10-Q - HSIC - Equibles

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

March 27, 2021

☐

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

Rule

405

Regulation

S-T

during

the

preceding

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,

emerging

growth

company.

See

the

definitions

“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 April 26, 2021,

there were

140,696,094

shares of the registrant’s common stock outstanding.

HENRY SCHEIN, INC.

INDEX

PART I. FINANCIAL INFORMATION

Page

ITEM 1.

Consolidated Financial Statements:

Balance Sheets as of March 27, 2021 and December 26, 2020

Statements of Income for the three months ended

March 27, 2021 and March 28, 2020

Statements of Comprehensive Income for the three months ended

March 27, 2021 and March 28, 2020

Statement of Changes in Stockholders' Equity for the three months ended

March 27, 2021 and March 28, 2020

Statements of Cash Flows for the three months ended

March 27, 2021 and March 28, 2020

Notes to Consolidated Financial Statements

Note 1 – Basis of Presentation

Note 2 – Critical Accounting Policies, Accounting Pronouncements Adopted

and Recently Issued Accounting Standards

Note 3 – Revenue from Contracts with Customers

Note 4 – Segment Data

Note 5 – Debt

Note 6 – Leases

Note 7 – Redeemable Noncontrolling Interests

Note 8 – Comprehensive Income

Note 9 – Fair Value Measurements

Note 10 – Business Acquisitions

Note 11 – Plans of Restructuring

Note 12 – Earnings Per Share

Note 13 – Income Taxes

Note 14 – Derivatives and Hedging Activities

Note 15 – Stock-Based Compensation

Note 16 – Supplemental Cash Flow Information

Note 17 – Legal Proceedings

Note 18 – Related Party Transactions

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

ITEM 1.

Legal Proceedings

ITEM 1A.

Risk Factors

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

ITEM 6.

Exhibits

Signature

Table of Contents

See accompanying notes.

PART

I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

HENRY SCHEIN, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

March 27,

December 26,

2021

2020

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

144,538

421,185

Accounts receivable, net of reserves of $

79,936

and $

88,030

1,317,546

1,424,787

Inventories, net

1,626,185

1,512,499

Prepaid expenses and other

482,356

432,944

Total current assets

3,570,625

3,791,415

Property and equipment, net

353,248

342,004

Operating lease right-of-use assets

301,759

288,847

Goodwill

2,587,438

2,504,392

Other intangibles, net

597,619

479,429

Investments and other

369,231

366,445

Total assets

7,779,920

7,772,532

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

909,575

1,005,655

Bank credit lines

67,415

73,366

Current maturities of long-term debt

111,176

109,836

Operating lease liabilities

68,580

64,716

Accrued expenses:

Payroll and related

286,106

295,329

Taxes

146,755

138,671

Other

533,161

595,529

Total current liabilities

2,122,768

2,283,102

Long-term debt

506,461

515,773

Deferred income taxes

42,254

30,065

Operating lease liabilities

248,624

238,727

Other liabilities

410,184

392,781

Total liabilities

3,330,291

3,460,448

Redeemable noncontrolling interests

452,899

327,699

Commitments and contingencies

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,

141,310,113

outstanding on March 27, 2021 and

142,462,571

outstanding on December 26, 2020

1,413

1,425

Additional paid-in capital

Retained earnings

3,493,060

3,454,831

Accumulated other comprehensive loss

(136,305)

(108,084)

Total Henry Schein, Inc. stockholders' equity

3,358,168

3,348,172

Noncontrolling interests

638,562

636,213

Total stockholders' equity

3,996,730

3,984,385

Total liabilities, redeemable noncontrolling

interests and stockholders' equity

7,779,920

7,772,532

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONSOLIDATED STATEMENTS

OF INCOME

(in thousands, except per share data)

(unaudited)

Three Months Ended

March 27,

March 28,

2021

2020

Net sales

2,924,961

2,428,871

Cost of sales

2,034,110

1,682,857

Gross profit

890,851

746,014

Operating expenses:

Selling, general and administrative

657,992

567,362

Restructuring costs

2,931

4,787

Operating income

229,928

173,865

Other income (expense):

Interest income

1,983

3,190

Interest expense

(6,485)

(7,812)

Other, net

309

(220)

Income from continuing operations before taxes, equity in

earnings of affiliates and noncontrolling interests

225,735

169,023

Income taxes

(56,685)

(37,910)

Equity in earnings of affiliates

5,878

2,734

Net income from continuing operations

174,928

133,847

Loss from discontinued operations

(282)

Net Income

174,928

133,565

Less: Net income attributable to noncontrolling interests

(8,931)

(3,304)

Net income attributable to Henry Schein, Inc.

165,997

130,261

Amounts attributable to Henry Schein, Inc.:

Continuing operations

165,997

130,543

Discontinued operations

(282)

Net income attributable to Henry Schein, Inc.

165,997

130,261

Earnings per share from continuing operations attributable to Henry Schein, Inc.:

Basic

1.17

0.91

Diluted

1.16

0.91

Loss per share from discontinued operations attributable to Henry Schein, Inc.:

Basic

0.00

Diluted

0.00

Earnings per share attributable to Henry Schein, Inc.:

Basic

1.17

0.91

Diluted

1.16

0.91

Weighted

-average common shares outstanding:

Basic

142,298

142,967

Diluted

143,398

143,095

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

Three Months Ended

March 27,

March 28,

2021

2020

Net income

174,928

133,565

Other comprehensive loss, net of tax:

Foreign currency translation loss

(38,481)

(89,312)

Unrealized gain from foreign currency hedging activities

3,361

15,143

Unrealized investment loss

(6)

(9)

Pension adjustment gain

807

724

Other comprehensive loss, net of tax

(34,319)

(73,454)

Comprehensive income

140,609

60,111

Comprehensive (income) loss attributable to noncontrolling interests:

Net income

(8,931)

(3,304)

Foreign currency translation loss

6,098

13,179

Comprehensive (income) loss attributable to noncontrolling interests

(2,833)

9,875

Comprehensive income attributable to Henry Schein, Inc.

137,776

69,986

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONSOLIDATED STATEMENT

OF CHANGES IN STOCKHOLDERS' EQUITY

(in thousands, except share and per 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 26, 2020

142,462,571

1,425

3,454,831

(108,084)

636,213

3,984,385

Net income (excluding $

7,053

attributable to Redeemable

noncontrolling interests from continuing operations)

165,997

1,878

167,875

Foreign currency translation loss (excluding loss of $

6,173

attributable to Redeemable noncontrolling interests)

(32,383)

(32,308)

Unrealized gain from foreign currency hedging activities,

net of tax of $

1,334

3,361

Unrealized investment loss, net of tax benefit of $

(6)

Pension adjustment gain, net of tax of $

219

807

Dividends paid

(77)

Change in fair value of redeemable securities

(45,520)

Initial noncontrolling interests and adjustments related to

business acquisitions

473

Repurchase and retirement of common stock

(1,325,242)

(13)

(12,250)

(76,396)

(88,659)

Stock-based compensation expense

281,645

12,787

12,790

Settlement of stock-based compensation awards

787

Shares withheld for payroll taxes

(108,861)

(2)

(7,176)

(7,178)

Transfer of charges in excess of

capital

51,372

(51,372)

Balance, March 27, 2021

141,310,113

1,413

3,493,060

(136,305)

638,562

3,996,730

Accumulated

Common Stock

Additional

Other

Total

$.01 Par Value

Paid-in

Retained

Comprehensive

Noncontrolling

Stockholders'

Amount

Capital

Earnings

Income / (Loss)

Interests

Equity

Balance, December 28, 2019

143,353,459

1,434

47,768

3,116,215

(167,373)

632,093

3,630,137

Cumulative impact of adopting new accounting standards

(412)

Net income (excluding $

2,839

attributable to Redeemable

noncontrolling interests from continuing operations)

130,261

465

130,726

Foreign currency translation loss (excluding loss of $

13,027

attributable to Redeemable noncontrolling interests)

(76,133)

(152)

(76,285)

Unrealized gain from foreign currency hedging activities,

net of tax of $

5,090

15,143

Unrealized investment loss, net of tax benefit of $

(9)

Pension adjustment gain, net of tax of $

324

724

Dividends paid

(499)

Purchase of noncontrolling interests

(1,597)

(692)

(2,289)

Change in fair value of redeemable securities

13,072

Repurchase and retirement of common stock

(1,200,000)

(12)

(10,949)

(62,828)

(73,789)

Stock-based compensation credit

507,410

(17,519)

(17,514)

Shares withheld for payroll taxes

(227,509)

(3)

(13,871)

(13,874)

Settlement of stock-based compensation awards

660

Separation of Animal Health business

Balance, March 28, 2020

142,433,360

1,424

17,565

3,183,236

(227,648)

631,215

3,605,792

Table of Contents

See accompanying notes.

HENRY SCHEIN, INC.

CONSOLIDATED STATEMENTS

OF CASH FLOWS

(in thousands)

(unaudited)

Three Months Ended

March 27,

March 28,

2021

2020

Cash flows from operating activities:

Net income

174,928

133,565

Loss from discontinued operations

(282)

Income from continuing operations

174,928

133,847

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

Depreciation and amortization

49,363

46,983

Impairment charge on intangible assets

2,000

Stock-based compensation (credit) expense

12,790

(17,514)

Provision for (benefit from) losses on trade and other accounts receivable

(2,696)

14,543

Provision for deferred income taxes

11,171

2,645

Equity in earnings of affiliates

(5,878)

(2,734)

Distributions from equity affiliates

5,139

2,413

Changes in unrecognized tax benefits

2,804

(1,575)

Other

(13,924)

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable

118,795

(1,283)

Inventories

(78,085)

73,038

Other current assets

(45,310)

(22,002)

Accounts payable and accrued expenses

(179,725)

(137,680)

Net cash provided by operating activities from continuing operations

63,331

78,757

Net cash used in operating activities from discontinued operations

(282)

Net cash provided by operating activities

63,331

78,475

Cash flows from investing activities:

Purchases of fixed assets

(13,843)

(23,008)

Payments related to equity investments and business

acquisitions, net of cash acquired

(204,027)

(37,947)

Proceeds from sale of equity investment

12,000

Repayments from loan to affiliate

139

1,137

Other

(5,513)

(5,787)

Net cash used in investing activities from continuing operations

(223,244)

(53,605)

Net cash used in investing activities from discontinued operations

Net cash used in investing activities

(223,244)

(53,605)

Cash flows from financing activities:

Net change in bank borrowings

(241)

358,639

Proceeds from issuance of long-term debt

250,000

Principal payments for long-term debt

(17,781)

(8,478)

Debt issuance costs

(85)

(58)

Payments for repurchases of common stock

(88,659)

(73,789)

Payments for taxes related to shares withheld for employee taxes

(6,158)

(13,155)

Distributions to noncontrolling shareholders

(6,520)

(3,664)

Acquisitions of noncontrolling interests in subsidiaries

(14,925)

Payments to Henry Schein Animal Health Business

(2,962)

Net cash provided by (used in) financing activities from continuing operations

(119,444)

491,608

Net cash provided by financing activities from discontinued operations

282

Net cash provided by (used in) financing activities

(119,444)

491,890

Effect of exchange rate changes on cash and cash equivalents from continuing operations

2,710

(5,489)

Effect of exchange rate changes on cash and cash equivalents from discontinued operations

Net change in cash and cash equivalents from continuing operations

(276,647)

511,271

Net change in cash and cash equivalents from discontinued operations

Cash and cash equivalents, beginning of period

421,185

106,097

Cash and cash equivalents, end of period

144,538

617,368

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 1

–

Basis of Presentation

Our consolidated financial statements include our accounts, as well

as those of our wholly-owned and majority-

owned subsidiaries.

Certain prior period amounts have been reclassified to conform

to the current period

presentation.

Our accompanying unaudited 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.

We consolidate a Variable Interest Entity (“VIE”) where we hold a variable interest and are the primary

beneficiary.

The VIE is a trade accounts receivable securitization.

We are the primary beneficiary because 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.

The results of operations and financial position of this VIE

are

included in our consolidated financial statements.

For the consolidated 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.

At March 27, 2021

and December 26, 2020,

there were no trade accounts receivable that were restricted to settle obligations of this

VIE,

nor were there liabilities of the VIE where the creditors have recourse to us.

The 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.

These unaudited interim 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

26, 2020.

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 months ended March 27, 2021 are not necessarily

indicative of the results to be expected

for any other interim period or for the year ending December 25, 2021.

In March 2020, the World Health Organization declared the Novel Coronavirus Disease 2019 (“COVID-19”) a

pandemic. The COVID-19 pandemic negatively impacted the global economy, disrupted global supply chains and

created significant volatility and disruption of global financial markets. In response,

many countries implemented

business closures and restrictions, stay-at-home and social distancing ordinances

and similar measures to combat

the pandemic, which significantly impacted global business and dramatically

reduced demand for dental products

and certain medical products in the second quarter of 2020.

Demand increased in the second half of 2020 and has

continued into the first quarter of 2021, resulting in growth over the

prior year driven by sales of personal

protective equipment (PPE) and COVID-19 related products.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Our 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; vendor

rebates; measurement of

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

plans; and pension plan

assumptions. Due to the significant uncertainty surrounding the

future impact of COVID-19, our judgments

regarding estimates and impairments could change in the future. In

addition, the impact of COVID-19 had a

material adverse effect on our business, results of operations and cash flows, primarily

in the second quarter of

In the latter half of the second quarter of 2020,

dental and medical practices began to re-open worldwide, and

continued to do so during the second half of 2020.

During the first quarter of 2021, patient traffic levels returned to

levels approaching pre-pandemic levels, although certain regions in the U.S.

and internationally are experiencing an

increase in COVID-19 cases. There is an ongoing risk that the COVID-19

pandemic may again have a material

adverse effect on our business, results of operations and cash flows and may result

in a material adverse effect on

our financial condition and liquidity. However, the extent of the potential impact cannot be reasonably estimated at

this time.

Note 2 – Critical Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting

Standards

Critical Accounting Policies

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

the three months ended March 27,

2021, as compared to the critical accounting policies described in Item

8 to the consolidated financial statements

included in our Annual Report on Form 10-K for the year ended December

26, 2020, except as follows:

Accounting Pronouncements Adopted

December 2019

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

(“ASU”) No. 2019-12, “Income Taxes” (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-

12”).

ASU 2019-12 will simplify the accounting for income taxes

by removing certain exceptions to the general

principles in Topic 740.

The amendments also improve consistent application

of and simplify U.S. GAAP for other

areas of Topic 740 by clarifying and amending existing guidance.

Our

adoption

of ASU 2019 - 12 did not have a

material impact on our consolidated financial statements.

Recently Issued Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options” (Subtopic

470-20) and “Derivatives and Hedging— in Entity’s Own Equity” (Subtopic 815-40): Accounting for Convertible

Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”).

ASU 2020-06 simplifies the accounting

for convertible instruments.

In addition to eliminating certain accounting models, this ASU

includes improvements

to the disclosures for convertible instruments and earnings-per-share (EPS) guidance and

amends the guidance for

the derivatives scope exception for contracts in an entity’s own equity.

ASU 2020-06 is effective for fiscal years

beginning after December 15, 2021.

We do not expect that the requirements of this ASU will have a material

impact on our consolidated financial statements.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 3 – Revenue from Contracts with Customers

Revenue is recognized in accordance with policies disclosed in Item 8 of our

Annual Report on Form 10-K for

the year ended December 26, 2020.

Disaggregation of Revenue

The following table disaggregates our revenue by segment and geography:

Three Months Ended

March 27, 2021

North America

International

Global

Revenues:

Health care distribution

Dental

1,044,783

744,145

1,788,928

Medical

965,127

27,910

993,037

Total health care distribution

2,009,910

772,055

2,781,965

Technology

and value-added services

121,937

21,059

142,996

Total revenues

2,131,847

793,114

2,924,961

Three Months Ended

March 28, 2020

North America

International

Global

Revenues:

Health care distribution

Dental

888,372

586,704

1,475,076

Medical

778,028

22,660

800,688

Total health care distribution

1,666,400

609,364

2,275,764

Technology

and value-added services

113,498

18,467

131,965

Total excluding

Corporate TSA revenues

(1)

1,779,898

627,831

2,407,729

Corporate TSA revenues

(1)

21,142

Total revenues

1,779,898

648,973

2,428,871

(1)

Corporate TSA revenues represents sales of certain animal health products to Covetrus under the transition services agreement

entered into in connection with the Animal Health Spin-off, which ended in December 2020.

See

Note-18 Related Party

Transactions

for further information.

At December 26, 2020, the current portion of contract liabilities of $

71.5

million was reported in Accrued

expenses: Other, and $

8.2

million related to non-current contract liabilities were reported in Other liabilities.

During the three months ended March 27, 2021, we recognized in revenue

32.9

million of the amounts that were

previously deferred at December 26, 2020.

At March 27, 2021, the current and non-current portion of contract

liabilities were $

73.7

million and $

9.5

million, respectively.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except 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.

The health care distribution reportable segment aggregates our global dental

and medical operating segments.

This

segment distributes consumable products, small equipment, laboratory products,

large equipment, equipment repair

services, branded and generic pharmaceuticals, vaccines, surgical products, diagnostic

tests, infection-control

products and vitamins.

Our global dental group serves office-based dental practitioners, dental laboratories, schools

and other institutions.

Our global medical group serves office-based medical practitioners, ambulatory

surgery

centers, other alternate-care settings and other institutions.

Our global dental and medical groups serve

practitioners in

countries worldwide.

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

technology and other value-added

services to health care practitioners.

Our technology group offerings include practice management software

systems for dental and medical practitioners.

Our value-added practice solutions include 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

March 27,

March 28,

2021

2020

Net Sales:

Health care distribution

(1)

Dental

1,788,928

1,475,076

Medical

993,037

800,688

Total health care distribution

2,781,965

2,275,764

Technology

and value-added services

(2)

142,996

131,965

Total excluding

Corporate TSA revenue

2,924,961

2,407,729

Corporate TSA revenues

(3)

21,142

Total

2,924,961

2,428,871

(1)

Consists of consumable 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

and vitamins.

(2)

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

and financial services on a non-recourse basis, e-services, continuing education services for practitioners, consulting and other

services.

(3)

Corporate TSA revenues represents sales of certain products to Covetrus under the transition services agreement entered into in

connection with the Animal Health Spin-off, which ended in December 2020.

See

Note-18 Related Party Transactions

for further

information.

Three Months Ended

March 27,

March 28,

2020

Operating Income:

Health care distribution

197,932

148,167

Technology

and value-added services

31,996

25,698

Total

229,928

173,865

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 5 – Debt

Bank Credit Lines

Bank credit lines consisted of the following:

March 27,

December 26,

2021

2020

Revolving credit agreement

Other short-term bank credit lines

67,415

73,366

Total

67,415

73,366

Revolving Credit Agreement

April 18, 2017

, we entered into a $

750

million revolving credit agreement (the “Credit Agreement”), which

matures in

April 2022

The interest rate is based on the USD LIBOR

plus a spread based on our leverage ratio at

the end of each financial reporting quarter.

We expect most LIBOR rates to be discontinued immediately after

December 31, 2021, while the remaining LIBOR rates will be discontinued

immediately after June 30, 2023, which

will require an amendment to our debt agreements to reflect a new

reference rate. We do not expect the

discontinuation of LIBOR as a reference rate in our debt agreements

to have a material adverse effect on our

financial position or to materially affect our interest expense.

The Credit Agreement also requires, among other

things, that we maintain maximum leverage ratios. Additionally, the 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 March 27, 2021, and December 26, 2020, we had no borrowings

on this

revolving credit facility.

As of March 27, 2021, and December 26, 2020, there were $

9.3

million and $

9.5

million

of letters of credit, respectively, provided to third parties under the credit facility.

On April 17, 2020, we amended the Credit Agreement to, among other

things, (i) modify the financial covenant

from being based on total leverage ratio to net leverage ratio, (ii) adjust the

pricing grid to reflect the net leverage

ratio calculation, and (iii) increase the maximum maintenance leverage ratio

through March 31, 2021.

364-Day Credit Agreement

On March 4, 2021 we repaid the outstanding obligations and terminated

the lender commitments under our $

700

million

364

-day credit agreement which was entered into on

April 17, 2020

This facility was originally scheduled

to mature on

April 16, 2021

Other Short-Term Credit

Lines

As of March 27, 2021 and December 26, 2020, we had various other short-term

bank credit lines available, of

which $

67.4

million and $

73.4

million, respectively, were outstanding.

At March 27, 2021 and December 26,

2020, borrowings under all of these credit lines had a weighted average

interest rate of

4.52

% and

4.14

respectively.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Long-term debt

Long-term debt consisted of the following:

March 27,

December 26,

2021

2020

Private placement facilities

606,355

613,498

Note payable

1,554

Various

collateralized and uncollateralized loans payable with interest,

in varying installments through

2023

at interest rates

ranging from

2.45

% to

4.27

% at March 27, 2021 and

ranging from

2.62

% to

4.27

% at December 26, 2020

5,969

4,596

Finance lease obligations (see Note 7)

5,313

5,961

Total

617,637

625,609

Less current maturities

(111,176)

(109,836)

Total long-term debt

506,461

515,773

Private Placement Facilities

Our private placement facilities, with

three

insurance companies, have a total facility amount of $

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

June 23, 2023

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

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.

On March 5, 2021, we amended the private placement facilities to, among other things, (a) modify the financial

covenant from being based on a net leverage ratio to a total leverage ratio and (b) restore the maximum

maintenance total leverage ratio to 3.25x and remove the 1.00% interest rate increase triggered if the net leverage

ratio were to exceed 3.0x.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

The components of our private placement facility borrowings as

of March 27, 2021 are presented in the following

table (in thousands):

Amount of

Borrowing

Date of Borrowing

Outstanding

Rate

Due Date

January 20, 2012

(1)

7,143

3.09

January 20, 2022

January 20, 2012

50,000

3.45

January 20, 2024

December 24, 2012

50,000

3.00

December 24, 2024

June 2, 2014

100,000

3.19

June 2, 2021

June 16, 2017

100,000

3.42

June 16, 2027

September 15, 2017

100,000

3.52

September 15, 2029

January 2, 2018

100,000

3.32

January 2, 2028

September 2, 2020

100,000

2.35

September 2, 2030

Less: Deferred debt issuance costs

(788)

606,355

(1)

Annual

repayments of approximately $

7.1

million for this borrowing commenced on

January 20, 2016

U.S. Trade Accounts Receivable Securitization

We have a facility agreement with a bank, as agent, 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 to

three years

Our current facility, which has a purchase limit of $

350

million, was scheduled to expire on

April 29, 2022

June 22, 2020, the expiration date for this facility was extended to

June 12, 2023

and was amended to adjust certain

covenant levels for 2020.

As of March 27, 2021 and December 26, 2020, there were

borrowings outstanding

under this securitization facility.

At March 27, 2021, the interest rate on borrowings under this

facility was based

on the asset-backed commercial paper rate of

0.18

% plus

0.95

%, for a combined rate of

1.13

At December 26,

2020, the interest rate on borrowings under this facility was based

on the asset-backed commercial paper rate of

0.22

% plus

0.95

%, for a combined rate of

1.17

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.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 6 – Leases

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 less than

one year

to approximately

15 years

, some of

which

may include options to extend the leases for up to 10 years

The components of lease expense were as

follows:

Three Months Ended

March 27,

March 28,

2021

2020

Operating lease cost:

(1)

23,106

22,079

Finance lease cost:

Amortization of right-of-use assets

604

432

Interest on lease liabilities

Total finance

lease cost

630

469

(1)

Includes variable lease expenses.

Supplemental balance sheet information related to leases is as follows:

March 27,

December 26,

2021

2020

Operating Leases:

Operating lease right-of-use assets

301,759

288,847

Current operating lease liabilities

68,580

64,716

Non-current operating lease liabilities

248,624

238,727

Total operating lease liabilities

317,204

303,443

Finance Leases:

Property and equipment, at cost

10,388

10,683

Accumulated depreciation

(4,607)

(4,277)

Property and equipment, net of accumulated depreciation

5,781

6,406

Current maturities of long-term debt

2,256

2,420

Long-term debt

3,057

3,541

Total finance

lease liabilities

5,313

5,961

Weighted Average

Remaining Lease Term in

Years:

Operating leases

7.4

7.5

Finance leases

4.2

4.3

Weighted Average

Discount Rate:

Operating leases

2.6

2.8

Finance leases

1.9

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Supplemental cash flow information related to leases is as follows:

Three Months Ended

March 27,

March 28,

2021

2020

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for operating leases

19,150

19,146

Operating cash flows for finance leases

Financing cash flows for finance leases

625

495

Right-of-use assets obtained in exchange for lease obligations:

Operating leases

32,388

8,065

Finance leases

1,222

Maturities of lease liabilities are as follows:

March 27, 2021

Operating

Finance

Leases

2021

57,860

1,821

2022

64,241

1,545

2023

46,827

643

2024

32,991

329

2025

29,515

294

Thereafter

117,566

883

Total future

lease payments

349,000

5,515

Less: imputed interest

(31,796)

(202)

Total

317,204

5,313

As of March 27, 2021, we have additional operating leases with total lease payments

of $

11.1

million for

buildings

and vehicles

that have not yet commenced.

These operating leases will commence subsequent to March

27, 2021,

with lease terms of

two years

10 years

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 7 – 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.

Accounting Standards Codification (“ASC”) Topic 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 three months ended March 27, 2021 and the year ended December

26, 2020 are presented in the

following table:

March 27,

December 26,

2021

2020

Balance, beginning of period

327,699

287,258

Decrease in redeemable noncontrolling interests due to

redemptions

(17,241)

Increase in redeemable noncontrolling interests due to business

acquisitions

85,037

28,387

Net income attributable to redeemable noncontrolling interests

7,053

13,363

Dividends declared

(6,237)

(12,631)

Effect of foreign currency translation loss attributable to

redeemable noncontrolling interests

(6,173)

(4,279)

Change in fair value of redeemable securities

45,520

32,842

Balance, end of period

452,899

327,699

Note 8 – 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:

March 27,

December 26,

2021

2020

Attributable to Redeemable noncontrolling interests:

Foreign currency translation adjustment

(30,790)

(24,617)

Attributable to noncontrolling interests:

Foreign currency translation adjustment

310

235

Attributable to Henry Schein, Inc.:

Foreign currency translation adjustment

(108,948)

(76,565)

Unrealized loss from foreign currency hedging activities

(8,127)

(11,488)

Unrealized investment gain (loss)

(5)

Pension adjustment loss

(19,225)

(20,032)

Accumulated other comprehensive loss

(136,305)

(108,084)

Total Accumulated

other comprehensive loss

(166,785)

(132,466)

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

The following table summarizes the components of comprehensive income, net

of applicable taxes as follows:

Three Months Ended

March 27,

March 28,

2021

2020

Net income

174,928

133,565

Foreign currency translation loss

(38,481)

(89,312)

Tax effect

Foreign currency translation loss

(38,481)

(89,312)

Unrealized gain from foreign currency hedging activities

4,695

20,233

Tax effect

(1,334)

(5,090)

Unrealized gain from foreign currency hedging activities

3,361

15,143

Unrealized investment loss

(8)

(11)

Tax effect

Unrealized investment loss

(6)

(9)

Pension adjustment gain

1,026

1,048

Tax effect

(219)

(324)

Pension adjustment gain

807

724

Comprehensive income

140,609

60,111

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 three months ended March

27, 2021 and three months ended March 28,

2020 was primarily impacted by changes in foreign currency exchange rates

of the Euro, British Pound, Brazilian

Real, Australian Dollar, and Canadian Dollar.

The following table summarizes our total comprehensive income, net of

applicable taxes, as follows:

Three Months Ended

March 27,

March 28,

2021

2020

Comprehensive income attributable to

Henry Schein, Inc.

137,776

69,986

Comprehensive income attributable to

noncontrolling interests

1,953

313

Comprehensive income (loss) attributable to

Redeemable noncontrolling interests

880

(10,188)

Comprehensive income

140,609

60,111

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 9 – 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.

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;

however, 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) is classified as

Level 3 within the fair value hierarchy as of

March 27, 2021 and December 26, 2020 was estimated at $

685.1

million and $

699.0

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 and unobservable

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 and a total return swap for the purpose of economically

hedging our unfunded non-qualified

supplemental retirement plan and our deferred compensation plan.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except 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.

See

Note 14-Derivatives and Hedging

Activities

for further information.

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 7–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

March 27, 2021 and December 26,

2020:

March 27, 2021

Level 1

Level 2

Level 3

Total

Assets:

Derivative contracts

1,856

Total return

swaps

1,458

Total assets

3,314

Liabilities:

Derivative contracts

5,353

Total liabilities

5,353

Redeemable noncontrolling interests

452,899

December 26, 2020

Level 1

Level 2

Level 3

Total

Assets:

Derivative contracts

1,868

Total return

swaps

1,565

Total assets

3,433

Liabilities:

Derivative contracts

11,765

Total liabilities

11,765

Redeemable noncontrolling interests

327,699

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 10

–

Business Acquisitions

Acquisitions

We completed acquisitions during the three months ended March 27, 2021 which were immaterial to our financial

statements.

The acquisitions that we completed included companies within

our Health care distribution and

Technology and value-added services segments.

Our initial ownership interest acquired ranges between

approximately

% to

100

Acquisitions within our Health care distribution segment include companies that

specialize in distribution of dental products, a provider of home medical supplies, and product kitting and sterile

packaging.

Within our Technology and value-added services segment, we acquired companies that focus on dental

marketing and website solutions, practice transition services, and business

analytics and intelligence software.

The following table summarizes the estimated fair value, as of the date

of acquisition, of consideration paid and net

assets acquired for acquisitions during the three months ended March 27, 2021.

While we use our best estimates

and assumptions to accurately value those 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, during the measurement period we may record adjustments to

the assets acquired and liabilities assumed

with the corresponding offset to goodwill within our consolidated balance sheets.

Acquisition consideration:

Cash

213.8

Redeemable noncontrolling interests

75.2

Total consideration

289.0

Identifiable assets acquired and liabilities assumed:

Current assets

86.9

Intangible assets

151.4

Other noncurrent assets

19.0

Current liabilities

(31.8)

Deferred income taxes

(9.4)

Other noncurrent liabilities

(22.4)

Total identifiable

net assets

193.7

Goodwill

95.3

Total net assets acquired

289.0

The major classes of assets and liabilities that we generally allocate purchase

price to, excluding goodwill, include

identifiable intangible assets (i.e., trademarks and trade names, customer

relationships and lists, non-compete

agreements and product development), property, plant and equipment, deferred taxes and other current and long-

term assets and liabilities.

The estimated fair value of identifiable intangible assets is based on critical

estimates,

judgments and assumptions derived from analysis of market conditions,

discount rates, discounted cash flows,

customer retention rates and estimated useful lives.

Some prior owners of acquired subsidiaries are eligible to receive additional

purchase price cash consideration if

certain financial targets are met.

We have accrued liabilities for the estimated fair value of additional purchase

price consideration at the time of the acquisition.

Any adjustments to these accrual amounts are recorded in our

consolidated statements of income.

For the three months ended March 27, 2021 and March 28, 2020,

there were no

material adjustments recorded in our consolidated statements of income

relating to changes in estimated contingent

purchase price liabilities.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 11 – Plans of Restructuring

On November 20, 2019, we committed to a contemplated initiative, intended

to mitigate stranded costs associated

with the Animal Health Spin-off and to rationalize operations and to provide expense

efficiencies.

These activities

were originally expected to be completed by the end of 2020.

In light of the changes to the business environment

brought on by the COVID-19 pandemic, we extended such activities

to the end of 2021.

During the three months ended March 27, 2021 and March 28, 2020, we

recorded restructuring costs of $

2.9

million and $

4.8

million, respectively. The restructuring costs for these periods included costs for severance

benefits and facility exit costs.

The costs associated with these restructurings are included in

a separate line item,

“Restructuring costs” within our consolidated statements of income.

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

in 2021, 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.

The following table shows the net amounts expensed and paid for restructuring

costs that were incurred during the

three months ended March 27, 2021 and during our 2020 fiscal year

and the remaining accrued balance of

restructuring costs as of March 27, 2021, which is included in Accrued

expenses: Other within our consolidated

balance sheets:

Facility

Severance

Closing

Costs

Other

Total

Balance, December 28, 2019

12,911

826

13,810

Provision

25,855

5,878

360

32,093

Payments and other adjustments

(26,152)

(6,309)

(329)

(32,790)

Balance, December 26, 2020

12,614

395

104

13,113

Provision

2,848

(151)

234

2,931

Payments and other adjustments

(8,623)

156

(243)

(8,710)

Balance, March 27, 2021

6,839

400

7,334

The following table shows, by reportable segment, the net amounts

expensed and paid for restructuring costs that

were incurred during the three months ended March 27, 2021 and during

our 2020 fiscal year and the remaining

accrued balance of restructuring costs as of March 27, 2021:

Technology

and

Health Care

Value-Added

Distribution

Services

Total

Balance, December 28, 2019

13,373

437

13,810

Provision

30,935

1,158

32,093

Payments and other adjustments

(31,484)

(1,306)

(32,790)

Balance, December 26, 2020

12,824

289

13,113

Provision

2,803

128

2,931

Payments and other adjustments

(8,531)

(179)

(8,710)

Balance, March 27, 2021

7,096

238

7,334

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 12

–

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

restricted stock and restricted stock units 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

March 27,

March 28,

2021

2020

Basic

142,298

142,967

Effect of dilutive securities:

Stock options, restricted stock and restricted stock units

1,100

128

Diluted

143,398

143,095

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 13 – Income Taxes

For the three months ended March 27, 2021 our effective tax rate was

25.1

% compared to

22.4

% for the prior year

period.

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

three months ended

March 27, 2021 was primarily due to state and foreign income taxes and interest

expense.

The difference between

our effective tax rate and the federal statutory tax rate for the three months ended

March 28, 2020 primarily relates

to state and foreign income taxes and interest expense as well as tax charges and credits associated

with legal entity

reorganizations outside the United States.

The American Rescue Plan Act of 2021 (“ARPA”) was signed into law on March 11, 2021.

The ARPA included a

corporate income tax provision to further limit the deductibility of compensation

under Section 162(m) for tax

years starting after December 31, 2026.

Section 162(m) generally limits the deductibility of compensation paid

covered employees of publicly held corporations.

Covered employees include the CEO, CFO and the three highest

paid officers. The ARPA expands the group of covered employees to additionally include five of the highest paid

employees.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act

(“CARES Act”) was enacted in

response to the COVID-19 pandemic.

The CARES Act includes, but is not limited to, certain income tax

provisions that modify the Section 163(j) limitation of business interest and

net operating loss carryover and

carryback rules.

We have analyzed the income tax provisions of the CARES Act and have accounted for the

impact in the three months ended March 28, 2020, which did not have a

material impact on our consolidated

financial statements.

There are certain other non-income tax benefits available to us under

the CARES Act that

require further clarification or interpretation that may affect our consolidated financial statements

in the future.

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

liabilities” within our consolidated

balance sheets, as of March 27, 2021 was approximately $

89.2

million, of which $

73.0

million 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 consolidated statements

of income.

The tax years subject to examination by major tax jurisdictions include years 2012, 2013, 2017 and forward by the

U.S Internal Revenue Service (the “IRS”) as well as the years 2008 and forward for certain states and certain

foreign jurisdictions. All tax returns audited by the IRS are officially closed through 2011 and 2014 through

We are currently under audit with the IRS for the years 2012 and 2013 and all fieldwork has been completed.

We reached a settlement with the U.S. Competent Authority to resolve certain transfer pricing issues related to

2012 and 2013 in the quarter ended December 28, 2019. For all remaining outstanding issues for 2012 and 2013,

we have provided all necessary documentation to the Appellate Division to date and are waiting for responses. We

do not believe the final resolution will have a material impact to our consolidated financial statements. During the

quarter ended September 26, 2020 we finalized negotiations with the Advance Pricing Division and reached an

agreement on an appropriate transfer pricing methodology for the years 2014-2025. The objective of this resolution

was to mitigate future transfer pricing audit adjustments. In the fourth quarter of 2020, we reached a favorable

resolution with the IRS relating to select audit years.

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 approximately $

0.5

million for the three months ended March 27, 2021, and

0.3

million for the three months ended March 28, 2020.

The total amount of accrued interest is included in “Other

liabilities”, and was approximately $

14.6

million as of March 27, 2021 and $

14.0

million as of December 26, 2020.

penalties were accrued for the periods presented.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 14

–

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 each other, and changes to the credit risk of the derivative counterparties.

We attempt to minimize these

risks by primarily using foreign currency forward contracts and by

maintaining counter-party credit limits.

These

hedging activities provide only limited protection against currency exchange

and credit risks.

Factors that could

influence the effectiveness of our hedging programs include currency markets and

availability of hedging

instruments and liquidity of the credit markets.

All 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

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

Accumulated other

comprehensive loss

within our consolidated balance sheets.

Amounts excluded from the assessment of hedge

effectiveness are included in interest expense within our consolidated statements

of income.

The aggregate

notional value of this net investment hedge, which matures on

November 16, 2023

, is approximately €

200

million.

During the three months ended March 27, 2021 and March 28, 2020,

we recognized approximately $

1.1

and $

1.2

million, respectively, of interest savings as a result of this net investment hedge.

March 20, 2020

we entered into a total return swap for the purpose of economically hedging our unfunded non-

qualified supplemental retirement plan (“SERP”) and our deferred compensation plan (“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 $

43.4

million.

At March 27, 2021, the notional value of the investments in

these plans was $

77.5

million.

At March 27, 2021, the financing blended rate for this swap was

based on LIBOR of

0.12

% plus

0.50

for a combined rate of

0.62

For the three months ended March 27, 2021, we have recorded a

gain, within the

selling, general and administrative line item in our consolidated statement

of income, of approximately $

2.7

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

This swap is expected to be renewed on an

annual basis after its current expiration date of March 29, 2022, and

is expected to result in a neutral impact to our

results of operations.

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

short-term (i.e., generally

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.

Our hedging activities have

historically not had a material impact on our consolidated financial statements.

Accordingly, additional disclosures

related to derivatives and hedging activities required by ASC 815 have

been omitted.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

Note 15 – Stock-Based Compensation

Our accompanying consolidated statements of income reflect pre-tax share-based

compensation expense of $

12.8

million ($

9.6

million after-tax) for the three months ended March 27, 2021 and pre-tax share

based compensation

credit of $

17.5

million ($

13.6

million after-tax) for the three months ended March 28, 2020.

The $

17.5

million

credit for share-based compensation during the three months ended March

28, 2020 reflected our reduced estimate

in expected achievement of performance targets resulting from the impact of COVID-19.

Our accompanying consolidated statements of cash flows present our

stock-based compensation expense (credit) as

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

for all periods presented.

In the

accompanying consolidated statements of cash flows, there were

benefits associated with tax deductions in

excess of recognized compensation as a cash inflow from financing

activities for the three months ended March 27,

2021 and March 28, 2020, respectively.

Stock-based compensation represents the cost related to stock-based awards granted

to employees and non-

employee directors.

We measure stock-based compensation at the grant date, based on the estimated fair value of

the award, and recognize the cost (net of estimated forfeitures) as compensation

expense over the requisite service

period.

Our stock-based compensation expense is reflected in selling, general

and administrative expenses in our

consolidated statements of income.

Stock-based awards are provided to certain employees and non-employee directors

under the terms of our 2020

Stock Incentive Plan and our 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 have been granted solely in the form of restricted stock units

(“RSUs”).

However, in March 2021, our equity-based awards were granted in the form of RSUs and non-qualified

stock options.

Grants of RSUs are stock-based awards granted to recipients with specified

vesting provisions.

In the case of

RSUs, common stock is generally delivered on or following satisfaction of vesting

conditions.

We issue RSUs that

vest solely based on the recipient’s continued service over time (primarily four-year cliff vesting, except for grants

made under the 2015 Non-Employee Director Stock Incentive Plan, which

are primarily

-month cliff vesting),

and RSUs that vest based on our achieving specified performance measurements

and the recipient’s continued

service over time (primarily three-year cliff vesting).

For these RSUs, we recognize the cost as compensation

expense on a straight-line basis.

During the three months ended March 27, 2021, as a result of the continuing

economic risk and uncertainty

resulting from the ongoing COVID-19 pandemic, the Compensation Committee

decided to adjust the form of

awards granted under our 2021 long-term incentive program for our 2021

fiscal year in a manner that focuses on

our long-term value by granting stock options and time-based RSUs rather

than performance-based RSUs.

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 are granted at an exercise price equal to our closing stock

price on the

date of grant.

Stock options issued during 2021 vest

one-third

per year based on the recipient’s continued service,

subject to the terms and conditions of the Plans, 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 estimate the fair

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

In addition to equity-based awards under the 2021 long-term incentive

program under the 2020 Stock Incentive

Plan, the Compensation Committee granted a Special Pandemic

Recognition Award under the 2020 Stock Incentive

Plan to recipients of performance-based RSUs under the 2018 long-term incentive

program.

These awards will vest

% on the first anniversary of the grant date and

% on the second anniversary of the grant date and are recorded

as compensation expense using a graded vesting method.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

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

stock price at

time 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.

The Plans provide for adjustments to the performance-based restricted

stock units targets for significant events,

including, without limitation, acquisitions, divestitures, new business ventures,

certain capital transactions

(including share repurchases), 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 and

foreign exchange fluctuations.

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.

Total unrecognized compensation cost related to unvested awards as of March 27, 2021 was $

110.0

million, which

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

2.8

years.

The following weighted-average assumptions were used in determining

the fair values of stock options using the

Black-Scholes valuation model:

Expected dividend yield

0.0

Expected stock price volatility

25.80

Risk-free interest rate

0.94

Expected life of options (years)

6.00

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

-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 stock option activity under the Plans during

the three months ended March 27,

2021:

Weighted

Average

Weighted

Remaining

Average

Contractual

Aggregate

Exercise

Life in

Intrinsic

Price

Years

Value

Outstanding at beginning of period

Granted

788

62.71

Forfeited

Outstanding at end of period

788

62.71

9.9

4,152

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

The following tables summarize the activity of our unvested RSUs for

the three months ended March 27, 2021:

Time-Based Restricted Stock Units

Weighted Average

Grant Date Fair

Intrinsic Value

Shares/Units

Value Per Share

Per Share

Outstanding at beginning of period

1,459

57.61

Granted

797

62.75

Vested

(256)

66.92

Forfeited

(7)

59.59

Outstanding at end of period

1,993

58.46

67.98

Performance-Based Restricted Stock Units

Weighted Average

Grant Date Fair

Intrinsic Value

Shares/Units

Value Per Share

Per Share

Outstanding at beginning of period

136

53.52

Granted

189

58.35

Vested

(78)

51.92

Forfeited

(4)

59.05

Outstanding at end of period

243

59.21

67.98

Note 16 – Supplemental Cash Flow Information

Cash paid for interest and income taxes was:

Three Months Ended

March 27,

March 28,

2021

2020

Interest

7,763

9,951

Income taxes

13,425

12,613

During the three months ended March 27, 2021 and March 28, 2020, we

had a $

4.7

million and $

20.2

million of

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

respectively.

Note 17 – Legal Proceedings

August 31, 2012

Archer and White Sales, Inc.

(“Archer”) filed a complaint against

Henry Schein, Inc. as well

as Danaher Corporation and its subsidiaries Instrumentarium Dental, Inc., Dental Equipment, LLC, Kavo Dental

Technologies, LLC and Dental Imaging Technologies Corporation (collectively, the “Danaher Defendants”)

in the

U.S. District Court for the Eastern District of Texas, Civil Action No. 2:12-CV-00572-JRG, styled as an antitrust

action under Section 1 of the Sherman Act, and the Texas Free Enterprise Antitrust Act.

Archer alleges a

conspiracy between Henry Schein, an unnamed company and the Danaher Defendants to terminate or limit

Archer’s distribution rights.

August 1, 2017

Archer

filed an amended complaint, adding

Patterson Companies,

Inc. (“Patterson”) and Benco Dental Supply Co. (“Benco”) as defendants

, and

alleging that Henry Schein,

Patterson, Benco and Burkhart Dental Supply conspired to fix prices and refused to compete with each other for

sales of dental equipment to dental professionals and agreed to enlist their common suppliers, the Danaher

Defendants, to join a price-fixing conspiracy and boycott by reducing the distribution territory of, and eventually

terminating, their price-cutting competing distributor Archer.

Archer seeks damages in an amount to be proved at

trial, to be

trebled with interest and costs, including attorneys’ fees, jointly and severally, as well as injunctive

relief.

October 30, 2017

Archer

filed a second amended complaint, to

add additional allegations that it believes

support its claims. The named parties and causes of action are the same as the August 1, 2017 amended complaint.

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

On October 1, 2012, we filed a motion for an order: (i) compelling Archer

to arbitrate its claims against us; (2)

staying all proceedings pending arbitration; and (3) joining the Danaher

Defendants’ motion to arbitrate and stay.

On May 28, 2013, the Magistrate Judge granted the motions to arbitrate

and stayed proceedings pending arbitration.

On June 10, 2013, Archer moved for reconsideration before the District Court

judge.

On December 7, 2016, the

District Court Judge granted Archer’s motion for reconsideration and lifted the stay.

Defendants appealed the

District Court’s order.

On December 21, 2017, the U.S. Court of Appeals for the Fifth Circuit

affirmed the District

Court’s order denying the motions to compel arbitration.

On June 25, 2018, the Supreme Court of the United States

granted defendants’ petition for writ of certiorari.

On October 29, 2018, the Supreme Court heard oral arguments.

On January 8, 2019, the Supreme Court issued its published decision vacating

the judgment of the Fifth Circuit and

remanding the case to the Fifth Circuit for further proceedings consistent with

the Supreme Court’s opinion.

April 2, 2019, the District Court stayed the proceeding in the trial court pending

resolution by the Fifth Circuit.

The

Fifth Circuit heard oral argument on May 1, 2019 on whether the case should be arbitrated.

The Fifth Circuit

issued its opinion on August 14, 2019 affirming the District Court’s order denying defendants’ motions to compel

arbitration.

Defendants filed a petition for rehearing en banc before the Fifth

Circuit.

The Fifth Circuit denied that

petition.

On October 1, 2019, the District Court set the case for trial

on February 3, 2020, which was subsequently

moved to January 29, 2020.

On January 24, 2020 the Supreme Court granted our motion to stay

the District Court

proceedings, pending the disposition of our petition for writ of certiorari, which

was filed on January 31, 2020.

Archer conditionally cross petitioned for certiorari on an arbitration issue

on March 2, 2020.

On June 15, 2020, the

Supreme Court granted our petition for writ of certiorari, and denied Archer’s conditional

petition for certiorari, and

thus the District Court proceedings remained stayed.

After briefing from the parties and several amici, the case was

argued before the Supreme Court on December 8, 2020.

On January 25, 2021, the Supreme Court dismissed the

writ of certiorari as improvidently granted.

That action dissolved the stay the Supreme Court had previously

granted.

The U.S. District Court for the Eastern District of Texas then set the case for trial, and jury selection was

scheduled to begin on June 1, 2021.

Patterson and the Danaher Defendants settled with Archer and

they have been

dismissed from the case with prejudice.

Benco has agreed to settle the case with the plaintiff. Henry Schein and the

plaintiff have agreed to settle this matter for an amount that is not material to the Company

and to dismiss the case

with prejudice.

May 29, 2018

, an amended complaint was filed in the MultiDistrict Litigation (“MDL”)

proceeding In Re

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

in an action entitled

The County of

Summit, Ohio et al.

v. Purdue Pharma, L.P.,

et al., Civil Action No. 1:18-op-45090-DAP (“County of

Summit

Action”), in the U.S. District Court for the Northern District of Ohio,

adding Henry Schein, Inc., Henry Schein

Medical Systems, Inc. and others as defendants

Summit County alleged that 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 Henry Schein Medical Systems, Inc.) reaped

financial rewards by refusing or otherwise failing to monitor appropriately and restrict the improper distribution of

those drugs.

On October 29, 2019, the Company was dismissed with prejudice from this lawsuit. Henry Schein,

working with Summit County, donated $1 million to a foundation and paid $250,000 of Summit County’s

expenses, as described in our prior filings with the SEC.

In addition to the County of Summit Action,

Henry Schein and/or one or more of its affiliated companies

have been

named as a defendant in multiple lawsuits (currently less than one-hundred

and fifty (

150

)), which

allege claims

similar to those alleged in the County of Summit Action

. These actions consist of some that have been consolidated

within the MDL and are currently abated for discovery purposes, and others

which remain pending in state courts

and are proceeding independently and outside of the MDL.

On October 9, 2020, the Circuit Court of the 17th

Judicial Circuit in and for Broward County, Florida, Case No. CACE19018882, granted Henry Schein’s motion to

dismiss the claims brought against it in the action filed by North

Broward Hospital District et. al.

The Florida court

gave plaintiffs until November 24, 2020 to replead their claims against Henry Schein.

On January 8, 2021, Henry

Schein filed a motion to dismiss the Amended Complaint.

By Order entered on March 24, 2021, the Circuit Court

of Washington County,

Arkansas, Case No. 72-CV20-156, granted Henry Schein’s motion to dismiss the claims

brought against it in the action filed by Fayetteville Arkansas Hospital Company, LLC, et al.

The Arkansas court

gave plaintiffs until forty-five (45) days from the date the court enters an order or orders deciding

all other motions

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

to dismiss currently pending before the court, to replead their claims against

Henry Schein.

An action filed by

Tucson Medical Center et al. was previously scheduled for trial beginning on June

1, 2021 but the court has vacated

that trial date.

At this time, the only cases set for trial are the actions filed by

West Virginia

University Hospitals,

Inc. et al., which is currently scheduled for a non-jury liability trial on plaintiffs’ public

nuisance claims on

November 1, 2021, and DCH Health Care Authority, et al., which is currently scheduled for a liability jury trial on

plaintiffs’ public nuisance claims on July 18, 2022.

Of Henry Schein’s 2020 revenue of approximately $

10.1

billion from continuing operations, sales of opioids represented less than

one-tenth of 1

percent.

Opioids represent

a negligible part of our business.

We intend to defend ourselves vigorously against these actions.

September 30, 2019

, the

City of Hollywood Police Officers Retirement System, individually and on behalf of

all others similarly situated

, filed a putative class action complaint for violation of the federal

securities laws

against

Henry Schein, Inc., Covetrus, Inc., and Benjamin Shaw and Christine Komola (Covetrus’s then Chief

Executive Officer and Chief Financial Officer, respectively

) in the U.S. District Court for the Eastern District of

New York,

Case No. 2:19-cv-05530-FB-RLM.

The complaint seeks to certify a class consisting of all persons and

entities who, subject to certain exclusions, purchased or otherwise acquired Covetrus

common stock from February

8, 2019 through August 12, 2019.

The case relates to the Animal Health Spin-off and Merger of the Henry Schein

Animal Health Business with Vets First Choice in February 2019.

The complaint alleges violations of Sections

10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Securities and Exchange Commission

Rule 10b-5 and asserts that defendants’ statements in the offering documents and after the transaction were

materially false and misleading

because they purportedly overstated Covetrus’s capabilities as to inventory

management and supply-chain services, understated the costs of integrating

the Henry Schein Animal Health

Business and Vets

First Choice, understated Covetrus’s separation costs from Henry Schein, and understated the

impact on earnings from online competition and alternative distribution

channels and from the loss of an allegedly

large customer in North America just before the Separation and Merger.

The complaint seeks unspecified monetary

damages and a jury trial.

Pursuant to the provisions of the PSLRA, the court appointed

lead plaintiff and lead

counsel on December 23, 2019.

Lead plaintiff filed a Consolidated Class Action Complaint on February 21,

2020.

Lead plaintiff added Steve Paladino, our Chief Financial Officer, as a defendant in the action.

Lead plaintiff filed

an Amended Consolidated Class Action Complaint on May 21, 2020,

in which it added a claim that Mr. Paladino is

a “control person” of Covetrus.

We intend to defend ourselves vigorously against this action.

February 5, 2021

Jack Garnsey filed a putative shareholder derivative action on behalf of Covetrus, Inc.

in the

U.S. District Court for the Eastern District of New York, naming as defendants

Benjamin Shaw, Christine T.

Komola, Steven Paladino, Betsy Atkins, Deborah G. Ellinger, Sandra L. Helton, Philip A. Laskaway, Mark J.

Manoff, Edward M. McNamara, Ravi Sachdev, David E. Shaw, Benjamin Wolin, and Henry Schein, Inc., with

Covetrus, Inc.

named as a nominal defendant.

The complaint alleges that

the individual defendants breached their

fiduciary duties under state law in connection with the same allegations asserted in the City of Hollywood securities

class action described above and further alleges that Henry Schein aided and abetted such breaches. The complaint

also asserts claims for contribution under the federal securities laws against Henry Schein and other defendants,

also arising out of the allegations in the City of Hollywood lawsuit.

The complaint seeks declaratory, injunctive,

and monetary relief. We intend to defend ourselves vigorously against this action.

On April 8, 2021 the Court

entered an order staying the Garnsey action until forty-five (

) days after a decision is issued finally resolving the

motions to dismiss in the City of Hollywood Class Action.

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 March 27, 2021, 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

Table of Contents

HENRY SCHEIN, INC.

NOTES TO CONSOLIDATED

FINANCIAL STATEMENTS

(in thousands, except per share data)

(unaudited

)

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.

Note 18 – Related Party Transactions

On February 7, 2019 (the “Distribution Date”), we completed the separation

(the “Separation”) and subsequent

merger (“Merger”) of our animal health business (the “Henry Schein Animal Health Business”) with Direct

Vet

Marketing, Inc. (d/b/a Vets First Choice, “Vets

First Choice”).

This was accomplished by a series of transactions

among us, Vets

First Choice, Covetrus, Inc. (f/k/a HS Spinco, Inc. “Covetrus”), a

wholly owned subsidiary of ours

prior to the Distribution Date, and HS Merger Sub, Inc., a wholly owned subsidiary

of Covetrus (“Merger Sub”). In

connection with the Separation, we contributed, assigned and transferred

to Covetrus certain applicable assets,

liabilities and capital stock or other ownership interests relating to the Henry

Schein Animal Health Business. On

the Distribution Date, we received a tax-free distribution of $

1,120

million from Covetrus pursuant to certain debt

financing incurred by Covetrus. On the Distribution Date and prior to the

Animal Health Spin-off, Covetrus issued

shares of Covetrus common stock to certain institutional accredited investors

for $

361.1

million (the “Share Sale”).

The proceeds of the Share Sale were paid to Covetrus and distributed to us. Subsequent

to the Share Sale, we

distributed, on a pro rata basis, all of the shares of the common stock

of Covetrus held by us to our stockholders of

record as of the close of business on January 17, 2019 (the “Animal Health

Spin-off”).

In connection with the completion of the Animal Health Spin-off during our 2019 fiscal year, we entered into a

transition services agreement with Covetrus under which we agreed to provide certain transition services for up to

twenty-four months in areas such as information technology, finance and accounting, human resources, supply

chain, and real estate and facility services.

Services provided under this transition services agreement ended in

December 2020.

During the three months ended March 28, 2020, we recorded approximately

4.4

million of fees

for these services.

Covetrus also purchased certain products from us pursuant

to the transition services agreement,

which ended in December 2020.

During the three months ended March 28, 2020, net sales

to Covetrus were

approximately $

21.1

million.

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 $31.0 million annually for the use of their intellectual property.

During the three

months ended March 27, 2021 and March 28, 2020, we recorded $

7.8

million and $

7.8

million, respectively in

connection with costs related to this royalty agreement.

As of March 27, 2021 and December 26, 2020, Henry

Schein One, LLC had a net receivable balance due from Internet Brands of

1.7

million and $

4.7

million,

respectively, comprised of amounts related to results of operations and the royalty agreement.

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

method.

During the three months ended March 27, 2021 and March 28,

2020, we recorded net sales of $

15.5

million and $

15.4

million, respectively, to such entities.

During the three months ended March 27, 2021 and March

28, 2020, we purchased $

3.8

million and $

3.0

million, respectively from such entities.

At March 27, 2021 and

December 26, 2020, we had in aggregate $

36.7

million and $

36.4

million, due from our equity affiliates, and $

7.8

million and $

8.6

million due to our equity affiliates, respectively.

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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 Novel Coronavirus

Disease 2019 (COVID-19)

on the Company, its 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 personal protective equipment (“PPE”)

and COVID-19 related product sales and inventory levels and whether

additional resurgences of the virus will

adversely impact the resumption of normal operations, the impact of restructuring

programs as well as of any future

acquisitions, and more generally current expectations regarding

performance in current and future periods.

Forward looking statements also include the (i) ability of the Company

to make additional testing available, the

nature of those tests and the number of tests intended to be made available

and the timing for availability, the nature

of the target market, as well as the efficacy or relative efficacy of the test results given that the test efficacy has

not

been, or will not have been, independently verified under normal FDA procedures

and (ii) potential for the

Company to distribute the COVID-19 vaccines and ancillary supplies.

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,

as well as other disease outbreaks, epidemics,

pandemics, or similar wide spread public health concerns and other natural

disasters or acts of terrorism; 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; 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; effects of a highly competitive (including, without limitation,

competition from third-

party online commerce sites) and consolidating market; the potential 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 macro-economic and political

conditions, including

international trade agreements and potential trade barriers; 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 confidentiality of sensitive personal information or standards in electronic

health records or transmissions;

changes in tax legislation; litigation risks; new or unanticipated litigation

developments and the status of litigation

matters; cyberattacks or other privacy or data security breaches; risks associated

with our global operations; our

dependence on our senior management, as well as employee hiring and

retention; and disruptions in financial

markets. The order in which these factors appear should not be construed

to indicate their relative importance or

priority.

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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.

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

COVID-19 Pandemic

In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic

negatively impacted the global economy, disrupted global supply chains and created significant volatility and

disruption of global financial markets. In response, many countries implemented

business closures and restrictions,

stay-at-home and social distancing ordinances and similar measures

to combat the pandemic, which significantly

impacted global business and dramatically reduced demand for dental

products and certain medical products in the

second quarter of 2020.

Demand increased in the second half of 2020 and continued into

the first quarter of 2021,

resulting in growth over the prior year driven by sales of PPE and COVID-19

related products.

Globally, our

medical business continued to benefit from sales of such PPE and other

COVID-19 related products for the three

months ended March 27, 2021, recording net sales of $288.2 million,

an increase of approximately 381.3%

compared to the prior year.

Excluding sales of PPE and other COVID-19 related products, medical

internal sales in

local currencies was down 6.8%, in part due to a mild influenza season that impacted

diagnostic and consumable

merchandise sales, as well as from lower pharmaceutical sales.

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The 8.4% increase in technology and value-added services net sales for the

three months ended March 27, 2021

includes an increase of 7.0%

local currency revenue (3.6% increase in internally generated revenue

and 3.4%

growth from acquisitions) and an increase of 1.4%

related to foreign currency exchange.

Sales growth was driven

by our practice management business, as well as strong financial services

revenue, which benefited from dental

equipment sales growth.

During the quarter ended March 27, 2021, the trend for transactional

software revenues

improved compared to the prior year, as more patients visited dental practices worldwide.

Gross Profit

Gross profit and gross margin percentages by segment and in total for the three months

ended March 27, 2021 and

March 28, 2020 were as follows (in thousands):

March 27,

Gross

March 28,

Gross

Increase / (Decrease)

2021

Margin %

2020

Margin %

Health care distribution

789,984

28.4

653,316

28.7

136,668

20.9

Technology and value-added services

100,867

70.5

92,085

69.8

8,782

9.5

Total excluding Corporate TSA revenues

890,851

30.5

745,401

31.0

145,450

19.5

Corporate TSA revenues

613

2.9

(613)

Total

890,851

30.5

746,014

30.7

144,837

19.4

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 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.

During December 2020, our previous transition services agreement with

Covetrus, in connection with the

completion of the Animal-Health Spin-off, concluded.

Under this agreement, Covetrus had agreed to purchase

certain products from us at a mark-up that ranged from 3% to 6% of our product

cost to cover handling costs.

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 pharmaceutical products are generally

at lower gross profit margins

than other products. Conversely, sales of our private label products achieve gross profit margins that are higher than

average. 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 at greater frequencies.

Health care distribution gross profit increased $136.7 million, or 20.9%, for

the three months ended March 27, 2021

compared to the prior year period, due primarily to the increase in net sales

discussed above.

Health care

distribution gross profit margin decreased to 28.4% for the three months ended March 27,

2021 from 28.7% for the

comparable prior year period due to adjustments recorded for PPE inventory

and COVID-19 related products, as

well as influenza diagnostic kits, caused by volatility of pricing and demand

experienced during the quarter.

Such

conditions may recur and adversely impact gross profit margins in future periods,

although we do not expect further

material inventory adjustments in 2021.

The overall increase in our health care distribution gross profit

attributable to an increase of $120.5 million from internally generated

revenue and $27.2 million increase in gross

profit from acquisitions, partially offset by an $11.0 million decline in gross profit due to the decrease

in the gross

margin rates.

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Technology and value-added services gross profit increased $8.8 million, or 9.5%, for the three months ended

March 27, 2021 compared to the prior year period.

The overall increase in our Technology and value-added

services gross profit is attributable to a $4.5 million increase in internally

generated revenue, $4.2 million additional

gross profit from acquisitions,

and an increase of $0.1 million from gross margin rates.

Technology and value-

added services gross profit margin increased to 70.5% for the three months ended March 27, 2021

from 69.8% for

the comparable prior year period primarily due to an increase in the volume of

our transactional revenue from

eClaims and credit card processing.

Selling, General and Administrative

Selling, general and administrative expenses by segment and in

total for the three months ended March 27, 2021

and March 28, 2020 were as follows (in thousands):

% of

March 27,

Respective

March 28,

Respective

Increase

2021

Net Sales

2020

Net Sales

Health care distribution

592,052

21.3

505,762

22.2

86,290

17.1

Technology and value-added services

68,871

48.2

66,387

50.3

2,484

3.7

Total

660,923

22.6

572,149

23.6

88,774

15.5

Selling, general and administrative expenses (including restructuring costs

in the three months ended March 27,

2021 and March 28, 2020) increased $88.8 million, or 15.5%, for the three

months ended March 27, 2021 from the

comparable prior year period.

The $86.3 million increase in selling, general and administrative expenses

within our

health care distribution segment for the three months ended March 27, 2021

as compared to the prior year period

was attributable to an increase of $64.8 million of operating costs (including

$12.8 million of settlement and

litigation costs), an increase of $23.3 million of additional

costs from acquired companies, partially offset by a

decrease of $1.8 million in restructuring costs.

The $2.5 million increase in selling, general and administrative

expenses within our technology and value-added services segment for the three

months ended March 27, 2021 as

compared to the prior year period was attributable to an increase of $3.5

million of additional costs from acquired

companies, partially offset by a decrease of $1.0 million of operating costs.

As a percentage of net sales, selling,

general and administrative expenses decreased to 22.6% from 23.6% for

the comparable prior year period.

As a component of total selling, general and administrative expenses, selling

expenses increased $12.9 million, or

3.5% to $384.7 million, for the three months ended March 27, 2021 from

the comparable prior year period.

As a

percentage of net sales, selling expenses decreased to 13.2% from 15.3%

for the comparable prior year period.

As a component of total selling, general and administrative expenses, general

and administrative expenses

increased $75.9 million, or 37.9% to $276.2 million, for the three months

ended March 27, 2021 from the

comparable prior year period, primarily due to an increase in payroll and payroll

related costs.

As a percentage of

net sales, general

and administrative expenses increased to 9.4% from 8.2% for the

comparable prior year period.

Our selling, general and administrative expenses for the three months

ended March 28, 2020 were affected by

certain estimates we made due to the adverse business environment brought

on by the COVID-19 pandemic.

For

example, in the prior-year quarter we recorded incremental bad debt reserves of approximately

$10 million for our

global dental business. We also recognized a net credit of approximately $17.5 million in stock-based compensation

expense during the prior-year quarter as we had estimated that no performance shares granted

in 2018, 2019 or

2020 would ultimately vest. In contrast, for the three months ended March

27, 2021, we recorded $12.8 million in

stock-based compensation expense.

Additionally, in the prior-year quarter we recorded total impairment charges of

approximately $6.1 million during the quarter related to prepaid royalty

expenses and a customer relationship

intangible asset. We recorded no such impairment charges in the three months ended March 27, 2021.

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Other Expense, Net

Other expense, net, for the three months ended March 27, 2021 and March

28, 2020 was as follows (in thousands):

March 27,

March 28,

Variance

2021

2020

Interest income

1,983

3,190

(1,207)

(37.8)

Interest expense

(6,485)

(7,812)

1,327

17.0

Other, net

309

(220)

529

240.5

Other expense, net

(4,193)

(4,842)

649

13.4

Interest income decreased $1.2 million primarily due to lower investment

and late fee income.

Interest expense

decreased $1.3 million primarily due to decreased borrowings under our

bank credit lines as well as lower interest

rates.

Income Taxes

For the three months ended March 27, 2021, our effective tax rate was 25.1% compared

to 22.4% for the prior year

period.

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

three months ended

March 27, 2021, was primarily due to state and foreign income taxes and interest

expense.

The difference between

our effective tax rate and the federal statutory tax rate for the three months ended

March 28, 2020 primarily relates

to state and foreign income taxes and interest expense as well as tax charges and credits associated

with legal entity

reorganizations outside the United States.

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 (which had been temporarily suspended, but were

resumed during the three months

ended March 27, 2021).

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.

The pandemic and the governmental responses to it had a material adverse

effect on our cash flows in the second

quarter of 2020.

In the latter half of the second quarter of 2020 and continuing

through year-end, dental and

medical practices began to re-open worldwide.

During the first quarter of 2021, patient traffic levels returned to

levels approaching pre-pandemic levels, although certain regions in the U.S.

and internationally are experiencing an

increase in COVID-19 cases. There is an ongoing risk that the COVID-19

pandemic may again have a material

adverse effect on our business, results of operations and cash flows and may result

in a material adverse effect on

our financial condition and liquidity. However, the extent of the potential impact cannot be reasonably estimated at

this time.

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

placements.

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.

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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.

We have no off-balance sheet arrangements.

Net cash from continuing operations provided by operating activities was

$63.3 million for the three months ended

March 27, 2021, compared to net cash from continuing operations provided

by operating activities of $78.8 million

for the comparable prior year period.

The net change of $15.4 million was primarily attributable to increased

working capital requirements, specifically an increase in inventories due

to stocking of PPE and other COVID-19

related products, partially offset by decreased accounts receivable due to lower days

sales outstanding. The effect

on operating cash flows from the increased working capital requirements

was partially offset by higher net income.

Net cash from continuing operations used in investing activities was

$223.2 million for the three months ended

March 27, 2021, compared to $53.6 million for the comparable prior

year period.

The net change of $169.6 million

was attributable to increased payments for equity investments and

business acquisitions.

Net cash from continuing operations used in financing activities was $119.4 million for the three

months ended

March 27, 2021, compared to net cash provided by financing activities

of $491.6 million for the comparable prior

year period.

The net change of $611.1 million was primarily due to decreased net proceeds from bank borrowings.

The following table summarizes selected measures of liquidity and capital

resources (in thousands):

March 27,

December 26,

2021

2020

Cash and cash equivalents

144,538

421,185

Working

capital

(1)

1,447,857

1,508,313

Debt:

Bank credit lines

67,415

73,366

Current maturities of long-term debt

111,176

109,836

Long-term debt

506,461

515,773

Total debt

685,052

698,975

Leases:

Current operating lease liabilities

68,580

64,716

Non-current operating lease liabilities

248,624

238,727

(1)

At March 27, 2021 and December 26, 2020, there were no trade accounts receivable that were restricted to settle obligations of this VIE,

nor were there liabilities of the VIE where the creditors have recourse to us.

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 decreased

to 42.8 days as of March 27, 2021 from

45.9 days as of March 28, 2020.

During the three months ended March 27, 2021, we wrote

off approximately $3.3

million of fully reserved accounts receivable against our trade receivable

reserve.

Our inventory turns from

operations increased to 5.2 as of March 27, 2021 from 4.9 as of March 28, 2020.

Our working capital accounts

may be impacted by current and future economic conditions.

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Bank Credit Lines

Bank credit lines consisted of the following:

March 27,

December 26,

2021

2020

Revolving credit agreement

Other short-term bank credit lines

67,415

73,366

Total

67,415

73,366

Revolving Credit Agreement

On April 18, 2017, we entered into a $750 million revolving credit agreement

(the “Credit Agreement”), which

matures in April 2022.

The interest rate is based on the USD LIBOR

plus a spread based on our leverage ratio at

the end of each financial reporting quarter.

We expect most LIBOR rates to be discontinued immediately after

December 31, 2021, while the remaining LIBOR rates will be discontinued

immediately after June 30, 2023, which

will require an amendment to our debt agreements to reflect a new

reference rate. We do not expect the

discontinuation of LIBOR as a reference rate in our debt agreements

to have a material adverse effect on our

financial position or to materially affect our interest expense.

The Credit Agreement also requires, among other

things, that we maintain maximum leverage ratios. Additionally, the 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 March 27, 2021, and December 26, 2020, we had no borrowings

on this

revolving credit facility.

As of March 27, 2021, and December 26, 2020, there were $9.3

million and $9.5 million

of letters of credit, respectively, provided to third parties under the credit facility.

On April 17, 2020, we amended the Credit Agreement to, among other

things, (i) modify the financial covenant

from being based on total leverage ratio to net leverage ratio, (ii) adjust the

pricing grid to reflect the net leverage

ratio calculation, and (iii) increase the maximum maintenance leverage ratio

through March 31, 2021.

364-Day Credit Agreement

On March 4, 2021 we repaid the outstanding obligations and terminated

the lender commitments under our $700

million 364-day credit agreement which was entered into on April 17, 2020.

This facility was originally scheduled

to mature on April 16, 2021.

Other Short-Term Credit

Lines

As of March 27, 2021 and December 26, 2020, we had various other short-term

bank credit lines available, of

which $67.4 million and $73.4 million, respectively, were outstanding.

At March 27, 2021 and December 26,

2020, borrowings under all of these credit lines had a weighted average

interest rate of 4.52% and 4.14%,

respectively.

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Long-term debt

Long-term debt consisted of the following:

March 27,

December 26,

2021

2020

Private placement facilities

606,355

613,498

Note payable

1,554

Various

collateralized and uncollateralized loans payable with interest,

in varying installments through 2023 at interest rates

ranging from 2.45% to 4.27% at March 27, 2021 and

ranging from 2.62% to 4.27% at December 26, 2020

5,969

4,596

Finance lease obligations (see Note 7)

5,313

5,961

Total

617,637

625,609

Less current maturities

(111,176)

(109,836)

Total long-term debt

506,461

515,773

Private Placement Facilities

Our private placement facilities, with three insurance companies,

have a total facility amount of $1 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 June 23, 2023.

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 to 15 years

(with an average life no longer than 12

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.

On March 5, 2021, we amended the private placement facilities

to, among other things, (a) modify the financial

covenant from being based on a net leverage ratio to a total leverage

ratio and (b) restore the maximum

maintenance total leverage ratio to 3.25x and remove the 1.00% interest

rate increase triggered if the net leverage

ratio were to exceed 3.0x.

The components of our private placement facility borrowings as

of March 27, 2021 are presented in the following

table (in thousands):

Amount of

Borrowing

Date of Borrowing

Outstanding

Rate

Due Date

January 20, 2012

(1)

7,143

3.09

January 20, 2022

January 20, 2012

50,000

3.45

January 20, 2024

December 24, 2012

50,000

3.00

December 24, 2024

June 2, 2014

100,000

3.19

June 2, 2021

June 16, 2017

100,000

3.42

June 16, 2027

September 15, 2017

100,000

3.52

September 15, 2029

January 2, 2018

100,000

3.32

January 2, 2028

September 2, 2020

100,000

2.35

September 2, 2030

Less: Deferred debt issuance costs

(788)

606,355

(1)

Annual repayments of approximately $7.1 million for this borrowing commenced on January 20, 2016.

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U.S. Trade Accounts Receivable Securitization

We have a facility agreement with a bank, as agent, 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 to three years.

Our current facility, which has a purchase limit of $350 million, was scheduled to expire on April 29, 2022.

June 22, 2020, the expiration date for this facility was extended to

June 12, 2023 and was amended to adjust certain

covenant levels for 2020.

As of March 27, 2021 and December 26, 2020, there were no borrowings

outstanding

under this securitization facility.

At March 27, 2021, the interest rate on borrowings under this

facility was based

on the asset-backed commercial paper rate of 0.18% plus 0.95%, for a combined

rate of 1.13%.

At December 26,

2020, the interest rate on borrowings under this facility was based

on the asset-backed commercial paper rate of

0.22% plus 0.95%, for a combined rate of 1.17%.

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 25 to 45 basis points depending upon program utilization.

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 less than one year to

approximately 15 years, some of

which may include options to extend the leases for up to 10 years.

As of March 27, 2021, our right-of-use assets

related to operating leases were $301.8 million and our current and non-current

operating lease liabilities were

$68.6 million and $248.6 million, respectively.

Stock Repurchases

On March 8, 2021, we announced the reinstatement of our share repurchase

program.

From March 3, 2003 through March 27, 2021, we repurchased $3.7 billion,

or 76,888,531 shares, under our

common stock repurchase programs, with $112.6 million available as of March 27, 2021 for future

common stock

share repurchases.

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.

Accounting Standards Codification Topic 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 three months ended March 27, 2021 and the year ended December

26, 2020 are presented in the

following table:

March 27,

December 26,

2021

2020

Balance, beginning of period

327,699

287,258

Decrease in redeemable noncontrolling interests due to

redemptions

(17,241)

Increase in redeemable noncontrolling interests due to business

acquisitions

85,037

28,387

Net income attributable to redeemable noncontrolling interests

7,053

13,363

Dividends declared

(6,237)

(12,631)

Effect of foreign currency translation loss attributable to

redeemable noncontrolling interests

(6,173)

(4,279)

Change in fair value of redeemable securities

45,520

32,842

Balance, end of period

452,899

327,699

Table of Contents

Changes in the estimated redemption amounts of the noncontrolling

interests subject to put options are adjusted at

each reporting period with a corresponding adjustment to Additional paid-in

capital.

Future reductions in the

carrying amounts are subject to a floor amount that is equal to the

fair value of the redeemable noncontrolling

interests at the time they were originally recorded.

The recorded value of the redeemable noncontrolling interests

cannot go below the floor level.

These adjustments do not impact the calculation of earnings per

share.

Additionally, some prior owners of such acquired subsidiaries are eligible to receive additional purchase price cash

consideration if certain financial targets are met.

Any adjustments to these accrual amounts are recorded in our

consolidated statements

of income.

For the three months ended March 27, 2021 and March 28, 2020,

there were no

material adjustments recorded in our consolidated statements

of income relating to changes in estimated contingent

purchase price liabilities.

Noncontrolling Interests

Noncontrolling interests represent our less than 50% ownership interest

in an acquired subsidiary. Our net income

is reduced by the portion of the subsidiaries net income that is attributable

to noncontrolling interests.

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 26, 2020,

except accounting policies adopted

as of December 27, 2020, which are discussed in

Note 2-Critical Accounting Policies, Accounting Pronouncements

Adopted and Recently Issued Accounting Standards

of the Notes to the Consolidated Financial Statements included

under Item 1.

Our financial results for the three months ended March 27, 2021 were

affected by certain estimates we made due to

the adverse business environment brought on by the COVID-19 pandemic.

For example, in the quarter ended

March 28, 2020 we recorded incremental bad debt reserves of approximately

$10.0 million for our global dental

business.

During the quarter ended March 28, 2020, we also recognized a net credit

of approximately $17.5 million

in stock-based compensation

expense due to our estimate that no performance shares granted in 2018,

2019 or 2020

would ultimately vest.

In contrast, for the three months ended March 27, 2021, we

recorded $12.8 million in stock-

based compensation expense.

Additionally in the quarter ended March 28, 2020, we recorded total impairment

charges of approximately $6.1 million related to prepaid royalty expenses and a customer

relationship intangible

asset.

We had no material impairment charges in the quarter ended March 27, 2021.

Although our selling, general

and administrative expenses for the three months ended March 27, 2021

represent management's best estimates and

assumptions that affect the reported amounts, our judgment could change in the future due

to the significant

uncertainty surrounding the macroeconomic effect of the COVID-19 pandemic.

Accounting Standards Update

For a discussion of accounting standards updates that have been adopted

or will be adopted, see

Note 2-Critical

Accounting Policies, Accounting Pronouncements Adopted and Recently Issued Accounting Standards

of the Notes

to the 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 26, 2020.

Table of Contents

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 March

27, 2021, 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

The combination of acquisitions and continued acquisition integrations undertaken

during the quarter and carried

over from prior quarters, as well as changes to the operating methods of some

of our internal controls over financial

reporting due to the COVID-19 pandemic, when considered in the aggregate,

represents a material change in our

internal control over financial reporting.

During the quarter ended March 27, 2021, we completed the acquisition of

dental and medical businesses in North

America and Europe with approximate aggregate annual revenues of approximately

$354 million.

In addition,

post-acquisition integration related activities continued for our North American

medical and global dental

businesses acquired during prior quarters, representing aggregate annual

revenues of approximately $299

million.

These acquisitions, the majority of which utilize separate

information and financial accounting systems,

have been included in our consolidated financial statements since their respective

dates of acquisition.

All acquisitions and continued acquisition integrations involve necessary

and appropriate change-management

controls that are considered in our quarterly assessment of the design and

operating effectiveness of our internal

control over financial reporting.

In addition, as a result of a combination of continued governmental imposed

and Company directed closures of

some of our facilities due to the COVID-19 pandemic, we have had

to maintain a number of changes to the

operating methods of some of our internal controls. For example, moving

from manual sign-offs and in-person

meetings to electronic sign-offs and electronic communications such as email and

telephonic or video conference

due to out-of-office working arrangements. However, the design of our internal control framework and objectives

over financial reporting remains unchanged and we do not believe that these

changes have materially affected, or

are reasonably likely to materially affect, the effectiveness of our internal control 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.

Table of Contents

PART

II.

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

For a discussion of Legal Proceedings, see

Note 17–Legal Proceedings

of the Notes to the Consolidated Financial

Statements included under Item 1.

ITEM 1A. RISK FACTORS

There have been no material changes from the risk factors disclosed in

Part 1, Item 1A, of our Annual Report on

Form 10-K for the year ended December 26, 2020.

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 $3.7 billion, authorized by our Board of Directors,

to the repurchase program provide for a total

of $3.8 billion of shares of our common stock to be repurchased under this

program.

On March 8, 2021, we announced the reinstatement of our share repurchase

program.

As of March 27, 2021, we had repurchased approximately $3.7 billion of common

stock (76,888,531 shares) under

these initiatives, with $112.6 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 March 27, 2021.

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)

12/27/20 through 1/30/2021

3,055,600

1/31/21 through 2/27/2021

3,253,214

2/28/21 through 3/27/2021

1,325,242

66.90

1,325,242

1,655,664

1,325,242

(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.

Table of Contents

ITEM 6.

EXHIBITS

4.1

Second Amendment to Second Amended and Restated Multicurrency Private

Shelf Agreement, dated as of March 5, 2021, by and among us, PGIM, Inc. and

each Prudential affiliate which becomes party thereto

(Incorporated by

reference to Exhibit 4.1 to our Current Report on Form 8-K filed on March 8,

2021.)

4.2

Second Amendment to Second Amended and Restated Master Note Facility,

dated as of March 5, 2021, by and among us, NYL Investors LLC and each

New York Life affiliate which becomes party thereto

(Incorporated by

reference to Exhibit 4.2 to our Current Report on Form 8-K filed on March 8,

2021.)

4.3

Second Amendment to Second Amended and Restated Multicurrency Master

Note Purchase Agreement, dated as of March 5, 2021, by and among us,

Metropolitan Life Insurance Company, MetLife Investment Management, LLC

and each MetLife affiliate which becomes party thereto

(Incorporated by

reference to Exhibit 4.3 to our Current Report on Form 8-K filed on March 8,

2021.)

10.1

Form of 2021 Stock Option Agreement pursuant to the Henry Schein, Inc. 2020

Stock Incentive Plan (as amended and restated effective as of May 21, 2020)

(Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K

filed on March 8,

2021.)**

10.2

Form of 2021 Special Pandemic Recognition Award Restricted Stock Unit

Agreement for time-based restricted stock unit awards pursuant to the Henry

Schein, Inc. 2013 Stock Incentive Plan (as amended and restated effective as of

May 14, 2013).**+

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 March 27, 2021, formatted in Inline XBRL (included within

Exhibit 101 attachments).+

Filed or furnished herewith.

** Indicates management contract or compensatory plan or agreement.

Table of Contents

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/ Steven Paladino

Steven Paladino

Executive Vice President and

Chief Financial Officer

(Authorized Signatory and Principal Financial

and Accounting Officer)

Dated: May 4, 2021

exhibit102

Form 3

3/21

Exhibit

10.2

FORM

2021

SPECIAL

PANDEMIC

RECOGNITION

AWARD

RESTRICTED

STOCK

UNIT

AGREEMENT

PURSUANT

THE

HENRY

SCHEIN,

INC.

2020

STOCK

INCENTIVE

PLAN

(AS

AMENDED

AND

RESTATED

EFFECTIVE

MAY

21,

2020)

THIS AGREEMENT (the “Agreement”) is made as of [Grant

Date] (the “Grant Date”), by and between Henry Schein,

Inc. (the “Company”) and

[Participant Name] (the “Participant”). Additional country-specific

terms and conditions that govern the grant made hereunder

are attached hereto on Annex 1,

which terms and conditions are incorporated by reference

herein and made a part of the Agreement.

WHEREAS

, the Company has adopted the Henry Schein, Inc.

2020 Stock Incentive Plan (as amended and restated effective as

of May 21, 2020),

as amended from time to time (the “Plan”) (a copy

of which is on file with the Company’s Corporate Human Resources Department and is available

for

Participant to review upon request at reasonable intervals

as determined by the Company), which is administered

by a Committee appointed by the Company’s

Board of Directors (the “Committee”);

WHEREAS,

pursuant to Section 9(d) of the Plan, the Committee may

grant Restricted Stock Units to Key Employees under

the Plan;

WHEREAS

, the shares of the Company’s common stock are traded on the Nasdaq Stock

Market under the symbol “HSIC”; and

WHEREAS

, the Participant is a Key Employee of the Company

or a Subsidiary.

NOW,

THEREFORE

, for and in consideration of the mutual promises herein

contained, and for other good and valuable consideration,

the receipt

and sufficiency of which are hereby acknowledged, the parties agree

as follows:

Grant

Restricted

Stock

Units

Subject to the restrictions and other conditions set forth

herein, in the Plan and Annex 1, the Committee has authorized

this grant of [Shares

Granted] Restricted Stock Units to the Participant on the Grant

Date.

Vesting

and

Payment

(a)

Except as set forth in Sections 2(c) and 2(d), fifty percent (50%)

of the Restricted Stock Units shall vest on the first

anniversary of the Grant Date, and fifty percent (50%)

of the Restricted Stock Units shall vest on the second anniversary

of the Grant Date (each, a “Scheduled

Payment Date”); in each case, provided that the Participant

has not had a Termination of Employment at any time prior to

the applicable Scheduled Payment

Date.

(b)

Except as set forth in Section 2(c), there shall be no

proportionate or partial vesting in the periods prior to the vesting

date

and all vesting shall occur only on the vesting date; provided

that no Termination of Employment has occurred prior to such date.

(c)

The Restricted Stock Units shall vest on a pro-rated basis upon

the Participant’s Retirement, unless otherwise provided

expressly in a written agreement between the Participant and

the Company (or a Subsidiary).

For purposes of this Section 2(c), the Participant shall

qualify for

“Retirement” if (i) the Participant’s age (minimum 55) plus years of service with

the Company and its Subsidiaries equal or exceed 70, (ii)

the Participant has

provided written notice of the Participant’s retirement to the Company at least

30 days prior to the date of such retirement, and (iii) no Termination of

Employment has occurred prior to the date of such retirement.

For purposes of determining the age and service requirement

under Section 2(c)(i), the

Participant’s age and years of service shall be determined by the Participant’s most recent birthday and employment

anniversary, respectively.

For purposes of

this Section 2(c), vesting on a pro-rated basis shall be calculated

as the difference between (x) the product of (A) the number

of Restricted Stock Units set forth

under Section 1 and (B) a fraction, the numerator of which

is the number of days from the Grant Date to the

date of the Participant’s Retirement and the

denominator of which is the number of days from the Grant

Date to the second anniversary of the Grant Date, minus

(y) the number of Restricted Stock Units

that have previously

vested as of the date of the Participant’s Retirement (if any).

(d)

The Restricted Stock Units shall become fully vested

on the earliest of (i) a Termination of Employment by the Company (or

a Subsidiary) without Cause occurring within the 2-year

period following a Change of Control, (ii) the Participant’s Disability and (iii) the Participant’s death;

provided that no Termination of Employment has occurred prior to any such event, unless otherwise

provided expressly in a written agreement between the

Participant and the Company (or a Subsidiary).

For purposes of this Agreement, “Cause” shall have

the meaning set forth in Section 7(b) of the Plan, but shall

also include any breach by Participant of any agreement

with the Company or any of its Subsidiaries.

For purposes of this Agreement, a “Change of Control”

shall mean a Change of Control as defined in the Plan.

For purposes of this Agreement, “Disability” shall mean

the approval of, and receiving benefits for,

long term disability by the disability insurance carrier under

the Company’s (or if applicable, Subsidiary’s) long term disability plan.

(e)

The Participant shall be entitled to receive one share of Common

Stock with respect to one vested Restricted Stock Unit.

The

Participant shall be paid one share of Common Stock with respect

to each vested Restricted Stock Unit within thirty (30)

days of the Scheduled Payment Date;

except that, in the event of (i) Retirement, (ii) a Termination of Employment by the Company

(or a Subsidiary) without Cause occurring within the

2-year

period following a Change of Control, (iii) death or (iv)

Disability, the Participant shall be paid within thirty (30) days of such Retirement, Termination of

Employment, death or Disability, subject to Section 18 set forth in Annex 1 to the extent

applicable, including with respect to a Participant who

qualifies for

Retirement at any time following the Grant Date.

Forfeiture

and

Recoupment.

(a)

Subject to Section 2 above, all unvested Restricted Stock Units will

be forfeited on the Participant’s Termination of

Employment.

(b)

Notwithstanding anything herein or in the Plan to the

contrary, the grant of Restricted Stock Units (including any dividends

credited thereupon) provided for under this Agreement is conditioned

on the Participant not engaging in any Competitive Activity

(as defined below) from the

date that is twelve (12) months prior to the applicable settlement

date set forth in Section 2(a) or Section 2(e) above, as

applicable (such applicable settlement

date, the “Payment Date”) through the first anniversary

of such Payment Date. If, on or after the date that is

twelve (12) months prior to the Payment Date but

prior to the Payment Date, the Participant engages in

a Competitive Activity, the Committee shall have the right, in its sole discretion, to cause

the immediate

Form 3

3/21

forfeiture of all of the Restricted Stock Units (including any

dividends credited thereupon) (whether or not vested) shall

be immediately forfeited in their

entirety, in which case the Participant shall have no further rights or interests with respect

to such Restricted Stock Units (including any such

dividends).

In the

event that the Participant engages in a Competitive Activity

on or after the Payment Date but on or prior to the first anniversary

of such Payment Date, the

Company shall have the right to recoup from the Participant,

and the Participant shall repay to the Company, within thirty (30) days following demand

by the

Company, a payment equal to the Fair Market Value of the aggregate shares of Common Stock payable in respect of such Restricted

Stock Units (including

any dividends credited thereupon) on the Payment Date (including

any dividends or other distributions thereafter paid thereon);

provided, that, the Company

may require the Participant to satisfy such payment obligations

hereunder either by forfeiting and returning to the Company such

shares of Common Stock,

Restricted Stock Units, dividends or any other Shares,

or making a cash payment or any combination of these methods,

as determined by the Company in its

sole discretion.

The Company and its Subsidiaries, in their sole

discretion, shall have the right to set off (or cause to be set off) any amounts

otherwise due to

the Participant from the Company (or the applicable Subsidiary)

in satisfaction of such repayment obligation, provided

that any such amounts are exempt from,

or set off in a manner intended to comply with, the requirements

of any applicable law (including, without limitation, Section

409A of the Code).

(c)

The Participant hereby acknowledges and agrees that the forfeiture

and recoupment conditions set forth in this Section

3, in

view of the nature of the business in which the Company

and its affiliates are engaged, are reasonable in scope and necessary

in order to protect the legitimate

business interests of the Company and its affiliates, and that any violation

thereof would result in irreparable harm to the Company and

its affiliates. The

Participant also acknowledges and agrees that (i) it is a material

inducement and condition to the Company’s issuance of the Restricted Stock Units

(including

any dividends credited thereupon) that such Participant agrees

to be bound by such forfeiture and recoupment conditions and, further, that the amounts

required

to be forfeited or repaid to the Company pursuant to forfeiture

and recoupment conditions set forth above are reasonable,

and (ii) nothing in this Agreement or

the Plan is intended to preclude the Company (or any

affiliate thereof) from seeking any remedies available at law, in equity, under contract to the Company or

otherwise, and the Company (or any affiliate thereof) shall have

the right to seek any such remedy with respect

to the Restricted Stock Units, any dividends

credited thereupon, or otherwise.

(d)

For purposes of this Agreement, the Participant will be deemed

to engage in a “Competitive Activity” if, either directly

indirectly, without the express prior written consent of the Company, the Participant (i) takes other employment

with, renders services to, or otherwise engages

in any business activities with, companies or other entities

that are competitors of the Company or any of its affiliates, (ii) solicits

or induces, or in any manner

attempts to solicit or induce, any person employed by or otherwise

providing services to the Company or any of its

affiliates, to terminate such person’s

employment or service relationship, as the case may be, with

the Company or any of its affiliates, (iii) diverts, or

attempts to divert, any person or entity from

doing business with the Company or any of its affiliates or induces,

or attempts to induce, any such person or entity from

ceasing to be a customer or other

business partner of the Company or any of its affiliates, (iv) violates

any agreement between the Participant and the Company or any

of its affiliates relating to

the non-disclosure of proprietary or confidential information

of the Company or any of its affiliates, and/or (v) conducts himself

or herself in a manner

adversely affecting the Company or any of its affiliates, including, without limitation,

making false, misleading or negative statements, either

orally or in

writing, about the Company or any of its affiliates. The determination

as to whether the Participant has engaged in a Competitive Activity

shall be made by the

Committee in its sole discretion.

(e)

This Section 3(e) applies solely with respect to Participants

who are members of the Company’s Executive Management

Committee.

Notwithstanding anything herein to the contrary, Participant agrees and acknowledges

that the Restricted Stock Units awarded under this

Agreement and the underlying shares shall be subject to the terms

and conditions of the Company’s Incentive Compensation Recoupment Policy

approved by

the Board.

Notwithstanding the foregoing, Participant agrees that

incentive compensation, as defined under of the Dodd-Frank Wall Street Reform and

Consumer Protection Act of 2010 and such regulations as

are promulgated thereunder from time to time (“Dodd-Frank”),

payable to Participant under this

Agreement shall be subject to any clawback policy adopted

or implemented by the Company in respect of Dodd-Frank,

or in respect of any other applicable

law or regulation.

Dividend

Equivalents.

Cash dividends on Shares shall be credited to a

dividend book entry account on behalf of the Participant with respect

each Restricted Stock Unit granted to a Participant, provided

that such cash dividends shall not be deemed to be reinvested

in Shares and will be held

uninvested and without interest and paid in cash if and when the

Restricted Stock Unit vests.

Stock dividends on Shares shall be credited to a dividend

book

entry account on behalf of the Participant with respect to each

Restricted Stock Unit granted to a Participant, provided

that the Participant shall not be entitled

to such dividend unless and until the Restricted Stock Unit vests.

Rights

Stockholder

The Participant shall have no rights as a stockholder with

respect to any shares covered by any Restricted Stock

Unit

unless and until the Participant has become the holder

of record of the shares, and no adjustments shall be made

for dividends in cash or other property,

distributions or other rights in respect of any such shares,

except as otherwise specifically provided for in

this Agreement or the Plan.

Withholding

Participant shall pay, or make arrangements to pay, in a manner satisfactory to the Company, an amount equal to the amount of all

applicable foreign, federal, state, provincial and local taxes that

the Company is required to withhold at any time.

In the absence of such arrangements, the

Company or one of its Subsidiaries shall have the right to withhold

such taxes from the Participant’s normal pay or other amounts payable to the Participant.

In addition, any statutorily required withholding obligation may

be satisfied, in whole or in part, at the Participant’s election, in the form

and manner

prescribed by the Committee, by delivery of shares of Common

Stock (including shares issuable under this Agreement).

Provisions

Plan

Control

This Agreement is subject to all the terms, conditions

and provisions of the Plan, including, without limitation,

the

amendment provisions thereof, and to such rules, regulations

and interpretations relating to the Plan as may be

adopted by the Committee and as may be in

effect from time to time.

The Plan is incorporated herein by reference.

Capitalized terms in this Agreement that are not otherwise

defined shall have the same

meaning as set forth in the Plan.

Subject to Section 3, if and to the extent that this Agreement

conflicts or is inconsistent with the terms, conditions

and

provisions of the Plan, the Plan shall control, and this Agreement

shall be deemed to be modified accordingly.

This Agreement contains the entire

understanding of the parties with respect to the subject matter

hereof and supersedes any prior agreements between the

Company and the Participant with

respect to the subject matter hereof.

Amendment.

To the extent applicable, the Board or the Committee may at any time and from time

to time amend, in whole or in part, any or all of

the provisions of this Agreement to comply with any applicable

laws and stock exchange rules and regulations (including,

without limitation, Section 409A of

the Code and the regulations thereunder) and may also amend,

suspend or terminate this Agreement subject to the

terms of the Plan.

Except as otherwise

provided in the Plan, no modification or waiver of any of

the provisions of this Agreement shall be effective unless in writing

and signed by the party against

whom it is sought to be enforced.

Notices.

Any notice or communication given hereunder shall be in writing

and shall be deemed to have been duly given when delivered in

person,

or by regular United States mail or similar foreign mail

or post, first class and prepaid, to the appropriate party

at the address set forth below (or such other

address as the party shall from time to time specify):

If to the Company, to:

Form 3

3/21

Henry Schein, Inc.

135 Duryea Road

Melville, New York

11747

Attention:

General Counsel

If to the Participant, to the address on file with the Company.

10.

Obligation

Continue

Employment

Services

This Agreement is not an agreement of employment,

consultancy or directorship.

This

Agreement does not guarantee that the Company or its Subsidiaries

will employ or retain, or continue to employ or retain,

the Participant during the entire, or

any portion of the, term of this Agreement, including

but not limited to any period during which any Restricted Stock

Unit is outstanding, nor does it modify in

any respect the Company or its Subsidiaries’ right to terminate

or modify the Participant’s employment, service relationship or compensation.

11.

Legend

The Company may at any time place legends referencing any

applicable federal, state or foreign securities law restrictions on all

certificates representing Shares issued pursuant to this Agreement.

The Participant shall, at the request of the Company, promptly present to the Company any

and all certificates representing Shares acquired pursuant

to this Agreement in the possession of the Participant

in order to carry out the provisions of this

Section.

12.

Securities

Representations

The grant of the Restricted Stock Units and issuance of Shares

upon vesting of the Restricted Stock Units shall be

subject to, and in compliance with, all applicable requirements

of federal, state or foreign securities law.

No Shares may be

issued hereunder if the issuance of

such Shares would constitute a violation of any applicable federal,

state or foreign securities laws or other law or regulations

or the requirements of any stock

exchange or market system upon which the Shares may

then be listed.

As a condition to the settlement of the Restricted Stock

Units, the Company may

require the Participant to satisfy any qualifications that may

be necessary or appropriate, to evidence compliance with any

applicable law or regulation.

The Shares are being issued to the Participant and this Agreement

is being made by the Company in reliance upon the following

express

representations and warranties of the Participant.

The Participant acknowledges, represents and warrants

that:

(a)

He or she has been advised that he or she may be an “affiliate” within

the meaning of Rule 144 under the Securities Act

1933, as amended (the “Act”) and in this connection the Company

is relying in part on his or her representations set forth in

this section.

(b)

If he or she is deemed an affiliate within the meaning of Rule

144 of the Act, the Shares must be held indefinitely

unless an

exemption from any applicable resale restrictions is available

or the Company files an additional registration statement

(or a “re-offer prospectus”) with regard

to such Shares and the Company is under no obligation to register

the Shares (or to file a “re-offer prospectus”).

(c)

If he or she is deemed an affiliate within the meaning of Rule

144 of the Act, he or she understands that the exemption from

registration under Rule 144 will not be available unless (i)

a public trading market then exists for the Common Stock

of the Company, (ii) adequate information

concerning the Company is then available to the public, and

(iii) other terms and conditions of Rule 144 or any exemption

therefrom are complied with; and

that any sale of the Shares may be made only in limited

amounts in accordance with such terms and conditions.

13.

Transfer

Personal

Data.

The Participant authorizes, agrees and unambiguously

consents to the transmission and processing by the Company

(or any Subsidiary) of any personal data information related

to Restricted Stock Units awarded under this Agreement,

for legitimate business purposes

(including, without limitation, the administration of the Plan)

out of the Participant’s home country and including to countries with less data protection

laws

than the data protection laws provided by the Participant’s home country.

This authorization/consent is freely given by the Participant.

14.

Delivery

Delay.

The delivery of any certificate representing the Common

Stock may be postponed by the Company for such period as

may be

required for it to comply with any applicable foreign,

federal, state or provincial securities law, or any national securities

exchange listing requirements and the

Company is not obligated to issue or deliver any securities

if, in the opinion of counsel for the Company, the issuance of such Shares shall constitute

violation by the Participant or the Company of any provisions

of any applicable foreign, federal, state or provincial law

or of any regulations of any

governmental authority or any national securities exchange.

The Participant acknowledges and understands that

the Company intends to meet its delivery

obligations in Common Stock with respect to Restricted Stock

Units, except as may be prohibited by law or described

in this Agreement, the Plan or

supplementary materials.

15.

Miscellaneous.

This Agreement shall inure to the benefit of and be binding

upon the parties hereto and their respective heirs, legal representatives,

successors and

assigns.

(a)

This Agreement shall be governed and construed in accordance

with the laws of New York (regardless of the law that might

otherwise govern under applicable New York principles of conflict of laws).

(b)

This Agreement may be executed in one or more counterparts,

all of which taken together shall constitute one contract.

(c)

The failure of any party hereto at any time to require performance

by another party of any provision of this Agreement shall

not affect the right of such party to require performance of that

provision, and any waiver by any party of any breach of

any provision of this Agreement shall

not be construed as a waiver of any continuing or succeeding

breach of such provision, a waiver of the provision itself,

or a waiver of any right under this

Agreement.

(d)

This Agreement and the Plan do not create a joint venture

or partnership between the Company and any Subsidiary.

(e)

Notwithstanding any provisions in this Agreement, this

grant of Restricted Stock Units shall be subject to any additional

country-specific terms and conditions set forth in Annex 1 to

the Agreement for the Participant’s country to the extent applicable. Moreover, if Participant

relocates to one of the countries included in Annex 1, the additional

country-specific terms and conditions for such country, if any, will apply to Participant to

the extent that the Company determines that the application

of such terms and conditions is necessary or advisable for legal

or administrative reasons.

16.

ACQUIRED

RIGHTS

THE PARTICIPANT

ACKNOWLEDGES AND AGREES THAT: (A) THE COMPANY MAY

TERMINATE OR

AMEND THE PLAN AT ANY TIME; (B) THE AWARD

OF RESTRICTED STOCK UNITS MADE UNDER THIS

AGREEMENT IS COMPLETELY

INDEPENDENT OF ANY OTHER AWARD OR GRANT AND IS MADE AT THE SOLE DISCRETION OF THE COMPANY;

AND (C) NO PAST

GRANTS OR AWARDS

(INCLUDING, WITHOUT LIMITATION, THE RESTRICTED STOCK UNITS AWARDED

HEREUNDER) GIVE THE

PARTICIPANT

ANY RIGHT TO ANY GRANTS OR AWARDS IN THE FUTURE WHATSOEVER.

Form 3

3/21

WITNESS

WHEREOF

, the parties hereto have executed this Agreement as of

the day and year first set forth above.

HENRY

SCHEIN,

INC.

___________________________

Michael S. Ettinger

Senior Vice President, Corporate & Legal Affairs and Chief of Staff

PARTICIPANT

[Electronic Signature]

[Participant Name]

[Acceptance Date]

ANNEX

Additional

Country

Specific

Terms

and

Conditions

for

the

Restricted

Stock

Unit

Agreement

This Annex 1 includes additional terms and conditions that govern

the Restricted Stock Units granted to the Participant

under the Plan if the

Participant works or resides in, or is otherwise subject to

the taxes imposed by, one of the countries listed below. This Annex 1 also includes other information

that may impact the Participant’s participation in the Plan. Certain capitalized terms

used but not defined in this Annex 1 have the meanings set forth

in the

Plan and/or the Agreement. This Annex 1 forms part

of the Agreement and should be read in conjunction with

the Agreement and the Plan.

The Participant agrees to sign any additional agreements

or undertakings that may be necessary or advisable in order

to comply with applicable law

or facilitate the administration of the Plan. Furthermore,

the Participant acknowledges that the applicable law of the

country in which the Participant is subject

to taxes or is residing or working at the time of grant or

vesting of the Restricted Stock Units or the sale

of shares of Common Stock received pursuant to the

Restricted Stock Units (including any rules or regulations

governing securities, foreign exchange, tax, labor, employment, or other matters)

may restrict or

prevent the issuance of shares of Common Stock or subject the Participant

to additional terms and conditions or procedural or regulatory

requirements that the

Participant is or will be solely responsible for and must

fulfill. Such requirements may be outlined in but are

not limited to items listed below in this Annex 1.

If the Participant is a citizen or resident of a country other

than the country in which he or she is subject to

taxes or is residing and/or working, or if

the Participant transfers employment or residency after the Restricted

Stock Units are granted to him or her, the information contained in this Annex

1 may not

be applicable to the Participant. Tax laws are often complex and outcomes can vary

depending on individual circumstances. Accordingly, the Participant is

advised to seek appropriate professional advice as to

how tax and other relevant laws in the applicable country may

apply to his or her situation.

UNITED STATES

The second to last sentence of Section 2(d) of Agreement

is hereby deleted in its entirety and replaced with the following:

“For the purposes of this Agreement, a “Change of Control”

shall mean the occurrence of a Section 409A Change

of Control (as defined in Section

17).”

As of the Grant Date, if the Participant either (i) qualifies

for Retirement (as defined in Section 2(c) of the Agreement)

or (ii) may become eligible to qualify

for Retirement prior to the Scheduled Payment Date, Section

4 of the Agreement is hereby deleted in its entirety and replaced

with the following:

“Dividend Equivalents.

Cash dividends on Shares shall be credited to a

dividend book entry account on behalf of the Participant with

respect to

each Restricted Stock Unit granted to the Participant, provided

that such cash dividends shall not be deemed to be reinvested

in Shares and will be held

uninvested and without interest.

The Participant’s right to receive any such cash dividends shall vest if

and when the related Restricted Stock Unit vests, and

such cash dividends shall be paid in cash to the Participant if and

when the related Restricted Stock Unit is paid to the

Participant.

Stock dividends on Shares

shall be credited to a dividend book entry account on behalf

of the Participant with respect to each Restricted Stock Unit

granted to the Participant.

The

Participant’s right to receive any such stock dividends shall vest if and when the

related Restricted Stock Unit vests, and such stock dividends

shall be paid in

stock to the Participant if and when the related Restricted Stock

Unit is paid to the Participant.”

The following shall be added to the Agreement as a new Section

17:

“Change of Control Defined.

For purposes of this Agreement, a “Section 409A

Change of Control” shall be deemed to have occurred upon:

(i) an acquisition by any Person of beneficial ownership (within

the meaning of Rule 13d-3 promulgated under the Act) of (A)

50% or more of the

then outstanding Shares or (B) 33% or more of the total combined

voting power of the then outstanding voting securities of HSI

entitled to vote

generally in the election of directors (the “Outstanding HSI

Voting

Securities”); excluding, however, the following: (w) any acquisition directly

from the Company, other than an acquisition by virtue of the exercise of a conversion privilege

unless the security being so converted was itself

acquired directly from the Company, (x) any acquisition by the Company, (y) any acquisition by an employee benefit

plan (or related trust)

sponsored or maintained by the Company or (z) any acquisition

by any corporation pursuant to a reorganization, merger, consolidation or similar

corporate transaction (in each case, a “Corporate Transaction”), if, pursuant

to such Corporate Transaction, the conditions described in clauses (A),

(B) and (C) of paragraph (iii) below are satisfied; or

(ii) within any 12-month period beginning on or after the date

of the Agreement, the individuals who constitute the Board immediately

before the

beginning of such period (the Board as of the date hereof shall

be hereinafter referred to as the “Incumbent Board”)

cease for any reason to

Form 3

3/21

constitute at least a majority of the Board; provided that for

purposes of this Subsection any individual who becomes a

member of the Board

subsequent to the date hereof whose election, or nomination

for election by HSI’s stockholders, was approved by a vote of at least a majority of

those individuals who are members of the Board and who are

also members of the Incumbent Board (or deemed to

be such pursuant to this proviso)

shall be considered as though such individual were a member

of the Incumbent Board; but, provided further, that any such individual whose

initial

assumption of office occurs as a result of either an actual or threatened

election contest (as such terms are used in Rule 14a-11 of Regulation 14A

promulgated under the Act) or other actual or threatened solicitation

of proxies or consents by or on behalf of a Person other than

the Board shall

not be so considered as a member of the Incumbent Board;

(iii) the consummation of a Corporate Transaction or, if consummation of such Corporate Transaction is subject

to the consent of any government

or governmental agency, the obtaining of such consent (either explicitly or implicitly by consummation);

excluding, however, such a Corporate

Transaction pursuant to which (A) all or substantially all of the individuals

and entities who are the beneficial owners, respectively, of the

outstanding Shares and Outstanding HSI Voting Securities immediately prior to such Corporate Transaction will beneficially

own, directly or

indirectly, more than 60% of, respectively, the outstanding shares of common stock of the corporation resulting from

such Corporate Transaction

and the combined voting power of the outstanding voting securities

of such corporation entitled to vote generally in the election of directors,

substantially the same proportions as their ownership, immediately

prior to such Corporate Transaction, of the outstanding Shares and Outstanding

HSI Voting Securities, as the case may be, (B) no Person (other than the Company, any employee benefit plan (or related trust) of the Company or

the corporation resulting from such Corporate Transaction and any Person

beneficially owning, immediately prior to such Corporate Transaction,

directly or indirectly, 33% or more of the outstanding Shares or Outstanding HSI

Voting

Securities, as the case may be, will beneficially own,

directly or indirectly, 33% or more of, respectively, the outstanding shares of common stock of the corporation resulting

from such Corporate

Transaction or the combined voting power of the then outstanding securities

of such corporation entitled to vote generally in the election

directors and (C) individuals who were members of the Incumbent

Board will constitute at least a majority of the members

of the board of directors

of the corporation resulting from such Corporate Transaction; or

(iv) the sale or other disposition of all or substantially all

of the assets of the Company; excluding, however, such sale or other

disposition to a

corporation with respect to which, following such sale or

other disposition, (x) more than 60% of, respectively, the then outstanding shares of

common stock of such corporation and the combined

voting power of the then outstanding voting securities

of such corporation entitled to vote

generally in the election of directors will be then beneficially

owned, directly or indirectly, by all or substantially all of the individuals and entities

who were the beneficial owners, respectively, of the outstanding

Common Stock and Outstanding HSI Voting Securities immediately prior to such

sale or other disposition in substantially the same proportion

as their ownership, immediately prior to such sale or

other disposition, of the

outstanding Common Stock and Outstanding HSI Voting Securities, as the case may be, (y) no Person (other than

the Company and any employee

benefit plan (or related trust) of the Company or such corporation

and any Person beneficially owning, immediately prior to such

sale or other

disposition, directly or indirectly, 33% or more of the outstanding Common Stock or Outstanding

HSI Voting Securities, as the case may be) will

beneficially own, directly or indirectly, 33% or more of, respectively, the then outstanding shares of common stock

of such corporation and the

combined voting power of the then outstanding voting securities

of such corporation entitled to vote generally in the election

of directors and (z)

individuals who were members of the Incumbent Board will

constitute at least a majority of the members of the board

of directors of such

corporation.

(v) No event set forth herein shall constitute a “Section

409A Change of Control” unless such event also qualifies

as a “change in control event” for

purposes of Treasury Regulation § 1.409A-3(i)(5).

Accordingly, the definition of “Section 409A Change of Control” set forth herein shall

limited, construed and interpreted in accordance with Section

409A and the regulations issued thereunder.”

The following shall be added to the Agreement as a new Section

18:

“Section 409A.

This Agreement is subject to Section 16(i) of the

Plan, and any provisions in this Agreement providing

for the payment of

“nonqualified deferred compensation” (as defined in Section

409A of the Code and the Treasury regulations thereunder) to the Participant

are intended to

comply with, or be exempt from, the requirements of Section

409A of the Code, and this Agreement shall be interpreted in

accordance therewith.

Neither

party individually or in combination may accelerate or defer the

timing of the payment of any such nonqualified deferred

compensation, except in compliance

with Section 409A of the Code and this Agreement, and no amount

shall be paid prior to the earliest date on which

it is permitted to be paid under Section

409A of the Code and this Agreement.

In no event whatsoever shall the Company be liable

for any additional tax, interest or penalty that may be imposed

the Participant as a result of Section 409A of the Code or

any damages for failing to comply with Section 409A

of the Code.

A Termination of Employment or

Retirement shall not be deemed to have occurred for

purposes of any provision of this Agreement providing for

the payment of any amounts or benefits subject

to Section 409A of the Code upon or following a Termination of Employment or Retirement,

as applicable, unless such Termination of Employment or

Retirement, as applicable, is also a “separation from service”

within the meaning of Section 409A of the Code and, for

purposes of any such provision of this

Agreement, references to a “termination,” “termination of employment”

or like terms shall mean “separation from service.” If

the Participant is a “specified

employee,” upon his or her “separation from service” (as defined

under Section 409A of the Code under such definitions

and procedures as established by the

Company in accordance with Section 409A of the Code), any

portion of a payment, settlement, or other distribution made

upon such a “separation from

service” that would cause the acceleration of, or an addition

to, any taxes pursuant to Section 409A of the Code will

not commence or be paid until a date that

is six (6) months and one (1) day following the applicable

“separation from service.” Any payments, settlements,

or other distributions that are delayed

pursuant to this Section 18 following the applicable “separation

from service” shall be accumulated and paid to the Participant

in a lump sum without interest

on the first business day immediately following the required

delay period.

Any amounts payable hereunder that satisfy the short-term deferral

exception in

Treas. Reg. §1.409A-1(b)(4) shall not be subject to Section 409A of the Code.

Whenever a payment under this Agreement may be

paid within a specified

period, the actual date of payment within the specified period shall

be within the Company’s sole discretion.”

exhibit311

EXHIBIT 31.1

CERTIFICATION

PURSUANT TO RULE 13a-14(a) OR 15d-14(a)

OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION

302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Stanley M. Bergman,

certify that:

I have reviewed this quarterly report on Form 10-Q of Henry Schein,

Inc.;

Based on my knowledge, this report does not contain any untrue statement of

a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances

under which such

statements were made, not misleading with respect to the period covered by

this report;

Based on my knowledge, the financial statements, and other financial information

included in this report,

fairly present in all material respects the financial condition, results of operations

and cash flows of the

registrant as of, and for, the periods presented

in this report;

The registrant's other certifying officer and I are responsible

for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a-15(e)

and 15d-15(e)) and internal control

over financial reporting (as defined in Exchange Act Rules 13a-15(f)

and 15d-15(f)) for the registrant and

have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls

and procedures

to be designed under our supervision, to ensure that material information

relating to the registrant,

including its consolidated subsidiaries, is made known to us by others within

those entities,

particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such

internal control over financial

reporting to be designed under our supervision, to provide reasonable

assurance regarding the

reliability of financial reporting and the preparation of financial statements for external

purposes in

accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls

and procedures and presented in this

report our conclusions about the effectiveness of the disclosure

controls and procedures, as of the end

of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over

financial reporting that

occurred during the registrant's most recent fiscal quarter (the registrant's fourth

fiscal quarter in the

case of an annual report) that has materially affected, or is reasonably

likely to materially affect, the

registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based

on our most recent evaluation of internal

control over financial reporting, to the registrant's auditors and the audit committee

of the registrant's board of

directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of

internal control over

financial reporting which are reasonably likely to adversely affect

the registrant's ability to record,

process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or

other employees who have a

significant role in the registrant's internal control over financial reporting.

Date:

May 4, 2021

/s/ Stanley M. Bergman

Stanley M. Bergman

Chairman and Chief Executive Officer

exhibit312

EXHIBIT 31.2

CERTIFICATION

PURSUANT TO RULE 13a-14(a) OR 15d-14(a)

OF THE SECURITIES

EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION

302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Steven Paladino,

certify that:

I have reviewed this quarterly report on Form 10-Q of Henry Schein,

Inc.;

Based on my knowledge, this report does not contain any untrue statement of

a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances

under which such

statements were made, not misleading with respect to the period covered by

this report;

Based on my knowledge, the financial statements, and other financial information

included in this report,

fairly present in all material respects the financial condition, results of operations

and cash flows of the

registrant as of, and for, the periods presented

in this report;

The registrant's other certifying officer and I are responsible

for establishing and maintaining disclosure

controls and procedures (as defined in Exchange Act Rules 13a-15(e)

and 15d-15(e)) and internal control

over financial reporting (as defined in Exchange Act Rules 13a-15(f)

and 15d-15(f)) for the registrant and

have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls

and procedures

to be designed under our supervision, to ensure that material information

relating to the registrant,

including its consolidated subsidiaries, is made known to us by others within

those entities,

particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such

internal control over financial

reporting to be designed under our supervision, to provide reasonable

assurance regarding the

reliability of financial reporting and the preparation of financial statements for external

purposes in

accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls

and procedures and presented in this

report our conclusions about the effectiveness of the disclosure

controls and procedures, as of the end

of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant's internal control over

financial reporting that

occurred during the registrant's most recent fiscal quarter (the registrant's fourth

fiscal quarter in the

case of an annual report) that has materially affected, or is reasonably

likely to materially affect, the

registrant's internal control over financial reporting; and

The registrant's other certifying officer and I have disclosed, based

on our most recent evaluation of internal

control over financial reporting, to the registrant's auditors and the audit committee

of the registrant's board of

directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of

internal control over

financial reporting which are reasonably likely to adversely affect

the registrant's ability to record,

process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or

other employees who have a

significant role in the registrant's internal control over financial reporting.

Date: May 4, 2021

/s/ Steven Paladino

Steven Paladino

Executive Vice President

and

Chief Financial Officer

exhibit321

EXHIBIT 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report on Form 10-Q of Henry Schein, Inc. (the

“Company”) for the period

ending March 27, 2021, as filed with the Securities and Exchange Commission

on the date hereof (the

“Report”), I, Stanley M. Bergman, the Chairman and Chief Executive

Officer of the Company,

and I, Steven

Paladino, Executive Vice President

and Chief Financial Officer of the Company,

do hereby certify pursuant

to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley

Act of 2002, to the best

of my knowledge and belief that:

(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange

Act

of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects,

the financial condition and

results of operations of the Company.

/s/ Stanley M. Bergman

Dated: May 4, 2021

Stanley M. Bergman

Chairman and Chief Executive Officer

Dated: May 4, 2021

/s/ Steven Paladino

Steven Paladino

Executive Vice President

and

Chief Financial Officer

This certification accompanies each Report pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002 and

shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed

filed by the Company

for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley

Act of 2002 has

been provided to the Company and will be retained by the Company

and furnished to the Securities and

Exchange Commission or its staff upon request.