Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 02, 2022 | May 06, 2022 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Apr. 2, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-37786 | |
Entity Registrant Name | US FOODS HOLDING CORP. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-0347906 | |
Entity Address, Address Line One | 9399 W. Higgins Road | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | Rosemont | |
Entity Address, State or Province | IL | |
Entity Address, Postal Zip Code | 60018 | |
City Area Code | 847 | |
Local Phone Number | 720-8000 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | USFD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001665918 | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | false | |
Entity Common Stock, Outstanding (in shares) | 223,891,807 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 190 | $ 148 |
Accounts receivable, less allowances of $33 and $33 | 1,658 | 1,469 |
Vendor receivables, less allowances of $11 and $7 | 199 | 145 |
Inventories—net | 1,826 | 1,686 |
Prepaid expenses | 148 | 120 |
Assets held for sale | 8 | 8 |
Other current assets | 21 | 18 |
Total current assets | 4,050 | 3,594 |
Property and equipment—net | 2,022 | 2,033 |
Goodwill | 5,625 | 5,625 |
Other intangibles—net | 819 | 830 |
Deferred tax assets | 9 | 8 |
Other assets | 435 | 431 |
Total assets | 12,960 | 12,521 |
Current liabilities: | ||
Cash overdraft liability | 214 | 183 |
Accounts payable | 2,077 | 1,662 |
Accrued expenses and other current liabilities | 635 | 610 |
Current portion of long-term debt | 103 | 95 |
Total current liabilities | 3,029 | 2,550 |
Long-term debt | 4,890 | 4,916 |
Deferred tax liabilities | 312 | 307 |
Other long-term liabilities | 473 | 479 |
Total liabilities | 8,704 | 8,252 |
Commitments and contingencies (Note 17) | ||
Series A convertible preferred stock, $0.01 par value—25 shares authorized; 0.5 issued and outstanding as of April 2, 2022 and January 1, 2022 | 534 | 534 |
Shareholders’ equity: | ||
Common stock, $0.01 par value—600 shares authorized; 224 and 223 issued and outstanding as of April 2, 2022 and January 1, 2022, respectively | 2 | 2 |
Additional paid-in capital | 2,973 | 2,970 |
Retained earnings | 766 | 782 |
Accumulated other comprehensive loss | (19) | (19) |
Total shareholders’ equity | 3,722 | 3,735 |
Total liabilities, mezzanine equity and shareholders’ equity | $ 12,960 | $ 12,521 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Statement of Financial Position [Abstract] | ||
Allowances for accounts receivable | $ 33 | $ 33 |
Allowances for vendor receivables | $ 11 | $ 7 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, Number of shares issued | 500,000 | 500,000 |
Preferred stock, outstanding (in shares) | 532,281 | 500,000 |
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 224,000,000 | 223,000,000 |
Common stock, outstanding (in shares) | 224,000,000 | 223,000,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net sales | $ 7,798 | $ 6,295 |
Cost of goods sold | 6,603 | 5,292 |
Gross profit | 1,195 | 1,003 |
Operating expenses: | ||
Distribution, selling and administrative costs | 1,161 | 972 |
Restructuring costs and asset impairment charges | 0 | 3 |
Total operating expenses | 1,161 | 975 |
Operating income | 34 | 28 |
Other income—net | (6) | (7) |
Interest expense—net | 55 | 54 |
Loss on extinguishment of debt | 0 | 23 |
Loss before income taxes | (15) | (42) |
Income tax benefit | (8) | (18) |
Net loss | (7) | (24) |
Other comprehensive loss—net of tax: | ||
Changes in retirement benefit obligations | 0 | 0 |
Recognition of interest rate swaps | 0 | 2 |
Comprehensive loss | (7) | (22) |
Net loss | (7) | (24) |
Series A convertible preferred stock dividends | (9) | (15) |
Net loss available to common shareholders | $ (16) | $ (39) |
Net loss per share | ||
Earnings Per Share, Basic | $ (0.07) | $ (0.18) |
Earnings Per Share, Diluted | $ (0.07) | $ (0.18) |
Weighted-average common shares outstanding | ||
Weighted Average Number of Shares Outstanding, Basic | 223 | 221 |
Weighted Average Number of Shares Outstanding, Diluted | 223 | 221 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Shares balance beginning of period (in shares) at Jan. 02, 2021 | 221 | ||||
Balance at beginning of period at Jan. 02, 2021 | $ 3,530 | $ 2 | $ 2,901 | $ 661 | $ (34) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 10 | 10 | |||
Proceeds from employee stock purchase plan | 5 | 5 | |||
Vested restricted stock units, net (in shares) | 1 | ||||
Vested restricted stock units, net | 0 | 0 | |||
Exercise of stock options (in shares) | 0 | ||||
Exercise of stock options | 4 | 4 | |||
Tax withholding payments for net share-settled equity awards | (12) | (12) | |||
Series A convertible preferred stock dividends | (15) | (15) | |||
Unrecognized gain (loss) on interest rate swaps, net of income tax | 2 | 2 | |||
Net loss | (24) | (24) | |||
Shares balance end of period (in shares) at Apr. 03, 2021 | 222 | ||||
Balance at end of period at Apr. 03, 2021 | 3,500 | $ 2 | 2,908 | 622 | (32) |
Shares balance beginning of period (in shares) at Jan. 01, 2022 | 223 | ||||
Balance at beginning of period at Jan. 01, 2022 | 3,735 | $ 2 | 2,970 | 782 | (19) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Share-based compensation expense | 12 | 12 | |||
Proceeds from employee stock purchase plan | 5 | 5 | |||
Vested restricted stock units, net (in shares) | 1 | ||||
Vested restricted stock units, net | 0 | 0 | |||
Exercise of stock options (in shares) | 0 | ||||
Exercise of stock options | 2 | 2 | |||
Tax withholding payments for net share-settled equity awards | (16) | (16) | |||
Series A convertible preferred stock dividends | (9) | (9) | |||
Net loss | (7) | (7) | |||
Shares balance end of period (in shares) at Apr. 02, 2022 | 224 | ||||
Balance at end of period at Apr. 02, 2022 | $ 3,722 | $ 2 | $ 2,973 | $ 766 | $ (19) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (7) | $ (24) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 89 | 101 |
Gain on disposal of property and equipment—net | (1) | 0 |
Loss on extinguishment of debt | 0 | 23 |
Amortization of deferred financing costs | 3 | 3 |
Deferred tax provision (benefit) | 4 | (4) |
Share-based compensation expense | 12 | 10 |
Provision (benefit) for doubtful accounts | 0 | (12) |
Changes in operating assets and liabilities: | ||
Increase in receivables | (243) | (315) |
Increase in inventories—net | (140) | (178) |
Increase in prepaid expenses and other assets | (37) | (25) |
Increase in accounts payable and cash overdraft liability | 463 | 555 |
Increase in accrued expenses and other liabilities | 15 | 42 |
Net cash provided by operating activities | 158 | 176 |
Cash flows from investing activities: | ||
Proceeds from sales of property and equipment | 2 | 0 |
Purchases of property and equipment | (72) | (46) |
Net cash used in investing activities | (70) | (46) |
Cash flows from financing activities: | ||
Proceeds from debt borrowings | 103 | 900 |
Principal payments on debt and financing leases | (131) | (926) |
Dividends, Preferred Stock, Cash | (9) | 0 |
Debt financing costs and fees | 0 | (18) |
Proceeds from employee stock purchase plan | 5 | 5 |
Proceeds from exercise of stock options | 2 | 4 |
Tax withholding payments for net share-settled equity awards | (16) | (12) |
Net cash used in financing activities | (46) | (47) |
Net increase in cash, and cash equivalents and restricted cash | 42 | 83 |
Cash, cash equivalents and restricted cash—beginning of period | 148 | 829 |
Cash, cash equivalents and restricted cash—end of period | 190 | 912 |
Supplemental disclosures of cash flow information: | ||
Interest paid—net of amounts capitalized | 37 | 33 |
Income taxes paid—net | 1 | 0 |
Property and equipment purchases included in accounts payable | 29 | 23 |
Property and equipment transferred to assets held for sale | 0 | 9 |
Leased assets obtained in exchange for financing lease liabilities | 7 | 7 |
Leased assets obtained in exchange for operating lease liabilities | 7 | 8 |
Cashless exercise of stock options | 1 | 0 |
Paid-in-kind Series A convertible preferred stock dividends | $ 0 | $ 15 |
Overview and Basis of Presentat
Overview and Basis of Presentation | 3 Months Ended |
Apr. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview and Basis of Presentation | OVERVIEW AND BASIS OF PRESENTATION US Foods Holding Corp., a Delaware corporation, and its consolidated subsidiaries are referred to in these consolidated financial statements and notes as “we,” “our,” “us,” the “Company,” or “US Foods.” US Foods Holding Corp. conducts all of its operations through its wholly owned subsidiary US Foods, Inc. (“USF”) and its subsidiaries. All of the Company’s indebtedness, as further described in Note 9, Debt, is a direct obligation of USF and its subsidiaries. Business Description —The Company, through USF, operates in one business segment in which it markets and distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States (“U.S.”). These customers include independently owned single and multi-unit restaurants, regional concepts, national restaurant chains, hospitals, nursing homes, hotels and motels, country clubs, government and military organizations, colleges and universities and retail locations. Basis of Presentation —The Company operates on a 52- or 53-week fiscal year, with all periods ending on a Saturday. When a 53-week fiscal year occurs, the Company reports the additional week in the fiscal fourth quarter. Fiscal years 2022 and 2021 are both 52-week fiscal years. The consolidated financial statements included in this Quarterly Report have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and disclosures normally included in financial statements and notes prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures included in this Quarterly Report are adequate to make the information presented not misleading. These interim consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in the 2021 Annual Report. The consolidated interim financial statements reflect all adjustments (consisting of normal recurring items) necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for interim periods are not necessarily indicative of the results that might be achieved for any other interim period or the full fiscal year. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Apr. 02, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity , which simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. As a result, convertible debt will be accounted for as a single liability measured at its amortized cost. Additionally, the new guidance requires the application of the if-converted method to calculate the impact of convertible instruments on diluted earnings per share. This guidance is effective for fiscal years beginning after December 15, 2021. The Company adopted the provisions of ASU No. 2020-06 at the beginning of the first quarter of fiscal year 2022, with no impact on our financial position, results of operations, cash flows or diluted earnings per share reporting. In October 2021, the FASB issued ASU No. 2021-08 Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which amends Accounting Standards Codification (“ASC”) 805 to require an acquirer to, at the date of acquisition, recognize and measure contract assets and contract liabilities acquired in accordance with ASU 2014-9, Revenue from Contracts with Customers (Topic 606) . The guidance is effective for fiscal years beginning after December 15, 2022, with early adoption permitted, and is to be applied prospectively to business combinations occurring on or after adoption of the new guidance. The Company adopted the provisions of ASU No. 2021-08 at the beginning of the first quarter of fiscal year 2022, with no impact on our financial position, results of operations or cash flows. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Apr. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | REVENUE RECOGNITIONThe Company recognizes revenue when the performance obligation is satisfied, which occurs when a customer obtains control of the promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services. The Company generates substantially all of its revenue from the distribution and sale of food and food-related products and recognizes revenue when title and risk of loss passes and the customer accepts the goods, which occurs at delivery. Customer sales incentives, such as volume-based rebates or discounts, are treated as a reduction of revenue at the time the revenue is recognized. Sales taxes invoiced to customers and remitted to governmental authorities are excluded from net sales. Shipping and handling costs are treated as fulfillment costs and included in distribution, selling and administrative costs. The Company did not have any material outstanding performance obligations, contract liabilities or capitalized contract acquisition costs as of April 2, 2022 or January 1, 2022. Customer receivables, which are included in accounts receivable, less allowances in the Company’s Consolidated Balance Sheets, were $1.7 billion and $1.5 billion as of April 2, 2022 and January 1, 2022, respectively. The Company has certain customer contracts under which incentives are paid upfront to its customers. These payments have become industry practice and are not related to financing any customer’s business, nor are these payments associated with any distinct good or service to be received from any customer. These incentive payments are capitalized in prepaid expenses and other assets and amortized as a reduction of revenue over the life of the contract or as goods or services are transferred to the customer. The Company’s contract assets for these upfront payments were $27 million included in prepaid expenses in the Company’s Consolidated Balance Sheets as of both April 2, 2022 and January 1, 2022, and $28 million and $26 million included in other assets in the Company’s Consolidated Balance Sheets as of April 2, 2022 and January 1, 2022 respectively. The following table presents the disaggregation of revenue for each of the Company’s principal product categories: 13 Weeks Ended April 2, 2022 April 3, 2021 Meats and seafood $ 2,950 $ 2,262 Dry grocery products 1,333 1,093 Refrigerated and frozen grocery products 1,179 994 Dairy 761 622 Equipment, disposables and supplies 811 693 Beverage products 376 324 Produce 388 307 Total Net sales $ 7,798 $ 6,295 |
Inventories
Inventories | 3 Months Ended |
Apr. 02, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES The Company’s inventories, consisting mainly of food and other food-related products, are primarily considered finished goods. Inventory costs include the purchase price of the product, freight costs to deliver it to the Company’s distribution and retail facilities, and depreciation and labor related to processing facilities and equipment, and are net of certain cash or non-cash consideration received from vendors. The Company assesses the need for valuation allowances for slow-moving, excess and obsolete inventories by estimating the net recoverable value of such goods based upon inventory category, inventory age, specifically identified items, and overall economic conditions.The Company records inventories at the lower of cost or market primarily using the last-in, first-out (“LIFO”) method. For our LIFO based inventories, the base year values of beginning and ending inventories are determined using the inventory price index computation method. This “links” current costs to original costs in the base year when the Company adopted LIFO. LIFO reserves in the Company’s Consolidated Balance Sheets were $414 million and $342 million as of April 2, 2022 and January 1, 2022, respectively. As a result of changes in LIFO reserves, cost of goods sold increased $72 million and $21 million for the 13 weeks ended April 2, 2022 and April 3, 2021, respectively. |
Allowance For Doubtful Accounts
Allowance For Doubtful Accounts Disclosures | 3 Months Ended |
Apr. 02, 2022 | |
Receivables [Abstract] | |
Allowance For Doubtful Accounts | ALLOWANCE FOR DOUBTFUL ACCOUNTSThe Company performs on-going credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current credit worthiness, as determined by the review of their current credit information. Collections and payments from customers are continuously monitored. The Company evaluates the collectability of its accounts receivable and determines the appropriate allowance for doubtful accounts based on a combination of factors. The Company maintains an allowance for doubtful accounts, which is based upon historical experience, future expected losses, as well as specific customer collection issues that have been identified. The Company uses specific criteria to determine uncollectible receivables to be written off, including bankruptcy, accounts referred to outside parties for collection, and accounts past due over specified periods. Due to the impact that the COVID-19 pandemic was expected to have on our customers, we significantly increased our allowance for doubtful accounts during the 13 weeks ended March 28, 2020. Since that initial charge in 2020, due to more favorable than anticipated collections on our pre-COVID-19 accounts receivable, we reduced our allowance for doubtful accounts for by $12 million the 13 weeks ended April 3, 2021. Activity in the allowance for doubtful accounts for the 13 weeks ended April 2, 2022 was de minimis. A summary of the activity in the allowance for doubtful accounts for the 13 weeks ended April 2, 2022 and April 3, 2021 was as follows: April 2, 2022 April 3, 2021 Balance as of beginning of year $ 33 $ 67 Charged (benefit) to costs and expenses, net — (12) Customer accounts written off—net of recoveries — (4) Balance as of end of period $ 33 $ 51 This table excludes the vendor receivable related allowance for doubtful accounts of $11 million and $7 million as of April 2, 2022 and January 1, 2022, respectively. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Apr. 02, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment are stated at cost. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 40 years. Property and equipment under financing leases and leasehold improvements are amortized on a straight-line basis over the shorter of the remaining terms of the related leases or the estimated useful lives of the assets, if reasonably assured the Company will purchase the assets at the end of the lease terms. As of April 2, 2022 and January 1, 2022, property and equipment-net included accumulated depreciation of $2,788 million and $2,722 million, respectively. Depreciation expense was $78 million and $82 million for the 13 weeks ended April 2, 2022 and April 3, 2021, respectively. |
Goodwill and Other Intangibles
Goodwill and Other Intangibles | 3 Months Ended |
Apr. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangibles | GOODWILL AND OTHER INTANGIBLES Goodwill includes the cost of acquired businesses in excess of the fair value of the tangible and other intangible net assets acquired. Other intangible assets include customer relationships, amortizable trade names, noncompete agreements, the brand names comprising the Company’s portfolio of exclusive brands, and trademarks. Brand names and trademarks are indefinite-lived intangible assets and, accordingly, are not subject to amortization, but are subject to impairment assessments as described below. Customer relationships, amortizable trade names and noncompete agreements are intangible assets with definite lives, and are carried at the acquired fair value less accumulated amortization. Customer relationships, amortizable trade names and noncompete agreements are amortized over their estimated useful lives (which range from approximately 3 to 15 years). Amortization expense was $11 million and $19 million for the 13 weeks ended April 2, 2022 and April 3, 2021, respectively. Goodwill and other intangibles—net consisted of the following: April 2, 2022 January 1, 2022 Goodwill $ 5,625 $ 5,625 Other intangibles—net Customer relationships—amortizable: Gross carrying amount $ 655 $ 655 Accumulated amortization (110) (99) Net carrying value 545 556 Trade names—amortizable: Gross carrying amount 4 4 Accumulated amortization (1) (1) Net carrying value 3 3 Brand names and trademarks—not amortizing 271 271 Total other intangibles—net $ 819 $ 830 The Company assesses for impairment of intangible assets with definite lives only if events occur that indicate that the carrying amount of an intangible asset may not be recoverable. The Company assesses goodwill and other intangible assets with indefinite lives for impairment annually, or more frequently if events occur that indicate an asset may be impaired. For goodwill and indefinite-lived intangible assets, the Company’s policy is to assess for impairment as of the beginning of each fiscal third quarter. No impairments were recognized for the 13 weeks ended April 2, 2022 and April 3, 2021, respectively. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Apr. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Certain assets and liabilities are carried at fair value under GAAP, under which fair value is a market-based measurement, not an entity-specific measurement. The Company’s fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, fair value accounting standards establish a fair value hierarchy which prioritizes the inputs used in measuring fair value as follows: • Level 1—observable inputs, such as quoted prices in active markets • Level 2—observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active or inactive markets that are observable either directly or indirectly, or other inputs that are observable or can be corroborated by observable market data • Level 3—unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions Any transfers of assets or liabilities between Level 1, Level 2, and Level 3 of the fair value hierarchy will be recognized as of the end of the reporting period in which the transfer occurs. There were no transfers between fair value levels in any of the periods presented below. The Company’s assets and liabilities measured at fair value on a recurring basis as of April 2, 2022 and January 1, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall, were as follows: April 2, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 101 $ — $ — $ 101 January 1, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 99 $ — $ — $ 99 There were no significant assets or liabilities on the Company’s Consolidated Balance Sheets measured at fair value on a nonrecurring basis for the periods presented above, except as further disclosed in Note 7, Goodwill and Other Intangibles. Recurring Fair Value Measurements Money Market Funds Money market funds include highly liquid investments with an original maturity of three or fewer months. These funds are valued using quoted market prices in active markets and are classified under Level 1 within the fair value hierarchy. Derivative Financial Instruments The Company has in the past, and may in the future, use interest rate swaps, designated as cash flow hedges, to manage its exposure to interest rate movements in connection with its variable-rate debt. T he Company had no outstanding interest rate swap agreements a s of both April 2, 2022 and January 1, 2022. Other Fair Value Measurements The carrying value of cash, accounts receivable, vendor receivables, cash overdraft liability and accounts payable approximate their fair values due to their short-term maturities. The fair value of the Company’s total debt approximated $4.9 billion and $5.1 billion as of April 2, 2022 and January 1, 2022, respectively, as compared to its carrying value of $5.0 billion as of both April 2, 2022 and January 1, 2022. The fair value of the Company’s 6.25% senior secured notes due April 15, 2025 (the “Senior Secured Notes due 2025”) was $1.0 billion as of both April 2, 2022 and January 1, 2022. The fair value of the Company’s 4.75% unsecured senior notes due February 15, 2029 (the “Unsecured Senior Notes due 2029”) was $0.9 billion as of both April 2, 2022 and January 1, 2022. The fair value of the Company’s 4.625% unsecured senior notes due June 1, 2030 (the “Unsecured Senior Notes due 2030”) was $0.5 billion as of both April 2, 2022 and January 1, 2022. Fair value of the Senior Secured Notes due 2025, the Unsecured Senior Notes due 2029 and the Unsecured Senior Notes due 2030 is based upon their closing market prices on the respective dates. The fair value of the Senior Secured Notes due 2025, the Unsecured Senior Notes due 2029 and the Unsecured Senior Notes due 2030 is classified under Level 2 of the fair value hierarchy. The fair value of the balance of the Company’s debt is primarily classified under Level 3 of the fair value hierarchy, with fair value estimated based upon a combination of the cash outflows expected under these debt facilities, interest rates that are currently available to the Company for debt with similar terms, and estimates of the Company’s overall credit risk. |
Debt
Debt | 3 Months Ended |
Apr. 02, 2022 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Total debt consisted of the following: Debt Description Maturity Interest Rate as of April 2, 2022 Carrying Value as of April 2, 2022 Carrying Value as of January 1, 2022 ABL Facility May 31, 2024 —% $ — $ — 2019 Incremental Term Loan Facility (net of $23 September 13, 2026 2.51% 1,439 1,442 2021 Incremental Term Loan Facility (net of $6 November 22, 2028 3.26% 891 893 Senior Secured Notes due 2025 (net of $9 and $11 of unamortized deferred financing costs, respectively) April 15, 2025 6.25% 991 989 Unsecured Senior Notes due 2029 (net of $8 and $8 of unamortized deferred financing costs, respectively) February 15, 2029 4.75% 892 892 Unsecured Senior Notes due 2030 (net of $5 of and $5 of unamortized deferred financing costs, respectively) June 1, 2030 4.625% 495 495 Obligations under financing leases 2022–2039 1.25% - 8.63% 277 292 Other debt January 1, 2031 5.75% 8 8 Total debt 4,993 5,011 Current portion of long-term debt (103) (95) Long-term debt $ 4,890 $ 4,916 As of April 2, 2022, approximately 47% of the Company’s total debt bears interest at a floating rate. ABL Facility USF’s asset based senior secured revolving credit facility (the “ABL Facility”) provides USF with loan commitments having a maximum aggregate principal amount of $1,990 million. The ABL Facility is scheduled to mature on May 31, 2024. Borrowings under the ABL Facility bear interest, at USF’s periodic election, at a rate equal to the sum of an alternative base rate (“ABR”), as described in the ABL Facility, plus a margin ranging from 0.00% to 0.50%, or the sum of LIBOR plus a margin ranging from 1.00% to 1.50%, in each case based on USF’s excess availability under the ABL Facility. The margin under the ABL Facility as of April 2, 2022 was 0.00% for ABR loans and 1.00% for LIBOR loans. USF had no outstanding borrowings, and had outstanding letters of credit totaling $263 million, under the ABL Facility as of April 2, 2022. The outstanding letters of credit primarily relate to securing USF’s obligations with respect to its insurance program and certain real estate leases. There was available capacity of $1,727 million under the ABL Facility as of April 2, 2022. Term Loan Facilities Under its term loan credit agreement, USF has entered into an incremental senior secured term loan facility borrowed in September 2019 (the “2019 Incremental Term Loan Facility”) and an incremental senior secured term loan borrowed in November 2021 (the “2021 Incremental Term Loan Facility”). 2019 Incremental Term Loan Facility The 2019 Incremental Term Loan Facility had an outstanding balance of $1,439 million, net of $23 million of unamortized deferred financing costs as of April 2, 2022. Borrowings under the 2019 Incremental Term Loan Facility bear interest at a rate per annum equal to, at USF’s option, either the sum of LIBOR plus a margin of 2.00%, or the sum of an ABR, as described in the 2019 Incremental Term Loan Facility plus a margin of 1.00% (subject to a LIBOR “floor” of 0.00%). The 2019 Incremental Term Loan Facility will mature on September 13, 2026. 2021 Incremental Term Loan Facility The 2021 Incremental Term Loan Facility had an outstanding balance of $891 million, net of $6 million of unamortized deferred financing costs as of April 2, 2022. Borrowings under the 2021 Incremental Term Loan Facility bear interest at a rate per annum equal to, at USF’s option, either the sum of LIBOR plus a margin of 2.75%, or the sum of an ABR, as described in the 2021 Incremental Term Loan Facility, plus a margin of 1.75% (subject to a LIBOR “floor” of 0.00%). The 2021 Incremental Term Loan Facility will mature on November 22, 2028. Senior Secured Notes due 2025 The Senior Secured Notes due 2025 had an outstanding balance of $991 million, net of $9 million of unamortized deferred financing costs, as of April 2, 2022. The Senior Secured Notes due 2025 bear interest at a rate of 6.25% per annum and will mature on April 15, 2025. Unsecured Senior Notes due 2029 The Unsecured Senior Notes due 2029 had an outstanding balance of $892 million, net of $8 million of unamortized deferred financing costs, as of April 2, 2022. The Unsecured Senior Notes due 2029 bear interest at a rate of 4.75% per annum and will mature on February 15, 2029. Unsecured Senior Notes due 2030 The Unsecured Senior Notes due 2030 had an outstanding balance of $495 million, net of $5 million of unamortized deferred financing costs, as of April 2, 2022. The Unsecured Senior Notes due 2030 bear interest at a rate of 4.625% per annum and will mature on June 1, 2030. Debt Covenants The agreements governing our indebtedness contain customary covenants. These include, among other things, covenants that restrict our ability to incur certain additional indebtedness, create or permit liens on assets, pay dividends, or engage in mergers or consolidations. USF had approximately $1.4 billion of restricted payment capacity under these covenants, and approximately $2.8 billion of its net assets were restricted after taking into consideration the net deferred tax assets and intercompany balances that eliminate in consolidation as of April 2, 2022. |
Restructuring Liabilities (Note
Restructuring Liabilities (Notes) | 3 Months Ended |
Apr. 02, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Liabilities | RESTRUCTURING LIABILITIES From time to time, the Company may implement initiatives or close or consolidate facilities in an effort to reduce costs and improve operating effectiveness. In connection with these activities, the Company may incur various costs including severance and other employee-related separation costs. During the 13 weeks ended April 2, 2022, net restructuring costs were de minimis. During the 13 weeks ended April 3, 2021, $3 million of net restructuring costs were recognized primarily related to initiatives to improve operational effectiveness. Net restructuring liabilities were $1 million and $3 million as of April 2, 2022 and January 1, 2022, respectively. |
Retirement Plans
Retirement Plans | 3 Months Ended |
Apr. 02, 2022 | |
Retirement Benefits [Abstract] | |
Retirement Plans | RETIREMENT PLANS The Company sponsors a defined benefit pension plan and a 401(k) savings plan for eligible employees, and provides certain postretirement health and welfare benefits to eligible retirees and their dependents. The components of net periodic pension benefit credits for Company sponsored defined benefit plans were as follows: 13 Weeks Ended April 2, 2022 April 3, 2021 Components of net periodic pension benefit credits Service cost $ 1 $ 1 Interest cost 7 7 Expected return on plan assets (13) (14) Amortization of net loss — — Net periodic pension benefit credits $ (5) $ (6) Other postretirement benefit costs were de minimis for both the 13 weeks ended April 2, 2022 and April 3, 2021. The service cost component of net periodic benefit credits is included in distribution, selling and administrative costs, while the other components of net periodic benefit credits are included in other income—net in the Company’s Consolidated Statements of Comprehensive Income. The Company does not expect to make significant contributions to its defined benefit pension plan in fiscal year 2022. Certain employees are eligible to participate in the Company’s 401(k) plan. The Company made employer matching contributions to the 401(k) plan of $16 million and $13 million for the 13 weeks ended April 2, 2022 and April 3, 2021, respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Apr. 02, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | EARNINGS PER SHARE The Company computes EPS in accordance with ASC 260, Earnings per Share . Basic EPS is computed by dividing net (loss) income available to common shareholders by the weighted-average number of shares of common stock outstanding. Diluted EPS is computed using the weighted average number of shares of common stock, plus the effect of potentially dilutive securities. The Company applies the treasury method to calculate the dilution impact of share-based awards—stock options, non-vested restricted shares with forfeitable dividend rights, restricted stock units, and employee stock purchase plan deferrals. The Company applies the if-converted method to calculate the dilution impact of the Series A convertible preferred stock (the “Series A Preferred Stock”), if dilutive in the period. For the 13 weeks ended April 2, 2022 and April 3, 2021, share-based awards representing 8 million and 9 million underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive. For the 13 weeks ended April 2, 2022 and April 3, 2021, Series A Preferred Stock representing 25 million and 24 million of underlying common shares, respectively, were not included in the computation because the effect would have been anti-dilutive. The following table sets forth the computation of basic and diluted EPS: 13 Weeks Ended April 2, 2022 April 3, 2021 Numerator: Net loss $ (7) $ (24) Less: Series A Preferred Stock Dividends (1) (9) (15) Net loss available to common shareholders $ (16) $ (39) Denominator: Weighted-average common shares outstanding—basic 223 221 Effect of dilutive share-based awards — — Effect of dilutive underlying shares of the Series A Preferred Stock (2) — — Weighted-average common shares outstanding—diluted 223 221 Net loss per share Basic $ (0.07) $ (0.18) Diluted $ (0.07) $ (0.18) (1) Series A Preferred Stock dividends for the first quarter of 2021 were paid in kind on March 31, 2021 in the form of shares of Series A Preferred Stock. Series A Preferred Stock dividends for the first quarter of 2022 were paid in cash on March 31, 2022. (2) Under the if-converted method, outstanding shares of the Series A Preferred Stock are converted to common shares for inclusion in the calculation of the weighted-average common shares outstanding—diluted. Once converted, there would be no preferred stock outstanding and therefore no Series A Preferred Stock dividend. |
Convertible Preferred Stock (No
Convertible Preferred Stock (Notes) | 3 Months Ended |
Apr. 02, 2022 | |
Convertible Preferred Stock [Abstract] | |
Convertible Preferred Stock | CONVERTIBLE PREFERRED STOCKOn May 6, 2020 (the “Issuance Date”), pursuant to the terms of an Investment Agreement (the “Investment Agreement”) with KKR Fresh Aggregator L.P., a Delaware limited partnership, which agreement was joined on February 25, 2021 by permitted transferee KKR Fresh Holdings L.P., a Delaware limited partnership (“KKR”), the Company issued and sold 500,000 shares of the Company’s Series A Preferred Stock, par value $0.01 per share, to KKR Fresh Aggregator L.P. for an aggregate purchase price of $500 million, or $1,000 per share (the “Issuance”). The Company used the net proceeds from the Issuance for working capital and general corporate purposes. As of both April 2, 2022 and January 1, 2022, the Company had issued a total of 532,281 shares of Series A Preferred Stock. The Series A Preferred Stock had a carrying value of $534 million as of both April 2, 2022 and January 1, 2022. On March 31, 2022, the Company paid cash dividends of $9 million on the shares of the Series A Preferred Stock. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 3 Months Ended |
Apr. 02, 2022 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | CHANGES IN ACCUMULATED OTHER COMPREHENSIVE LOSS The following table presents changes in accumulated other comprehensive loss by component for the periods presented: 13 Weeks Ended April 2, 2022 April 3, 2021 Accumulated other comprehensive loss components Retirement benefit obligations: Balance as of beginning of period (1) $ (19) $ (29) Reclassification adjustments: Amortization of net loss (2) (3) — — Total before income tax — — Income tax provision — — Current period comprehensive income, net of tax — — Balance as of end of period (1) $ (19) $ (29) Interest rate swaps (4) : Balance as of beginning of period (1) $ — $ (5) Change in fair value of interest rate swaps — — Amounts reclassified to interest expense—net — 2 Total before income tax — 2 Income tax provision — — Current period comprehensive income, net of tax — 2 Balance as of end of period (1) $ — $ (3) Accumulated other comprehensive loss as of end of period (1) $ (19) $ (32) (1) Amounts are presented net of tax. (2) Included in the computation of net periodic benefit costs. See Note 11, Retirement Plans, for additional information. (3) Included in other income—net in the Company’s Consolidated Statements of Comprehensive Income. (4) The Company’s interest rate swaps expired on July 31, 2021. The Company has not entered into any new interest rate swap agreements. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Apr. 02, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 15. RELATED PARTY TRANSACTIONS As of December, 31, 2021, FMR LLC, held approximately 11% of the Company’s outstanding common stock. As of both April 2, 2022 and January 1, 2022, as reported by the administrative agent of the 2019 and 2021 Incremental Term Loan Facilities, investment funds managed by an affiliate of FMR LLC held approximately $24 million in aggregate principal amount of the 2019 Incremental Term Loan Facility and the 2021 Incremental Term Loan Facility. Certain FMR LLC affiliates also provide administrative and trustee services for the Company’s 401(k) Plan and provide administrative services for other Company sponsored employee benefit plans. Fees earned by FMR LLC affiliates are not material to the Company’s consolidated financial statements. As of April 2, 2022, KKR held 100% of the Company’s outstanding Series A Preferred Stock, representing approximately 10% of the Company’s outstanding stock on a converted basis. As reported by the administrative agent of the 2019 Incremental Term Loan Facility, investment funds managed by an affiliate of KKR held approximately $17 million in aggregate principal amount of the 2019 Incremental Term Loan Facility as of both April 2, 2022 and January 1, 2022. During the 13 weeks ended April 3, 2021, KKR Capital Markets LLC, an affiliate of KKR, received $1 million for debt advisory services rendered in connection with the Unsecured Senior Notes due 2029 financing. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | INCOME TAXES The determination of the Company’s overall effective income tax rate requires the use of estimates. The effective income tax rate reflects the income earned and taxed in U.S. federal and various state jurisdictions based on enacted tax law, permanent differences between book and tax items, tax credits and the Company’s change in relative income in each jurisdiction. The Company estimated its annual effective income tax rate for the full fiscal year and applied the annual effective income tax rate to the results of the 13 weeks ended April 2, 2022 and April 3, 2021, and then recognized the impact of discrete tax items for purposes of determining its year-to-date tax provision. For the 13 weeks ended April 2, 2022, the Company's effective income tax rate of 51% differed from the 21% federal corporate income tax rate primarily as a result of state income taxes and the recognition of various discrete tax items. These discrete tax items included a tax benefit of $4 million, primarily related to excess tax benefits associated with share-based compensation. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Purchase Commitments —The Company enters into purchase orders with vendors and other parties in the ordinary course of business and has a limited number of purchase contracts with certain vendors that require it to buy a predetermined volume of products. The Company had $1,890 million of purchase orders and purchase contract commitments as of April 2, 2022 to be purchased in the remainder of fiscal year 2022 and $49 million of information technology commitments through August 2025 that are not recorded in the Company’s Consolidated Balance Sheets. To minimize fuel price risk, the Company enters into forward purchase commitments for a portion of its projected diesel fuel requirements. The Company had diesel fuel forward purchase commitments totaling $33 million through March 2023, as of April 2, 2022. Additionally, the Company had electricity forward purchase commitments totaling $14 million through June 2024, as of April 2, 2022. The Company does not measure its forward purchase commitments for fuel and electricity at fair value, as the amounts under contract meet the physical delivery criteria in the normal purchase exception. Legal Proceedings —The Company is subject to a number of legal proceedings arising in the normal course of business. These legal proceedings, whether pending, threatened or unasserted, if decided adversely to or settled by the Company, may result in liabilities material to its financial position, results of operations, or cash flows. The Company has recognized provisions with respect to the proceedings, where appropriate, in its Consolidated Balance Sheets. It is possible that the Company could settle one or more of these proceedings or could be required to make expenditures, in excess of the established provisions, in amounts that cannot be reasonably estimated. However, the Company, at present, believes that the ultimate outcome of these proceedings will not have a material adverse effect on its consolidated financial position, results of operations or cash flows. |
Business Information
Business Information | 3 Months Ended |
Apr. 02, 2022 | |
Segment Reporting [Abstract] | |
Business information | BUSINESS INFORMATION The Company’s consolidated results represent the results of its one business segment based on how the Company’s chief operating decision maker, the Chief Executive Officer, views the business for purposes of evaluating performance and making operating decisions. The Company markets and distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the U.S. The Company uses a centralized management structure, and its strategies and initiatives are implemented and executed consistently across the organization to maximize value to the organization as a whole. The Company uses shared resources for sales, procurement, and general and administrative activities across each of its distribution facilities and operations. The Company’s distribution facilities form a single network to reach its customers; it is common for a single customer to make purchases from several different distribution facilities. Capital projects, whether for cost savings or generating incremental revenue, are evaluated based on estimated economic returns to the organization as a whole. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue by principal product categories | The following table presents the disaggregation of revenue for each of the Company’s principal product categories: 13 Weeks Ended April 2, 2022 April 3, 2021 Meats and seafood $ 2,950 $ 2,262 Dry grocery products 1,333 1,093 Refrigerated and frozen grocery products 1,179 994 Dairy 761 622 Equipment, disposables and supplies 811 693 Beverage products 376 324 Produce 388 307 Total Net sales $ 7,798 $ 6,295 |
Allowance for Doubtful Accoun_2
Allowance for Doubtful Accounts (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Receivables [Abstract] | |
Allowance for doubtful accounts | A summary of the activity in the allowance for doubtful accounts for the 13 weeks ended April 2, 2022 and April 3, 2021 was as follows: April 2, 2022 April 3, 2021 Balance as of beginning of year $ 33 $ 67 Charged (benefit) to costs and expenses, net — (12) Customer accounts written off—net of recoveries — (4) Balance as of end of period $ 33 $ 51 |
Goodwill and Other Intangibles
Goodwill and Other Intangibles (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill and Other Intangibles, Net | Goodwill and other intangibles—net consisted of the following: April 2, 2022 January 1, 2022 Goodwill $ 5,625 $ 5,625 Other intangibles—net Customer relationships—amortizable: Gross carrying amount $ 655 $ 655 Accumulated amortization (110) (99) Net carrying value 545 556 Trade names—amortizable: Gross carrying amount 4 4 Accumulated amortization (1) (1) Net carrying value 3 3 Brand names and trademarks—not amortizing 271 271 Total other intangibles—net $ 819 $ 830 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets and Liabilities | The Company’s assets and liabilities measured at fair value on a recurring basis as of April 2, 2022 and January 1, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall, were as follows: April 2, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 101 $ — $ — $ 101 January 1, 2022 Level 1 Level 2 Level 3 Total Assets Money market funds $ 99 $ — $ — $ 99 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Debt Disclosure [Abstract] | |
Components of total debt | Total debt consisted of the following: Debt Description Maturity Interest Rate as of April 2, 2022 Carrying Value as of April 2, 2022 Carrying Value as of January 1, 2022 ABL Facility May 31, 2024 —% $ — $ — 2019 Incremental Term Loan Facility (net of $23 September 13, 2026 2.51% 1,439 1,442 2021 Incremental Term Loan Facility (net of $6 November 22, 2028 3.26% 891 893 Senior Secured Notes due 2025 (net of $9 and $11 of unamortized deferred financing costs, respectively) April 15, 2025 6.25% 991 989 Unsecured Senior Notes due 2029 (net of $8 and $8 of unamortized deferred financing costs, respectively) February 15, 2029 4.75% 892 892 Unsecured Senior Notes due 2030 (net of $5 of and $5 of unamortized deferred financing costs, respectively) June 1, 2030 4.625% 495 495 Obligations under financing leases 2022–2039 1.25% - 8.63% 277 292 Other debt January 1, 2031 5.75% 8 8 Total debt 4,993 5,011 Current portion of long-term debt (103) (95) Long-term debt $ 4,890 $ 4,916 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit (Credit) Costs | The components of net periodic pension benefit credits for Company sponsored defined benefit plans were as follows: 13 Weeks Ended April 2, 2022 April 3, 2021 Components of net periodic pension benefit credits Service cost $ 1 $ 1 Interest cost 7 7 Expected return on plan assets (13) (14) Amortization of net loss — — Net periodic pension benefit credits $ (5) $ (6) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted EPS | The following table sets forth the computation of basic and diluted EPS: 13 Weeks Ended April 2, 2022 April 3, 2021 Numerator: Net loss $ (7) $ (24) Less: Series A Preferred Stock Dividends (1) (9) (15) Net loss available to common shareholders $ (16) $ (39) Denominator: Weighted-average common shares outstanding—basic 223 221 Effect of dilutive share-based awards — — Effect of dilutive underlying shares of the Series A Preferred Stock (2) — — Weighted-average common shares outstanding—diluted 223 221 Net loss per share Basic $ (0.07) $ (0.18) Diluted $ (0.07) $ (0.18) (1) Series A Preferred Stock dividends for the first quarter of 2021 were paid in kind on March 31, 2021 in the form of shares of Series A Preferred Stock. Series A Preferred Stock dividends for the first quarter of 2022 were paid in cash on March 31, 2022. (2) Under the if-converted method, outstanding shares of the Series A Preferred Stock are converted to common shares for inclusion in the calculation of the weighted-average common shares outstanding—diluted. Once converted, there would be no preferred stock outstanding and therefore no Series A Preferred Stock dividend. |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Apr. 02, 2022 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Loss | The following table presents changes in accumulated other comprehensive loss by component for the periods presented: 13 Weeks Ended April 2, 2022 April 3, 2021 Accumulated other comprehensive loss components Retirement benefit obligations: Balance as of beginning of period (1) $ (19) $ (29) Reclassification adjustments: Amortization of net loss (2) (3) — — Total before income tax — — Income tax provision — — Current period comprehensive income, net of tax — — Balance as of end of period (1) $ (19) $ (29) Interest rate swaps (4) : Balance as of beginning of period (1) $ — $ (5) Change in fair value of interest rate swaps — — Amounts reclassified to interest expense—net — 2 Total before income tax — 2 Income tax provision — — Current period comprehensive income, net of tax — 2 Balance as of end of period (1) $ — $ (3) Accumulated other comprehensive loss as of end of period (1) $ (19) $ (32) (1) Amounts are presented net of tax. (2) Included in the computation of net periodic benefit costs. See Note 11, Retirement Plans, for additional information. (3) Included in other income—net in the Company’s Consolidated Statements of Comprehensive Income. (4) The Company’s interest rate swaps expired on July 31, 2021. The Company has not entered into any new interest rate swap agreements. |
Overview and Basis of Present_2
Overview and Basis of Presentation (Detail) | 3 Months Ended |
Apr. 02, 2022segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business segments | 1 |
Schedule of Disaggregation of R
Schedule of Disaggregation of Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Net sales | $ 7,798 | $ 6,295 |
Meats and seafood | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 2,950 | 2,262 |
Dry grocery products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 1,333 | 1,093 |
Refrigerated and frozen grocery products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 1,179 | 994 |
Dairy | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 761 | 622 |
Equipment, disposables and supplies | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 811 | 693 |
Beverage products | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | 376 | 324 |
Produce | ||
Disaggregation of Revenue [Line Items] | ||
Total Net sales | $ 388 | $ 307 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Disaggregation of Revenue [Line Items] | ||
Accounts receivable, less allowances | $ 1,658 | $ 1,469 |
Prepaid expenses | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 27 | 27 |
Other assets | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 28 | $ 26 |
Inventories (Detail)
Inventories (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Jan. 01, 2022 | |
Inventory Disclosure [Abstract] | |||
LIFO balance sheet reserves | $ 414 | $ 342 | |
Increase (decrease) of cost of goods sold from changes in LIFO reserves | $ 72 | $ 21 |
Allowance for Doubtful Accoun_3
Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Jan. 01, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Provision (benefit) for doubtful accounts | $ 0 | $ (12) | |
Allowances for vendor receivables | 11 | $ 7 | |
SEC Schedule, 12-09, Allowance, Credit Loss | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for doubtful accounts | 33 | 67 | |
Provision (benefit) for doubtful accounts | 0 | (12) | |
Allowance for Doubtful Accounts Receivable, Net Write-offs | 0 | (4) | |
Allowance for doubtful accounts | $ 33 | $ 51 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 02, 2022 | Apr. 03, 2021 | Jan. 01, 2022 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, accumulated depreciation | $ 2,788 | $ 2,722 | |
Depreciation expense | $ 78 | $ 82 | |
Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (years) | 3 years | ||
Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, useful life (years) | 40 years |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Other Intangible Assets [Line Items] | ||
Amortization expense | $ 11,000,000 | $ 19,000,000 |
Indefinite-lived intangible assets, impairment | $ 0 | $ 0 |
Minimum | ||
Other Intangible Assets [Line Items] | ||
Estimated useful lives of intangible assets (in years) | 3 years | |
Maximum | ||
Other Intangible Assets [Line Items] | ||
Estimated useful lives of intangible assets (in years) | 15 years |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles - Schedule of Goodwill and Other Intangibles, Net (Detail) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Other intangibles—net | ||
Goodwill | $ 5,625 | $ 5,625 |
Total other intangibles—net | 819 | 830 |
Brand Names and Trademarks | ||
Other intangibles—net | ||
Brand names and trademarks—not amortizing | 271 | 271 |
Customer Relationships | ||
Other intangibles—net | ||
Gross carrying amount | 655 | 655 |
Accumulated amortization | (110) | (99) |
Net carrying value | 545 | 556 |
Trade Names | ||
Other intangibles—net | ||
Gross carrying amount | 4 | 4 |
Accumulated amortization | (1) | (1) |
Net carrying value | $ 3 | $ 3 |
Schedule of Fair Value Assets a
Schedule of Fair Value Assets and Liabilities (Detail) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Assets | ||
Money market funds | $ 101 | $ 99 |
Level 1 | ||
Assets | ||
Money market funds | 101 | 99 |
Level 2 | ||
Assets | ||
Money market funds | 0 | 0 |
Level 3 | ||
Assets | ||
Money market funds | $ 0 | $ 0 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Apr. 02, 2022 | Jan. 01, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swaps | $ 0 | $ 0 |
Senior notes | Senior Secured Notes due 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 6.25% | 6.25% |
Senior notes | Unsecured Senior Notes due 2029 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 4.75% | |
Senior notes | Unsecured Senior Notes due 2030 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 4.625% | |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Approximated fair value of debt | $ 4,900,000,000 | $ 5,100,000,000 |
Fair Value | Senior notes | Senior Secured Notes due 2025 | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Approximated fair value of debt | 1,000,000,000 | 1,000,000,000 |
Fair Value | Senior notes | Unsecured Senior Notes due 2029 | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Approximated fair value of debt | 900,000,000 | 900,000,000 |
Fair Value | Senior notes | Unsecured Senior Notes due 2030 | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Approximated fair value of debt | 500,000,000 | 500,000,000 |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Approximated fair value of debt | $ 5,000,000,000 | $ 5,000,000,000 |
Debt - Schedule of Components o
Debt - Schedule of Components of Total Debt (Detail) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Debt Instrument [Line Items] | ||
Total debt | $ 4,993 | $ 5,011 |
Current portion of long-term debt | (103) | (95) |
Long-term debt | $ 4,890 | 4,916 |
ABL Facility | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Interest rate | 0.00% | |
Total debt | $ 0 | 0 |
2019 Term Loan Facility | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ 23 | 25 |
Interest rate | 2.51% | |
Total debt | $ 1,439 | 1,442 |
2021 Term Loan Facility | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ 6 | 7 |
Interest rate | 3.26% | |
Total debt | $ 891 | 893 |
Senior Secured Notes due 2025 | Senior notes | ||
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ 9 | $ 11 |
Interest rate | 6.25% | 6.25% |
Total debt | $ 991 | $ 989 |
Unsecured Senior Notes due 2029 | Senior notes | ||
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ 8 | 8 |
Interest rate | 4.75% | |
Total debt | $ 892 | 892 |
Unsecured Senior Notes due 2030 | Senior notes | ||
Debt Instrument [Line Items] | ||
Unamortized deferred financing costs | $ 5 | |
Interest rate | 4.625% | |
Total debt | $ 495 | 495 |
Lease agreements | Lease agreements | ||
Debt Instrument [Line Items] | ||
Total debt | $ 277 | $ 292 |
Lease agreements | Lease agreements | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 1.25% | |
Lease agreements | Lease agreements | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 8.63% | |
Other debt | Other Debt Obligations | ||
Debt Instrument [Line Items] | ||
Total debt | $ 8 | $ 8 |
Other debt | Other Debt Obligations | Minimum | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.75% | |
Other debt | Other Debt Obligations | Maximum | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.75% |
Debt - Additional Information (
Debt - Additional Information (Detail) | Apr. 02, 2022 |
Debt Disclosure [Abstract] | |
Percentage of principal amount of total debt borrowed at floating rate (percent) | 47.00% |
Debt - ABL Facility (Detail)
Debt - ABL Facility (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Jan. 01, 2022 | |
Debt Instrument [Line Items] | ||
Borrowings under facility | $ 4,993 | $ 5,011 |
Revolving Credit Facility | ABL Facility | ||
Debt Instrument [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 1,990 | |
Borrowings under facility | 0 | $ 0 |
Letters of credit, outstanding amount | 263 | |
Available capacity in credit facility | $ 1,727 | |
Revolving Credit Facility | ABL Facility | ABR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 0.00% | |
Revolving Credit Facility | ABL Facility | ABR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 0.00% | |
Revolving Credit Facility | ABL Facility | ABR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 0.50% | |
Revolving Credit Facility | ABL Facility | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 1.00% | |
Revolving Credit Facility | ABL Facility | LIBOR | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 1.00% | |
Revolving Credit Facility | ABL Facility | LIBOR | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 1.50% |
Debt - Term Loan Agreement (Det
Debt - Term Loan Agreement (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Jan. 01, 2022 | |
Debt Instrument [Line Items] | ||
Borrowings under facility | $ 4,993 | $ 5,011 |
2019 Term Loan Facility | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Borrowings under facility | 1,439 | 1,442 |
Unamortized deferred financing costs | $ 23 | 25 |
2019 Term Loan Facility | LIBOR | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 2.00% | |
2019 Term Loan Facility | ABR | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 1.00% | |
2019 Term Loan Facility | Interest Rate Floor | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 0.00% | |
2021 Term Loan Facility | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Borrowings under facility | $ 891 | 893 |
Unamortized deferred financing costs | $ 6 | $ 7 |
2021 Term Loan Facility | LIBOR | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 2.75% | |
2021 Term Loan Facility | ABR | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 1.75% | |
2021 Term Loan Facility | Interest Rate Floor | Senior secured term loan facility | ||
Debt Instrument [Line Items] | ||
Basis spread on variable interest rate | 0.00% |
Senior Secured Notes due 2025 (
Senior Secured Notes due 2025 (Detail) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Debt Instrument [Line Items] | ||
Borrowings under facility | $ 4,993 | $ 5,011 |
Senior Secured Notes due 2025 | Senior notes | ||
Debt Instrument [Line Items] | ||
Borrowings under facility | 991 | 989 |
Unamortized deferred financing costs | $ 9 | $ 11 |
Unsecured Senior Notes due 2029
Unsecured Senior Notes due 2029 (Detail) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Debt Instrument [Line Items] | ||
Borrowings under facility | $ 4,993 | $ 5,011 |
Unsecured Senior Notes due 2029 | Senior notes | ||
Debt Instrument [Line Items] | ||
Borrowings under facility | 892 | 892 |
Unamortized deferred financing costs | $ 8 | $ 8 |
Interest rate | 4.75% |
Unsecured Senior Notes due 2030
Unsecured Senior Notes due 2030 (Detail) - USD ($) $ in Millions | Apr. 02, 2022 | Jan. 01, 2022 |
Debt Instrument [Line Items] | ||
Borrowings under facility | $ 4,993 | $ 5,011 |
Unsecured Senior Notes due 2030 | Senior notes | ||
Debt Instrument [Line Items] | ||
Borrowings under facility | 495 | $ 495 |
Unamortized deferred financing costs | $ 5 | |
Interest rate | 4.625% |
Debt - Restrictive Covenants (D
Debt - Restrictive Covenants (Detail) $ in Billions | Apr. 02, 2022USD ($) |
Debt Disclosure [Abstract] | |
Restricted payment capacity | $ 1.4 |
Restricted assets | $ 2.8 |
Restructuring Liabilities (Deta
Restructuring Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 03, 2021 | Apr. 02, 2022 | Jan. 01, 2022 | |
Restructuring and Related Activities [Abstract] | |||
Restructuring Costs | $ 3 | ||
Restructuring Reserve | $ 1 | $ 3 |
Retirement Plans - Components o
Retirement Plans - Components of Net Periodic Benefit Costs (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Retirement Benefits [Abstract] | ||
Service cost | $ 1 | $ 1 |
Interest cost | 7 | 7 |
Expected return on plan assets | (13) | (14) |
Amortization of net loss | 0 | 0 |
Net periodic pension benefit credits | $ (5) | $ (6) |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Retirement Benefits [Abstract] | ||
Employer matching contribution | $ 16 | $ 13 |
Multiemployer plan contributions | $ 12 | $ 10 |
Schedule of Earnings Per Share
Schedule of Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Numerator: | ||
Net loss | $ (7) | $ (24) |
Series A convertible preferred stock dividends | (9) | (15) |
Net loss available to common shareholders | $ (16) | $ (39) |
Denominator: | ||
Weighted-average common shares outstanding—basic | 223 | 221 |
Effect of dilutive share-based awards | 0 | 0 |
Effect of dilutive underlying shares of the Series A Preferred Stock (2) | 0 | 0 |
Weighted-average common shares outstanding—diluted | 223 | 221 |
Earnings Per Share, Basic | $ (0.07) | $ (0.18) |
Earnings Per Share, Diluted | $ (0.07) | $ (0.18) |
Earnings Per Share Other Inform
Earnings Per Share Other Information (Details) - shares shares in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 8 | 9 |
Series A Preferred Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities (in shares) | 25 | 24 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | May 06, 2020 | Apr. 02, 2022 | Jan. 01, 2022 |
Convertible Preferred Stock [Abstract] | |||
Preferred stock issued (in shares) | 500,000 | 500,000 | 500,000 |
Preferred stock par value (dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 |
Proceeds from issuance of preferred stock | $ 500 | ||
Preferred stock proceeds (dollars per share) | $ 1,000 | ||
Preferred stock, outstanding (in shares) | 532,281 | 500,000 | |
Preferred Stock, Value, Outstanding | $ 534 | ||
Dividends, Preferred Stock, Cash | $ (9) |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 3,735 | $ 3,530 |
Balance at end of period | 3,722 | 3,500 |
Retirement benefit obligations | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (19) | (29) |
Total before income tax | 0 | 0 |
Income tax provision | 0 | 0 |
Current period comprehensive income, net of tax | 0 | 0 |
Balance at end of period | (19) | (29) |
Amortization of net loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 0 |
Interest rate swap | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | 0 | (5) |
Change in fair value of interest rate swaps | 0 | 0 |
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax | 0 | 2 |
Total before income tax | 0 | 2 |
Income tax provision | 0 | 0 |
Current period comprehensive income, net of tax | 0 | 2 |
Balance at end of period | 0 | (3) |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (19) | (34) |
Balance at end of period | $ (19) | $ (32) |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 03, 2021 | Apr. 02, 2022 | Jan. 01, 2022 | |
FMR LLC | US Foods Holding Corp | |||
Related Party Transaction [Line Items] | |||
Percentage of company's outstanding common stock | 11.00% | ||
FMR LLC | Long-term Debt | |||
Related Party Transaction [Line Items] | |||
Debt, principal amount | $ 24 | $ 24 | |
KKR Capital Markets LLC | |||
Related Party Transaction [Line Items] | |||
Debt advisory fees | $ 1 | ||
KKR Capital Markets LLC | Long-term Debt | |||
Related Party Transaction [Line Items] | |||
Debt, principal amount | $ 17 | $ 17 |
Taxes - Additional Information
Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 02, 2022 | Apr. 03, 2021 | |
Income Tax Disclosure [Abstract] | ||
Effective tax rate (percent) | 51.00% | 43.00% |
Federal corporate income tax rate (percent) | 21.00% | 21.00% |
Tax benefit related to excess tax benefits associated with share-based compensation | $ 4 | $ 6 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Apr. 02, 2022USD ($) |
Purchase orders and contract commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Purchase commitments | $ 1,890 |
Information technology commitments | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Purchase commitments | 49 |
Diesel fuel | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Purchase commitments | 33 |
Electricity | |
Unrecorded Unconditional Purchase Obligation [Line Items] | |
Purchase commitments | $ 14 |
Business Information - Addition
Business Information - Additional Information (Detail) | 3 Months Ended |
Apr. 02, 2022segment | |
Segment Reporting [Abstract] | |
Number of business segments | 1 |