FILED PURSUANT TO RULE 424(B)(3)
File Number 333-144884
ARAMARK CORPORATION
SUPPLEMENT NO. 5 TO
MARKET MAKING PROSPECTUS DATED
FEBRUARY 5, 2008
THE DATE OF THIS SUPPLEMENT IS NOVEMBER 12, 2008
ON NOVEMBER 12, 2008, ARAMARK CORPORATION FILED THE ATTACHED FORM 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 12, 2008
ARAMARK CORPORATION
(Exact name of registrant as specified in charter)
| Delaware | 001-04762 | 95-2051630 | ||
(State or Other Jurisdiction of Incorporation)) | (Commission File Number) | (IRS Employer Identification No.) |
1101 Market Street Philadelphia, Pennsylvania | 19107 | |
| (Address of Principal Executive Offices) | Zip Code |
Registrant’s telephone, including area code: 215-238-3000
N/A
(Former name and former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
The following information, including the financial reports and schedules attached as an exhibit to this Form 8-K, is furnished pursuant to Item 2.02. Results of Operations and Financial Condition.
The information contained in this Current Report, including exhibit 99.1, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information contained in this Current Report shall not be incorporated by reference into any registration statement or other document or filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
On November 12, 2008, ARAMARK Corporation will hold a conference call announcing its financial results for the quarter and fiscal year ended October 3, 2008. A copy of the financial reports and schedules that are the subject of the conference call are attached hereto as exhibit 99.1.
| ITEM 9.01. | Financial Statements and Exhibits |
(d) Exhibits.
Number | Description | Method of Filing | ||
99.1 | ARAMARK Corporation financial reports and schedules. | Furnished herewith |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ARAMARK CORPORATION | ||||||||
| Date: November 12, 2008 | By: | /s/ L. FREDERICK SUTHERLAND | ||||||
| Name: | L. Frederick Sutherland | |||||||
| Title: | Executive Vice President and Chief Financial Officer | |||||||
Index to Exhibits
Number | Description | Method of Filing | ||
99.1 | ARAMARK Corporation financial reports and schedules. | Furnished herewith |
Exhibit 99.1
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands)
| Three Months Ended October 3, 2008 | Three Months Ended September 28, 2007 | |||||
Sales | $ | 3,566,277 | $ | 3,148,724 | ||
Costs and Expenses: | ||||||
Cost of services provided | 3,223,383 | 2,832,320 | ||||
Depreciation and amortization | 134,954 | 121,028 | ||||
Selling and general corporate expenses | 33,165 | 48,585 | ||||
| 3,391,502 | 3,001,933 | |||||
Operating income | 174,775 | 146,791 | ||||
Interest and other financing costs, net | 132,348 | 128,258 | ||||
Income before income taxes | 42,427 | 18,533 | ||||
Provision for income taxes | 8,803 | 6,260 | ||||
Net income | $ | 33,624 | $ | 12,273 | ||
Notes:
The three month period of fiscal 2008 is a 14 week period and the three month period of fiscal 2007 is a 13 week period.
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands)
| Successor | Predecessor | |||||||||||
| Fiscal Year Ended October 3, 2008 | Period from January 27, 2007 through September 28, 2007 | Period from September 30, 2006 through January 26, 2007 | ||||||||||
Sales | $ | 13,470,152 | $ | 8,438,448 | $ | 3,945,868 | ||||||
Costs and Expenses: | ||||||||||||
Cost of services provided | 12,218,089 | 7,623,684 | 3,586,961 | |||||||||
Depreciation and amortization | 509,137 | 322,480 | 116,438 | |||||||||
Selling and general corporate expenses | 176,790 | 126,874 | 173,934 | |||||||||
Other (income) expense | — | (21,177 | ) | — | ||||||||
| 12,904,016 | 8,051,861 | 3,877,333 | ||||||||||
Operating income | 566,136 | 386,587 | 68,535 | |||||||||
Interest and other financing costs, net | 514,690 | 365,887 | 48,672 | |||||||||
Income before income taxes | 51,446 | 20,700 | 19,863 | |||||||||
Provision for income taxes | 11,986 | 4,641 | 5,063 | |||||||||
Net income | $ | 39,460 | $ | 16,059 | $ | 14,800 | ||||||
Notes:
The twelve month period ended October 3, 2008 is a 53 week period.
ARAMARK CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED BALANCE SHEET DATA
(Unaudited)
(In Thousands)
| October 3, 2008 | September 28, 2007 | |||||
Assets | ||||||
Current Assets | $ | 1,798,320 | $ | 1,643,901 | ||
Property and Equipment, net | 1,223,096 | 1,205,121 | ||||
Goodwill | 4,512,133 | 4,629,505 | ||||
Other Intangible Assets | 2,215,321 | 2,400,073 | ||||
Other Assets | 774,533 | 715,098 | ||||
| $ | 10,523,403 | $ | 10,593,698 | |||
Liabilities and Shareholder’s Equity | ||||||
Current Liabilities (1) | $ | 1,811,644 | $ | 1,762,788 | ||
Long-Term Borrowings | 5,804,880 | 5,839,123 | ||||
Other Liabilities | 1,337,472 | 1,372,551 | ||||
Common Stock Subject to Repurchase | 229,628 | 179,677 | ||||
Total Shareholder’s Equity | 1,339,779 | 1,439,559 | ||||
| $ | 10,523,403 | $ | 10,593,698 | |||
Notes:
Certain immaterial adjustments have been made to the September 28, 2007 balance sheet presentation related to the currency effects of purchase accounting.
(1) Includes $54.7 million and $51.4 million of current maturities of long-term borrowings as of October 3, 2008 and September 28, 2007, respectively.
ARAMARK CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED CASH FLOW DATA
(Unaudited)
(In Thousands)
| Successor | Predecessor | |||||||||||
| Fiscal Year Ended October 3, 2008 | Period from January 27, 2007 through September 28, 2007 | Period from September 30, 2006 through January 26, 2007 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 39,460 | $ | 16,059 | $ | 14,800 | ||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization | 509,137 | 322,480 | 116,438 | |||||||||
Income taxes deferred | (18,264 | ) | (118,668 | ) | (11,640 | ) | ||||||
Stock-based compensation expense | 11,760 | 27,518 | 84,059 | |||||||||
Gain from sale of investment | — | (21,177 | ) | — | ||||||||
Changes in noncash working capital | (86,168 | ) | 302,722 | (269,729 | ) | |||||||
Net proceeds from sale of receivables | 17,000 | 22,000 | — | |||||||||
Other operating activities | 23,357 | 9,463 | (10,079 | ) | ||||||||
Net cash provided by (used in) operating activities | 496,282 | 560,397 | (76,151 | ) | ||||||||
Cash flows from investing activities: | ||||||||||||
Net purchases of property and equipment and client contract investments | (350,397 | ) | (235,791 | ) | (61,479 | ) | ||||||
Proceeds from sale of investment | — | 285,982 | — | |||||||||
Acquisition of ARAMARK Corporation | — | (6,100,687 | ) | — | ||||||||
Acquisitions and other investing activities | (54,792 | ) | (55,084 | ) | (78,473 | ) | ||||||
Net cash used in investing activities | (405,189 | ) | (6,105,580 | ) | (139,952 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Net proceeds of additional long-term borrowings | (20,590 | ) | 3,787,339 | 285,970 | ||||||||
Proceeds from issuance of common stock | 2,656 | — | 9,666 | |||||||||
Capital contributions | 4,900 | 1,844,136 | — | |||||||||
Repurchase of stock | (14,141 | ) | (750 | ) | — | |||||||
Payment of dividend | — | — | (12,624 | ) | ||||||||
Other financing activities | 1,363 | (138,508 | ) | 22,016 | ||||||||
Net cash provided by (used in) financing activities | (25,812 | ) | 5,492,217 | 305,028 | ||||||||
Increase (decrease) in cash and cash equivalents | $ | 65,281 | $ | (52,966 | ) | $ | 88,925 | |||||
Notes:
The twelve month period ended October 3, 2008 is a 53 week period.
ARAMARK CORPORATION AND SUBSIDIARIES
SALES AND OPERATING INCOME BY SEGMENT
SUPPLEMENTAL DATA
(Unaudited)
(In Thousands)
| Three Months Ended October 3, 2008 | Three Months Ended September 28, 2007 | ||||||
Sales | |||||||
Food and Support Services—North America | $ | 2,374,711 | $ | 2,153,016 | |||
Food and Support Services—International | 730,064 | 578,789 | |||||
Uniform and Career Apparel | 461,502 | 416,919 | |||||
| $ | 3,566,277 | $ | 3,148,724 | ||||
Operating Income | |||||||
Food and Support Services—North America | $ | 116,681 | $ | 116,125 | |||
Food and Support Services—International | 21,441 | 21,061 | |||||
Uniform and Career Apparel | 34,329 | 29,748 | |||||
Corporate | 2,324 | (20,143 | ) | ||||
| $ | 174,775 | $ | 146,791 | ||||
Notes:
The Food and Support Services—Domestic segment has been renamed the Food and Support Services—North America segment. The three month period of fiscal 2008 is a 14 week period and the three month period of fiscal 2007 is a 13 week period.
ARAMARK CORPORATION AND SUBSIDIARIES
SALES AND OPERATING INCOME BY SEGMENT
SUPPLEMENTAL DATA
(Unaudited)
(In Thousands)
| Successor | Predecessor | |||||||||||
| Fiscal Year Ended October 3, 2008 | Period from January 27, 2007 through September 28, 2007 | Period from September 30, 2006 through January 26, 2007 | ||||||||||
Sales | ||||||||||||
Food and Support Services—North America | $ | 8,924,863 | $ | 5,758,952 | $ | 2,674,435 | ||||||
Food and Support Services—International | 2,783,033 | 1,561,579 | 714,550 | |||||||||
Uniform and Career Apparel | 1,762,256 | 1,117,917 | 556,883 | |||||||||
| $ | 13,470,152 | $ | 8,438,448 | $ | 3,945,868 | |||||||
Operating Income | ||||||||||||
Food and Support Services—North America | $ | 386,804 | $ | 267,457 | $ | 130,735 | ||||||
Food and Support Services—International | 97,181 | 64,691 | 22,621 | |||||||||
Uniform and Career Apparel | 126,615 | 82,029 | 51,161 | |||||||||
| 610,600 | 414,177 | 204,517 | ||||||||||
Corporate | (44,464 | ) | (48,767 | ) | (135,982 | ) | ||||||
Other income (expense) (1) | — | 21,177 | — | |||||||||
| $ | 566,136 | $ | 386,587 | $ | 68,535 | |||||||
Notes:
The Food and Support Services—Domestic segment has been renamed the Food and Support Services—North America segment. The twelve month period ended October 3, 2008 is a 53 week period.
(1) The Successor period from January 27, 2007 through September 28, 2007 includes a $21.2 million gain related to the sale of our stake in SMG.
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED CONSOLIDATED SALES GROWTH
(Unaudited)
(In thousands)
Management believes that presentation of sales growth, adjusted to eliminate the effects of acquisitions, divestitures, the impact of currency translation, conforming the fiscal reporting period of a subsidiary to that of the Company in fiscal 2007 and the estimated impact of the 53rd week in fiscal 2008, provides useful information to investors because it enhances comparability between the current year and prior year reporting periods. Elimination of the currency translation effect provides constant currency comparisons without the distortion of currency rate fluctuations.
Although ARAMARK Corporation continued as the same legal entity after the going-private transaction (the “Transaction”), the consolidated statements of income are presented for two periods: Predecessor and Successor, which relate to the period preceding the Transaction and the period succeeding the Transaction, respectively. The Company refers to the operations of ARAMARK Corporation and subsidiaries for both the Predecessor and Successor periods. We have prepared our supplementary discussion of the results of operations for the three and twelve months ended October 3, 2008 by comparing the three months ended October 3, 2008 to the three months ended September 28, 2007 and the twelve months ended October 3, 2008 to the mathematical combination of the Successor and Predecessor periods in the twelve months ended September 28, 2007. Although this presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it provides a meaningful method of comparison because it enables us to compare our consolidated results over equivalent periods of time. The combined operating results have not been prepared as pro forma results under applicable regulations and may not reflect the actual results we would have achieved absent the Transaction and may not be predictive of future results of operations.
| Three Months Ended | % Change | ||||||||||
| October 3, 2008 | September 28, 2007 | ||||||||||
ARAMARK Corporation Consolidated Sales (as reported) | $ | 3,566,277 | $ | 3,148,724 | 13 | % | |||||
Effect of Currency Translation | — | 11,739 | |||||||||
Effect of Acquisitions and Divestitures | (11,472 | ) | (2,350 | ) | |||||||
Estimated impact of 53rd Week | (246,900 | ) | — | ||||||||
ARAMARK Corporation Consolidated Sales (as adjusted) | $ | 3,307,905 | $ | 3,158,113 | 5 | % | |||||
| Twelve Months Ended | % Change | ||||||||||
| October 3, 2008 | September 28, 2007 | ||||||||||
ARAMARK Corporation Consolidated Sales (as reported) | $ | 13,470,152 | $ | 12,384,316 | 9 | % | |||||
Effect of Currency Translation | — | 225,746 | |||||||||
Effect of Acquisitions and Divestitures | (39,590 | ) | (9,193 | ) | |||||||
Conforming the Fiscal Reporting Period of a Subsidiary to that of ARAMARK Corporation | — | (25,223 | ) | ||||||||
Estimated impact of 53rd Week | (246,900 | ) | — | ||||||||
ARAMARK Corporation Consolidated Sales (as adjusted) | $ | 13,183,662 | $ | 12,575,646 | 5 | % | |||||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED CONSOLIDATED OPERATING INCOME GROWTH
(Unaudited)
(In thousands)
Management believes that presentation of operating income growth, adjusted to eliminate increased amortization of acquisition-related customer relationship intangible assets and depreciation of property and equipment resulting from the going-private transaction (the “Transaction”), charges related to the Transaction, stock-based compensation under SFAS 123R, a currency transaction gain in 2007 and the impact of the divestiture of SMG, a venue management company, in 2007, including the gain from the sale, provides useful information to investors because it enhances comparability between the current year and prior year reporting periods.
Although ARAMARK Corporation continued as the same legal entity after the going-private transaction (the “Transaction”), the consolidated statements of income are presented for two periods: Predecessor and Successor, which relate to the period preceding the Transaction and the period succeeding the Transaction, respectively. The Company refers to the operations of ARAMARK Corporation and subsidiaries for both the Predecessor and Successor periods. We have prepared our supplementary discussion of the results of operations for the three and twelve months ended October 3, 2008 by comparing the three months ended October 3, 2008 to the three months ended September 28, 2007 and the twelve months ended October 3, 2008 to the mathematical combination of the Successor and Predecessor periods in the twelve months ended September 28, 2007. Although this presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it provides a meaningful method of comparison because it enables us to compare our consolidated results over equivalent periods of time. The combined operating results have not been prepared as pro forma results under applicable regulations and may not reflect the actual results we would have achieved absent the Transaction and may not be predictive of future results of operations.
| Three Months Ended | % Change | ||||||||||
| October 3, 2008 | September 28, 2007 | ||||||||||
ARAMARK Corporation Consolidated Operating Income (as reported) | $ | 174,775 | $ | 146,791 | |||||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the Transaction | 39,340 | 30,747 | |||||||||
Transaction-Related Charges | — | 1,146 | |||||||||
Stock-Based Compensation under SFAS 123R | (10,386 | ) | 9,940 | ||||||||
ARAMARK Corporation Consolidated Operating Income (as adjusted) | $ | 203,729 | $ | 188,624 | 8 | % | |||||
| Twelve Months Ended | % Change | ||||||||||
| October 3, 2008 | September 28, 2007 | ||||||||||
ARAMARK Corporation Consolidated Operating Income (as reported) | $ | 566,136 | $ | 455,122 | |||||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the Transaction | 135,104 | 82,332 | |||||||||
Transaction-Related Charges | — | 117,825 | |||||||||
Stock-Based Compensation under SFAS 123R | 11,760 | 34,625 | |||||||||
Currency Transaction Gain | — | (3,804 | ) | ||||||||
Gain from Sale of SMG | — | (21,177 | ) | ||||||||
Divestiture of SMG in 2007 | — | (14,554 | ) | ||||||||
ARAMARK Corporation Consolidated Operating Income (as adjusted) | $ | 713,000 | $ | 650,369 | 10 | % | |||||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED CONSOLIDATED OPERATING INCOME MARGIN
(Unaudited)
(In thousands)
Management believes that presentation of operating income, adjusted to eliminate increased amortization of acquisition-related customer relationship intangible assets and depreciation of property and equipment resulting from the going-private transaction (the “Transaction”), charges related to the Transaction, stock-based compensation under SFAS 123R, a currency transaction gain in 2007 and the impact of the divestiture of SMG, a venue management company, in 2007, including the gain from the sale, provides useful information to investors because it enhances comparability between the current year and prior year reporting periods. The table below is presented to illustrate the effect of these adjustments on operating income margin, which we define as operating income expressed as a percentage of sales.
Although ARAMARK Corporation continued as the same legal entity after the going-private transaction (the “Transaction”), the consolidated statements of income are presented for two periods: Predecessor and Successor, which relate to the period preceding the Transaction and the period succeeding the Transaction, respectively. The Company refers to the operations of ARAMARK Corporation and subsidiaries for both the Predecessor and Successor periods. We have prepared our supplementary discussion of the results of operations for the twelve months ended October 3, 2008 by comparing the twelve months ended October 3, 2008 to the mathematical combination of the Successor and Predecessor periods in the twelve months ended September 28, 2007. Although this presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it provides a meaningful method of comparison because it enables us to compare our consolidated results over equivalent periods of time. The combined operating results have not been prepared as pro forma results under applicable regulations and may not reflect the actual results we would have achieved absent the Transaction and may not be predictive of future results of operations.
| Twelve Months Ended | ||||||||
| �� | October 3, 2008 | September 28, 2007 | ||||||
ARAMARK Corporation Consolidated Sales (as reported) | $ | 13,470,152 | $ | 12,384,316 | ||||
ARAMARK Corporation Consolidated Operating Income (as reported) | $ | 566,136 | $ | 455,122 | ||||
ARAMARK Corporation Consolidated Operating Income Margin (as reported) | 4.20 | % | 3.67 | % | ||||
ARAMARK Corporation Consolidated Sales (as reported) | $ | 13,470,152 | $ | 12,384,316 | ||||
ARAMARK Corporation Consolidated Operating Income (as reported) | $ | 566,136 | $ | 455,122 | ||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the Transaction | 135,104 | 82,332 | ||||||
Transaction-Related Charges | — | 117,825 | ||||||
Stock-Based Compensation under SFAS 123R | 11,760 | 34,625 | ||||||
Currency Transaction Gain | — | (3,804 | ) | |||||
Gain from Sale of SMG | — | (21,177 | ) | |||||
Divestiture of SMG in 2007 | — | (14,554 | ) | |||||
ARAMARK Corporation Consolidated Operating Income (as adjusted) | $ | 713,000 | $ | 650,369 | ||||
ARAMARK Corporation Consolidated Operating Income Margin (as adjusted) | 5.29 | % | 5.25 | % | ||||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED FOOD AND SUPPORT SERVICES—NORTH AMERICA OPERATING INCOME GROWTH
(Unaudited)
(In thousands)
Management believes that presentation of operating income growth, adjusted to eliminate increased amortization of acquisition-related customer relationship intangible assets and depreciation of property and equipment resulting from the going-private transaction (the “Transaction”) and the impact of the divestiture of SMG, a venue management company, in 2007, provides useful information to investors because it enhances comparability between the current year and prior year reporting periods.
Although ARAMARK Corporation continued as the same legal entity after the going-private transaction (the “Transaction”), the consolidated statements of income are presented for two periods: Predecessor and Successor, which relate to the period preceding the Transaction and the period succeeding the Transaction, respectively. The Company refers to the operations of ARAMARK Corporation and subsidiaries for both the Predecessor and Successor periods. We have prepared our supplementary discussion of the results of operations for the three and twelve months ended October 3, 2008 by comparing the three months ended October 3, 2008 to the three months ended September 28, 2007 and the twelve months ended October 3, 2008 to the mathematical combination of the Successor and Predecessor periods in the twelve months ended September 28, 2007. Although this presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it provides a meaningful method of comparison because it enables us to compare our consolidated results over equivalent periods of time. The combined operating results have not been prepared as pro forma results under applicable regulations and may not reflect the actual results we would have achieved absent the Transaction and may not be predictive of future results of operations.
| Three Months Ended | % Change | |||||||||
| October 3, 2008 | September 28, 2007 | |||||||||
Food and Support Services - North America Operating Income (as reported) | $ | 116,681 | $ | 116,125 | ||||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the Transaction | 27,679 | 23,410 | ||||||||
Food and Support Services - North America Operating Income (as adjusted) | $ | 144,360 | $ | 139,535 | 3 | % | ||||
| Twelve Months Ended | % Change | |||||||||
| October 3, 2008 | September 28, 2007 | |||||||||
Food and Support Services - North America Operating Income (as reported) | $ | 386,804 | $ | 398,192 | ||||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the Transaction | 97,479 | 63,324 | ||||||||
Divestiture of SMG in 2007 | — | (14,554 | ) | |||||||
Food and Support Services - North America Operating Income (as adjusted) | $ | 484,283 | $ | 446,962 | 8 | % | ||||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED FOOD AND SUPPORT SERVICES—INTERNATIONAL OPERATING INCOME GROWTH
(Unaudited)
(In thousands)
Management believes that presentation of operating income growth, adjusted to eliminate increased amortization of acquisition-related customer relationship intangible assets resulting from the going-private transaction (the “Transaction”), provides useful information to investors because it enhances comparability between the current year and prior year reporting periods.
Although ARAMARK Corporation continued as the same legal entity after the going-private transaction (the “Transaction”), the consolidated statements of income are presented for two periods: Predecessor and Successor, which relate to the period preceding the Transaction and the period succeeding the Transaction, respectively. The Company refers to the operations of ARAMARK Corporation and subsidiaries for both the Predecessor and Successor periods. We have prepared our supplementary discussion of the results of operations for the three and twelve months ended October 3, 2008 by comparing the three months ended October 3, 2008 to the three months ended September 28, 2007 and the twelve months ended October 3, 2008 to the mathematical combination of the Successor and Predecessor periods in the twelve months ended September 28, 2007. Although this presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it provides a meaningful method of comparison because it enables us to compare our consolidated results over equivalent periods of time. The combined operating results have not been prepared as pro forma results under applicable regulations and may not reflect the actual results we would have achieved absent the Transaction and may not be predictive of future results of operations.
| Three Months Ended | % Change | ||||||||
| October 3, 2008 | September 28, 2007 | ||||||||
Food and Support Services—International Operating Income (as reported) | $ | 21,441 | $ | 21,061 | |||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets Resulting from the Transaction | 3,219 | 1,406 | |||||||
Food and Support Services—International Operating Income (as adjusted) | $ | 24,660 | $ | 22,467 | 10 | % | |||
| Twelve Months Ended | % Change | ||||||||
| October 3, 2008 | September 28, 2007 | ||||||||
Food and Support Services—International Operating Income (as reported) | $ | 97,181 | $ | 87,312 | |||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets Resulting from the Transaction | 8,049 | 2,705 | |||||||
Food and Support Services—International Operating Income (as adjusted) | $ | 105,230 | $ | 90,017 | 17 | % | |||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED UNIFORM AND CAREER APPAREL OPERATING INCOME GROWTH
(Unaudited)
(In thousands)
Management believes that presentation of operating income growth, adjusted to eliminate increased amortization of acquisition-related customer relationship intangible assets and depreciation of property and equipment resulting from the going-private transaction (the “Transaction”), provides useful information to investors because it enhances comparability between the current year and prior year reporting periods.
Although ARAMARK Corporation continued as the same legal entity after the going-private transaction (the “Transaction”), the consolidated statements of income are presented for two periods: Predecessor and Successor, which relate to the period preceding the Transaction and the period succeeding the Transaction, respectively. The Company refers to the operations of ARAMARK Corporation and subsidiaries for both the Predecessor and Successor periods. We have prepared our supplementary discussion of the results of operations for the three and twelve months ended October 3, 2008 by comparing the three months ended October 3, 2008 to the three months ended September 28, 2007 and the twelve months ended October 3, 2008 to the mathematical combination of the Successor and Predecessor periods in the twelve months ended September 28, 2007. Although this presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it provides a meaningful method of comparison because it enables us to compare our consolidated results over equivalent periods of time. The combined operating results have not been prepared as pro forma results under applicable regulations and may not reflect the actual results we would have achieved absent the Transaction and may not be predictive of future results of operations.
| Three Months Ended | % Change | ||||||||
| October 3, 2008 | September 28, 2007 | ||||||||
Uniform and Career Apparel Operating Income (as reported) | $ | 34,329 | $ | 29,748 | |||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the Transaction | 8,441 | 5,931 | |||||||
Uniform and Career Apparel Operating Income (as adjusted) | $ | 42,770 | $ | 35,679 | 20 | % | |||
| Twelve Months Ended | % Change | ||||||||
| October 3, 2008 | September 28, 2007 | ||||||||
Uniform and Career Apparel Operating Income (as reported) | $ | 126,615 | $ | 133,190 | |||||
Increased Amortization of Acquisition-Related Customer Relationship Intangible Assets and Depreciation of Property and Equipment Resulting from the Transaction | 29,575 | 16,303 | |||||||
Uniform and Career Apparel Operating Income (as adjusted) | $ | 156,190 | $ | 149,493 | 4 | % | |||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED CORPORATE EXPENSES
(Unaudited)
(In thousands)
Management believes that presentation of corporate expenses, adjusted to eliminate charges related to the going-private transaction (the “Transaction”), stock-based compensation under SFAS 123R and a currency transaction gain in 2007, provides useful information to investors because it enhances comparability between the current year and prior year reporting periods.
Although ARAMARK Corporation continued as the same legal entity after the going-private transaction (the “Transaction”), the consolidated statements of income are presented for two periods: Predecessor and Successor, which relate to the period preceding the Transaction and the period succeeding the Transaction, respectively. The Company refers to the operations of ARAMARK Corporation and subsidiaries for both the Predecessor and Successor periods. We have prepared our supplementary discussion of the results of operations for the three and twelve months ended October 3, 2008 by comparing the three months ended October 3, 2008 to the three months ended September 28, 2007 and the twelve months ended October 3, 2008 to the mathematical combination of the Successor and Predecessor periods in the twelve months ended September 28, 2007. Although this presentation does not comply with U.S. generally accepted accounting principles (GAAP), we believe that it provides a meaningful method of comparison because it enables us to compare our consolidated results over equivalent periods of time. The combined operating results have not been prepared as pro forma results under applicable regulations and may not reflect the actual results we would have achieved absent the Transaction and may not be predictive of future results of operations.
| Three Months Ended | ||||||||
| October 3, 2008 | September 28, 2007 | |||||||
Corporate Expenses (as reported) | $ | (2,324 | ) | $ | 20,143 | |||
Transaction-Related Charges | — | (1,146 | ) | |||||
Stock-Based Compensation under SFAS 123R | 10,385 | (9,940 | ) | |||||
Corporate Expenses (as adjusted) | $ | 8,061 | $ | 9,057 | ||||
| Twelve Months Ended | ||||||||
| October 3, 2008 | September 28, 2007 | |||||||
Corporate Expenses (as reported) | $ | 44,464 | $ | 184,749 | ||||
Transaction-Related Charges | — | (117,825 | ) | |||||
Stock-Based Compensation under SFAS 123R | (11,760 | ) | (34,625 | ) | ||||
Currency Transaction Gain | — | 3,804 | ||||||
Corporate Expenses (as adjusted) | $ | 32,704 | $ | 36,103 | ||||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED EBITDA
(Unaudited)
(In millions)
The following is a reconciliation of net income, which is a GAAP measure of our operating results, to Adjusted EBITDA as defined in our debt agreements. The terms and related calculations are defined in the Company’s senior secured credit agreement and indenture. Management believes that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information about the calculation of certain financial covenants in the Company’s senior secured credit agreement and the indenture. Adjusted EBITDA is a material component of these covenants. EBITDA and Adjusted EBITDA are not presentations made in accordance with GAAP, are not measures of financial performance or condition, liquidity or profitability, and should not be considered as an alternative to (1) net income, operating income or any other performance measures determined in accordance with GAAP or (2) operating cash flows determined in accordance with GAAP. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.
| Twelve Months Ended October 3, 2008 | |||
Net income | $ | 39.5 | |
Interest and other financing costs, net | 514.7 | ||
Provision for income taxes | 12.0 | ||
Depreciation and amortization | 509.1 | ||
EBITDA | 1,075.3 | ||
Stock-based compensation expense | 11.8 | ||
Pro forma EBITDA for equity method investees | 17.3 | ||
Pro forma EBITDA for current year acquisitions | 1.7 | ||
Other | 1.4 | ||
Adjusted EBITDA | $ | 1,107.5 | |
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED EBITDA
(Unaudited)
(In millions)
The following is a reconciliation of net income, which is a GAAP measure of our operating results, to Adjusted EBITDA as defined in our debt agreements. The terms and related calculations are defined in the Company’s senior secured credit agreement and indenture. Management believes that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information about the calculation of certain financial covenants in the Company’s senior secured credit agreement and the indenture. Adjusted EBITDA is a material component of these covenants. EBITDA and Adjusted EBITDA are not presentations made in accordance with GAAP, are not measures of financial performance or condition, liquidity or profitability, and should not be considered as an alternative to (1) net income, operating income or any other performance measures determined in accordance with GAAP or (2) operating cash flows determined in accordance with GAAP. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.
| Twelve Months Ended June 27, 2008 | |||
Net income | $ | 18.2 | |
Interest and other financing costs, net | 510.6 | ||
Provision for income taxes | 9.3 | ||
Depreciation and amortization | 495.3 | ||
EBITDA | 1,033.4 | ||
Stock-based compensation expense | 32.0 | ||
Unusual or non-recurring gains and losses | 4.2 | ||
Pro forma EBITDA for equity method investees | 18.0 | ||
Pro forma EBITDA for current year acquisitions | 0.1 | ||
Costs related to the merger transaction | 1.1 | ||
Other | 1.3 | ||
Adjusted EBITDA | $ | 1,090.1 | |
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
ADJUSTED EBITDA
(Unaudited)
(In millions)
The following is a reconciliation of net income, which is a GAAP measure of our operating results, to Adjusted EBITDA as defined in our debt agreements. The terms and related calculations are defined in the Company’s senior secured credit agreement and indenture. Management believes that the presentation of EBITDA and Adjusted EBITDA is appropriate to provide additional information about the calculation of certain financial covenants in the Company’s senior secured credit agreement and the indenture. Adjusted EBITDA is a material component of these covenants. EBITDA and Adjusted EBITDA are not presentations made in accordance with GAAP, are not measures of financial performance or condition, liquidity or profitability, and should not be considered as an alternative to (1) net income, operating income or any other performance measures determined in accordance with GAAP or (2) operating cash flows determined in accordance with GAAP. Additionally, EBITDA and Adjusted EBITDA are not intended to be measures of free cash flow for management’s discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.
| Twelve Months Ended September 28, 2007 | ||||
Net income | $ | 30.9 | ||
Interest and other financing costs, net | 414.6 | |||
Provision for income taxes | 9.7 | |||
Depreciation and amortization | 438.9 | |||
EBITDA | 894.1 | |||
Stock-based compensation expense | 111.6 | |||
Unusual or non-recurring gains and losses | (23.7 | ) | ||
Pro forma EBITDA for equity method investees | 1.8 | |||
Pro forma EBITDA for current year acquisitions | 1.4 | |||
Costs related to the merger transaction | 40.4 | |||
Other | 4.6 | |||
Adjusted EBITDA | $ | 1,030.2 | ||
ARAMARK CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
FREE CASH FLOW
(Unaudited)
(In millions)
Management believes that presentation of free cash flow, which is defined as cash flows from operating activities less net capital expenditures, provides useful information to investors because it represents a measure of cash flow available for distribution among all the security holders of a company, including debt holders.
| Twelve Months Ended October 3, 2008 | ||||
Net cash provided by operating activities | $ | 496.3 | ||
Net purchases of property and equipment and client contract investments | (350.4 | ) | ||
Free cash flow | $ | 145.9 | ||