US Foods : 2022 Annual Report to Stockholders

US FOODS® ANNUAL REPORT 2022

Dear Shareholders:

On behalf of our Board of Directors and our associates, thank you for your investment in US Foods®.

As US Foods' new Chief Executive Officer, I am honored to lead one of America's top food distribution companies, serving approximately 250,000 restaurants and foodservice operators across the country. I am also incredibly proud of our 29,000 associates who, in 2022, delivered our strongest financial performance in recent history by executing against our long-range plan that we announced early last year.

FISCAL YEAR 2022 HIGHLIGHTS

• Net income available to common shareholders was $228 million
• Adjusted EBITDA increased 23.9% to $1.31 billion1
• Diluted EPS was $1.01 and Adjusted Diluted EPS was $2.141, an increase of 38.1%
• Net sales increased 15.5% to $34.1 billion
• Total case volume increased 1.7% and independent restaurant case volume increased 4.3%
• Gross profit increased 18.0% to $5.5 billion
• Net debt reduced by $220 million1
• Introduced $500 million share repurchase program

We produced these strong results by making significant progress against each of the three pillars of our long-range plan.

GREW PROFITABLE MARKET SHARE

First, we took systematic steps to grow profitable market share, outgrowing the market by approximately 150 basis points, excluding targeted exits. We drove even stronger share gains in independent restaurants.

We continued to provide on-trend, versatile, labor-saving and sustainably- sourced private label brand products

through our innovative Scoop™ lineup, which proudly includes products

from our Hungry for Better program. In fact, last year was our most successful Scoop in the program's 11-year history.

From the introduction of our industry- leading technology platform, MOXē, to expanding our Pronto™ service to nearly 30 markets, to opening six new CHEF'STORE® locations in 2022, we made tremendous strides in positioning US Foods as a partner of choice for our customers through innovative technology and our omnichannel offering. Furthermore, as our customers navigated inflation, our Restaurant Operations Consultants provided tools to help operators adjust their menu offerings and pricing, and identified private label brand options to save time and labor.

FURTHER OPTIMIZED GROSS MARGINS

Second, we increased gross margins through several strategic initiatives, including pricing optimization, while effectively managing supply challenges and inflation and deflation. We improved our fill rates despite a challenging supply environment and strengthened vendor service levels by collaborating with vendors who truly want to win with us. Our Cost of Goods management program performed well, with approximately 40% of our total vendor spend addressed last year. Additionally, we made significant progress on inbound logistics, yielding improved financial results and better collaboration with our partners.

IMPROVED OPERATIONAL EFFICIENCIES

Third, we continued to improve our operational efficiencies despite a challenging macro labor environment. Our enhanced routing efforts drove miles out of our network - which also reduces our carbon footprint, contributing to our recent science-based climate goal to reduce greenhouse gas emissions by 32.5% by 2032 from a 2019 base year. To simplify how we operate, we tackled unproductive inventory, resulting in a 5% SKU reduction over prior year.

1Each of these measures are non-GAAP financial measures. See Annex A for a reconciliation of non-GAAP measures to the corresponding GAAP results.

Additionally, we completed our warehouse selection technology deployment program, which enables an enhanced associate experience, improved selection accuracy and, ultimately, a better customer experience. We addressed turnover challenges faced by many companies in 2022 with a laser focus on improving retention by simplifying our core processes, strengthening leadership engagement and piloting more flexible shift schedules - all of which began to pay dividends in the second half of the year.

And we continued to transform our Supply Chain, which is a key lever in improving our operational performance.

None of this progress would have been possible without our dedicated associates who focus on serving our customers and bring our Cultural Beliefs to life day in and day out, which drives our performance and makes US Foods a great place to work.

LOOKING AHEAD

Building on our momentum in 2022, we are well-positioned for future profitable growth. I am excited to lead this next chapter for US Foods, and I am optimistic about our future and our ability to continue to deliver value to our shareholders, customers, associates and communities.

Thank you again for your trust and investment in our company.

Dave Flitman

Chief Executive Officer

U S F O O D S A N N U A L R E P O R T 2 0 2 2

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2022

OR

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

Commission File No.001-37786

US FOODS HOLDING CORP.

(Exact name of registrant as specified in its charter)

Delaware	26-0347906
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

9399 W. Higgins Road, Suite 100

Rosemont, IL 60018

[phone]

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

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

	Title of each class		Trading symbol(s)		Name of each exchange on which registered
	Common Stock, par value $0.01 per share		USFD		New York Stock Exchange
	Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒	No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐	No ☒

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐

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

As of July 1, 2022, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the registrant's common stock held by non-affiliates was approximately $7.0 billion (based on the reported closing sale price of the registrant's common stock on such date on the New York Stock Exchange). 224,320,466 shares of the registrant's common stock were outstanding as of February 10, 2023.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A under the Securities Exchange Act of 1934, relating to the registrant's Annual Meeting of Stockholders to be held on May 18, 2023, are incorporated herein by reference for purposes of Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K. The definitive proxy statement will be filed with the Securities and Exchange Commission not later than 120 days after the registrant's fiscal year ended December 31, 2022.

US Foods Holding Corp.

Annual Report on Form 10-K

TABLE OF CONTENTS

Page No.

PART I.

Item 1.	Business
Item 1A.	Risk Factors
Item 1B.	Unresolved Staff Comments
Item 2.	Properties
Item 3.	Legal Proceedings
Item 4.	Mine Safety Disclosures

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 6. [Reserved]

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures about Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence Item 14. Principal Accounting Fees and Services

PART IV

2

9

19

20

21

21

22

23

24

34

36

77

77

79

79

80

80

80

80

80

Item 15.	Exhibits, Financial Statement Schedules	81
Item 16.	Form 10-K Summary	85
Signatures		86