cik0-20241227

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 27, 2024

¨ 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: 001-36223

___________________________________________



Aramark
(Exact name of registrant as specified in its charter)
Delaware		20-8236097
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2400 Market Street		19103
Philadelphia,	Pennsylvania
(Address of principal executive offices)		(Zip Code)

(215) 238-3000

(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 $0.01 per share	ARMK	New York Stock Exchange

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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

As of January 24, 2025, the number of shares of the registrant's common stock outstanding is 265,104,846.


TABLE OF CONTENTS
			Page
PART I - Financial Information
	Item 1.	Financial Statements (Unaudited)	1
		Condensed Consolidated Balance Sheets	1
		Condensed Consolidated Statements of Income	2
		Condensed Consolidated Statements of Comprehensive Income	3
		Condensed Consolidated Statements of Cash Flows	4
		Condensed Consolidated Statements of Stockholders' Equity	5
		Notes to Condensed Consolidated Financial Statements	6
	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 3.	Quantitative and Qualitative Disclosure About Market Risk	23
	Item 4.	Controls and Procedures	23

PART II - Other Information
	Item 1.	Legal Proceedings	24
	Item 1A.	Risk Factors	24
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
	Item 3.	Defaults Upon Senior Securities	24
	Item 4.	Mine Safety Disclosures	24
	Item 5.	Other Information	25
	Item 6.	Exhibits	25

Table of Contents

Special Note About Forward-Looking Statements

This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations as to future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our operations, our liquidity and capital resources, the conditions in our industry and our growth strategy. In some cases, forward-looking statements can be identified by words such as "outlook," "aim," "anticipate," "have confidence," "estimate," "expect," "will be," "will continue," "will likely result," "project," "intend," "plan," "believe," "see," "look to" and other words and terms of similar meaning or the negative versions of such words. These forward-looking statements are subject to risks and uncertainties that may change at any time and actual results or outcomes may differ materially from those that we expected.

Some of the factors that we believe could affect or continue to affect our results include without limitation: unfavorable economic conditions; natural disasters, global calamities, climate change, pandemics, energy shortages, sports strikes and other adverse incidents; geopolitical events including, but not limited to, the ongoing conflict between Russia and Ukraine and the ongoing conflict in the Middle East, global supply chain disruptions, inflation, volatility and disruption of global financial markets; the failure to retain current clients, renew existing client contracts and obtain new client contracts; a determination by clients to reduce their outsourcing or use of preferred vendors; competition in our industries; increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our food and support services contracts; currency risks and other risks associated with international operations, including compliance with a broad range of laws and regulations, including the United States Foreign Corrupt Practices Act; risks associated with suppliers from whom our products are sourced; disruptions to our relationship with our distribution partners; the contract intensive nature of our business, which may lead to client disputes; the inability to hire and retain key or sufficient qualified personnel or increases in labor costs; our expansion strategy and our ability to successfully integrate the businesses we acquire and costs and timing related thereto; risks associated with the completed spin-off of Aramark Uniform and Career Apparel ("Uniform") as an independent publicly traded company to our stockholders; continued or further unionization of our workforce; liability resulting from our participation in multiemployer defined benefit pension plans; laws and governmental regulations including those relating to food and beverages, the environment, wage and hour and government contracting; liability associated with noncompliance with applicable law or other governmental regulations; new interpretations of or changes in the enforcement of the government regulatory framework; increases or changes in income tax rates or tax-related laws; potential liabilities, increased costs, reputational harm, and other adverse effects based on our commitments and stakeholder expectations relating to environmental, social and governance considerations; the failure to maintain food safety throughout our supply chain, food-borne illness concerns and claims of illness or injury; a cybersecurity incident or other disruptions in the availability of our computer systems or privacy breaches; our leverage; variable rate indebtedness that subjects us to interest rate risk; the inability to generate sufficient cash to service all of our indebtedness; debt agreements that limit our flexibility in operating our business; and other factors set forth under the headings "Part I, Item 1A Risk Factors," "Part I, Item 3 Legal Proceedings" and "Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations" and other sections of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on November 19, 2024 as such factors may be updated from time to time in our other periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov and which may be obtained by contacting Aramark's investor relations department via its website at www.aramark.com. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and in our other filings with the SEC. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us. Forward-looking statements speak only as of the date made. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, changes in our expectations, or otherwise, except as required by law.

PART I

Item 1. Financial Statements

ARAMARK AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands, except share amounts)


	December 27, 2024		September 27, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	484,149	$	672,483
Receivables (less allowances: $35,959 and $34,259)	2,201,099		2,096,928
Inventories	366,690		387,601
Prepayments and other current assets	242,875		249,550

Total current assets	3,294,813		3,406,562
Property and Equipment, net	1,602,582		1,573,193
Goodwill	4,713,625		4,677,201
Other Intangible Assets	1,826,131		1,804,602
Operating Lease Right-of-use Assets	677,095		638,659
Other Assets	592,420		574,154
	$	12,706,666	$	12,674,371
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term borrowings	$	942,833	$	964,286
Current operating lease liabilities	53,886		54,163
Accounts payable	1,104,769		1,394,007
Accrued payroll and related expenses	361,245		518,912
Accrued expenses and other current liabilities	1,034,122		1,282,842
Total current liabilities	3,496,855		4,214,210
Long-Term Borrowings	4,976,953		4,307,171
Noncurrent Operating Lease Liabilities	247,244		241,012
Deferred Income Taxes	396,651		375,378
Other Noncurrent Liabilities	497,340		490,132
Commitments and Contingencies (see Note 9)
Redeemable Noncontrolling Interests	9,739		7,494
Stockholders' Equity:
Common stock, par value $0.01 (authorized: 600,000,000 shares; issued: 306,798,710 shares and 304,285,195 shares; and outstanding: 265,649,625 shares and 263,939,983 shares)	3,068		3,043
Capital surplus	3,959,269		3,931,932
Retained earnings	315,470		239,709
Accumulated other comprehensive loss	(161,377)		(132,457)
Treasury stock (held in treasury: 41,149,085 shares and 40,345,212 shares)	(1,034,546)		(1,003,253)
Total stockholders' equity	3,081,884		3,038,974
	$	12,706,666	$	12,674,371

See notes to the condensed consolidated financial statements.

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ARAMARK AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(in thousands, except per share data)


	Three Months Ended
	December 27, 2024		December 29, 2023
Revenue	$	4,552,086	$	4,407,765
Costs and Expenses:
Cost of services provided (exclusive of depreciation and amortization)	4,151,232		4,045,078
Depreciation and amortization	113,204		105,544
Selling and general corporate expenses	70,386		90,193
Total costs and expenses	4,334,822		4,240,815
Operating income	217,264		166,950

Interest Expense, net	75,804		114,562
Income Before Income Taxes	141,460		52,388
Provision for Income Taxes	35,757		23,871
Net income	105,703		28,517
Less: Net income (loss) attributable to noncontrolling interests	84		(19)
Net income attributable to Aramark stockholders	$	105,619	$	28,536

Earnings per share attributable to Aramark stockholders:
Basic	$	0.40	$	0.11
Diluted	$	0.39	$	0.11
Weighted Average Shares Outstanding:
Basic	264,882		262,053
Diluted	268,690		264,287

See notes to the condensed consolidated financial statements.

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ARAMARK AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(in thousands)


	Three Months Ended
	December 27, 2024		December 29, 2023
Net income	$	105,703	$	28,517
Other comprehensive loss, net of tax

Foreign currency translation adjustments	(41,747)		15,349
Fair value of cash flow hedges	12,827		(37,532)

Other comprehensive loss, net of tax	(28,920)		(22,183)
Comprehensive income	76,783		6,334
Less: Net income (loss) attributable to noncontrolling interests	84		(19)
Comprehensive income attributable to Aramark stockholders	$	76,699	$	6,353

See notes to the condensed consolidated financial statements.

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ARAMARK AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)


	Three Months Ended
	December 27, 2024		December 29, 2023
Cash flows from operating activities:
Net income	$	105,703	$	28,517
Adjustments to reconcile Net income to Net cash used in operating activities:
Depreciation and amortization	113,204		105,544

Increase in contingent consideration liability (see Note 11)	11,127		—

Deferred income taxes	9,456		1,175
Share-based compensation expense	14,848		13,654
Changes in operating assets and liabilities
Receivables	(159,800)		(209,339)
Inventories	13,938		33,303
Prepayments and Other Current Assets	(10,691)		(7,864)
Accounts Payable	(261,503)		(180,799)
Accrued Expenses	(383,370)		(460,413)
Payments made to clients on contracts	(61,032)		(45,075)
Other operating activities	20,968		64,220
Net cash used in operating activities	(587,152)		(657,077)
Cash flows from investing activities:
Purchases of property and equipment and other	(119,861)		(115,621)
Disposals of property and equipment	2,073		4,420



Acquisition of certain businesses, net of cash acquired	(111,366)		(83,316)


Other investing activities	(1,685)		(3,451)
Net cash used in investing activities	(230,839)		(197,968)
Cash flows from financing activities:
Proceeds from long-term borrowings	180,793		228,221
Payments of long-term borrowings	(10,781)		(1,538,997)
Net change in funding under the Receivables Facility	525,000		600,000
Payments of dividends	(27,860)		(24,915)
Proceeds from issuance of common stock	11,977		4,496
Other financing activities	(36,431)		(47,808)
Net cash provided by (used in) financing activities	642,698		(779,003)
Effect of foreign exchange rates on cash and cash equivalents and restricted cash	(18,960)		5,334
Decrease in cash and cash equivalents and restricted cash	(194,253)		(1,628,714)
Cash and cash equivalents and restricted cash, beginning of period	732,613		1,972,367
Cash and cash equivalents and restricted cash, end of period	$	538,360	$	343,653


Supplemental disclosure of cash flow information	Three Months Ended
(in thousands)	December 27, 2024		December 29, 2023
Interest paid	$	65,261	$	111,464
Income taxes paid	10,665		45,440

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the condensed consolidated Balance Sheets:


Balance Sheet classification
(in thousands)	December 27, 2024		December 29, 2023
Cash and cash equivalents	$	484,149	$	295,597
Restricted cash in Prepayments and other current assets	54,211		48,056
Total cash and cash equivalents and restricted cash	$	538,360	$	343,653

See notes to the condensed consolidated financial statements.

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ARAMARK AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

(in thousands)


	Total Stockholders' Equity		Common Stock		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock
Balance, September 27, 2024	$	3,038,974	$	3,043	$	3,931,932	$	239,709	$	(132,457)	$	(1,003,253)
Net income attributable to Aramark stockholders	105,619						105,619
Other comprehensive loss	(28,920)								(28,920)
Capital contributions from issuance of common stock	15,413		25		15,388
Share-based compensation expense of equity awards	14,388				14,388
Purchase of noncontrolling interest	(2,439)				(2,439)
Repurchases of common stock	(31,293)										(31,293)
Dividends declared ($0.105 per share)	(29,858)						(29,858)
Balance, December 27, 2024	$	3,081,884	$	3,068	$	3,959,269	$	315,470	$	(161,377)	$	(1,034,546)


	Total Stockholders' Equity		Common Stock		Capital Surplus		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock
Balance, September 29, 2023	$	3,712,718	$	3,011	$	3,825,620	$	964,158	$	(98,237)	$	(981,834)
Net income attributable to Aramark stockholders	28,536						28,536
Other comprehensive loss	(22,183)								(22,183)
Capital contributions from issuance of common stock	8,228		13		8,215
Share-based compensation expense of equity awards	13,654				13,654
Repurchases of common stock	(12,333)										(12,333)
Separation of Uniform Segment (See Note 1)	(855,105)						(886,514)		31,409
Dividends declared ($0.095 per share)	(26,881)						(26,881)
Balance, December 29, 2023	$	2,846,634	$	3,024	$	3,847,489	$	79,299	$	(89,011)	$	(994,167)

See notes to the condensed consolidated financial statements.

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ARAMARK AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Aramark (the "Company") is a leading global provider of food and facilities services to education, healthcare, business & industry and sports, leisure & corrections clients. The Company's largest market is the United States, which is supplemented by an additional 15-country footprint. The Company also provides services on a more limited basis in several additional countries and in offshore locations. The Company operates its business in two reportable segments that share many of the same operating characteristics: Food and Support Services United States ("FSS United States") and Food and Support Services International ("FSS International").

The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and should be read in conjunction with the audited consolidated financial statements, and the notes to those statements, included in the Company's Form 10-K filed with the SEC on November 19, 2024. The Condensed Consolidated Balance Sheet as of September 27, 2024 was derived from audited financial statements which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of the Company, the statements include all adjustments, which are of a normal, recurring nature, required for a fair presentation for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for a full year, due to the seasonality of some of the Company's business activities and the possibility of changes in general economic conditions.

The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany transactions and accounts have been eliminated.

New Accounting Standards Updates

Standards Not Yet Adopted (from most to least recent date of issuance)

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance requires disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation and depreciation and amortization included in each income statement line item. The guidance also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. The guidance is effective for the Company for annual periods beginning in fiscal 2028 and for interim periods beginning in fiscal 2029. The Company is currently assessing the impact of the new guidance on its financial statement disclosures.

In March 2024, the SEC adopted final climate-related disclosure rules under SEC Release Nos. 33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors. The rules require disclosure of governance, risk management and strategy related to material climate-related risks as well as disclosure of material greenhouse gas emissions in registration statements and annual reports. In addition, the rules require presentation of certain material climate-related disclosures in the annual consolidated financial statements. On April 4, 2024, the SEC voluntarily stayed the effective date of the final rules pending completion of judicial review following legal challenges. The new rules are applicable for the Company for annual periods beginning in fiscal 2026, pending resolution of the stay. The Company is currently assessing the impact of the new guidance on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. The guidance will require improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The guidance is effective for the Company's annual disclosures for fiscal 2026 and early adoption is permitted. The Company is currently assessing the impact of the new guidance on its financial statement disclosures.

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to enhance the reportable segment disclosures. The guidance will require additional disclosures about significant segment expenses. The guidance is effective for the Company's annual disclosures for fiscal 2025 and for interim periods beginning in fiscal 2026; early adoption is permitted. The Company is currently assessing the impact of the new guidance on its financial statement disclosures.

Other new accounting pronouncements recently issued or newly effective were not applicable to the Company, did not have a material impact on the condensed consolidated financial statements or are not expected to have a material impact on the condensed consolidated financial statements.

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ARAMARK AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Comprehensive Income

Comprehensive income includes all changes to stockholders' equity during a period, except those resulting from investments by and distributions to stockholders. Components of comprehensive income include net income, changes in foreign currency translation adjustments (net of tax) and changes in the fair value of cash flow hedges (net of tax).

The summary of the components of comprehensive income is as follows (in thousands):


	Three Months Ended
	December 27, 2024				December 29, 2023
	Pre-Tax Amount	Tax Effect	After-Tax Amount		Pre-Tax Amount	Tax Effect	After-Tax Amount
Net income			$	105,703			$	28,517

Foreign currency translation adjustments	(41,747)	—	(41,747)		15,349	—	15,349
Fair value of cash flow hedges	17,334	(4,507)	12,827		(50,719)	13,187	(37,532)

Other comprehensive loss	(24,413)	(4,507)	(28,920)		(35,370)	13,187	(22,183)
Comprehensive income			76,783				6,334
Less: Net income (loss) attributable to noncontrolling interests			84				(19)
Comprehensive income attributable to Aramark stockholders			$	76,699			$	6,353

For the three months ended December 29, 2023, the amounts in the table above exclude the impact of a $5.1 million pension plan adjustment and a $26.3 million currency translation adjustment related to the separation and distribution of the Uniform segment (discussed below).

Accumulated other comprehensive loss consists of the following (in thousands):


	December 27, 2024		September 27, 2024
Pension plan adjustments	$	(20,233)	$	(20,233)
Foreign currency translation adjustments	(190,447)		(148,700)
Cash flow hedges	49,303		36,476

	$	(161,377)	$	(132,457)

Currency Translation

Gains and losses resulting from the translation of financial statements of non-United States subsidiaries are reflected as a component of accumulated other comprehensive loss in stockholders' equity. Beginning in fiscal 2018, Argentina was determined to have a highly inflationary economy. As a result, the Company remeasures the financial statements of Argentina's operations in accordance with the accounting guidance for highly inflationary economies. The impact of the Argentina remeasurement was a foreign currency transaction loss of $0.7 million and $3.9 million during the three month periods ended December 27, 2024 and December 29, 2023, respectively, to the Condensed Consolidated Statements of Income. The impact of foreign currency transaction gains and losses exclusive of Argentina's operations included in the Company's operating results during the three month periods of both fiscal 2025 and 2024 were immaterial to the condensed consolidated financial statements.

Current Assets

The Company insures portions of its risk related to general liability, automobile liability, workers’ compensation liability claims as well as certain property damage risks through a wholly owned captive insurance subsidiary (the "Captive") as part of its approach to risk finance. The Captive is subject to regulations within its domicile of Bermuda, including regulations established by the Bermuda Monetary Authority (the "BMA") relating to levels of liquidity and solvency as such concepts are defined by the BMA. The Captive was in compliance with these regulations as of December 27, 2024. These regulations may have the effect of limiting the Company's ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of its general liability, automobile liability, workers' compensation liability, certain property damage and related Captive costs. As of December 27, 2024 and September 27, 2024, cash and cash equivalents at the Captive were $98.7 million and $94.7 million, respectively. The Captive also invests in United States Treasury securities where the amount of these investments as of December 27, 2024 and September 27, 2024 was $42.8 million and $42.3 million, respectively, and is recorded in "Prepayments and other current assets" on the Condensed Consolidated Balance Sheets.

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ARAMARK AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Within the FSS International segment, the Company receives certain cash on behalf of the Company's clients, which is contractually restricted from withdrawal and usage. This restricted cash is recorded in "Prepayments and other current assets" on the Condensed Consolidated Balance Sheets.

Other Assets

Other assets consist primarily of costs to obtain or fulfill contracts (including employee sales commissions), long-term receivables, interest rate swaps, investments in 50% or less owned entities and computer software costs.

For investments in 50% or less owned entities accounted for under the equity method of accounting, the carrying amount as of December 27, 2024 and September 27, 2024 was $83.8 million and $84.0 million, respectively.

For investments in 50% or less owned entities, other than those accounted for under the equity method of accounting, the Company measures these investments at cost, less any impairment and adjusted for changes in fair value resulting from observable price changes for an identical or a similar investment of the same issuer due to the lack of readily available fair values related to those investments. The carrying amount of equity investments without readily determinable fair values as of December 27, 2024 and September 27, 2024 was $33.6 million and $35.4 million.

Supply Chain Finance Program

The Company has agreements with third-party administrators that allow participating vendors to voluntarily elect to sell payment obligations from the Company to financial institutions as part of a Supply Chain Finance Program ("SCF Program"). The Company's payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. When participating vendors elect to sell one or more of the Company's payment obligations, the Company's rights and obligations to settle the payable on their contractual due date are not impacted. The Company has no economic or commercial interest in a vendor's decision to sell the Company's payment obligations. The Company agrees on commercial terms with vendors for the goods and services procured, which are consistent with payment terms observed at other peer companies in the industry, and the terms are not impacted by the SCF Program. For the SCF Program, the Company does not provide asset pledges, or other forms of guarantees, as security for the committed payment to the financial institutions. As of December 27, 2024 and September 27, 2024, the Company had $1.7 million and $2.6 million, respectively, of outstanding payment obligations to the financial institutions as part of the SCF Program recorded in "Accounts payable" on the Condensed Consolidated Balance Sheets.

Lease Arrangements

Certain of the Company's lease arrangements, primarily vehicle leases, with terms of one to eight years, contain provisions related to residual value guarantees. The maximum potential liability to the Company under such arrangements was approximately $37.8 million at December 27, 2024 if the terminal fair value of vehicles coming off lease was zero. Consistent with past experience, management does not expect any significant payments will be required pursuant to these arrangements. No amounts have been accrued for the guarantee arrangements at December 27, 2024.

Other Current and Noncurrent Liabilities

The Company is self-insured for certain obligations related to its employee health care benefit programs as well as for certain risks retained under its general liability, automobile liability, workers' compensation liability and certain property damage programs. Reserves for these programs are estimated through actuarial methods, with the assistance of third-party actuaries using loss development assumptions based on the Company's claims history.

Separation and Distribution of Aramark Uniform and Career Apparel

On September 30, 2023, the Company completed the separation and distribution of its Uniform segment into an independent publicly traded company, Vestis. The separation was structured as a tax free spin-off, which occurred by way of a pro rata distribution to Aramark stockholders. Each of the Aramark stockholders received one share of Vestis common stock for every two shares of Aramark common stock held of record as of the close of business on September 20, 2023. Vestis is now an independent public company under the symbol “VSTS” on the New York Stock Exchange.

In connection with the separation and distribution, the Company entered into or adopted several agreements that provide a framework for the relationship between the Company and Vestis, including, but not limited to the following:

Separation and Distribution Agreement - governs the rights and obligations of the parties regarding the distribution following the completion of the separation, including the transfer of assets and assumption of liabilities, and establishes certain rights and obligations between the Company and Vestis following the distribution, including procedures with respect to claims subject to indemnification and related matters.

Transition Services Agreement - governs services between the Company and Vestis and their respective affiliates to provide each other on an interim, transitional basis, various services, including, but not limited to, administrative,

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ARAMARK AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

information technology and cybersecurity support services and certain finance, treasury, tax and governmental function services. The services will terminate no later than 24 months following the distribution date.

Tax Matters Agreement - governs the parties’ respective rights, responsibilities and obligations with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes.

Employee Matters Agreement - governs the allocation of liabilities and responsibilities relating to employment matters, employee compensation and benefits plans and programs and other related matters.

Under these agreements, the Company will continue to provide certain services to Vestis following the separation and distribution. The agreements do not provide the Company with the ability to influence the operating or financial policies of Vestis subsequent to the separation date. During the three months ended December 27, 2024 and December 29, 2023, the value of the services provided to Vestis were immaterial to the Company's financial statements with no outstanding receivables balance as of December 27, 2024 and September 27, 2024.

During the three months ended December 29, 2023, the Company incurred $20.0 million of transaction fees related to the separation and distribution of its Uniform segment and $8.8 million of charitable contribution expense for the contribution of Vestis shares to a donor advised fund in order to fund charitable contributions, which were recorded within "Selling and general corporate expenses" on the Condensed Consolidated Statements of Income.

The Company recorded its distribution of Vestis' net assets as a change in "Retained Earnings." The amount recorded reflected the carrying amounts, as of September 29, 2023, of the net assets distributed offset by the holdback of Vestis shares upon distribution of $8.8 million and $3.6 million of net cash received from Vestis post-separation. The Company also recorded a net decrease to "Accumulated other comprehensive loss" of $31.4 million to derecognize foreign currency translation adjustments and pension plan adjustments which were attributable to Vestis.

NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS:

Goodwill represents the excess of the fair value of consideration paid for an acquired entity over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized and is subject to an impairment test that the Company conducts annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists, using discounted cash flows.

Changes in total goodwill during the three months ended December 27, 2024 are as follows (in thousands):


Segment	September 27, 2024		Acquisitions		Translation		December 27, 2024
FSS United States	$	4,184,547	$	6,392	$	(173)	$	4,190,766
FSS International	492,654		61,580		(31,375)		522,859
	$	4,677,201	$	67,972	$	(31,548)	$	4,713,625

Other intangible assets consist of the following (in thousands):


	December 27, 2024						September 27, 2024
	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
Customer relationship assets	$	1,212,430	$	(537,861)	$	674,569	$	1,168,108	$	(521,102)	$	647,006
Trade names	1,198,059		(46,497)		1,151,562		1,197,486		(39,890)		1,157,596
	$	2,410,489	$	(584,358)	$	1,826,131	$	2,365,594	$	(560,992)	$	1,804,602

Amortization of intangible assets for the three months ended December 27, 2024 and December 29, 2023 was $28.5 million and $23.9 million, respectively.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3. BORROWINGS:

Long-term borrowings, net, are summarized in the following table (in thousands):


	December 27, 2024		September 27, 2024
Senior Secured Credit Facility:
$1.4 Billion Revolving Credit Facility due August 2029	$	204,039	$	30,138
Term A Loans due August 2029	474,173		499,624
United States Term B Loans due June 2030	1,070,885		1,073,060
United States Term B Loans due April 2028	725,836		725,504
United States Term B Loans due January 2027	836,948		836,680
Senior Unsecured Notes:
5.000% Senior Unsecured Notes due February 2028	1,144,789		1,144,404
5.000% Senior Unsecured Notes due April 2025	551,161		550,789
3.125% Senior Unsecured Notes (EUR) due April 2025	338,705		362,459
Other:
Receivables Facility due July 2026	525,000		—
Finance leases	39,109		40,440
Other	9,141		8,359
	5,919,786		5,271,457
Less—current portion	(942,833)		(964,286)
	$	4,976,953	$	4,307,171

As of December 27, 2024, there were $862.2 million of outstanding foreign currency borrowings.

As of December 27, 2024, there were $1,158.1 million of availability under the senior secured revolving credit facility and $75.0 million of availability under the Receivables Facility.

5.000% Senior Notes Due April 2025 Redemption Notice

On January 17, 2025, the Company issued a notice of conditional redemption for the 5.000% Senior Notes due April 2025 (the "5.000% 2025 Notes”). The Company notified holders of the election to redeem the entire $551.5 million aggregate principal amount of the 5.000% 2025 Notes on February 18, 2025, at a redemption price equal to 100.000% of the aggregate principal amount, plus accrued and unpaid interest to the date of redemption.

6.375% Senior Notes due 2025 Repayment

On October 2, 2023, the Company fully redeemed the $1,500.0 million 6.375% Senior Notes due May 1, 2025 (the “6.375% 2025 Notes”) in conjunction with the separation and distribution of the Uniform segment (see Note 1). The Company recorded $31.8 million of charges to "Interest Expense, net" in the Condensed Consolidated Statements of Income for the three months ended December 29, 2023, consisting of the payment of a $23.9 million call premium and a $7.9 million non-cash loss for the write-off of unamortized deferred financing costs on the 6.375% 2025 Notes. The amount paid for the call premium is included within "Other financing activities" on the Condensed Consolidated Statements of Cash Flows for the three months ended December 29, 2023.

NOTE 4. DERIVATIVE INSTRUMENTS:

The Company enters into contractual derivative arrangements to manage changes in market conditions related to interest on debt obligations, including interest rate swap agreements, which are recognized as either assets or liabilities on the balance sheet at fair value at the end of each quarter. The counterparties to the Company's contractual derivative agreements are all major international financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company continually monitors its positions and the credit ratings of its counterparties and does not anticipate nonperformance by the counterparties. The Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged and how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively for designated hedges. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Cash Flow Hedges

The Company has approximately $2.3 billion notional amount of outstanding interest rate swap agreements as of December 27, 2024, which fix the rate on a like amount of variable rate borrowings with varying maturities through December of fiscal 2028.

Changes in the fair value of a derivative that is designated as and meets all the required criteria for a cash flow hedge are recorded in accumulated other comprehensive loss and reclassified into earnings as the underlying hedged item affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Cash flows from hedging transactions are classified in the same category as the cash flows from the respective hedged item. As of December 27, 2024 and September 27, 2024, $49.3 million and $36.5 million, respectively, of unrealized net of tax gains related to the interest rate swaps were included in "Accumulated other comprehensive loss" on the Condensed Consolidated Balance Sheets.

The following table summarizes the unrealized gain (loss) arising from the Company's derivatives designated as cash flow hedging instruments on Other comprehensive loss (in thousands):


	Three Months Ended
	December 27, 2024		December 29, 2023
Interest rate swap agreements(1)	$	33,001	$	(31,953)


(1)			Change in the amounts driven by changes in forward interest rates.

The following table summarizes the location and fair value, using Level 2 inputs (see Note 11 for a description of the fair value levels), of the Company's derivatives designated as hedging instruments on the Condensed Consolidated Balance Sheets (in thousands):


	Balance Sheet Location	December 27, 2024		September 27, 2024
ASSETS
Interest rate swap agreements	Prepayments and other current assets	$	2,149	$	8,134
Interest rate swap agreements	Other Assets	64,477		41,158

The following table summarizes the location of the gain reclassified from "Accumulated other comprehensive loss" into earnings for derivatives designated as hedging instruments on the Condensed Consolidated Statements of Income (in thousands):


		Three Months Ended
	Income Statement Location	December 27, 2024		December 29, 2023
Interest rate swap agreements	Interest Expense, net	$	(15,667)	$	(18,766)

As of December 27, 2024, the Company has a Euro denominated term loan in the amount of €92.9 million. The term loan was designated as a hedge of the Company's net Euro currency exposure represented by certain holdings in the Company's European affiliates.

At December 27, 2024, the net of tax gain expected to be reclassified from "Accumulated other comprehensive loss" into earnings over the next twelve months based on current market rates is approximately $22.1 million.

NOTE 5. REVENUE RECOGNITION:

The Company generates revenue through sales of food and facility services to customers based on written contracts at the locations it serves. The Company provides food and beverage services, including catering and retail services, and facilities services, including plant operations and maintenance, custodial, housekeeping, landscaping and other services. In accordance with ASC 606, the Company accounts for a customer contract when both parties have approved the arrangement and are committed to perform their respective obligations, each party's rights can be identified, payment terms can be identified, the contract has commercial substance and it is probable the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized upon the transfer of control of the promised product or service to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services.

Performance Obligations

The Company recognizes revenue when its performance obligation is satisfied. Each contract generally has one performance obligation, which is satisfied over time. The Company primarily accounts for its performance obligations under the series guidance, using the as-invoiced practical expedient when applicable. The Company applies the right to invoice practical expedient to record revenue as the services are provided, given the nature of the services provided and the frequency of billing under the customer contracts. Under this practical expedient, the Company recognizes revenue in an amount that corresponds

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

directly with the value to the customer of the Company’s performance completed to date and for which the Company has the right to invoice the customer. Certain arrangements include performance obligations which include variable consideration (primarily per transaction fees). For these arrangements, the Company does not need to estimate the variable consideration for the contract and allocate to the entire performance obligation; therefore, the variable fees are recognized in the period they are earned.

Disaggregation of Revenue

The following table presents revenue disaggregated by revenue source (in millions):


	Three Months Ended
	December 27, 2024		December 29, 2023
FSS United States:
Business & Industry	$	432.2	$	383.1
Education	1,141.1		1,112.3
Healthcare	404.6		399.1
Sports, Leisure & Corrections	950.3		903.6
Facilities & Other	372.8		414.7
Total FSS United States	3,301.0		3,212.8

FSS International:
Europe	675.1		637.8
Rest of World	576.0		557.2
Total FSS International	1,251.1		1,195.0

Total Revenue	$	4,552.1	$	4,407.8

Contract Balances

Deferred income is recognized in "Accrued expenses and other current liabilities" and "Other Noncurrent Liabilities" on the Condensed Consolidated Balance Sheets when the Company has received consideration, or has the right to receive consideration, in advance of the transfer of the performance obligation of the contract to the customer, primarily prepaid meal plans. The consideration received remains a liability until the goods or services have been provided to the customer. The Company classifies deferred income as current if the deferred income is expected to be recognized in the next 12 months or as noncurrent if the deferred income is expected to be recognized in excess of the next 12 months. If the Company cannot render its performance obligation according to contract terms after receiving the consideration in advance, amounts may be contractually required to be refunded to the customer.

During the three months ended December 27, 2024, deferred income increased related to customer prepayments and decreased related to income recognized during the period as a result of satisfying the performance obligation or return of funds related to non-performance. For the three months ended December 27, 2024, the Company recognized $224.3 million of revenue that was included in deferred income at the beginning of the period. Deferred income balances are summarized in the following table (in millions):


	December 27, 2024		September 27, 2024
Deferred income	$	191.7	$	352.5

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6. INCOME TAXES:

During the three months ended December 29, 2023, the Company recorded a valuation allowance adjustment to the "Provision for Income Taxes" on the Condensed Consolidated Statements of Income of $7.1 million against certain foreign tax credits, as it is more likely than not a tax benefit will not be realized due to the reduction of future forecasted foreign income as a result of the separation and distribution of the Uniform segment.

In 2021, the Organization for Economic Co-operation & Development (“OECD”) released the Pillar Two Global Anti-Base Erosion Model Rules (“Pillar Two”). Under Pillar Two, multinational companies with consolidated revenue greater than €750 million will be subject to a minimum effective tax rate of 15.0% within each respective country. Guided by the OECD framework, more than 140 countries have agreed to enact Pillar Two legislation. The Company currently operates in several countries which will be subject to Pillar Two. In certain countries that have enacted legislation incorporating the global minimum tax, the legislation became effective for the Company at the beginning of fiscal 2025. There was no material impact on the condensed consolidated financial statements. The Company is continuing to monitor and evaluate the potential impact of newly enacted legislation incorporating the global minimum tax in additional countries and does not anticipate the impact will be material.

NOTE 7. STOCKHOLDERS' EQUITY:

On January 24, 2025, a $0.105 dividend per share of common stock was declared, payable on February 24, 2025, to stockholders of record on the close of business on February 10, 2025.

On November 5, 2024, the Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $500.0 million of Aramark's outstanding common stock. Under the share repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases, privately negotiated transactions, accelerated share repurchases and Rule 10b5-1 trading plans. The size and timing of any repurchases will depend on a number of factors, including share price, general business and market conditions and other factors. The share repurchase program does not have a fixed expiration date and may be terminated at any time. During the three months ended December 27, 2024, the Company repurchased 24,743 shares of its common stock for $0.9 million.

The Company has 100.0 million shares of preferred stock authorized, with a par value of $0.01 per share. At December 27, 2024 and September 27, 2024, zero shares of preferred stock were issued or outstanding.

NOTE 8. EARNINGS PER SHARE:

Basic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of stock awards.

The following table sets forth the computation of basic and diluted earnings per share attributable to the Company's stockholders (in thousands, except per share data):


	Three Months Ended
	December 27, 2024		December 29, 2023
Earnings:
Net income attributable to Aramark stockholders	$	105,619	$	28,536
Shares:
Basic weighted-average shares outstanding	264,882		262,053
Effect of dilutive securities	3,808		2,234
Diluted weighted-average shares outstanding	268,690		264,287

Basic Earnings Per Share:
Net income attributable to Aramark stockholders	$	0.40	$	0.11
Diluted Earnings Per Share:
Net income attributable to Aramark stockholders	$	0.39	$	0.11

The following table represents shares that were outstanding but were not included in the diluted earnings per common share (in millions):

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


	Three Months Ended
	December 27, 2024	December 29, 2023
Share-based awards(1)	6.5	13.1
Performance stock units(2)	1.6	1.3


(1)			Share-based awards were not included in the computation of diluted earnings per common share, as their effect would have been antidilutive.
(2)			Performance stock units were not included in the computation of diluted earnings per common share, as the performance targets were not yet met.

NOTE 9. COMMITMENTS AND CONTINGENCIES:

From time to time, the Company and its subsidiaries are a party to various legal actions, proceedings and investigations involving claims incidental to the conduct of their business, including actions by clients, customers, employees, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, ESG-related non-financial disclosure laws, false claims or whistleblower statutes, minority, women and disadvantaged business enterprise statutes, tax codes, antitrust and competition laws, consumer protection statutes, procurement regulations, intellectual property laws, food safety and sanitation laws, cost and accounting principles, the Foreign Corrupt Practices Act, the U.K. Bribery Act, other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws and alcohol licensing and service laws, or alleging negligence and/or breaches of contractual and other obligations. Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or cash flows. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company's business, financial condition, results of operations or cash flows.

On May 17, 2024, a purported shareholder of Vestis, the Company's former Uniform segment that was spun-off from Aramark in September 2023, commenced a putative class action lawsuit against Vestis and certain of its officers in the United States District Court for the Northern District of Georgia on behalf of purchasers of Vestis’ common stock between October 2, 2023 and May 1, 2024. The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, based on allegedly false or misleading statements generally related to Vestis’ business and operations, pricing practices, and financial results and outlook. The lawsuit seeks unspecified damages and other relief. On November 22, 2024, the complaint was amended to add the Company and its Chief Executive Officer as additional defendants. The Company intends to vigorously defend this matter.

NOTE 10. BUSINESS SEGMENTS:

The Company reports its operating results in two reportable segments: FSS United States and FSS International. The Company defines its segments as those operations whose results the chief operating decision maker, identified as the Chief Executive Officer, regularly reviews to analyze performance and allocate resources. Generally, on an annual basis, approximately 84% of the global revenue is related to food services and 16% is related to facilities services.

Financial information by segment is as follows (in millions):

Three Months Ended

Revenue

December 27, 2024

December 29, 2023

FSS United Stat

SEC Form 10-Q filed by Aramark