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What changed in Aramark's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Aramark's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+308 added−373 removedSource: 10-K (2023-11-21) vs 10-K (2022-11-22)

Top changes in Aramark's 2023 10-K

308 paragraphs added · 373 removed · 242 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

48 edited+11 added−41 removed68 unchanged
Biggest changeThe customer base is serviced by a leading geographic footprint in the United States and Canada with programs focused on uniforms, floor mats, towels, linens, managed restroom and first aid services. Customers operate in a wide range of industries in the United States and Canada.
Biggest changeUniform 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.
You may request a copy of our SEC filings (excluding exhibits) and our Business Conduct Policy at no cost by writing or telephoning us at the following address or telephone number: Aramark 2400 Market Street Philadelphia, PA 19103 Attention: Corporate Secretary Telephone: (215) 238-3000 The references to our website and the SEC's website are intended to be inactive textual references only and the contents of those websites are not incorporated by reference herein. 10 Table of Contents
You may request a copy of our SEC filings (excluding exhibits) and our Business Conduct Policy at no cost by writing or telephoning us at the following address or telephone number: Aramark 2400 Market Street Philadelphia, PA 19103 Attention: Corporate Secretary Telephone: (215) 238-3000 The references to our website and the SEC's website are intended to be inactive textual references only and the contents of those websites are not incorporated by reference herein. 8 Table of Contents
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 1,320 colleges, universities, school systems & districts and private schools.
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.
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 2022, 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 2023, approximately two-thirds of our Food and Support Services revenue was derived from profit and loss contracts. Client Interest Contracts.
Clients and Services Our Food and Support Services segments serve a number of sectors across 19 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 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.
We have established consistent tools, methodologies and training to efficiently support the development of our employees as they work within our individual businesses to help ensure a close connection to the business, their teammates and client partners.
We have established consistent tools, methodologies and trainings to efficiently support the development of our employees as they work within our individual businesses to help ensure a close connection to the business, their teammates and client partners.
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 100 colleges and universities.
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.
Item 1. Business Overview Aramark (the “Company”, “we” or “us”) is a leading global provider of food, facilities and uniform services to education, healthcare, business & industry, and sports, leisure & corrections clients. Our core market is the United States, which is supplemented by an additional 18-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 core market is the United States, which is supplemented by an additional 14-country footprint.
As part of this 5-year 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 people and planet goals convey our priorities and ambitions, focusing our efforts and inspiring our organization.
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.
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. 7 Table of Contents 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.
Generally, our agreements with our distributors in 3 Table of Contents the FSS International segment are subject to termination by either party after a notice period, which is generally 60 days. The pricing and other financial terms of these agreements are renegotiated periodically.
Generally, our agreements with our distributors in the FSS International segment are subject to termination by either party after a notice period, which is generally 60 days. The pricing and other financial terms of these agreements are renegotiated periodically.
Human Capital As a company focused on delivering food, facilities and uniforms services in thousands of client locations across 19 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 15 countries, our human capital is material to our operations and core to the long-term success of Aramark. Our People.
We believe that the following competitive factors are the principal drivers of our success: • quality and breadth of services and management talent; • 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 and management talent; 4 Table of Contents • innovation; • reputation within the industry; • pricing; • financial strength and stability; and • purchasing scale.
Our people goal is to enable equity and well-being for millions of people, including our employees, customers, communities, and people in our supply chain. The "Human Capital" section below provides examples of this work. Our planet goal is to promote planetary health on our path to net zero.
Our people goal is to enable equity and well-being for millions of people, including our employees, customers, communities, and people in our supply chain. The "Human Capital" section below provides examples of this work. Our planet goal is to promote planetary health on our path to net zero greenhouse gas ("GHG") emissions.
We may also be subject to laws and regulations that limit 8 Table of Contents or restrict the use of trans fats in the food we serve or other requirements relating to ingredient or nutrient labeling.
We may also be subject to laws and regulations that limit or restrict the use of trans fats in the food we serve or other requirements relating to ingredient or nutrient labeling.
As of September 30, 2022, 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 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.
In fiscal 2022, Sysco distributed approximately 46% 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 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.
Do Well. and broader programs and initiatives on our website (www.aramark.com/sustainability). Nothing on our website shall be deemed incorporated by reference into this Annual Report on Form 10-K.
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.
As of September 30, 2022, our subsidiaries held liquor licenses in 44 states and the District of Columbia, 5 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 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.
Do Well. - Our Sustainability Plan Be Well. Do Well. is Aramark’s sustainability plan and directly connects to our mission: Because we’re rooted in service, we do great things for our people, our partners, our communities, and our planet.
Do Well. is Aramark’s ESG platform and directly connects to our mission: Because we’re rooted in service, we do great things for our people, our partners, our communities, and our planet.
We have experienced no material interruptions of operations due to disputes with our employees. Diversity, Equity and Inclusion. As a result of being rooted in service, we do great things for our people, our partners, our communities, and our planet. We believe that it is vital to align our diversity, equity and inclusion priorities with our business strategy.
As a result of being rooted in service, we do great things for our people, our partners, our communities, and our planet. We believe that it is vital to align our diversity, equity and inclusion priorities with our business strategy.
We operate our business in three reportable segments that share 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").
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 have 11 active employee resource groups, examples include those supporting women, racially and ethnically diverse employees, the LGBTQ+ community, veterans and individuals with disabilities. These groups have 79 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 47 local hubs across the United States and international markets and play a key role in creating a culture of inclusion.
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. 2 Table of Contents Healthcare. We provide a wide range of non-clinical food and food-related support services to approximately 652 healthcare and senior living clients and more than 733 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 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.
Continuing to increase diversity in executive and all levels of the leadership pipeline remains an organizational priority for the coming years. In 2022, we established ESG goals for our executive leadership team reflective of this priority.
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.
Through our Aramark Building Community initiative, we create opportunities for our employees to do more through volunteerism and engagement. In fiscal 2022, over 8,200 employees volunteered to host and participate in service projects supporting more than 928 nonprofits and benefiting over one million community members across 11 countries. Compensation, Benefits, Safety and Wellness.
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.
As an example, in our FSS United States segment, in fiscal 2022, we hired 79,000 new employees, up from 59,000 in fiscal 2021, made up of 93% hourly employees and 7% salaried employees.
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.
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.
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.
Our uniform rental business and our Food and Support Service business 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 local, state, federal and international laws and regulations governing the use, management, shipping and 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 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.
In fiscal 2022, our FSS United States segment generated $10,030.8 million in revenue, or 62% of our total revenue, and our FSS International segment generated $3,656.4 million in revenue, or 22% 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 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.
We make available free of charge on www.aramark.com our annual, quarterly and current reports, and amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
These filings are available to the public over the internet at the SEC's website at www.sec.gov. Our principal internet address is www.aramark.com. We make available free of charge on www.aramark.com our annual, quarterly and current reports, and amendments to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
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. Facilities & Other. We provide a variety of support services to more than 435 facilities clients and more than 800 locations.
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.
The following chart shows a breakdown of our revenue and operating income by our reportable segments: Reportable Segments: FSS United States FSS International Uniform FY 2022 Revenue (a) : $ 10,030.8 $ 3,656.4 $ 2,639.4 FY 2022 Operating Income (a) : $ 449.0 $ 112.5 $ 218.1 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.
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.
Aramark was also named one of the “Best Places to Work for Disability Inclusion,” for the sixth year in a row, by the 2022 Disability Equality Index®, earning a top score of 100%. Talent Acquisition, Development and Retention .
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.
Our operations are subject to various laws and regulations, including, but not limited to, those governing: • alcohol licensing and service; • collection of sales and other taxes; • minimum wage, overtime, classification, wage payment and employment discrimination; • immigration; • governmental funded entitlement programs and cost and accounting principles; • false claims, whistleblowers and customer protection; • environmental protection and environmental sustainability matters such as packaging and waste, greenhouse gas emissions, animal health and welfare, deforestation and land use; • food safety, sanitation, labeling and human health and safety; • customs and import and export controls; • the Foreign Corrupt Practices Act, the U.K.
If we fail to comply with applicable laws, we may be subject to investigations, criminal sanctions or civil remedies, including fines, penalties, damages, reimbursement, injunctions, seizures, disgorgements, debarments from government contracts or loss of liquor licenses. 6 Table of Contents Our operations are subject to various laws and regulations, including, but not limited to, those governing: • alcohol licensing and service; • collection of sales and other taxes; • minimum wage, overtime, classification, wage payment and employment discrimination; • immigration; • governmental funded entitlement programs and cost and accounting principles; • false claims, whistleblowers and consumer protection; • environmental protection and environmental sustainability matters such as packaging and waste, greenhouse gas emissions, animal health and welfare, deforestation and land use; • food safety, sanitation, labeling and human health and safety; • customs and import and export controls; • the Foreign Corrupt Practices Act, the U.K.
Certain of these storage tank systems also are subject to performance standards, periodic monitoring and recordkeeping requirements. We also may use and manage chemicals and hazardous materials in our operations from time to time.
We own or operate aboveground and underground storage tank systems at some locations to store petroleum products for use in our or our clients' operations. Certain of these storage tank systems also are subject to performance standards, periodic monitoring and recordkeeping requirements. We also may use and manage chemicals and hazardous materials in our operations from time to time.
Our Board of Directors oversees our Environmental, Social and Governance ("ESG") goals and objectives, and supports implementation of our ESG priorities and commitments, progress towards which we will report in our 2022 Be Well. Do Well. Progress Report, to be released in early 2023.
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.
In 2022, Aramark was recognized by DiversityInc as a Top Company for employee resource groups for the first time, and a Top 50 Company for Diversity for the sixth consecutive year.
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.
As discussed above under “Purchasing", we earn vendor consideration, including discounts, rebates and other applicable credits that we typically retain except in those cases 4 Table of Contents where the contract and/or applicable law requires us to credit these to our clients.
As discussed above under “Purchasing", we earn vendor consideration, including discounts, rebates and other applicable credits that we typically retain except in those cases where the contract and/or applicable law requires us to credit these to our clients. For our client interest contracts, both our upside potential and downside risk are reduced compared to our profit and loss contracts.
Based on total revenue in fiscal 2022, we hold a top 3 position in North America in food and facilities services and the #2 position in North America in uniform services. Internationally, we hold a top 3 position in food and facilities services based on total revenue in fiscal 2022 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 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.
Our approximately 273,875 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.
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.
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 also provide procurement services for a number of clients in a variety of industries.
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.
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 18 countries outside the United States. Our largest international operations are in Canada, Chile, China, Germany, Spain and the United Kingdom.
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.
For our client interest contracts, both our upside potential and downside risk are reduced compared to our profit and loss contracts. For fiscal 2022, approximately one-third of our Food and Support Services revenue was derived from client interest contracts.
For fiscal 2023, approximately one-third of our Food and Support Services revenue was derived from client interest contracts.
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.
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.
As of September 30, 2022, 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 44.43 % 55.57 % 41.06 % 58.94 % 29.70 % 19.21 % 6.64 % 0.66 % 0.29 % 2.44 % Hourly Employees 42.84 % 57.16 % 37.57 % 62.43 % 31.64 % 20.25 % 7.04 % 0.70 % 0.30 % 2.50 % Salaried Employees 57.25 % 42.75 % 69.09 % 30.91 % 14.08 % 10.85 % 3.44 % 0.37 % 0.26 % 1.91 % As of September 30, 2022, 36% of our Board of Directors and 50% of our CEO's direct reports were female.
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.
Operating income excludes $151.2 million related to corporate expenses. In fiscal 2022, we generated $16.3 billion of revenue, $628.4 million of operating income and $194.5 million of net income attributable to Aramark stockholders.
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.
As of September 30, 2022, approximately 42,200 employees in our United States and Canadian operations were covered by approximately 730 collective bargaining agreements. Of those employees covered by collective bargaining agreements, approximately 33,100 employees are within the FSS United States segment and approximately 9,100 are within the Uniform segment.
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.
Removed
On October 6, 2019, we entered into a Stewardship Framework Agreement (the “Stewardship Framework Agreement”) with MR BridgeStone Advisor LLC (“Mantle Ridge”), on behalf of itself and its affiliated funds (such funds, together with Mantle Ridge, collectively, the “Mantle Ridge Group”), pursuant to which several new directors were elected to our Board of Directors and John Zillmer was appointed as our Chief Executive Officer.
Added
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.
Removed
Aramark’s Intention to Spin-off Uniform Segment On May 10, 2022, we announced our intention to spin-off our Uniform segment into an independent publicly traded company to our stockholders. The proposed spin-off is intended to be a tax-free transaction to us and our stockholders for United States federal income tax purposes.
Added
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.
Removed
The proposed spin-off is expected to be completed in the second half of fiscal 2023, subject to certain customary conditions, including final approval of our Board of Directors, receipt of a favorable opinion and Internal Revenue Service ruling with respect to the tax-free nature of the transaction, the effectiveness of a registration statement on 1 Table of Contents Form 10 to be filed with the SEC and the receipt of other regulatory approvals.
Added
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.
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Refer to Note 15 to the audited consolidated financial statements for the Uniform segment financial disclosures. Recent Developments Recent global events, including the COVID-19 pandemic ("COVID-19"), have adversely affected global economies, disrupted global supply chains and labor force participation and created significant volatility and disruption of financial markets.
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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.
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COVID-19 related disruptions negatively impacted our financial and operating results beginning in the second quarter of fiscal 2020 through the first half of fiscal 2021. Our financial results started to improve during the second half of fiscal 2021 and continued to improve throughout fiscal 2022 as COVID-19 restrictions were lifted and operations re-opened.
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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.
Removed
In addition, the ongoing conflict between Russia and Ukraine, countries in which we do not have direct operations, further disrupted global supply chains and heightened volatility and disruption of global financial markets.
Added
We also provide our services on a more limited basis in several additional countries and in offshore locations. Our largest international operations are in Canada, Chile, China, Germany, Spain and the United Kingdom. There are particular risks associated with our international operations. Please see Item 1A.
Removed
The ongoing volatility and disruption of financial markets caused by these global events, as well as other current global economic factors, triggered inflation in our food and labor costs, increased market interest rates and has driven significant changes in foreign currencies.
Added
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.
Removed
The impact on our longer-term operational and financial performance will depend on future developments, including our response and governmental response to inflation, our interest rate hedging strategy, the duration and severity of the ongoing volatility and disruption of global financial markets and our ability to effectively hire and retain personnel.
Added
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
Some of these future developments are outside of our control and are highly uncertain. We continue to remain principally focused on the safety and well-being of our employees, clients and everyone we serve, while simultaneously taking timely, proactive measures to adapt to the current environment.
Added
In 2023, Aramark secured science-based GHG reduction targets validated by the Science Based Targets Initiative ("SBTi"). These targets include near-term targets to significantly reduce emissions in direct operations and supply chain and a commitment to reach net zero GHG emissions across the enterprise by fiscal 2050.
Removed
Throughout fiscal 2022, we saw continued improved profitability from clients re-opening as COVID-19 restrictions eased as well as from effective management of operating costs, including supply chain initiatives, and pricing pass-throughs to mitigate the effects of elevated inflation.
Added
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
We continue to evaluate and react to the effects of a prolonged global disruption, including items such as inflationary pressures on food and product costs, greater labor challenges and the financial condition of our clients in certain businesses.
Added
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.
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We expect these challenges to continue into fiscal 2023, and we regularly evaluate and react in order to take appropriate actions to mitigate the risk in these areas.
Removed
We also have a strong presence in Japan through our 50% ownership of AIM Services Co., Ltd., which is a leader in providing outsourced food services in Japan. There are particular risks associated with our international operations. Please see Item 1A.
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In response to the early stages of the COVID-19 pandemic, in certain instances, mainly within the Business & Industry sector, we renegotiated contract terms by temporarily transitioning from profit and loss contracts to client interest contracts in order to mitigate lost profits.
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As COVID restrictions lifted and operations re-opened, we are working with our clients to transition back to profit and loss contracts, as appropriate.
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Recently, our business and results of operations have started to resemble our historically typical patterns of seasonality following the disruption caused by COVID-19. Uniform Our Uniform segment provides a full-service employee uniform solution, resulting in a contracted and recurring revenue model.
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Clients use our uniforms to meet a variety of needs, including: • establishing corporate identity and brand awareness; • projecting a professional image; • protecting workers—work clothes can help protect workers from difficult environments such as heavy soils, heat, flame or chemicals; • protecting products—uniforms can help protect products against contamination in the food, pharmaceutical, electronics, health care and automotive industries.
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In fiscal 2022, our Uniform segment generated $2,639.4 million in revenue, or 16% of our total revenue. Clients and Services We serve businesses of all sizes in many different industries. We have a diverse client base, in which none of our clients individually represents a material portion of our revenue.
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We typically visit our clients' sites weekly, delivering clean, finished 5 Table of Contents uniforms and, at the same time, removing the soiled uniforms or other items for cleaning, repair or replacement. We also offer products for direct sale.
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Our cleanroom service offers advanced static dissipative garments, barrier apparel, sterile garments and cleanroom application accessories for clients with contamination-free operations in the technology, healthcare and pharmaceutical industries. We conduct our direct marketing business through three primary brands - WearGuard, Crest and Aramark.
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We design, source or manufacture and distribute distinctive image apparel to workers in a wide variety of industries through the internet at www.shoparamark.com, dedicated sales representatives and telemarketing sales channels.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of our contracts require us to pay liquidated damages during any period in which the liquor license for the facility is suspended as a result of our actions, and most contracts are subject to termination if the liquor license for the facility is lost as a result of our actions.
Biggest changeSome of our contracts require us to pay liquidated damages during any period in which the liquor license for the facility is suspended as a result of our actions, and most contracts are subject to termination if the liquor license for the facility is lost as a result of our actions. 14 Table of Contents If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business.
Due to the labor intensive nature of our businesses and the fact that 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 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.
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 recent 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. 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.
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, customer 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, 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 cannot be certain this trend will continue or not be reversed or, if it does continue, that we will be selected and retained as a preferred vendor to provide these services. Unfavorable developments with respect to either outsourcing or the use of preferred vendors could have a material adverse effect on our business and results of operations.
We cannot be certain this dynamic will continue or not be reversed or, if it does continue, that we will be selected and retained as a preferred vendor to provide these services. Unfavorable developments with respect to either outsourcing or the use of preferred vendors could have a material adverse effect on our business and results of operations.
These risks may be exacerbated by the current economic environment, due to, among other things, increased cost pressure at our clients, tight labor markets and heightened competition in a contracted marketplace. In addition, consolidation by our clients in the industries we serve could result in our losing business if the combined entity chooses a different provider.
These risks may be exacerbated by the current economic environment, due to, among other things, increased cost pressure at our clients, tight labor markets and heightened competition. In addition, consolidation by our clients in the industries we serve could result in our losing business if the combined entity chooses a different provider.
These provisions provide for, among other things: • the ability of our Board of Directors to issue one or more series of preferred stock; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; • certain limitations on convening special stockholder meetings; • the removal of directors only upon the affirmative vote of the holders of at least 75% in voting power of all the then-outstanding common stock of the company entitled to vote thereon, voting together as a single class; and • that certain provisions may be amended only by the affirmative vote of the holders of at least 75% in voting power of all the then-outstanding common stock of the company entitled to vote thereon, voting together as a single class.
These provisions provide for, among other things: • the ability of our Board of Directors to issue one or more series of preferred stock; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings; • certain limitations on convening special stockholder meetings; 20 Table of Contents • the removal of directors only upon the affirmative vote of the holders of at least 75% in voting power of all the then-outstanding common stock of the company entitled to vote thereon, voting together as a single class; and • that certain provisions may be amended only by the affirmative vote of the holders of at least 75% in voting power of all the then-outstanding common stock of the company entitled to vote thereon, voting together as a single class.
Approximately two-thirds of our Food and Support Services revenue in fiscal 2022 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 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.
The portion of our Food and Support Services business that provides services in facilities such as convention centers and tourist and recreational attractions is particularly sensitive to an economic downturn, as expenditures to take vacations or hold or attend conventions are funded to a partial or total extent by discretionary income.
The portion of our business that provides services in facilities such as convention centers and tourist and recreational attractions is particularly sensitive to an economic downturn, as expenditures to take vacations or hold or attend conventions are funded to a partial or total extent by discretionary income.
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 have been materially impacted by the COVID-19 pandemic.
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.
For example, global supply chain disruptions caused by 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 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.
There can be no assurance that additional laws or regulations in this area would not limit our activities in the future or significantly increase the cost of regulatory compliance. We must also 17 Table of Contents obtain and comply with the terms of licenses in order to sell alcoholic beverages in the states in which we serve alcoholic beverages.
There can be no assurance that additional laws or regulations in this area would not limit our activities in the future or significantly increase the cost of regulatory compliance. We must also obtain and comply with the terms of licenses in order to sell alcoholic beverages in the states in which we serve alcoholic beverages.
There are many factors that could reduce the numbers of events in a facility or attendance at an event, including the COVID-19 pandemic and other health crises, decreases in attendees’ discretionary income, 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 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.
We cannot guarantee that we will achieve our announced ESG goals and initiatives, satisfy all stakeholder expectations, or that the benefits of implementing or achieving these goals and initiatives will not surpass their projected costs.
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.
In addition, any significant increase in the number of work stoppages at our various operations could adversely affect our business, financial condition or results of operations. 16 Table of Contents We may incur significant liability as a result of our participation in multiemployer defined benefit pension plans. A number of our locations operate under collective bargaining agreements.
In addition, any significant increase in the number of work stoppages at our various operations could adversely affect our business, financial condition or results of operations. We may incur significant liability as a result of our participation in multiemployer defined benefit pension plans. A number of our locations operate under collective bargaining agreements.
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 a currently strengthening 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. 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.
We have also identified a trend among some of our clients towards the retention of a limited number of preferred vendors to provide all or a large part of their required services.
We have also identified a preference among some of our clients towards the retention of a limited number of preferred vendors to provide all or a large part of their required services.
For example, in early stages of the COVID-19 pandemic, or in the past, such as in the period of economic distress following the financial crisis of 2008, certain of our businesses were negatively affected by reduced employment levels at our clients’ locations and declining levels of business and customer spending.
For example, in early stages of the COVID-19 pandemic, or in the period of economic distress following the financial crisis of 2008, certain of our businesses were negatively affected by reduced employment levels at our clients’ locations and declining levels of business and customer spending.
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.
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.
In particular, new 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 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.
For example, in response to the changed circumstances caused by shutdowns earlier in 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.
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.
Our business is contract intensive, and we are parties to many contracts with clients all over the world. Our client interest contracts provide that client billings, and for some contracts the sharing of profits and losses, are based on our determinations of costs of service.
Our business is contract intensive and may lead to client disputes. Our business is contract intensive, and we are parties to many contracts with clients all over the world. Our client interest contracts provide that client billings, and for some contracts the sharing of profits and losses, are based on our determinations of costs of service.
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, 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 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.
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 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.
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 18 Table of Contents Liability Act and similar federal, state and local statutes and regulations governing the use, management and 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 Liability Act and similar federal, state, local and international statutes and regulations governing the use, management and disposal of chemicals and hazardous materials.
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 2022, approximately 22% 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 2023, approximately 23% of our revenue was generated outside of the United States.
Sysco, which distributed approximately 46% of our food and non-food products in the United States and Canada in fiscal 2022 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 2023 based on purchase dollars, and other distributors are responsible for tracking our orders and delivering products to our specific locations.
In addition, client and 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 evolving.
Increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our Food and Support Services contracts may constrain our ability to make a profit.
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.
Bribery Act and other anti-corruption law compliance matters, as well as cybersecurity, data protection and supply chain laws; potential difficulties in staffing and labor disputes; differing local labor laws; managing and obtaining support and distribution for local operations; credit risk or financial condition of local clients; potential imposition of restrictions on investments; 14 Table of Contents potentially adverse tax consequences, including imposition or increase of withholding, VAT and other taxes on remittances and other payments by subsidiaries; foreign exchange controls; energy shortages; local political and social conditions; geopolitical tensions, including, for example, tensions between the United States and China or volatility in the South American region; and the ability to comply with terms of government assistance programs.
Bribery Act and other anti-corruption law compliance matters, as well as cybersecurity, data protection, corporate sustainability reporting and supply chain laws; potential difficulties in staffing and labor disputes; differing local labor laws; managing and obtaining support and distribution for local operations; credit risk or financial condition of local clients; potential imposition of restrictions on investments; potentially adverse tax consequences, including imposition or increase of withholding, VAT and other taxes on remittances and other payments by subsidiaries; foreign exchange controls; energy shortages; local political and social conditions; geopolitical tensions, including, for example, tensions between the United States and China or overall global volatility; and the ability to comply with terms of government assistance programs.
Compliance and claims of non-compliance with these regulations could result in liability and expense to us and may impede our ability to attract and retain talent. Historically, we have also regularly hired a large number of part-time and seasonal workers, particularly in our Food and Support Services segments.
Compliance and claims of non-compliance with these regulations could result in liability and expense to us and may impede our ability to attract and retain talent. Historically, we have also regularly hired a large number of part-time and seasonal workers.
Changes or new interpretations in, or changes in the enforcement of, the statutory or regulatory framework applicable to services provided under government contracts or bidding procedures, including an adverse change in government spending policies or appropriations, budget priorities or revenue levels, particularly by our Food and Support Services businesses, could result in fewer new contracts or contract renewals, modifications to the methods we apply to price government contracts, or in contract terms of shorter duration than we have historically experienced.
Changes or new interpretations in, or changes in the enforcement of, the statutory or regulatory framework applicable to services provided under government contracts or bidding procedures, including an adverse change in government spending policies or appropriations, budget priorities or revenue levels could result in fewer new contracts or contract renewals, modifications to the methods we apply to price government contracts, or in contract terms of shorter duration than we have historically experienced.
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. Our expansion strategy involves risks.
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.
Increasing demands from clients, customers and other stakeholders relating to sustainability, including that we set reduced emissions, waste and other sustainability targets and take actions to meet them, also could result in increased costs for our Food and Support Services segment.
Increasing demands from clients, customers and other stakeholders relating to sustainability, including that we set reduced emissions, waste and other sustainability targets and take actions to meet them, also could result in increased costs for business.
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.
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.
The impact of these global events on our longer-term operational and financial performance will depend on future developments, our response and governmental response to inflation, and the duration and severity of the conflict in Ukraine.
The impact of these global events on our longer-term operational and financial performance will depend on future developments, our response and governmental response to inflation, and the duration and severity of such conflicts.
We currently have a presence in 18 countries outside of the United States with approximately 117,850 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 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.
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. In addition, goodwill and other intangible assets resulting from business combinations represent a significant portion of our assets.
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.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control, including recurring outbreaks stemming from the COVID-19 pandemic.
Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control.
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.
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.
In addition, political unrest and global conflicts like the ongoing conflict between Russia and Ukraine have disrupted, and in the future may further continue to disrupt, global supply chains and heighten volatility and disruption of global financial markets.
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.
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. We have a number of major national competitors in the uniform rental industry with significant financial resources.
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.
In addition, although none of our significant long-term borrowings mature prior to 2025, if we were to need to refinance our existing indebtedness, the conditions in the financial markets at that time could make it difficult to refinance our existing indebtedness on acceptable terms or at all.
In addition, if we were to need to refinance our existing indebtedness, the conditions in the financial markets at that time could make it difficult to refinance our existing indebtedness on acceptable terms or at all.
Any failure, or perceived failure, to achieve ESG goals and initiatives, as well as to manage ESG risks, adhere to public statements, comply with federal, state or international ESG laws and regulations or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price. 19 Table of Contents 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 failure, or perceived failure, to achieve ESG goals and initiatives, as well as to manage ESG risks, adhere to public statements, comply with federal, state or international ESG laws and regulations or meet evolving and varied stakeholder expectations and standards could result in legal and regulatory proceedings against us and materially adversely affect our business, reputation, results of operations, financial condition and stock price.
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.
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.
New laws and regulations in these areas have been proposed and may be adopted, and the criteria used by regulators and other relevant stakeholders to evaluate our ESG practices, capabilities, and performance may change rapidly, which in each case could require us to undertake costly initiatives or operational changes.
New laws and regulations in these areas have been proposed and in some cases adopted, and the criteria used by regulators and other relevant stakeholders to evaluate our ESG practices, capabilities, and performance are, and will continue to, change and evolve, including in ways that may require us to undertake costly initiatives or operational changes.
Our ability to meet those financial ratios and tests can be affected by events beyond our control and, in the event of a significant deterioration of our financial performance, there can be no assurance that we will satisfy those ratios 22 Table of Contents and tests.
Our ability to meet those financial ratios and tests can be affected by events beyond our control and, in the event of a significant deterioration of our financial performance, there can be no assurance that we will satisfy those ratios and tests. A breach of any of these covenants could result in a default under the Credit Agreement.
In addition, from time to time, we have had difficulty in hiring and retaining qualified management personnel, particularly at the entry management level. We will continue to have significant requirements to hire such personnel.
The loss of any of our key executive or senior management personnel could harm our business. In addition, from time to time, we have had difficulty in hiring and retaining qualified management personnel, particularly at the entry management level. We will continue to have significant requirements to hire such personnel.
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.
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.
Our ability to do so generally depends on a variety of factors, including the quality, price and responsiveness of our services, as well as our ability to market these services effectively and differentiate ourselves from our competitors.
Our success depends on our ability to retain our current clients, renew our existing client contracts and obtain new business on commercially-favorable terms. Our ability to do so generally depends on a variety of factors, including the quality, price and responsiveness of our services, as well as our ability to market these services effectively and differentiate ourselves from our competitors.
Similarly, a sudden termination of the relationship with a significant provider in other geographic areas could in the short term adversely affect our ability to provide services and disrupt our client relationships in such areas. Our business is contract intensive and may lead to client disputes.
A cyber, weather or other incident could also disrupt our distributors' operations and, therefore, impact our business in the short term. Similarly, a sudden termination of the relationship with a significant provider in other geographic areas could in the short term adversely affect our ability to provide services and disrupt our client relationships in such areas.
Our industrial laundries are subject to certain volume and chemical air and water pollution discharge limits and monitoring, permitting and recordkeeping requirements. We own or operate aboveground and underground storage tank systems at some locations to store petroleum products for use in our or our clients' operations, including some national parks.
We own or operate aboveground and underground storage tank systems at some locations to store petroleum products for use in our or our clients' operations, including some national parks. Certain of these storage tank systems also are subject to performance standards and periodic monitoring and recordkeeping requirements.
In addition, labor unions representing employees of some of our current and prospective clients have occasionally opposed the outsourcing trend as they believed that current union jobs for their memberships might be lost.
We cannot be certain this trend will continue or not be reversed or that clients that have outsourced functions will not decide to perform these functions themselves. In addition, labor unions representing employees of some of our current and prospective clients have occasionally opposed the outsourcing trend as they believed that current union jobs for their memberships might be lost.
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.
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.
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.
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.
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 (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.
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.
If interest rates increase and we do not hedge such variable rates, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, which will negatively impact our net income and operating cash flows, including cash available for servicing our indebtedness.
If interest rates increase and we do not hedge such variable rates, our debt service obligations on the variable rate indebtedness will increase even though the amount borrowed will remain the same, which will negatively impact our net income and operating cash flows, including cash available for servicing our indebtedness. 18 Table of Contents Additionally, our ability to refinance portions of our indebtedness in advance of their maturity dates depends on securing new financing bearing interest at rates that we are able to service.
We may be adversely affected if clients reduce their outsourcing or use of preferred vendors. Our business and growth strategies depend in large part on the continuation of a current trend toward outsourcing services.
We may be adversely affected if clients reduce their outsourcing or use of preferred vendors. Our business and growth strategies depend in large part on the continuation of a movement toward outsourcing services. Clients will outsource if they perceive that outsourcing may provide quality services at a lower overall cost and permit them to focus on their core business activities.
In addition, clients are increasingly focused on and requiring us to set targets and meet standards related to environmental sustainability matters, such as packaging and waste, greenhouse gas emissions, animal health and welfare, deforestation and land use.
In addition, clients are increasingly focused on and requiring us to make commitments, set targets and meet standards related to environmental sustainability matters, such as waste management, greenhouse gas emissions, including lower-carbon food offerings, animal health and welfare, deforestation and land use. Our ability to retain clients may depend in part on the effectiveness of our response to these expectations.
In addition, product recalls or health concerns associated with food contamination may also increase our raw material costs. Our operations and reputation may be adversely affected by disruptions to or breaches of our information systems or if our data is otherwise compromised.
Our operations and reputation may be adversely affected by disruptions to or breaches of our information systems or if our data is otherwise compromised.
If one of our suppliers were to violate the law, or engage in conduct that results in adverse publicity, our reputation may be harmed simply due to our association with that supplier. Drought, flood, natural disasters and other extreme weather events caused by climate change or other environmental conditions could also result in supply chain disruptions.
If one of our suppliers were to violate the law, or engage in conduct that results in adverse publicity, our reputation may be harmed simply due to our association with that supplier.
We believe much of our future growth and success depends on the continued availability, service and well-being of key executive and management talent. The loss of any of our key executive or senior management personnel could harm our business.
Our business may suffer if we lose key management personnel, are unable to hire and retain sufficient qualified personnel or if labor costs increase. We believe much of our future growth and success depends on the continued availability, service and well-being of key executive and management talent.
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. 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 environmental, social and governance ("ESG") considerations may expose us to liabilities, increased costs, reputational harm, and other adverse effects on our business.
If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation. 23 Table of Contents Anti-takeover provisions in our organizational documents could delay or prevent a change of control.
In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.
If our senior secured indebtedness was accelerated by the lenders as a result of a default, our senior notes may become due and payable as well. Any such acceleration may also constitute an amortization event under our Receivables Facility, which could result in the amount outstanding under that facility becoming due and payable.
If our senior secured indebtedness was accelerated by the lenders as a result of a default, our senior notes may become due and payable as well.
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. Like others in our business, we also receive requests for information from government agencies in connection with these reviews and audits.
Like others in our business, we also receive requests for information from government agencies in connection with these reviews and audits.
The proposed spin-off may hinder our ability to retain existing business and operational relationships, including with clients, customers, suppliers and employees, as well as to cultivate new business relationships.
The spin-off may hinder our ability to retain existing business and operational relationships, including with clients, customers, suppliers and employees, as well as to cultivate new business relationships. Based on these and other factors we may not be able to achieve the full strategic and financial benefits that are expected as a result of the spin-off.
In addition, we make statements about our ESG goals and initiatives through our “Be Well. Do Well.” report, other non-financial reports, information provided on our website, press statements and other communications.
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.
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. Labor-Related Risks Continued or further unionization of our workforce may increase our costs and work stoppages could damage our business.
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.
The proposed spin-off is also complex and subject to potentially unforeseen costs and expenses, including additional general and administrative costs for us and the new independent public company, costs from lost synergies, restructuring costs or other costs and expenses.
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.
As of September 30, 2022, our outstanding indebtedness was $7,410.9 million. We had additional availability of $1,105.6 million under our revolving credit facilities and availability of $395.1 million under the Receivables Facility as of that date.
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.
For example, in 2020, the Court of Justice of the European Union struck down a permitted personal data transfer mechanism between the European Union and 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 20 Table of Contents data transfers.
These recent developments require us to review and amend the legal mechanisms by which we make and receive such cross-border personal data transfers.
Certain of these storage tank systems also are subject to performance standards and periodic monitoring and recordkeeping requirements. We also may use and manage chemicals and hazardous materials in our operations from time to time.
We also may use and manage chemicals and hazardous materials in our operations from time to time.
Oil and natural gas prices have fluctuated significantly in the last several years. Substantial increases in the cost of fuel and utilities have historically resulted in significant cost increases in our uniform rental business, and to a lesser extent in our Food and Support Services segments.
Oil and natural gas prices have fluctuated significantly in the last several years, which has increased the cost of fuel and utilities. From time to time we have experienced increases in our food costs.
Legal, Regulatory, Safety and Security Risks Laws and governmental regulations relating to food and beverages may subject us to significant liability and reputational harm. The laws and regulations relating to each of our Food and Support Services segments are numerous and complex.
In addition, any increased funding obligations for underfunded multiemployer defined benefit pension plans could have an adverse financial impact on us. Legal, Regulatory, Safety and Security Risks Laws and governmental regulations relating to food and beverages may subject us to significant liability and reputational harm. The laws and regulations relating to our business are numerous and complex.
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. Increases or changes in income tax rates or laws of tax matters could adversely impact our financial results.
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.
There can be no assurance that we will continue to pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.
Any such acceleration may also constitute an amortization event under our Receivables Facility, which could result in the amount outstanding under that facility becoming due and payable. 19 Table of Contents There can be no assurance that we will continue to pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.
Any decrease in the number of games played, or the occurrence of games with limited or no fans attending, has resulted in, and would in the future result in a loss of revenue and reduced profits at the venues we service. 11 Table of Contents The ultimate scale and scope of recurring outbreaks stemming from the COVID-19 pandemic and the pace and degree of recovery are unknown and may continue to impact our business for an extended period.
Any decrease in the number of games played, or the occurrence of games with limited or no fans attending, has resulted in, and would in the future result in a loss of revenue and reduced profits at the venues we service. 9 Table of Contents Operational Risks Our failure to retain our current clients, renew our existing client contracts on comparable terms and obtain new client contracts on expected terms could adversely affect our business.
Bribery Act, other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws and alcohol licensing and service laws.
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.
The effects of global climate change will likely increase the frequency and severity of such natural disasters and business disruptions and may also impact the availability of water resources, food resources, forests or other natural resources.
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.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition, we own 6 properties consisting of offices, land and warehouses and lease 64 facilities throughout the world that we use in our FSS International segment. We also maintain other real estate and leasehold improvements, which we use in the Uniform and FSS segments.
Biggest changeIn 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
Of these, approximately 47% are leased and approximately 53% are owned. 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 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.
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Item 2. Properties Our principal executive offices are currently leased at 2400 Market Street, Philadelphia, Pennsylvania 19103. Our principal real estate is primarily comprised of Uniform facilities.
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As of September 30, 2022, we operated over 350 service facilities in our Uniform segment, consisting of industrial laundries, cleanroom laundries, warehouses, distribution centers, satellites, depots, standalone garages, shared service centers and administrative offices that are located across the United States, as well as in Mexico, Canada and Puerto Rico.
Removed
No individual parcel of real estate owned or leased is of material significance to our total assets. 24 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe 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 30, 2022.
Biggest changeWe 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.
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, customer 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 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.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

7 edited+2 added−2 removed3 unchanged
Biggest changeBruno served as Chief Operating Officer, Sports, Leisure, Corrections, Facilities and K-12. From 2014 to 2018, Mr. Bruno served as Chief Operating Officer, Sports, Leisure and Corrections. 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.
Biggest changeFrom 2018 to November 2019, Mr. Bruno served as Chief Operating Officer, Sports, Leisure, Corrections, Facilities and K-12. From 2014 to 2018, Mr. Bruno served as Chief Operating Officer, Sports, Leisure and Corrections.
Harrington served as Vice President and Associate General Counsel and from May 2006 to August 2009, she served as Assistant General Counsel. Before joining us, Ms. Harrington was an Associate at WilmerHale LLP. Marc A. Bruno was appointed Chief Operating Officer, United States Food and Facilities in November 2019. From 2018 to November 2019, Mr.
From August 2009 to March 2019, Ms. Harrington served as Vice President and Associate General Counsel and from May 2006 to August 2009, she served as Assistant General Counsel. Before joining us, Ms. Harrington was an Associate at WilmerHale LLP. Marc A. Bruno was appointed Chief Operating Officer, United States Food and Facilities in November 2019.
Item 4. Mine Safety Disclosures Not Applicable. ______________________________________ 25 Table of Contents Information About Our Executive Officers Our executive officers as of November 22, 2022 are as follows: Name Age Position With Aramark Since John J. Zillmer 67 Chief Executive Officer 2019 Thomas G. Ondrof 58 Executive Vice President and Chief Financial Officer 2020 Lynn B.
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.
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. Lynn B. McKee was appointed Executive Vice President, Human Resources in May 2004. From August 2012 to August 2013, Ms.
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.
McKee 67 Executive Vice President, Human Resources 1980 Lauren A. Harrington 47 Senior Vice President and General Counsel 2006 Marc A. Bruno 51 Chief Operating Officer, United States Food and Facilities 1993 John J.
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.
Bruno serves on the Board of Directors of United Rentals, Inc., Special Olympics of Pennsylvania and Alex's Lemonade Stand Foundation. 26 Table of Contents PART II
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
Zillmer was appointed Chief Executive Officer and a member of the Board of Directors in October 2019 and was elected in connection with entering into the Stewardship Framework Agreement. Prior to joining us, Mr. Zillmer served as Chief Executive Officer and Executive Chairman of Univar from 2009 to 2012.
Zillmer served as Chief Executive Officer and Executive Chairman of Univar from 2009 to 2012.
Removed
McKee served as Executive Vice President, Human Resources and Communications. From January 2004 to May 2004, Ms. McKee served as our Senior Vice President of Human Resources and from 2001 to 2003, she served as Senior Vice President of Human Resources for our Food and Support Services Group.
Added
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.
Removed
From 1998 to 2001, she served as our Staff Vice President, Executive Development and Compensation. Ms. McKee serves on the Board of Directors of WSFS Financial Corporation and Board of Trustees for Saint Joseph's University. Lauren A. Harrington was appointed Senior Vice President and General Counsel in March 2019. From August 2009 to March 2019, Ms.
Added
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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSeptember 29, 2017 September 28, 2018 September 27, 2019 October 2, 2020 October 1, 2021 September 30, 2022 Aramark $ 100.0 $ 105.9 $ 105.9 $ 67.8 $ 88.1 $ 76.8 S&P 500 $ 100.0 $ 115.7 $ 117.6 $ 132.9 $ 172.9 $ 142.3 Dow Jones Consumer Non-Cyclical Index $ 100.0 $ 128.9 $ 130.3 $ 160.0 $ 193.1 $ 135.8 Unregistered Sales of Equity Securities There were no unregistered sales of equity securities during the fiscal year ended September 30, 2022 which have not been previously disclosed in a quarterly report on Form 10-Q or a current report on Form 8-K.
Biggest changeSeptember 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.
The graph assumes that $100 was invested in our common stock and in each index at the market close on September 29, 2017 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 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.
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 28, 2022, there were approximately 956 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 27, 2023, there were approximately 934 holders of record of our outstanding common stock.
The following graph shows a comparison from September 29, 2017, the last trading day of fiscal 2017, through September 30, 2022 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 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").
Purchases of Equity Securities by the Issuer There were no repurchases of equity securities by us in the fourth fiscal quarter ended September 30, 2022. Item 6. [Reserved] 27 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 29, 2023. Item 6. [Reserved] 24 Table of Contents

Item 7. Management's Discussion & Analysis

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

93 edited+38 added−48 removed56 unchanged
Biggest changeThe change in operating assets and liabilities compared to the prior year period was primarily due to: • Accrued expenses by $253.6 million, generating a lower source of cash during fiscal 2022 compared to fiscal 2021 primarily due to the following: higher payments related to the annual bonus; payment of social security taxes in the current year whereas payment was previously deferred in the prior year as permitted under the CARES Act (see Note 1 to the audited consolidated financial statements); impact of client advances within our Higher Education business from operations returning; and higher commission payments in our Sports business in the current year compared to the prior year from the return of operations; • Receivables by $172.5 million, generating a greater use of cash during fiscal 2022 compared to fiscal 2021 as operations returned following the lifting of COVID-19 restrictions, new business and timing of collections; • Prepayment and Other Current Assets by $105.7 million, generating a use of cash during fiscal 2022 compared to a source of cash in fiscal 2021 mainly from proceeds received in the second quarter of fiscal 2021 related to the fiscal 2020 federal income tax return ($93.6 million); and • Inventories by $64.0 million, generating a greater use of cash during fiscal 2022 compared to fiscal 2021 primarily due to operations returning after COVID-19 restrictions lifted, the impact of inflation and increased purchasing from new business.
Biggest changeBoth 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.
Covenant Adjusted EBITDA, as presented by us, may not be comparable to other similarly titled measures of other companies because not all companies use identical calculations. The following is a reconciliation of Net income (loss) attributable to ASI stockholder, which is a U.S. GAAP measure of ASI''s operating results, to Covenant Adjusted EBITDA as defined in our debt agreements.
Covenant Adjusted EBITDA, as presented by us, may not be comparable to other similarly titled measures of other companies because not all companies use identical calculations. The following is a reconciliation of Net income attributable to ASI stockholder, which is a U.S. GAAP measure of ASI''s operating results, to Covenant Adjusted EBITDA as defined in our debt agreements.
("ASI") and its restricted subsidiaries plus interest and other financing costs, net, provision (benefit) 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 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.
These regulations may have the effect of limiting our ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of our general liability, automobile liability, workers’ compensation liability, property liability and related Captive costs.
These regulations may have the effect of limiting our ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of our general liability, automobile liability, workers’ compensation liability, certain property damage and related Captive costs.
Self-Insurance Reserves We self-insure for obligations related to certain risks that we retain under our casualty program, which includes general liability, automobile liability and workers’ compensation liability, as well as for property liability and employee healthcare benefit programs.
Self-Insurance Reserves We self-insure for obligations related to certain risks that we retain under our casualty program, which includes general liability, automobile liability and workers’ compensation liability, as well as for certain property damage risks and employee healthcare benefit programs.
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 2022, 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 2023, approximately one-third of our FSS United States and FSS International segment revenue was derived from client interest contracts.
Consolidated total indebtedness secured by a lien is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, debt in respect of sales-leaseback transactions, disqualified and preferred stock and advances under the Receivables Facility secured by a lien reduced by the amount of cash and cash equivalents on the consolidated balance sheet that is free and clear of any lien.
Consolidated total indebtedness secured by a lien is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, debt in respect of sales-leaseback transactions, disqualified and preferred stock and advances under the Receivables Facility secured by a lien reduced by the amount of cash and cash equivalents on the consolidated balance sheets that is free and clear of any lien.
During the fourth quarter of fiscal 2022, 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 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.
The "Other financing activities" caption also reflects a use of cash during fiscal 2022 and fiscal 2021, primarily related to taxes paid by us when we withhold shares upon an employee's exercise or vesting of equity awards to cover income taxes.
The "Other financing activities" caption also reflects a use of cash during fiscal 2023 and fiscal 2022, primarily related to taxes paid by us when we withhold shares upon an employee's exercise or vesting of equity awards to cover income taxes.
In addition to customary exceptions, the Credit Agreement and indentures permit Restricted Payments in the aggregate up to an amount that increases quarterly by 50% of our 37 Table of Contents Consolidated Net Income, as such term is defined in these debt agreements, subject to being in compliance with the interest coverage ratio described below.
In addition to customary exceptions, the Credit Agreement and indentures permit Restricted Payments in the aggregate up to an amount that increases quarterly by 50% of our Consolidated Net Income, as such term is defined in these debt agreements, subject to being in compliance with the interest coverage ratio described below.
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.
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.
Consolidated interest expense is defined in the Credit Agreement as consolidated interest expense excluding interest income, adjusted for acquisitions and dispositions, further adjusted for certain non-cash or nonrecurring interest expense and our estimated share of interest expense from one equity method investee.
Consolidated interest expense is defined in the Credit Agreement as 35 Table of Contents consolidated interest expense excluding interest income, adjusted for acquisitions and dispositions, further adjusted for certain non-cash or nonrecurring interest expense and our estimated share of interest expense from one equity method investee.
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.
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.
(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 30, 2022 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 29, 2023 plus the specified margin in the associated debt agreements for each period presented.
We operate 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.
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.
The indentures governing our senior notes contain similar provisions. As of September 30, 2022, 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 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").
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. 30 Table of Contents Provision (Benefit) for Income Taxes The Provision (Benefit) for Income Taxes represents federal, foreign, state and local income taxes.
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.
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 30, 2022.
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 amount of this investment as of September 30, 2022 was $78.2 million and recorded in "Prepayments and other current assets" on the Consolidated Balance Sheets. Critical Accounting Policies and Estimates Our significant accounting policies are described in the notes to the audited consolidated financial statements included in this Annual Report.
The amount of this investment as of September 29, 2023 and September 30, 2022 was $110.7 million and $78.2 million, respectively, and recorded in "Prepayments and other current assets" on the Consolidated Balance Sheets. Critical Accounting Policies and Estimates Our significant accounting policies are described in the notes to the audited consolidated financial statements included in this Annual Report.
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 30, 2022 and October 1, 2021 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 29, 2023 and September 30, 2022 should be read in conjunction with our audited consolidated financial statements and the notes to those statements.
The "Other investing activities" caption includes $19.0 million and $10.0 million of proceeds received during fiscal 2022 and 2021, 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 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.
Discussion and analysis of our financial condition and results of operations for the fiscal year ended October 1, 2021 compared to the fiscal year ended October 2, 2020 is included under the heading Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Fiscal 2021 Compared to Fiscal 2020 and - Liquidity and Capital Resources” in our Annual Report on Form 10-K filed for the fiscal year ended October 1, 2021 with the Securities and Exchange Commission ("SEC") on November 23, 2021.
Discussion and analysis of our financial condition and results of operations for the fiscal year ended September 30, 2022 compared to the fiscal year ended October 1, 2021 is included under the heading Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Fiscal 2022 Compared to Fiscal 2021 and - Liquidity and Capital Resources” in our Annual Report on Form 10-K filed for the fiscal year ended September 30, 2022 with the Securities and Exchange Commission ("SEC") on November 22, 2022.
The fiscal years ended September 30, 2022 and October 1, 2021 were each a fifty-two week period. 31 Table of Contents Results of Operations Fiscal 2022 Compared to Fiscal 2021 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 2022 and 2021 (dollars in millions).
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).
The market based method is dependent on several subjective factors including the determination of market multiples and future cash 41 Table of Contents flows.
The market based method is dependent on several subjective factors including the determination of market multiples and future cash flows.
Our covenant requirements and actual ratios for the twelve months ended September 30, 2022 are as follows: Covenant Requirements Actual Ratios Consolidated Secured Debt Ratio (1) ≤ 5.125x 2.73x Interest Coverage Ratio (Fixed Charge Coverage Ratio) (2) ≥ 2.000x 3.55x (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 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.
These financial ratios, tests and covenants involve the calculation of certain measures that we refer to in this discussion as "Covenant Adjusted EBITDA." Covenant Adjusted EBITDA is not a measurement of financial performance under U.S. GAAP. Covenant Adjusted EBITDA is defined as net income (loss) of Aramark Services, Inc.
These financial ratios, tests and covenants involve the calculation of certain measures that we refer to in this discussion as "Covenant Adjusted EBITDA." Covenant Adjusted EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States ("U.S. GAAP"). Covenant Adjusted EBITDA is defined as net income of Aramark Services, Inc.
We believe that our cash and cash equivalents, marketable securities and availability under our revolving credit facility and Receivables Facility will be adequate to meet anticipated cash requirements for the foreseeable future to fund working capital, capital spending, debt service obligations, refinancings, dividends and other cash needs. We have no significant debt maturities due until 2025.
We believe that our cash and cash equivalents, marketable securities and availability under our revolving credit facility and Receivables Facility will be adequate to meet anticipated cash requirements for the foreseeable future to fund working capital, capital spending, debt service obligations, refinancings, dividends and other cash needs.
Estimated contributions to our defined benefit pension plans in fiscal 2023 are $2.8 million (see Note 9 to the audited consolidated financial statements). We have a Receivables Facility agreement with three financial institutions where we sell on a continuous basis an undivided interest in all eligible accounts receivable, as defined in the Receivables Facility.
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.
We adopted a new accounting standard related to the measurement of expected credit losses as of October 3, 2020 (the first day of fiscal 2021). 42 Table of Contents As of September 30, 2022 and October 1, 2021, our allowance for credit losses was $56.4 million and $79.6 million, respectively.
We adopted a new accounting standard related to the measurement of expected credit losses as of October 3, 2020 (the first day of fiscal 2021). As of September 29, 2023 and September 30, 2022, our allowance for credit losses was $56.6 million and $56.4 million, respectively.
(2) Personnel costs decreased as a percentage of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2022 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 the prior year period 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 income (loss) 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 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.
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.
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.
As of September 30, 2022 and October 1, 2021, our valuation allowance reserves recorded against deferred tax assets were $83.8 million and $97.5 million, respectively (see Note 10 to the audited consolidated financial statements). 43 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 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.
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 30, 2022 October 1, 2021 Net cash provided by operating activities $ 694.5 $ 657.1 Net cash used in investing activities (831.3) (634.4) Net cash used in financing activities (37.7) (2,005.3) 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." 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.
As of September 30, 2022 and October 1, 2021, cash and cash equivalents at the Captive were $23.1 million and $194.3 million, respectively. During fiscal 2022, the Captive began investing a portion of its cash and cash equivalents in United States Treasury securities to improve returns on the Captive's assets.
As of September 29, 2023 and September 30, 2022, cash and cash equivalents at the Captive were $32.8 million and $23.1 million, respectively. During fiscal 2022, the Captive began investing a portion of its cash and cash equivalents in United States Treasury securities to improve returns on the Captive's assets.
Our accounting estimate related to inventory obsolescence is a critical accounting estimate because customer demand in certain of our businesses can be variable and changes in our reserve for inventory obsolescence could materially affect our results of operations. As of September 30, 2022 and October 1, 2021, our reserve for inventory obsolescence was $51.3 million and $45.7 million, respectively.
Our accounting estimate related to inventory obsolescence is a critical accounting estimate because customer demand in certain of our businesses can be variable and changes in our reserve for inventory obsolescence could materially affect our results of operations. As of September 29, 2023 and September 30, 2022, our reserve for inventory obsolescence was $21.0 million and $51.3 million, respectively.
Foreign currency translation unfavorably impacted revenue during fiscal 2022 (2.6%). 32 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 30, 2022 and October 1, 2021.
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.
All other terms and conditions of the agreement remained largely unchanged. As of September 30, 2022, there are $104.9 million outstanding under the Receivables Facility. Amounts borrowed under the Receivables Facility fluctuate monthly based on our funding requirements and the level of qualified receivables available to collateralize the Receivables Facility.
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.
During fiscal 2022 and fiscal 2021, we received proceeds of $1.9 million and $17.0 million, respectively, related to favorable loss experience in older insurance years under our general liability, automobile liability and 36 Table of Contents workers' compensation programs.
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.
Corporate Corporate expenses, those administrative expenses not allocated to the business segments, increased by $31.8 million during fiscal 2022 compared to the prior year period.
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.
The Facilities & Other sector had high-single digit operating income margins, compared to mid-single digit operating income margins in the prior year. The Education and Sports, Leisure & Corrections sectors had mid-single digit operating income margins, consistent with prior year.
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.
During fiscal 2022, we recorded a benefit to the "Provision (Benefit) for Income Taxes" within the Consolidated Statements of Income (Loss) of $8.5 million for the reversal of a valuation allowance at a subsidiary in the FSS International segment driven by our ability to utilize the deferred tax assets based on future taxable income expected due to the acquisition of a business.
During fiscal 2023 and fiscal 2022, we recorded an income tax benefit of $3.8 million and $8.5 million, respectively, for the reversal of a valuation allowance at a subsidiary in the FSS International segment driven by our ability to utilize deferred tax assets based on future taxable income expected due to business acquisitions.
The "Changes in other assets" caption was driven by an increase to in-service rental merchandise from operations returning after COVID-19 restrictions lifted, which more than offset higher cash distributions received from our 50% ownership interest in AIM Services Co., Ltd. in fiscal 2022 compared to fiscal 2021.
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.
As of September 30, 2022 and October 1, 2021, our self-insurance reserves were $254.4 million and $235.7 million, respectively. Income Taxes We use the asset and liability method of accounting for income taxes.
As of September 29, 2023 and September 30, 2022, our self-insurance reserves were $269.8 million and $254.4 million, respectively. Income Taxes We use the asset and liability method of accounting for income taxes.
Twelve Months Ended (in millions) September 30, 2022 October 1, 2021 Net income (loss) attributable to ASI stockholders $ 194.5 $ (90.8) Interest and other financing costs, net 372.7 401.4 Provision (Benefit) for income taxes 61.5 (40.6) Depreciation and amortization 532.3 550.7 Share-based compensation expense (1) 95.5 71.1 Unusual or non-recurring (gains) and losses (2) — (77.1) Pro forma EBITDA for equity method investees (3) 8.4 10.2 Pro forma EBITDA for certain transactions (4) 11.8 11.2 Other (5)(6) 45.0 102.5 Covenant Adjusted EBITDA $ 1,321.7 $ 938.6 (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 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).
As collections reduce previously transferred interests, interests in new, eligible receivables are transferred to ARAMARK Receivables, LLC, subject to meeting certain conditions. 40 Table of Contents Supplemental Consolidating Information Pursuant to Regulation S-X Rule 13-01, which simplified certain disclosure requirements for guarantors and issuers of guaranteed securities, we are no longer required to provide condensed consolidating financial statements for Aramark and its subsidiaries, including the guarantors and non-guarantors under our Credit Agreement and the indentures governing our senior notes.
Supplemental Consolidating Information Pursuant to Regulation S-X Rule 13-01, which simplified certain disclosure requirements for guarantors and issuers of guaranteed securities, we are no longer required to provide condensed consolidating financial statements for Aramark and its subsidiaries, including the guarantors and non-guarantors under our Credit Agreement and the indentures governing our senior notes.
Fiscal Year Ended September 30, 2022 October 1, 2021 Cost of services provided (exclusive of depreciation and amortization) $ % of Revenue $ % of Revenue FSS United States $ 9,145.0 91.2 % $ 6,237.6 91.6 % FSS International 3,456.5 94.5 % 2,719.2 94.9 % Uniform 2,166.0 82.1 % 2,050.4 84.7 % $ 14,767.5 90.5 % $ 11,007.2 91.0 % The following table presents the percentages attributable to the components in cost of services provided (exclusive of depreciation and amortization) for fiscal 2022 and fiscal 2021.
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.
Changes in tax law, their interpretation and resolution of tax audits could significantly impact the income taxes provided in our consolidated financial statements. Assumptions, judgments and estimates relative to the amount of deferred income taxes take into account future taxable income.
The assumptions, judgments and estimates relative to the current income tax provision (benefit) take into account current tax laws, their interpretation and possible results of foreign and domestic tax audits. Changes in tax law, their interpretation and resolution of tax audits could significantly impact the income taxes provided in our consolidated financial statements.
Cash Flows Used In Financing Activities During fiscal 2022, cash used in financing activities was impacted by the following: • payment 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 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).
(4) Represents the annualizing of net EBITDA from acquisitions made during the period.
(3) Represents the annualizing of net EBITDA from certain acquisitions and divestitures made during the period.
Any of the assumptions, judgments and estimates mentioned above could cause the actual income tax obligations to differ from our estimates.
Assumptions, judgments and estimates relative to the amount of deferred income taxes take into account future taxable income. Any of the assumptions, judgments and estimates mentioned above could cause the actual income tax obligations to differ from our estimates.
Revenue for each of these sectors is summarized as follows (in millions): Fiscal Year Ended Change September 30, 2022 October 1, 2021 % Business & Industry $ 1,081.2 $ 695.7 55.4 % Education 3,161.5 2,124.4 48.8 % Healthcare 1,235.8 891.2 38.7 % Sports, Leisure & Corrections 2,722.0 1,511.3 80.1 % Facilities & Other 1,830.3 1,586.7 15.4 % $ 10,030.8 $ 6,809.3 47.3 % The Healthcare sector 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 1,318.3 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.
(3) Represents mainly the commitments for capital projects to help finance improvements or renovations at the facilities in which we operate. (4) Includes certain unfunded employee retirement obligations, contingent consideration obligations related to acquisitions, deferred social security taxes, self-insurance obligations and other obligations.
(3) Represents mainly the commitments for capital projects to help finance improvements or renovations at the facilities in which we operate. (4) Includes certain unfunded employee retirement obligations, contingent consideration obligations related to acquisitions, self-insurance obligations, and other obligations. We have excluded from the table above uncertain tax liabilities due to the uncertainty of the amount and period of payment.
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 five sectors of the FSS United States reportable segment are Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other.
For fiscal 2022, approximately two-thirds of our FSS United States and FSS International segment 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.
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.
We have operations in 18 countries outside the United States. Our largest international operations are in Canada, Chile, China, Germany, Spain and the United Kingdom, and in a majority of these countries we are one of the leading food and/or facility services providers.
Our largest international operations are in Canada, Chile, China, Germany, Spain and the United Kingdom, and in a majority of these countries we are one of the leading food and/or facility services providers. • Uniform and Career Apparel ("Uniform") - Provided a full-service employee uniform solution, resulting in a contracted and recurring revenue model.
Fiscal Year Ended Cost of services provided (exclusive of depreciation and amortization) components September 30, 2022 October 1, 2021 Food and support service costs (1) 26.5 % 24.3 % Personnel costs (2) 47.7 % 50.3 % Other direct costs 25.8 % 25.4 % 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 2022 mainly from operations reopening as COVID-19 restrictions were lifted and food cost inflation.
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.
The weighted average interest rate of our existing debt obligations for each fiscal year from 2023 through 2028 is 3.65%, 3.74%, 3.63%, 3.02%, 3.20% and 3.26%, 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 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).
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.
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.
The customer base is serviced by a leading geographic footprint in the United States and Canada with programs focused on uniforms, floor mats, towels, linens, managed restroom and first aid services. Customers operate in a wide range of industries in the United States and Canada.
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. Customers operated in the United States and Canada in a wide range of industries, including manufacturing, hospitality, retail, food processing, pharmaceuticals, healthcare and automotive.
The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt. The average debt balance for each fiscal year from 2023 through 2028 is $7,421.0 million, $7,327.5 million, $5,324.5 million, $2,941.4 million, $2,347.8 million and $791.8 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 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.
We make assumptions, judgments and estimates to determine the current income tax provision (benefit), deferred tax asset and liabilities and valuation allowance recorded against a deferred tax asset. The assumptions, judgments and estimates relative to the current income tax provision (benefit) take into account current tax laws, their interpretation and possible results of foreign and domestic tax audits.
We make assumptions, judgments and estimates to determine the current income tax provision (benefit), deferred tax asset and liabilities 39 Table of Contents and valuation allowance recorded against a deferred tax asset.
We have excluded from the table above uncertain tax liabilities due to the uncertainty of the amount and period of payment. As of September 30, 2022, we have gross uncertain tax liabilities of $80.2 million (see Note 10 to the audited consolidated financial statements). During fiscal 2022, we made contributions totaling $5.7 million into our defined benefit pension plans.
As of September 29, 2023, we have gross uncertain tax liabilities of $70.3 million (see Note 10 to the audited consolidated 36 Table of Contents financial statements). During fiscal 2023, we made contributions totaling $1.2 million into our defined benefit pension plans.
Overview We are a leading global provider of food, facilities and uniform services to education, healthcare, business & industry and sports, leisure & corrections clients. Our core market is the United States, which is supplemented by an additional 18-country footprint. Through our established brand, broad geographic presence and employees, we anchor our business in our partnerships with thousands of clients.
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.
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.
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.
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 customers including students, patients, employees, sports fans and guests worldwide.
These increases in corporate expenses during fiscal 2022 more than offset lower personnel costs from incentive expenses related to the annual bonus. 35 Table of Contents Liquidity and Capital Resources Overview Our principal sources of liquidity are cash generated from operating activities, funds from borrowings, investments in marketable securities and existing cash on hand.
These decreases in corporate expenses during fiscal 2023 more than offset higher expenses related to the spin-off of the Uniform segment compared to prior year period ($14.8 million). Liquidity and Capital Resources Overview Our principal sources of liquidity are cash generated from operating activities, funds from borrowings, investments in marketable securities and existing cash on hand.
We insure portions of our risk in general liability, automobile liability, workers’ compensation liability and property liability through a wholly owned captive insurance subsidiary (the "Captive") to enhance our risk financing strategies.
We insure portions of our risk related to general liability, automobile liability, workers’ compensation liability claims as well as certain property damage risks through a wholly owned captive insurance subsidiary (the "Captive") as part of our approach to risk finance.
(5) "Other" for the twelve months ended September 30, 2022 includes 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 ($34.8 million), the reversal of a contingent consideration liability related to an acquisition earn out ($20.7 million), non-cash charges for inventory write-downs to net realizable value and fixed asset write-offs related to personal protective equipment ($20.5 million), severance charges ($19.6 million), United States and non-United States governmental labor related tax credits resulting from the COVID-19 pandemic ($17.3 million), favorable impact related to a client contract dispute ($9.6 million), charges related to the Company's intention to spin-off the Uniform segment 38 Table of Contents ($9.3 million), gain from a funding agreement related to a legal matter ($6.5 million), the loss from the change in fair value related to certain gasoline and diesel agreements ($6.4 million), compensation expense related to an acquisition earn out contingent on employees staying until the performance period ends ($5.6 million), the gain from the insurance proceeds received related to property damage from a tornado in Nashville ($4.0 million), the impact of hyperinflation in Argentina ($3.5 million), due diligence charges related to acquisitions ($2.5 million) and other miscellaneous expenses.
(5) "Other" for the twelve months ended September 30, 2022 includes 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 ($34.8 million), non-cash charges for inventory write-downs to net realizable value and fixed asset write-offs related to personal protective equipment ($20.5 million), severance charges ($19.6 million), United States and non-United States governmental labor related tax credits resulting from the COVID-19 pandemic ($17.3 million), the reversal of contingent consideration liabilities related to acquisition earn outs, net of expense ($15.1 million), the favorable impact related to a client contract dispute ($9.6 million), charges related to our spin-off of the Uniform segment ($9.3 million), favorable adjustments for the EBITDA impact attributable to equity investments that are permitted in the calculation in accordance with the Credit Agreement and indentures, primarily from our previous ownership interest in AIM Services Co., Ltd.
These changes in operating assets and liabilities more than offset: • Accounts payable by $169.6 million, generating a greater source of cash during fiscal 2022 compared to fiscal 2021 as operations returned following the lifting of COVID-19 restrictions, new business and timing of disbursements.
These changes in operating assets and liabilities more than offset: • Accounts payable by $329.1 million, resulting in a lower source of cash during fiscal 2023 compared to fiscal 2022 from the timing of disbursements.
The maximum amount available under the Receivables Facility as of September 30, 2022 is $500.0 million. During the third quarter of fiscal 2022, we increased the purchase limit available under the Receivables Facility from $400.0 million to $500.0 million and the additional seasonal tranche of $100.0 million has been eliminated.
The maximum amount available under the Receivables Facility as of September 29, 2023 is $600.0 million. During the third quarter of fiscal 2023, we increased the purchase limit available under the Receivables Facility from $500.0 million to $600.0 million and extended the scheduled maturity date from June 2024 to July 2026.
The Sports, Leisure & Corrections sector increased due to the acquisition of Union Supply, which contributed $82.5 million of revenue during fiscal 2022, and higher per capita customer spending in stadiums and arenas.
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.
Consolidated Overview Revenue increased by 35.0% during fiscal 2022 compared to the prior year period, which was primarily attributable to base business growth, including from operations re-opening across all business segments after COVID-19 restrictions lifted, growth in net new business and pricing pass-throughs. In addition, the Next Level and Union Supply acquisitions contributed to the revenue growth (3.0%).
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.
Operating income increased by $437.0 million during fiscal 2022 compared to the prior year period, which was driven by base business growth, including from clients re-opening after COVID-19 restrictions lifted, effective cost management and higher vendor discounts from stabilizing supply chain disruptions with our suppliers.
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.
The increase was attributable to: • higher share-based compensation expense (see Note 12 to the audited consolidated financial statements); • the unfavorable change in fair value of certain gasoline and diesel agreements ($12.2 million); and • accounting and legal fees related to our intention to spin-off the Uniform segment ($5.2 million).
The decrease was attributable to: • lower share-based compensation expense ($8.6 million) compared to the prior period (see Note 12 to the audited consolidated financial statements); and • favorable change in fair value of certain gasoline and diesel agreements ($8.3 million).
(6) "Other" for the twelve months ended October 1, 2021 includes non-cash charges for inventory write-downs to net realizable value and for excess inventory related to personal protective equipment ($36.0 million), labor charges, incremental expenses and other expenses associated with closed or partially closed client locations resulting from the COVID-19 pandemic, net of United States and non-United States governmental labor related tax credits ($28.4 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 ($25.3 million), expenses related to merger and integration related charges ($22.2 million), gain from a funding agreement related to a legal matter ($10.0 million), reversal of severance charges ($8.2 million), the gain from the change in fair value related to certain gasoline and diesel agreements ($5.9 million), a favorable settlement of a legal matter ($4.7 million), non-cash impairment charges related to various assets ($3.8 million), charges related to a client contract dispute ($2.6 million), expenses related to the impact of the ice storm in Texas ($2.5 million), a non-cash charge related to an environmental matter ($2.5 million), non-cash charges related to information technology assets ($2.2 million), the impact of hyperinflation in Argentina ($1.8 million) and other miscellaneous expenses.
(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.
The ongoing volatility and disruption of financial markets caused by these global events, as well as other current global economic factors, triggered inflation in our food and labor costs, increased market interest rates and has driven significant changes in foreign currencies.
Business Update Continued volatility of global economies and financial markets caused by global events and other factors, including the ongoing conflict between Russia and Ukraine and the recent Israel-Hamas War and escalating tensions in the region, has caused inflation in product, energy and labor costs, has increased market interest rates and has driven significant changes in foreign currencies.
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 in our FSS United States and FSS International segments.
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 also recorded a benefit to the "Provision (Benefit) for Income Taxes" within the Consolidated Statements of Income (Loss) of $4.2 million due to a state tax law change during fiscal 2022.
We also recorded a benefit to the Provision for Income Taxes of $4.2 million during fiscal 2022 due to a state tax law change (see Note 10 to the audited consolidated financial statements). 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 Business & Industry sector had negative low-single digit operating income margins, compared to negative mid-single digit operating income margins in the prior year. As described above, during the COVID-19 pandemic, and in following periods, operating income margins in the FSS United States sectors may differ from our otherwise historical patterns, particularly in the Business & Industry sector.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest change(US$ equivalent in millions) Expected Fiscal Year of Maturity As of September 30, 2022 2023 2024 2025 2026 2027 Thereafter Total Fair Value Debt: Fixed rate $ 29 $ 26 $ 2,393 $ 19 $ 15 $ 1,197 $ 3,679 $ 3,457 Average interest rate 4.0 % 4.0 % 5.6 % 4.0 % 4.0 % 5.0 % 5.4 % Variable rate $ 38 $ 149 $ 1,716 $ 313 $ 839 $ 730 $ 3,785 $ 3,696 Average interest rate 5.5 % 3.7 % 4.3 % 3.6 % 4.3 % 5.0 % 4.3 % Interest Rate Swaps: Receive variable/pay fixed $ 1,550 $ — $ 800 $ — $ 700 $ 500 $ 3,550 $ 155 Average pay rate 2.1 % — % 1.6 % — % 2.2 % 1.5 % Average receive rate 3.1 % — % 3.1 % — % 3.1 % 3.1 % 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.
Biggest changeWe 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.
The information below summarizes our market risks associated with debt obligations and other significant financial instruments as of September 30, 2022 (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 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.
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 30, 2022. 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 29, 2023. For interest rate swaps, the table presents the notional amounts and related weighted-average interest rates by fiscal year of maturity.
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. 44 Table of Contents
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. 41 Table of Contents
As of September 30, 2022, we had contracts for 9.4 million gallons outstanding through September of fiscal 2022. As of September 30, 2022, the fair value of our gasoline and diesel fuel hedge agreements is $2.6 million, which is included in "Accounts payable" on our Consolidated Balance Sheets. Item 8.
As of September 29, 2023, the fair value of our gasoline and diesel fuel hedge agreements is immaterial, which is included in "Accounts payable" on our Consolidated Balance Sheets. Item 8. Financial Statements and Supplementary Data See Financial Statements and Schedule beginning on page S-1. Item 9.
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(US$ 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.
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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.

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