Related Party Transactions

3 Months Ended

Apr. 01, 2017

12.	RELATED PARTY TRANSACTIONS

On January 31, 2017, the Company completed a secondary offering of 41,400,000 shares of its common stock held by investment funds associated with the Sponsors. The Company did not receive any proceeds from the offering. In accordance with terms of the registration rights agreement with the Sponsors, the Company incurred approximately $2 million of expenses in connection with the secondary offering, approximately half of which was incurred in 2016. Underwriting discounts and commissions were paid by the selling shareholders. As a result of the secondary offering, each Sponsor’s ownership interest in the Company’s common stock was reduced to approximately 28.34% as of January 31, 2017.

In connection with the February 2017 amendment of the Amended and Restated 2016 Term Loan, KKR Capital Markets LLC, an affiliate of KKR, received a de minimis fee for services rendered. Investment funds or accounts managed or advised by an affiliate of KKR held less than 2% of the Company’s outstanding debt as of April 1, 2017.

The Company was previously a party to consulting agreements with each of the Sponsors pursuant to which each Sponsor provided the Company with ongoing consulting and management advisory services and received fees and reimbursement of related out of pocket expenses. On June 1, 2016, the agreements with each of the Sponsors were terminated for an aggregate termination fee of $31 million. For the13-week period ended April 2, 2016, the Company recorded $3 million in fees and expenses in Distribution, selling and administrative costs in the Consolidated Statements of Comprehensive Income.

On January 8, 2016, the Company paid a $666 million, or $3.94 per share, one-time special cash distribution to its shareholders of record as of January 4, 2016, of which $657 million was paid to the Sponsors. The distribution was funded with cash on hand and approximately $314 million of additional borrowings under USF’s credit facilities. The Company has no current plans to pay future dividends, and has never paid dividends on its common stock, other than the January 2016 one-time cash distribution. Any decision to declare and pay dividends in the future will be made at the sole discretion of our Board of Directors, and could be limited by USF debt covenants.