in any of the periods presented below.

There were no significant assets or liabilities on the Company’s Consolidated Balance Sheets measured at fair value on a nonrecurring basis for the periods presented above, except as further disclosed in Note 7, Goodwill and Other Intangibles.

Recurring Fair Value Measurements

Money Market Funds

Money market funds include highly liquid investments with an original maturity of three or fewer months. These funds are valued using quoted market prices in active markets and are classified under Level 1 within the fair value hierarchy. As of March 29, 2025 and December 28, 2024, the fair value of the Company’s Level 1 assets was $36 million and zero, respectively.

Derivative Financial Instruments

The Company has in the past, and may in the future, use interest rate hedges, designated as cash flow hedges, to manage its exposure to interest rate movements in connection with its variable-rate debt. In April 2023, the Company entered into two, two-year rate cap agreements, which matured on April 30, 2025, with a total notional amount of $450 million, which effectively capped the interest rate on approximately 34% of the current principal amount of the Term Loan Facilities. The Company’s maximum exposure to the variable component of the interest rate on the Term Loan Facilities was 5% on the notional amount covered by the interest rate cap. The Company’s derivative financial instruments are classified as Level 2 assets. As of March 29, 2025 and December 28, 2024, the fair value of the Company’s Level 2 assets recorded within other current assets was zero for both periods.

The Company records its interest rate caps within other current assets in the Consolidated Balance Sheet at fair value, based on projections of cash flows and future interest rates. The determination of fair value includes the consideration of any credit valuation adjustments necessary, giving consideration to the creditworthiness of the respective counterparties or the Company, as appropriate.

The effective portion of gains and losses on the interest rate caps are initially recorded in other comprehensive loss, net of tax and reclassified from accumulated other comprehensive income (loss), net of tax to interest expense within the Company’s Consolidated Statement of Comprehensive Income during the period in which the hedged transaction affects income. There was no ineffectiveness attributable to the Company’s interest rate caps during the 13 weeks ended March 29, 2025.

On April 10, 2025, the Company entered into a one-year interest rate cap agreement, which will mature on April 30, 2026, with a total notional amount of $450 million, which effectively caps the interest rate on approximately 34% of the current principal amount of the Term Loan Facilities. The Company’s maximum exposure to the variable component of the interest rate on the Term Loan Facilities will be 5% on the notional amount covered by the interest rate cap. During the next twelve months, the Company estimates an immaterial amount will be reclassified from accumulated other comprehensive income (loss) to income.

Other Fair Value Measurements

The carrying value of cash, accounts receivable, vendor receivables, cash overdraft liability and accounts payable approximate their fair values due to their short-term maturities.

The fair value of the Company’s total debt approximated $4.8 billion as of both March 29, 2025 and December 28, 2024, as compared to its carrying value of $4.8 billion and $4.9 billion as of March 29, 2025 and December 28, 2024, respectively.

The fair value of the Company’s senior notes is based upon their quoted market prices on the respective dates and are classified under Level 2 of the fair value hierarchy. The fair value of all of the Company’s individual senior note issuances approximates carrying value. The fair value of the balance of the Company’s debt is primarily classified under Level 3 of the fair value hierarchy, with fair value estimated based upon a combination of the cash outflows expected under these debt facilities, interest rates that are currently available to the Company for debt with similar terms, and estimates of the Company’s overall credit risk.

9. DEBT

Total debt consisted of the following:


Debt Description	Maturity	Interest Rate as of March 29, 2025	Carrying Value as of March 29, 2025		Carrying Value as of December 28, 2024
ABL Facility	December 7, 2027	5.67%	$	75	$	223

2021 Incremental Term Loan Facility (net of $1 and $0 of unamortized deferred financing costs, respectively)	November 22, 2028	6.07%	609		610
2024 Incremental Term Loan Facility (net of $8 and $8 of unamortized deferred financing costs, respectively)	October 3, 2031	6.07%	717		717
Senior Notes due 2028 (net of $3 and $4 of unamortized deferred financing costs, respectively)	September 15, 2028	6.88%	497		496
Senior Notes due 2029 (net of $5 and $5 of unamortized deferred financing costs, respectively)	February 15, 2029	4.75%	895		895
Senior Notes due 2030 (net of $3 and $3 of unamortized deferred financing costs, respectively)	June 1, 2030	4.63%	497		497
Senior Notes due 2032 (net of $4 and $4 of unamortized deferred financing costs, respectively)	January 15, 2032	7.25%	496		496
Senior Notes due 2033 (net of $3 and $4 of unamortized deferred financing costs, respectively)	April 15, 2033	5.75%	497		496
Obligations under financing leases	2025–2037	1.26%-8.31%	514		490
Other debt	January 1, 2031	5.75%	8		8
Total debt			4,805		4,928
Current portion of long-term debt			(116)		(109)
Long-term debt			$	4,689	$	4,819

ABL Facility

The Company’s asset based senior secured revolving credit facility (the “ABL Facility”) provides the Company with loan commitments having a maximum aggregate principal amount of $2,300 million. The ABL Facility is scheduled to mature on December 7, 2027.

Borrowings under the ABL Facility bear interest at a rate per annum equal to, at the Company’s periodic election, Term Secured Overnight Financing Rate (“Term SOFR”) or Adjusted Borrowing Rate (“ABR”), as described in the ABL facility, plus the following margin and credit spread adjustment:

Borrowing Election

Margin based on USF’s excess availability under the ABL Facility

Credit Spread Adjustment

SOFR Floor

Margin at March 29, 2025

ABR

0.00% to 0.50%

N/A

0.25%

Term SOFR

1.00% to 1.50%

0.10%

0.00%

1.25%

On April 30, 2024, the ABL Facility was amended to provide certain providers of supply chain financings a security interest in certain assets of the Company under the ABL Facility.

The Company had outstanding borrowings totaling $75 million, and had outstanding letters of credit totaling $567 million, under the ABL Facility as of March 29, 2025. The outstanding letters of credit primarily relate to securing USF’s obligations with respect to its insurance program and certain real estate leases. There was available capacity of $1,658 million under the ABL Facility as of March 29, 2025. Subsequent to the fiscal quarter ended March 29, 2025, outstanding letters of credit were reduced by approximately $118 million after additional surety bonds were issued in the first quarter of 2025 to secure the Company’s obligations with respect to its insurance program.

Term Loan Facilities

The Amended and Restated Term Loan Credit Agreement, dated as of June 27, 2016 (as amended, the “Term Loan Credit Agreement”), provides the Company with an incremental senior secured term loan borrowed in October 2024 (the “2024

Incremental Term Loan Facility”), an incremental senior secured term loan borrowed in November 2021 (the “2021 Incremental Term Loan Facility”) and the right to request additional incremental senior secured term loan commitments.

The 2021 Incremental Term Loan Facility had an outstanding balance of $609 million, net of $1 million of unamortized deferred financing costs as of March 29, 2025. The 2024 Incremental Term Loan Facility had an outstanding balance of $717 million, net of $8 million of unamortized deferred financing costs as of March 29, 2025. Borrowings under the Term Loan Credit Agreement bear interest at a rate per annum equal to, at the Company’s periodic election, Term SOFR or ABR, as described in the Term Loan Credit Agreement, plus the following margin:

Borrowing Election

Margin

SOFR Floor

ABR

0.75%

N/A

Term SOFR

1.75%

0.00%

USF’s maximum exposure to the variable component of the interest rate on the Term Loan Facilities is 5% on the notional amount covered by the interest rate caps described above. Borrowings under the Term Loan Credit Agreement may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of SOFR-based borrowings. The Term Loan Credit Agreement may require mandatory repayments if certain assets are sold.

On February 27, 2024, the 2021 Incremental Term Loan Facility was amended to reduce the interest rate margins under the term loan facility to 2.00% for Term SOFR borrowings and 1.00% for ABR borrowings and eliminate the credit spread adjustment. The Company applied modification accounting to the majority of the continuing lenders as the terms were not substantially different from the terms that applied to those lenders prior to the amendment. For the remaining lenders, the Company applied debt extinguishment accounting. The Company recorded $1 million of third-party costs related to the February 27, 2024 amendment in interest expense. Unamortized deferred financing costs of $3 million as of February 27, 2024 were carried forward and will be amortized through November 22, 2028, the maturity date of the term loan facility.

On October 3, 2024, the Company amended the 2021 Incremental Term Loan Facility, entered into the 2024 Incremental Term Loan Facility, and completed a private offering of $500 million aggregate principal amount of its 5.75% Unsecured Senior Notes due 2033 (the “Unsecured Senior Notes due 2033”). Proceeds from the incremental term loans and senior notes, along with cash on hand, were used to repay all of the then outstanding borrowings under the incremental senior secured term loan facility borrowed in September 2019 (the “2019 Incremental Term Loan Facility”). The 2021 Incremental Term Loan Facility amendment reduced the interest rate margins under the term loan facility to 1.75% for Term SOFR borrowings and 0.75% for ABR borrowings. The Unsecured Senior Notes due 2033 are unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly-owned domestic subsidiaries that provide guarantees under the Company’s senior secured term loan credit facilities.

In connection with the repayment of the 2019 Incremental Term Loan Facility during the fourth quarter of fiscal year 2024, the Company applied debt extinguishment accounting and recorded $10 million in the Company’s Consolidated Statements of Comprehensive Income, primarily consisting of a write-off of pre-existing unamortized deferred financing costs related to the incremental Term Loan Facility. Lender fees and third-party costs of $10 million related to the 2021 Incremental Term Loan amendment, issuance of the 2024 Incremental Term Loan Facility and the Unsecured Senior Notes due 2033 were capitalized as deferred financing costs.

Senior Notes

Each of the Company’s outstanding senior notes are redeemable, at USF’s option, in whole or in part, at a price multiplied by the remaining principal, plus accrued and unpaid interest, if any, to but not including the applicable redemption date. The senior notes are unconditionally guaranteed on a senior unsecured basis by each of the Company’s existing and future wholly-owned domestic subsidiaries that provide guarantees under the Company’s senior secured term loan credit facilities.

As of March 29, 2025, the Term Loan Facility, ABL Facility and certain variable rate finance leases, which were approximately 30% of the Company’s total debt, bore interest at a floating rate.

Debt Covenants

The agreements governing our indebtedness contain customary covenants. These include, among other things, covenants that restrict our ability to incur certain additional indebtedness, create or permit liens on assets, pay dividends, or engage in mergers or consolidations. The Company had approximately $2.5 billion of restricted payment capacity under these covenants, and approximately $2.1 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of March 29, 2025.

10. STOCKHOLDERS’ EQUITY

Earnings Per Share

The Company computes EPS in accordance with Accounting Standards Codification (“ASC”) 260, Earnings per Share. Basic EPS is computed by dividing net income available to common shareholders by the weighted-average number of

SEC Form 10-Q filed by US Foods Holding Corp.