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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
___________________________________________

For the quarterly period ended April 1, 2022 Commission File Number: 001-36223

cik0-20220401_g1.jpg
Aramark
(Exact name of registrant as specified in its charter)
Delaware20-8236097
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
2400 Market Street
19103
Philadelphia,
Pennsylvania
(Address of principal executive offices)(Zip Code)
(215) 238-3000
(Registrant's telephone number, including area code)
___________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on which Registered
Common Stock,
par value $0.01 per share
ARMK
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated fileroNon-accelerated fileroSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   No  x
As of April 29, 2022, the number of shares of the registrant's common stock outstanding is 257,302,239.



    
TABLE OF CONTENTS
Page



Special Note About Forward-Looking Statements
This report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current expectations as to future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. These statements include, but are not limited to, statements related to our expectations regarding the impact of the ongoing COVID-19 pandemic, the performance of our business, our financial results, our operations, our liquidity and capital resources, the conditions in our industry and our growth strategy. In some cases forward-looking statements can be identified by words such as "outlook," "aim," "anticipate," "are or remain or continue to be confident," "have confidence," "estimate," "expect," "will be," "will continue," "will likely result," "project," "intend," "plan," "believe," "see," "look to" and other words and terms of similar meaning or the negative versions of such words. These forward-looking statements are subject to risks and uncertainties that may change at any time, actual results or outcomes may differ materially from those that we expected.
Some of the factors that we believe could affect or continue to affect our results include without limitation: the severity and duration of the ongoing COVID-19 pandemic; the pandemic's impact on the United States and global economies, including particularly the client sectors we serve and governmental responses to the pandemic; unfavorable economic conditions; natural disasters, global calamities, climate change, new pandemics, sports strikes and other adverse incidents; the failure to retain current clients, renew existing client contracts and obtain new client contracts; a determination by clients to reduce their outsourcing or use of preferred vendors; competition in our industries; increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our food and support services contracts; currency risks and other risks associated with international operations, including compliance with a broad range of laws and regulations, including the United States Foreign Corrupt Practices Act; risks associated with suppliers from whom our products are sourced; disruptions to our relationship with our distribution partners; the contract intensive nature of our business, which may lead to client disputes; our expansion strategy and our ability to successfully integrate the businesses we acquire and costs and timing related thereto; continued or further unionization of our workforce; liability resulting from our participation in multiemployer defined benefit pension plans; the inability to hire and retain key or sufficient qualified personnel or increases in labor costs; laws and governmental regulations including those relating to food and beverages, the environment, wage and hour and government contracting; liability associated with noncompliance with applicable law or other governmental regulations; new interpretations of or changes in the enforcement of the government regulatory framework; increases or changes in income tax rates or tax-related laws; the failure to maintain food safety throughout our supply chain, food-borne illness concerns and claims of illness or injury; a cybersecurity incident or other disruptions in the availability of our computer systems or privacy breaches; our leverage; the inability to generate sufficient cash to service all of our indebtedness; debt agreements that limit our flexibility in operating our business; risks associated with the impact, timing or terms of the proposed spin-off of Aramark Uniform Services (our Uniform segment) as an independent publicly traded company to our stockholders (the "proposed spin-off'"); risks associated with the expected benefits and costs of the proposed spin-off, including the risk that the expected benefits of the proposed spin-off will not be realized within the expected time frame, in full or at all, and the risk that conditions to the proposed spin-off will not be satisfied and/or that the proposed spin-off will not be completed within the expected time frame, on the expected terms or at all; the expected qualification of the proposed spin-off as a tax-free transaction for United States federal income tax purposes, including whether or not an Internal Revenue Service ruling will be sought or obtained; the risk that any consents or approvals required in connection with the proposed spin-off will not be received or obtained within the expected time frame, on the expected terms or at all; risks associated with expected financing transactions undertaken in connection with the proposed spin-off and risks associated with indebtedness incurred in connection with the proposed spin-off; the risk of increased costs from lost synergies, costs of restructuring transactions and other costs incurred in connection with the proposed spin-off; retention of existing management team members as a result of the proposed spin-off; reaction of customers, our employees and other parties to the proposed spin-off; and the impact of the proposed spin-off on our business and the risk that the proposed spin-off may be more difficult, time-consuming or costly than expected, including the impact on our resources, systems, procedures and controls, diversion of management’s attention and the impact on relationships with customers, suppliers, employees and other business counterparties; and other factors set forth under the headings “Part I, Item 2—Management’s Discussion and Analysis of Financial Condition and Results of Operations" and "Part II, Item 1A—Risk Factors—Risks associated with the proposed spin-off" herein and headings "Part I, Item 1A Risk Factors," "Part I, Item 3 Legal Proceedings" and "Part II, Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations" and other sections of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission ("SEC") on November 23, 2021 as such factors may be updated from time to time in our other periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov and which may be obtained by contacting Aramark's investor relations department via its website at www.aramark.com. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and in our other filings with the SEC. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us. Forward-looking statements speak only as of


the date made. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, changes in our expectations, or otherwise, except as required by law.



PART I
Item 1.    Financial Statements
ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share amounts)
April 1, 2022October 1, 2021
ASSETS
Current Assets:
         Cash and cash equivalents$429,306 $532,591 
         Receivables (less allowances: $79,174 and $79,644)
1,989,035 1,748,601 
         Inventories435,614 412,676 
         Prepayments and other current assets219,192 204,987 
                   Total current assets3,073,147 2,898,855 
Property and Equipment, net2,007,174 2,038,394 
Goodwill5,504,938 5,487,297 
Other Intangible Assets2,027,102 2,028,622 
Operating Lease Right-of-use Assets584,386 587,854 
Other Assets1,465,487 1,335,142 
$14,662,234 $14,376,164 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term borrowings$66,575 $58,850 
Current operating lease liabilities67,870 67,280 
Accounts payable928,782 919,090 
Accrued expenses and other current liabilities1,636,345 1,812,213 
Total current liabilities2,699,572 2,857,433 
Long-Term Borrowings7,727,122 7,393,417 
Noncurrent Operating Lease Liabilities299,962 314,378 
Deferred Income Taxes and Other Noncurrent Liabilities1,022,402 1,079,014 
Commitments and Contingencies (see Note 11)
Redeemable Noncontrolling Interest8,971 9,050 
Stockholders' Equity:
Common stock, par value $0.01 (authorized: 600,000,000 shares; issued: 295,776,750 shares and 294,329,180 shares; and outstanding: 257,232,915 shares and 255,998,119 shares)
2,958 2,943 
Capital surplus3,607,267 3,533,054 
Retained earnings347,316 327,557 
Accumulated other comprehensive loss(112,750)(208,011)
Treasury stock (shares held in treasury: 38,543,835 shares and 38,331,061 shares)
(940,586)(932,671)
Total stockholders' equity2,904,205 2,722,872 
$14,662,234 $14,376,164 

The accompanying notes are an integral part of these condensed consolidated financial statements.
1

ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
(in thousands, except per share data)
Three Months Ended
April 1, 2022April 2, 2021
Revenue$3,860,529 $2,819,692 
Costs and Expenses:
Cost of services provided (exclusive of depreciation and amortization)3,491,238 2,592,243 
Depreciation and amortization132,285 137,319 
Selling and general corporate expenses95,015 84,784 
3,718,538 2,814,346 
Operating income141,991 5,346 
Interest and Other Financing Costs, net89,685 96,278 
Income (Loss) Before Income Taxes52,306 (90,932)
Provision (Benefit) for Income Taxes16,761 (13,269)
Net income (loss)35,545 (77,663)
Less: Net loss attributable to noncontrolling interest(203)(87)
Net income (loss) attributable to Aramark stockholders$35,748 $(77,576)
Earnings (Loss) per share attributable to Aramark stockholders:
Basic$0.14 $(0.30)
 Diluted$0.14 $(0.30)
Weighted Average Shares Outstanding:
Basic257,100 254,508 
 Diluted258,747 254,508 
Six Months Ended
April 1, 2022April 2, 2021
Revenue$7,808,789 $5,563,481 
Costs and Expenses:
Cost of services provided (exclusive of depreciation and amortization)7,062,283 5,127,870 
Depreciation and amortization267,803 275,893 
Selling and general corporate expenses196,465 174,839 
7,526,551 5,578,602 
Operating income (loss)282,238 (15,121)
Interest and Other Financing Costs, net182,702 196,687 
Income (Loss) Before Income Taxes99,536 (211,808)
Provision (Benefit) for Income Taxes21,284 (52,765)
Net income (loss)78,252 (159,043)
Less: Net loss attributable to noncontrolling interest(107)(224)
Net income (loss) attributable to Aramark stockholders$78,359 $(158,819)
Earnings (Loss) per share attributable to Aramark stockholders:
Basic$0.31 $(0.63)
 Diluted$0.30 $(0.63)
Weighted Average Shares Outstanding:
Basic256,785 254,088 
 Diluted258,399 254,088 
The accompanying notes are an integral part of these condensed consolidated financial statements.
2





ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(in thousands)
Three Months Ended
April 1, 2022April 2, 2021
Net income (loss)$35,545 $(77,663)
Other comprehensive income, net of tax
Foreign currency translation adjustments6,372 (735)
Fair value of cash flow hedges70,708 18,058 
         Share of equity investee's comprehensive income435 748 
Other comprehensive income, net of tax77,515 18,071 
Comprehensive income (loss)113,060 (59,592)
Less: Net loss attributable to noncontrolling interest(203)(87)
Comprehensive income (loss) attributable to Aramark stockholders$113,263 $(59,505)
Six Months Ended
April 1, 2022April 2, 2021
Net income (loss)$78,252 $(159,043)
Other comprehensive income, net of tax
Pension plan adjustments1,779 (975)
Foreign currency translation adjustments(698)25,447 
Fair value of cash flow hedges93,485 27,177 
         Share of equity investee's comprehensive income695 528 
Other comprehensive income, net of tax95,261 52,177 
Comprehensive income (loss)173,513 (106,866)
Less: Net loss attributable to noncontrolling interest(107)(224)
Comprehensive income (loss) attributable to Aramark stockholders$173,620 $(106,642)

The accompanying notes are an integral part of these condensed consolidated financial statements.
3

ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
April 1, 2022April 2, 2021
Cash flows from operating activities:
Net income (loss)$78,252 $(159,043)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities
Depreciation and amortization
267,803 275,893 
Deferred income taxes
5,350 (31,146)
Share-based compensation expense
47,913 34,888 
Changes in operating assets and liabilities:
Accounts Receivable
(223,966)(6,728)
Inventories
(21,920)17,414 
Prepayments and Other Current Assets
(15,632)86,275 
Accounts Payable
1,091 7,819 
Accrued Expenses
(250,460)7,712 
Payments made to clients on contracts
(14,977)(28,854)
Other operating activities
(1,721)17,631 
Net cash (used in) provided by operating activities(128,267)221,861 
Cash flows from investing activities:
Purchases of property and equipment and other
(173,035)(148,318)
Disposals of property and equipment
10,003 5,567 
Acquisition of certain businesses, net of cash acquired
(72,556)(37,923)
Acquisition of certain equity method investments(64,000) 
Other investing activities
9,769 4,964 
Net cash used in investing activities(289,819)(175,710)
Cash flows from financing activities:
Proceeds from long-term borrowings
101,878 65,343 
Payments of long-term borrowings
(42,821)(871,748)
Net change in funding under the Receivables Facility
300,000 (315,600)
Payments of dividends
(56,464)(55,875)
Proceeds from issuance of common stock
23,703 27,277 
Other financing activities
(8,483)(13,028)
Net cash provided by (used in) financing activities317,813 (1,163,631)
Effect of foreign exchange rates on cash and cash equivalents(3,012)8,303 
Decrease in cash and cash equivalents(103,285)(1,109,177)
Cash and cash equivalents, beginning of period532,591 2,509,188 
Cash and cash equivalents, end of period$429,306 $1,400,011 
Six Months Ended
(dollars in millions)April 1, 2022April 2, 2021
Interest paid$173.2 $186.3 
Income taxes paid (refunded)10.6 (109.9)
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
Total Stockholders' Equity
Common Stock
Capital Surplus
Retained Earnings
Accumulated Other
Comprehensive Loss
Treasury Stock
Balance, October 1, 2021$2,722,872 $2,943 $3,533,054 $327,557 $(208,011)$(932,671)
Net income attributable to Aramark stockholders42,611 42,611 
Other comprehensive income17,746 17,746 
Capital contributions from issuance of common stock14,084 10 14,074 
Share-based compensation expense24,651 24,651 
Repurchases of common stock(7,157)(7,157)
Payments of dividends ($0.11 per share)
(30,346)(30,346)
Balance, December 31, 2021$2,784,461 $2,953 $3,571,779 $339,822 $(190,265)$(939,828)
Net income attributable to Aramark stockholders35,748 35,748 
Other comprehensive income77,515 77,515 
Capital contributions from issuance of common stock12,231 5 12,226 
Share-based compensation expense23,262 23,262 
Repurchase of common stock(758)(758)
Payments of dividends ($0.11 per share)
(28,254)(28,254)
Balance, April 1, 2022$2,904,205 $2,958 $3,607,267 $347,316 $(112,750)$(940,586)

The accompanying notes are an integral part of these condensed consolidated financial statements.















5

ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
(in thousands)
Total Stockholders' Equity
Common Stock
Capital Surplus
Retained Earnings
Accumulated Other
Comprehensive Loss
Treasury Stock
Balance, October 2, 2020$2,735,988 $2,907 $3,416,132 $532,379 $(307,258)$(908,172)
Net loss attributable to Aramark stockholders(81,243)(81,243)
Other comprehensive income34,106 34,106 
Capital contributions from issuance of common stock10,487 12 10,475 
Share-based compensation expense18,312 18,312 
Repurchases of common stock(10,621)(10,621)
Payments of dividends ($0.11 per share)
(29,890)(29,890)
Balance, January 1, 2021$2,677,139 $2,919 $3,444,919 $421,246 $(273,152)$(918,793)
Net loss attributable to Aramark stockholders(77,576)(77,576)
Other comprehensive income18,071 18,071 
Capital contributions from issuance of common stock20,244 10 20,234 
Share-based compensation expense16,576 16,576 
Repurchase of common stock(2,952)(2,952)
Payments of dividends ($0.11 per share)
(27,965)(27,965)
Balance, April 2, 2021$2,623,537 $2,929 $3,481,729 $315,705 $(255,081)$(921,745)

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Aramark (the "Company") is a leading global provider of food, 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 23, 2021. The Condensed Consolidated Balance Sheet as of October 1, 2021 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, the impact of the COVID-19 pandemic ("COVID-19") and the possibility of changes in general economic conditions.
The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany transactions and accounts have been eliminated.
New Accounting Standards Updates
Adopted Standards
In January 2020, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") which provided clarification and improvements to existing guidance related to accounting for certain equity securities upon the application or discontinuation of equity method accounting and the measurement of forward contracts and purchased options on certain securities. The guidance was effective for the Company in the first quarter of fiscal 2022. 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 March 2022, the FASB issued an ASU which eliminates the accounting guidance for troubled debt restructuring for creditors in Accounting Standards Codification 310-40, Receivables - Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. In addition, the ASU requires an entity to disclose current-period gross write offs by year of origination for financing receivables and net investments in leases. 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 March 2022, the FASB issued an ASU which expands the scope of existing guidance to allow entities to apply the portfolio layer method to portfolios of all financial assets, including both prepayable and non-prepayable financial assets. 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 November 2021, the FASB issued an ASU which requires that an entity provide certain annual disclosures when they have received government assistance. The guidance is effective for the Company in the first quarter of fiscal 2023 and early adoption is permitted. The Company is currently evaluating the impact of this standard.
In October 2021, the FASB issued an ASU which requires 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.
In January 2021, the FASB issued an ASU which clarifies 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. The Company may adopt this guidance through December 31, 2022, which generally can be applied to applicable contract modifications through December 31, 2022. The Company is currently evaluating the impact of this standard.
7

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
In March 2020, the FASB issued an ASU which provides optional expedients that may be adopted and applied through December 31, 2022 to assist with the discontinuance of LIBOR. The expedients allow 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 adopted 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 adopt the remaining amendments of this standard through December 31, 2022, which generally can be applied to applicable contract modifications through December 31, 2022. The Company is currently evaluating the impact of this standard.
Comprehensive Income (Loss)
Comprehensive income (loss) includes all changes to stockholders' equity during a period, except those resulting from investments by and distributions to stockholders. Components of comprehensive income (loss) include net income (loss), changes in foreign currency translation adjustments (net of tax), pension plan 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 income (loss) (net of tax).
The summary of the components of comprehensive income (loss) is as follows (in thousands):
Three Months Ended
April 1, 2022April 2, 2021
Pre-Tax AmountTax EffectAfter-Tax AmountPre-Tax AmountTax EffectAfter-Tax Amount
Net income (loss)$35,545 $(77,663)
Foreign currency translation adjustments4,179 2,193 6,372 (3,486)2,751 (735)
Fair value of cash flow hedges95,551 (24,843)70,708 24,403 (6,345)18,058 
Share of equity investee's comprehensive income 435  435 748  748 
Other comprehensive income100,165 (22,650)77,515 21,665 (3,594)18,071 
Comprehensive income (loss)113,060 (59,592)
Less: Net loss attributable to noncontrolling interest(203)(87)
Comprehensive income (loss) attributable to Aramark stockholders$113,263 $(59,505)
Six Months Ended
April 1, 2022April 2, 2021
Pre-Tax AmountTax EffectAfter-Tax AmountPre-Tax AmountTax EffectAfter-Tax Amount
Net income (loss)$78,252 $(159,043)
Pension plan adjustments2,480 (701)1,779 (975) (975)
Foreign currency translation adjustments(3,931)3,233 (698)24,198 1,249 25,447 
Fair value of cash flow hedges126,331 (32,846)93,485 36,726 (9,549)27,177 
Share of equity investee's comprehensive income 695  695 528  528 
Other comprehensive income 125,575 (30,314)95,261 60,477 (8,300)52,177 
Comprehensive income (loss)173,513 (106,866)
Less: Net loss attributable to noncontrolling interest(107)(224)
Comprehensive income (loss) attributable to Aramark stockholders$173,620 $(106,642)
8

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Accumulated other comprehensive loss consists of the following (in thousands):
April 1, 2022October 1, 2021
Pension plan adjustments$(22,544)$(24,323)
Foreign currency translation adjustments(127,710)(127,012)
Cash flow hedges44,236 (49,249)
Share of equity investee's accumulated other comprehensive loss(6,732)(7,427)
$(112,750)$(208,011)
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 2022 and 2021 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 April 1, 2022. 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 April 1, 2022 and October 1, 2021, cash and cash equivalents at the Captive were $137.8 million and $194.3 million, respectively.
Other Assets
Other assets consist primarily of costs to obtain or fulfill contracts, including rental merchandise in-service, long-term receivables, investments in 50% or less owned entities, computer software costs and employee sales commissions.
For investments in 50% or less owned entities accounted for under the equity method of accounting, the carrying amount as of April 1, 2022 and October 1, 2021 was $273.3 million and $224.6 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 April 1, 2022 and October 1, 2021 was $180.5 million.
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, property liability as well as for 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
COVID-19 has adversely affected global economies, disrupted global supply chains and labor force participation and created significant volatility and disruption of financial markets. The impact from COVID-19 has caused a deterioration in the Company's revenue, operating income (loss) and net income (loss) and could continue to materially affect the Company's operating results, cash flows and/or financial condition for an extended period of time. COVID-19 related disruptions negatively impacted the Company's financial and operating results beginning in the second quarter of fiscal 2020 through the first half of fiscal 2021. The Company's financial results started to improve during the second half of fiscal 2021 and continued to improve during the first half of fiscal 2022 as COVID-19 restrictions were lifted and operations continued to re-open. The ongoing impact of COVID-19 on the Company's longer-term operational and financial performance will depend on future developments, which continue to be highly uncertain and cannot be predicted.
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
9

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
were paid during the six months ended April 1, 2022. Approximately $64.2 million of social security taxes remain deferred, which are recorded as liabilities within "Accrued expenses and other current liabilities" on the Company’s Condensed Consolidated Balance Sheet as of April 1, 2022.
Within the FSS International and Uniform segments, many foreign jurisdictions in which the Company operates provided companies various forms of relief from COVID-19, including labor related tax credits. These labor related tax credits generally allowed companies to receive credits if they retained employees on their payroll, rather than furloughing or terminating employees as a result of the business disruption caused by COVID-19. The Company qualified for these tax credits. The Company recorded approximately $21.0 million and $33.2 million of labor related tax credits in the FSS International segment within "Cost of services provided (exclusive of depreciation and amortization)" on the Condensed Consolidated Statements of Income (Loss) during the three and six months ended April 1, 2022, respectively. The Company recorded approximately $39.5 million and $74.0 million of labor related tax credits within "Cost of services provided (exclusive of depreciation and amortization)" on the Condensed Consolidated Statements of Income (Loss) during the three and six months ended April 2, 2021, of which approximately $4.5 million and $9.2 million were recorded in the Uniform segment and the remainder was recorded in the FSS International segment. The Company does not expect to receive significant additional tax credits during the remainder of fiscal 2022.
The Company accounted for these labor related tax credits as a reduction to the expense that they were intended to compensate in the period in which the corresponding expense was incurred and there was reasonable assurance the Company would both receive the tax credits and comply with all conditions attached to the tax credits.
NOTE 2. SEVERANCE:
Beginning in the third quarter of fiscal 2020, the Company made changes to its organization as a result of COVID-19. These actions included headcount reductions, resulting in severance charges during fiscal 2020. As of April 1, 2022 and October 1, 2021, the Company had an accrual of approximately $14.1 million and $24.6 million, respectively, related to unpaid severance obligations. The majority of the charges are expected to be paid out through the remainder of fiscal 2022. During both the three and six months ended April 2, 2021, the Company reversed approximately $5.4 million of unpaid obligations related to severance, which were recorded in both "Cost of services provided (exclusive of depreciation and amortization)" and "Selling and general corporate expenses" in the Condensed Consolidated Statements of Income (Loss).
Beginning in the fourth quarter of fiscal 2021, the Uniform segment approved action plans to streamline and improve the efficiency and effectiveness of the segment's general and administrative functions. Part of this action plan also included a series of facility consolidations and closures. As of April 1, 2022 and October 1, 2021, the Company had an accrual of approximately $5.3 million and $9.0 million, respectively, related to unpaid severance obligations within the Uniform segment. The majority of the charges are expected to be paid out through the remainder of fiscal 2022.
NOTE 3. 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 April 1, 2022 are as follows (in thousands):
Segment
October 1, 2021AcquisitionsTranslationApril 1, 2022
FSS United States$4,087,936 $983 $14 $4,088,933 
FSS International434,465 25,072 (8,527)451,010 
Uniforms964,896  99 964,995 
$5,487,297 $26,055 $(8,414)$5,504,938 
10

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Other intangible assets consist of the following (in thousands):
April 1, 2022October 1, 2021
Gross AmountAccumulated AmortizationNet AmountGross AmountAccumulated AmortizationNet Amount
Customer relationship assets$1,371,406 $(446,744)$924,662 $2,106,423 $(1,173,092)$933,331 
Trade names1,105,871 (3,431)1,102,440 1,100,579 (5,288)1,095,291 
$2,477,277 $(450,175)$2,027,102 $3,207,002 $(1,178,380)$2,028,622 
Amortization of intangible assets for the six months ended April 1, 2022 and April 2, 2021 was approximately $54.4 million and $57.6 million, respectively.
NOTE 4. BORROWINGS:
Long-term borrowings, net, are summarized in the following table (in thousands):
April 1, 2022October 1, 2021
Senior secured revolving credit facility, due April 2026$144,521 $71,896 
Senior secured term loan facility, due March 20251,660,991 1,660,382 
Senior secured term loan facility, due April 2026388,828 406,543 
Senior secured term loan facility, due January 2027834,127 833,643 
Senior secured term loan facility, due April 2028722,573 721,986 
5.000% senior notes, due April 2025
595,415 594,719 
3.125% senior notes, due April 2025(1)
357,080 374,668 
6.375% senior notes, due May 2025
1,485,425 1,483,328 
5.000% senior notes, due February 2028
1,140,809 1,140,144 
Receivables Facility, due June 2024300,000  
Finance leases140,808 146,368 
Other23,120 18,590 
7,793,697 7,452,267 
Less—current portion(66,575)(58,850)
$7,727,122 $7,393,417 
(1)
This is a Euro denominated borrowing.
As of April 1, 2022, there were approximately $905.2 million of outstanding foreign currency borrowings.
As of April 1, 2022, the Company had approximately $1,043.8 million of availability under the senior secured revolving credit facility and approximately $100.0 million of availability under the Receivables Facility.
NOTE 5. DERIVATIVE INSTRUMENTS:
The Company enters into contractual derivative arrangements to manage changes in market conditions related to interest on debt obligations, foreign currency exposures and exposure to fluctuating gasoline and diesel fuel prices. Derivative instruments utilized during the period include interest rate swap agreements, foreign currency forward exchange contracts 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.
11

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Cash Flow Hedges
The Company has approximately $3.6 billion notional amount of outstanding interest rate swap agreements as of April 1, 2022, which fix the rate on a like amount of variable rate borrowings through December of fiscal 2028. During the six months ended April 1, 2022, the Company entered into $700.0 million notional amount of forward starting interest rate swap agreements to hedge the cash flow risk of variability in interest payments on variable rate borrowings. During the six months ended April 1, 2022, interest rate swaps with notional amounts of $250.0 million matured.
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 income (loss) and reclassified into earnings as the underlying hedged item affects earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. As of April 1, 2022 and October 1, 2021, approximately $44.2 million and ($49.2) million, respectively, of unrealized net of tax gains (losses) related to the interest rate swaps were included in "Accumulated other comprehensive loss."
The following table summarizes the effect of the Company's derivatives designated as cash flow hedging instruments on Other comprehensive income (in thousands):
Three Months Ended
April 1, 2022April 2, 2021
Interest rate swap agreements$85,001 $12,169 
Six Months Ended
April 1, 2022April 2, 2021
Interest rate swap agreements$103,327 $10,927 
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 April 1, 2022, the Company has contracts for approximately 8.8 million gallons outstanding through March of fiscal 2023. 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 gain of approximately $1.1 million and a loss of approximately $0.4 million for the three and six months ended April 1, 2022, respectively. The impact on earnings related to the change in fair value of these unsettled contracts were gains of approximately $2.2 million and $5.8 million for the three and six months ended April 2, 2021, respectively. The change in fair value for unsettled contracts is included in "Selling and general corporate expenses" on the Condensed Consolidated Statements of Income (Loss). 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 (Loss).
As of April 1, 2022, the Company had foreign currency forward exchange contracts outstanding with nominal notional amounts to mitigate the risk of changes in foreign currency exchange rates on short-term intercompany loans to certain international subsidiaries. Gains and losses on foreign currency exchange contracts are recognized in earnings as the contracts were not designated as hedging instruments, substantially offsetting currency transaction gains and losses on short-term intercompany loans.
12

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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 LocationApril 1, 2022October 1, 2021
ASSETS
Designated as hedging instruments:
Interest rate swap agreements(1)
Other Assets$66,055 $ 
Not designated as hedging instruments:
Gasoline and diesel fuel agreementsPrepayments and other current assets2,108 2,551 
$68,163 $2,551 
LIABILITIES
Designated as hedging instruments:
Interest rate swap agreementsAccounts payable$6,277 $1,541 
Interest rate swap agreements(1)
Other Noncurrent Liabilities 65,011 
$6,277 $66,552 
Not designated as hedging instruments:
Foreign currency forward exchange contractsAccounts payable$122 $27 
$6,399 $66,579 
(1)Interest rate swap position moved from a liability position as of October 1, 2021 to an asset position as of April 1, 2022 due to changes in forward interest rates.
13

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the location of the loss (gain) reclassified from "Accumulated other comprehensive loss" into earnings for derivatives designated as hedging instruments and the location of the loss (gain) for the Company's derivatives not designated as hedging instruments in the Condensed Consolidated Statements of Income (Loss) (in thousands):
Three Months Ended
Income Statement Location
April 1, 2022April 2, 2021
Designated as hedging instruments:
Interest rate swap agreementsInterest and Other Financing Costs, net$10,550 $12,234 
Not designated as hedging instruments:
Gasoline and diesel fuel agreementsCost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses(3,980)(3,886)
Foreign currency forward exchange contractsInterest and Other Financing Costs, net43 (505)
(3,937)(4,391)
$6,613 $7,843 
Six Months Ended
Income Statement Location
April 1, 2022April 2, 2021
Designated as hedging instruments:
Interest rate swap agreementsInterest and Other Financing Costs, net$23,004 $25,799 
Not designated as hedging instruments:
Gasoline and diesel fuel agreementsCost of services provided (exclusive of depreciation and amortization) / Selling and general corporate expenses(3,945)(6,027)
Foreign currency forward exchange contractsInterest and Other Financing Costs, net95 (103)
(3,850)(6,130)
$19,154 $19,669 
At April 1, 2022, the net of tax loss expected to be reclassified from "Accumulated other comprehensive loss" into earnings over the next twelve months based on current market rates is approximately $0.8 million.
NOTE 6. 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.
14

ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Disaggregation of Revenue
The following table presents revenue disaggregated by revenue source (in millions):
Three Months Ended(1)
Six Months Ended(1)
April 1, 2022April 2, 2021April 1, 2022April 2, 2021
FSS United States:
    Business & Industry$243.8 $157.8 $474.5 $312.2 
    Education895.4 583.4 1,805.4 1,096.6 
    Healthcare301.0 197.0 597.4 383.8 
    Sports, Leisure & Corrections450.6 224.2 998.7 450.7 
    Facilities & Other447.5 388.6 887.7 753.5 
         Total FSS United States2,338.3 1,551.0 4,763.7 2,996.8 
FSS International:
    Europe426.8 307.2 857.5 636.4 
    Rest of World444.1 370.5 886.6 735.8 
          Total FSS International870.9 677.7 1,744.1 1,372.2 
Uniform651.3 591.0 1,301.0 1,194.5 
Total Revenue$