BUSINESS SEGMENT INFORMATION (Tables)

9 Months Ended

12 Months Ended

Oct. 01, 2016

Jan. 02, 2016

Schedule of Quantitative Reconciliation of Adjusted EBITDA

The following is a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial performance measure, which is Net (loss) income for the periods presented (in thousands):


	39-Weeks Ended
	October 1, 2016			September 26, 2015
Adjusted EBITDA	$	706,934		$	620,090
Adjustments:
Sponsor fees ⁽¹⁾		(35,691	)		(7,571	)
Restructuring and tangible asset impairment charges⁽²⁾		(38,799	)		(81,697	)
Share-based compensation expense ⁽³⁾		(14,429	)		(7,888	)
LIFO reserve change⁽⁴⁾		24,808			41,999
Loss on extinguishment of debt⁽⁵⁾		(53,632	)		—
Business transformation costs ⁽⁶⁾		(25,777	)		(30,969	)
Acquisition related costs⁽⁷⁾		(671	)		(78,616	)
Acquisition termination fees—net⁽⁸⁾		—			287,500
Other⁽⁹⁾		(4,186	)		(19,102	)

EBITDA		558,557			723,746
Interest expense—net		(189,759	)		(210,821	)
Income tax benefit (provision)		78,117			(36,761	)
Depreciation and amortization expense		(313,985	)		(298,701	)

Net income	$	132,930		$	177,463

(1)	Consists of fees paid to the Sponsors for consulting and management advisory services. On June 1, 2016, the consulting and management agreements with each of the Sponsors were terminated for an aggregate termination fee of $31 million.

(2)	Consists primarily of facility related closing costs, including severance and related costs, tangible asset impairment charges, organizational realignment costs and estimated multiemployer pension withdrawal liabilities.

(3)	Share-based compensation expense for vesting of stock awards.

(4)	Represents the non-cash impact of LIFO reserve adjustments.

(5)

Includes fees paid to debt holders, third party costs, early redemption premium, and the write off of certain pre-existing unamortized deferred financing costs, partially offset by the write-off of unamortized issue premium related to the June 2016 debt refinancing, and the loss related to the September 2016 CMBS Fixed Facility defeasance. See Note 10, Debt.

(6)	Consists primarily of costs related to significant process and systems redesign, across multiple functions.

(7)	Consists of costs related to the Acquisition, including certain employee retention costs.

(8)	Consists of net fees received in connection with the termination of the Acquisition Agreement.

(9)

Other includes gains, losses or charges as specified under USF’s debt agreements. The balance for the 39-weeks ended October 1, 2016 includes $5 million of IPO readiness costs, $4 million of closed facility carrying costs and $3 million of business acquisition related costs, partially offset by a $10 million insurance benefit. The balance for the 39-weeks ended September 26, 2015 includes a $16 million legal settlement charge, $9 million of brand re-launch and marketing costs, and $4 million of closed facility carrying costs, partially offset by a $11 million net insurance benefit.

The following is a reconciliation for the last three fiscal years of Adjusted EBITDA to the most directly comparable GAAP financial performance measure, which is Net income (loss):


	2015			2014			2013
	(in thousands)
Adjusted EBITDA	$	875,195		$	866,237		$	845,393
Adjustments:
Sponsor fees⁽¹⁾		(10,136	)		(10,438	)		(10,302	)
Restructuring and tangible asset impairment charges⁽²⁾		(172,707	)		50			(8,386	)
Share-based compensation expense⁽³⁾		(15,832	)		(11,736	)		(8,406	)
Net LIFO reserve change⁽⁴⁾		73,882			(60,321	)		(11,925	)
Loss on extinguishment of debt⁽⁵⁾		—			—			(41,796	)
Pension settlements⁽⁶⁾		—			(2,370	)		(1,778	)
Business transformation costs⁽⁷⁾		(45,583	)		(54,135	)		(60,800	)
Acquisition related costs⁽⁸⁾		(84,472	)		(37,905	)		(3,522	)
Acquisition termination fees—net⁽⁹⁾		287,500			—			—
Other⁽¹⁰⁾		(31,272	)		(25,577	)		(31,587	)

EBITDA		876,575			663,805			666,891
Interest expense, net		(285,175	)		(289,202	)		(306,087	)
Income tax provision		(24,635	)		(35,968	)		(29,822	)
Depreciation and amortization expense		(399,247	)		(411,549	)		(388,188	)

Net income (loss)	$	167,518		$	(72,914	)	$	(57,206	)

(1)	Consists of management fees paid to the Sponsors.

(2)	Consists primarily of facility related closing costs, including severance and related costs, tangible asset impairment charges, organizational realignment costs, and estimated multiemployer pension withdrawal liabilities.

(3)	Share-based compensation expense represents costs recorded for vesting of stock option awards, restricted stock and restricted stock units.

(4)	Represents the non-cash impact of net LIFO reserve adjustments.

(5)	Includes fees paid to debt holders, third party costs, early redemption premium, and the write off of old debt facility unamortized debt issuance costs. See Note 11, Debt for a further description of debt refinancing transactions.

(6)	Consists of charges resulting from lump-sum payment settlements to retirees and former employees participating in several USF sponsored pension plans.

(7)	Consists primarily of costs related to significant process and systems redesign across multiple functions.

(8)	Consists of costs related to the Acquisition.

(9)	Consists of net fees received in connection with the termination of the Acquisition Agreement.

(10)

Other includes gains, losses or charges as specified in the Company’s debt agreements. The fiscal year 2015 balance consists primarily of a $16 million litigation settlement cost, and $16 million of brand re-launch and marketing costs, offset by a net insurance benefit of $11 million. The fiscal year 2014 balance includes $16 million of costs subject to coverage under the Company’s insurance policies.

Sales Mix for Principal Product Categories

The following table presents the sales mix for the Company’s principal product categories for the last three fiscal years:


	2015		2014		2013
	(in thousands)
Meats and seafood	$	8,391,997	$	8,326,191	$	7,684,396
Dry grocery products		4,123,584		4,152,682		4,275,669
Refrigerated and frozen grocery products		3,582,517		3,463,411		3,446,308
Dairy		2,457,516		2,555,362		2,332,346
Equipment, disposables and supplies		2,171,006		2,132,044		2,133,899
Beverage products		1,279,201		1,263,965		1,309,303
Produce		1,121,711		1,126,146		1,115,257

	$	23,127,532	$	23,019,801	$	22,297,178