Henry Schein - 10-Q quarterly report FY2023 Q3

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒

QUARTERLY

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

OF 1934

For the

quarterly

period ended

September 30, 2023

☐

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

ACT

OF 1934

For the transition period from ____________ to ____________

Commission File Number:

0-27078

HENRY SCHEIN, INC.

(Exact name of registrant as specified in its charter)

Delaware

11-3136595

(State or other jurisdiction of

(I.R.S. Employer Identification No.)

incorporation or organization)

135 Duryea Road

Melville

New York

(Address of principal executive offices)

11747

(Zip Code)

(

631

)

843-5500

(Registrant’s telephone number, including area code)

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 $.01 per share

HSIC

The

Nasdaq

Global Select Market

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

☒

☐

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

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller

reporting company, or an emerging growth company.

See the definitions of “large accelerated filer,”

“accelerated filer,”

“smaller reporting company,”

and “emerging growth company”

in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period

for

complying with any new or revised financial accounting standards provided

pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined

in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

As of November 13, 2023,

there were

129,938,341

shares of the registrant’s common stock outstanding.

HENRY SCHEIN, INC.

INDEX

PART I. FINANCIAL INFORMATION

Page

ITEM 1.

Condensed Consolidated Financial Statements:

Condensed Consolidated Balance Sheets

as of September 30, 2023 and December 31, 2022

Condensed Consolidated Statements of Income

for the three and nine months ended

September 30, 2023 and September 24, 2022

Condensed Consolidated Statements of Comprehensive Income

for the

three and nine months ended September 30, 2023 and September 24, 2022

Condensed Consolidated Statement of Changes in Stockholders' Equity

for the three months ended

September 30, 2023 and September 24, 2022

Condensed Consolidated Statement of Changes in Stockholders' Equity

for the nine months ended

September 30, 2023 and September 24, 2022

Condensed Consolidated Statements of Cash Flows

for the nine months ended

September 30, 2023 and September 24, 2022

Notes to Condensed Consolidated Financial Statements

Note 1 – Basis of Presentation

Note 2 – Critical Accounting Policies, Accounting Standard Adopted, and Recently

Issued Accounting Standards

Note 3 – Net Sales from Contracts with Customers

Note 4 – Segment Data

Note 5 – Business Acquisitions

Note 6 – Fair Value Measurements

Note 7 – Derivatives and Hedging Activities

Note 8 – Debt

Note 9 – Income Taxes

Note 10 – Plan of Restructuring

and Integration Costs

Note 11 – Legal Proceedings

Note 12 – Stock-Based Compensation

Note 13 – Redeemable Noncontrolling Interests

Note 14 – Comprehensive Income

Note 15 – Earnings Per Share

Note 16 – Supplemental Cash Flow Information

Note 17 – Related Party Transactions

Note 18 –

Subsequent Event

ITEM 2.

Management's Discussion and Analysis of

Financial Condition and Results of Operations

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

ITEM 4.

Controls and Procedures

PART II. OTHER INFORMATION

Unregistered Sales of Equity Securities and Use of Proceeds

See accompanying notes.

PART

I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions,

except share data)

September 30,

December 31,

2023

2022

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

166

117

Accounts receivable, net of allowance for credit losses of $

and $

1,573

1,442

Inventories, net

1,833

1,963

Prepaid expenses and other

541

466

Total current assets

4,113

3,988

Property and equipment, net

474

383

Operating lease right-of-use assets

323

284

Goodwill

3,595

2,893

Other intangibles, net

834

587

Investments and other

471

472

Total assets

9,810

8,607

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND

STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

953

1,004

Bank credit lines

103

Current maturities of long-term debt

Operating lease liabilities

Accrued expenses:

Payroll and related

274

314

Taxes

137

132

Other

571

592

Total current liabilities

2,093

2,224

Long-term debt

1,815

1,040

Deferred income taxes

Operating lease liabilities

314

275

Other liabilities

396

361

Total liabilities

4,709

3,936

Redeemable noncontrolling interests

821

576

Commitments and contingencies

(nil)

Stockholders' equity:

Preferred stock, $

0.01

par value,

1,000,000

shares authorized,

none

outstanding

Common stock, $

0.01

par value,

480,000,000

shares authorized,

129,935,883

outstanding on September 30, 2023 and

131,792,817

outstanding on December 31, 2022

Additional paid-in capital

Retained earnings

3,897

3,678

Accumulated other comprehensive loss

(247)

(233)

Total Henry Schein, Inc. stockholders' equity

3,651

3,446

Noncontrolling interests

629

649

Total stockholders' equity

4,280

4,095

Total liabilities, redeemable noncontrolling

interests and stockholders' equity

9,810

8,607

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF INCOME

(in millions,

except share and per share data)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Net sales

3,162

3,067

9,322

9,276

Cost of sales

2,167

2,153

6,386

6,444

Gross profit

995

914

2,936

2,832

Operating expenses:

Selling, general and administrative

725

648

2,149

2,010

Depreciation and amortization

152

137

Restructuring and integration costs

Operating income

200

211

576

675

Other income (expense):

Interest income

Interest expense

(25)

(8)

(58)

(23)

Other, net

(2)

Income before taxes, equity in earnings of affiliates and

noncontrolling interests

179

205

528

658

Income taxes

(39)

(46)

(119)

(155)

Equity in earnings of affiliates

Net income

143

162

419

515

Less: Net income attributable to noncontrolling interests

(6)

(12)

(21)

(24)

Net income attributable to Henry Schein, Inc.

137

150

398

491

Earnings per share attributable to Henry Schein, Inc.:

Basic

1.06

1.10

3.04

3.59

Diluted

1.05

1.09

3.02

3.55

Weighted-average common

shares outstanding:

Basic

130,388,353

135,608,678

130,888,717

136,731,413

Diluted

131,442,135

137,084,049

132,149,172

138,488,254

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(in millions)

(unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Net income

143

162

419

515

Other comprehensive income (loss), net of tax:

Foreign currency translation loss

(45)

(89)

(17)

(176)

Unrealized gain from foreign currency hedging

activities

Pension adjustment gain

Other comprehensive loss, net of tax

(39)

(77)

(15)

(155)

Comprehensive income

104

404

360

Less: Comprehensive income attributable to noncontrolling

interests:

Net income

(6)

(12)

(21)

(24)

Foreign currency translation loss

Comprehensive income attributable to noncontrolling

interests

(4)

(6)

(20)

(10)

Comprehensive income attributable to Henry Schein, Inc.

100

384

350

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN

STOCKHOLDERS’ EQUITY

(in millions, except share data)

(unaudited)

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, July 1, 2023

130,576,806

3,769

(210)

626

4,186

Net income (excluding $

attributable to redeemable

noncontrolling interests)

137

141

Foreign currency translation loss (excluding loss of $

attributable to redeemable noncontrolling interests)

(43)

Unrealized gain from foreign currency hedging activities,

net of tax of $

Dividends declared

(1)

Change in fair value of redeemable noncontrolling interests

Initial noncontrolling interests and adjustments related to

business acquisitions

(1)

Repurchases and retirement of common stock

(659,681)

(6)

(44)

(50)

Stock-based compensation expense

23,985

Stock issued upon exercise of stock options

3,884

Shares withheld for payroll taxes

(9,183)

Settlement of stock-based compensation awards

Transfer of charges in excess of

capital

(35)

Balance, September 30, 2023

129,935,883

3,897

(247)

629

4,280

Accumulated

Common Stock

Additional

Other

Total

$0.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, June 25, 2022

136,439,560

3,834

(241)

633

4,227

Net income (excluding $

attributable to redeemable

noncontrolling interests)

150

152

Foreign currency translation loss (excluding loss of $

attributable to redeemable noncontrolling interests)

(83)

Unrealized gain from foreign currency hedging activities,

net of tax of $

Pension adjustment gain, net of tax of $

Dividends declared

(1)

Change in fair value of redeemable securities

Repurchases and retirement of common stock

(1,183,729)

(12)

(78)

(90)

Stock-based compensation expense

3,640

Stock issued upon exercise of stock options

597

Shares withheld for payroll taxes

(1,194)

(1)

Settlement of stock-based compensation awards

Transfer of charges in excess of

capital

(16)

Balance, September 24, 2022

135,258,887

3,922

(312)

634

4,245

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENT

OF CHANGES IN

STOCKHOLDERS' EQUITY

(in millions, except share data)

(unaudited)

Accumulated

Common Stock

Additional

Other

Total

$.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 31, 2022

131,792,817

3,678

(233)

649

4,095

Net income (excluding $

attributable to redeemable

noncontrolling interests)

398

408

Foreign currency translation loss (excluding loss of $

attributable to redeemable noncontrolling interests)

(16)

Unrealized gain from foreign currency hedging activities,

net of tax of $

Dividends declared

(28)

Change in fair value of redeemable noncontrolling interests

Initial noncontrolling interests and adjustments related to

business acquisitions

(2)

Repurchases and retirement of common stock

(2,521,695)

(26)

(175)

(201)

Stock-based compensation expense

1,060,883

Stock issued upon exercise of stock options

19,744

Shares withheld for payroll taxes

(415,048)

(32)

Settlement of stock-based compensation awards

(818)

Transfer of charges in excess of

capital

(4)

Balance, September 30, 2023

129,935,883

3,897

(247)

629

4,280

Accumulated

Common Stock

Additional

Other

Total

$.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 25, 2021

137,145,558

3,595

(171)

638

4,063

Net income (excluding $

attributable to redeemable

noncontrolling interests)

491

496

Foreign currency translation loss (excluding loss of $

attributable to redeemable noncontrolling interests)

(162)

(1)

(163)

Unrealized gain from foreign currency hedging activities,

net of tax of $

Pension adjustment gain, net of tax of $

Dividends declared

(1)

Purchase of noncontrolling interests

(7)

Change in fair value of redeemable securities

Repurchases and retirement of common stock

(2,529,126)

(28)

(172)

(200)

Stock-based compensation expense

958,539

Stock issued upon exercise of stock options

30,424

Shares withheld for payroll taxes

(343,541)

(30)

Settlement of stock-based compensation awards

(2,967)

Transfer of charges in excess of

capital

(8)

Balance, September 24, 2022

135,258,887

3,922

(312)

634

4,245

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONDENSED CONSOLIDATED STATEMENTS

OF CASH FLOWS

(in millions)

(unaudited)

Nine Months Ended

September 30,

September 24,

2023

2022

Cash flows from operating activities:

Net income

419

515

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

Depreciation and amortization

180

160

Non-cash restructuring charges

Stock-based compensation expense

Provision for losses on trade and other accounts receivable

Benefit from deferred income taxes

(4)

(20)

Equity in earnings of affiliates

(10)

(12)

Distributions from equity affiliates

Changes in unrecognized tax benefits

Other

(11)

(25)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

(72)

(93)

Inventories

180

(9)

Other current assets

(55)

(96)

Accounts payable and accrued expenses

(170)

(131)

Net cash provided by operating activities

532

348

Cash flows from investing activities:

Purchases of fixed assets

(108)

(67)

Payments related to equity investments and business acquisitions,

net of cash acquired

(668)

(127)

Proceeds from loan to affiliate

Other

(36)

(26)

Net cash used in investing activities

(808)

(211)

Cash flows from financing activities:

Net change in bank borrowings

(98)

Proceeds from issuance of long-term debt

1,158

165

Principal payments for long-term debt

(457)

(58)

Debt issuance costs

(3)

Proceeds from issuance of stock upon exercise of stock options

Payments for repurchases and retirement of common stock

(200)

Payments for taxes related to shares withheld for employee taxes

(34)

(30)

Distributions to noncontrolling shareholders

(41)

(18)

Acquisitions of noncontrolling interests in subsidiaries

(19)

(33)

Net cash provided by (used in) financing activities

307

(121)

Effect of exchange rate changes on cash and cash equivalents

(11)

Net change in cash and cash equivalents

Cash and cash equivalents, beginning of period

117

118

Cash and cash equivalents, end of period

166

123

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 1 – Basis of Presentation

Our condensed consolidated financial statements include the accounts of Henry

Schein, Inc. and all of our

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

All intercompany accounts and transactions are eliminated

consolidation.

Investments in unconsolidated affiliates in which we have the ability to

influence the operating or

financial decisions are accounted for under the equity method.

Certain prior period amounts have been reclassified

to conform to the current period presentation.

These reclassifications, individually and in the aggregate, did

not

have a material impact on our condensed consolidated financial condition,

results of operations or cash flows.

Our accompanying unaudited condensed consolidated financial statements

have been prepared in accordance with

accounting principles generally accepted in the United States

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

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

Accordingly, they do not include all of the

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

financial statements.

The unaudited interim condensed consolidated financial statements should be

read in conjunction with the audited

consolidated financial statements and notes to the consolidated financial

statements contained in our Annual Report

on Form 10-K for the year ended December 31, 2022 and with the information

contained in our other publicly-

available filings with the Securities and Exchange Commission.

The condensed consolidated financial statements

reflect all adjustments considered necessary for a fair presentation of

the consolidated results of operations and

financial position for the interim periods presented.

All such adjustments are of a normal recurring nature.

The preparation of financial statements in conformity with accounting principles

generally accepted in the United

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

assets and liabilities and

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

statements and the reported amounts of

revenues and expenses during the reporting period.

Actual results could differ from those estimates.

The results of

operations for the three and nine months ended September 30, 2023

are not necessarily indicative of the results to

be expected for any other interim period or for the year ending December 30, 2023.

Our condensed consolidated financial statements reflect estimates and assumptions

made by us that affect, among

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

asset valuation; inventory valuation; equity

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

deferred income taxes and income

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

supplier rebates; measurement of

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

plans; and pension plan

assumptions.

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

we consider a Variable Interest Entity (“VIE”) because we are the primary beneficiary, and we have the power to

direct activities that most significantly affect the economic performance and have

the obligation to absorb the

majority of the losses or benefits.

For this VIE, the trade accounts receivable transferred to the VIE

are pledged as

collateral to the related debt.

The creditors have recourse to us for losses on these trade accounts

receivable.

September 30, 2023 and December 31, 2022, certain trade accounts receivable

that can only be used to settle

obligations of this VIE were $

million and $

327

million, respectively, and the liabilities of this VIE where the

creditors have recourse to us were $

million and $

255

million, respectively.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 2 – Critical Accounting Policies, Accounting Standard Adopted,

and Recently Issued Accounting

Standards

Critical Accounting Policies

There have been no material changes in our critical accounting policies

during the nine months ended September

30, 2023, as compared to the critical accounting policies described in Item 7

of our Annual Report on Form 10-K

for the year ended December 31, 2022.

Accounting Standard Adopted

During the quarter ended September 30, 2023, we adopted Accounting

Standards Codification (“ASC”) Topic 848,

Reference Rate Reform (Topic 848).

The adoption of Topic 848 did not have a material impact on our condensed

consolidated financial statements.

Recently Issued Accounting Standards

In September 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

(“ASU”) No. 2022-04, “Liabilities – Supplier Finance Programs (Subtopic

405-50): Disclosure of Supplier Finance

Program Obligations,” which will increase transparency of supplier finance

programs by requiring entities that use

such programs in connection with the purchase of goods and services to disclose

certain qualitative and quantitative

information about such programs.

ASU 2022-04 is effective for fiscal years beginning after December 15, 2022,

including interim periods within those fiscal years, except for amended

roll forward information, which is effective

for fiscal years beginning after December 15, 2023.

We do not expect that the requirements of this guidance will

have a material impact on our condensed consolidated financial statements.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 3 – Net Sales from Contracts with Customers

Net sales are recognized in accordance with policies disclosed in Item

8 of our Annual Report on Form 10-K for

the year ended December 31, 2022.

Disaggregation of Net Sales

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

area:

Three Months Ended

Nine Months Ended

September 30, 2023

North

America

International

Global

North

America

International

Global

Net sales:

Health care distribution

Dental

1,134

748

1,882

3,447

2,290

5,737

Medical

1,044

1,070

2,920

2,991

Total health care distribution

2,178

774

2,952

6,367

2,361

8,728

Technology

and value-added services

185

210

519

594

Total net sales

2,363

799

3,162

6,886

2,436

9,322

Three Months Ended

Nine Months Ended

September 24, 2022

North

America

International

Global

North

America

International

Global

Net sales:

Health care distribution

Dental

1,131

654

1,785

3,360

2,106

5,466

Medical

1,088

1,106

3,215

3,274

Total health care distribution

2,219

672

2,891

6,575

2,165

8,740

Technology

and value-added services

155

176

469

536

Total net sales

2,374

693

3,067

7,044

2,232

9,276

Deferred Revenue

At September 30, 2023, the current and non-current portion of contract

liabilities were $

million and $

million,

respectively.

During the nine months ended September 30, 2023, we recognized,

in net sales, $

million of the

amount that was previously deferred at December 31, 2022.

At December 31, 2022, the current portion of contract

liabilities of $

million was reported in accrued expenses: other, and $

million related to non-current contract

liabilities was reported in other liabilities.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 4

–

Segment Data

We conduct our business through

two

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

value-added services.

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

Our global

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

and other

institutions.

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

emergency

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

and large enterprises, such as

group practices and integrated delivery networks, among other providers

across a wide range of specialties.

Our

dental and medical groups serve practitioners in

countries worldwide.

The health care distribution reportable segment aggregates our global dental

and medical operating segments.

This

segment distributes consumable products, dental specialty products, small

equipment, laboratory products, large

equipment, equipment repair services, branded and generic pharmaceuticals,

vaccines, surgical products, diagnostic

tests, infection-control products, personal protective equipment (“PPE”)

and vitamins.

Our global technology and value-added services reportable segment provides

software, technology and other value-

added services to health care practitioners.

Our technology offerings include practice management software

systems for dental and medical practitioners.

Our value-added practice solutions include practice consultancy,

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

basis, e-services, practice

technology, network and hardware services, as well as continuing education services for practitioners.

The following tables present information about our reportable and operating

segments:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Net Sales:

Health care distribution

(1)

Dental

1,882

1,785

5,737

5,466

Medical

1,070

1,106

2,991

3,274

Total health care distribution

2,952

2,891

8,728

8,740

Technology

and value-added services

(2)

210

176

594

536

Total

3,162

3,067

9,322

9,276

(1)

Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and

generic pharmaceuticals, vaccines, surgical products, dental specialty products (including implant, orthodontic and endodontic

products), diagnostic tests, infection-control products, PPE products and vitamins.

(2)

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

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

education services for practitioners, consulting and other services.

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Operating Income:

Health care distribution

160

179

471

579

Technology

and value-added services

105

Total

200

211

576

675

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 5

–

Business Acquisitions

Our acquisition strategy is focused on investments in companies that

add new customers and sales teams, increase

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

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

connection with our business acquisitions, the major classes of assets

and liabilities to which we generally allocate

acquisition consideration to, excluding goodwill, include identifiable

intangible assets (i.e., customer relationships

and lists, trademarks and trade names, product development and

non-compete agreements), inventory and accounts

receivable.

The estimated fair value of identifiable intangible assets is based

on critical judgments and assumptions

derived from analysis of market conditions, including discount rates,

projected revenue growth rates (which are

based on historical trends and assessment of financial projections), estimated

customer attrition and projected cash

flows.

These assumptions are forward-looking and could be affected by future economic and

market conditions.

While we use our best estimates and assumptions to accurately value

assets acquired and liabilities assumed at the

acquisition date as well as contingent consideration, where applicable,

our estimates are inherently uncertain and

subject to refinement.

As a result, within 12 months following the date of acquisition,

or the measurement period,

we may record adjustments to the assets acquired and liabilities assumed

with the corresponding offset to goodwill

within our condensed consolidated balance sheets.

At the end of the measurement period or final determination of

the values of such assets acquired or liabilities assumed, whichever

comes first, any subsequent adjustments are

recognized in our condensed consolidated statements of operations.

During the nine months ended September 30, 2023 we completed accounting

for certain acquisitions that occurred

in the year ended December 31, 2022.

In relation to these acquisitions, we did not record material adjustments

our condensed consolidated financial statements relating to changes in estimated

values of assets acquired,

liabilities assumed and contingent consideration assets and liabilities.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Acquisition of S.I.N. Implant System

On July 5, 2023 we acquired a

100

% voting equity interest in S.I.N. Implant System (“S.I.N.”), one of Brazil’s

leading manufacturers of dental implants.

Based in São Paulo and founded in 2003, S.I.N. manufactures

extensive line of products to perform dental implant procedures and

is focused on advancing the development of

value-priced dental implants.

S.I.N. recently expanded the distribution of its products into the United

States and

other international markets.

The following table aggregates

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

consideration

paid and net assets acquired in the S.I.N.:

2023

Acquisition consideration:

Cash

326

Total consideration

326

Identifiable assets acquired and liabilities assumed:

Current assets

Intangible assets

155

Other noncurrent assets

Current liabilities

(33)

Long-term debt

(22)

Deferred income taxes

(55)

Other noncurrent liabilities

(27)

Total identifiable

net assets

126

Goodwill

200

Total net assets acquired

326

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

acquisition as well as the expected

growth potential of S.I.N.

The acquired goodwill is not deductible for tax purposes.

The following table summarizes the preliminary identifiable intangible assets

acquired as part of the acquisition of

S.I.N.:

2023

Estimated Useful Lives (in years)

Customer relationships and lists

Trademarks/ Tradenames

Non-compete agreements

Product development

Other

Total

155

The accounting for the acquisition of S.I.N. has not been completed

in several areas, including but not limited to

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

liabilities and income and non-income based taxes.

To assist management in the allocation of consideration,

engaged valuation specialists to determine the fair value of intangible and

tangible assets acquired and liabilities

assumed.

will finalize the amounts recognized as the information necessary

to complete the analysis is

obtained.

We expect to finalize these amounts as soon as possible but no later than one year from the acquisition

date.

The pro forma financial information has not been presented because

the impact of the S.I.N. acquisition

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

during the three and nine months ended September 30, 2023 was immaterial

to our condensed consolidated

financial statements.

Acquisition of Biotech Dental

On April 5, 2023, we acquired a

% voting equity interest in Biotech Dental (“Biotech Dental”), which

is a

provider of dental implants, clear aligners, individualized prosthetics,

and innovative digital dental software based

in France.

Biotech Dental has several important solutions for dental practices

and dental labs, including Nemotec, a

comprehensive, integrated suite of planning and diagnostic software

using open architecture that connects disparate

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

accuracy and an improved patient

experience.

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

management software solutions will help customers streamline their

clinical as well as administrative workflow for

the ultimate benefit of patients.

The following table aggregates

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

consideration

paid and net assets acquired in the Biotech Dental acquisition:

2023

Acquisition consideration:

Cash

216

Fair value of contributed equity share in a controlled subsidiary

Redeemable noncontrolling interests

182

Total consideration

423

Identifiable assets acquired and liabilities assumed:

Current assets

Intangible assets

119

Other noncurrent assets

Current liabilities

(51)

Long-term debt

(84)

Deferred income taxes

(38)

Other noncurrent liabilities

(22)

Total identifiable

net assets

Goodwill

343

Total net assets acquired

423

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

acquisition as well as the expected

growth potential of Biotech Dental.

The acquired goodwill is deductible for tax purposes.

The following table summarizes the preliminary identifiable intangible assets

acquired as part of the acquisition of

Biotech Dental:

2023

Estimated Useful Lives (in years)

Customer relationships and lists

Trademarks/ Tradenames

Non-compete agreements

Other

Total

119

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The accounting for the acquisition of Biotech Dental has

not been completed in several areas, including but not

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

accrued liabilities and income and non-income based taxes.

To assist management in the allocation of

consideration, we engaged valuation specialists to determine the fair value

of intangible and tangible assets

acquired and liabilities assumed.

We will finalize the amounts recognized as the information necessary to complete

the analysis is obtained.

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

acquisition date.

The pro forma financial information has not been presented because

the impact of the Biotech

Dental acquisition during the three and nine months ended September

30, 2023 was immaterial to our condensed

consolidated financial statements.

Other 2023 Acquisitions

During the nine months ended September 30, 2023, we acquired companies

within the health care distribution and

technology and value-added services segments.

Our acquired ownership interest ranged between

% to

100

The following table aggregates

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

consideration

paid and net assets acquired for these acquisitions during the nine

months ended September 30, 2023.

2023

Acquisition consideration:

Cash

167

Deferred consideration

Estimated fair value of contingent consideration payable

Fair value of previously held equity method investment

Redeemable noncontrolling interests

Total consideration

283

Identifiable assets acquired and liabilities assumed:

Current assets

Intangible assets

117

Other noncurrent assets

Current liabilities

(23)

Deferred income taxes

(13)

Long-term debt

(8)

Other noncurrent liabilities

(10)

Total identifiable

net assets

113

Goodwill

170

Total net assets acquired

283

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

these acquisitions are expected to

provide for us, as well as the expected growth potential.

Approximately half of the acquired goodwill is deductible

for tax purposes.

In connection with an acquisition of a controlling interest of an

affiliate, we recognized a gain of approximately $

million related to the remeasurement to fair value of our previously held

equity investment, using a discounted cash

flow model based on Level 3 inputs, as defined in

Note 6 – Fair Value Measurements

The following table summarizes the preliminary identifiable intangible assets

acquired during the nine months

ended September 30, 2023 and their estimated useful lives as of the date

of the acquisition:

2023

Estimated Useful Lives (in years)

Customer relationships and lists

Trademarks/ Tradenames

Non-compete agreements

Product development

Patents

Other

Total

117

The pro forma financial information has not been presented because the

impact of the acquisitions during the three

and nine months ended September 30, 2023 was immaterial to our condensed

consolidated financial statements.

Acquisition Costs

During the nine months ended September 30, 2023 and September 24, 2022

we incurred $

million and $

million, respectively, in acquisition costs, which are included in “selling, general and administrative” within our

condensed consolidated statements of income.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 6 – Fair Value Measurements

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

paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

The fair value hierarchy distinguishes between

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

from independent sources (observable

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

information available in the circumstances (unobservable inputs).

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

highest priority to unadjusted quoted prices

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

to unobservable inputs (Level 3).

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

•

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

or liabilities that are accessible at the

measurement date.

•

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

observable for the asset or liability,

either directly or indirectly.

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

in active markets;

quoted prices for identical or similar assets or liabilities in markets

that are not active; inputs other than quoted

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

derived principally from or corroborated by

observable market data by correlation or other means.

•

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

The following section describes the fair values of our financial instruments

and the methodologies that we used to

measure their fair values.

Investments and notes receivable

There are no quoted market prices available for investments in unconsolidated

affiliates and notes receivable.

Certain of our notes receivable contain variable interest rates.

We believe the carrying amounts are a reasonable

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

markets.

Debt

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

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

classified as Level 3 within the fair value hierarchy, and as of September 30, 2023 and December 31, 2022 was

estimated at $

1,899

million and $

1,149

million, respectively.

Factors that we considered when estimating the fair

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

spreads.

Derivative contracts

Derivative contracts are valued using quoted market prices and

significant other observable inputs.

We use

derivative instruments to minimize our exposure to fluctuations in foreign

currency exchange rates.

Our derivative

instruments primarily include foreign currency forward agreements related

to certain intercompany loans, certain

forecasted inventory purchase commitments with foreign suppliers,

foreign currency forward contracts to hedge a

portion of our euro-denominated foreign operations which are designated

as net investment hedges, hedging of the

floating interest rate to a fixed interest rate on our $

750

million term loan

(see

Note 8 – Debt

for additional

information)

, and a total return swap for the purpose of economically hedging our

unfunded non-qualified

supplemental executive retirement plan (the “SERP”) and our deferred compensation

plan (the “DCP”).

See

Note 7

– Derivatives and Hedging Activities

for additional information.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

are obtained by comparing our contract

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

is based on market rates for comparable

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

Total

Return Swaps

The fair value for the total return swap is measured by valuing

the underlying exchange traded funds of the swap

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

date and are classified within Level 2 of the

fair value hierarchy.

Redeemable noncontrolling interests

The values for redeemable noncontrolling interests are classified within

Level 3 of the fair value hierarchy and are

based on recent transactions and/or implied multiples of earnings.

See

Note 13 – Redeemable Noncontrolling

Interests

for additional information.

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

recognized at fair value on a recurring

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

September 30, 2023 and December 31,

2022:

September 30, 2023

Level 1

Level 2

Level 3

Total

Assets:

Derivative contracts designated as hedges

Derivative contracts undesignated

Total assets

Liabilities:

Derivative contracts designated as hedges

Derivative contracts undesignated

Total return

swaps

Total liabilities

Redeemable noncontrolling interests

821

December 31, 2022

Level 1

Level 2

Level 3

Total

Assets:

Derivative contracts designated as hedges

Derivative contracts undesignated

Total assets

Liabilities:

Derivative contracts designated as hedges

Derivative contracts undesignated

Total return

swaps

Total liabilities

Redeemable noncontrolling interests

576

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 7 – Derivatives and Hedging Activities

We are exposed to market risks as well as changes in foreign currency exchange rates as measured against the U.S.

dollar and changes to the credit risk of the derivative counterparties.

We attempt to minimize these risks by

primarily using interest rate swaps, foreign currency forward contracts

and by maintaining counter-party credit

limits.

These hedging activities provide only limited protection

against interest rate, currency exchange and credit

risks.

Factors that could influence the effectiveness of our hedging programs

include market interest rates, currency

markets and availability of hedging instruments and liquidity of the credit

markets.

All interest rate swaps and

foreign currency forward contracts that we enter into are components of

hedging programs and are entered into for

the sole purpose of hedging an existing or anticipated interest rate

or currency exposure.

We do not enter into such

contracts for speculative purposes and we manage our credit risks by diversifying

our counterparties, maintaining a

strong balance sheet and having multiple sources of capital.

During 2019 we entered into foreign currency forward contracts

to hedge a portion of our euro-denominated

foreign operations which are designated as net investment hedges.

These net investment hedges offset the change

in the U.S. dollar value of our investment in certain euro-functional currency

subsidiaries due to fluctuating foreign

exchange rates.

Gains and losses related to these net investment hedges are recorded

in accumulated other

comprehensive loss within our condensed consolidated balance sheets.

Amounts excluded from the assessment of

hedge effectiveness are included in interest expense within our condensed consolidated

statements of income.

The

aggregate notional value of this net investment hedge, which

matured on

November 16, 2023

, is approximately

€

200

million.

During the three months ended September 30, 2023 and September

24, 2022, we recorded an

increase of $

million and $

million, respectively, within other comprehensive income related to these foreign

currency forward contracts.

During the nine months ended September 30, 2023 and September 24, 2022,

recorded an increase of $

million and $

million, respectively, within other comprehensive income related to

these foreign currency forward contracts.

See

Note 6 – Fair Value Measurements

for additional information.

March 20, 2020

, we entered into a total return swap for the purpose of economically

hedging our unfunded non-

qualified SERP and our DCP.

This swap will offset changes in our SERP and DCP liabilities.

At the inception, the

notional value of the investments in these plans was $

million.

At September 30, 2023, the notional value of the

investments in these plans was $

million.

At September 30, 2023, the financing blended rate for

this swap was

based on the Secured Overnight Financing Rate (“SOFR”) of

5.31

% plus

0.52

%, for a combined rate of

5.83

For

the three months ended September 30, 2023 and September 24, 2022, we have

recorded a loss, within selling,

general and administrative in our condensed consolidated statement of

income, of approximately $

million and $

million, respectively, net of transaction costs, related to this undesignated swap.

For the nine months ended

September 30, 2023 and September 24, 2022,

we have recorded a loss, within selling, general and administrative

our condensed consolidated statement of income, of approximately $

million and $

million, respectively, net of

transaction costs, related to this undesignated swap.

On July 11, 2023, we entered into interest rate swap agreements to hedge the cash flow of our variable

rate $

750

million floating debt term loan facility, with

three years

maturity, effectively changing the floating rate portion of

our obligation to a fixed rate.

Under the terms of the interest rate swap agreements, we receive variable

interest

payments based on the one-month Term SOFR rate and pay interest at a fixed rate.

As of September 30, 2023, the

notional value of the interest rate swap agreements was $

745

million.

For the three and nine months ended

September 30, 2023, we recorded, within accumulated other comprehensive

loss within our condensed consolidated

balance sheets, a gain of $

million related to the change in the fair value of these interest rate swap

agreements,

since we have designated these swaps agreements as cash flow hedges.

Fluctuations in the value of certain foreign currencies as compared

to the U.S. dollar may positively or negatively

affect our revenues, gross margins, operating expenses and retained earnings, all of which are expressed

in U.S.

dollars.

Where we deem it prudent, we engage in hedging programs using primarily

foreign currency forward

contracts aimed at limiting the impact of foreign currency exchange

rate fluctuations on earnings.

We purchase

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

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

to protect against currency

exchange risks associated with intercompany loans due from our international

subsidiaries and the payment of

merchandise purchases to our foreign suppliers.

We do not hedge the translation of foreign currency profits into

U.S. dollars, as we regard this as an accounting exposure, not an

economic exposure.

Amounts related to our

hedging activities are recorded in prepaid expenses and other and/or accrued

expenses: other within our condensed

consolidated balance sheets.

Our hedging activities have historically not had a material impact on our

condensed

consolidated financial statements.

Accordingly, additional disclosures related to derivatives and hedging activities

required by ASC 815 have been omitted.

Note 8 – Debt

Bank Credit Lines

Bank credit lines consisted of the following:

September 30,

December 31,

2023

2022

Revolving credit agreement

Other short-term bank credit lines

103

Total

103

Revolving Credit Agreement

August 20, 2021

, we entered into a $

1.0

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

which was scheduled to mature on

August 20, 2026

July 11, 2023

, we amended and restated the Revolving

Credit Agreement to, among other things, extend the maturity date

July 11, 2028

and update the interest rate

provisions to reflect the current market approach for a multicurrency

facility.

The interest rate on this revolving

credit facility is based on Term Secured Overnight Financing Rate (“Term SOFR”) plus a spread based on our

leverage ratio at the end of each financial reporting quarter.

The Revolving Credit Agreement requires, among

other things, that we maintain certain maximum leverage ratios.

Additionally, the Revolving Credit Agreement

contains customary representations, warranties and affirmative covenants as well

as customary negative covenants,

subject to negotiated exceptions, on liens, indebtedness, significant corporate

changes (including mergers),

dispositions and certain restrictive agreements.

As of September 30, 2023 and December 31, 2022, we had $

million and $

million in borrowings, respectively under this revolving credit facility.

As of September 30, 2023

and December 31, 2022, there were $

million and $

million of letters of credit, respectively, provided to third

parties under this credit facility.

Other Short-Term Bank Credit

Lines

As of September 30, 2023 and December 31, 2022, we had various other

short-term bank credit lines available, in

various currencies, with a maximum borrowing capacity of $

366

million and $

402

million, respectively.

As of

September 30, 2023 and December 31, 2022, $

million and $

103

million, respectively, were outstanding.

September 30, 2023 and December 31, 2022, borrowings under all

of these credit lines had a weighted average

interest rate of

4.34

% and

10.11

%, respectively.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Long-term debt

Long-term debt consisted of the following:

September 30,

December 31,

2023

2022

Private placement facilities

1,074

699

U.S. trade accounts receivable securitization

330

Term loan

745

Various

collateralized and uncollateralized loans payable with interest,

in varying installments through 2023 at interest rates

ranging from

0.00

% to

9.42

% at September 30, 2023 and

ranging from

0.00

% to

3.50

% at December 31, 2022

Finance lease obligations

Total

1,887

1,046

Less current maturities

(72)

(6)

Total long-term debt

1,815

1,040

Private Placement Facilities

Our private placement facilities include

four

insurance companies, have a total facility amount of $

1.5

billion, and

are available on an uncommitted basis at fixed rate economic

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

time to time through

October 20, 2026

The facilities allow us to issue senior promissory notes to the

lenders at a

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

at the time of issuance.

The term of each

possible issuance will be selected by us and can range from

five

15 years

(with an average life no longer than

years

The proceeds of any issuances under the facilities will be used

for general corporate purposes, including

working capital and capital expenditures, to refinance existing indebtedness,

and/or to fund potential acquisitions.

The agreements provide, among other things, that we maintain

certain maximum leverage ratios, and contain

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

of assets and certain changes in

ownership.

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

pay off the facilities prior to the

applicable due dates.

The components of our private placement facility borrowings, which

have a weighted average interest rate of

3.65

%, as of September 30, 2023 are presented in the following table:

Amount of

Borrowing

Date of Borrowing

Outstanding

Rate

Due Date

January 20, 2012

3.45

January 20, 2024

December 24, 2012

3.00

December 24, 2024

June 16, 2017

100

3.42

June 16, 2027

September 15, 2017

100

3.52

September 15, 2029

January 2, 2018

100

3.32

January 2, 2028

September 2, 2020

100

2.35

September 2, 2030

June 2, 2021

100

2.48

June 2, 2031

June 2, 2021

100

2.58

June 2, 2033

May 4, 2023

4.79

May 4, 2028

May 4, 2023

4.84

May 4, 2030

May 4, 2023

4.96

May 4, 2033

May 4, 2023

150

4.94

May 4, 2033

Less: Deferred debt issuance costs

(1)

Total

1,074

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

U.S. Trade Accounts Receivable Securitization

We have a facility agreement based on the securitization of our U.S. trade accounts receivable that is structured as

an asset-backed securitization program with pricing committed for up

three years

This facility agreement has a

purchase limit of $

450

million with

two

banks as agents, and expires on

December 15, 2025

As of September 30, 2023 and December 31, 2022, the borrowings

outstanding under this securitization facility

were $

million and $

330

million, respectively.

At September 30, 2023, the interest rate on borrowings under this

facility was based on the asset-backed commercial paper rate of

5.59

% plus

0.75

%, for a combined rate of

6.34

At December 31, 2022, the interest rate on borrowings under

this facility was based on the asset-backed

commercial paper rate of

4.58

% plus

0.75

%, for a combined rate of

5.33

If our accounts receivable collection pattern changes due to customers

either paying late or not making payments,

our ability to borrow under this facility may be reduced.

We are required to pay a commitment fee of

basis points depending upon program utilization.

Term Loan

On July 11, 2023, we entered into a

three-year

750

million term loan credit agreement (the “Term Credit

Agreement”).

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

ratio at the end of each financial reporting quarter.

This term loan matures on July 11, 2026.

As of September 30,

2023, the borrowings outstanding under this term loan were $

745

million.

At September 30, 2023, the interest on

this Term Credit Agreement was

5.33

% plus

1.35

% for a combined rate of

6.68

However, we have a hedge in

place

(see

Note 7 – Derivatives and Hedging Activities

for additional information)

that ultimately creates an

effective fixed rate of

5.79

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

maximum leverage ratios.

Additionally, the Term

Credit Agreement contains customary representations,

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

to negotiated exceptions, on

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

and certain restrictive

agreements.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 9 – Income Taxes

For the nine months ended September 30, 2023 our effective tax rate was

22.5

%, compared to

23.5

% for the prior

year period.

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

relates to state

and foreign income taxes and interest expense.

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

“other liabilities” within our condensed

consolidated balance sheets, as of September 30, 2023 and December 31,

2022 was $

110

million and $

million,

respectively, of which $

102

million and $

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

It is possible that the amount of unrecognized tax benefits will

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

material impact on our condensed consolidated statements of income.

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

The tax years subject to examination by the

IRS include years 2020 and forward.

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

to IRS

examination.

The total amounts of interest and penalties are classified as a component

of the provision for income taxes.

The

amount of tax interest expense was $

million for the nine months ended September 30, 2023 and $

million for the

nine months ended September 24, 2022.

The total amount of accrued interest is included in “other

liabilities,” and

was $

million as of September 30, 2023 and $

million as of December 31, 2022.

The amount of penalties

accrued for during the periods presented were not material to our condensed

consolidated financial statements.

Note 10 – Plan of Restructuring

and Integration Costs

On August 1, 2022, we committed to a restructuring plan focused on

funding the priorities of the strategic plan and

streamlining operations and other initiatives to increase efficiency.

We revised our previous expectations of

completion and now expect this initiative to extend through 2024.

We are currently unable in good faith to make a

determination of an estimate of the amount or range of amounts expected to

be incurred in connection with these

activities, both with respect to each major type of cost associated

therewith and with respect to the total cost, or an

estimate of the amount or range of amounts that will result in future

cash expenditures.

During the three months ended September 30, 2023 and September 24, 2022,

we recorded restructuring costs of

million and $

million, respectively.

During the nine months ended September 30, 2023 and September

24,

2022, we recorded restructuring costs of $

million and $

million, respectively.

The restructuring costs for these

periods primarily related to severance and employee-related costs,

accelerated amortization of right-of-use lease

assets and fixed assets, and other lease exit costs.

Included in restructuring costs for the nine months ended

September 30, 2023 were immaterial amounts related to the disposal

of an unprofitable U.S. business initiated

during 2022 and completed during the first quarter of 2023.

On August 26, 2022, we acquired Midway Dental Supply.

In connection with this acquisition, during the three

months ended September 24, 2022, we recorded integration costs

of $

million related to one-time employee and

other costs, as well as restructuring charges of $

million, which are included in the $

million of restructuring

charges discussed above.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Restructuring and integration costs recorded for the three and nine

months ended September 30, 2023 and

September 24, 2022, consisted of the following:

Three Months Ended September 30, 2023

Health-Care Distribution

Technology

and

Value-Added

Services

Restructuring

Costs

Integration

Costs

Restructuring

Costs

Total

Severance and employee-related costs

Accelerated depreciation and amortization

Exit and other related costs

Total restructuring

and integration costs

Three Months Ended September 24, 2022

Health-Care Distribution

Technology

and

Value-Added

Services

Restructuring

Costs

Integration

Costs

Restructuring

Costs

Total

Severance and employee-related costs

Accelerated depreciation and amortization

Exit and other related costs

Integration employee-related and other costs

Total restructuring

and integration costs

Nine Months Ended September 30, 2023

Health-Care Distribution

Technology

and

Value-Added

Services

Restructuring

Costs

Integration

Costs

Restructuring

Costs

Total

Severance and employee-related costs

Accelerated depreciation and amortization

Exit and other related costs

Loss on disposal of a business

Total restructuring

and integration costs

Nine Months Ended September 24, 2022

Health-Care Distribution

Technology

and

Value-Added

Services

Restructuring

Costs

Integration

Costs

Restructuring

Costs

Total

Severance and employee-related costs

Accelerated depreciation and amortization

Exit and other related costs

Integration employee-related and other costs

Total restructuring

and integration costs

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes,

by reportable segment, the activity related to the liabilities associated

with our

restructuring initiatives

for the period ended September 30, 2023.

The remaining accrued balance of restructuring

costs as of September 30, 2023, which primarily relates to severance and

employee-related costs, is included in

accrued expenses: other within our condensed consolidated balance sheet.

Liabilities related to exited leased

facilities are recorded within our current and non-current operating lease

liabilities within our condensed

consolidated balance sheet.

Technology

and

Health Care

Value-Added

Distribution

Services

Total

Balance, December 31, 2022

Restructuring and integration costs

Non-cash asset impairment and accelerated

depreciation and amortization of right-of-use lease

assets and other long-lived assets

(12)

(2)

(14)

Non-cash impairment on disposal of a business

Cash payments and other adjustments

(37)

(6)

(43)

Balance, September 30, 2023

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 11 – Legal Proceedings

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

related lawsuits (currently less than one-

hundred and seventy-five (

175

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

number of those cases).

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

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

their own market share and that the entities

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

financial rewards by refusing or

otherwise failing to monitor appropriately and restrict the improper distribution

of those drugs.

These actions

consist of some that have been consolidated within the MultiDistrict Litigation

(“MDL”) proceeding In Re National

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

and are currently stayed, and others which

remain pending in state courts and are proceeding independently and outside

of the MDL.

At this time, the

following cases are set for trial: the action filed by Mobile County Board

of Health, et al. in Alabama state court,

which has been set for a jury trial on August 12, 2024; and the action filed

by Florida Health Sciences Center, Inc.

(and

other hospitals located throughout the State of Florida) in Florida state

court, which is currently scheduled

for a jury trial in September 2025.

Of Henry Schein’s 2022 net sales of approximately $

12.6

billion from

continuing operations, sales of opioids represented less than two-tenths of 1 percent.

Opioids represent a negligible

part of our business.

We intend to defend ourselves vigorously against these actions.

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

States Attorney’s Office for the

Western District of Virginia,

seeking documents in connection with an investigation of possible violations

of the

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

Henry Schein.

The investigation relates to the sale of veterinary prescription drugs

to certain customers.

October 2022, Henry Schein received a second Grand Jury Subpoena

from the United States Attorney’s Office for

the Western District of Virginia.

The October Subpoena seeks documents relating to payments Henry

Schein

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

Butler was spun off into a separate company and became a

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

We are cooperating with the

investigation.

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

including, without limitation, product

liability claims, employment matters, commercial disputes, governmental

inquiries and investigations (which may

in some cases involve our entering into settlement arrangements or consent

decrees), and other matters arising out

of the ordinary course of our business.

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

in our opinion none of these other pending matters are currently

anticipated to have a material adverse effect on our

consolidated financial position, liquidity or results of operations.

As of September 30, 2023, we had accrued our best estimate of potential losses

relating to claims that were

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

a loss.

This accrued amount, as

well as related expenses, was not material to our financial position,

results of operations or cash flows.

Our method

for determining estimated losses considers currently available facts,

presently enacted laws and regulations and

other factors, including probable recoveries from third parties.

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HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 12 – Stock-Based Compensation

Stock-based awards are provided to certain employees under the terms of

our 2020 Stock Incentive Plan and to

non-employee directors under the terms of our 2023 Non-Employee Director

Stock Incentive Plan (formerly known

as the 2015 Non-Employee Director Stock Incentive Plan) (together, the “Plans”).

The Plans are administered by

the Compensation Committee of the Board of Directors (the “Compensation

Committee”).

Historically, equity-

based awards to our employees have been granted solely in the form

of time-based and performance-based

restricted stock units (“RSUs”) with the exception of our 2021 plan year

in which non-qualified stock options

were

issued in place of performance-based RSUs.

In 2022, we granted time-based and performance-based RSUs,

as well

as non-qualified stock options.

For our 2023 plan year,

we returned to granting our employees equity-based awards

solely in the form of time-based and performance-based RSUs.

Our non-employee directors receive equity-based

awards solely in the form of time-based RSUs.

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

In the case of RSUs, common

stock is delivered on or following satisfaction of vesting conditions.

We issue RSUs to employees that primarily

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

four

-year cliff vesting and/or (ii)

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

with

three

-year cliff vesting.

RSUs granted to our non-employee directors primarily are granted

with

-month

cliff vesting.

For these RSUs, we recognize the cost as compensation expense on

a straight-line basis.

With respect to time-based RSUs, we estimate the fair value based on our closing stock price on the date of

grant.

With respect to performance-based RSUs, the number of shares that ultimately vest and are

received by the

recipient is based upon our performance as measured against specified

targets over a specified period, as

determined by the Compensation Committee.

Although there is no guarantee that performance targets will be

achieved, we estimate the fair value of performance-based RSUs based on

our closing stock price at time of grant.

Each of the Plans provide for certain adjustments to the performance

measurement in connection with awards under

the Plans.

With respect to the performance-based RSUs granted under our 2020 Stock Incentive Plan, such

performance measurement adjustments relate to significant events, including,

without limitation, acquisitions,

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

repurchases), differences in

budgeted average outstanding shares (other than those resulting from capital

transactions referred to above),

restructuring costs, if any, certain litigation settlements or payments, if any, changes in accounting principles or in

applicable laws or regulations, changes in income tax rates in certain

markets, foreign exchange fluctuations, the

financial impact either positive or negative, of the difference in projected earnings

generated by COVID-19 test kits

(solely with respect to performance-based RSUs granted in the 2022 and

2023 plan years) and impairment charges

(solely with respect to performance-based RSUs granted in the 2023 plan

year), and unforeseen events or

circumstances affecting us.

Over the performance period, the number of shares of common stock that will

ultimately vest and be issued and the

related compensation expense is adjusted upward or downward based upon

our estimation of achieving such

performance targets.

The ultimate number of shares delivered to recipients and

the related compensation cost

recognized as an expense will be based on our actual performance metrics

as defined under the Plans.

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

common stock at a fixed price following

vesting of the stock options.

Stock options were granted at an exercise price equal to our closing stock

price on the

date of grant.

Stock options issued in 2021 and 2022 vest one-third per year based

on the recipient’s continued

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

are fully vested

three years

from the

grant date and have a contractual term of

ten years

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

upon certain events.

Compensation expense for these stock options is recognized

using a graded vesting method.

We estimated the fair value of stock options using the Black-Scholes valuation model.

During the nine months

ended September 30, 2023 we did

t grant any stock options.

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HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Our accompanying condensed consolidated statements of income reflect

pre-tax share-based compensation expense

of $

million ($

million after-tax) and $

million ($

million after-tax) for the three and nine months ended

September 30, 2023, respectively.

For the three and nine months ended September 24, 2022, we

recorded pre-tax

share-based compensation expense of $

million ($

million after-tax) and $

million ($

million after-tax),

respectively.

Total unrecognized compensation cost related to unvested awards as of September 30, 2023 was $

million, which

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

2.5

years.

Our accompanying condensed consolidated statements of cash flows present

our stock-based compensation expense

as an adjustment to reconcile net income to net cash provided by operating

activities for all periods presented.

the accompanying condensed consolidated statements of cash flows, there were

no benefits associated with tax

deductions in excess of recognized compensation as a cash inflow from

financing activities for the nine months

ended September 30, 2023 and September 24, 2022, respectively.

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

the foreseeable future.

The expected stock price volatility is based on implied volatilities

from traded options on

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

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

Treasury yield curve in effect at the time of grant in conjunction with considering the expected life of options.

The

six

-year expected life of the options was determined using the simplified

method for estimating the expected term

as permitted under SAB Topic 14.

Estimates of fair value are not intended to predict actual future events or

the

value ultimately realized by recipients of stock options, and subsequent

events are not indicative of the

reasonableness of the original estimates of fair value made by us.

The following table summarizes the stock option activity during the nine

months ended September 30, 2023:

Stock Options

Weighted Average

Aggregate

Exercise

Remaining Contractual

Intrinsic

Price

Life (in years)

Value

Outstanding at beginning of period

1,117,574

71.38

Exercised

(21,204)

62.74

Forfeited

(10,399)

78.32

Outstanding at end of period

1,085,971

71.48

7.8

Options exercisable at end of period

573,620

68.39

Weighted Average

Aggregate

Number of

Exercise

Remaining Contractual

Intrinsic

Options

Price

Life (in years)

Value

Vested

or expected to vest

508,728

75.04

8.0

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HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following tables summarize the activity of our unvested RSUs for

the nine months ended September 30, 2023:

Time-Based Restricted Stock Units

Performance-Based Restricted Stock Units

Weighted Average

Grant Date Fair

Intrinsic Value

Grant Date Fair

Intrinsic Value

Shares/Units

Value Per Share

Per Share

Shares/Units

Value Per Share

Per Share

Outstanding at beginning of period

1,756,044

66.59

520,916

60.23

Granted

417,873

77.61

382,387

80.65

Vested

(429,425)

61.91

(631,458)

60.65

Forfeited

(75,227)

71.59

(55,510)

76.82

Outstanding at end of period

1,669,265

70.38

74.25

216,335

69.54

74.25

Note 13 – Redeemable Noncontrolling Interests

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

at certain times, to require us to acquire

their ownership interest in those entities at fair value.

ASC 480-10 is applicable for noncontrolling interests where

we are or may be required to purchase all or a portion of the outstanding

interest in a consolidated subsidiary from

the noncontrolling interest holder under the terms of a put option

contained in contractual agreements.

The

components of the change in the redeemable noncontrolling interests for

the nine months ended September 30,

2023 and the year ended December 31, 2022 are presented in

the following table:

September 30,

December 31,

2023

2022

Balance, beginning of period

576

613

Decrease in redeemable noncontrolling interests due to acquisitions of

noncontrolling interests in subsidiaries

(19)

(31)

Increase in redeemable noncontrolling interests due to business

acquisitions

281

Net income attributable to redeemable noncontrolling interests

Dividends declared

(13)

(21)

Effect of foreign currency translation loss attributable to

redeemable noncontrolling interests

(1)

(6)

Change in fair value of redeemable securities

(14)

(4)

Balance, end of period

821

576

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HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 14 – Comprehensive Income

Comprehensive income includes certain gains and losses that, under U.S.

GAAP,

are excluded from net income as

such amounts are recorded directly as an adjustment to stockholders’

equity.

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

applicable taxes as of:

September 30,

December 31,

2023

2022

Attributable to redeemable noncontrolling interests:

Foreign currency translation adjustment

(38)

(37)

Attributable to noncontrolling interests:

Foreign currency translation adjustment

(1)

Attributable to Henry Schein, Inc.:

Foreign currency translation adjustment

(252)

(236)

Unrealized gain from foreign currency hedging activities

Pension adjustment loss

(2)

Accumulated other comprehensive loss

(247)

(233)

Total Accumulated

other comprehensive loss

(286)

(271)

The following table summarizes the components of comprehensive income, net

of applicable taxes as follows:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Net income

143

162

419

515

Foreign currency translation loss

(45)

(89)

(17)

(176)

Tax effect

Foreign currency translation loss

(45)

(89)

(17)

(176)

Unrealized gain from foreign currency hedging

activities

Tax effect

(3)

(4)

(1)

(7)

Unrealized gain from foreign currency hedging

activities

Pension adjustment gain

Tax effect

(1)

Pension adjustment gain

Comprehensive income

104

404

360

Our financial statements are denominated in the U.S. Dollar currency.

Fluctuations in the value of foreign

currencies as compared to the U.S. Dollar may have a significant impact

on our comprehensive income.

The

foreign currency translation loss during the nine months ended September

30, 2023 and nine months ended

September 24, 2022 was primarily due to changes in foreign currency

exchange rates of the Australian Dollar,

Brazilian Real, British Pound, Canadian Dollar, Chinese Yuan, and Euro.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

The following table summarizes our total comprehensive income, net of

applicable taxes as follows:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Comprehensive income attributable to

Henry Schein, Inc.

100

384

350

Comprehensive income attributable to

noncontrolling interests

Comprehensive income attributable to

redeemable noncontrolling interests

Comprehensive income

104

404

360

Note 15

–

Earnings Per Share

Basic earnings per share is computed by dividing net income attributable

to Henry Schein, Inc. by the weighted-

average number of common shares outstanding for the period.

Our diluted earnings per share is computed similarly

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

for presently unvested RSUs

and upon exercise of stock options using the treasury stock method

in periods in which they have a dilutive effect.

A reconciliation of shares used in calculating earnings per basic and

diluted share follows:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Basic

130,388,353

135,608,678

130,888,717

136,731,413

Effect of dilutive securities:

Stock options and restricted stock units

1,053,782

1,475,371

1,260,455

1,756,841

Diluted

131,442,135

137,084,049

132,149,172

138,488,254

The number of antidilutive securities that were excluded from the calculation

of diluted weighted average common

shares outstanding are as follows:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Stock options

424,005

482,497

426,237

310,565

Restricted stock units

7,362

445,994

15,072

261,718

Total anti-dilutive

securities excluded from earnings per

share computation

431,367

928,491

441,309

572,283

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HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 16 – Supplemental Cash Flow Information

Cash paid for interest and income taxes was:

Nine Months Ended

September 30,

September 24,

2023

2022

Interest

Income taxes

178

235

During the nine months ended September 30, 2023 and September 24, 2022,

we had $

million and $

million of

non-cash net unrealized gains related to foreign currency hedging activities,

respectively.

See

Note 7 – Derivatives

and Hedging Activities

for

additional information related to our total return swap and our interest rate

swap

agreements.

Note 17 – Related Party Transactions

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

with Internet Brands, which was

formed on July 1, 2018, we entered into a

ten-year

royalty agreement with Internet Brands whereby we will pay

Internet Brands approximately $

million annually for the use of their intellectual property.

During the three and

nine months ended September 30, 2023, we recorded $

million and $

million, respectively, in connection with

costs related to this royalty agreement.

During the three and nine months ended September 24, 2022, we recorded

million and $

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

As of

September 30, 2023 and December 31, 2022, Henry Schein One, LLC had

a net payable balance due to Internet

Brands of $

million and $

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

royalty agreement.

The components of this payable are recorded within accrued expenses:

other, within our

condensed consolidated balance sheets.

During our normal course of business, we have interests in entities that we account for under the equity accounting

method.

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

recorded net sales of $

million and

million, respectively, to such entities.

During the three and nine months ended September 24, 2022, we

recorded net sales of $

million and $

million, respectively, to such entities.

During the three and nine months

ended September 30, 2023, we purchased $

million and $

million, respectively, from such entities.

During the

three and nine months ended September 24, 2022, we purchased $

million and $

million, respectively, from such

entities.

At September 30, 2023 and December 31, 2022, we had an aggregate

of $

million and $

million,

respectively, due from our equity affiliates, and $

million and $

million, respectively, due to our equity affiliates.

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

and minority shareholders.

These

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

ranging from less than

one year

years.

As of September 30, 2023, current and non-current liabilities associated with

related party operating leases

were $

million and $

million, respectively.

Related party leases represented

6.9

% and

7.6

% of the total current

and non-current operating lease liabilities.

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HENRY SCHEIN, INC.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(in millions, except share and per share data)

(unaudited

)

Note 18 – Subsequent Event

On October 14, 2023, we became aware of a cybersecurity incident

that primarily affected the operations of our

North American and European dental and medical distribution businesses.

Henry Schein One, our practice

management software, revenue cycle management and patient relationship

management solutions business was not

affected, and our manufacturing businesses and our equipment sales and

service operations were mostly unaffected.

Once we became aware of the issue, we took steps to assess, contain and

remediate this incident.

Our distribution

operations resumed and we reactivated our ecommerce platform.

We also notified law enforcement and our

customers and suppliers informing them of both the incident and

management’s efforts to mitigate its impact on our

daily operations.

As previously disclosed, while our forensic investigation is still

ongoing, we have determined that

a data breach occurred.

We are notifying potentially affected parties as appropriate.

On November 22, 2023, we experienced a disruption to our ecommerce

platform and related applications. The

Company has restored its ecommerce platform and certain other

applications in the United States, Canada and

certain European countries.

Our ecommerce platform in the remaining European countries and other applications

are expected to follow shortly.

We continue to review the impact of the incident on our business.

As previously disclosed, we believe the incident

will adversely impact our financial results for the fourth quarter and

full year 2023.

We maintain cyber insurance, subject to certain retentions and policy limitations.

There can be no assurance that

the insurance coverage we maintain is sufficient to cover costs and expenses related

to this cybersecurity incident.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

Cautionary Note Regarding Forward-Looking Statements

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

Litigation Reform Act of 1995, we

provide the following cautionary remarks regarding important factors

that, among others, could cause future results

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

expressed or implied

herein.

All forward-looking statements made by us are subject to

risks and uncertainties and are not guarantees of

future performance.

These forward-looking statements involve known and unknown

risks, uncertainties and other

factors that may cause our actual results, performance and achievements

or industry results to be materially

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

forward-looking

statements.

These statements are generally identified by the use of such

terms as “may,” “could,” “expect,”

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

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

terms.

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

to, those discussed in

the documents we file with the Securities and Exchange Commission

(SEC), including our Annual Report on Form

10-K.

Forward looking statements include the overall impact of the Coronavirus

Disease 2019 (COVID-19) on us,

our results of operations, liquidity and financial condition (including

any estimates of the impact on these items),

the rate and consistency with which dental and other practices resume or

maintain normal operations in the United

States and internationally, expectations regarding PPE products and COVID-19 related product sales and inventory

levels, whether additional resurgences or variants of the virus will adversely impact the

resumption of normal

operations, whether supply chain disruptions will adversely impact our

business, the impact of the cybersecurity

incident disclosed in the Company’s Current Report on Form 8-K filed on October 15, 2023 on our business and

results of operations, including the accuracy of our estimates of the

impact, the timing and extent of any recovery

on insurance claims, the impact of integration and restructuring programs

as well as of any future acquisitions,

general economic conditions including exchange rates, inflation and

recession, and more generally current

expectations regarding performance in current and future periods.

Forward looking statements also include (i) our

ability to have continued access to a variety of COVID-19 test types,

and COVID-19 vaccines and ancillary

supplies, and (ii) expectations regarding COVID-19 test sales, demand and

inventory levels.

Risk factors and uncertainties that could cause actual results to differ materially from

current and historical results

include, but are not limited to: risks associated with COVID-19

and any variants thereof, as well as other disease

outbreaks, epidemics, pandemics, or similar wide-spread public health concerns

and other natural disasters; our

dependence on third parties for the manufacture and supply of our products;

our ability to develop or acquire and

maintain and protect new products (particularly technology products) and

technologies that achieve market

acceptance with acceptable margins; transitional challenges associated with acquisitions,

dispositions and joint

ventures, including the failure to achieve anticipated synergies/benefits; legal, regulatory, compliance,

cybersecurity, financial and tax risks associated with acquisitions, dispositions and joint ventures; certain provisions

in our governing documents that may discourage third-party acquisitions

of us; adverse changes in supplier rebates

or other purchasing incentives; risks related to the sale of corporate brand

products; effects of a highly competitive

(including, without limitation, competition from third-party online commerce

sites) and consolidating market; the

repeal or judicial prohibition on implementation of the Affordable Care Act; changes in the health

care industry;

risks from expansion of customer purchasing power and multi-tiered

costing structures; increases in shipping costs

for our products or other service issues with our third-party shippers; general

global and domestic macro-economic

and political conditions, including inflation, deflation, recession, fluctuations

in energy pricing and the value of the

U.S. dollar as compared to foreign currencies, and changes to other economic

indicators, international trade

agreements, potential trade barriers and terrorism; geopolitical wars;

failure to comply with existing and future

regulatory requirements; risks associated with the EU Medical Device Regulation;

failure to comply with laws and

regulations relating to health care fraud or other laws and regulations; failure

to comply with laws and regulations

relating to the collection, storage and processing of sensitive personal

information or standards in electronic health

records or transmissions; changes in tax legislation; risks related to

product liability, intellectual property and other

claims; litigation risks;

new or unanticipated litigation developments and the status

of litigation matters; risks

associated with customs policies or legislative import restrictions; cyberattacks

or other privacy or data security

breaches (including the recent October 2023 incident); risks associated with

our global operations; our dependence

on our senior management, employee hiring and retention, and our relationships

with customers, suppliers and

Table of Contents

manufacturers; and disruptions in financial markets.

The order in which these factors appear should not be

construed to indicate their relative importance or priority.

We caution that these factors may not be exhaustive and that many of these factors are beyond our ability to control

or predict.

Accordingly, any forward-looking statements contained herein should not be relied upon as a prediction

of actual results.

We undertake no duty and have no obligation to update forward-looking statements except as

required by law.

Where You

Can Find Important Information

We may disclose important information through one or more of the following channels: SEC filings, public

conference calls and webcasts, press releases, the investor relations

page of our website (www.henryschein.com)

and the social media channels identified on the Newsroom page of our website.

Recent Developments

During the year ended December 31, 2022 we experienced a decrease

in the sales of PPE and COVID-19 test kits

as compared to the comparable prior-year period.

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

continued to experience a decrease in the sales of PPE and COVID-19

test kits, primarily due to ongoing decreases

in market prices for PPE (principally gloves) and lower market demand

for COVID-19 test kits compared with the

same periods in the prior year, and we expect further decreases in sales in 2023 compared to the prior

year.

While the U.S. economy has recently experienced inflationary

pressures and strengthening of the U.S. dollar, their

impacts have not been material to our results of operations.

The impact from inflation, including manufacturer

price increases excluding PPE products, was slightly more pronounced

in Europe.

Though inflation impacts both

our revenues and costs, the depth and breadth of our product portfolio

often allows us to offer lower-cost national

brand solutions or corporate brand alternatives to our more price-sensitive

customers who are unable to absorb

price increases, thus positioning us to protect our gross profit.

Our condensed consolidated financial statements reflect estimates and

assumptions made by us that affect, among

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

asset valuation; inventory valuation; equity

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

deferred income taxes and income

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

supplier rebates; measurement of

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

plans; and pension plan

assumptions.

Cybersecurity Incident

On October 14, 2023, we became aware of a cybersecurity incident

that primarily affected the operations of our

North American and European dental and medical distribution businesses.

Henry Schein One, our practice

management software, revenue cycle management and patient relationship

management solutions business was not

affected, and our manufacturing businesses and our equipment sales and

service operations were mostly unaffected.

Once we became aware of the issue, we took steps to assess, contain and

remediate this incident.

Our distribution

operations resumed and we reactivated our ecommerce platform.

We also notified law enforcement and our

customers and suppliers informing them of both the incident and

management’s efforts to mitigate its impact on our

daily operations.

As previously disclosed, while our forensic investigation is still

ongoing, we have determined that

a data breach occurred.

We are notifying potentially affected parties as appropriate.

On November 22, 2023, we experienced a disruption to our ecommerce

platform and related applications. The

Company has restored its ecommerce platform and certain other

applications in the United States, Canada and

certain European countries.

Our ecommerce platform in the remaining European countries and other applications

are expected to follow shortly.

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We continue to review the impact of the incident on our business.

As previously disclosed, we believe the incident

will adversely impact our financial results for the fourth quarter and

full year 2023.

We maintain cyber insurance, subject to certain retentions and policy limitations.

There can be no assurance that

the insurance coverage we maintain is sufficient to cover costs and expenses related

to this cybersecurity incident.

Executive-Level Overview

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

by a network of people and

technology.

believe we are the world’s largest provider of health care products and services primarily to office-

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

serve more than one million customers

worldwide including dental practitioners, laboratories, physician practices, and

ambulatory surgery centers, as well

as government, institutional health care clinics and other alternate care clinics.

believe that we have a strong

brand identity due to our more than 91 years of experience distributing health

care products.

We are headquartered in Melville, New York,

employ approximately 24,000 people (of which approximately

11,500 are based outside of the United States) and have operations or affiliates in 33 countries and territories.

Our

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

through contribution from

strategic acquisitions.

have established strategically located distribution centers around

the world to enable us to better serve our

customers and increase our operating efficiency.

This infrastructure, together with broad product and service

offerings at competitive prices, and a strong commitment to customer service, enables

us to be a single source of

supply for our customers’ needs.

While our primary go-to-market strategy is in our capacity as a distributor, we also market and sell our own

corporate brand portfolio of cost-effective, high-quality consumable merchandise products,

manufacture certain

dental specialty products in the areas of implants, orthodontics and endodontics,

and repackage/relabel prescription

drugs and/or devices.

have achieved scale in these global businesses primarily

through acquisitions, as

manufacturers of these products typically do not utilize a distribution channel

to serve customers.

conduct our business through two reportable segments: (i) health

care distribution and (ii) technology and

value-added services.

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

Our global

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

and other

institutions.

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

emergency

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

and large enterprises, such as

group practices and integrated delivery networks, among other providers

across a wide range of specialties.

The health care distribution reportable segment, combining our global dental and

medical operating segments,

distributes consumable products, small equipment, laboratory products, large equipment, equipment

repair services,

branded and generic pharmaceuticals, vaccines, surgical products, dental specialty

products (including implant,

orthodontic and endodontic products), diagnostic tests, infection-control products,

PPE products and vitamins.

Our global technology and value-added services business provides software, technology

and other value-added

services to health care practitioners.

Our technology business offerings include practice management software

systems for dental and medical practitioners.

Our value-added practice solutions include practice consultancy,

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

basis, e-services, practice

technology, network and hardware services, as well as consulting, and continuing education services for

practitioners.

A key element to grow closer to our customers is our One Schein initiative, which

is a unified go-to-market

approach that enables practitioners to work synergistically with our supply chain,

equipment sales and service and

other value-added services, allowing our customers to leverage the

combined value that we offer through a single

program.

Specifically, One Schein provides customers with streamlined access to our comprehensive offering of

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national brand products, our corporate brand products and proprietary specialty

products and solutions (including

implant, orthodontic and endodontic products).

In addition, customers have access to a wide range of services,

including software and other value-added services.

Industry Overview

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

This trend has benefited

distributors capable of providing a broad array of products and services at low

prices.

It also has accelerated the

growth of HMOs, group practices, other managed care accounts and collective buying

groups, which, in addition to

their emphasis on obtaining products at competitive prices, tend to favor distributors

capable of providing

specialized management information support.

believe that the trend towards cost containment has the potential

to favorably affect demand for technology solutions, including software, which can

enhance the efficiency and

facilitation of practice management.

Our operating results in recent years have been significantly affected by strategies

and transactions that we

undertook to expand our business, domestically and internationally, in part to address significant changes in the

health care industry, including consolidation of health care distribution companies, health care reform, trends

toward managed care, cuts in Medicare and collective purchasing arrangements.

Industry Consolidation

The health care products distribution industry, as it relates to office-based health care practitioners, is fragmented

and diverse.

The industry ranges from sole practitioners working out of

relatively small offices to group practices

or service organizations ranging in size from a few practitioners to a large number of practitioners who have

combined or otherwise associated their practices.

Due in part to the inability of office-based health care practitioners to store and manage

large quantities of supplies

in their offices, the distribution of health care supplies and small equipment to office-based health

care practitioners

has been characterized by frequent, small quantity orders, and a need for rapid,

reliable and substantially complete

order fulfillment.

The purchasing decisions within an office-based health care practice are typically

made by the

practitioner or an administrative assistant.

Supplies and small equipment are generally purchased from more

than

one distributor, with one generally serving as the primary supplier.

The trend of consolidation extends to our customer base.

Health care practitioners are increasingly seeking to

partner, affiliate or combine with larger entities such as hospitals, health systems, group practices or physician

hospital organizations.

In many cases, purchasing decisions for consolidated groups

are made at a centralized or

professional staff level; however, orders are delivered to the practitioners’ offices.

believe that consolidation within the industry will continue to

result in a number of distributors, particularly

those with limited financial, operating and marketing resources, seeking to

combine with larger companies that can

provide growth opportunities.

This consolidation also may continue to result in distributors seeking

to acquire

companies that can enhance their current product and service offerings or provide

opportunities to serve a broader

customer base.

Our approach to acquisitions and joint ventures has been to expand our role as

a provider of products and services

to the health care industry.

This trend has resulted in our expansion into service areas that complement

our existing

operations and provide opportunities for us to develop synergies with, and thus strengthen, the acquired

businesses.

As industry consolidation continues, we believe that we are positioned to

capitalize on this trend, as we believe we

have the ability to support increased sales through our existing infrastructure, although

there can be no assurances

that we will be able to successfully accomplish this.

also have invested in expanding our sales/marketing

infrastructure to include a focus on building relationships with decision

makers who do not reside in the office-

based practitioner setting.

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As the health care industry continues to change, we continually evaluate possible

candidates for joint venture or

acquisition and intend to continue to seek opportunities to expand our

role as a provider of products and services to

the health care industry.

There can be no assurance that we will be able to successfully pursue

any such

opportunity or consummate any such transaction, if pursued.

If additional transactions are entered into or

consummated, we would incur merger and/or acquisition-related costs, and there

can be no assurance that the

integration efforts associated with any such transaction would be successful.

Aging Population and Other Market Influences

The health care products distribution industry continues to experience growth

due to the aging population,

increased health care awareness, the proliferation of medical technology

and testing, new pharmacological

treatments, and expanded third-party insurance coverage, partially offset by the effects of unemployment

insurance coverage.

In addition, the physician market continues to benefit from the

shift of procedures and

diagnostic testing from acute care settings to alternate-care sites, particularly

physicians’ offices.

According to the U.S. Census Bureau’s International Database, between 2023 and 2033, the 45 and older

population is expected to grow by approximately 11%.

Between 2023 and 2043, this age group is expected to grow

by approximately 21%.

This compares with expected total U.S. population growth

rates of approximately 6%

between 2023 and 2033 and approximately 11% between 2023 and 2043.

According to the U.S. Census Bureau’s International Database, in 2023 there are approximately seven million

Americans aged 85 years or older, the segment of the population most in need of long-term care

and elder-care

services.

By the year 2050, that number is projected to nearly triple to approximately

19 million.

The population

aged 65 to 84 years is projected to increase by approximately 23% during

the same period.

As a result of these market dynamics, annual expenditures for health

care services continue to increase in the

United States.

We believe that demand for our products and services will grow while continuing to be impacted by

current and future operating, economic, and industry conditions.

The Centers for Medicare and Medicaid Services,

or CMS, published “National Health Expenditure Data” indicating

that total national health care spending reached

approximately $4.3 trillion in 2021, or 18.3% of the nation’s gross domestic product, the benchmark

measure for

annual production of goods and services in the United States.

Health care spending is projected to reach

approximately $7.2 trillion by 2031, or 19.6% of the nation’s projected gross domestic product.

Government

Certain of our businesses involve the distribution, manufacturing, importation,

exportation, marketing and sale of,

and/or third party payment for, pharmaceuticals and/or medical devices, and in this regard, we are subject

extensive local, state, federal and foreign governmental laws and regulations,

including as applicable to our

wholesale distribution of pharmaceuticals and medical devices, manufacturing

activities, and as part of our

specialty home medical supply business that distributes and sells medical equipment

and supplies directly to

patients.

Federal, state and certain foreign governments have also increased enforcement

activity in the health care

sector, particularly in areas of fraud and abuse, anti-bribery and corruption, controlled substances handling,

medical

device regulations and data privacy and security standards.

Certain of our businesses are subject to various additional federal, state,

local and foreign laws and regulations,

including with respect to the sale, transportation, importation, storage, handling

and disposal of hazardous or

potentially hazardous substances; “forever chemicals” such as per-and

polyfluoroalkyl substances (PFAS); and safe

working conditions.

In addition, certain of our businesses must operate in compliance with a

variety of burdensome

and complex coding, billing and record-keeping requirements in order to substantiate

claims for payment under

federal, state and commercial healthcare reimbursement programs.

One of these businesses was suspended in

October 2021 by CMS from receiving payments from Medicare, although

it was permitted to continue to perform

and bill for Medicare services.

Such suspension was terminated on September 30, 2022.

Government and private insurance programs fund a large portion of the total cost of medical care,

and there have

been efforts to limit such private and government insurance programs, including efforts, thus far

unsuccessful, to

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seek repeal of the entire United States Patient Protection and Affordable Care Act,

as amended by the Health Care

and Education Reconciliation Act, each enacted in March 2010.

In addition, activities to control medical costs,

including laws and regulations lowering reimbursement rates for pharmaceuticals,

medical devices, medical

supplies, and/or medical treatments or services, are ongoing.

Many of these laws and regulations are subject to

change and their evolving implementation may impact our operations and our

financial performance.

Our businesses are generally subject to numerous laws and regulations that could

impact our financial performance,

and failure to comply with such laws or regulations could have a material adverse

effect on our business.

A more detailed discussion of governmental laws and regulations

is included in Management’s Discussion &

Analysis of Financial Condition and Results of Operations, contained

in our Annual Report on Form 10-K for the

fiscal year ended December 31, 2022, filed with the SEC on February 21, 2023.

Results of Operations

The following tables summarize the significant components of our operating

results for the three and nine months

ended September 30, 2023 and September 24, 2022 and cash flows for

the nine months ended September 30, 2023

and September 24, 2022:

Three Months Ended

Nine Months Ended

September 30,

September 24,

September 30,

September 24,

2023

2022

2023

2022

Operating results:

Net sales

3,162

3,067

9,322

9,276

Cost of sales

2,167

2,153

6,386

6,444

Gross profit

995

914

2,936

2,832

Operating expenses:

Selling, general and administrative

725

648

2,149

2,010

Depreciation and amortization

152

137

Restructuring and integration costs

Operating income

200

211

576

675

Other expense, net

(21)

(6)

(48)

(17)

Net income

143

162

419

515

Net income attributable to Henry Schein, Inc.

137

150

398

491

Nine Months Ended

September 30,

September 24,

2023

2022

Cash flows:

Net cash provided by operating activities

532

348

Net cash used in investing activities

(808)

(211)

Net cash provided by (used in) financing activities

307

(121)

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Plan of Restructuring and Integration Costs

On August 1, 2022, we committed to a restructuring plan focused on

funding the priorities of the strategic plan and

streamlining operations and other initiatives to increase efficiency.

We revised our previous expectations of

completion and now expect this initiative to extend through 2024.

We are currently unable in good faith to make a

determination of an estimate of the amount or range of amounts expected to

be incurred in connection with these

activities, both with respect to each major type of cost associated

therewith and with respect to the total cost, or an

estimate of the amount or range of amounts that will result in future

cash expenditures.

During the three months ended September 30, 2023 and September 24, 2022,

we recorded restructuring costs of

$11 million and $9 million, respectively.

During the nine months ended September 30, 2023 and September

24,

2022, we recorded restructuring costs of $59 million and $9 million, respectively.

The restructuring costs for these

periods primarily related to severance and employee-related costs,

accelerated amortization of right-of-use lease

assets and fixed assets, and other lease exit costs.

Included in restructuring costs for the nine months ended

September 30, 2023 were immaterial amounts related to the disposal

of an unprofitable U.S. business initiated

during 2022 and completed during the first quarter of 2023.

On August 26, 2022, we acquired Midway Dental Supply.

In connection with this acquisition, during the three

months ended September 24, 2022, we recorded integration costs

of $1 million related to one-time employee and

other costs, as well as restructuring charges of $2 million, which are included

in the $9 million of restructuring

charges discussed above.

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Three Months Ended September 30, 2023 Compared to Three Months Ended September 24, 2022

Net Sales

Net sales were as follows:

September 30,

% of

September 24,

% of

Increase / (Decrease)

2023

Total

2022

Total

Health care distribution

(1)

Dental

1,882

59.5

1,785

58.2

5.4

Medical

1,070

33.9

1,106

36.0

(36)

(3.1)

Total health care distribution

2,952

93.4

2,891

94.2

2.1

Technology and value-added services

(2)

210

6.6

176

5.8

18.8

Total

3,162

100.0

3,067

100.0

3.1

The components of our sales growth were as follows:

Total Local

Currency

Growth

Foreign

Exchange

Impact

Total Sales

Growth

Local Currency Growth

Local Internal

Growth

Acquisition

Growth

Health care distribution

(1)

Dental Merchandise

0.3

4.8

5.1

1.8

6.9

Dental Equipment

(2.0)

0.9

(1.1)

1.7

0.6

Total Dental

(0.2)

3.8

3.6

1.8

5.4

Medical

(4.6)

1.4

(3.2)

0.1

(3.1)

Total Health Care Distribution

(1.9)

2.9

1.0

1.1

2.1

Technology and value-added services

(2)

9.6

8.6

18.2

0.6

18.8

Total

(1.2)

3.2

2.0

1.1

3.1

Note: Percentages for Net Sales; Gross Profit; Selling, General and Administrative; Other Expense, Net; and Income Taxes are based on

actual values and may not recalculate due to rounding.

(1)

Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and

generic pharmaceuticals, vaccines, surgical products, dental specialty products (including implant, orthodontic and endodontic

products), diagnostic tests, infection-control products, PPE products and vitamins.

(2)

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

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

education services for practitioners, consulting and other services.

Global Sales

Global net sales for the three months ended September 30, 2023 increased 3.1%

and was primarily attributable to

acquisitions.

The components of our sales growth are presented in the table

above.

The estimated increase in internally generated local currency sales, excluding

PPE products and COVID-19 test

kits, was 1.1%.

We estimate that sales of PPE products and COVID-19 test kits were approximately $175 million

and $244 million for the three months ended September 30, 2023 and

September 24, 2022, respectively,

representing an estimated decrease of $69 million or 28.2%

versus the prior year, with the $69 million net decrease

year-over-year representing 2.2% of global net sales for the three

months ended September 30, 2023.

Dental

Dental net sales for the three months ended September 30, 2023 increased 5.4%.

The components of our sales

growth are presented in the table above.

Our sales growth in local currency for dental merchandise was 5.1%

and

was primarily attributable to acquisitions.

Our decrease in sales in local currency for dental equipment was

primarily attributable to a slowdown in digital equipment sales, partially

offset by growth in North America for

traditional dental equipment.

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The estimated increase in internally generated local currency sales, excluding

PPE products, was 0.3%.

estimate that sales of PPE products were approximately $83 million and

$94 million for the three months ended

September 30, 2023 and September 24, 2022,

respectively, representing an estimated decrease of $10 million or

11.0%

versus the prior year, with the $10 million net decrease year-over-year representing 0.5% of dental net sales

for the three months ended September 30, 2023.

Medical

Medical net sales for the three months ended September 30, 2023 decreased

3.1%.

The components of this

decrease are presented in the table above.

The local currency decrease in medical sales is primarily attributable

lower sales of PPE products and COVID-19 test kits.

The estimated increase in internally generated local currency sales, excluding

PPE products and COVID-19 test

kits, was 0.8%

and was adversely impacted by a replacement of branded pharmaceutical

sales with lower priced

generic products and an increase in lower priced corporate brand sales.

We estimate that sales of PPE products and

COVID-19 test kits were approximately $92 million and $150 million

for the three months ended September 30,

2023 and September 24, 2022,

respectively, representing an estimated decrease of $59 million or 39.0% versus the

prior year, with the $59 million net decrease year-over-year representing 5.4%

of medical net sales for the three

months ended September 30, 2023.

Technology and value-added services

Technology and value-added services net sales for the three months ended September 30, 2023 increased 18.8%

driven by acquisitions and revenue of practice management solutions.

The components of our sales growth are

presented in the table above.

During the three months ended September 30, 2023, the trend for sales

of practice

management software growth remains strong as we continued to increase

the number of cloud-based users.

Gross Profit

Gross profit and gross margin percentages by segment and in total were as follows:

September 30,

Gross

September 24,

Gross

Increase

2023

Margin %

2022

Margin %

Health care distribution

851

28.8

799

27.7

6.5

Technology and value-added services

144

68.7

115

65.0

25.5

Total

995

31.5

914

29.8

8.8

As a result of different practices of categorizing costs associated with distribution networks

throughout our

industry, our gross margins may not necessarily be comparable to other distribution companies.

Additionally, we

realize substantially higher gross margin percentages in our technology and value-added services

segment than in

our health care distribution segment.

These higher gross margins result from being both the developer and seller of

software products and services, as well as certain financial services.

The software industry typically realizes higher

gross margins to recover investments in research and development.

Within our health care distribution segment, gross profit margins may vary from one period to the next.

Changes in

the mix of products sold as well as changes in our customer mix have

been the most significant drivers affecting

our gross profit margin.

For example, sales of our corporate brand products achieve

gross profit margins that are

higher than average total gross profit margins of all products.

With respect to customer mix, sales to our large-

group customers are typically completed at lower gross margins due to the higher

volumes sold as opposed to the

gross margin on sales to office-based practitioners, who normally purchase lower volumes.

Health care distribution gross profit increased primarily due to the increase

in net sales discussed above, including

$35 million of gross profit from acquisitions and gross margin expansion,

mainly as a result of a favorable impact

of sales mix of higher-margin products.

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Technology and value-added services gross profit increased as a result of a higher gross profit from internally

generated sales and gross profit of $13 million from acquisitions, as well as

an increase in gross margin rates,

primarily due to product mix.

Operating Expenses

Operating expenses (consisting of selling, general and administrative

expenses; depreciation and amortization; and

restructuring and integration costs) by segment and in total were as follows:

% of

September 30,

Respective

September 24,

Respective

Increase

2023

Net Sales

2022

Net Sales

Health care distribution

691

23.4

620

21.5

11.3

Technology and value-added services

104

49.7

47.2

25.1

Total

795

25.1

703

22.9

12.9

The net increase in operating expenses is attributable to the following:

Restructuring and

Integration Costs

Operating Costs

Acquisitions

Total

Health care distribution

Technology and value-added services

(8)

Total

The restructuring and integration costs are primarily related to severance

and employee-related costs, and other

lease exit costs.

The increase in operating costs includes increases in payroll and

payroll related costs,

facility

related costs and consulting expenses in both of our reportable segments,

and increased acquisition expenses in our

healthcare distribution segment.

Other Expense, Net

Other expense, net was as follows:

September 30,

September 24,

Variance

2023

2022

Interest income

300.2

Interest expense

(25)

(8)

(17)

(202.6)

Other, net

(2)

(3)

(292.4)

Other expense, net

(21)

(6)

(15)

(252.2)

Interest income increased primarily due to increased interest rates.

Interest expense increased primarily due to

increased borrowings and increased interest rates.

Income Taxes

For the three months ended September 30, 2023 our effective tax rate was 21.9% compared

to 22.7% for the prior

year period.

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

relates to state

and foreign income taxes and interest expense.

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Nine Months Ended September 30, 2023 Compared to Nine Months Ended September

24, 2022

Net Sales

Net sales were as follows:

September 30,

% of

September 24,

% of

Increase / (Decrease)

2023

Total

2022

Total

Health care distribution

(1)

Dental

5,737

61.5

5,466

58.9

271

5.0

Medical

2,991

32.1

3,274

35.3

(283)

(8.6)

Total health care distribution

8,728

93.6

8,740

94.2

(12)

(0.1)

Technology and value-added services

(2)

594

6.4

536

5.8

10.7

Total

9,322

100.0

9,276

100.0

0.5

The components of our sales growth were as follows:

Total Local

Currency

Growth

Foreign

Exchange

Impact

Total Sales

Growth

Local Currency Growth

Local Internal

Growth

Acquisition

Growth

Health care distribution

(1)

Dental Merchandise

1.7

4.0

5.7

(0.4)

5.3

Dental Equipment

2.7

1.5

4.2

(0.4)

3.8

Total Dental

1.9

3.5

5.4

(0.4)

5.0

Medical

(9.3)

0.7

(8.6)

Total Health Care Distribution

(2.3)

2.4

0.1

(0.2)

(0.1)

Technology and value-added services

(2)

7.2

3.8

11.0

(0.3)

10.7

Total

(1.7)

2.5

0.8

(0.3)

0.5

Note: Percentages for Net Sales; Gross Profit; Selling, General and Administrative; Other Expense, Net; and Income Taxes are based on

actual values and may not recalculate due to rounding.

(1)

Consists of consumable products, small equipment, laboratory products, large equipment, equipment repair services, branded and

generic pharmaceuticals, vaccines, surgical products, dental specialty products (including implant, orthodontic and endodontic

products), diagnostic tests, infection-control products, PPE products and vitamins.

(2)

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

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

education services for practitioners, consulting and other services.

Global Sales

Global net sales for the nine months ended September 30, 2023 increased 0.5%.

The components of our sales

growth are presented in the table above.

The estimated increase in internally generated local currency sales, excluding

PPE products and COVID-19 test

kits, was 3.5%.

We estimate that sales of PPE products and COVID-19 test kits were approximately $540 million

and $990 million for the nine months ended September 30, 2023 and

September 24, 2022, respectively,

representing an estimated decrease of $450 million or 45.5% versus the prior year, with the $450 million net

decrease year-over-year representing 4.8% of global net sales for the nine months ended September 30,

2023.

Dental

Dental net sales for the nine months ended September 30, 2023 increased

5.0%.

The components of our sales

growth are presented in the table above.

Our sales growth in local currency for dental merchandise was primarily

attributable to acquisitions.

Our sales growth in local currency for dental equipment was primarily

attributable to

growth in traditional equipment sales in North America.

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The estimated increase in internally generated local currency sales, excluding

PPE products and COVID-19 test

kits, was 3.8%.

We estimate that sales of PPE products were approximately $264 million and $351 million for the

nine months ended September 30, 2023 and September 24, 2022, respectively, representing an estimated decrease

of $87 million or 25.0%

versus the prior year, with the $87 million net decrease year-over-year representing 1.5%

of dental net sales for the nine months ended September 30, 2023.

Medical

Medical net sales for the nine months ended September 30, 2023 decreased

8.6%.

The components of this decrease

are presented in the table above.

The local currency decrease in medical sales is primarily attributable

to lower

sales of PPE products and COVID-19 test kits and other point-of-care

diagnostic products.

The estimated increase in internally generated local currency sales, excluding

PPE products and COVID-19 test

kits, was 2.3%.

We estimate that sales of PPE products and COVID-19 test kits were approximately $276 million

and $639 million for the nine months ended September 30, 2023 and

September 24, 2022, respectively,

representing an estimated decrease of $363 million or 56.8% versus

the prior year, with the $363 million net

decrease year-over-year representing 12.1% of medical net sales for the nine months ended September 30, 2023.

Technology and value-added services

Technology and value-added services net sales for the nine months ended September 30, 2023 increased 10.7%.

The components of our sales growth are presented in the table above.

During the nine months ended September 30,

2023, the trend for sales of practice management software growth remains

strong as we continued to increase the

number of cloud-based users.

We also experienced increased demand for our revenue cycle management solutions.

The increase in sales during the quarter ended September 30, 2023 was

partially offset by the expiration, during the

third quarter of 2022, of a modestly profitable government contract in

one of our value-added services businesses.

Gross Profit

Gross profit and gross margin percentages by segment and in total were as follows:

September 30,

Gross

September 24,

Gross

Increase

2023

Margin %

2022

Margin %

Health care distribution

2,534

29.0

2,482

28.4

2.1

Technology and value-added services

402

67.6

350

65.3

14.8

Total

2,936

31.5

2,832

30.5

104

3.7

As a result of different practices of categorizing costs associated with distribution networks

throughout our

industry, our gross margins may not necessarily be comparable to other distribution companies.

Additionally, we

realize substantially higher gross margin percentages in our technology and value-added services

segment than in

our health care distribution segment.

These higher gross margins result from being both the developer and seller of

software products and services, as well as certain financial services.

The software industry typically realizes higher

gross margins to recover investments in research and development.

Within our health care distribution segment, gross profit margins may vary from one period to the next.

Changes in

the mix of products sold as well as changes in our customer mix have

been the most significant drivers affecting

our gross profit margin.

For example, sales of our corporate brand products achieve

gross profit margins that are

higher than average total gross profit margins of all products.

With respect to customer mix, sales to our large-

group customers are typically completed at lower gross margins due to the higher

volumes sold as opposed to the

gross margin on sales to office-based practitioners, who normally purchase lower volumes.

Health care distribution gross profit for the nine months ended September 30, 2023

increased compared to the

prior-year period due to the increase in sales, mainly due to a reduction in sales of

PPE products and COVID-19

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test kits offset by $74 million of gross profit from acquisitions and gross margin expansion

as a result of a favorable

impact of sales mix of higher-margin products.

Technology and value-added services gross profit increased as a result of a higher gross profit from internally

generated sales and gross profit of $18 million from acquisitions, as well

as an increase in gross margin rates

primarily due to product mix and increases in productivity.

Operating Expenses

Operating expenses (consisting of selling, general and administrative expenses;

depreciation and amortization; and

restructuring and integration costs) by segment and in total were as follows:

% of

September 30,

Respective

September 24,

Respective

Increase

2023

Net Sales

2022

Net Sales

Health care distribution

2,063

23.6

1,903

21.8

160

8.4

Technology and value-added services

297

50.1

254

47.4

17.0

Total

2,360

25.3

2,157

23.3

203

9.4

The net increase in operating expenses is attributable to the following:

Restructuring and

Integration Costs

Operating Costs

Acquisitions

Total

Health care distribution

160

Technology and value-added services

Total

203

The restructuring and integration costs are primarily related to severance

and employee-related costs, accelerated

amortization of right-of-use lease assets and fixed assets, and other lease exit

costs.

During the nine months ended

September 30, 2023, our operating expenses were favorably impacted

by the recognition of a remeasurement gain

of $18 million following an acquisition of a controlling interest of

a previously held equity investment.

The

increase in operating costs includes increases in payroll and payroll related costs,

travel, convention, consulting,

and occupancy expenses in both of our reportable segments and increased

acquisition expenses in our healthcare

distribution segment.

Other Expense, Net

Other expense, net was as follows:

September 30,

September 24,

Variance

2023

2022

Interest income

132.2

Interest expense

(58)

(23)

(35)

(153.4)

Other, net

(2)

(3)

(331.4)

Other expense, net

(48)

(17)

(31)

(184.5)

Interest income increased primarily due to increased interest rates.

Interest expense increased primarily due to

increased borrowings and increased interest rates.

Income Taxes

For the nine months ended September 30, 2023 our effective tax rate was 22.5% compared

to 23.5% for the prior

year period.

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

relates to state

and foreign income taxes and interest expense.

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Liquidity and Capital Resources

Our principal capital requirements have included funding of acquisitions, purchases

of additional noncontrolling

interests, repayments of debt principal, the funding of working capital needs,

purchases of fixed assets and

repurchases of common stock.

Working capital requirements generally result from increased sales, special

inventory forward buy-in opportunities and payment terms for receivables

and payables.

Historically, sales have

tended to be stronger during the second half of the year and special inventory

forward buy-in opportunities have

been most prevalent just before the end of the year, and have caused our working capital requirements

to be higher

from the end of the third quarter to the end of the first quarter of

the following year.

We finance our business primarily through cash generated from our operations, revolving credit facilities and debt

placements.

Please see

Note 8 – Debt

for further information.

Our ability to generate sufficient cash flows from

operations is dependent on the continued demand of our customers

for our products and services, and access to

products and services from our suppliers.

Our business requires a substantial investment in working capital, which

is susceptible to fluctuations during the

year as a result of inventory purchase patterns and seasonal demands.

Inventory purchase activity is a function of

sales activity, special inventory forward buy-in opportunities and our desired level of inventory.

We anticipate

future increases in our working capital requirements.

We finance our business to provide adequate funding for at least 12 months.

Funding requirements are based on

forecasted profitability and working capital needs, which, on occasion, may

change.

Consequently, we may change

our funding structure to reflect any new requirements.

We believe that our cash and cash equivalents, our ability to access private debt markets and public equity markets,

and our available funds under existing credit facilities provide us with

sufficient liquidity to meet our currently

foreseeable short-term and long-term capital needs.

Our acquisition strategy is focused on investments in companies that

add new customers and sales teams, increase

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

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

part of our BOLD+1 Strategic Plan, including pursuing focused mergers and acquisitions,

subsequent to September

30, 2023 we have announced acquisitions of companies specializing

in clear aligners,

homecare medical products

delivered directly to patients, and dental practice transition services.

Net cash provided by operating activities was $532 million for the

nine months ended September 30, 2023,

compared to net cash provided by operating activities of $348 million for

the prior year.

The net change of $184

million was primarily due to a favorable change in working capital (primarily

inventories), net of acquisitions,

partially offset by a decrease in operating income.

Net cash used in investing activities was $808 million for the nine months

ended September 30, 2023, compared to

net cash used in investing activities of $211 million for the prior year.

The net change of $597 million was

primarily attributable to increased business combinations and investment activity.

Net cash provided by financing activities was $307 million for the nine

months ended September 30, 2023,

compared to net cash used in financing activities of $121 million for the prior

year.

The net change of $428 million

was primarily due to increased net borrowings from debt.

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The following table summarizes selected measures of liquidity and capital

resources:

September 30,

December 31,

2023

2022

Cash and cash equivalents

166

117

Working

capital

(1)

2,020

1,764

Debt:

Bank credit lines

103

Current maturities of long-term debt

Long-term debt

1,815

1,040

Total debt

1,899

1,149

Leases:

Current operating lease liabilities

Non-current operating lease liabilities

314

275

(1)

Includes $0 million and $327 million of certain accounts receivable which serve as security for U.S. trade accounts receivable

securitization at September 30, 2023 and December 31, 2022, respectively.

Our cash and cash equivalents consist of bank balances and investments

in money market funds representing

overnight investments with a high degree of liquidity.

Accounts receivable days sales outstanding and inventory turns

Our accounts receivable days sales outstanding from operations

increased to 43.7 days as of September 30, 2023

from 42.9 days as of September 24, 2022.

During the nine months ended September 30, 2023, we wrote

off

approximately $13 million of fully reserved accounts receivable against

our trade receivable reserve.

Our inventory

turns from operations decreased to 4.5 as of September 30, 2023 from 4.7

as of September 24, 2022.

Our working

capital accounts may be impacted by current and future economic conditions.

Leases

We have operating and finance leases for corporate offices, office space, distribution and other facilities, vehicles,

and certain equipment.

Our leases have remaining terms of one year to approximately

18 years, some of which

may include options to extend the leases for up to 15 years.

As of September 30, 2023, our right-of-use assets

related to operating leases were $323 million and our current and non-current

operating lease liabilities were $74

million and $314 million, respectively.

Stock Repurchases

On February 8, 2023, our Board of Directors authorized the repurchase

of up to an additional $400 million in shares

of our common stock.

From March 3, 2003 through September 30, 2023, we repurchased $4.7

billion, or 89,702,364 shares, under our

common stock repurchase programs, with $315 million available

as of September 30, 2023 for future common

stock share repurchases.

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Critical Accounting Policies and Estimates

There have been no material changes in our critical accounting policies and

estimates from those disclosed in Item

7 of our Annual Report on Form 10-K for the year ended December 31, 2022,

except accounting policies adopted

as of January 1, 2023, which are discussed in

Note 2 - Critical Accounting Policies and Recently Issued Accounting

Standards

of the Notes to the Condensed Consolidated Financial Statements included

under Item 1.

Accounting Standards Update

For a discussion of accounting standards updates that have been adopted

or will be adopted, see

Note 2 - Critical

Accounting Policies and Recently Issued Accounting Standards

of the Notes to the Condensed Consolidated

Financial Statements included under Item 1.

ITEM 3.

QUANTITATIVE

AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our exposure to market risk

from that disclosed in Item 7A of our Annual

Report on Form 10-K for the year ended December 31, 2022.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including

our principal executive officer and

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

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

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

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

amended (the “Exchange Act”).

Based

on this evaluation, our management, including our principal executive

officer and principal financial officer,

concluded that our disclosure controls and procedures were effective as of September 30,

2023, to ensure that all

material information required to be disclosed by us in reports that we file

or submit under the Exchange Act is

accumulated and communicated to them as appropriate to allow timely

decisions regarding required disclosure and

that all such information is recorded, processed, summarized and reported

within the time periods specified in the

SEC’s rules and forms.

Changes in Internal Control over Financial Reporting

During the quarter ended September 30, 2023, we acquired a 100% voting equity

interest in S.I.N Implant System,

an implant manufacturer headquartered in Brazil.

The full integration of this acquisition, as well as our previously

reported acquisition of Biotech Dental, will extend beyond year-end and, therefore, we anticipate

excluding Biotech

Dental, and S.I.N. from our annual assessment of internal control over

financial reporting as of December 30, 2023,

as permitted by SEC staff interpretive guidance for newly acquired businesses.

Post-acquisition integration related activities for other dental and

medical businesses acquired during prior quarters

across the U.S., Europe, Australia, China, and Brazil will continue, and

will be included in our annual assessment

of internal control over financial reporting as of December 30, 2023.

These acquisitions, the majority of which

utilize separate information and financial accounting systems, have been

included in our condensed consolidated

financial statements since their respective dates of acquisition.

Finally, we continued systems implementation activities in the U.S. for two of our dental businesses.

The combination of acquisitions (including S.I.N., and Biotech Dental),

continued acquisition integrations and

systems implementation activities undertaken during the quarter and

carried over from prior quarters when

considered in the aggregate, represents a material change in our

internal control over financial reporting.

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During the quarter, all acquisitions, continued acquisition integrations and systems implementation activities

involve necessary and appropriate change-management controls

that are considered in our quarterly assessment of

changes in our internal control over financial reporting.

Subsequent to the September 30, 2023 quarter end, on October 14, 2023, we

experienced a cybersecurity incident

that primarily affected the operations of our North American and European

dental and medical distribution

businesses.

As part of the Company’s incident response plan, precautionary actions were

taken to

contain the

incident including shutting down connectivity to networks and key business,

operating and financial accounting

systems globally.

In addition to notifying customers and all relevant law enforcement

authorities, we engaged

external cyber-security experts to support our assessment of the cyber-incident’s impact as well as sanitize, rebuild

and restore our information systems.

On November 22, 2023, we experienced a disruption to our ecommerce

platform and related applications. The

Company has restored its ecommerce platform and certain other

applications in the United States, Canada and

certain European countries.

Our ecommerce platform in the remaining European countries and other applications

are expected to follow shortly.

In order to mitigate the impact of this disruption on our systems and on our

ability to service customers, alternative

procedures and controls were temporarily implemented.

An investigation is ongoing to assess the impact on our

businesses and internal controls over financial reporting.

Limitations of the Effectiveness of Internal Control

A control system, no matter how well conceived and operated, can provide

only reasonable, not absolute, assurance

that the objectives of the internal control system are met.

Because of the inherent limitations of any internal control

system, no evaluation of controls can provide absolute assurance that

all control issues, if any, within a company

have been detected.

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PART

II.

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

For a discussion of Legal Proceedings, see

Note 11–Legal Proceedings

of the Notes to the Condensed Consolidated

Financial Statements included under Item 1.

ITEM 1A. RISK FACTORS

Referring to risk factors disclosed in Part 1, Item 1A, of our Annual Report

on Form 10-K for the year ended

December 31, 2022, and in particular the first risk factor under General Risks

addressing security risks associated

with our information systems, the third paragraph is amended and restated

as follows:

While we have implemented measures to protect our IS systems, such

measures may not prevent these events.

Any

such security incidents could disrupt our operations, harm our reputation, or

otherwise have a material adverse

effect on our business.

In addition to immaterial prior incidents, in October 2023,

Henry Schein experienced a

cybersecurity incident that primarily affected the operations of our North American

and European dental and

medical distribution businesses.

Henry Schein One, our practice management software, revenue cycle

management

and patient relationship management solutions business was not affected, and our

manufacturing businesses and our

equipment sales and service operations were mostly unaffected.

Once we became aware of the issue, we

took steps

to assess, contain and remediate this incident.

restored affected systems and applications, our distribution

operations resumed and we reactivated our ecommerce platform.

also notified law enforcement and our

customers and suppliers, informing them of both the incident and management’s efforts to mitigate its impact on

our daily operations. As previously disclosed, while our forensic investigation

is still ongoing, we have determined

that a data breach occurred.

We are notifying potentially affected parties as appropriate.

On November 22, 2023,

we experienced a disruption to our ecommerce platform and related

applications. The Company has restored its

ecommerce platform and certain other applications in the United States, Canada

and certain European

countries.

Our ecommerce platform in the remaining European countries

and other applications are expected to

follow shortly.

continue to review the impact of the incident on the Company’s business.

As previously

disclosed, we believe the incident will adversely impact our financial results

for the fourth quarter and full year

2023.

We maintain cyber insurance, subject to certain retentions and policy limitations.

There can be no assurance

that the insurance coverage we maintain is sufficient or will be available in adequate

amounts or at a reasonable

cost to cover costs and expenses related to security incidents.

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ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES

AND USE OF PROCEEDS

Purchases of equity securities by the issuer

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

allowed us to repurchase up to two million

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

stock, which represented

approximately 2.3% of the shares outstanding at the commencement

of the program.

Subsequent additional

increases totaling $4.9

billion, authorized by our Board of Directors, to the repurchase program

provide for a total

of $5.0 billion (including $400 million authorized on February 8, 2023) of shares

of our common stock to be

repurchased under this program.

As of September 30, 2023, we had repurchased approximately $4.7 billion

of common stock (89,702,364 shares)

under these initiatives, with $315 million available for future common

stock share repurchases.

The following table summarizes repurchases of our common stock

under our stock repurchase program during the

fiscal quarter ended September 30, 2023:

Total Number

Maximum Number

Total

of Shares

Number

Average

Purchased as Part

that May Yet

of Shares

Price Paid

of Our Publicly

Be Purchased Under

Fiscal Month

Purchased (1)

Per Share

Announced Program

Our Program (2)

7/2/2023 through 8/5/2023

4,674,091

8/6/2023 through 9/2/2023

330,000

76.86

330,000

4,448,396

9/3/2023 through 9/30/2023

329,681

74.72

329,681

4,242,422

659,681

(1)

All repurchases were executed in the open market under our existing publicly announced authorized program.

(2)

The maximum number of shares that may yet be purchased under this program is determined at the end of each month based on the

closing price of our common stock at that time.

This table excludes shares withheld from employees to satisfy minimum tax withholding

requirements for equity-based transactions.

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ITEM 5.

OTHER INFORMATION

Rule 10b5-1 Trading Arrangements

During the three months ended September 30, 2023, (i)

Stanley M. Bergman

, the Company’s

Chairman of the

Board and Chief Executive Officer

, on behalf of himself and a family trust for which his wife serves

as co-trustee,

and (ii)

James P. Breslawski

, the Company’s

Vice Chairman and President

, each

adopted

a Rule

10b5-1

trading

arrangement which is a trading plan for the future sale of securities that

is intended to satisfy the affirmative

defense of Exchange Act

Rule

10b5-1

(c), as well as the requirements of the Company’s insider trading policy. Each

plan is subject to an initial “cooling off” period during which there may be no transactions

between the adoption

date and a date that is the later of 90 days or two business days following

the Company’s filing of its next quarterly

report on Form 10-Q or Annual Report on form 10-K.

September 8, 2023

, Mr. Bergman and the Bergman

Family 2010 Trust #2 adopted the trading plan to sell a total of

56,886

shares (

40,152

shares to be sold by Mr.

Bergman and

16,734

shares to be sold by the Bergman Family 2010 Trust #2) based on limit orders at specified

prices, with a term of eight months (

i.e.,

through May 7, 2024).

September 19, 2023

, Mr. Breslawski adopted

the trading plan to sell

9,085

shares based on limit orders at specified prices, with a term through

December 31,

2024.

ITEM 6.

EXHIBITS

10.1

Henry Schein, Inc. Deferred Compensation Plan, as amended and restated

effective as of November 14, 2023. (Incorporated by reference to Exhibit 10.1

to our Current Report on Form 8-K filed on November 16, 2023)**

31.1

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+

31.2

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+

32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.+

101.INS

Inline XBRL Instance Document - the instance document does not appear

in the

Interactive Data File because its XBRL tags are embedded within the

Inline

XBRL document+

101.SCH

Inline XBRL Taxonomy Extension Schema Document+

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document+

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document+

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document+

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document+

104

The cover page of Henry Schein, Inc.’s Quarterly Report on Form 10-Q for the

quarter ended September 30, 2023, formatted in Inline XBRL (included

within

Exhibit 101 attachments).+

** Indicates management contract or compensatory plan or agreement.

+ Filed or furnished herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the

Registrant has duly caused this Report to

be signed on its behalf by the undersigned thereunto duly authorized.

Henry Schein, Inc.

(Registrant)

By: /s/ Ronald N. South

Ronald N. South

Senior Vice President and

Chief Financial Officer

(Authorized Signatory and Principal Financial

and Accounting Officer)

Dated: November 28, 2023

Henry Schein - 10-Q quarterly report FY2023 Q3

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