Cover Page
Cover Page - shares | 6 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-36223 | |
Entity Registrant Name | Aramark | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-8236097 | |
Entity Address, Address Line One | 2400 Market Street | |
Entity Address, Postal Zip Code | 19103 | |
Entity Address, City or Town | Philadelphia, | |
Entity Address, State or Province | PA | |
City Area Code | 215 | |
Local Phone Number | 238-3000 | |
Title of 12(b) Security | Common Stock, | |
Trading Symbol | ARMK | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 260,608,618 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001584509 | |
Current Fiscal Year End Date | --09-29 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Current Assets: | ||
Cash and cash equivalents | $ 302,692 | $ 329,452 |
Receivables (less allowances: $59,771 and $56,388) | 2,353,580 | 2,147,957 |
Inventories | 609,589 | 552,386 |
Prepayments and other current assets | 330,695 | 262,195 |
Total current assets | 3,596,556 | 3,291,990 |
Property and Equipment, net | 2,015,037 | 2,032,045 |
Goodwill | 5,581,989 | 5,515,124 |
Other Intangible Assets | 2,091,797 | 2,113,726 |
Operating Lease Right-of-use Assets | 646,485 | 592,145 |
Other Assets | 1,524,217 | 1,537,406 |
ASSETS | 15,456,081 | 15,082,436 |
Current Liabilities: | ||
Current maturities of long-term borrowings | 110,461 | 65,047 |
Current operating lease liabilities | 69,111 | 68,858 |
Accounts payable | 1,137,912 | 1,322,936 |
Accrued expenses and other current liabilities | 1,650,599 | 1,829,045 |
Total current liabilities | 2,968,083 | 3,285,886 |
Long-Term Borrowings | 7,906,636 | 7,345,860 |
Noncurrent Operating Lease Liabilities | 310,006 | 305,623 |
Deferred Income Taxes and Other Noncurrent Liabilities | 1,079,979 | 1,106,587 |
Commitments and Contingencies (see Note 11) | ||
Redeemable Noncontrolling Interests | 8,104 | 8,840 |
Stockholders' Equity: | ||
Common stock, par value $0.01 (authorized: 600,000,000 shares; issued: 299,830,459 shares and 297,555,924 shares; and outstanding: 260,548,025 shares and 258,728,942 shares) | 2,998 | 2,976 |
Capital surplus | 3,767,067 | 3,681,966 |
Retained earnings | 477,632 | 406,784 |
Accumulated other comprehensive loss | (95,623) | (111,571) |
Treasury stock (shares held in treasury: 39,282,434 shares and 38,826,982 shares) | (968,801) | (950,515) |
Total stockholders' equity | 3,183,273 | 3,029,640 |
LIABILITIES AND STOCKHOLDERS' EQUITY | $ 15,456,081 | $ 15,082,436 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 59,771 | $ 56,388 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 299,830,459 | 297,555,924 |
Common stock, shares outstanding (in shares) | 260,548,025 | 258,728,942 |
Treasury stock, shares held in treasury (in shares) | 39,282,434 | 38,826,982 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Mar. 31, 2023 | Apr. 01, 2022 | |
Income Statement [Abstract] | ||||
Revenue | $ 4,602,085 | $ 3,860,529 | $ 9,203,083 | $ 7,808,789 |
Costs and Expenses: | ||||
Cost of services provided (exclusive of depreciation and amortization) | 4,179,411 | 3,491,238 | 8,341,495 | 7,062,283 |
Depreciation and amortization | 136,789 | 132,285 | 273,273 | 267,803 |
Selling and general corporate expenses | 103,902 | 95,015 | 206,686 | 196,465 |
Costs and Expenses | 4,420,102 | 3,718,538 | 8,821,454 | 7,526,551 |
Operating income | 181,983 | 141,991 | 381,629 | 282,238 |
Interest and Other Financing Costs, net | 114,021 | 89,685 | 215,366 | 182,702 |
Income Before Income Taxes | 67,962 | 52,306 | 166,263 | 99,536 |
Provision for Income Taxes | 12,080 | 16,761 | 36,730 | 21,284 |
Net income | 55,882 | 35,545 | 129,533 | 78,252 |
Less: Net loss attributable to noncontrolling interests | (159) | (203) | (659) | (107) |
Net income attributable to Aramark stockholders | $ 56,041 | $ 35,748 | $ 130,192 | $ 78,359 |
Earnings per share attributable to Aramark stockholders: | ||||
Basic (in dollars per share) | $ 0.21 | $ 0.14 | $ 0.50 | $ 0.31 |
Diluted (in dollars per share) | $ 0.21 | $ 0.14 | $ 0.50 | $ 0.30 |
Weighted Average Shares Outstanding: | ||||
Basic (in shares) | 260,673 | 257,100 | 260,063 | 256,785 |
Diluted (in shares) | 262,537 | 258,747 | 261,993 | 258,399 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2023 | Dec. 30, 2022 | Apr. 01, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Apr. 01, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 55,882 | $ 35,545 | $ 129,533 | $ 78,252 | ||
Other comprehensive (loss) income, net of tax | ||||||
Pension plan adjustments | 0 | 1,779 | ||||
Foreign currency translation adjustments | 10,156 | 6,372 | 44,993 | (698) | ||
Fair value of cash flow hedges | (22,370) | 70,708 | (28,535) | 93,485 | ||
Share of equity investee's comprehensive income | 82 | 435 | (510) | 695 | ||
Other comprehensive (loss) income, net of tax | (12,132) | $ 28,080 | 77,515 | $ 17,746 | 15,948 | 95,261 |
Comprehensive income | 43,750 | 113,060 | 145,481 | 173,513 | ||
Less: Net loss attributable to noncontrolling interests | (159) | (203) | (659) | (107) | ||
Comprehensive income attributable to Aramark stockholders | $ 43,909 | $ 113,263 | $ 146,140 | $ 173,620 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 129,533 | $ 78,252 |
Adjustments to reconcile net income to net cash used in operating activities | ||
Depreciation and amortization | 273,273 | 267,803 |
Asset write-downs | 35,479 | 0 |
Reduction of contingent consideration liability (see Note 13) | (73,891) | 0 |
Deferred income taxes | 20,700 | 5,350 |
Share-based compensation expense | 45,077 | 47,913 |
Changes in operating assets and liabilities: | ||
Receivables | (142,561) | (223,966) |
Inventories | (49,053) | (21,920) |
Prepayments and Other Current Assets | (20,267) | (15,632) |
Accounts Payable | (222,552) | 1,091 |
Accrued Expenses | (219,507) | (250,460) |
Payments made to clients on contracts | (85,335) | (14,977) |
Other operating activities | 16,382 | (1,721) |
Net cash used in operating activities | (292,722) | (128,267) |
Cash flows from investing activities: | ||
Purchases of property and equipment and other | (202,911) | (173,035) |
Disposals of property and equipment | 18,623 | 10,003 |
Purchases of marketable securities | (69,998) | 0 |
Proceeds from marketable securities | 40,000 | 0 |
Acquisition of certain businesses, net of cash acquired | (31,182) | (72,556) |
Acquisition of certain equity method investments | 0 | (64,000) |
Other investing activities | 19,611 | 9,769 |
Net cash used in investing activities | (225,857) | (289,819) |
Cash flows from financing activities: | ||
Proceeds from long-term borrowings | 174,937 | 101,878 |
Payments of long-term borrowings | (52,086) | (42,821) |
Net change in funding under the Receivables Facility | 395,065 | 300,000 |
Payments of dividends | (57,225) | (56,464) |
Proceeds from issuance of common stock | 34,053 | 23,703 |
Other financing activities | (17,417) | (8,483) |
Net cash provided by financing activities | 477,327 | 317,813 |
Effect of foreign exchange rates on cash and cash equivalents | 14,492 | (3,012) |
Decrease in cash and cash equivalents | (26,760) | (103,285) |
Cash and cash equivalents, beginning of period | 329,452 | 532,591 |
Cash and cash equivalents, end of period | 302,692 | 429,306 |
Supplemental Cash Flow Information | ||
Interest paid | 201,900 | 173,200 |
Income taxes paid | $ 22,700 | $ 10,600 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Capital Surplus | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning Balance at Oct. 01, 2021 | $ 2,722,872 | $ 2,943 | $ 3,533,054 | $ 327,557 | $ (208,011) | $ (932,671) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Aramark stockholders | 42,611 | 42,611 | ||||
Other comprehensive income | 17,746 | 17,746 | ||||
Capital contributions from issuance of common stock | 14,084 | 10 | 14,074 | |||
Share-based compensation expense | 24,651 | 24,651 | ||||
Repurchases of common stock | (7,157) | (7,157) | ||||
Payments of dividends ($0.11 per share) | (30,346) | (30,346) | ||||
Ending Balance at Dec. 31, 2021 | 2,784,461 | 2,953 | 3,571,779 | 339,822 | (190,265) | (939,828) |
Beginning Balance at Oct. 01, 2021 | 2,722,872 | 2,943 | 3,533,054 | 327,557 | (208,011) | (932,671) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Aramark stockholders | 78,359 | |||||
Other comprehensive income | 95,261 | |||||
Ending Balance at Apr. 01, 2022 | 2,904,205 | 2,958 | 3,607,267 | 347,316 | (112,750) | (940,586) |
Beginning Balance at Dec. 31, 2021 | 2,784,461 | 2,953 | 3,571,779 | 339,822 | (190,265) | (939,828) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Aramark stockholders | 35,748 | 35,748 | ||||
Other comprehensive income | 77,515 | 77,515 | ||||
Capital contributions from issuance of common stock | 12,231 | 5 | 12,226 | |||
Share-based compensation expense | 23,262 | 23,262 | ||||
Repurchases of common stock | (758) | (758) | ||||
Payments of dividends ($0.11 per share) | (28,254) | (28,254) | ||||
Ending Balance at Apr. 01, 2022 | 2,904,205 | 2,958 | 3,607,267 | 347,316 | (112,750) | (940,586) |
Beginning Balance at Sep. 30, 2022 | 3,029,640 | 2,976 | 3,681,966 | 406,784 | (111,571) | (950,515) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Aramark stockholders | 74,151 | 74,151 | ||||
Other comprehensive income | 28,080 | 28,080 | ||||
Capital contributions from issuance of common stock | 33,594 | 20 | 33,574 | |||
Share-based compensation expense | 24,043 | 24,043 | ||||
Repurchases of common stock | (15,559) | (15,559) | ||||
Payments of dividends ($0.11 per share) | (30,686) | (30,686) | ||||
Ending Balance at Dec. 30, 2022 | 3,143,263 | 2,996 | 3,739,583 | 450,249 | (83,491) | (966,074) |
Beginning Balance at Sep. 30, 2022 | 3,029,640 | 2,976 | 3,681,966 | 406,784 | (111,571) | (950,515) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Aramark stockholders | 130,192 | |||||
Other comprehensive income | 15,948 | |||||
Ending Balance at Mar. 31, 2023 | 3,183,273 | 2,998 | 3,767,067 | 477,632 | (95,623) | (968,801) |
Beginning Balance at Dec. 30, 2022 | 3,143,263 | 2,996 | 3,739,583 | 450,249 | (83,491) | (966,074) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income attributable to Aramark stockholders | 56,041 | 56,041 | ||||
Other comprehensive income | (12,132) | (12,132) | ||||
Capital contributions from issuance of common stock | 6,452 | 2 | 6,450 | |||
Share-based compensation expense | 21,034 | 21,034 | ||||
Repurchases of common stock | (2,727) | (2,727) | ||||
Payments of dividends ($0.11 per share) | (28,658) | (28,658) | ||||
Ending Balance at Mar. 31, 2023 | $ 3,183,273 | $ 2,998 | $ 3,767,067 | $ 477,632 | $ (95,623) | $ (968,801) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Stockholders' Equity - Parentheticals (Unaudited) - $ / shares | 3 Months Ended | |||
Mar. 31, 2023 | Dec. 30, 2022 | Apr. 01, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared, per share (in dollars per share) | $ 0.11 | $ 0.11 | $ 0.11 | $ 0.11 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 6 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Aramark (the "Company") is a leading global provider of food, facilities and uniform services to education, healthcare, business & industry and sports, leisure & corrections clients. The Company's core market is the United States, which is supplemented by an additional 18-country footprint. The Company operates its 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"). The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited consolidated financial statements, and the notes to those statements, included in the Company's Form 10-K filed with the SEC on November 22, 2022. The Condensed Consolidated Balance Sheet as of September 30, 2022 was derived from audited financial statements which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of the Company, the statements include all adjustments, which are of a normal, recurring nature, required for a fair presentation for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for a full year, due to the seasonality of some of the Company's business activities and the possibility of changes in general economic conditions. The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany transactions and accounts have been eliminated. Aramark's Intention to Spin-off Uniform Segment On May 10, 2022, the Company announced its intention to spin-off its Uniform segment into an independent publicly traded company to Aramark’s stockholders. The proposed spin-off is intended to be a tax-free transaction to Aramark and its stockholders for United States federal income tax purposes. The proposed spin-off is expected to be completed in the fourth quarter of fiscal 2023, subject to certain customary conditions, including final approval of the Aramark 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 Form 10 to be filed with the SEC and the receipt of other regulatory approvals. New Accounting Standards Updates Adopted Standards (from most to least recent date of issuance) In December 2022, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") which defers the sunset date of Topic 848, Reference Rate Reform , to December 31, 2024 from December 31, 2022 and is effective for the Company upon issuance of the ASU. In January 2021, the FASB issued an ASU, which clarified certain optional expedients and exceptions for contract modifications and hedge accounting that may apply to derivatives that are affected by the discontinuance of LIBOR and the reference rate reform standard. In March 2020, the FASB issued an ASU which provided optional expedients that may be applied to assist with the discontinuance of LIBOR. The expedients allowed companies to ease the potential accounting burden when modifying contracts and hedging relationships that use LIBOR as a reference rate, if certain criteria are met. During fiscal 2020, the Company applied the optional expedient to assert probability of forecasted hedged transactions occurring on its interest rate swap derivative contracts regardless of any expected contract modifications related to reference rate reform. The Company may apply the optional expedients of this standard through December 31, 2024. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. In November 2021, the FASB issued an ASU which requires an entity to provide certain annual disclosures when they have received government assistance. The guidance was effective for the Company in the first quarter of fiscal 2023. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. Standards Not Yet Adopted (from most to least recent date of issuance) In September 2022, the FASB issued an ASU to enhance the transparency of supplier finance programs, which may be referred to as reverse factoring, payables finance or structured payables arrangements. The guidance will require that a buyer in a supplier finance program disclose the program's nature, activity and potential magnitude. The guidance is effective for the Company in the first quarter of fiscal 2024 and early adoption is permitted. The Company is currently evaluating the impact of this standard. In October 2021, the FASB issued an ASU which required that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606") as if it had originated the contracts. The guidance is effective for the Company in the first quarter of fiscal 2024 and early adoption is permitted. The Company is currently evaluating the impact of this standard. Other new accounting pronouncements recently issued or newly effective were not applicable to the Company, did not have a material impact on the condensed consolidated financial statements or are not expected to have a material impact on the condensed consolidated financial statements. Comprehensive Income Comprehensive income includes all changes to stockholders' equity during a period, except those resulting from investments by and distributions to stockholders. Components of comprehensive income include net income, pension plan adjustments (net of tax), changes in foreign currency translation adjustments (net of tax), changes in the fair value of cash flow hedges (net of tax) and changes to the share of any equity investees' comprehensive (loss) income (net of tax). The summary of the components of comprehensive income is as follows (in thousands): Three Months Ended March 31, 2023 April 1, 2022 Pre-Tax Amount Tax Effect After-Tax Amount Pre-Tax Amount Tax Effect After-Tax Amount Net income $ 55,882 $ 35,545 Foreign currency translation adjustments 10,658 (502) 10,156 4,179 2,193 6,372 Fair value of cash flow hedges (30,230) 7,860 (22,370) 95,551 (24,843) 70,708 Share of equity investee's comprehensive income 82 — 82 435 — 435 Other comprehensive (loss) income (19,490) 7,358 (12,132) 100,165 (22,650) 77,515 Comprehensive income 43,750 113,060 Less: Net loss attributable to noncontrolling interests (159) (203) Comprehensive income attributable to Aramark stockholders $ 43,909 $ 113,263 Six Months Ended March 31, 2023 April 1, 2022 Pre-Tax Amount Tax Effect After-Tax Amount Pre-Tax Amount Tax Effect After-Tax Amount Net income $ 129,533 $ 78,252 Pension plan adjustments — — — 2,480 (701) 1,779 Foreign currency translation adjustments 47,727 (2,734) 44,993 (3,931) 3,233 (698) Fair value of cash flow hedges (38,561) 10,026 (28,535) 126,331 (32,846) 93,485 Share of equity investee's comprehensive (loss) income (510) — (510) 695 — 695 Other comprehensive income 8,656 7,292 15,948 125,575 (30,314) 95,261 Comprehensive income 145,481 173,513 Less: Net loss attributable to noncontrolling interests (659) (107) Comprehensive income attributable to Aramark stockholders $ 146,140 $ 173,620 Accumulated other comprehensive loss consists of the following (in thousands): March 31, 2023 September 30, 2022 Pension plan adjustments $ (7,210) $ (7,210) Foreign currency translation adjustments (168,395) (213,388) Cash flow hedges 86,190 114,725 Share of equity investee's accumulated other comprehensive loss (6,208) (5,698) $ (95,623) $ (111,571) Currency Translation Beginning in fiscal 2018, Argentina was determined to have a highly inflationary economy. As a result, the Company remeasures the financial statements of Argentina's operations in accordance with the accounting guidance for highly inflationary economies. The impact of foreign currency transaction gains and losses during the three and six month periods of both fiscal 2023 and 2022 were immaterial to the condensed consolidated financial statements. Current Assets The Company insures portions of its risk in general liability, automobile liability, workers’ compensation liability and property liability through a wholly owned captive insurance subsidiary (the "Captive"), to enhance its risk financing strategies. The Captive is subject to regulations within its domicile of Bermuda, including regulations established by the Bermuda Monetary Authority (the "BMA") relating to levels of liquidity and solvency as such concepts are defined by the BMA. The Captive was in compliance with these regulations as of March 31, 2023. These regulations may have the effect of limiting the Company's ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of its general liability, automobile liability, workers' compensation liability, property liability and related Captive costs. As of March 31, 2023 and September 30, 2022, cash and cash equivalents at the Captive were $11.6 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. The amount of this investment as of March 31, 2023 and September 30, 2022 was $109.1 million and $78.2 million, respectively, and recorded in "Prepayments and other current assets" on the Condensed Consolidated Balance Sheets. Property and Equipment and Operating Lease Right-of-use Assets Starting in December 2022 and continuing into the second quarter of fiscal 2023, the Company completed a strategic review of certain administrative locations, taking into account facility capacity and current utilization, among other factors. Based on this review, the Company vacated or otherwise reduced its usage at certain of these locations, resulting in an analysis of the recoverability of the assets associated with the locations. As a result, for the three and six months ended March 31, 2023, the Company recorded an impairment charge of $3.3 million and $26.7 million, respectively, within its FSS United States and Uniform segments, which is included in "Cost of services provided (exclusive of depreciation and amortization)" in the Condensed Consolidated Statements of Income. For the three and six months ended March 31, 2023, the non-cash impairment charges within the FSS United States segment consisted of operating lease right-of-use assets of $0.7 million and $8.6 million, respectively, and property and equipment of zero and $10.4 million, respectively. For the three and six months ended March 31, 2023, the non-cash impairment charges within the Uniform segment consisted of operating lease right-of-use assets of $2.3 million and $7.1 million, respectively, and other costs of $0.3 million and $0.6 million, respectively. Other Assets Other assets consist primarily of costs to obtain or fulfill contracts, including employee sales commissions and rental merchandise in-service, long-term receivables, investments in 50% or less owned entities and computer software costs. For investments in 50% or less owned entities accounted for under the equity method of accounting, the carrying amount as of March 31, 2023 and September 30, 2022 was $242.8 million and $224.5 million, respectively. For investments in 50% or less owned entities, other than those accounted for under the equity method of accounting, the Company measures these investments at cost, less any impairment and adjusted for changes in fair value resulting from observable price changes for an identical or a similar investment of the same issuer due to the lack of readily available fair values related to those investments. The carrying amount of equity investments without readily determinable fair values as of both March 31, 2023 and September 30, 2022 was $180.5 million. On May 8, 2023, the Company executed an agreement to sell a portion of its ownership interest in an equity investment. The transaction is anticipated to close in the Company's fiscal third quarter, subject to the completion of closing documentation. Other Current and Noncurrent Liabilities The Company is self-insured for obligations related to certain risks that are retained under the Company's casualty program, which includes general liability, automobile liability and workers' compensation liability, as well as for property liability and employee healthcare benefit programs. Reserves for retained costs associated with the casualty program are estimated through actuarial methods, with the assistance of third-party actuaries, using loss development assumptions based on the Company's claims history. Impact of COVID-19 The Coronavirus Aid, Relief and Economic Security Act ("CARES Act") provided for deferred payment of the employer portion of social security taxes through the end of calendar 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% of the amount due December 31, 2022. Approximately $64.2 million of the deferred social security taxes were paid during both the six months ended March 31, 2023 and April 1, 2022. |
Severance
Severance | 6 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Severance | SEVERANCE: During the second quarter of fiscal 2023, the Company approved headcount reductions to streamline and improve the efficiency and effectiveness of operational and administrative functions. As a result of these actions, severance charges of $36.3 million were recorded within “Cost of services provided (exclusive of depreciation and amortization)” and "Selling and general corporate expenses" on the Condensed Consolidated Statements of Income for the three and six months ended March 31, 2023. The following table summarizes the severance charges by segment recognized in the Condensed Consolidated Statements of Income for the three and six months ended March 31, 2023 (in millions): FSS United States $ 3.3 FSS International 25.8 Uniform 6.6 Corporate 0.6 $ 36.3 As of March 31, 2023, the Company had an accrual of approximately $31.0 million related to these unpaid severance obligations. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS: Goodwill represents the excess of the fair value of consideration paid for an acquired entity over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized and is subject to an impairment test that the Company conducts annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists, using discounted cash flows. Changes in total goodwill during the six months ended March 31, 2023 are as follows (in thousands): Segment September 30, 2022 Acquisitions Translation March 31, 2023 FSS United States $ 4,150,266 $ 13,767 $ 20 $ 4,164,053 FSS International 401,483 22,622 30,246 454,351 Uniforms 963,375 — 210 963,585 $ 5,515,124 $ 36,389 $ 30,476 $ 5,581,989 Other intangible assets consist of the following (in thousands): March 31, 2023 September 30, 2022 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer relationship assets $ 1,487,245 $ (543,327) $ 943,918 $ 1,474,588 $ (487,877) $ 986,711 Trade names 1,159,082 (11,203) 1,147,879 1,133,736 (6,721) 1,127,015 $ 2,646,327 $ (554,530) $ 2,091,797 $ 2,608,324 $ (494,598) $ 2,113,726 Amortization of intangible assets for the six months ended March 31, 2023 and April 1, 2022 was approximately $57.1 million and $54.4 million, respectively. |
Borrowings
Borrowings | 6 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Borrowings | BORROWINGS: Long-term borrowings, net, are summarized in the following table (in thousands): March 31, 2023 September 30, 2022 Senior secured revolving credit facility, due April 2026 $ 240,128 $ 90,897 Senior secured term loan facility, due March 2025 1,662,243 1,661,611 Senior secured term loan facility, due April 2026 343,362 334,135 Senior secured term loan facility, due January 2027 835,121 834,619 Senior secured term loan facility, due April 2028 723,777 723,170 5.000% senior notes, due April 2025 548,655 547,981 3.125% senior notes, due April 2025 (1) 351,075 317,204 6.375% senior notes, due May 2025 1,489,835 1,487,593 5.000% senior notes, due February 2028 1,142,192 1,141,491 Receivables Facility, due June 2024 500,000 104,935 Finance leases 141,543 147,373 Other 39,166 19,898 8,017,097 7,410,907 Less—current portion (110,461) (65,047) $ 7,906,636 $ 7,345,860 (1) This is a Euro denominated borrowing. As of March 31, 2023, there were approximately $945.1 million of outstanding foreign currency borrowings. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | DERIVATIVE INSTRUMENTS: The Company enters into contractual derivative arrangements to manage changes in market conditions related to interest on debt obligations and exposure to fluctuating gasoline and diesel fuel prices. Derivative instruments utilized during the period include interest rate swap agreements and gasoline and diesel fuel agreements. All derivative instruments are recognized as either assets or liabilities on the balance sheet at fair value at the end of each quarter. The counterparties to the Company's contractual derivative agreements are all major international financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company continually monitors its positions and the credit ratings of its counterparties and does not anticipate nonperformance by the counterparties. For designated hedging relationships, the Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged and how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively for designated hedges. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items. Cash Flow Hedges The Company has approximately $2.0 billion notional amount of outstanding interest rate swap agreements as of March 31, 2023, which fix the rate on a like amount of variable rate borrowings through December of fiscal 2028. During the first quarter of fiscal 2023, $1.2 billion notional amount of previously forward starting interest rate swap agreements to hedge the cash flow risk of variability in interest payments on variable rate borrowings became effective. In addition, interest rate swaps with notional amounts of approximately $1.6 billion matured during the six months ended March 31, 2023. Changes in the fair value of a derivative that is designated as and meets all the required criteria for a cash flow hedge are recorded in accumulated other comprehensive loss and reclassified into earnings as the underlying hedged item affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of March 31, 2023 and September 30, 2022, $86.2 million and $114.7 million, respectively, of unrealized net of tax gains related to the interest rate swaps were included in "Accumulated other comprehensive loss" on the Condensed Consolidated Balance Sheets. The following table summarizes the effect of the Company's derivatives designated as cash flow hedging instruments on Other comprehensive (loss) income (in thousands): Three Months Ended March 31, 2023 April 1, 2022 Interest rate swap agreements $ (16,315) $ 85,001 Six Months Ended March 31, 2023 April 1, 2022 Interest rate swap agreements $ (14,331) $ 103,327 Derivatives not Designated in Hedging Relationships The Company 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 its exposure to price fluctuations for gasoline and diesel fuel. As of March 31, 2023, the Company has contracts for 5.7 million gallons outstanding through December of fiscal 2024. The Company does not record its gasoline and diesel fuel agreements as hedges for accounting purposes. The impact on earnings related to the change in fair value of these unsettled contracts was a loss of $1.3 million and a gain of $0.7 million for the three and six months ended March 31, 2023. The impact on earnings related to the change in fair value of these unsettled contracts was a gain of $1.1 million and a loss of $0.4 million for the three and six months ended April 1, 2022. The change in fair value for unsettled contracts is included in "Selling and general corporate expenses" on the Condensed Consolidated Statements of Income. When the contracts settle, the gain or loss is recorded to "Cost of services provided (exclusive of depreciation and amortization)" on the Condensed Consolidated Statements of Income. The following table summarizes the location and fair value, using Level 2 inputs (see Note 13 for a description of the fair value levels), of the Company's derivatives designated and not designated as hedging instruments in the Condensed Consolidated Balance Sheets (in thousands): Balance Sheet Location March 31, 2023 September 30, 2022 ASSETS Designated as hedging instruments: Interest rate swap agreements Prepayments and other current assets $ — $ 5,278 Interest rate swap agreements Other Assets 116,472 149,755 $ 116,472 $ 155,033 LIABILITIES Not designated as hedging instruments: Gasoline and diesel fuel agreements Accounts payable 1,888 2,631 $ 1,888 $ 2,631 The following table summarizes the location of the (gain) loss reclassified from "Accumulated other comprehensive loss" into earnings for derivatives designated as hedging instruments and the location of the (gain) loss for the Company's derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Income (in thousands): Three Months Ended Income Statement Location March 31, 2023 April 1, 2022 Designated as hedging instruments: Interest rate swap agreements Interest and Other Financing Costs, net $ (13,915) $ 10,550 Not designated as hedging instruments: Gasoline and diesel fuel agreements Cost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses 2,487 (3,980) $ (11,428) $ 6,570 Six Months Ended Income Statement Location March 31, 2023 April 1, 2022 Designated as hedging instruments: Interest rate swap agreements Interest and Other Financing Costs, net $ (24,230) $ 23,004 Not designated as hedging instruments: Gasoline and diesel fuel agreements Cost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses 479 (3,945) $ (23,751) $ 19,059 As of March 31, 2023, the Company has an outstanding Japanese yen denominated term loan in the amount of ¥8,409 million. The term loan was designated as a hedge of the Company's net Japanese currency exposure represented by the equity investment in the Company's Japanese affiliate, AIM Services Co., Ltd. Additionally, as of March 31, 2023, the Company has a Euro denominated term loan in the amount of €96.4 million. The term loan was designated as a hedge of the Company's net Euro currency exposure represented by certain holdings in the Company's European affiliates. At March 31, 2023, the net of tax gain expected to be reclassified from "Accumulated other comprehensive loss" into earnings over the next twelve months based on current market rates is approximately $42.8 million. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION: The Company generates revenue through sales of food, facility and uniform services to customers based on written contracts at the locations it serves. Within the FSS United States and FSS International segments, the Company provides food and beverage services, including catering and retail services, and facilities services, including plant operations and maintenance, custodial, housekeeping, landscaping and other services. Within the Uniform segment, the Company provides a full service uniform solution, including delivery, cleaning and maintenance. In accordance with ASC 606, the Company accounts for a customer contract when both parties have approved the arrangement and are committed to perform their respective obligations, each party's rights can be identified, payment terms can be identified, the contract has commercial substance and it is probable the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized upon the transfer of control of the promised product or service to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services. Performance Obligations The Company recognizes revenue when its performance obligation is satisfied. Each contract generally has one performance obligation, which is satisfied over time. The Company primarily accounts for its performance obligations under the series guidance, using the as-invoiced practical expedient when applicable. The Company applies the right to invoice practical expedient to record revenue as the services are provided, given the nature of the services provided and the frequency of billing under the customer contracts. Under this practical expedient, the Company recognizes revenue in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date and for which the Company has the right to invoice the customer. Certain arrangements include performance obligations which include variable consideration (primarily per transaction fees). For these arrangements, the Company does not need to estimate the variable consideration for the contract and allocate to the entire performance obligation; therefore, the variable fees are recognized in the period they are earned. Disaggregation of Revenue The following table presents revenue disaggregated by revenue source (in millions): Three Months Ended Six Months Ended March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 FSS United States: Business & Industry $ 343.2 $ 243.8 $ 674.7 $ 474.5 Education 983.7 895.4 1,987.3 1,805.4 Healthcare 337.3 301.0 661.9 597.4 Sports, Leisure & Corrections 676.0 450.6 1,460.6 998.7 Facilities & Other 503.0 447.5 979.7 887.7 Total FSS United States 2,843.2 2,338.3 5,764.2 4,763.7 FSS International: Europe 552.0 426.8 1,056.2 857.5 Rest of World 521.0 444.1 1,009.5 886.6 Total FSS International 1,073.0 870.9 2,065.7 1,744.1 Uniform 685.9 651.3 1,373.2 1,301.0 Total Revenue $ 4,602.1 $ 3,860.5 $ 9,203.1 $ 7,808.8 Contract Balances Deferred income is recognized in "Accrued expenses and other current liabilities" and "Deferred Income Taxes and Other Noncurrent Liabilities" on the Condensed Consolidated Balance Sheets when the Company has received consideration, or has the right to receive consideration, in advance of the transfer of the performance obligation of the contract to the customer, primarily prepaid meal plans. The consideration received remains a liability until the goods or services have been provided to the customer. The Company classifies deferred income as current if the deferred income is expected to be recognized in the next 12 months or as noncurrent if the deferred income is expected to be recognized in excess of the next 12 months. If the Company cannot render its performance obligation according to contract terms after receiving the consideration in advance, amounts may be contractually required to be refunded to the customer. During the six months ended March 31, 2023, deferred income increased related to customer prepayments and decreased related to income recognized during the period as a result of satisfying the performance obligation or return of funds related to non-performance. For the six months ended March 31, 2023, the Company recognized $207.9 million of revenue that was included in deferred income at the beginning of the period. Deferred income balances are summarized in the following table (in millions): March 31, 2023 September 30, 2022 Deferred income $ 260.3 $ 324.5 |
Income Taxes
Income Taxes | 6 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES:As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact the need for valuation allowances against deferred tax assets. During the three and six months ended March 31, 2023, the Company recorded a benefit to the "Provision for Income Taxes" to the Condensed Consolidated Statements of Income of $3.8 million for the reversal of a valuation allowance at a foreign subsidiary driven by the Company's ability to utilize the deferred tax assets based on future taxable income expected due to the acquisition of a business. During the six months ended April 1, 2022, the Company recorded a benefit to the "Provision for Income Taxes" to the Condensed Consolidated Statements of Income of $8.5 million for the reversal of a valuation allowance at a foreign subsidiary driven by the Company's ability to utilize the deferred tax assets based on future taxable income expected due to the acquisition of a business. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY: On May 2, 2023, the Company's Board of Directors approved an $0.11 dividend per share of common stock, payable on May 31, 2023, to stockholders of record on the close of business on May 17, 2023. The Company has 100.0 million shares of preferred stock authorized, with a par value of $0.01 per share. At March 31, 2023 and September 30, 2022, zero shares of preferred stock were issued or outstanding. On December 15, 2022, the Board of Directors approved, and the stockholders of Aramark subsequently adopted by written consent, the Aramark 2023 Stock Incentive Plan to replace the Third Amended and Restated 2013 Stock Incentive Plan. The 2023 Stock Incentive Plan provides for up to 8.5 million of new shares authorized for issuance to participants, in addition to the shares that remained available for issuance under the 2013 Incentive Plan. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION: The following table summarizes the share-based compensation expense and related information for Time-Based Options ("TBOs"), Retention Time-Based Options ("TBO-Rs"), Time-Based Restricted Stock Units ("RSUs"), Performance Stock Units ("PSUs"), Deferred Stock Units and Employee Stock Purchase Plan ("ESPP") recorded within "Selling and general corporate expenses" on the Condensed Consolidated Statements of Income (in millions). Three Months Ended Six Months Ended March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 TBOs $ 3.9 $ 3.8 $ 7.6 $ 8.2 TBO-Rs 1.2 1.1 3.1 2.4 RSUs 13.2 14.3 26.8 29.4 PSUs 2.3 1.2 4.4 2.8 Deferred Stock Units 0.5 0.5 0.8 1.0 ESPP (1) — 2.3 2.4 4.1 $ 21.1 $ 23.2 $ 45.1 $ 47.9 Taxes related to share-based compensation $ 3.9 $ 4.1 $ 8.1 $ 8.7 Cash Received from Option Exercises/ESPP Purchases 4.5 12.0 34.1 23.7 Tax (Provision) Benefit on Share Deliveries (0.1) 0.2 0.4 0.1 (1) The Company temporarily suspended its ESPP beginning in the second quarter of fiscal 2023. The below table summarizes the number of shares granted and the weighted-average grant-date fair value per unit during the six months ended March 31, 2023: Shares Granted Weighted Average Grant-Date Fair Value TBOs (1) 0.9 $ 17.01 RSUs (1) 1.3 $ 40.27 PSUs (1)(2) 0.5 $ 48.88 2.7 (1) The Company's annual grants for fiscal 2023 were awarded in November 2022 and will vest based upon continued employment over four years. All TBOs remain exercisable for 10 years from the date of grant. (2) During the first quarter of fiscal 2023, the Company granted PSUs subject to the level of achievement of adjusted revenue growth, cumulative adjusted earnings per share, return on invested capital and relative total shareholder return for the cumulative performance period over three years and the participant's continued employment with the Company over four years. The Company is accounting for a portion of the award as a performance-based award, with the grant-date fair value based on the fair value of the Company's common stock. The Company is accounting for the remainder of the award as a market-based award valued utilizing the Monte Carlo Simulation pricing model, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE: Basic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of stock awards. The following table sets forth the computation of basic and diluted earnings per share attributable to the Company's stockholders (in thousands, except per share data): Three Months Ended Six Months Ended March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 Earnings: Net income attributable to Aramark stockholders $ 56,041 $ 35,748 $ 130,192 $ 78,359 Shares: Basic weighted-average shares outstanding 260,673 257,100 260,063 256,785 Effect of dilutive securities 1,864 1,647 1,930 1,614 Diluted weighted-average shares outstanding 262,537 258,747 261,993 258,399 Basic Earnings Per Share: Net income attributable to Aramark stockholders $ 0.21 $ 0.14 $ 0.50 $ 0.31 Diluted Earnings Per Share: Net income attributable to Aramark stockholders $ 0.21 $ 0.14 $ 0.50 $ 0.30 Share-based awards to purchase 8.6 million and 9.7 million shares were outstanding for the three months ended March 31, 2023 and April 1, 2022, respectively, but were not included in the computation of diluted earnings per common share, as their effect would have been antidilutive. In addition, PSUs related to 0.9 million and 1.0 million shares were outstanding for the three months ended March 31, 2023 and April 1, 2022, respectively, but were not included in the computation of diluted earnings per common share, as the performance targets were not yet met. Share-based awards to purchase 8.8 million and 9.6 million shares were outstanding for the six months ended March 31, 2023 and April 1, 2022, respectively, but were not included in the computation of diluted earnings per common share, as their effect would have been antidilutive. In addition, PSUs related to 0.9 million and 1.0 million shares were outstanding for the six months ended March 31, 2023 and April 1, 2022, respectively, but were not included in the computation of diluted earnings per common share, as the performance targets were not yet met. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES: Certain of the Company's lease arrangements, primarily vehicle leases, with terms of one From time to time, the Company and its subsidiaries are a party to various legal actions, proceedings and investigations involving claims incidental to the conduct of their business, including actions by clients, consumers, employees, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, minority, women and disadvantaged business enterprise statutes, tax codes, antitrust and competition laws, consumer protection statutes, procurement regulations, intellectual property laws, food safety and sanitation laws, cost and accounting principles, the Foreign Corrupt Practices Act, the U.K. Bribery Act, other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws and alcohol licensing and service laws, or alleging negligence and/or breaches of contractual and other obligations. Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or cash flows. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company's business, financial condition, results of operations or cash flows. |
Business Segments
Business Segments | 6 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Business Segments | BUSINESS SEGMENTS: The Company reports its operating results in three reportable segments: FSS United States, FSS International and Uniform. Corporate includes general expenses not specifically allocated to an individual segment and share-based compensation expense (see Note 9). In the Company's food and support services segments, approximately 73% of the global revenue is related to food services and 27% is related to facilities services. During the six months ended March 31, 2023 and April 1, 2022, the Company received proceeds of approximately $19.8 million and $9.0 million, respectively, relating to the recovery of the Company's investment (possessory interest) at one of the National Park Service sites within the FSS United States segment. The Company recorded a gain related to the recovery of its investment, which is included in "Cost of services provided (exclusive of depreciation and amortization)" on the Condensed Consolidated Statements of Income. Financial information by segment follows (in millions): Three Months Ended Revenue March 31, 2023 April 1, 2022 FSS United States $ 2,843.2 $ 2,338.3 FSS International 1,073.0 870.9 Uniform 685.9 651.3 $ 4,602.1 $ 3,860.5 Three Months Ended Operating Income March 31, 2023 April 1, 2022 FSS United States $ 156.0 $ 82.1 FSS International 6.8 37.1 Uniform 55.9 56.0 Total Segment Operating Income 218.7 175.2 Corporate (36.7) (33.2) Total Operating Income $ 182.0 $ 142.0 Three Months Ended Reconciliation to Income Before Income Taxes March 31, 2023 April 1, 2022 Total Operating Income $ 182.0 $ 142.0 Interest and Other Financing Costs, net 114.0 89.7 Income Before Income Taxes $ 68.0 $ 52.3 Six Months Ended Revenue March 31, 2023 April 1, 2022 FSS United States $ 5,764.2 $ 4,763.7 FSS International 2,065.7 1,744.1 Uniform 1,373.2 1,301.0 $ 9,203.1 $ 7,808.8 Six Months Ended Operating Income March 31, 2023 April 1, 2022 FSS United States $ 319.2 $ 181.1 FSS International 33.6 59.8 Uniform 102.4 114.9 Total Segment Operating Income 455.2 355.8 Corporate (73.6) (73.6) Total Operating Income $ 381.6 $ 282.2 Six Months Ended Reconciliation to Income Before Income Taxes March 31, 2023 April 1, 2022 Total Operating Income $ 381.6 $ 282.2 Interest and Other Financing Costs, net 215.3 182.7 Income Before Income Taxes $ 166.3 $ 99.5 |
Fair Value of Financial Assets
Fair Value of Financial Assets and Financial Liabilities | 6 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Financial Liabilities | FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES: Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets • Level 2—inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement Recurring Fair Value Measurements The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, borrowings and derivatives. Management believes that the carrying value of cash and cash equivalents, accounts receivable and accounts payable are representative of their respective fair values. In conjunction with the fair value measurement of the derivative instruments, the Company made an accounting policy election to measure the credit risk of its derivative instruments that are subject to master netting agreements on a net basis by counterparty portfolio, as the gross values would not be materially different. The fair value of the Company's debt at March 31, 2023 and September 30, 2022 was $7,968.1 million and $7,153.4 million, respectively. The carrying value of the Company's debt at March 31, 2023 and September 30, 2022 was $8,017.1 million and $7,410.9 million, respectively. The 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 inputs utilized in estimating the fair value of the Company's debt have been classified as Level 2 in the fair value hierarchy levels. As part of the Union Supply acquisition completed in fiscal 2022, the Company recorded a contingent consideration obligation based on the fair value of the expected payments with a separate amount that will be accounted for as compensation expense to be recognized in the Condensed Consolidated Statements of Income over the earnout period. The Company performed a fair value assessment of the contingent consideration obligation based on the terms and conditions of the Union Supply purchase agreement, using internal models. The inputs utilized in estimating the fair value of the contingent consideration have been classified as Level 3 in the fair value hierarchy levels and are subject to risk and uncertainty. The calculation of fair value is dependent on several subjective factors including future earnings and profitability. If assumptions or estimates vary from what was expected, the fair value of the contingent consideration liability may materially change. During the three and six months ended March 31, 2023, due to lower performance than expected mainly from inflationary cost pressures, the Company adjusted the contingent consideration liability to the fair value of the future expected payment, resulting in income of $29.7 million, which is comprised of the adjusted contingent consideration liability recorded as part of the acquisition and reversal of a portion of compensation expense previously recognized in the Condensed Consolidated Statements of Income since the acquisition. The income is included in "Cost of services provided (exclusive of depreciation and amortization)" on the Condensed Consolidated Statements of Income. The contingent consideration liability at March 31, 2023 and September 30, 2022 was $20.3 million and $45.8 million, respectively. As part of the Next Level acquisition completed in fiscal 2021, the Company recorded a contingent consideration obligation based on the fair value of the expected payments. The Company performed a fair value assessment of the contingent consideration obligation based on the terms and conditions of the Next Level purchase agreement, as amended, using internal models. The inputs utilized in estimating the fair value of the contingent consideration have been classified as Level 3 in the fair value hierarchy levels and are subject to risk and uncertainty. The calculation of fair value is dependent on several subjective factors including future earnings and profitability. If assumptions or estimates vary from what was expected, the fair value of the contingent consideration liability may materially change. During the three and six months ended March 31, 2023, due to continued lower performance than expected mainly from inflationary cost pressures and the reduced probability of prospective business opportunities, the Company adjusted the contingent consideration liability to the fair value of the future expected payment, resulting in income of $18.4 million and $48.4 million, respectively, which is included in "Cost of services provided |
Subsequent Events
Subsequent Events | 6 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS: Sale of Certain Investments On April 6, 2023, the Company sold its 50% ownership interest in AIM Services Co., Ltd., a leading Japanese food services company, to Mitsui & Co., Ltd. for $535 million in a taxable transaction. Repayment of Borrowings On April 17, 2023, the Company repaid $468.0 million of United States dollar denominated term loan, due 2025, and ¥8,409.0 million ($63.0 million) of yen denominated term loan, due 2026. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and should be read in conjunction with the audited consolidated financial statements, and the notes to those statements, included in the Company's Form 10-K filed with the SEC on November 22, 2022. The Condensed Consolidated Balance Sheet as of September 30, 2022 was derived from audited financial statements which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of the Company, the statements include all adjustments, which are of a normal, recurring nature, required for a fair presentation for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for a full year, due to the seasonality of some of the Company's business activities and the possibility of changes in general economic conditions.The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany transactions and accounts have been eliminated. |
New Accounting Standard Updates | New Accounting Standards Updates Adopted Standards (from most to least recent date of issuance) In December 2022, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") which defers the sunset date of Topic 848, Reference Rate Reform , to December 31, 2024 from December 31, 2022 and is effective for the Company upon issuance of the ASU. In January 2021, the FASB issued an ASU, which clarified certain optional expedients and exceptions for contract modifications and hedge accounting that may apply to derivatives that are affected by the discontinuance of LIBOR and the reference rate reform standard. In March 2020, the FASB issued an ASU which provided optional expedients that may be applied to assist with the discontinuance of LIBOR. The expedients allowed companies to ease the potential accounting burden when modifying contracts and hedging relationships that use LIBOR as a reference rate, if certain criteria are met. During fiscal 2020, the Company applied the optional expedient to assert probability of forecasted hedged transactions occurring on its interest rate swap derivative contracts regardless of any expected contract modifications related to reference rate reform. The Company may apply the optional expedients of this standard through December 31, 2024. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. In November 2021, the FASB issued an ASU which requires an entity to provide certain annual disclosures when they have received government assistance. The guidance was effective for the Company in the first quarter of fiscal 2023. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements. Standards Not Yet Adopted (from most to least recent date of issuance) In September 2022, the FASB issued an ASU to enhance the transparency of supplier finance programs, which may be referred to as reverse factoring, payables finance or structured payables arrangements. The guidance will require that a buyer in a supplier finance program disclose the program's nature, activity and potential magnitude. The guidance is effective for the Company in the first quarter of fiscal 2024 and early adoption is permitted. The Company is currently evaluating the impact of this standard. In October 2021, the FASB issued an ASU which required that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606") as if it had originated the contracts. The guidance is effective for the Company in the first quarter of fiscal 2024 and early adoption is permitted. The Company is currently evaluating the impact of this standard. |
Comprehensive Income | Comprehensive IncomeComprehensive income includes all changes to stockholders' equity during a period, except those resulting from investments by and distributions to stockholders. Components of comprehensive income include net income, pension plan adjustments (net of tax), changes in foreign currency translation adjustments (net of tax), changes in the fair value of cash flow hedges (net of tax) and changes to the share of any equity investees' comprehensive (loss) income (net of tax). |
Currency Translation | Currency TranslationBeginning in fiscal 2018, Argentina was determined to have a highly inflationary economy. As a result, the Company remeasures the financial statements of Argentina's operations in accordance with the accounting guidance for highly inflationary economies. The impact of foreign currency transaction gains and losses during the three and six month periods of both fiscal 2023 and 2022 were immaterial to the condensed consolidated financial statements. |
Current Assets | Current AssetsThe Company insures portions of its risk in general liability, automobile liability, workers’ compensation liability and property liability through a wholly owned captive insurance subsidiary (the "Captive"), to enhance its risk financing strategies. The Captive is subject to regulations within its domicile of Bermuda, including regulations established by the Bermuda Monetary Authority (the "BMA") relating to levels of liquidity and solvency as such concepts are defined by the BMA. The Captive was in compliance with these regulations as of March 31, 2023. These regulations may have the effect of limiting the Company's ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of its general liability, automobile liability, workers' compensation liability, property liability and related Captive costs. |
Property and Equipment and Operating Lease Right-of-use Assets | Property and Equipment and Operating Lease Right-of-use Assets Starting in December 2022 and continuing into the second quarter of fiscal 2023, the Company completed a strategic review of certain administrative locations, taking into account facility capacity and current utilization, among other factors. Based on this review, the Company vacated or otherwise reduced its usage at certain of these locations, resulting in an analysis of the recoverability of the assets associated with the locations. As a result, for the three and six months ended March 31, 2023, the Company recorded an impairment charge of $3.3 million and $26.7 million, respectively, within its FSS United States and Uniform segments, which is included in "Cost of services provided (exclusive of depreciation and amortization)" in the Condensed Consolidated Statements of Income. For the three and six months ended March 31, 2023, the non-cash impairment charges within the FSS United States segment consisted of operating lease right-of-use assets of $0.7 million and $8.6 million, respectively, and property and equipment of zero and $10.4 million, respectively. For the three and six months ended March 31, 2023, the non-cash impairment charges within the Uniform segment consisted of operating lease right-of-use assets of $2.3 million and $7.1 million, respectively, and other costs of $0.3 million and $0.6 million, respectively. |
Other Assets | Other Assets Other assets consist primarily of costs to obtain or fulfill contracts, including employee sales commissions and rental merchandise in-service, long-term receivables, investments in 50% or less owned entities and computer software costs. For investments in 50% or less owned entities accounted for under the equity method of accounting, the carrying amount as of March 31, 2023 and September 30, 2022 was $242.8 million and $224.5 million, respectively. |
Other Current and Noncurrent Liabilities | Other Current and Noncurrent Liabilities The Company is self-insured for obligations related to certain risks that are retained under the Company's casualty program, which includes general liability, automobile liability and workers' compensation liability, as well as for property liability and employee healthcare benefit programs. Reserves for retained costs associated with the casualty program are estimated through actuarial methods, with the assistance of third-party actuaries, using loss development assumptions based on the Company's claims history. |
Fair Value of Financial Instruments | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets • Level 2—inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement Recurring Fair Value Measurements |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Components of Comprehensive Income (Loss) | The summary of the components of comprehensive income is as follows (in thousands): Three Months Ended March 31, 2023 April 1, 2022 Pre-Tax Amount Tax Effect After-Tax Amount Pre-Tax Amount Tax Effect After-Tax Amount Net income $ 55,882 $ 35,545 Foreign currency translation adjustments 10,658 (502) 10,156 4,179 2,193 6,372 Fair value of cash flow hedges (30,230) 7,860 (22,370) 95,551 (24,843) 70,708 Share of equity investee's comprehensive income 82 — 82 435 — 435 Other comprehensive (loss) income (19,490) 7,358 (12,132) 100,165 (22,650) 77,515 Comprehensive income 43,750 113,060 Less: Net loss attributable to noncontrolling interests (159) (203) Comprehensive income attributable to Aramark stockholders $ 43,909 $ 113,263 Six Months Ended March 31, 2023 April 1, 2022 Pre-Tax Amount Tax Effect After-Tax Amount Pre-Tax Amount Tax Effect After-Tax Amount Net income $ 129,533 $ 78,252 Pension plan adjustments — — — 2,480 (701) 1,779 Foreign currency translation adjustments 47,727 (2,734) 44,993 (3,931) 3,233 (698) Fair value of cash flow hedges (38,561) 10,026 (28,535) 126,331 (32,846) 93,485 Share of equity investee's comprehensive (loss) income (510) — (510) 695 — 695 Other comprehensive income 8,656 7,292 15,948 125,575 (30,314) 95,261 Comprehensive income 145,481 173,513 Less: Net loss attributable to noncontrolling interests (659) (107) Comprehensive income attributable to Aramark stockholders $ 146,140 $ 173,620 |
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss consists of the following (in thousands): March 31, 2023 September 30, 2022 Pension plan adjustments $ (7,210) $ (7,210) Foreign currency translation adjustments (168,395) (213,388) Cash flow hedges 86,190 114,725 Share of equity investee's accumulated other comprehensive loss (6,208) (5,698) $ (95,623) $ (111,571) |
Severance (Tables)
Severance (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | The following table summarizes the severance charges by segment recognized in the Condensed Consolidated Statements of Income for the three and six months ended March 31, 2023 (in millions): FSS United States $ 3.3 FSS International 25.8 Uniform 6.6 Corporate 0.6 $ 36.3 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill Assets by Segment | Changes in total goodwill during the six months ended March 31, 2023 are as follows (in thousands): Segment September 30, 2022 Acquisitions Translation March 31, 2023 FSS United States $ 4,150,266 $ 13,767 $ 20 $ 4,164,053 FSS International 401,483 22,622 30,246 454,351 Uniforms 963,375 — 210 963,585 $ 5,515,124 $ 36,389 $ 30,476 $ 5,581,989 |
Schedule of Other Intangible Assets | Other intangible assets consist of the following (in thousands): March 31, 2023 September 30, 2022 Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer relationship assets $ 1,487,245 $ (543,327) $ 943,918 $ 1,474,588 $ (487,877) $ 986,711 Trade names 1,159,082 (11,203) 1,147,879 1,133,736 (6,721) 1,127,015 $ 2,646,327 $ (554,530) $ 2,091,797 $ 2,608,324 $ (494,598) $ 2,113,726 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term borrowings, net, are summarized in the following table (in thousands): March 31, 2023 September 30, 2022 Senior secured revolving credit facility, due April 2026 $ 240,128 $ 90,897 Senior secured term loan facility, due March 2025 1,662,243 1,661,611 Senior secured term loan facility, due April 2026 343,362 334,135 Senior secured term loan facility, due January 2027 835,121 834,619 Senior secured term loan facility, due April 2028 723,777 723,170 5.000% senior notes, due April 2025 548,655 547,981 3.125% senior notes, due April 2025 (1) 351,075 317,204 6.375% senior notes, due May 2025 1,489,835 1,487,593 5.000% senior notes, due February 2028 1,142,192 1,141,491 Receivables Facility, due June 2024 500,000 104,935 Finance leases 141,543 147,373 Other 39,166 19,898 8,017,097 7,410,907 Less—current portion (110,461) (65,047) $ 7,906,636 $ 7,345,860 (1) This is a Euro denominated borrowing. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) | The following table summarizes the effect of the Company's derivatives designated as cash flow hedging instruments on Other comprehensive (loss) income (in thousands): Three Months Ended March 31, 2023 April 1, 2022 Interest rate swap agreements $ (16,315) $ 85,001 Six Months Ended March 31, 2023 April 1, 2022 Interest rate swap agreements $ (14,331) $ 103,327 |
Schedule of Derivative Instruments, Balance Sheet Presentation | The following table summarizes the location and fair value, using Level 2 inputs (see Note 13 for a description of the fair value levels), of the Company's derivatives designated and not designated as hedging instruments in the Condensed Consolidated Balance Sheets (in thousands): Balance Sheet Location March 31, 2023 September 30, 2022 ASSETS Designated as hedging instruments: Interest rate swap agreements Prepayments and other current assets $ — $ 5,278 Interest rate swap agreements Other Assets 116,472 149,755 $ 116,472 $ 155,033 LIABILITIES Not designated as hedging instruments: Gasoline and diesel fuel agreements Accounts payable 1,888 2,631 $ 1,888 $ 2,631 |
Schedule Summarizes the Location of (Gain) Loss Reclassified from AOCI Into Earnings for Derivatives Designated as Hedging Instruments and the Location of (Gain) Loss | The following table summarizes the location of the (gain) loss reclassified from "Accumulated other comprehensive loss" into earnings for derivatives designated as hedging instruments and the location of the (gain) loss for the Company's derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Income (in thousands): Three Months Ended Income Statement Location March 31, 2023 April 1, 2022 Designated as hedging instruments: Interest rate swap agreements Interest and Other Financing Costs, net $ (13,915) $ 10,550 Not designated as hedging instruments: Gasoline and diesel fuel agreements Cost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses 2,487 (3,980) $ (11,428) $ 6,570 Six Months Ended Income Statement Location March 31, 2023 April 1, 2022 Designated as hedging instruments: Interest rate swap agreements Interest and Other Financing Costs, net $ (24,230) $ 23,004 Not designated as hedging instruments: Gasoline and diesel fuel agreements Cost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses 479 (3,945) $ (23,751) $ 19,059 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents revenue disaggregated by revenue source (in millions): Three Months Ended Six Months Ended March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 FSS United States: Business & Industry $ 343.2 $ 243.8 $ 674.7 $ 474.5 Education 983.7 895.4 1,987.3 1,805.4 Healthcare 337.3 301.0 661.9 597.4 Sports, Leisure & Corrections 676.0 450.6 1,460.6 998.7 Facilities & Other 503.0 447.5 979.7 887.7 Total FSS United States 2,843.2 2,338.3 5,764.2 4,763.7 FSS International: Europe 552.0 426.8 1,056.2 857.5 Rest of World 521.0 444.1 1,009.5 886.6 Total FSS International 1,073.0 870.9 2,065.7 1,744.1 Uniform 685.9 651.3 1,373.2 1,301.0 Total Revenue $ 4,602.1 $ 3,860.5 $ 9,203.1 $ 7,808.8 |
Contract with Customer, Asset and Liability | Deferred income balances are summarized in the following table (in millions): March 31, 2023 September 30, 2022 Deferred income $ 260.3 $ 324.5 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan | The following table summarizes the share-based compensation expense and related information for Time-Based Options ("TBOs"), Retention Time-Based Options ("TBO-Rs"), Time-Based Restricted Stock Units ("RSUs"), Performance Stock Units ("PSUs"), Deferred Stock Units and Employee Stock Purchase Plan ("ESPP") recorded within "Selling and general corporate expenses" on the Condensed Consolidated Statements of Income (in millions). Three Months Ended Six Months Ended March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 TBOs $ 3.9 $ 3.8 $ 7.6 $ 8.2 TBO-Rs 1.2 1.1 3.1 2.4 RSUs 13.2 14.3 26.8 29.4 PSUs 2.3 1.2 4.4 2.8 Deferred Stock Units 0.5 0.5 0.8 1.0 ESPP (1) — 2.3 2.4 4.1 $ 21.1 $ 23.2 $ 45.1 $ 47.9 Taxes related to share-based compensation $ 3.9 $ 4.1 $ 8.1 $ 8.7 Cash Received from Option Exercises/ESPP Purchases 4.5 12.0 34.1 23.7 Tax (Provision) Benefit on Share Deliveries (0.1) 0.2 0.4 0.1 (1) The Company temporarily suspended its ESPP beginning in the second quarter of fiscal 2023. |
Schedule of Unrecognized Compensation Cost, Nonvested Awards | The below table summarizes the number of shares granted and the weighted-average grant-date fair value per unit during the six months ended March 31, 2023: Shares Granted Weighted Average Grant-Date Fair Value TBOs (1) 0.9 $ 17.01 RSUs (1) 1.3 $ 40.27 PSUs (1)(2) 0.5 $ 48.88 2.7 (1) The Company's annual grants for fiscal 2023 were awarded in November 2022 and will vest based upon continued employment over four years. All TBOs remain exercisable for 10 years from the date of grant. (2) During the first quarter of fiscal 2023, the Company granted PSUs subject to the level of achievement of adjusted revenue growth, cumulative adjusted earnings per share, return on invested capital and relative total shareholder return for the cumulative performance period over three years and the participant's continued employment with the Company over four years. The Company is accounting for a portion of the award as a performance-based award, with the grant-date fair value based on the fair value of the Company's common stock. The Company is accounting for the remainder of the award as a market-based award valued utilizing the Monte Carlo Simulation pricing model, which calculates multiple potential outcomes for an award and establishes fair value based on the most likely outcome. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share attributable to the Company's stockholders (in thousands, except per share data): Three Months Ended Six Months Ended March 31, 2023 April 1, 2022 March 31, 2023 April 1, 2022 Earnings: Net income attributable to Aramark stockholders $ 56,041 $ 35,748 $ 130,192 $ 78,359 Shares: Basic weighted-average shares outstanding 260,673 257,100 260,063 256,785 Effect of dilutive securities 1,864 1,647 1,930 1,614 Diluted weighted-average shares outstanding 262,537 258,747 261,993 258,399 Basic Earnings Per Share: Net income attributable to Aramark stockholders $ 0.21 $ 0.14 $ 0.50 $ 0.31 Diluted Earnings Per Share: Net income attributable to Aramark stockholders $ 0.21 $ 0.14 $ 0.50 $ 0.30 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Sales by Segment | Financial information by segment follows (in millions): Three Months Ended Revenue March 31, 2023 April 1, 2022 FSS United States $ 2,843.2 $ 2,338.3 FSS International 1,073.0 870.9 Uniform 685.9 651.3 $ 4,602.1 $ 3,860.5 Six Months Ended Revenue March 31, 2023 April 1, 2022 FSS United States $ 5,764.2 $ 4,763.7 FSS International 2,065.7 1,744.1 Uniform 1,373.2 1,301.0 $ 9,203.1 $ 7,808.8 |
Schedule of Operating Income by Segment | Three Months Ended Operating Income March 31, 2023 April 1, 2022 FSS United States $ 156.0 $ 82.1 FSS International 6.8 37.1 Uniform 55.9 56.0 Total Segment Operating Income 218.7 175.2 Corporate (36.7) (33.2) Total Operating Income $ 182.0 $ 142.0 Three Months Ended Reconciliation to Income Before Income Taxes March 31, 2023 April 1, 2022 Total Operating Income $ 182.0 $ 142.0 Interest and Other Financing Costs, net 114.0 89.7 Income Before Income Taxes $ 68.0 $ 52.3 Six Months Ended Operating Income March 31, 2023 April 1, 2022 FSS United States $ 319.2 $ 181.1 FSS International 33.6 59.8 Uniform 102.4 114.9 Total Segment Operating Income 455.2 355.8 Corporate (73.6) (73.6) Total Operating Income $ 381.6 $ 282.2 Six Months Ended Reconciliation to Income Before Income Taxes March 31, 2023 April 1, 2022 Total Operating Income $ 381.6 $ 282.2 Interest and Other Financing Costs, net 215.3 182.7 Income Before Income Taxes $ 166.3 $ 99.5 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 USD ($) country | Mar. 31, 2023 USD ($) segment country | Apr. 01, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Number of reportable segments | segment | 3 | |||
Cash and cash equivalents | $ 302,692 | $ 302,692 | $ 329,452 | |
Impairment charges | 35,479 | $ 0 | ||
Equity method investment, aggregate cost | 242,800 | 242,800 | 224,500 | |
Equity securities without readily determinable fair value, amount | 180,500 | 180,500 | 180,500 | |
Cost of services provided | FSS United States and Uniform | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Impairment charges | 3,300 | 26,700 | ||
Cost of services provided | FSS United States | Right Of Use Assets | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Impairment charges | 700 | 8,600 | ||
Cost of services provided | FSS United States | Leasehold Improvements | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Impairment charges | 0 | 10,400 | ||
Cost of services provided | Uniform | Right Of Use Assets | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Impairment charges | 2,300 | 7,100 | ||
Cost of services provided | Uniform | Other Assets | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Impairment charges | 300 | 600 | ||
Deferred Income Taxes and Other Noncurrent Liabilities | CARES Act | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Payment of deferred social security taxes | 64,200 | $ 64,200 | ||
Captive | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Cash and cash equivalents | 11,600 | 11,600 | 23,100 | |
Captive | Prepaid Expenses and Other Current Assets | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Investment at cost | $ 109,100 | $ 109,100 | $ 78,200 | |
Foreign Countries Outside North America | ||||
Basis of Presentation and Summary of Significant Accounting Policies [Line Items] | ||||
Number of foreign countries in which entity operates | country | 18 | 18 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Components of Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2023 | Dec. 30, 2022 | Apr. 01, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Apr. 01, 2022 | |
Pre-Tax Amount | ||||||
Pension plan adjustments | $ 0 | $ 2,480 | ||||
Foreign currency translation adjustments | $ 10,658 | $ 4,179 | 47,727 | (3,931) | ||
Fair value of cash flow hedges | (30,230) | 95,551 | (38,561) | 126,331 | ||
Share of equity investee's comprehensive income | 82 | 435 | (510) | 695 | ||
Other comprehensive (loss) income | (19,490) | 100,165 | 8,656 | 125,575 | ||
Tax Effect | ||||||
Pension plan adjustments | 0 | (701) | ||||
Foreign currency translation adjustments | (502) | 2,193 | (2,734) | 3,233 | ||
Fair value of cash flow hedges | 7,860 | (24,843) | 10,026 | (32,846) | ||
Share of equity investee's comprehensive income | 0 | 0 | 0 | 0 | ||
Other comprehensive (loss) income | 7,358 | (22,650) | 7,292 | (30,314) | ||
After-Tax Amount | ||||||
Net income | 55,882 | 35,545 | 129,533 | 78,252 | ||
Pension plan adjustments | 0 | 1,779 | ||||
Foreign currency translation adjustments | 10,156 | 6,372 | 44,993 | (698) | ||
Fair value of cash flow hedges | (22,370) | 70,708 | (28,535) | 93,485 | ||
Share of equity investee's comprehensive income | 82 | 435 | (510) | 695 | ||
Other comprehensive (loss) income, net of tax | (12,132) | $ 28,080 | 77,515 | $ 17,746 | 15,948 | 95,261 |
Comprehensive income | 43,750 | 113,060 | 145,481 | 173,513 | ||
Less: Net loss attributable to noncontrolling interests | (159) | (203) | (659) | (107) | ||
Comprehensive income attributable to Aramark stockholders | $ 43,909 | $ 113,263 | $ 146,140 | $ 173,620 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Pension plan adjustments | $ (7,210) | $ (7,210) |
Foreign currency translation adjustments | (168,395) | (213,388) |
Cash flow hedges | 86,190 | 114,725 |
Share of equity investee's accumulated other comprehensive loss | (6,208) | (5,698) |
Total accumulated other comprehensive loss | $ (95,623) | $ (111,571) |
Severance - Narrative (Details)
Severance - Narrative (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 USD ($) | Mar. 31, 2023 USD ($) | |
Accrued Payroll and Related Expenses | Employee Severance and Other Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance and related costs accrual | $ 31 | $ 31 |
Cost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | $ 36.3 | $ 36.3 |
Severance - Schedule of Restruc
Severance - Schedule of Restructuring and Related Costs (Details) - Cost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Mar. 31, 2023 | Mar. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | $ 36.3 | $ 36.3 |
Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | 0.6 | 0.6 |
FSS United States | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | 3.3 | 3.3 |
FSS International | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | 25.8 | 25.8 |
Uniform | ||
Restructuring Cost and Reserve [Line Items] | ||
Severance costs | $ 6.6 | $ 6.6 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill Assets by Segment (Details) $ in Thousands | 6 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of the period | $ 5,515,124 |
Acquisitions | 36,389 |
Translation | 30,476 |
Balance at the end of the period | 5,581,989 |
FSS United States | |
Goodwill [Roll Forward] | |
Balance at beginning of the period | 4,150,266 |
Acquisitions | 13,767 |
Translation | 20 |
Balance at the end of the period | 4,164,053 |
FSS International | |
Goodwill [Roll Forward] | |
Balance at beginning of the period | 401,483 |
Acquisitions | 22,622 |
Translation | 30,246 |
Balance at the end of the period | 454,351 |
Uniform | |
Goodwill [Roll Forward] | |
Balance at beginning of the period | 963,375 |
Acquisitions | 0 |
Translation | 210 |
Balance at the end of the period | $ 963,585 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 2,646,327 | $ 2,608,324 |
Accumulated Amortization | (554,530) | (494,598) |
Net Amount | 2,091,797 | 2,113,726 |
Customer relationship assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,487,245 | 1,474,588 |
Accumulated Amortization | (543,327) | (487,877) |
Net Amount | 943,918 | 986,711 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,159,082 | 1,133,736 |
Accumulated Amortization | (11,203) | (6,721) |
Net Amount | $ 1,147,879 | $ 1,127,015 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Mar. 31, 2023 | Apr. 01, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 57.1 | $ 54.4 |
Borrowings - Schedule of Debt (
Borrowings - Schedule of Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Debt Instrument [Line Items] | ||
Finance leases | $ 141,543 | $ 147,373 |
Other | 39,166 | 19,898 |
Debt and capital lease obligations | 8,017,097 | 7,410,907 |
Less—current portion | (110,461) | (65,047) |
Long-Term Borrowings | 7,906,636 | 7,345,860 |
Receivables Facility, due June 2024 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 500,000 | 104,935 |
Secured Debt | Senior secured revolving credit facility, due April 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 240,128 | 90,897 |
Secured Debt | Senior secured term loan facility, due March 2025 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,662,243 | 1,661,611 |
Secured Debt | Senior secured term loan facility, due April 2026 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 343,362 | 334,135 |
Secured Debt | Senior secured term loan facility, due January 2027 | ||
Debt Instrument [Line Items] | ||
Long-term debt | 835,121 | 834,619 |
Secured Debt | Senior secured term loan facility, due April 2028 | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 723,777 | 723,170 |
Senior Notes | 5.000% senior notes, due April 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate stated percentage | 5% | |
Long-term debt | $ 548,655 | 547,981 |
Senior Notes | 3.125% senior notes, due April 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate stated percentage | 3.125% | |
Long-term debt | $ 351,075 | 317,204 |
Senior Notes | 6.375% senior notes, due May 2025 | ||
Debt Instrument [Line Items] | ||
Interest rate stated percentage | 6.375% | |
Long-term debt | $ 1,489,835 | 1,487,593 |
Senior Notes | 5.000% senior notes, due February 2028 | ||
Debt Instrument [Line Items] | ||
Interest rate stated percentage | 5% | |
Long-term debt | $ 1,142,192 | $ 1,141,491 |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Senior secured revolving credit facility, due April 2026 | |
Debt Instrument [Line Items] | |
Remaining borrowing capacity | $ 935.3 |
Foreign | |
Debt Instrument [Line Items] | |
Long-term debt | $ 945.1 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) $ in Thousands, € in Millions, ¥ in Millions, gal in Millions | 3 Months Ended | 6 Months Ended | ||||||
Mar. 31, 2023 USD ($) | Apr. 01, 2022 USD ($) | Mar. 31, 2023 USD ($) gal | Apr. 01, 2022 USD ($) | Mar. 31, 2023 JPY (¥) | Mar. 31, 2023 EUR (€) | Dec. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Derivative [Line Items] | ||||||||
Cash flow hedges | $ 86,190 | $ 86,190 | $ 114,725 | |||||
Senior secured term loan facility, due April 2026 | Secured Debt | ||||||||
Derivative [Line Items] | ||||||||
Long-term debt | 343,362 | 343,362 | 334,135 | |||||
Designated as Hedging Instrument | Euro Denominated Term Loan, Aramark Investments Limited | Senior secured term loan facility, due April 2026 | Secured Debt | ||||||||
Derivative [Line Items] | ||||||||
Long-term debt | € | € 96.4 | |||||||
Designated as Hedging Instrument | YEN Denominated Term Loan, Aramark Services, Inc. Due 2026 | Senior secured term loan facility, due April 2026 | Secured Debt | ||||||||
Derivative [Line Items] | ||||||||
Long-term debt | ¥ | ¥ 8,409 | |||||||
Designated as Hedging Instrument | Cash Flow Hedging | ||||||||
Derivative [Line Items] | ||||||||
Net tax loss expected to be reclassified from accumulated other comprehensive loss | 42,800 | |||||||
Interest rate swap agreements | Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of derivative | 2,000,000 | 2,000,000 | ||||||
Interest rate swap agreements | Designated as Hedging Instrument | Cash Flow Hedging | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of derivative | $ 1,200,000 | |||||||
Notional amount of matured hedges | 1,600,000 | |||||||
Cash flow hedges | 86,200 | $ 86,200 | $ 114,700 | |||||
Gasoline and diesel fuel agreements | Not Designated as Hedging Instrument | ||||||||
Derivative [Line Items] | ||||||||
Notional amount, volume | gal | 5.7 | |||||||
Gain (loss) from change in fair value of unsettled contracts | $ 1,300 | $ (1,100) | $ (700) | $ 400 |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Mar. 31, 2023 | Apr. 01, 2022 | |
Interest rate swap agreements | Cash Flow Hedging | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Gain (loss) on interest rate swap agreements | $ (16,315) | $ 85,001 | $ (14,331) | $ 103,327 |
Derivative Instruments - Balanc
Derivative Instruments - Balance Sheet Presentation (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Sep. 30, 2022 |
Derivative instruments | ||
Interest rate swap agreements | $ 1,888 | $ 2,631 |
Designated as Hedging Instrument | ||
Derivative instruments | ||
Fair value of derivative assets | 116,472 | 155,033 |
Prepayments and other current assets | Interest rate swap agreements | Designated as Hedging Instrument | ||
Derivative instruments | ||
Fair value of derivative assets | 0 | 5,278 |
Other Assets | Interest rate swap agreements | Designated as Hedging Instrument | ||
Derivative instruments | ||
Fair value of derivative assets | 116,472 | 149,755 |
Accounts payable | Gasoline and diesel fuel agreements | Not Designated as Hedging Instrument | ||
Derivative instruments | ||
Interest rate swap agreements | $ 1,888 | $ 2,631 |
Derivative Instruments - Locati
Derivative Instruments - Location of (Gain) Loss Reclassified from AOCI Into Earnings (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Mar. 31, 2023 | Apr. 01, 2022 | |
Derivative instruments | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Cost of services provided (exclusive of depreciation and amortization) | Cost of services provided (exclusive of depreciation and amortization) | Cost of services provided (exclusive of depreciation and amortization) | Cost of services provided (exclusive of depreciation and amortization) |
Gain (loss) recognized in income | $ (11,428) | $ 6,570 | $ (23,751) | $ 19,059 |
Interest rate swap agreements | Cash Flow Hedging | Designated as Hedging Instrument | ||||
Derivative instruments | ||||
Gain (Loss), reclassification, before tax | (13,915) | 10,550 | (24,230) | 23,004 |
Gasoline and diesel fuel agreements | Not Designated as Hedging Instrument | ||||
Derivative instruments | ||||
Gain (loss) recognized in income | $ 2,487 | $ (3,980) | $ 479 | $ (3,945) |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligation Narrative (Details) $ in Millions | 6 Months Ended |
Mar. 31, 2023 USD ($) performance_obligation | |
Revenue from Contract with Customer [Abstract] | |
Number of remaining performance obligations | performance_obligation | 1 |
Deferred revenue recognized | $ | $ 207.9 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Mar. 31, 2023 | Apr. 01, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 4,602,085 | $ 3,860,529 | $ 9,203,083 | $ 7,808,789 |
FSS United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,843,200 | 2,338,300 | 5,764,200 | 4,763,700 |
FSS United States | Total FSS United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,843,200 | 2,338,300 | 5,764,200 | 4,763,700 |
FSS International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,073,000 | 870,900 | 2,065,700 | 1,744,100 |
FSS International | Total FSS International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,073,000 | 870,900 | 2,065,700 | 1,744,100 |
FSS International | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 552,000 | 426,800 | 1,056,200 | 857,500 |
FSS International | Rest of World | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 521,000 | 444,100 | 1,009,500 | 886,600 |
Uniform | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 685,900 | 651,300 | 1,373,200 | 1,301,000 |
Business & Industry | FSS United States | Total FSS United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 343,200 | 243,800 | 674,700 | 474,500 |
Education | FSS United States | Total FSS United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 983,700 | 895,400 | 1,987,300 | 1,805,400 |
Healthcare | FSS United States | Total FSS United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 337,300 | 301,000 | 661,900 | 597,400 |
Sports, Leisure & Corrections | FSS United States | Total FSS United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 676,000 | 450,600 | 1,460,600 | 998,700 |
Facilities & Other | FSS United States | Total FSS United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 503,000 | $ 447,500 | $ 979,700 | $ 887,700 |
Revenue Recognition - Deferred
Revenue Recognition - Deferred Income (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Sep. 30, 2022 |
Revenue from Contract with Customer [Abstract] | ||
Deferred income | $ 260.3 | $ 324.5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2023 | Apr. 01, 2022 | |
FSS International | |||
Income Tax Contingency [Line Items] | |||
Valuation allowance against DTAs | $ 3.8 | $ 3.8 | $ 8.5 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | May 02, 2023 | Mar. 31, 2023 | Dec. 15, 2022 | Sep. 30, 2022 |
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 | ||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Dividends payable (in dollars per share) | $ 0.11 | |||
2023 Stock Incentive Plan | ||||
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 8,500,000 |
Share-Based Compensation - Comp
Share-Based Compensation - Compensation Expense and Other Options (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Mar. 31, 2023 | Apr. 01, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 21,100 | $ 23,200 | $ 45,100 | $ 47,900 |
Taxes related to share-based compensation | 3,900 | 4,100 | 8,100 | 8,700 |
Cash Received from Option Exercises/ESPP Purchases | 4,500 | 12,000 | 34,053 | 23,703 |
Tax (Provision) Benefit on Share Deliveries | (100) | 200 | 400 | 100 |
TBOs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 3,900 | 3,800 | 7,600 | 8,200 |
TBO-Rs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 1,200 | 1,100 | 3,100 | 2,400 |
RSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 13,200 | 14,300 | 26,800 | 29,400 |
PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 2,300 | 1,200 | 4,400 | 2,800 |
Deferred Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | 500 | 500 | 800 | 1,000 |
ESPP | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 0 | $ 2,300 | $ 2,400 | $ 4,100 |
Share-Based Compensation - Sche
Share-Based Compensation - Schedule of Unrecognized Compensation Cost (Details) shares in Millions | 6 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 2.7 |
Award vesting period (in years) | 4 years |
Award requisite service period (in years) | 4 years |
TBOs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 0.9 |
Weighted Average Grant-Date Fair Value (dollars per share) | $ / shares | $ 17.01 |
Award expiration period (in years) | 10 years |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 1.3 |
Weighted Average Grant-Date Fair Value (dollars per share) | $ / shares | $ 40.27 |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares granted (in shares) | 0.5 |
Weighted Average Grant-Date Fair Value (dollars per share) | $ / shares | $ 48.88 |
Award vesting period (in years) | 3 years |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2023 | Dec. 30, 2022 | Apr. 01, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Apr. 01, 2022 | |
Earnings: | ||||||
Net income attributable to Aramark stockholders | $ 56,041 | $ 74,151 | $ 35,748 | $ 42,611 | $ 130,192 | $ 78,359 |
Shares: | ||||||
Basic weighted-average shares outstanding (in shares) | 260,673 | 257,100 | 260,063 | 256,785 | ||
Effect of dilutive securities (in shares) | 1,864 | 1,647 | 1,930 | 1,614 | ||
Diluted weighted-average shares outstanding (in shares) | 262,537 | 258,747 | 261,993 | 258,399 | ||
Basic Earnings Per Share: | ||||||
Net Income (loss) attributable to Aramark stockholders (in dollars per share) | $ 0.21 | $ 0.14 | $ 0.50 | $ 0.31 | ||
Diluted Earnings Per Share: | ||||||
Net Income (loss) attributable to Aramark stockholders (in dollars per share) | $ 0.21 | $ 0.14 | $ 0.50 | $ 0.30 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Mar. 31, 2023 | Apr. 01, 2022 | |
Share-based Compensation Award | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS (in shares) | 8.6 | 9.7 | 8.8 | 9.6 |
Performance-Based Options and Performance Stock Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of EPS (in shares) | 0.9 | 1 | 0.9 | 1 |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Mar. 31, 2023 USD ($) |
Loss Contingencies [Line Items] | |
Residual value guarantee | $ 0 |
Minimum | Vehicles | |
Loss Contingencies [Line Items] | |
Lease term (in years) | 1 year |
Maximum | |
Loss Contingencies [Line Items] | |
Residual value guarantee | $ 26,900,000 |
Residual value of leased asset | $ 0 |
Maximum | Vehicles | |
Loss Contingencies [Line Items] | |
Lease term (in years) | 12 years |
Business Segments - Narrative (
Business Segments - Narrative (Details) $ in Millions | 6 Months Ended | |
Mar. 31, 2023 USD ($) segment nationalPark | Apr. 01, 2022 USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 3 | |
Possessory interest in National Park service sites | nationalPark | 1 | |
Cost of services provided | FSS United States | ||
Segment Reporting Information [Line Items] | ||
Proceeds from recovery of investment | $ | $ 19.8 | $ 9 |
Food Services | Sales | Product Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 73% | |
Facilities & Other | Sales | Product Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 27% |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2023 | Apr. 01, 2022 | Mar. 31, 2023 | Apr. 01, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 4,602,085 | $ 3,860,529 | $ 9,203,083 | $ 7,808,789 |
Total Operating Income | 181,983 | 141,991 | 381,629 | 282,238 |
Interest and Other Financing Costs, net | 114,021 | 89,685 | 215,366 | 182,702 |
Income Before Income Taxes | 67,962 | 52,306 | 166,263 | 99,536 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Operating Income | 218,700 | 175,200 | 455,200 | 355,800 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Total Operating Income | (36,700) | (33,200) | (73,600) | (73,600) |
Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Total Operating Income | 182,000 | 142,000 | 381,600 | 282,200 |
Interest and Other Financing Costs, net | 114,000 | 89,700 | 215,300 | 182,700 |
Income Before Income Taxes | 68,000 | 52,300 | 166,300 | 99,500 |
FSS United States | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 2,843,200 | 2,338,300 | 5,764,200 | 4,763,700 |
FSS United States | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Operating Income | 156,000 | 82,100 | 319,200 | 181,100 |
FSS International | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 1,073,000 | 870,900 | 2,065,700 | 1,744,100 |
FSS International | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Operating Income | 6,800 | 37,100 | 33,600 | 59,800 |
Uniform | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 685,900 | 651,300 | 1,373,200 | 1,301,000 |
Uniform | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total Operating Income | $ 55,900 | $ 56,000 | $ 102,400 | $ 114,900 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Financial Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | |
Fair Value Disclosure | Union Supply Group, Inc. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in amount of contingent consideration liability | $ 29.7 | $ 29.7 | |
Fair Value Disclosure | Next Level Hospitality | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Change in amount of contingent consideration liability | 18.4 | 48.4 | |
Fair Value Disclosure | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of debt | 7,968.1 | 7,968.1 | $ 7,153.4 |
Fair Value Disclosure | Fair Value, Measurements, Recurring | Union Supply Group, Inc. | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | 20.3 | 20.3 | 45.8 |
Fair Value Disclosure | Fair Value, Measurements, Recurring | Next Level Hospitality | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration | 0 | 0 | 48.4 |
Carrying Value Disclosure | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying value of debt | $ 8,017.1 | $ 8,017.1 | $ 7,410.9 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands, ¥ in Millions | Feb. 02, 2023 USD ($) | Apr. 17, 2023 USD ($) | Apr. 17, 2023 JPY (¥) | Mar. 31, 2023 USD ($) | Sep. 30, 2022 USD ($) |
Senior secured term loan facility, due March 2025 | Secured Debt | |||||
Subsequent Event [Line Items] | |||||
Long-term debt | $ 1,662,243 | $ 1,661,611 | |||
Senior secured term loan facility, due April 2026 | Secured Debt | |||||
Subsequent Event [Line Items] | |||||
Long-term debt | $ 343,362 | $ 334,135 | |||
Subsequent Event | Senior secured term loan facility, due March 2025 | US Denominated Term Loan, Aramark Services, Inc. Due 2025 | Secured Debt | |||||
Subsequent Event [Line Items] | |||||
Long-term debt | $ 468,000 | ||||
Subsequent Event | Senior secured term loan facility, due April 2026 | YEN Denominated Term Loan, Aramark Services, Inc. Due 2026 | Secured Debt | |||||
Subsequent Event [Line Items] | |||||
Long-term debt | $ 63,000 | ¥ 8,409 | |||
AIM Services Co., Ltd | AIM Services Co., Ltd | |||||
Subsequent Event [Line Items] | |||||
Equity method investment, ownership interest, percent | 50% | ||||
Proceeds from sale of investments | $ 535,000 |