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Aramark

AramarkARMKEarnings & Financial Report

NYSE · Consumer Discretionary · Retail-Eating Places

Aramark is an American food service and facilities services provider to clients in areas including education, prisons, healthcare, business, and leisure. It operates in North America and an additional 14 countries, including the United Kingdom, Germany, Chile, Ireland, and Spain.

What changed in Aramark's 10-K — 2023 vs 2024

Top changes in Aramark's 2024 10-K

314 paragraphs added · 302 removed · 234 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

54 edited+8 added−12 removed61 unchanged
We are subject to various environmental protection laws and regulations, including the United States Federal Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and Liability Act and similar federal, state, local and international statutes and regulations governing the use, management and 7 Table of Contents disposal of chemicals and hazardous materials.
We are subject to various environmental protection laws and regulations, including the United States Federal Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation, and 7 Table of Contents Liability Act and similar federal, state, local and international statutes and regulations governing the use, management and disposal of chemicals and hazardous materials.
Institutions may decide to operate their own services or outsource to one of our competitors following the expiration or termination of contracts with us. In our FSS United States segment, our external competitors include other multi-regional food and support service providers, such as Compass Group plc, Delaware North Companies Inc. and Sodexo SA.
Institutions may decide to operate their own services or outsource to one of our competitors following the expiration or termination of contracts with us. In our United States segment, our external competitors include other multi-regional food and support service providers, such as Compass Group plc, Delaware North Companies Inc. and Sodexo SA.
Our History Since our founding in 1959, we have broadened our service offerings and expanded our client base through a combination of organic growth and acquisitions, with the goal of further developing our food, facilities and uniform capabilities, as well as growing our international presence.
Our History Since our founding in 1959, we have broadened our service offerings and expanded our client base through a combination of organic growth and acquisitions, with the goal of further developing our food and facilities capabilities, as well as growing our international presence.
We have 11 active employee resource groups, supporting women, racially and ethnically diverse employees, the LGBTQ+ community, veterans, individuals with disabilities, interfaith community, and dietitians and other health and wellness professionals. These groups have 47 local hubs across the United States and international markets and play a key role in creating a culture of inclusion.
We have 11 active employee resource groups, supporting women, racially and ethnically diverse employees, the LGBTQ+ community, veterans, individuals with disabilities, interfaith community, and dietitians and other health and wellness professionals. These groups have 54 local hubs across the United States and international markets and play a key role in creating a culture of inclusion.
Because we serve alcoholic beverages at many sports, entertainment and recreational facilities, including convention centers and national and state parks, we also hold liquor licenses incidental to our food service operations and are subject to the liquor license requirements of the jurisdictions in which we hold a liquor license.
Because we serve alcoholic beverages at many sports, entertainment and recreational facilities, including convention centers, college stadiums, and national and state parks, we also hold liquor licenses incidental to our food service operations and are subject to the liquor license requirements of the jurisdictions in which we hold a liquor license.
Continuing to increase diversity in executive and all levels of the leadership pipeline remains an organizational priority for the coming years. In fiscal 2023, consistent with fiscal 2022, we established ESG goals for our executive leadership team reflective of this priority and we continue to make advancements toward these goals.
Continuing to increase diversity in executive and all levels of the leadership pipeline remains an organizational priority for the coming years. In fiscal 2024, consistent with fiscal 2023, we established ESG goals for our executive leadership team reflective of this priority, and we continue to make advancements toward these goals.
We also provide our services on a more limited basis in several additional countries and in offshore locations. Based on total revenue in fiscal 2023, we hold a top 2 position in North America in food and facilities services and a top 3 position in food and facilities services internationally in most countries in which we have significant operations.
We also provide our services on a more limited basis in several additional countries and in offshore locations. Based on total revenue in fiscal 2024, we hold a top 2 position in North America in food and facilities services and a top 3 position in food and facilities services internationally in most countries in which we have significant operations.
Human Capital As a company focused on delivering food and facilities services in thousands of client locations across 15 countries, our human capital is material to our operations and core to the long-term success of Aramark. Our People.
Human Capital As a company focused on delivering food and facilities services in thousands of client locations across 16 countries, our human capital is material to our operations and core to the long-term success of Aramark. Our People.
In fiscal 2023, Sysco distributed approximately 45% of our food and non-food products in the United States and Canada based on purchase dollars, and we believe that we are one of their largest clients.
In fiscal 2024, Sysco distributed approximately 45% of our food and non-food products in the United States and Canada based on purchase dollars, and we believe that we are one of their largest clients.
At sports, entertainment and recreational facilities, our clients attract patrons to their site, usually for specific events such as sporting events, concerts and conventions. We manage our Food and Support Services business in two geographic reportable segments split between our United States and International operations.
At sports, entertainment and recreational facilities, our clients attract patrons to their site, usually for specific events such as sporting events, concerts and conventions. We manage our business in two geographic reportable segments split between our United States and International operations.
Item 1. Business Overview Aramark (the “Company”, “we” or “us”) is a leading global provider of food and facilities services to education, healthcare, business & industry, and sports, leisure & corrections clients. Our core market is the United States, which is supplemented by an additional 14-country footprint.
Item 1. Business Overview Aramark (the “Company”, “we” or “us”) is a leading global provider of food and facilities services to education, healthcare, business & industry, and sports, leisure & corrections clients. Our largest market is the United States, which is supplemented by an additional 15-country footprint.
Seasonality Our revenue and operating results have varied, and we expect them to continue to vary, from quarter to quarter as a result of different factors. Historically, within our FSS United States segment, there has been a lower level of activity during our first and second fiscal quarters in operations that provide services to sports and leisure clients.
Seasonality Our revenue and operating results have varied, and we expect them to continue to vary, from quarter to quarter as a result of different factors. Historically, within our FSS United States segment, there has been a lower level of activity during the first half of our fiscal year in operations that provide services to sports and leisure clients.
As of September 29, 2023, we do not anticipate any expenditures for environmental remediation that would have a material effect on our financial condition. Intellectual Property We have the patents, trademarks, trade names and licenses that are necessary for the operation of our business.
As of September 27, 2024, we do not anticipate any expenditures for environmental remediation that would have a material effect on our financial condition. Intellectual Property We have the patents, trademarks, trade names and licenses that are necessary for the operation of our business.
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.
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 NYSE.
We also serve convention and civic centers, national and state parks and other resort operations, plus other popular tourist attractions in the United States. Additionally, we provide correctional food services, operate commissaries, laundry facilities and property rooms. 2 Table of Contents Facilities & Other.
We also serve convention and civic centers, national and state parks and other resort operations, plus other popular tourist attractions in the United States. Additionally, we provide correctional food services and operate commissaries, laundry facilities and property rooms. Facilities & Other.
We believe that the following competitive factors are the principal drivers of our success: • quality and breadth of services and management talent; 4 Table of Contents • innovation; • reputation within the industry; • pricing; • financial strength and stability; and • purchasing scale.
We believe that the following competitive factors are the principal drivers of our success: • quality and breadth of services provided; • management talent; • innovation; • reputation within the industry; • pricing; • financial strength and stability; and • purchasing scale.
As part of this strategy, introduced in 2019, we identified priorities that align with our business objectives, with a focus on efforts to help people and our planet, as we serve our clients, employees, shareholders, and other stakeholders. Our strategic, interconnected people and planet goals convey our priorities and ambitions, focusing our efforts and inspiring our organization.
As part of this platform, we identified priorities that align with our business objectives, with a focus on efforts to help people and our planet, as we serve our clients, employees, shareholders, and other stakeholders. Our strategic, interconnected people and planet goals convey our priorities and ambitions, focusing our efforts and inspiring our organization.
See “Types of Contracts” below. We purchase most products and other items through food service distribution companies, including Sysco Corporation ("Sysco"), US Foods, Performance Food Group and other regional distributors. Sysco is our primary distributor with respect to our food and facilities business, while US Foods is our primary distributor with respect to our procurement services business.
We purchase most products and other items through food service distribution companies, including Sysco Corporation ("Sysco"), US Foods, Performance Food Group and other regional distributors. Sysco is our primary distributor with respect to our food and facilities business, while US Foods is our primary distributor with respect to our procurement services business.
We use two general contract types in our Food and Support Services segments: profit and loss contracts and client interest contracts. These contracts differ in their provision for the amount of financial risk that we bear and, accordingly, the potential compensation, profits or fees we may receive.
We use two general contract types: profit and loss contracts and client interest contracts. These contracts differ in their provision for the amount of financial risk that we bear and, accordingly, the potential compensation, profits or fees we may receive.
We benefit from greater upside potential with a profit and loss contract, although we do consequently bear greater downside risk than with a client interest contract. For fiscal 2023, approximately two-thirds of our Food and Support Services revenue was derived from profit and loss contracts. Client Interest Contracts.
We benefit from greater upside potential with a profit and loss contract, although we do consequently bear greater downside risk than with a client interest contract. For fiscal 2024, approximately two-thirds of our revenue was derived from profit and loss contracts. Client Interest Contracts.
We also provide procurement services for a number of clients in a variety of industries. Our FSS International segment provides a similar range of services as those provided to our FSS United States segment clients and operates in each of the sectors. We have operations in 14 countries outside the United States.
We also provide procurement services for a number of clients in a variety of industries through our Avendra and other procurement services businesses. Our FSS International segment provides a similar range of services as those provided to our FSS United States segment clients and operates in each of the sectors. We have operations in 15 countries outside the United States.
Bribery Act and other anti-corruption laws; • antitrust, competition, procurement and lobbying; • minority, women and disadvantaged business enterprise statutes; • motor carrier safety; and • privacy and data security. The laws and regulations relating to each of our Food and Support Services segments are numerous and complex.
Bribery Act and other anti-corruption laws; • antitrust, competition, procurement and lobbying; • minority, women and disadvantaged business enterprise statutes; • motor carrier safety; and • privacy and data security. The laws and regulations relating to our business are numerous and complex.
We offer our education clients a single source provider for food-related managed service solutions, including dining, catering, food service management and convenience-oriented retail operations. Healthcare. We provide a wide range of non-clinical food and food-related support services to approximately 725 healthcare and senior living clients, which comprise of approximately 130 client families, and more than 765 facilities.
We offer our education clients a single source provider for food-related managed service solutions, including dining, catering, food service management and convenience-oriented retail operations. Healthcare. We provide a wide range of non-clinical food, food-related and facility support services to approximately 190 healthcare and senior living client families and more than 1,100 facilities (1) .
As of September 30, 2023, approximately 5 Table of Contents 33,700 employees in our United States and Canadian operations were covered by collective bargaining agreements. We have experienced no material interruptions of operations due to disputes with our employees. Diversity, Equity and Inclusion.
As of September 27, 2024, approximately 38,000 employees in our United States and Canadian operations were covered by collective bargaining agreements. We have experienced no material interruptions of operations due to disputes with our employees. 5 Table of Contents Diversity, Equity and Inclusion.
This lower level of activity, historically, has been partially offset during our first and second fiscal quarters by the increased activity levels in our educational operations.
This lower level of activity, historically, has been partially offset during the first half of our fiscal year by the increased activity levels in our educational operations.
As of September 29, 2023, our subsidiaries held liquor licenses in 44 states and the District of Columbia, 4 Canadian provinces and certain other countries. Typically, liquor licenses must be renewed annually and may be revoked or suspended for cause at any time.
As of September 27, 2024, our subsidiaries held liquor licenses in 43 states and the District of Columbia, 3 Canadian provinces and certain other countries. Typically, liquor licenses must be renewed annually and may be revoked or suspended for cause at any time.
Conversely, historically there has been a significant increase in the provision of services to sports and leisure clients during our third and fourth fiscal quarters, which is partially offset by the effect of summer recess at colleges, universities and schools in our educational operations.
Conversely, historically there has been a significant increase in the provision of services to sports and leisure clients during the second half of our fiscal year, which is partially offset by the effect of summer recess at colleges, universities and schools in our 4 Table of Contents educational operations.
We sponsor numerous training, education and leadership development programs for our employees, from hourly associates to upper levels of management, designed to enhance leadership and managerial capability, ensure quality execution of our programs, drive client satisfaction and increase return on investment. Community Engagement.
We sponsor numerous training, education and leadership development programs for our employees, from hourly associates to upper levels of management, designed to enhance leadership and managerial capability, ensure quality execution of our programs, drive client satisfaction and increase return on investment. Community Engagement. Through our Aramark Building Community initiative, we create meaningful opportunities to engage and focus resources locally.
We provide a variety of support services to approximately 445 facility clients, which comprise of approximately 300 client families, and more than 800 locations. These services include the management of housekeeping, plant operations and maintenance, energy management, custodial, groundskeeping, landscaping, transportation, capital program management and payment services and other facility consulting services relating to building operations.
We provide a variety of support services to approximately 220 client families, which comprise of approximately 500 facilities (1) . These services include the management of housekeeping, plant operations and maintenance, energy management, custodial, groundskeeping, landscaping, transportation, capital program management, payment services and other facility consulting services relating to building operations.
On January 26, 2007, we delisted from the New York Stock Exchange (“NYSE”) in conjunction with a going-private transaction executed with certain private equity investment funds, as well as approximately 250 senior management personnel.
On January 26, 2007, we delisted from the New York Stock Exchange (“NYSE”) in conjunction with a going-private transaction executed with certain private equity investment funds, as well as approximately 250 senior management personnel. On December 17, 2013, we completed an initial public offering of our common stock.
We also provide a number of innovative programs designed to promote physical, emotional and financial well-being. Our commitment to the safety of our employees and a “zero harm” culture, continues to be a top priority, and through Aramark SAFE, our global safety management system, we empower our employees to identify, evaluate and manage risk throughout our locations.
Our commitment to the safety of our employees and a “zero harm” culture, continues to be a top priority, and through Aramark SAFE, our global safety management system, we empower our employees to identify, evaluate and manage risk throughout our locations.
Competition There is significant competition in the Food and Support Services business from local, regional, national and international companies, as well as from the businesses, healthcare institutions, senior living facilities, colleges and universities, correctional facilities, school districts and public assembly facilities that decide to provide these services themselves.
For fiscal 2024, approximately one-third of our revenue was derived from client interest contracts. Competition There is significant competition in our business from local, regional, national and international companies, as well as from the businesses, healthcare institutions, senior living facilities, colleges and universities, correctional facilities, school districts and public assembly facilities that decide to provide these services themselves.
In the FSS United States segment, the range of services provided by sector are as follows: Education. Within the Education sector, we serve Higher Education and K-12 clients. We deliver a wide range of food and food-related services, as well as procurement services, at more than 1,300 colleges, universities, school systems & districts and private schools.
Within the Education sector, we serve Higher Education and K-12 clients. We deliver a wide range of food and food-related services, as well as procurement services, at approximately 1,330 colleges, universities, school systems & districts and private schools.
In fiscal 2023, our FSS United States segment generated $11,721.4 million in revenue, or 62% of our total revenue, and our FSS International segment generated $4,361.8 million in revenue, or 23% of our total revenue. No individual client represents more than 2% of our total revenue, other than, collectively, a number of United States government agencies.
In fiscal 2024, our FSS United States segment generated $12,576.7 million in revenue, or 72% of our total revenue, and our FSS International segment generated $4,824.0 million in revenue, or 28% of our total revenue. No individual client represents more than 2% of our total revenue, other than, collectively, a number of United States government agencies.
Our approximately 262,550 employees, after considering the separation of our Uniform and Career Apparel ("Uniform") segment described below, partner with thousands of education, healthcare, business and sports, leisure & corrections clients to serve millions of customers including students, patients, employees, sports fans and guests worldwide.
Our approximately 266,680 employees partner with thousands of education, healthcare, business and sports, leisure & corrections clients to serve millions of customers including students, patients, employees, sports fans and guests worldwide.
As an example, in our FSS United States segment, in fiscal 2023, we hired 100,000 new employees, up from 79,000 in fiscal 2022, made up of 94% hourly employees and 6% salaried employees.
As an example, in our FSS United States segment, in fiscal 2024, we hired over 93,000 new employees, compared to approximately 100,000 in fiscal 2023, made up of 96% hourly employees and 4% salaried employees.
Clients and Services Our Food and Support Services segments serve a number of sectors across 15 countries around the world. Our Food and Support Services operations focus on serving clients in five principal sectors: Education, Healthcare, Business & Industry, Sports, Leisure & Corrections and Facilities & Other.
Clients and Services We serve a number of sectors across 16 countries around the world. Our operations focus on serving clients in five principal sectors: Education, Healthcare, Business & Industry, Sports, Leisure & Corrections and Facilities & Other. In the FSS United States segment, the range of services provided by sector are as follows: Education.
Prior to the separation, we operated our business in three reportable segments that shared many of the same operating characteristics: Food and Support Services United States ("FSS United States"), Food and Support Services International ("FSS International") and Uniform and Career Apparel ("Uniform").
We operate our 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").
Aramark was also named one of the “Best Places to Work for Disability Inclusion,” for the seventh year in a row, by the 2023 Disability Equality Index®, earning a top score of 100%. Additionally, Aramark was recognized as a "Best Company for Diversity, Equity and Inclusion" by Black Enterprise. Talent Acquisition, Development and Retention.
Aramark was also named one of the "Best Places to Work for Disability Inclusion," for the eight consecutive year, by the 2024 Disability Equality Index®, earning a top score of 100%. Talent Acquisition, Development and Retention.
We serve hundreds of venues for professional (including minor league affiliates) and college sports teams, including 28 teams in Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League and at more than 115 colleges and universities.
We serve various venues for professional (including minor league affiliates) and college sports teams, including 26 teams in Major League Baseball, the National Basketball Association, the National Football League and the National Hockey League, and for approximately 150 college and university teams.
As of September 30, 2023, following the separation of our Uniform segment, our active United States employee base reflected the following gender, racial and ethnic demographic information: United States Employee Population Male Female White Minority Black Hispanic Asian American Indian Pacific Islander 2 or more races Total 42.41 % 57.59 % 40.51 % 59.49 % 31.18 % 18.43 % 6.47 % 0.65 % 0.26 % 2.50 % Hourly Employees 41.17 % 58.83 % 37.65 % 62.35 % 32.85 % 19.22 % 6.79 % 0.67 % 0.27 % 2.55 % Salaried Employees 54.01 % 45.99 % 67.21 % 32.79 % 15.58 % 11.09 % 3.45 % 0.40 % 0.22 % 2.05 % As of September 30, 2023, 40% of our Board of Directors and 57% of our CEO's direct reports were female.
As of September 27, 2024, our active United States employee base reflected the following gender, racial and ethnic demographic information: United States Employee Population Male Female White Diverse Black Hispanic Asian American Indian Pacific Islander 2 or more races Total 43.37 % 56.63 % 39.31 % 60.69 % 30.47 % 20.20 % 6.42 % 0.71 % 0.27 % 2.62 % Hourly Employees 42.61 % 57.39 % 36.19 % 63.81 % 32.21 % 21.20 % 6.73 % 0.72 % 0.28 % 2.67 % Salaried Employees 49.55 % 50.45 % 64.67 % 35.33 % 16.25 % 12.09 % 3.90 % 0.63 % 0.22 % 2.24 % As of September 27, 2024, 40% of our Board of Directors and 57% of our CEO's direct reports were female.
Our service and product offerings include a full range of coffee offerings, “grab and go” food operations, mailed gift boxes, convenience stores, micromarkets and a proprietary drinking water filtration system. Sports, Leisure & Corrections .
Our service and product offerings include a full range of coffee offerings, “grab and go” food operations, convenience stores, micromarkets and a proprietary drinking water filtration system. Sports, Leisure & Corrections . We provide concessions, banquet and catering services, retail services and merchandise sales, recreational and lodging services and facility management services at sports, entertainment and recreational facilities.
We believe that these connections throughout various levels within the client organization allow us to develop strong relationships with the client and gain a better understanding of 3 Table of Contents the clients' requirements.
One key effort in our approach is identifying and matching individuals at various levels in our organization with individuals in a variety of roles at both existing and potential clients. We believe that these connections throughout various levels within the client organization allow us to develop strong relationships with the client and gain a better understanding of the clients' requirements.
In fiscal 2023, we generated $18.9 billion of revenue, $862.9 million of operating income and $674.1 million of net income attributable to Aramark stockholders.
In fiscal 2024, we generated $17.4 billion of revenue, $706.5 million of operating income and $262.5 million of net income attributable to Aramark stockholders.
Do Well. and broader programs and initiatives on our website (www.aramark.com/environmental-social-governance). Nothing on our website shall be deemed incorporated by reference into this Annual Report on Form 10-K.
Aramark also submits a disclosure annually to CDP’s (formerly the Carbon Disclosure Project) climate and forest questionnaires, with responses available publicly. You can read more about Be Well. Do Well. and broader programs and initiatives on our website (www.aramark.com/environmental-social-governance). Nothing on our website shall be deemed incorporated by reference into this Annual Report on Form 10-K.
On December 17, 2013, we completed an initial public offering of our common stock. 1 Table of Contents Aramark’s Spin-off of the Uniform Segment The separation of our Uniform segment was structured as a tax free spin-off, which occurred by way of a pro rata distribution to Aramark stockholders.
Aramark’s Spin-off of the Uniform Segment On September 30, 2023, we completed the separation and distribution of our Aramark Uniform and Career Apparel ("Uniform") segment into an independent publicly traded company, Vestis Corporation ("Vestis"). The separation of our Uniform segment was structured as a tax free spin-off, which occurred by way of a pro rata distribution to Aramark stockholders.
In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to eligible employees. Our core health and welfare benefits are supplemented with specific programs to manage or improve common health conditions, a variety of voluntary benefits and paid time away from work programs.
Our core health and welfare benefits are supplemented with specific programs to manage or improve common health conditions, a variety of voluntary benefits and paid time away from work programs. We also provide a number of innovative programs designed to promote physical, emotional and financial well-being.
Food and Support Services Our Food and Support Services segments manage a number of interrelated services, including food, hospitality, procurement and facility services, for school districts, colleges & universities, healthcare & senior living facilities, businesses, sports, entertainment & recreational venues, conference & convention centers, national & state parks and correctional institutions.
Our Business We manage a number of interrelated services, including food, hospitality, procurement and facility services, for school districts, colleges & universities, healthcare & senior living facilities, businesses, sports, entertainment & recreational venues, conference & convention centers, national & state parks and correctional institutions. 1 Table of Contents We are the exclusive provider of food and beverage services at most of the locations we serve and are responsible for hiring, training and supervising the majority of the food service personnel in addition to ordering, receiving, preparing and serving food and beverage items sold at those facilities.
As of September 30, 2023, following the separation of our Uniform segment, we had a total of approximately 262,550 employees, including approximately 142,260 employees in FSS United States, 119,830 employees in FSS International and 460 employees in Aramark corporate staff. This total consists of approximately 27,700 management or salaried employees and approximately 234,850 frontline or hourly employees.
As of September 27, 2024, we had a total of approximately 266,680 employees, including approximately 140,970 employees in FSS United States, 125,250 employees in FSS International and 460 employees in Aramark corporate staff. This total consists of approximately 27,160 management or salaried employees and approximately 239,520 frontline or hourly employees.
Contractually required capital expenditures typically take the form of investments in leasehold improvements, equipment and/or grants to clients. At the end of the contract term or upon its earlier termination, assets such as equipment and leasehold improvements typically become the property of the client, but generally the client must reimburse us for any undepreciated or unamortized capital investments.
At the end of the contract term or upon its earlier termination, assets such as equipment and leasehold improvements typically become the property of the client, but generally the client must reimburse us for any undepreciated or unamortized capital investments. 3 Table of Contents Our contracts are generally obtained and renewed either through a competitive process or on a negotiated basis, although contracts in the public sector, including school districts and correctional clients, are frequently awarded on a competitive bid basis, as required by applicable law.
Our Board of Directors reviews our ESG goals and objectives, supports implementation of our ESG priorities and commitments, and oversees progress which we report in our Be Well. Do Well. Progress Report, the update of which will be released in early calendar 2024.
We believe that our climate-related work is intended to complement our existing commitments and integrated priorities related to operational efficiency, circularity and responsible sourcing. Our Board of Directors reviews our ESG goals and objectives, supports implementation of our ESG priorities and commitments, and oversees progress which we report in our Be Well. Do Well.
Our reporting aligns with multiple frameworks and standards including Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI) and the Task Force on Climate-Related Financial Disclosures (TCFD). Aramark also submits a disclosure annually to CDP’s (formerly the Carbon Disclosure Project) climate and forest questionnaires, with responses available publicly. You can read more about Be Well.
Progress Report, the update of which will be released in early calendar 2025. Our reporting aligns with multiple frameworks and standards including the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI) and the Task Force on Climate-Related Financial Disclosures (TCFD).
Through our Aramark Building Community initiative, we create opportunities for our employees to do more through volunteerism and engagement. In fiscal 2023, over 9,700 employees volunteered to host and participate in service projects supporting more than 1,000 nonprofits and benefiting nearly 1.8 million community members across 12 countries. Compensation, Benefits, Safety and Wellness.
In fiscal 2024, over 9,000 employees volunteered to host and participate in 475 service projects supporting more than 1,000 nonprofit organizations. These efforts benefited community members in 234 cities across 12 countries worldwide.
With the completion of the separation and distribution, the historical results of the Uniform segment will be presented as discontinued operations in our consolidated financial statements beginning in the first quarter of fiscal 2024. Refer to Note 15 to the audited consolidated financial statements for Uniform reportable segment financial disclosures.
The historical results of the Uniform segment have been reflected as discontinued operations in our audited consolidated financial statements for all periods prior to the separation and distribution. Assets and liabilities associated to the Uniform segment are classified as assets and liabilities of discontinued operations in our audited Consolidated Balance Sheet as of September 29, 2023.
Removed
Subsequent to the end of fiscal 2023, we completed the previously announced separation of our Uniform segment into an independent publicly traded company, Vestis Corporation (“Vestis”), on September 30, 2023. Going forward, we plan to operate our remaining Food and Support Services business in two geographic reportable segments split between our United States and International operations.
Added
The following chart shows a breakdown of our revenue and operating income by these reportable segments: Reportable Segments: FSS United States FSS International FY 2024 Revenue (1) : $ 12,576.7 $ 4,824.0 FY 2024 Operating Income (1) : $ 659.9 $ 187.3 (1) Dollars in millions. Operating income excludes $140.7 million related to corporate expenses.
Removed
The following chart shows a breakdown of our revenue and operating income by these reportable segments: Reportable Segments: FSS United States FSS International Uniform (b) FY 2023 Revenue (a) : $ 11,721.4 $ 4,361.8 $ 2,770.7 FY 2023 Operating Income (a) : $ 669.5 $ 114.5 $ 227.3 Services: Food, hospitality and facilities Food, hospitality and facilities Rental, sale and maintenance of uniform apparel and other items Sectors: Business & industry; sports, leisure & corrections; education; healthcare; and facilities and other Business & industry; sports, leisure & corrections; education; healthcare; and facilities and other Business; public institutions; manufacturing; transportation; and service industries (a) Dollars in millions.
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Additional disclosures regarding the separation and distribution are provided in Note 2 to the audited consolidated financial statements.
Removed
Operating income excludes $148.4 million related to corporate expenses. (b) Subsequent to the end of fiscal 2023, we completed the previously announced separation of our Uniform segment into an independent publicly traded company, Vestis Corporation, on September 30, 2023.
Added
See “Types of Contracts” (1) In fiscal 2024, management began reporting healthcare facility services within “Healthcare," whereas healthcare facility services were previously reported within "Facilities & Other." As such, client families and facilities previously included within “Facilities & Other" are now reflected within "Healthcare." 2 Table of Contents below.
Removed
We are the exclusive provider of food and beverage services at most of the locations we serve and are responsible for hiring, training and supervising the majority of the food service personnel in addition to ordering, receiving, preparing and serving food and beverage items sold at those facilities.
Added
Contractually required capital expenditures typically take the form of investments in leasehold improvements, equipment and/or grants to clients.
Removed
We provide concessions, banquet and catering services, retail services and merchandise sales, recreational and lodging services and facility management services at sports, entertainment and recreational facilities.
Added
For cash flows, historically there has been cash usage during our first fiscal quarter due to lower activity within our sports and leisure clients as well as payments related to employee incentives.
Removed
One key effort in our approach is identifying and matching individuals at various levels in our organization with individuals in a variety of roles at both existing and potential clients.
Added
Conversely, historically there have been cash inflows during our fourth fiscal quarter due to an inflow of customer prepayments particularly within our Higher Education business in anticipation of the fall semester and higher activity within our sports and leisure clients. Be Well. Do Well. - Our Environmental, Social and Governance ("ESG") Platform Be Well.
Removed
Food and Support Services contracts are generally obtained and renewed either through a competitive process or on a negotiated basis, although contracts in the public sector, including school districts and correctional clients, are frequently awarded on a competitive bid basis, as required by applicable law.
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For 2024, Aramark ranked #29 on Fair360's (formerly DiversityInc) 2024 Top 50 Companies list, up 11 spots from 2023. This is the eighth consecutive year Aramark appeared on the Top 50 list. For the first time, we were also ranked on the Top Companies for Black Executives list by Fair360.
Removed
For fiscal 2023, approximately one-third of our Food and Support Services revenue was derived from client interest contracts.
Added
As an example of these projects, members from all of Aramark's 11 employee resource groups mobilized to provide 3,890 backpacks with school supplies to students in 30 communities globally. Compensation, Benefits, Safety and Wellness. In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to eligible employees.
Removed
Uniform Our Uniform segment, which was spun-off into its own public company on September 30, 2023, provided a full-service employee uniform solution. The customer base was serviced by a leading geographic footprint in the United States and Canada with programs focused on uniforms, floor mats, towels, linens, restroom supplies, first-aid supplies, safety products and other workplace supplies.
Removed
Its customers operated in the United States and Canada in a wide range of industries, including manufacturing, hospitality, retail, food processing, pharmaceuticals, healthcare and automotive. In fiscal 2023, our Uniform segment generated $2,770.7 million in revenue, or 15% of our total revenue. Be Well. Do Well. - Our Environmental, Social and Governance ("ESG") Platform Be Well.
Removed
The new science-based targets are aligned with our existing commitments and integrated priorities related to operational efficiency, waste management and responsible sourcing, and we are working actively to confirm and implement a pathway to net zero emissions.
Removed
For 2023, Aramark was recognized by DiversityInc as a Top Company for supplier diversity for the first time, and a Top 50 Company for Diversity for the seventh consecutive year.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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For example, in response to the changed circumstances caused by shutdowns at the beginning of COVID-19 pandemic, we worked with clients to renegotiate contracts and financial structures in order to mitigate lost revenues caused by partial or full closure of client premises.
For example, in response to the changed circumstances caused by shutdowns at the beginning of the COVID-19 pandemic, we worked with clients to renegotiate contracts and financial structures in order to mitigate lost revenues caused by partial or full closure of client premises.
If our relationship with, or the business of, Sysco or another primary distributor were to be disrupted, we would have to arrange alternative distributors and our operations and cost structure could be adversely affected in the short term. For example, past labor shortages and other labor disputes at our primary distributors exacerbated the recent supply chain issues impacting our business.
If our relationship with, or the business of, Sysco or another primary distributor were to be disrupted, we would have to arrange alternative distributors and our operations and cost structure could be adversely affected in the short term. For example, past labor shortages and other labor disputes at our primary distributors have exacerbated supply chain issues impacting our business.
Since we accept debit and credit cards for payment from clients and customers, we are also subject to various industry data protection standards and protocols, such as payment network security operating guidelines and the Payment Card Industry Data Security Standard.
Since we accept debit and credit cards for payment from clients and customers, we are also subject to various industry data protection standards and protocols, such as payment network security operating guidelines and the global Payment Card Industry Data Security Standard.
In addition, we make statements about our ESG goals, commitments and initiatives through our annual “Be Well. Do Well.” Progress Report, other non-financial reports, information provided on our website, press statements and other communications. Implementing our ESG programs involves risks and uncertainties, including increased costs, requires investments and often depends on third-party performance or data that is outside our control.
In addition, we make statements about our ESG goals, commitments and initiatives through our annual “Be Well. Do Well.” Progress Report, other non-financial reports, information provided on our website, press statements and other communications. Implementing our ESG programs involves risks and uncertainties, including increased costs, required investments and often depends on third-party performance or data that is outside our control.
Sysco, which distributed approximately 45% of our food and non-food products in the United States and Canada in fiscal 2023 based on purchase dollars, and other distributors are responsible for tracking our orders and delivering products to our specific locations.
Sysco, which distributed approximately 45% of our food and non-food products in the United States and Canada in fiscal 2024 based on purchase dollars, and other distributors are responsible for tracking our orders and delivering products to our specific locations.
Also, in connection with any acquisition, we could fail to discover liabilities of the acquired company for which we may be responsible as a successor owner or operator in spite of any investigation we make prior to the acquisition, or significant compliance issues which require remediation, resulting in additional unanticipated costs, risk creation, and potential reputational harm.
Also, in connection with any acquisition, we could fail to discover liabilities of the acquired company for which we may be responsible as a successor owner or operator in spite of any investigation we make prior to the acquisition, or significant compliance issues, such as anti-corruption issues, which require remediation, resulting in additional unanticipated costs, risk creation and potential reputational harm.
We are subject to governmental regulation at the federal, state, international, national, provincial and local levels in many areas of our business, such as employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental 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, supply chain laws, food safety, labeling and sanitation laws, government funded entitlement programs, government assistance programs, cost and accounting principles, the Foreign Corrupt Practices Act, the U.K.
We are subject to governmental regulation at the federal, state, international, national, provincial and local levels in many areas of our business, such as 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, supply chain laws, food safety, labeling and sanitation laws, government funded entitlement programs, government assistance programs, cost and accounting principles, the Foreign Corrupt Practices Act, the U.K.
The acute and chronic effects of global climate change, including the increasing frequency and severity of extreme weather, changing precipitation patterns and rising mean temperatures may result in business disruptions. Climate change may also impact the availability and costs of water, food or other resources that could adversely affect our ability to deliver services.
The acute and chronic effects of global climate change, including the increasing frequency and severity of extreme weather, changing precipitation patterns and rising mean temperatures may result in supply chain and other business disruptions. Climate change may also impact the availability and costs of water, food or other resources or commodities that could adversely affect our ability to deliver services.
In addition, we provide many of our services under contracts of indefinite term, which are subject to termination on short notice by either party without cause. Some of our profit and loss and client interest contracts contain minimum guaranteed remittances to our client regardless of our revenue or profit at the facility, typically contingent on certain future events.
In addition, we provide many of our services under contracts of indefinite term, which are subject to termination on short notice by either party without cause. Some of our contracts contain minimum guaranteed remittances to our client regardless of our revenue or profit at the facility, typically contingent on certain future events.
There are many factors that could reduce the numbers of events in a facility or attendance at an event decreases in attendees’ discretionary income, including pandemics and other health crises, labor disruptions involving sports leagues, poor performance by the teams playing in a facility, number of playoff games, short-term weather conditions or more prolonged climate change, and adverse economic conditions which would adversely affect revenue and profits.
There are many factors that could reduce the number of events in a facility, attendance at an event or decrease attendees’ discretionary income, including pandemics and other health crises, labor disruptions involving sports leagues, poor performance by the teams playing in a facility, number of playoff games, short-term weather conditions or more prolonged climate change-related conditions and adverse economic conditions which would adversely affect revenue and profits.
We also do not have direct operations in the Middle East, but the recent Israel-Hamas War and escalating tensions in the region may disrupt global markets and impact our supply chain.
We also do not have direct operations in the Middle East, but the ongoing Israel-Hamas War and escalating tensions in the region may disrupt global markets and impact our supply chain.
While we do not believe any reviews, audits or 12 Table of Contents other such matters should result in material adjustments, if a large number of our client arrangements were modified in response to any such matter, the effect could be materially adverse to our business or results of operations.
While we do not believe any reviews, audits or other such matters should result in material adjustments, if a large number of our client arrangements were modified in response to any such matter, the effect could be materially adverse to our business or results of operations.
For example, global supply chain disruptions caused by global events, such as the COVID-19 pandemic and the Russian/Ukraine conflict have resulted, and may continue to result, in delivery delays as well as lower fill rates and higher substitution rates for a wide-range of products.
For example, global supply chain disruptions caused by global events, such as the Russian/Ukraine conflict have resulted, and may continue to result, in delivery delays as well as lower fill rates and higher substitution rates for a wide-range of products.
While we maintain insurance coverage that may cover certain aspects of cyber risks, such insurance coverage may be unavailable or insufficient to cover all losses or all types of claims that may arise. Further, as 16 Table of Contents cybersecurity risks evolve, such insurance may not be available to us on commercially reasonable terms or at all.
While we maintain insurance coverage that may cover certain aspects of cyber risks, such insurance coverage may be unavailable or insufficient to cover all losses or all types of claims that may arise. Further, as cybersecurity risks evolve, such insurance may not be available to us on commercially reasonable terms or at all.
Due to the labor intensive nature of our businesses and the fact that historically approximately two-thirds of our Food and Support Services segments' revenue is from profit and loss contracts under which we have limited ability to pass along cost increases, a shortage of labor or increases in wage levels in excess of normal levels could have a material adverse effect on our results of operations.
Due to the labor intensive nature of our businesses and the fact that historically approximately two-thirds of our revenue is from profit and loss contracts under which we have limited ability to pass along cost increases, a shortage of labor or increases in wage levels in excess of normal levels could have a material adverse effect on our results of operations.
We may, in the future, be required to expend material amounts to rectify the consequences of any such events. In addition, changes to environmental laws may subject us to additional costs or cause us to change aspects of our business.
We may, in the future, be required to expend material amounts to rectify the consequences of any such events. 17 Table of Contents In addition, changes to environmental laws may subject us to additional costs or cause us to change aspects of our business.
Contract terms under which we base these determinations and, for certain government contracts, regulations governing our cost determinations, may be subject to differing interpretations which could result in disputes with our clients from time to time. Clients generally have the right to audit our contracts, and we periodically review our compliance with contract terms and provisions.
Contract terms under which we base these determinations and, for certain government contracts, regulations governing our cost determinations, may be subject to differing interpretations which could result in disputes with our clients 12 Table of Contents from time to time. Clients generally have the right to audit our contracts, and we periodically review our compliance with contract terms and provisions.
Our profitability can be adversely affected to the extent we are faced with cost increases for food, wages, other labor related expenses (including workers' compensation, state unemployment insurance and federal or state mandated health benefits and 10 Table of Contents other healthcare costs), insurance, fuel, utilities, service and small wares, transportation, shipping, piece goods, clothing and equipment, especially to the extent we are unable to recover such increased costs through increases in prices for our products and services due to general economic conditions, inflationary pressures, supply chain disruptions, competitive conditions or contractual provisions in our client contracts.
Our profitability can be adversely affected to the extent we are faced with cost increases for food, wages, other labor related expenses (including workers' compensation, state unemployment insurance and federal or state mandated health benefits and other healthcare costs), insurance, fuel, utilities, service and small wares, transportation, shipping, clothing and equipment, especially to the extent we are unable to recover such increased costs through increases in prices for our products and services due to general economic conditions, inflationary pressures, supply chain disruptions, tariffs, competitive conditions or contractual provisions in our client contracts.
We have two main types of contracts in our food and facilities business: profit and loss contracts in which we bear all of the expenses of the contract but gain the benefit of the revenue, and client interest contracts in which our clients share some or all of the expenses and gain some or all of the revenue.
We have two main types of contracts: profit and loss contracts in which we bear all of the expenses of the contract but gain the benefit of the revenue, and client interest contracts in which our clients share some or all of the expenses and gain some or all of the revenue.
In addition, client, customer and other stakeholder expectations regarding environmental, social and governance considerations for suppliers are evolving.
In addition, client, customer and other stakeholder expectations regarding environmental, social and governance considerations for suppliers are increasing and otherwise evolving.
Our international business faces risks that could have an effect on our results of operations and financial condition. A significant portion of our revenue is derived from international business. During fiscal 2023, approximately 23% of our revenue was generated outside of the United States.
Our international business faces risks that could have an effect on our results of operations and financial condition. A significant portion of our revenue is derived from international business. During fiscal 2024, approximately 28% of our revenue was generated outside of the United States.
Approximately two-thirds of our Food and Support Services revenue in fiscal 2023 is from profit and loss contracts under which we have limited ability to pass on cost increases to our clients. Therefore, absent our ability to negotiate contractual changes, including pricing, we may have to absorb cost increases, which may adversely impact our operating results.
Approximately two-thirds of our revenue in fiscal 2024 is from profit and loss contracts under which we have limited ability to pass on cost increases to our clients. Therefore, absent our ability to negotiate contractual changes, including pricing, we may have to absorb cost increases, which may adversely impact our operating results.
Our commitments and stakeholder expectations relating to environmental, social and governance ("ESG") considerations may expose us to liabilities, increased costs, reputational harm, and other adverse effects on our business.
Our commitments and stakeholder expectations relating to ESG considerations may expose us to liabilities, increased costs, reputational harm and other adverse effects on our business.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future, subject to the restrictions contained in our senior secured credit facilities and the indentures governing our senior notes. If new indebtedness is added to our current debt levels, the related risks that we now face could increase. On July 27, 2017, the U.K.
We and our subsidiaries may be able to incur substantial additional indebtedness in the future, subject to the restrictions contained in our senior secured credit facilities and the indentures governing our senior notes. If new indebtedness is added to our current debt levels, the related risks that we now face could increase.
We, along with many governments, regulators, investors, employees, clients, customers and other stakeholders, are increasingly focused on ESG considerations relating to our business, including greenhouse gas emissions, human and civil rights, animal welfare and diversity, equity and inclusion.
We, along with many governments, regulators, investors, employees, clients, customers and other stakeholders, are increasingly focused on ESG and sustainability considerations relating to our business, including greenhouse gas emissions, single-use plastics, food waste, human and civil rights, animal welfare and diversity, equity and inclusion.
Furthermore, the stock market has experienced extreme volatility that, in some cases, has been unrelated or disproportionate to the operating performance of particular companies. As evidenced by the COVID-19 pandemic, these broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance.
Furthermore, the stock market has experienced extreme volatility that, in some cases, has been unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance.
Bribery Act, other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws and alcohol licensing and service laws. From time to time, government agencies have conducted reviews and audits of certain of our practices as part of routine inquiries of providers of services under government contracts, or otherwise.
Bribery Act, other anti-corruption laws, lobbying laws, motor carrier safety laws, laws implementing the EU Corporate Sustainability Reporting Directive, data privacy and security laws and alcohol licensing and service laws. From time to time, government agencies have conducted reviews and audits of certain of our practices as part of routine inquiries of providers of services under government contracts, or otherwise.
In particular, new federal, state, local or international laws and regulations related to climate change (including, but not limited to, certain requirements relating to the disclosure of greenhouse gas emissions and associated business risks), single use plastics and disposable packaging and food waste, could affect our operations or result in significant additional expense and operating restrictions on us.
In particular, new federal, state, local or international laws and regulations related to ESG disclosures (including, but not limited to, the EU Corporate Sustainability Reporting Directive and California's Climate Accountability Package), climate change (including, but not limited to, certain requirements relating to the disclosure of greenhouse gas emissions and associated business risks), single use plastics and disposable packaging and food waste, could affect our operations or result in significant additional expense and operating restrictions on us.
If we fail to comply with these laws or regulations, we could be subject to significant litigation, monetary damages, regulatory enforcement actions or fines in one or more jurisdictions and we could experience a material adverse effect on our results of operations, financial condition and business. Environmental requirements may subject us to significant liability and limit our ability to grow.
If we fail to comply with these laws or regulations, we could be subject to significant litigation, monetary damages, regulatory enforcement actions or fines in one or more jurisdictions and we could experience a material adverse effect on our results of operations, financial condition and business.
We currently have a presence in 14 countries outside of the United States with approximately 119,830 personnel. We also provide our services on a more limited basis in several additional countries and in offshore locations.
We currently have a presence in 15 countries outside of the United States with approximately 125,250 personnel. We also provide our services on a more limited basis in several additional countries and in offshore locations.
We may also face increased competition from offsite food delivery at our clients as online restaurant aggregators and similar businesses, as well as other providers with potentially disruptive business models, have been successful at applying technology developments to local food service.
We may also face increased competition from offsite food delivery at our clients as online restaurant aggregators and similar businesses, as well as other providers with potentially disruptive business models, have been successful at applying technology developments to local food service. If we fail to implement emerging technologies as quickly and efficiently as our competitors, we may lose clients.
Our expansion strategy involves risks. We may seek to acquire companies or interests in companies, or enter into joint ventures that complement our business. Our inability to complete acquisitions, integrate acquired companies successfully or enter into joint ventures may render us less competitive. At any given time, we may be evaluating one or more acquisitions or engaging in acquisition negotiations.
Our inability to complete acquisitions, integrate acquired companies successfully or enter into joint ventures may render us less competitive. At any given time, we may be evaluating one or more acquisitions or engaging in acquisition negotiations.
While the spin-off has been completed, we are still subject to potentially continued unforeseen costs and expenses, including additional general and administrative costs, costs from lost synergies, restructuring costs or other costs and expenses.
On September 30, 2023, we completed the separation and distribution of the Uniform segment. While the spin-off has been completed, we are still subject to potentially continued unforeseen expenses, including additional general and administrative costs, costs from lost synergies, restructuring costs or other costs and expenses.
Even instances of food-borne illness, food tampering or contamination at a location served by one of our competitors could result in negative publicity regarding the food service industry generally and could negatively impact our revenue. Future food safety issues may also from time to time disrupt our business.
Even instances of food-borne illness, food tampering or contamination at a location served by one of our competitors could result in negative publicity regarding the food service industry generally and could negatively impact our revenue.
The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, may be difficult to detect for a long time and often are not recognized until after an attack is launched or occurs. As a result, we and such third parties may be unable to anticipate these techniques or to implement adequate preventative measures.
The techniques used to obtain unauthorized access, disable or degrade service or sabotage systems change frequently, may be difficult to detect for a long time and often are not recognized until after an attack is launched or occurs.
In addition, goodwill and other intangible assets resulting from business combinations represent a significant portion of our assets. 13 Table of Contents If goodwill or other intangible assets were deemed to be impaired, we would need to take a charge to earnings to write down these assets to their fair value.
In addition, goodwill and other intangible assets resulting from business combinations represent a significant portion of our assets. If goodwill or other intangible assets were deemed to be impaired, we would need to take a charge to earnings to write down these assets to their fair value. We face risks associated with the recently completed spin-off of our Uniform segment.
In addition, we or such third parties may decide to upgrade existing information technology systems from time to time to support the needs of our business and growth strategy and the risk of system disruption is increased when significant system changes are undertaken.
In addition, we or such third parties may decide to upgrade existing information technology systems from time to time to support the needs of our business and growth strategy and the risk of system disruption is increased when significant system changes are undertaken. 16 Table of Contents We maintain a global cybersecurity program aligned with the National Institute of Standards and Technology Cybersecurity Framework.
Natural disasters, including hurricanes, earthquakes and droughts, global calamities, such as the COVID-19 pandemic and other public health crises, or political unrest and global conflicts, have affected, and in the future could affect, our revenue and operating results. As noted, our revenue and operating results were materially impacted by the COVID-19 pandemic.
Natural disasters, including hurricanes, earthquakes and droughts, global calamities, pandemics and other public health crises, or political unrest and global conflicts, have affected, and in the future could affect, our revenue and operating results.
Emerging international operations present several additional risks, including greater fluctuation in currencies relative to the United States dollar; economic and governmental instability; civil disturbances; volatility in gross domestic production; and nationalization and expropriation of private assets.
We will continue to explore and consider opportunities to develop our business in emerging countries over the long term. Emerging international operations present several additional risks, including greater fluctuation in currencies relative to the United States dollar, economic and governmental instability, civil disturbances, volatility in gross domestic production, and nationalization and expropriation of private assets.
We cannot guarantee that we will achieve our announced ESG targets and commitments, satisfy all stakeholder expectations, or that the benefits of implementing or achieving these goals and initiatives will not surpass their projected costs.
We are also at risk for challenge or criticism associated with stakeholders who reject or challenge our ESG programs and commitments. We cannot guarantee that we will achieve our announced ESG targets and commitments, satisfy all stakeholder expectations or that the benefits of implementing or achieving these goals and initiatives will not surpass their projected costs.
Continued or further unionization of our workforce may increase our costs and work stoppages could damage our business. Subsequent to fiscal year-end, after consideration of the separation and distribution of the Uniform segment, approximately 33,700 employees in our United States and Canadian operations were represented by unions and covered by collective bargaining agreements.
Continued or further unionization of our workforce may increase our costs and work stoppages could damage our business. Approximately 38,000 employees in our United States and Canadian operations were represented by unions and covered by collective bargaining agreements.
Additionally, we are subject to regular review and audit by both domestic and foreign tax authorities as well as to the prospective and retrospective effects of changing tax regulations and legislation. 15 Table of Contents Considering the unpredictability of possible changes to the United States or foreign tax laws and regulations and their potential interdependency, it is very difficult to predict the cumulative effect of such tax laws and regulations on our results of operations and cash flow, but such laws and regulations (and changes thereto) could adversely impact our financial results.
Considering the unpredictability of possible changes to the United States or foreign tax laws and regulations and their potential interdependency, it is very difficult to predict the cumulative effect of such tax laws and regulations on our results of operations and cash flow, but such laws and regulations (and changes thereto) could adversely impact our financial results.
We are highly leveraged. As of September 29, 2023, our outstanding indebtedness was $8,263.5 million. We had additional availability of $953.8 million under our revolving credit facilities and availability of $600.0 million under the Receivables Facility as of that date.
As of September 27, 2024, our outstanding indebtedness was $5,271.5 million. We had additional availability of $1,341.6 million under our revolving credit facilities and availability of $600.0 million under the Receivables Facility as of that date.
We may be subject to significant liabilities to the extent that human health is adversely affected or the value of such properties is diminished by such migration. 17 Table of Contents Risks Related to Our Indebtedness Our leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industries, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations.
Risks Related to Our Indebtedness Our leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industries, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations. We are highly leveraged.
Additionally, as a global company we are subject to laws, rules and regulations regarding cross-border data flows and recent legal developments have created increased complexity and uncertainty regarding transfers of personal data from the European Union to the United States.
Additionally, as a global company we are subject to laws, rules and regulations regarding cross-border data flows, which have increased complexity regarding transferring data from a number of countries to the United States. These recent developments require us to review and amend the legal mechanisms by which we make and receive such cross-border personal data transfers.
In addition, the operating results of our non-United States subsidiaries are translated into United States dollars and those results are affected by movements in foreign currencies relative to the United States dollar. Unfavorable fluctuations in foreign currency exchange rates have had, and could in the future continue to have, an adverse effect on our results of operations.
In addition, the operating results of our non-United States subsidiaries are translated into United States dollars and those results are affected by movements in foreign currencies relative to the United States dollar.
Significant judgment is required in determining our worldwide provision (benefit) for income taxes and other tax liabilities. Changes in tax laws or tax rulings may have a significant adverse impact on our effective tax rate.
As a multinational corporation, we are subject to income taxes, as well as non-income-based taxes, in both the United States and various foreign jurisdictions. Significant judgment is required in determining our worldwide provision for income taxes and other tax liabilities. Changes in tax laws or tax rulings may have a significant adverse impact on our effective tax rate.
While we do not have direct operations within Russia or Ukraine, the conflict involving these nations has heightened the disruption to our supply chain, triggered inflation in our food and labor costs and may increase our risk of cyberattacks.
In addition, political unrest and global conflicts have disrupted, and in the future may continue to disrupt, global supply chains and heighten volatility and disruption of global financial markets. For example, while we do not have direct operations within Russia or Ukraine, the conflict involving these nations has triggered inflation in our costs and may increase our risk of cyberattacks.
Possible future acquisitions could also result in additional contingent liabilities and amortization expenses related to intangible assets being incurred, which could have a material adverse effect on our business, financial condition or results of operations.
Delays in or poor execution of the integration of these systems could disrupt our operations and increase costs and could also potentially adversely impact the effectiveness of our disclosure controls and internal controls over financial reporting. 13 Table of Contents Possible future acquisitions could also result in additional contingent liabilities and amortization expenses related to intangible assets being incurred, which could have a material adverse effect on our business, financial condition or results of operations.
Local labor and employment laws in countries outside of the United States can make it more difficult and costly to reduce labor costs in connection with decreases in demand for our services.
Unfavorable fluctuations in foreign currency exchange rates have had, and could in the future continue to have, an adverse effect on our results of operations. 11 Table of Contents Local labor and employment laws in countries outside of the United States can make it more difficult and costly to reduce labor costs in connection with decreases in demand for our services.
In addition, product recalls or health concerns associated with food contamination may also increase our raw material costs. Increases or changes in income tax rates or laws of tax matters could adversely impact our financial results. As a multinational corporation, we are subject to income taxes, as well as non-income-based taxes, in both the United States and various foreign jurisdictions.
In addition, product recalls or health concerns associated with food contamination may also increase our raw material costs. 15 Table of Contents Increases or changes in income tax rates or laws of tax matters could adversely impact our financial results.
While we have a significant international presence, certain competitors have more extensive portfolios of services and a broader geographic footprint than we do. Therefore, we may be placed at a competitive disadvantage for clients who require multiservice or multinational bids.
While we have a significant international presence, certain competitors have more extensive portfolios of services and a broader geographic footprint than we do.
Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our contracts may constrain our ability to make a profit.
Therefore, we may be placed at a competitive disadvantage for clients who require multiservice or multinational bids. 10 Table of Contents Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our contracts may constrain our ability to make a profit.
Food safety is a top priority for us and we dedicate substantial resources to ensuring that our customers enjoy safe, quality food products. Claims of illness or injury relating to food quality, food handling or allergens are common in the food service industry and a number of these claims may exist at any given time.
A failure to maintain food safety throughout our supply chain and food-borne illness concerns, and risks relating to allergens, may result in reputational harm and claims of illness or injury that could adversely affect us. Food safety is a top priority for us and we dedicate substantial resources to ensuring that our customers enjoy safe, quality food products.
Any of these changes could result in lower revenue or profits than we have historically achieved, which could have an adverse effect on our results of operations. A failure to maintain food safety throughout our supply chain and food-borne illness concerns may result in reputational harm and claims of illness or injury that could adversely affect us.
Any of these changes could result in lower revenue or profits than we have historically achieved, which could have an adverse effect on our results of operations.
Because food safety issues could be experienced at the source or by food suppliers, distributors or subcontractors, food safety could, in part, be out of our control.
Claims of illness or injury relating to food quality, food handling or allergens are common in the food service industry and a number of these claims may exist at any given time. Because food safety issues could be experienced at the source or by food suppliers, distributors or subcontractors, food safety could, in part, be out of our control.
Additional or amended laws or regulations in this area may significantly increase the cost of compliance, expose us to liabilities, or cause reputational harm. We serve alcoholic beverages at many facilities, and must comply with applicable licensing laws, as well as state and local service laws, commonly called dram shop statutes in the United States.
We serve alcoholic beverages at many facilities, including at college stadiums, and offer more innovative services, such as self-service options, and must comply with applicable licensing laws, as well as state and local service laws, commonly called dram shop statutes in the United States.
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In addition, political unrest and global conflicts have disrupted, and in the future may continue to disrupt, global supply chains and heighten volatility and disruption of global financial markets.
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We may fail to realize the anticipated benefits of acquisitions and joint ventures or successfully integrate the operations of the companies we acquire. We may seek to acquire companies or interests in companies, or enter into joint ventures that complement our business.
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For example, during fiscal 2021, in certain countries we were unable to reduce our international labor costs to reflect the adverse impact of the COVID-19 pandemic to the same extent as we were able to in the United States and therefore the decrease in our international operating income as a percentage of the decrease in our revenues was higher than in our United States business. 11 Table of Contents We will continue to explore and consider opportunities to develop our business in emerging countries over the long term.
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Additional or amended laws or regulations in this area may significantly increase the cost of compliance, expose us to liabilities or cause reputational harm.
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Delays in or poor execution of the integration of these systems could disrupt our operations and increase costs, and could also potentially adversely impact the effectiveness of our disclosure controls and internal controls over financial reporting.
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There is also a risk that our suppliers, distributors or subcontractors underreport food safety incidents or system failures, which could hinder response and tracking of such risks.
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We face risks associated with the recently completed spin-off of our Uniform segment.
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Additionally, social media has increased the speed with which negative publicity, including actual or perceived food safety incidents, is disseminated before there is any meaningful opportunity to investigate, respond to and address an issue. Future food safety issues may also from time to time disrupt our business.
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On September 30, 2023, we completed the previously announced separation and distribution of the Uniform segment through the pro rata distribution of 130,725,188 shares of common stock, par value $0.01 per share of Vestis to the stockholders of record of the Company as of the close of business on September 20, 2023.
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Additionally, we are subject to regular review and audit by both domestic and foreign tax authorities as well as to the prospective and retrospective effects of changing tax regulations and legislation. Countries are also requiring additional disclosures related to tax liabilities paid within jurisdictions.
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We maintain a global cybersecurity program aligned with the five pillars of the National Institute of Standards and Technology Cybersecurity Framework: Identification, Prevention, Detection, Response and Recovery. Our cross functional Cyber Governance Committee is responsible for prioritizing and managing evolving cyber risks.
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Although we believe we are currently compliant, we may fall awry of such requirements and be required to pay additional taxes under such systems, such as the Organization for Economic Co-operation & Development's Pillar Two Global Anti-Base Erosion Model Rules.
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These recent developments require us to review and amend the legal mechanisms by which we make and receive such cross-border personal data transfers.
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In addition, the rapid evolution and increased adoption of artificial intelligence technologies may also heighten our risks by making cyber-attacks more difficult to detect, contain and mitigate. As a result, we and such third parties may be unable to anticipate these techniques or to implement adequate preventative measures.
Removed
Subsequent to fiscal year-end, after consideration of the separation and distribution of the Uniform segment and repayment of the 6.375% Senior Notes due 2025, our outstanding indebtedness was $5,149.5 million.
Added
Our cross functional Cybersecurity Team, led by our Chief Information Security Officer ("CISO"), is responsible for prioritizing and managing evolving cyber risks.
Removed
Financial Conduct Authority announced that it intended to stop requiring banks to submit LIBOR rates after 2021. On March 5, 2021, the ICE Benchmark Administration announced that all non-USD key LIBORs would cease publication after 2021, and select USD LIBOR rates would continue until June 30, 2023.
Added
The rapid development and integration of artificial intelligence ("AI") technologies into our processes presents several risks to our business. The use of AI technologies within our business processes must be managed effectively and ethically to avoid outputs that are false, biased, or inconsistent with our values and strategies.
Removed
The Alternative Reference Rates Committee, which was convened by the F ederal Reserve Board and the New York Federal Reserve, identified the Secured Overnight Financing Rate (“SOFR”) as the recommended risk-free alternative rate for USD LIBOR.
Added
Failure to properly manage, could also lead to unauthorized access to sensitive information and could harm our reputation and competitive position. At the same time, if we fail to keep pace with the rapid evolution of AI technologies, our competitive position and business results could suffer.
Removed
As a result, on June 29, 2023, we amended our senior secured credit agreement (as supplemented or otherwise modified from time to time, the "Credit Agreement") to provide for a transition of the underlying interest rate applicable to all term loans outstanding and revolving credit commitments and loans available and/or outstanding, in each case, under the Credit Agreement, from a LIBOR-based rate to a forward-looking term rate based on SOFR.
Added
In addition, the evolving regulatory landscape for AI technologies requires continuous monitoring and adaptation to ensure compliance and mitigate potential legal risks. Environmental requirements may subject us to significant liability and limit our ability to grow.
Removed
At this time, it is not possible to predict the full effect that the discontinuance of LIBOR, or the establishment of alternative reference rates such as SOFR, will have on us or our borrowing costs. SOFR is a relatively new reference rate and its composition and characteristics are not the same as LIBOR.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties Our principal executive offices are currently leased at 2400 Market Street, Philadelphia, Pennsylvania 19103. We own 14 buildings that we use in our FSS United States segment, including several office/warehouse spaces, and we lease 114 premises, consisting of offices, office/warehouses and distribution centers.
Item 2. Properties Our principal executive offices are currently leased at 2400 Market Street, Philadelphia, Pennsylvania 19103. We own 15 buildings that we use in our FSS United States segment, including several office/warehouse spaces, and we lease 119 premises, consisting of offices, warehouses and distribution centers.
In addition, we own 6 properties consisting of offices, land and warehouses and lease 63 facilities throughout the world that we use in our FSS International segment. We also maintain other real estate and leasehold improvements. No individual parcel of real estate owned or leased is of material significance to our total assets. 21 Table of Contents
In addition, we own 6 properties consisting of offices, land and warehouses and lease 56 facilities throughout the world that we use in our FSS International segment. We also maintain other real estate and leasehold improvements. No individual parcel of real estate owned or leased is of material significance to our total assets.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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We engage in informal settlement discussions with federal, state, local and foreign authorities regarding allegations of violations of environmental laws in connection with our operations or businesses conducted by our predecessors or companies that we have acquired, the aggregate amount of which and related remediation costs we do not believe should have a material adverse effect on our financial condition or results of operations as of September 29, 2023.
We engage in informal settlement discussions with federal, state, local and foreign authorities regarding allegations of violations of environmental laws in connection with our operations or businesses conducted by our predecessors or companies that we have acquired, the aggregate amount of which and related remediation costs we do not believe should have a material adverse effect on our financial condition or results of operations as of September 27, 2024.
Legal Proceedings From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of their business, including those brought by clients, customers, employees, government entities and third parties under, among others, 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, 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.
Legal Proceedings From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of our 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.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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From 2008 to 2014, he served as President, Sports and Entertainment, and prior to that he served in various other positions within our food and support services business from 1993 to 2008. Mr. Bruno serves on the Board of Directors of United Rentals, Inc., Special Olympics of Pennsylvania and Alex's Lemonade Stand Foundation. 23 Table of Contents PART II
From 2008 to 2014, he served as President, Sports & Entertainment, and prior to that he served in various other positions within our food and support services business from 1993 to 2008. Mr. Bruno serves on the Board of Directors of United Rentals, Inc., Special Olympics of Pennsylvania and Alex's Lemonade Stand Foundation. 24 Table of Contents PART II
Charpentier also served in various Human Resources and operational positions at Aramark from 1995 until 2018, including as Vice President, Human Resources at Aramark Headquarters from 2017 to 2018 and Vice President, Human Resources, Aramark Education from 2014 to 2017. Lauren A. Harrington was appointed Senior Vice President and General Counsel in March 2019.
Prior to that, Ms. Charpentier also served in various Human Resources and operational positions at Aramark from 1995 until 2018, including as Vice President, Human Resources at Aramark Headquarters from 2017 to 2018 and Vice President, Human Resources, Aramark Education from 2014 to 2017. Lauren A. Harrington was appointed Senior Vice President and General Counsel in March 2019.
Charpentier 50 Senior Vice President and Chief Human Resources Officer 2021 Lauren A. Harrington 48 Senior Vice President and General Counsel 2006 Marc A. Bruno 52 Chief Operating Officer, United States Food and Facilities 1993 John J. Zillmer was appointed Chief Executive Officer and a member of the Board of Directors in October 2019. Prior to joining us, Mr.
Charpentier 51 Senior Vice President and Chief Human Resources Officer 2021 Lauren A. Harrington 49 Senior Vice President and General Counsel 2006 Marc A. Bruno 53 Chief Operating Officer, United States Food and Facilities 1993 John J. Zillmer was appointed Chief Executive Officer and a member of the Board of Directors in October 2019. Prior to joining us, Mr.
Mr. Zillmer serves on the Board of Directors as Non-Executive Chairman of CSX Corporation, as well as the Board of Directors of Ecolab, Inc. Mr. Zillmer was formerly on the Board of Directors of Veritiv Corporation, Performance Food Group (PFG) Company, Inc. and Reynolds American Inc. Thomas G.
Mr. Zillmer serves on the Board of Directors as Non-Executive Chairman of CSX Corporation, as well as the Board of Directors of Ecolab, Inc. Mr. Zillmer was formerly on the Board of Directors of Veritiv Corporation, Performance Food Group (PFG) Company, Inc. and Reynolds American Inc. James J.
Charpentier served as Senior Vice President, Human Resources and Diversity, Aramark United States Food & Facilities. Previously Ms. Charpentier was a Vice President, People & Culture, the Americas of Four Seasons Hotels & Resorts from 2018 to 2021. Prior to that, Ms.
Charpentier was appointed Senior Vice President and Chief Human Resources Officer in January 2023. From August 2021 to January 2023, Ms. Charpentier served as Senior Vice President, Human Resources and Diversity, Aramark United States Food & Facilities. Previously Ms. Charpentier was Vice President, People & Culture, the Americas of Four Seasons Hotels & Resorts from 2018 to 2021.
Item 4. Mine Safety Disclosures Not Applicable. ______________________________________ 22 Table of Contents Information About Our Executive Officers Our executive officers as of November 21, 2023 are as follows: Name Age Position With Aramark Since John J. Zillmer 68 Chief Executive Officer 2019 Thomas G. Ondrof 59 Executive Vice President and Chief Financial Officer 2020 Abigail A.
Item 4. Mine Safety Disclosures Not Applicable. ______________________________________ 23 Table of Contents Information About Our Executive Officers Our executive officers as of November 19, 2024 are as follows: Name Age Position With Aramark Since John J. Zillmer 69 Chief Executive Officer 2019 James J. Tarangelo 51 Senior Vice President and Chief Financial Officer 2003 Abigail A.
Ondrof was appointed Executive Vice President and Chief Financial Officer in January 2020. Prior to joining us, Mr. Ondrof served as Head of Strategic Growth of Performance Food Group from March 2018 to December 2019 and Chief Financial Officer of Performance Food Group from October 2016 to March 2018.
Tarangelo was appointed Senior Vice President and Chief Financial Officer in January 2024. From June 2020 to January 2024, Mr. Tarangelo served as Senior Vice President and Treasurer and from December 2016 to June 2020 as Vice President and Treasurer. Previously Mr.
Removed
Prior to that, he served in a variety of financial and business development leadership roles at Compass Group North America, including Chief Development Officer, Chief Strategy Officer and Chief Financial Officer. Abigail A. Charpentier was appointed Senior Vice President and Chief Human Resources Officer in December 2022 effective January 2023. From August 2021 to January 2023, Ms.
Added
Tarangelo was Chief Financial Officer of Aramark International from 2014 to 2016 with financial oversight for operations across various international countries. Prior to that, he served in a variety of financial and business development leadership roles in Aramark starting from 2003. Before joining Aramark, Mr. Tarangelo worked with Legg Mason’s investment banking group and PricewaterhouseCoopers LLP. Abigail A.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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The graph assumes that $100 was invested in our common stock and in each index at the market close on September 28, 2018 and assumes that all dividends were reinvested. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested in our common stock and in each index at the market close on September 27, 2019 and assumes that all dividends were reinvested. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Shares of our common stock began trading on December 12, 2013 and are quoted on the NYSE under the ticker symbol “ARMK.” As of October 27, 2023, there were approximately 934 holders of record of our outstanding common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Shares of our common stock began trading on December 12, 2013 and are quoted on the NYSE under the ticker symbol “ARMK.” As of October 25, 2024, there were approximately 912 holders of record of our outstanding common stock.
The following graph shows a comparison from September 28, 2018, the last trading day of fiscal 2018, through September 29, 2023 of the cumulative total return for our common stock, The Standard & Poor’s (“S&P”) 500 Stock Index and The Dow Jones Consumer Non-Cyclical Index ("DJUSCY").
The following graph shows a comparison from September 27, 2019, the last trading day of fiscal 2019, through September 27, 2024 of the cumulative total return for our common stock, The Standard & Poor’s (“S&P”) 500 Stock Index and The Dow Jones Consumer Non-Cyclical Index ("DJUSCY").
Purchases of Equity Securities by the Issuer There were no repurchases of equity securities by us in the fourth fiscal quarter ended September 29, 2023. Item 6. [Reserved] 24 Table of Contents
Purchases of Equity Securities by the Issuer There were no repurchases of equity securities by us in the fourth fiscal quarter ended September 27, 2024. Item 6. [Reserved] 25 Table of Contents
September 28, 2018 September 27, 2019 October 2, 2020 October 1, 2021 September 30, 2022 September 29, 2023 Aramark $ 100.0 $ 100.0 $ 64.0 $ 83.2 $ 72.5 $ 80.7 S&P 500 $ 100.0 $ 101.6 $ 114.9 $ 149.5 $ 123.0 $ 147.2 Dow Jones Consumer Non-Cyclical Index $ 100.0 $ 101.1 $ 124.2 $ 149.8 $ 105.3 $ 122.8 Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the fiscal year ended September 29, 2023 which have not been previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.
September 27, 2019 October 2, 2020 October 1, 2021 September 30, 2022 September 29, 2023 September 27, 2024 Aramark $ 100.0 $ 64.0 $ 83.2 $ 72.5 $ 80.7 $ 123.8 S&P 500 $ 100.0 $ 113.5 $ 147.1 $ 121.1 $ 144.8 $ 193.7 Dow Jones Consumer Non-Cyclical Index $ 100.0 $ 122.4 $ 148.2 $ 104.2 $ 121.4 $ 163.9 Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the fiscal year ended September 27, 2024 which have not been previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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(4) "Other" for the twelve months ended September 29, 2023 includes the reversal of contingent consideration liabilities related to acquisition earn outs, net of expense ($85.7 million), charges related to the spin-off of the Uniform segment ($51.1 million), adjustments to remove the impact attributable to the adoption of certain accounting standards that are made to the calculation in accordance with the Credit Agreement and indentures ($47.5 million), net severance charges ($37.5 million), non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($29.3 million), income related to non-United States governmental wage subsidies ($12.5 million), the impact of hyperinflation in Argentina ($10.4 million), non-cash charges related to information technology assets ($8.2 million), the gain from the sale of land ($6.8 million), net multiemployer pension plan withdrawal charges ($5.9 million), labor charges and other expenses associated with closed or partially closed locations from adverse weather ($5.4 million), legal settlement charges ($2.7 million), non-cash charges for inventory write-downs ($2.6 million), the gain from the change in fair value related to certain gasoline and diesel agreements ($1.9 million) and other miscellaneous expenses.
(5) "Other" for the twelve months ended September 29, 2023 includes the reversal of contingent consideration liabilities related to acquisition earn outs, net of expense ($85.7 million), charges related to our spin-off of the Uniform segment ($51.1 million), adjustments to remove the impact attributable to the adoption of certain accounting standards that are made to the calculation in accordance with the Credit Agreement and indentures ($47.5 million), net severance charges ($37.5 million), non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($29.3 million), income related to non-United States governmental wage subsidies ($12.5 million), the impact of hyperinflation in Argentina ($10.4 million), non-cash charges related to information technology assets ($8.2 million), the gain from the sale of land ($6.8 million), net multiemployer pension plan withdrawal charges ($5.9 million), labor charges and other expenses associated with closed or partially closed locations from adverse weather ($5.4 million), legal settlement charges ($2.7 million), non-cash charges for inventory write-downs ($2.6 million), the gain from the change in fair value related to certain gasoline and diesel agreements ($1.9 million) and other miscellaneous expenses.
During fiscal 2022, we resolved the matter by entering into a settlement agreement with the client whereby our obligations totaled $13.6 million, resulting in a reversal of previously reserved amounts of $5.7 million, which is included in "Cost of services provided (exclusive of depreciation and amortization)" on the Consolidated Statements of Income (Loss).
During fiscal 2022, we resolved the matter by entering into a settlement agreement with the client whereby our obligations totaled $13.6 million, resulting in a reversal of previously reserved amounts of $5.7 million, which is included in "Cost of services provided (exclusive of depreciation and amortization)" on the Consolidated Statements of Income.
We believe that an accounting estimate relating to asset impairment is a critical accounting estimate because the assumptions underlying future cash flow estimates are subject to change from time to time and the recognition of an impairment could have a significant impact on our Consolidated Statements of Income (Loss).
We believe that an accounting estimate relating to asset impairment is a critical accounting estimate because the assumptions underlying future cash flow estimates are subject to change from time to time and the recognition of an impairment could have a significant impact on our Consolidated Statements of Income.
Selling and general corporate expenses include sales commissions, severance, share-based compensation and other unallocated costs related to administrative functions including finance, legal and human resources. Interest and Other Financing Costs, net Interest and other financing costs, net, relates primarily to interest expense on long-term borrowings.
Selling and general corporate expenses include sales commissions, severance, share-based compensation and other unallocated costs related to administrative functions including finance, legal and human resources. Interest Expense, net Interest Expense, net, relates primarily to interest expense on long-term borrowings.
(3) Other direct costs represented a lower proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 driven by food and support service costs increasing at a higher proportion as compared to other direct costs.
(3) Other direct costs represented a lower proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to fiscal 2022 driven by food and support service costs increasing at a higher proportion as compared to other direct costs.
Sale of AIM Services Co., Ltd Equity Investment On April 6, 2023, we sold our 50% ownership interest in AIM Services Co., Ltd., a leading Japanese food services company, to Mitsui & Co., Ltd. for $535.0 million in cash in a taxable transaction resulting in a pre-tax gain on sale of this equity investment of $377.1 million ($278.7 million net of tax) during fiscal 2023 (see Note 1 to the audited consolidated financial statements).
Sale of AIM Services Co., Ltd Equity Investment During fiscal 2023, we sold our 50% ownership interest in AIM Services Co., Ltd., a leading Japanese food services company, to Mitsui & Co., Ltd. for $535.0 million in cash in a taxable transaction resulting in a pre-tax gain on sale of this equity investment of $377.1 million ($278.7 million gain net of tax) (see Note 1 to the audited consolidated financial statements).
Cash provided by financing activity more than offset cash used in the following: • repayments of United States Term B-3 Loans due 2025 ($1,664.8 million); • payments of dividends ($114.6 million); • repayment of borrowing under the Receivables Facility ($104.9 million); and • repayment of yen denominated term loans due 2026 ($63.0 million).
Cash provided by financing activities more than offset cash used in the following: • repayments of United States Term B-3 Loans due 2025 ($1,664.8 million); • payments of dividends ($114.6 million); • repayment of borrowing under the Receivables Facility ($104.9 million); and • repayment of yen denominated term loans due 2026 ($63.0 million).
Cost of services provided (exclusive of depreciation and amortization) consists of direct expenses associated with our operations, which includes food costs, wages, other labor-related expenses (including workers' compensation, severance, state unemployment insurance and federal or state mandated health benefits and other healthcare costs), insurance, fuel, utilities, piece goods and clothing and equipment.
Cost of services provided (exclusive of depreciation and amortization) consists of direct expenses associated with our operations, which includes food costs, wages, other labor-related expenses (including workers' compensation, severance, state unemployment insurance and federal or state mandated health benefits and other healthcare costs), insurance, fuel, utilities, clothing and equipment.
During the fourth quarter of fiscal 2023, we performed the annual impairment test for goodwill for each of our reporting units using a quantitative testing approach. Based on the evaluation performed, we determined that the fair value of each of the reporting units significantly exceeded its respective carrying amount, and therefore, we determined that goodwill was not impaired.
During the fourth quarter of fiscal 2024, we performed the annual impairment test for goodwill for each of our reporting units using a quantitative testing approach. Based on the evaluation performed, we determined that the fair value of each of the reporting units significantly exceeded its respective carrying amount, and therefore, we determined that goodwill was not impaired.
Our Food and Support Services operations focus on serving clients in five principal sectors: Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other. Our FSS International reportable segment provides a similar range of services as those provided to our FSS United States clients and operates in the same sectors.
Our operations focus on serving clients in five principal sectors: Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other. Our FSS International reportable segment provides a similar range of services as those provided to our FSS United States clients and operates in the same sectors.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of Aramark's (the "Company," "we," "our" and "us") financial condition and results of operations for the fiscal years ended September 29, 2023 and September 30, 2022 should be read in conjunction with our audited consolidated financial statements and the notes to those statements.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of Aramark's (the "Company," "we," "our" and "us") financial condition and results of operations for the fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022 should be read in conjunction with our audited consolidated financial statements and the notes to those statements.
Through our established brand, broad geographic presence and employees, we anchor our business in our partnerships with thousands of clients. Through these partnerships we serve millions of customers including students, patients, employees, sports fans and guests worldwide.
Through our established brand, broad geographic presence and employees, we anchor our business in our partnerships with thousands of clients. Through these partnerships we serve millions of consumers including students, patients, employees, sports fans and guests worldwide.
Our reserves for retained costs associated with our casualty program are estimated through actuarial methods, with the assistance of third-party actuaries, using loss development assumptions based on our claims history. Our casualty program reserves take into account reported claims as well as incurred-but-not-reported losses using loss development factors based upon past experience.
Our reserves for retained costs associated with our casualty program are estimated through actuarial methods, with the assistance of third-party actuaries, using loss development assumptions based on 43 Table of Contents our claims history. Our casualty program reserves take into account reported claims as well as incurred-but-not-reported losses using loss development factors based upon past experience.
In determining legal reserves, we consider, among other issues: • interpretation of contractual rights and obligations; 38 Table of Contents • the status of government regulatory initiatives, interpretations and investigations; • the status of settlement negotiations; • prior experience with similar types of claims; • whether there is available insurance; and • advice of counsel.
In determining legal reserves, we consider, among other issues: • interpretation of contractual rights and obligations; • the status of government regulatory initiatives, interpretations and investigations; • the status of settlement negotiations; • prior experience with similar types of claims; • whether there is available insurance; and • advice of counsel.
The "Other investing activities" caption includes $37.6 million and $19.0 million of proceeds received during fiscal 2023 and 2022, respectively, relating to the recovery of our investment (possessory interest) at one of the National Park Service sites within our Sports, Leisure & Corrections sector.
The "Other investing activities" caption includes $37.6 million and $19.0 million of proceeds received during fiscal 2023 and fiscal 2022, respectively, relating to possessory interest at one of the National Park sites within our Sports, Leisure & Corrections sector.
"Payments made to clients on contracts" generated a higher use of cash during fiscal 2023 compared to fiscal 2022 primarily due to contract renewals and new business. Fiscal 2022 included $57.7 million of proceeds associated with labor related tax credits from many foreign jurisdictions in which we operate as a form of relief from COVID-19.
"Payments made to clients on contracts" generated a higher use of cash during fiscal 2023 compared to fiscal 2022 primarily due to contract renewals and new business. Fiscal 2022 included $51.8 million of proceeds associated with labor related tax credits from many foreign jurisdictions in which we operate as a form of relief from COVID-19.
In the following discussion and analysis of financial condition and results of operations, certain financial measures may be considered “non-GAAP financial measures” under SEC rules. These rules require supplemental explanation and reconciliation, which is provided elsewhere in this Annual Report.
In the following discussion and analysis of financial condition and results of operations, certain financial measures may be considered “non-GAAP financial measures” under the Securities and Exchange Commission ("SEC") rules. These rules require supplemental explanation and reconciliation, which is provided elsewhere in this Annual Report.
Overview We are a leading global provider of food and facilities services to education, healthcare, business & industry and sports, leisure & corrections clients. Our core market is the United States, which is supplemented by an additional 14-country footprint. We also provide our services on a more limited basis in several additional countries and in offshore locations.
Overview We are a leading global provider of food and facilities services to education, healthcare, business & industry and sports, leisure & corrections clients. Our largest market is the United States, which is supplemented by an additional 15-country footprint. We also provide our services on a more limited basis in several additional countries and in offshore locations.
Interest and other financing costs, net also includes third-party costs associated with long-term borrowings that were capitalized and are being amortized over the term of the borrowing. Provision for Income Taxes The Provision for Income Taxes represents federal, foreign, state and local income taxes.
Interest Expense, net also includes third-party costs associated with long-term borrowings that were capitalized and are being amortized over the term of the borrowing. Provision for Income Taxes The Provision for Income Taxes represents federal, foreign, state and local income taxes.
Direct expense related to 26 Table of Contents food costs within Cost of services provided (exclusive of depreciation and amortization) are offset by rebates, vendor allowances and volume discounts. Depreciation and amortization expenses mainly relate to assets used in generating revenue.
Direct expense related to food costs within cost of services provided (exclusive of depreciation and amortization) are offset by rebates, vendor allowances and volume discounts. Depreciation and amortization expenses mainly relate to assets used in generating revenue.
These increases in operating income during fiscal 2023 more than offset the following: • increased inflationary costs in food and labor; • non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements); and • non-cash charge for the impairment of computer software assets ($8.2 million). 30 Table of Contents FSS International Segment FSS International segment revenue increased by approximately 19.3% during fiscal 2023 compared to the prior year period.
These increases in operating income more than offset the following: • increased inflationary costs in food and labor; • non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements); and • non-cash charge for the impairment of computer software assets ($8.2 million). 34 Table of Contents FSS International Segment FSS International segment revenue increased by approximately 19.3% during fiscal 2023 compared to fiscal 2022.
The Sports, Leisure & Corrections sector increased due to higher per capita customer spending in stadiums and arenas and the acquisition of Union Supply, which contributed an additional 2.0% of revenue during fiscal 2023 as compared to the prior year period. The Business & Industry sector increased due to client personnel continuing to return to office locations.
The Sports, Leisure & Corrections sector increased due to higher per capita customer spending in stadiums and arenas and the acquisition of Union Supply, which contributed an additional 2.0% of revenue during fiscal 2023 as compared to fiscal 2022. The Business & Industry sector increased due to client personnel continuing to return to office locations.
(2) These amounts represent future interest payments related to our existing debt obligations based on fixed and variable interest rates specified in the associated debt agreements and reflect any current hedging arrangements. Payments related to variable debt are based on applicable rates at September 29, 2023 plus the specified margin in the associated debt agreements for each period presented.
(2) These amounts represent future interest payments related to our existing debt obligations based on fixed and variable interest rates specified in the associated debt agreements and reflect any current hedging arrangements. Payments related to variable debt are based on applicable rates at September 27, 2024 plus the specified margin in the associated debt agreements for each period presented.
These increases in operating income during fiscal 2023 more than offset the following: • increased inflationary costs in product and labor; • decline in profit related to the sale of our 50% ownership interest in AIM Services Co., Ltd.; • prior year labor related tax credits provided from governmental assistance programs ($24.1 million); • higher severance charges ($18.0 million) (see Note 3 to the audited consolidated financial statements); • prior year favorable impact related to a client contract dispute ($9.6 million); • unfavorable impact of foreign currency translation ($7.8 million); • higher currency translation losses from Argentina hyperinflation ($7.0 million) (see Note 1 to the audited consolidated financial statements); and • non-cash charges for the impairment of certain assets related to a business that was sold ($5.2 million).
These increases in operating income more than offset the following: • increased inflationary costs in product and labor; • greater labor related tax credits provided from governmental assistance programs in fiscal 2022 as compared to fiscal 2023 ($24.1 million); • higher net severance charges ($18.0 million); • favorable impact related to a client contract dispute in fiscal 2022 ($9.6 million); • unfavorable impact of foreign currency translation ($7.8 million); • decline in profit related to the sale of our 50% ownership interest in AIM Services Co., Ltd.; • higher currency translation losses from Argentina hyperinflation ($7.0 million) (see Note 1 to the audited consolidated financial statements); and • non-cash charges for the impairment of certain assets related to a business that was sold ($5.2 million).
The indentures governing our senior notes contain similar provisions. As of September 29, 2023, we were in compliance with these covenants. As stated above, the Credit Agreement and the indentures governing our senior notes contain provisions that restrict our ability to pay dividends and repurchase stock (collectively, "Restricted Payments").
The indentures governing our senior notes contain similar provisions. As of September 27, 2024, we were in compliance with these covenants. As stated above, the Credit Agreement and the indentures governing our senior notes contain provisions that restrict our ability to pay dividends and repurchase stock (collectively, "Restricted Payments").
("ASI") and its restricted subsidiaries plus interest and other financing costs, net, provision for income taxes, and depreciation and amortization, further adjusted to give effect to adjustments required in calculating covenant ratios and compliance under our Credit Agreement and the indentures governing our senior notes.
("ASI") and its restricted subsidiaries plus interest expense, net, provision for income taxes, and depreciation and amortization, further adjusted to give effect to adjustments required in calculating covenant ratios and compliance under our Credit Agreement and the indentures governing our senior notes.
The Captive is subject to the 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 September 29, 2023.
The Captive is subject to the 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 September 27, 2024.
Cash Flows Provided by (Used in) Investing Activities The net cash flows provided by investing activities during fiscal 2023 was primarily impacted by proceeds from the sales of equity investments ($685.0 million) (see Note 1 to the audited consolidated financial statements) and proceeds from the maturity of United States Treasury securities related to our captive insurance subsidiary ($80.0 million), offset by purchases of property and equipment and other ($461.4 million), purchases of United States Treasury securities related to our captive insurance subsidiary ($110.0 million) and acquisitions of certain businesses ($50.2 million).
Cash Flows Provided by (Used in) Investing Activities The net cash flows provided by investing activities during fiscal 2023 was primarily impacted by proceeds from the sales of equity investments ($633.2 million) (see Note 1 to the audited consolidated financial statements) and proceeds from the maturity of United States Treasury securities related to our captive insurance subsidiary ($80.0 million), partially offset by purchases of property and equipment and other ($383.5 million), purchases of United States Treasury securities related to our captive insurance subsidiary ($110.0 million) and acquisitions of certain businesses ($50.2 million).
See Note 5 to the audited consolidated financial statements for additional information on borrowing activities during fiscal 2023. During fiscal 2022, cash used in financing activities was impacted by the following: • payments of dividends ($113.1 million); • borrowing under the Receivables Facility ($104.9 million); and • the repayment of 5.000% 2025 Senior Notes and foreign term loans ($66.7 million).
See Note 6 to the audited consolidated financial statements for additional information on borrowing activities during fiscal 2023. During fiscal 2022, cash used in financing activities was driven by payments of dividends ($113.1 million) and the repayment of 5.000% 2025 Senior Notes and foreign term loans ($66.7 million), partially offset by borrowing under the Receivables Facility ($104.9 million).
Cash Flows Provided by Operating Activities Cash provided by operating activities increased by $71.9 million during fiscal 2023 compared to fiscal 2022. The change was driven by higher net income, inclusive of non-cash adjustments, in fiscal 2023 compared to fiscal 2022, as discussed in "Results of Operations" above.
Fiscal 2023 Compared to Fiscal 2022 Cash Flows Provided by Operating Activities Cash provided by operating activities increased by $47.7 million during fiscal 2023 compared to fiscal 2022. The change was driven by higher net income, inclusive of non-cash adjustments, in fiscal 2023 compared to fiscal 2022, as discussed in "Results of Operations" above.
Additionally, cash provided by operating activities was favorably impacted by the change in operating assets and liabilities compared to the prior year period by $36.1 million, which was primarily due to: • Receivables by $261.2 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period had a higher use of cash from operations returning following the lifting of COVID-19 restrictions.
Additionally, cash provided by operating activities in fiscal 2023 was favorably impacted by the change in operating assets and liabilities compared to fiscal 2022 by $36.4 million, which was primarily due to: • Receivables by $232.9 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period had a higher use of cash from operations returning following the lifting of COVID-19 restrictions.
Sources of Revenue Our clients engage us, generally through written contracts, to provide our services at their locations. Depending on the type of client and service, we are paid either by our client or directly by the customer to whom we have been provided access by our client.
Sources of Revenue Our clients engage us, generally through written contracts, to provide our services at their locations. Depending on the type of client and service, we are paid either by our client or directly by the customer to whom we have been provided access by our client. We typically use either profit and loss contracts or client interest contracts.
Both periods were impacted by base and new business growth and timing of collections; • Accrued expenses by $74.9 million generating a greater source of cash during fiscal 2023 compared to fiscal 2022 primarily due to timing of deferred income payments, growth in business operations, higher severance charges recorded in fiscal 2023 and timing of other payments, which more than offset higher interest payments on borrowings; and • Inventories by $33.6 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period was impacted from operations returning following the lifting of COVID-19 restrictions.
Both periods were impacted by base and new business growth and timing of collections; • Accrued expenses by $46.5 million generating a greater source of cash during fiscal 2023 compared to fiscal 2022 primarily due to timing of deferred income payments, growth in business operations, higher net severance charges recorded in fiscal 2023 and timing of other payments, which more than offset higher interest payments on borrowings; and • Inventories by $42.1 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period was impacted from operations returning following the lifting of COVID-19 restrictions.
The net cash flows used in investing activities during fiscal 2022 was impacted by purchases of property and equipment and other ($388.4 million), acquisitions of certain businesses, including Union Supply ($199.6 million) and other acquisitions ($140.4 million) (see Note 2 to the audited consolidated financial statements), purchases of marketable securities ($78.2 million) and the acquisition of equity investments ($64.0 million).
The net cash flows used in investing activities during fiscal 2022 was impacted by purchases of property and equipment and other ($311.9 million), acquisitions of certain businesses, including Union Supply ($199.6 million) and other acquisitions ($123.2 million) (see Note 3 to the audited consolidated financial statements), purchases of marketable securities ($78.2 million) and the acquisition of equity investments ($64.0 million).
Consolidated Overview Revenue increased by 15.5% during fiscal 2023 compared to the prior year period, which was primarily attributable to growth in base business, including pricing pass-throughs, and net new business. In addition, the Union Supply acquisition contributed an additional 1.2% of revenue compared to the prior year period.
Consolidated Overview Revenue increased by 17.5% during fiscal 2023 compared to fiscal 2022, which was primarily attributable to growth in base business, including pricing pass-throughs, and net new business. In addition, the Union Supply acquisition contributed an additional 1.5% of revenue in fiscal year 2023 compared to fiscal year 2022.
The increase was primarily attributable to base business growth, including contract price increases, and net new business growth. The growth in revenue was offset by the negative impact of foreign currency translation (5.0%). Operating income increased by $2.0 million during fiscal 2023 compared to the prior year period.
The increase was primarily attributable to base business growth, including contract price increases, and net new business growth. The growth in revenue was offset by the unfavorable impact of foreign currency translation by 5.0%. Operating income increased by $2.0 million during fiscal 2023 compared to fiscal 2022.
The market based method is dependent on several subjective factors including the determination of market multiples and future cash flows.
The 42 Table of Contents market based method is dependent on several subjective factors including the determination of market multiples and future cash flows.
(2) Personnel costs decreased as a percentage of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to the prior year period due to food and support service costs increasing at a higher proportion as compared to personnel costs.
(2) Personnel costs decreased as a percentage of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to fiscal 2022 due to food and support service costs increasing at a higher proportion as compared to personnel costs.
The "Other operating activities" caption reflects mainly adjustments to net 32 Table of Contents income in the current year and prior year periods related to certain non-cash gains and losses and adjustments to non-operating cash gains and losses.
The "Other operating activities" caption reflects mainly adjustments to net income in the current year and prior year periods related to certain non-cash gains and losses and adjustments to non-operating cash gains and losses.
Our covenant requirements and actual ratios for the twelve months ended September 29, 2023 are as follows: Covenant Requirements Actual Ratios Consolidated Secured Debt Ratio (1) ≤ 5.125x 1.76x Interest Coverage Ratio (Fixed Charge Coverage Ratio) (2) ≥ 2.000x 3.63x (1) The Credit Agreement requires ASI to maintain a maximum Consolidated Secured Debt Ratio, defined as consolidated total indebtedness secured by a lien to Covenant Adjusted EBITDA, not to exceed 5.125x.
Our covenant requirements and actual ratios for the twelve months ended September 27, 2024 are as follows: Covenant Requirements Actual Ratios Consolidated Secured Debt Ratio (1) ≤ 5.125x 1.99x Interest Coverage Ratio (Fixed Charge Coverage Ratio) (2) ≥ 2.000x 3.73x (1) The Credit Agreement requires ASI to maintain a maximum Consolidated Secured Debt Ratio, defined as consolidated total indebtedness secured by a lien to Covenant Adjusted EBITDA, not to exceed 5.125x.
Some management fee contracts entitle us to receive incentive fees based upon our performance under the contract, as measured by factors such as revenue, operating costs and customer satisfaction surveys. For fiscal 2023, approximately one-third of our FSS United States and FSS International segment revenue was derived from client interest contracts.
Some management fee contracts entitle us to receive incentive fees based upon our performance under the contract, as measured by factors such as revenue, operating costs and customer satisfaction surveys. For fiscal 2024, approximately one-third of our revenue was derived from client interest contracts.
($377.1 million), the fiscal 2023 gain from the sale of our equity investment in a foreign company ($51.8 million), the fiscal 2023 non-cash charge for the impairment of certain assets related to a 34 Table of Contents business that was sold ($5.2 million) and the fiscal 2023 loss from the sale of a portion of our equity investment in the San Antonio Spurs NBA franchise ($1.1 million).
($377.1 million), the pre-tax gain from the sale of our equity investment in a foreign company ($51.8 million), the non-cash charge for the impairment of certain assets related to a business that was sold ($5.2 million) and the pre-tax loss from the sale of a portion of our equity investment in the San Antonio Spurs NBA franchise ($1.1 million).
The increase for fiscal 2023 was primarily due to higher interest rates related to our senior secured term loan facilities and our Receivables Facility and revolving credit facility. 29 Table of Contents The Provision for Income Taxes for fiscal 2023 and fiscal 2022 was recorded at an effective tax rate of 20.9% and 24.0%, respectively.
The increase was primarily due to higher interest rates related to our senior secured term loan facilities, our Receivables Facility and our revolving credit facility. The Provision for Income Taxes for fiscal 2023 and fiscal 2022 was recorded at an effective tax rate of 20.7% and 17.9%, respectively.
(2) The twelve months ended September 29, 2023 represents the fiscal 2023 gain from the sale of our equity method investment in AIM Services, Co., Ltd.
The twelve months ended September 29, 2023 represents the pre-tax gain from the sale of our equity method investment in AIM Services, Co., Ltd.
During fiscal 2023 and fiscal 2022, we received proceeds of $21.4 million and $1.9 million, respectively, related to favorable loss experience in older insurance years under our general liability, automobile liability and workers' compensation programs.
During fiscal 2024 and fiscal 2023, we received proceeds of $6.5 million and $21.4 million, respectively, related to favorable loss experience in older insurance years under our general liability, automobile liability and workers' compensation programs.
Fiscal Year Ended Cost of services provided (exclusive of depreciation and amortization) components September 29, 2023 September 30, 2022 Food and support service costs (1) 28.8 % 26.5 % Personnel costs (2) 45.8 % 47.7 % Other direct costs (3) 25.4 % 25.8 % 100.0 % 100.0 % (1) Food and support service costs represented a higher proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to the prior year period mainly from product cost inflation and volume increases due to revenue growth.
Fiscal Year Ended Cost of services provided (exclusive of depreciation and amortization) components September 29, 2023 September 30, 2022 Food and support service costs (1) 30.0 % 27.5 % Personnel costs (2) 45.1 % 47.2 % Other direct costs (3) 24.9 % 25.3 % 100.0 % 100.0 % (1) Food and support service costs represented a higher proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to fiscal 2022 mainly from product cost inflation and volume increases due to revenue growth.
Pursuant to the Receivables Facility, we formed ARAMARK Receivables, LLC, a wholly-owned, consolidated, bankruptcy-remote subsidiary. ARAMARK Receivables, LLC was formed for the sole purpose of buying and selling receivables generated by certain of our subsidiaries. Under the Receivables Facility, we and certain of our subsidiaries transfer without recourse all of our accounts receivable to ARAMARK Receivables, LLC.
Pursuant to the Receivables Facility, we formed ARAMARK Receivables, LLC, a wholly-owned, consolidated, bankruptcy-remote subsidiary. ARAMARK Receivables, LLC was formed for the sole purpose of buying and selling receivables generated by certain of our subsidiaries.
The "Changes in other assets" caption was driven by the prior year increase to in-service rental merchandise from operations returning after COVID-19 restrictions lifted and higher amortization of client investments due to an increase in investments related to base and new business growth, which more than offset higher cash distributions received from our 50% ownership interest in AIM Services Co., Ltd. in fiscal 2022 compared to fiscal 2023.
The "Changes in other assets" caption was driven by higher amortization of client investments due to an increase in investments related to base and new business growth, which more than offset higher cash distributions received from our 50% ownership interest in AIM Services Co., Ltd. in fiscal 2022 compared to fiscal 2023.
As of September 29, 2023 and September 30, 2022, our valuation allowance reserves recorded against deferred tax assets were $78.2 million and $83.8 million, respectively (see Note 10 to the audited consolidated financial statements). 40 Table of Contents New Accounting Standards Updates See Note 1 to the audited consolidated financial statements for a full description of recent accounting standards updates, including the expected dates of adoption.
As of September 27, 2024 and September 29, 2023, our valuation allowance reserves recorded against deferred tax assets were $80.6 million and $78.2 million, respectively (see Note 11 to the audited consolidated financial statements). 44 Table of Contents New Accounting Standards Updates See Note 1 to the audited consolidated financial statements for a full description of recent accounting standards updates, including the expected dates of adoption.
Foreign currency translation unfavorably impacted revenue during fiscal 2023 by 1.3%. 28 Table of Contents The following table presents the cost of services provided (exclusive of depreciation and amortization) by segment and as a percent of revenue for the fiscal years ended September 29, 2023 and September 30, 2022.
Foreign currency translation unfavorably impacted revenue during fiscal 2024 by 1.7%. 28 Table of Contents The following table presents the cost of services provided (exclusive of depreciation and amortization) by segment and as a percent of revenue for fiscal 2024 and fiscal 2023.
Litigation and Claims From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of our businesses, including those brought by clients, customers, employees, government entities and third parties under, among others, 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, false claims or whistleblower statutes, procurement regulations, intellectual property laws, food safety and sanitation laws, cost and accounting principles, the Foreign Corrupt Practices Act, the U.K.
Litigation and Claims From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of our 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.
Twelve Months Ended (in millions) September 29, 2023 September 30, 2022 Net income attributable to ASI stockholders $ 674.1 $ 194.5 Interest and other financing costs, net 439.6 372.7 Provision for income taxes 177.6 61.5 Depreciation and amortization 546.4 532.3 Share-based compensation expense (1) 86.9 95.5 Unusual or non-recurring (gains) and losses (2) (422.6) — Pro forma EBITDA for certain transactions (3) 4.0 11.8 Other (4)(5) 100.7 53.4 Covenant Adjusted EBITDA $ 1,606.7 $ 1,321.7 (1) Represents share-based compensation expense resulting from the application of accounting for stock options, restricted stock units, performance stock units, deferred stock units awards and employee stock purchases (see Note 12 to the audited consolidated financial statements).
Twelve Months Ended (in millions) September 27, 2024 September 29, 2023 Net income attributable to ASI stockholders $ 262.5 $ 674.1 Interest expense, net 366.7 439.6 Provision for income taxes 103.0 177.6 Depreciation and amortization 435.5 546.4 Share-based compensation expense (1) 62.6 86.9 Unusual or non-recurring (gains) and losses (2) (22.8) (422.6) Pro forma EBITDA for certain transactions (3) 0.8 4.0 Other (4)(5) 126.7 100.7 Covenant Adjusted EBITDA $ 1,335.0 $ 1,606.7 (1) Represents share-based compensation expense resulting from the application of accounting for stock options, restricted stock units, performance stock units, deferred stock units awards and employee stock purchases (see Note 13 to the audited consolidated financial statements).
Corporate Corporate expenses, those administrative expenses not allocated to the business segments, decreased by $2.8 million during fiscal 2023 compared to the prior year period.
Corporate Corporate expenses, those administrative expenses not allocated to the business segments, increased by $1.2 million during fiscal 2024 compared to the prior year period.
The increase during fiscal 2023 was attributable to: • base business growth, including volume recovery from COVID-19, and effective cost management; • higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 16 to the audited consolidated financial statements); • higher income related to favorable loss experience under our general liability, automotive liability and workers' compensation liability programs when compared to fiscal 2022 ($19.1 million); and • higher income attributed to the Union Supply acquisition as compared to the prior year period ($10.6 million).
The increase was attributable to: • base business growth, including volume recovery from COVID-19, and effective cost management; • higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 17 to the audited consolidated financial statements); • higher income related to favorable loss experience under our general liability, automobile liability and workers' compensation liability programs when compared to fiscal 2022 ($19.1 million); • higher income from proceeds associated with possessory interest at one of the National Park sites when compared to fiscal 2022 ($17.3 million) (see Note 1 to the audited consolidated financial statements); and • higher income attributed to the Union Supply acquisition as compared to fiscal 2022 ($10.6 million).
These increases in operating income during fiscal 2023 more than offset: • increased inflationary costs in product, energy and labor; • higher personnel and other expenses related to the spin-off of the Uniform segment ($41.8 million); • impairment charges of operating lease right-of-use assets and property and equipment and other costs related to certain real estate properties ($26.7 million) (see Note 1 to the audited consolidated financial statements); • prior year labor related tax credits provided from governmental assistance programs ($24.5 million); • higher severance charges ($20.8 million) (see Note 3 to the audited consolidated financial statements); and • negative impact of foreign currency translation ($10.2 million).
These increases in operating income more than offset: • increased inflationary costs in product, energy and labor; • greater labor related tax credits provided from governmental assistance programs in fiscal 2022 as compared to fiscal 2023 ($24.1 million); • impairment charges of operating lease right-of-use assets and property and equipment and other costs related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements); • higher expenses related to the spin-off of the Uniform segment ($14.8 million); • higher net severance charges ($13.2 million); and • negative impact of foreign currency translation ($9.6 million).
The terms and related calculations are defined in the Credit Agreement and the indentures governing our senior notes. Covenant Adjusted EBITDA is a measure of ASI and its restricted subsidiaries only and does not include the results of Aramark.
The terms and related calculations are defined in the Credit Agreement and the indentures governing our senior notes. Covenant Adjusted EBITDA is a measure of ASI and its restricted subsidiaries only and does not include the results of Aramark. The Covenant Adjusted EBITDA for fiscal 2023 includes the reported results of the Uniform segment prior to the spin-off.
Operating income increased by $234.5 million during fiscal 2023 compared to the prior year period, which was driven by base business growth, including volume recovery from COVID-19, and effective cost management.
Operating income increased by $209.6 million during fiscal 2023 compared to fiscal 2022, which was driven by base business growth, including volume recovery from COVID-19, and effective cost management.
Cash Flows Provided by (Used in) Financing Activities During fiscal 2023, cash provided by financing activities was impacted by the following: • proceeds from issuance of new United States Term B-6 Loans due 2030 ($1,089.0 million); • proceeds from Uniform issuance of new United States Term A-1 Loans due 2025 ($800.0 million); • proceeds from Uniform issuance of new United States Term A-2 Loans due 2028 ($700.0 million); and • borrowings under the revolving credit facility ($101.4 million).
Cash Flows Provided by (Used in) Financing Activities During fiscal 2023, cash provided by financing activities was impacted by the following: • distribution from Vestis prior to the separation and distribution ($1,456.7 million); • proceeds from issuance of new United States Term B-6 Loans due 2030 ($1,089.0 million); and • borrowings under the revolving credit facility ($101.4 million).
The Education and Sports, Leisure & Corrections sectors had mid-single digit operating income margins, consistent with prior year. The Business & Industry sector had low-single digit operating income margins compared to negative low-single digit operating income margins in the prior year.
The Facilities & Other and Healthcare sectors had high-single digit operating income margins, consistent with prior year. The Education sector had high-single digit operating income margins compared to mid-single digit operating income margins in the prior year. The Sports, Leisure & Corrections sector had mid-single digit operating income margins, consistent with prior year.
Client interest contracts include management fee contracts, under which our clients reimburse our operating costs and pay us a management fee, which may be calculated as a fixed dollar amount or a percentage of revenue or operating costs.
For fiscal 2024, approximately two-thirds of our revenue was derived from profit and loss contracts. Client interest contracts include management fee contracts, under which our clients reimburse our operating costs and pay us a management fee, which may be calculated as a fixed dollar amount or a percentage of revenue or operating costs.
For goodwill, the impairment test may first consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
For goodwill, we perform the assessment of goodwill at the reporting unit level, which is an operating segment or one level below the operating segment. The impairment test may first consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
For additional information regarding the risks associated with our liquidity and capital resources, see Part I, Item 1A, "Risk Factors." The table below summarizes our cash activity (in millions): Fiscal Year Ended September 29, 2023 September 30, 2022 Net cash provided by operating activities $ 766.4 $ 694.5 Net cash provided by (used in) investing activities 208.9 (831.3) Net cash provided by (used in) financing activities 653.6 (37.7) Reference to the audited Consolidated Statements of Cash Flows will facilitate understanding of the discussion that follows.
For additional information regarding the risks associated with our liquidity and capital resources, see Part I, Item 1A, "Risk Factors." 35 Table of Contents The table below summarizes our cash activity (in millions): Fiscal Year Ended September 27, 2024 September 29, 2023 September 30, 2022 Net cash provided by operating activities of Continuing Operations $ 726.5 $ 511.6 $ 463.9 Net cash (used in) provided by investing activities of Continuing Operations (415.9) 223.7 (745.2) Net cash (used in) provided by financing activities of Continuing Operations (1,561.2) 659.6 (34.6) Reference to the audited Consolidated Statements of Cash Flows will facilitate understanding of the discussion that follows.
However, the payment of any future dividends will be at the discretion of our Board of Directors and our Board of Directors may, at any time, determine not to continue to declare quarterly dividends. 33 Table of Contents Covenant Compliance The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends, make distributions or repurchase our capital stock; make investments, loans or advances; repay or repurchase any subordinated debt, except as scheduled or at maturity; create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing our subordinated debt (or any indebtedness that refinances our subordinated debt); and fundamentally change our business.
Fiscal 2023 also includes debt issuance costs of $8.2 million related to United States Term B-6 Loans due 2030. 38 Table of Contents Covenant Compliance The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends, make distributions or repurchase our capital stock; make investments, loans or advances; repay or repurchase any subordinated debt, except as scheduled or at maturity; create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing our subordinated debt (or any indebtedness that refinances our subordinated debt); and fundamentally change our business.
During the COVID-19 pandemic and in following periods, operating income margin in certain sectors within the FSS United States reportable segment have differed from our otherwise historical patterns, particularly in the Business & Industry sector. FSS United States segment revenue increased by approximately 16.9% during fiscal 2023 compared to the prior year period.
The Business & Industry sector had low-single digit operating income margins in fiscal 2023 compared to negative low-single digit operating income margins in fiscal 2022. During the COVID-19 pandemic and in following periods, operating income margin in certain sectors within the FSS United States reportable segment have differed from our otherwise historical patterns, particularly in the Business & Industry sector.
Fiscal Year Ended September 29, 2023 September 30, 2022 Cost of services provided (exclusive of depreciation and amortization) $ % of Revenue $ % of Revenue FSS United States $ 10,596.0 90.4 % $ 9,145.0 91.2 % FSS International 4,159.1 95.4 % 3,456.5 94.5 % Uniform 2,282.7 82.4 % 2,166.0 82.1 % $ 17,037.8 90.4 % $ 14,767.5 90.5 % The following table presents the percentages attributable to the components in cost of services provided (exclusive of depreciation and amortization) for fiscal 2023 and fiscal 2022.
The following table presents the cost of services provided (exclusive of depreciation and amortization) by segment and as a percent of revenue for fiscal 2023 and fiscal 2022. 32 Table of Contents Fiscal Year Ended September 29, 2023 September 30, 2022 Cost of services provided (exclusive of depreciation and amortization) $ % of Revenue $ % of Revenue FSS United States $ 10,615.6 90.6 % $ 9,159.0 91.3 % FSS International 4,159.1 95.4 % 3,456.5 94.5 % $ 14,774.7 91.9 % $ 12,615.5 92.2 % The following table presents the percentages attributable to the components in cost of services provided (exclusive of depreciation and amortization) for fiscal 2023 and fiscal 2022.
("Union Supply"), a commissary goods and services supplier, for cash consideration of $199.6 million, plus contingent consideration (see Note 2 and Note 16 to the audited consolidated financial statements).
Acquisition of Union Supply During fiscal 2022, we completed the acquisition of Union Supply Group Inc. ("Union Supply"), a commissary goods and services supplier, for cash consideration of $199.6 million, plus contingent consideration (see Note 3 and Note 17 to the audited consolidated financial statements).
The fiscal years ended September 29, 2023 and September 30, 2022 were each a fifty-two week period. 27 Table of Contents Results of Operations Fiscal 2023 Compared to Fiscal 2022 The following tables present an overview of our results on a consolidated and segment basis with the amount of and percentage change between periods for the fiscal years 2023 and 2022 (dollars in millions).
Results of Operations Fiscal 2024 Compared to Fiscal 2023 The following tables present an overview of our results on a consolidated and segment basis with the amount of and percentage change between periods for the fiscal years 2024 and 2023 (dollars in millions).
In preparing our financial statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenue and expenses.
Critical Accounting Estimates Our significant accounting policies are described in the notes to the audited consolidated financial statements included in this Annual Report. In preparing our financial statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenue and expenses.
The five sectors of the FSS United States reportable segment are Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other.
Segment Results FSS United States Segment The FSS United States reportable segment consists of five sectors which have similar economic characteristics and comprise a single operating segment. The five sectors of the FSS United States reportable segment are Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other.
The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt. The weighted average debt balance for each fiscal year from 2024 through 2029 is $6,779.3 million, $6,216.8 million, $4,676.6 million, $4,006.0 million, $2,415.9 million and $1,069.7 million, respectively.
The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt. The weighted average debt balance for each fiscal year from 2025 through 2030 is $4,835.4 million, $4,316.2 million, $3,854.5 million, $2,272.3 million, $1,284.5 million and $536.6 million, respectively.
The weighted average interest rate of our existing debt obligations for each fiscal year from 2024 through 2029 is 3.76%, 4.28%, 4.37%, 4.86%, 6.36% and 7.70%, respectively (see Note 5 to the audited consolidated financial statements for the terms and maturities of existing debt obligations).
The weighted average interest rate of our existing debt obligations for each fiscal year from 2025 through 2030 is 2.19%, 2.97%, 3.83%, 5.53%, 6.89% and 6.96%, respectively (see Note 6 to the audited consolidated financial statements for the terms and maturities of existing debt obligations).
Estimated contributions to our defined benefit pension plans in fiscal 2024 are $1.0 million (see Note 9 to the audited consolidated financial statements). We have a Receivables Facility agreement with four financial institutions where we sell on a continuous basis an undivided interest in all eligible accounts receivable, as defined in the Receivables Facility.
As of September 27, 2024, we have gross uncertain tax liabilities of $70.2 million (see Note 11 to the audited consolidated financial statements). We have a Receivables Facility agreement with four financial institutions where we sell on a continuous basis an undivided interest in all eligible accounts receivable, as defined in the Receivables Facility.
The increase in operating income during fiscal 2023 also benefited from higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 16 to the audited consolidated financial statements), prior year charge related to inventory write-downs to zero net realizable value for personal protective equipment ($20.5 million) and from higher income related to favorable loss experience under our general liability, automotive liability and workers' compensation liability programs when compared to fiscal 2022 ($19.1 million).
The increase in operating income also benefited from higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 17 to the audited consolidated financial statements), from higher income related to favorable loss experience under our general liability, automobile liability and workers' compensation liability programs in fiscal 2023 when compared to fiscal 2022 ($19.1 million) and higher income from proceeds associated with possessory interest at one of the National Park sites in fiscal 2023 when compared to fiscal 2022 ($17.3 million) (see Note 1 to the audited consolidated financial statements).
Critical accounting estimates and the related assumptions are evaluated periodically as conditions warrant, and changes to such estimates are recorded as new information or changed conditions require. 37 Table of Contents Asset Impairment Determinations Indefinite lived intangible assets that are not amortized are subject to an impairment test that we conduct annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.
Asset Impairment Determinations Indefinite lived intangible assets that are not amortized are subject to an impairment test that we conduct annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists.
All other terms and conditions of the agreement remained largely unchanged. As of September 29, 2023, there are no outstanding borrowings under the Receivables Facility. Amounts borrowed under the Receivables Facility may fluctuate monthly based on our funding requirements and the level of qualified receivables available to collateralize the Receivables Facility.
The maximum amount available under the Receivables Facility as of September 27, 2024 is $600.0 million. As of September 27, 2024, there are no outstanding borrowings under the Receivables Facility. Amounts borrowed under the Receivables Facility may fluctuate monthly based on our funding requirements and the level of qualified receivables available to collateralize the Receivables Facility.
The lower effective tax rate in the current year compared to the prior year was driven by favorable tax effects from the sale of our equity investment in a foreign company (see Note 1 to the audited consolidated financial statements) and the reversal of a portion of the Union Supply contingent consideration liability (see Note 16 to the audited consolidated financial statements), as the majority of the gains from these transactions were not subject to tax.
(see Note 1 to the audited consolidated financial statements) and a higher prior year reversal of a portion of the Union Supply contingent consideration liability (see Note 17 to the audited consolidated financial statements), as the majority of the gains from these transactions were not subject to tax.
We typically use either profit and loss contracts or client interest contracts in our FSS United States and FSS International segments. These contracts differ in their provision for the amount of financial risk we bear and, accordingly, the potential compensation, profits or fees we may receive.
These contracts differ in their provision for the amount of financial risk we bear and, accordingly, the potential compensation, profits or fees we may receive. Under profit and loss contracts, we receive all of the revenue from, and bear all of the expenses of, the provision of our services at a client location.
The increase was primarily attributable to base business growth, including contract price increases mainly within the Corrections and Higher Education businesses, and net new business growth.
FSS United States segment revenue increased by approximately 16.9% during fiscal 2023 compared to fiscal 2022. The increase was primarily attributable to base business growth, including contract price increases mainly within the Corrections and Higher Education businesses, and net new business growth.
Revenue for each of these sectors is summarized as follows (in millions): Fiscal Year Ended Change September 29, 2023 September 30, 2022 % Business & Industry $ 1,407.2 $ 1,081.2 30.2 % Education 3,437.0 3,161.5 8.7 % Healthcare 1,318.3 1,235.8 6.7 % Sports, Leisure & Corrections 3,537.1 2,722.0 29.9 % Facilities & Other 2,021.8 1,830.3 10.5 % $ 11,721.4 $ 10,030.8 16.9 % The Healthcare and Facilities & Other sectors had high-single digit operating income margins, consistent with prior year.
Revenue for each of these sectors is summarized as follows (in millions): Fiscal Year Ended Change September 29, 2023 September 30, 2022 % Business & Industry $ 1,407.2 $ 1,081.2 30.2 % Education 3,437.0 3,161.5 8.7 % Healthcare (1) 1,667.7 1,581.4 5.5 % Sports, Leisure & Corrections 3,537.1 2,722.0 29.9 % Facilities & Other (1) 1,672.4 1,484.7 12.6 % $ 11,721.4 $ 10,030.8 16.9 % (1) In fiscal 2024, management began reporting results for healthcare facility services within "Healthcare," whereas the results were previously reported within "Facilities & Other." As such, the "Healthcare" and "Facilities & Other" results for the fiscal years ended September 29, 2023 and September 30, 2022 were recast to reflect this change.
Prior to the separation, we operated our business in three reportable segments: • Food and Support Services United States ("FSS United States") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities serving the general public in the United States. • Food and Support Services International ("FSS International") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities serving the general public.
We operate our business in two geographic reportable segments: • Food and Support Services United States ("FSS United States") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities within the United States. • Food and Support Services International ("FSS International") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities outside of the United States with the largest operations within Canada, Chile, China, Germany, Spain and the United Kingdom.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−3 removed2 unchanged
For debt obligations, the table presents principal cash flows and related interest rates by contractual fiscal year of maturity. Variable interest rates disclosed represent the weighted-average rates of the portfolio at September 29, 2023. For interest rate swaps, the table presents the notional amounts and related weighted-average interest rates by fiscal year of maturity.
For debt obligations, the table presents principal cash flows and related interest rates by contractual fiscal year of maturity. Variable interest rates disclosed represent the weighted-average rates of the portfolio at September 27, 2024. For interest rate swaps, the table presents the notional amounts and related weighted-average interest rates by fiscal year of maturity.
The information below summarizes our market risks associated with debt obligations and other significant financial instruments as of September 29, 2023 (see Notes 5 and 6 to the audited consolidated financial statements). Fair values were computed using market quotes, if available, or based on discounted cash flows using market interest rates as of the end of the respective periods.
The information below summarizes our market risks associated with debt obligations and other significant financial instruments as of September 27, 2024 (see Notes 6 and 7 to the audited consolidated financial statements). Fair values were computed using market quotes, if available, or based on discounted cash flows using market interest rates as of the end of the respective periods.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. 41 Table of Contents
Item 8. Financial Statements and Supplementary Data See Financial Statements and Schedule beginning on page S-1. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. 45 Table of Contents
(US$ equivalent in millions) Expected Fiscal Year of Maturity As of September 29, 2023 2024 2025 2026 2027 2028 Thereafter Total Fair Value Debt: Fixed rate $ 1,537 (1) $ 929 $ 29 $ 24 $ 1,169 $ 50 $ 3,738 $ 3,628 Average interest rate 6.3 % 4.3 % 4.4 % 4.4 % 5.0 % 4.4 % 5.3 % Variable rate $ 74 $ 903 (1) $ 405 $ 886 $ 1,302 (1) $ 1,042 $ 4,612 $ 4,612 Average interest rate 5.9 % 7.7 % 6.6 % 7.2 % 7.9 % 7.9 % 7.5 % Interest Rate Swaps: Receive variable/pay fixed $ — $ 800 $ — $ 850 $ 500 $ — $ 2,150 $ 147 Average pay rate — % 1.5 % — % 2.5 % 1.5 % — % Average receive rate — % 5.3 % — % 5.3 % 5.3 % — % (1) Subsequent to September 29, 2023, Aramark redeemed the 6.375% Senior Notes due 2025 of $1,500.0 million from the proceeds received in conjunction with the separation and distribution of the Uniform segment.
(US$ equivalent in millions) Expected Fiscal Year of Maturity As of September 27, 2024 2025 2026 2027 2028 2029 Thereafter Total Fair Value Debt: Fixed rate $ 923 $ 7 $ 6 $ 1,153 $ 3 $ 35 $ 2,127 $ 2,097 Average interest rate 4.3 % 6.0 % 6.0 % 5.0 % 6.0 % 6.0 % 4.7 % Variable rate $ 45 $ 38 $ 877 $ 767 $ 440 $ 1,031 $ 3,198 $ 3,204 Average interest rate 5.8 % 6.1 % 7.1 % 7.2 % 6.0 % 7.2 % 7.0 % Interest Rate Swaps: Receive variable/pay fixed $ 800 $ — $ 950 $ 500 $ — $ — $ 2,250 $ 49 Average pay rate 1.5 % — % 2.6 % 1.5 % — % — % Average receive rate 5.2 % — % 5.2 % 5.2 % — % — % All our gasoline and diesel fuel agreements matured during fiscal 2024.
Removed
In addition, the Uniform segment United States term loan of $800.0 million due 2025 and $700.0 million due 2028 will be removed from Aramark’s Consolidated Balance Sheets as a result of the separation and distribution of the Uniform segment on September 30, 2023.
Removed
We entered into a series of pay fixed/receive floating gasoline and diesel fuel agreements based on the Department of Energy weekly retail on-highway index in order to limit our exposure to price fluctuations for gasoline and diesel fuel. As of September 29, 2023, we had contracts for 6.6 million gallons outstanding through June of fiscal 2024.
Removed
As of September 29, 2023, the fair value of our gasoline and diesel fuel hedge agreements is immaterial, which is included in "Accounts payable" on our Consolidated Balance Sheets. Item 8. Financial Statements and Supplementary Data See Financial Statements and Schedule beginning on page S-1. Item 9.

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