Aramark
|
|
(Exact name of registrant as specified in its charter)
|
|
Delaware
|
20-8236097
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification Number)
|
Aramark Tower
1101 Market Street
Philadelphia, Pennsylvania
|
19107
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
x
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
Smaller reporting company
|
o
|
Emerging growth company
|
o
|
TABLE OF CONTENTS
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Page
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December 29, 2017
|
|
September 29, 2017
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
185,663
|
|
|
$
|
238,797
|
|
Receivables (less allowances: 2018 - $53,170; 2017 - $53,416)
|
1,813,276
|
|
|
1,615,993
|
|
||
Inventories
|
614,914
|
|
|
610,732
|
|
||
Prepayments and other current assets
|
198,434
|
|
|
187,617
|
|
||
Total current assets
|
2,812,287
|
|
|
2,653,139
|
|
||
Property and Equipment, net
|
1,035,233
|
|
|
1,042,031
|
|
||
Goodwill
|
5,253,116
|
|
|
4,715,511
|
|
||
Other Intangible Assets
|
1,901,528
|
|
|
1,120,824
|
|
||
Other Assets
|
1,524,658
|
|
|
1,474,724
|
|
||
|
$
|
12,526,822
|
|
|
$
|
11,006,229
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Current maturities of long-term borrowings
|
$
|
71,173
|
|
|
$
|
78,157
|
|
Accounts payable
|
833,429
|
|
|
955,925
|
|
||
Accrued expenses and other current liabilities
|
1,107,965
|
|
|
1,334,013
|
|
||
Total current liabilities
|
2,012,567
|
|
|
2,368,095
|
|
||
Long-Term Borrowings
|
6,976,508
|
|
|
5,190,331
|
|
||
Deferred Income Taxes and Other Noncurrent Liabilities
|
805,464
|
|
|
978,944
|
|
||
Redeemable Noncontrolling Interest
|
9,889
|
|
|
9,798
|
|
||
Stockholders' Equity:
|
|
|
|
||||
Common stock, par value $.01 (authorized: 600,000,000 shares; issued: 2018—278,197,208 shares and 2017—277,111,042 shares;
and outstanding: 2018—245,752,174 shares and 2017—245,593,961 shares)
|
2,782
|
|
|
2,771
|
|
||
Capital surplus
|
3,039,523
|
|
|
3,014,546
|
|
||
Retained earnings
|
512,254
|
|
|
247,050
|
|
||
Accumulated other comprehensive loss
|
(112,156
|
)
|
|
(123,760
|
)
|
||
Treasury stock (shares held in treasury: 2018—32,445,034 shares and 2017—31,517,081 shares)
|
(720,009
|
)
|
|
(681,546
|
)
|
||
Total stockholders' equity
|
2,722,394
|
|
|
2,459,061
|
|
||
|
$
|
12,526,822
|
|
|
$
|
11,006,229
|
|
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
Sales
|
$
|
3,965,118
|
|
|
$
|
3,735,383
|
|
Costs and Expenses:
|
|
|
|
||||
Cost of services provided
|
3,520,064
|
|
|
3,299,329
|
|
||
Depreciation and amortization
|
133,849
|
|
|
126,527
|
|
||
Selling and general corporate expenses
|
92,168
|
|
|
65,472
|
|
||
|
3,746,081
|
|
|
3,491,328
|
|
||
Operating income
|
219,037
|
|
|
244,055
|
|
||
Interest and Other Financing Costs, net
|
76,299
|
|
|
65,677
|
|
||
Income Before Income Taxes
|
142,738
|
|
|
178,378
|
|
||
(Benefit) Provision for Income Taxes
|
(149,702
|
)
|
|
52,943
|
|
||
Net income
|
292,440
|
|
|
125,435
|
|
||
Less: Net income attributable to noncontrolling interest
|
156
|
|
|
96
|
|
||
Net income attributable to Aramark stockholders
|
$
|
292,284
|
|
|
$
|
125,339
|
|
|
|
|
|
||||
Earnings per share attributable to Aramark stockholders:
|
|
|
|
||||
Basic
|
$
|
1.19
|
|
|
$
|
0.51
|
|
Diluted
|
$
|
1.16
|
|
|
$
|
0.50
|
|
Weighted Average Shares Outstanding:
|
|
|
|
||||
Basic
|
245,086
|
|
|
244,758
|
|
||
Diluted
|
252,244
|
|
|
252,593
|
|
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
Net income
|
$
|
292,440
|
|
|
$
|
125,435
|
|
Other comprehensive income (loss), net of tax
|
|
|
|
||||
Foreign currency translation adjustments
|
6,384
|
|
|
(34,880
|
)
|
||
Fair value of cash flow hedges
|
5,205
|
|
|
10,198
|
|
||
Share of equity investee's comprehensive income
|
15
|
|
|
—
|
|
||
Other comprehensive income (loss), net of tax
|
11,604
|
|
|
(24,682
|
)
|
||
Comprehensive income
|
304,044
|
|
|
100,753
|
|
||
Less: Net income attributable to noncontrolling interest
|
156
|
|
|
96
|
|
||
Comprehensive income attributable to Aramark stockholders
|
$
|
303,888
|
|
|
$
|
100,657
|
|
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
292,440
|
|
|
$
|
125,435
|
|
Adjustments to reconcile net income to net cash used in operating activities
|
|
|
|
||||
Depreciation and amortization
|
133,849
|
|
|
126,527
|
|
||
Deferred income taxes
|
(178,231
|
)
|
|
819
|
|
||
Share-based compensation expense
|
16,489
|
|
|
16,224
|
|
||
Changes in operating assets and liabilities
|
(590,893
|
)
|
|
(296,738
|
)
|
||
Other operating activities
|
14,897
|
|
|
1,707
|
|
||
Net cash used in operating activities
|
(311,449
|
)
|
|
(26,026
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment, client contract investments and other
|
(118,907
|
)
|
|
(106,600
|
)
|
||
Disposals of property and equipment
|
1,160
|
|
|
1,349
|
|
||
Acquisition of certain businesses, net of cash acquired
|
(1,321,688
|
)
|
|
(1,045
|
)
|
||
Other investing activities
|
(3,351
|
)
|
|
166
|
|
||
Net cash used in investing activities
|
(1,442,786
|
)
|
|
(106,130
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from long-term borrowings
|
2,279,287
|
|
|
45,987
|
|
||
Payments of long-term borrowings
|
(647,622
|
)
|
|
(13,609
|
)
|
||
Net change in funding under the Receivables Facility
|
136,050
|
|
|
132,000
|
|
||
Payments of dividends
|
(25,779
|
)
|
|
(25,246
|
)
|
||
Proceeds from issuance of common stock
|
4,929
|
|
|
3,121
|
|
||
Repurchase of stock
|
(24,410
|
)
|
|
—
|
|
||
Other financing activities
|
(21,354
|
)
|
|
(15,726
|
)
|
||
Net cash provided by financing activities
|
1,701,101
|
|
|
126,527
|
|
||
Decrease in cash and cash equivalents
|
(53,134
|
)
|
|
(5,629
|
)
|
||
Cash and cash equivalents, beginning of period
|
238,797
|
|
|
152,580
|
|
||
Cash and cash equivalents, end of period
|
$
|
185,663
|
|
|
$
|
146,951
|
|
|
|
Three Months Ended
|
||||||
(dollars in millions)
|
|
December 29, 2017
|
|
December 30, 2016
|
||||
Interest paid
|
|
$
|
69.3
|
|
|
$
|
27.5
|
|
Income taxes paid
|
|
$
|
63.2
|
|
|
$
|
17.8
|
|
|
Three Months Ended
|
||||||||||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||||||||||
|
Pre-Tax Amount
|
Tax Effect
|
After-Tax Amount
|
|
Pre-Tax Amount
|
Tax Effect
|
After-Tax Amount
|
||||||||
Net income
|
|
|
$
|
292,440
|
|
|
|
|
$
|
125,435
|
|
||||
Foreign currency translation adjustments
|
6,384
|
|
—
|
|
6,384
|
|
|
(43,648
|
)
|
8,768
|
|
(34,880
|
)
|
||
Fair value of cash flow hedges
|
7,341
|
|
(2,136
|
)
|
5,205
|
|
|
16,718
|
|
(6,520
|
)
|
10,198
|
|
||
Other
|
15
|
|
—
|
|
15
|
|
|
—
|
|
—
|
|
—
|
|
||
Other comprehensive income (loss)
|
13,740
|
|
(2,136
|
)
|
11,604
|
|
|
(26,930
|
)
|
2,248
|
|
(24,682
|
)
|
||
Comprehensive income
|
|
|
304,044
|
|
|
|
|
100,753
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
|
|
156
|
|
|
|
|
96
|
|
||||||
Comprehensive income attributable to Aramark stockholders
|
|
|
$
|
303,888
|
|
|
|
|
$
|
100,657
|
|
|
December 29, 2017
|
|
September 29, 2017
|
||||
Pension plan adjustments
|
$
|
(45,275
|
)
|
|
$
|
(45,275
|
)
|
Foreign currency translation adjustments
|
(56,174
|
)
|
|
(62,558
|
)
|
||
Cash flow hedges
|
(1,589
|
)
|
|
(6,794
|
)
|
||
Share of equity investee's accumulated other comprehensive loss
|
(9,118
|
)
|
|
(9,133
|
)
|
||
|
$
|
(112,156
|
)
|
|
$
|
(123,760
|
)
|
Current assets
|
157,614
|
|
Noncurrent assets
|
1,339,956
|
|
Total assets
|
1,497,570
|
|
|
|
|
Current liabilities
|
108,384
|
|
Noncurrent liabilities
|
2,809
|
|
Total liabilities
|
111,193
|
|
|
|
Estimated Fair
Value (in millions) |
|
Weighted-
Average Estimated Useful Life (in years) |
||
Customer relationship assets
|
|
$
|
567.0
|
|
|
15
|
Trade name
|
|
|
222.0
|
|
|
indefinite
|
Total intangible assets
|
|
$
|
789.0
|
|
|
|
Segment
|
September 29, 2017
|
|
Acquisitions
|
|
Translation
|
|
December 29, 2017
|
||||||||
FSS United States
|
$
|
3,493,756
|
|
|
$
|
524,940
|
|
|
$
|
—
|
|
|
$
|
4,018,696
|
|
FSS International
|
637,816
|
|
|
—
|
|
|
4,969
|
|
|
642,785
|
|
||||
Uniform
|
583,939
|
|
|
7,696
|
|
|
—
|
|
|
591,635
|
|
||||
|
$
|
4,715,511
|
|
|
$
|
532,636
|
|
|
$
|
4,969
|
|
|
$
|
5,253,116
|
|
|
December 29, 2017
|
|
September 29, 2017
|
||||||||||||||||||||
|
Gross
Amount |
|
Accumulated
Amortization |
|
Net
Amount |
|
Gross
Amount |
|
Accumulated
Amortization |
|
Net
Amount |
||||||||||||
Customer relationship assets
|
$
|
1,958,904
|
|
|
$
|
(1,088,271
|
)
|
|
$
|
870,633
|
|
|
$
|
1,376,812
|
|
|
$
|
(1,063,350
|
)
|
|
$
|
313,462
|
|
Trade names
|
1,030,895
|
|
|
—
|
|
|
1,030,895
|
|
|
807,362
|
|
|
—
|
|
|
807,362
|
|
||||||
|
$
|
2,989,799
|
|
|
$
|
(1,088,271
|
)
|
|
$
|
1,901,528
|
|
|
$
|
2,184,174
|
|
|
$
|
(1,063,350
|
)
|
|
$
|
1,120,824
|
|
|
|
December 29, 2017
|
|
September 29, 2017
|
||||
Senior secured revolving credit facility, due March 2022
|
|
$
|
485,600
|
|
|
$
|
—
|
|
Senior secured term loan facility, due March 2022
|
|
493,088
|
|
|
1,125,858
|
|
||
Senior secured term loan facility, due March 2024
|
|
1,403,683
|
|
|
1,403,429
|
|
||
Senior secured term loan facility, due March 2025
|
|
1,776,166
|
|
|
—
|
|
||
5.125% senior notes, due January 2024
|
|
903,328
|
|
|
903,654
|
|
||
4.750% senior notes, due June 2026
|
|
493,616
|
|
|
493,464
|
|
||
5.000% senior notes, due April 2025
|
|
590,022
|
|
|
589,733
|
|
||
3.125% senior notes, due April 2025
|
|
385,691
|
|
|
379,429
|
|
||
Receivables Facility, due May 2019
|
|
390,250
|
|
|
254,200
|
|
||
Capital leases
|
|
114,477
|
|
|
114,400
|
|
||
Other
|
|
11,760
|
|
|
4,321
|
|
||
|
|
7,047,681
|
|
|
5,268,488
|
|
||
Less—current portion
|
|
(71,173
|
)
|
|
(78,157
|
)
|
||
|
|
$
|
6,976,508
|
|
|
$
|
5,190,331
|
|
2018
|
$
|
52,960
|
|
2019
|
450,967
|
|
|
2020
|
85,656
|
|
|
2021
|
86,202
|
|
|
2022
|
876,458
|
|
|
2023
|
47,000
|
|
|
Thereafter
|
5,483,161
|
|
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
Interest rate swap agreements
|
$
|
5,245
|
|
|
$
|
10,745
|
|
|
|
|
|
Three Months Ended
|
||||||
|
|
Income Statement Location
|
|
December 29, 2017
|
|
December 30, 2016
|
||||
Designated as hedging instruments:
|
|
|
|
|
|
|
||||
Interest rate swap agreements
|
|
Interest expense
|
|
$
|
2,096
|
|
|
$
|
5,973
|
|
Not designated as hedging instruments:
|
|
|
|
|
|
|
||||
Gasoline and diesel fuel agreements
|
|
Costs of services provided / Selling and general corporate expenses
|
|
$
|
(3,416
|
)
|
|
$
|
(4,684
|
)
|
Foreign currency forward exchange contracts
|
|
Interest expense
|
|
(650
|
)
|
|
(7,404
|
)
|
||
|
|
|
|
(4,066
|
)
|
|
(12,088
|
)
|
||
|
|
|
|
$
|
(1,970
|
)
|
|
$
|
(6,115
|
)
|
|
|
Three Months Ended
|
||||||
|
|
December 29, 2017
|
|
December 30, 2016
|
||||
TBOs
|
|
$
|
5.0
|
|
|
$
|
5.3
|
|
RSUs
|
|
5.8
|
|
|
6.4
|
|
||
PSUs
|
|
5.3
|
|
|
3.6
|
|
||
Deferred Stock and Other Units
|
|
0.4
|
|
|
0.9
|
|
||
|
|
$
|
16.5
|
|
|
$
|
16.2
|
|
|
|
|
|
|
||||
Taxes related to share-based compensation
|
|
$
|
4.6
|
|
|
$
|
6.0
|
|
|
|
Shares Granted (in millions)
|
|
Weighted-Average Grant-Date Fair Value (dollars per share)
|
|||
TBOs
|
|
1.9
|
|
|
$
|
8.56
|
|
RSUs
|
|
0.9
|
|
|
$
|
40.74
|
|
PSUs
|
|
0.7
|
|
|
$
|
38.96
|
|
|
|
3.5
|
|
|
|
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
Earnings:
|
|
|
|
||||
Net income attributable to Aramark stockholders
|
$
|
292,284
|
|
|
$
|
125,339
|
|
Shares:
|
|
|
|
||||
Basic weighted-average shares outstanding
|
245,086
|
|
|
244,758
|
|
||
Effect of dilutive securities
|
7,158
|
|
|
7,835
|
|
||
Diluted weighted-average shares outstanding
|
252,244
|
|
|
252,593
|
|
||
|
|
|
|
||||
Basic Earnings Per Share:
|
|
|
|
||||
Net income attributable to Aramark stockholders
|
$
|
1.19
|
|
|
$
|
0.51
|
|
Diluted Earnings Per Share:
|
|
|
|
||||
Net income attributable to Aramark stockholders
|
$
|
1.16
|
|
|
$
|
0.50
|
|
|
Sales
|
||||||
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
FSS United States
|
$
|
2,649.5
|
|
|
$
|
2,531.2
|
|
FSS International
|
913.0
|
|
|
808.7
|
|
||
Uniform
|
402.6
|
|
|
395.5
|
|
||
|
$
|
3,965.1
|
|
|
$
|
3,735.4
|
|
|
Operating Income
|
||||||
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
FSS United States
|
$
|
180.1
|
|
|
$
|
176.3
|
|
FSS International
|
46.0
|
|
|
40.6
|
|
||
Uniform
|
44.5
|
|
|
53.8
|
|
||
|
270.6
|
|
|
270.7
|
|
||
Corporate
|
(51.6
|
)
|
|
(26.6
|
)
|
||
Operating Income
|
219.0
|
|
|
244.1
|
|
||
Interest and Other Financing Costs, net
|
(76.3
|
)
|
|
(65.7
|
)
|
||
Income Before Income Taxes
|
$
|
142.7
|
|
|
$
|
178.4
|
|
•
|
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
|
|
Aramark (Parent)
|
|
Issuers
|
|
Guarantors
|
|
Non
Guarantors |
|
Eliminations
|
|
Consolidated
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
5
|
|
|
$
|
35,676
|
|
|
$
|
35,464
|
|
|
$
|
114,518
|
|
|
$
|
—
|
|
|
$
|
185,663
|
|
Receivables
|
—
|
|
|
4,567
|
|
|
357,469
|
|
|
1,451,240
|
|
|
—
|
|
|
1,813,276
|
|
||||||
Inventories
|
—
|
|
|
15,130
|
|
|
517,885
|
|
|
81,899
|
|
|
—
|
|
|
614,914
|
|
||||||
Prepayments and other current assets
|
—
|
|
|
29,867
|
|
|
76,697
|
|
|
91,870
|
|
|
—
|
|
|
198,434
|
|
||||||
Total current assets
|
5
|
|
|
85,240
|
|
|
987,515
|
|
|
1,739,527
|
|
|
—
|
|
|
2,812,287
|
|
||||||
Property and Equipment, net
|
—
|
|
|
27,056
|
|
|
765,273
|
|
|
242,904
|
|
|
—
|
|
|
1,035,233
|
|
||||||
Goodwill
|
—
|
|
|
173,104
|
|
|
3,882,344
|
|
|
1,197,668
|
|
|
—
|
|
|
5,253,116
|
|
||||||
Investment in and Advances to Subsidiaries
|
2,722,389
|
|
|
6,855,179
|
|
|
90,049
|
|
|
511,659
|
|
|
(10,179,276
|
)
|
|
—
|
|
||||||
Other Intangible Assets
|
—
|
|
|
29,677
|
|
|
908,770
|
|
|
963,081
|
|
|
—
|
|
|
1,901,528
|
|
||||||
Other Assets
|
—
|
|
|
54,525
|
|
|
1,139,124
|
|
|
333,011
|
|
|
(2,002
|
)
|
|
1,524,658
|
|
||||||
|
$
|
2,722,394
|
|
|
$
|
7,224,781
|
|
|
$
|
7,773,075
|
|
|
$
|
4,987,850
|
|
|
$
|
(10,181,278
|
)
|
|
$
|
12,526,822
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current maturities of long-term borrowings
|
$
|
—
|
|
|
$
|
18,836
|
|
|
$
|
20,444
|
|
|
$
|
31,893
|
|
|
$
|
—
|
|
|
$
|
71,173
|
|
Accounts payable
|
—
|
|
|
148,544
|
|
|
338,940
|
|
|
345,945
|
|
|
—
|
|
|
833,429
|
|
||||||
Accrued expenses and other current liabilities
|
—
|
|
|
179,220
|
|
|
581,017
|
|
|
347,640
|
|
|
88
|
|
|
1,107,965
|
|
||||||
Total current liabilities
|
—
|
|
|
346,600
|
|
|
940,401
|
|
|
725,478
|
|
|
88
|
|
|
2,012,567
|
|
||||||
Long-term Borrowings
|
—
|
|
|
6,115,649
|
|
|
63,184
|
|
|
797,675
|
|
|
—
|
|
|
6,976,508
|
|
||||||
Deferred Income Taxes and Other Noncurrent Liabilities
|
—
|
|
|
392,738
|
|
|
352,156
|
|
|
60,570
|
|
|
—
|
|
|
805,464
|
|
||||||
Intercompany Payable
|
—
|
|
|
—
|
|
|
5,583,237
|
|
|
608,249
|
|
|
(6,191,486
|
)
|
|
—
|
|
||||||
Redeemable Noncontrolling Interest
|
—
|
|
|
—
|
|
|
9,889
|
|
|
—
|
|
|
—
|
|
|
9,889
|
|
||||||
Total Stockholders' Equity
|
2,722,394
|
|
|
369,794
|
|
|
824,208
|
|
|
2,795,878
|
|
|
(3,989,880
|
)
|
|
2,722,394
|
|
||||||
|
$
|
2,722,394
|
|
|
$
|
7,224,781
|
|
|
$
|
7,773,075
|
|
|
$
|
4,987,850
|
|
|
$
|
(10,181,278
|
)
|
|
$
|
12,526,822
|
|
|
Aramark (Parent)
|
|
Aramark Services, Inc.
|
|
Guarantors
|
|
Non
Guarantors |
|
Eliminations
|
|
Consolidated
|
||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cash and cash equivalents
|
$
|
5
|
|
|
$
|
111,512
|
|
|
$
|
37,513
|
|
|
$
|
89,767
|
|
|
$
|
—
|
|
|
$
|
238,797
|
|
Receivables
|
—
|
|
|
3,721
|
|
|
303,664
|
|
|
1,308,608
|
|
|
—
|
|
|
1,615,993
|
|
||||||
Inventories
|
—
|
|
|
15,737
|
|
|
514,267
|
|
|
80,728
|
|
|
—
|
|
|
610,732
|
|
||||||
Prepayments and other current assets
|
—
|
|
|
14,123
|
|
|
83,404
|
|
|
90,090
|
|
|
—
|
|
|
187,617
|
|
||||||
Total current assets
|
5
|
|
|
145,093
|
|
|
938,848
|
|
|
1,569,193
|
|
|
—
|
|
|
2,653,139
|
|
||||||
Property and Equipment, net
|
—
|
|
|
29,869
|
|
|
775,362
|
|
|
236,800
|
|
|
—
|
|
|
1,042,031
|
|
||||||
Goodwill
|
—
|
|
|
173,104
|
|
|
3,874,647
|
|
|
667,760
|
|
|
—
|
|
|
4,715,511
|
|
||||||
Investment in and Advances to Subsidiaries
|
2,459,056
|
|
|
5,248,858
|
|
|
90,049
|
|
|
567,277
|
|
|
(8,365,240
|
)
|
|
—
|
|
||||||
Other Intangible Assets
|
—
|
|
|
29,683
|
|
|
914,000
|
|
|
177,141
|
|
|
—
|
|
|
1,120,824
|
|
||||||
Other Assets
|
—
|
|
|
53,538
|
|
|
1,112,076
|
|
|
311,112
|
|
|
(2,002
|
)
|
|
1,474,724
|
|
||||||
|
$
|
2,459,061
|
|
|
$
|
5,680,145
|
|
|
$
|
7,704,982
|
|
|
$
|
3,529,283
|
|
|
$
|
(8,367,242
|
)
|
|
$
|
11,006,229
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current maturities of long-term borrowings
|
$
|
—
|
|
|
$
|
33,487
|
|
|
$
|
20,330
|
|
|
$
|
24,340
|
|
|
$
|
—
|
|
|
$
|
78,157
|
|
Accounts payable
|
—
|
|
|
167,926
|
|
|
461,192
|
|
|
326,807
|
|
|
—
|
|
|
955,925
|
|
||||||
Accrued expenses and other current liabilities
|
—
|
|
|
200,130
|
|
|
814,542
|
|
|
319,253
|
|
|
88
|
|
|
1,334,013
|
|
||||||
Total current liabilities
|
—
|
|
|
401,543
|
|
|
1,296,064
|
|
|
670,400
|
|
|
88
|
|
|
2,368,095
|
|
||||||
Long-term Borrowings
|
—
|
|
|
4,460,730
|
|
|
63,604
|
|
|
665,997
|
|
|
—
|
|
|
5,190,331
|
|
||||||
Deferred Income Taxes and Other Noncurrent Liabilities
|
—
|
|
|
425,297
|
|
|
513,797
|
|
|
39,850
|
|
|
—
|
|
|
978,944
|
|
||||||
Intercompany Payable
|
—
|
|
|
—
|
|
|
5,224,196
|
|
|
747,347
|
|
|
(5,971,543
|
)
|
|
—
|
|
||||||
Redeemable Noncontrolling Interest
|
—
|
|
|
—
|
|
|
9,798
|
|
|
—
|
|
|
—
|
|
|
9,798
|
|
||||||
Total Stockholders' Equity
|
2,459,061
|
|
|
392,575
|
|
|
597,523
|
|
|
1,405,689
|
|
|
(2,395,787
|
)
|
|
2,459,061
|
|
||||||
|
$
|
2,459,061
|
|
|
$
|
5,680,145
|
|
|
$
|
7,704,982
|
|
|
$
|
3,529,283
|
|
|
$
|
(8,367,242
|
)
|
|
$
|
11,006,229
|
|
|
Aramark (Parent)
|
|
Issuers
|
|
Guarantors
|
|
Non
Guarantors |
|
Eliminations
|
|
Consolidated
|
||||||||||||
Sales
|
$
|
—
|
|
|
$
|
258,271
|
|
|
$
|
2,643,266
|
|
|
$
|
1,063,581
|
|
|
$
|
—
|
|
|
$
|
3,965,118
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services provided
|
—
|
|
|
225,216
|
|
|
2,320,190
|
|
|
974,658
|
|
|
—
|
|
|
3,520,064
|
|
||||||
Depreciation and amortization
|
—
|
|
|
4,491
|
|
|
105,895
|
|
|
23,463
|
|
|
—
|
|
|
133,849
|
|
||||||
Selling and general corporate expenses
|
—
|
|
|
53,666
|
|
|
33,698
|
|
|
4,804
|
|
|
—
|
|
|
92,168
|
|
||||||
Interest and other financing costs, net
|
—
|
|
|
71,175
|
|
|
68
|
|
|
5,056
|
|
|
—
|
|
|
76,299
|
|
||||||
Expense allocations
|
—
|
|
|
(65,203
|
)
|
|
61,110
|
|
|
4,093
|
|
|
—
|
|
|
—
|
|
||||||
|
—
|
|
|
289,345
|
|
|
2,520,961
|
|
|
1,012,074
|
|
|
—
|
|
|
3,822,380
|
|
||||||
Income (Loss) before Income Tax
|
—
|
|
|
(31,074
|
)
|
|
122,305
|
|
|
51,507
|
|
|
—
|
|
|
142,738
|
|
||||||
Provision (Benefit) for Income Taxes
|
—
|
|
|
(20,709
|
)
|
|
(142,447
|
)
|
|
13,454
|
|
|
—
|
|
|
(149,702
|
)
|
||||||
Equity in Net Income of Subsidiaries
|
292,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(292,284
|
)
|
|
—
|
|
||||||
Net income (loss)
|
292,284
|
|
|
(10,365
|
)
|
|
264,752
|
|
|
38,053
|
|
|
(292,284
|
)
|
|
292,440
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
156
|
|
|
—
|
|
|
—
|
|
|
156
|
|
||||||
Net income (loss) attributable to Aramark stockholders
|
292,284
|
|
|
(10,365
|
)
|
|
264,596
|
|
|
38,053
|
|
|
(292,284
|
)
|
|
292,284
|
|
||||||
Other comprehensive income (loss), net of tax
|
11,604
|
|
|
5,389
|
|
|
—
|
|
|
19,002
|
|
|
(24,391
|
)
|
|
11,604
|
|
||||||
Comprehensive income (loss) attributable to Aramark stockholders
|
$
|
303,888
|
|
|
$
|
(4,976
|
)
|
|
$
|
264,596
|
|
|
$
|
57,055
|
|
|
$
|
(316,675
|
)
|
|
$
|
303,888
|
|
|
Aramark (Parent)
|
|
Aramark Services, Inc.
|
|
Guarantors
|
|
Non
Guarantors |
|
Eliminations
|
|
Consolidated
|
||||||||||||
Sales
|
$
|
—
|
|
|
$
|
252,379
|
|
|
$
|
2,528,456
|
|
|
$
|
954,548
|
|
|
$
|
—
|
|
|
$
|
3,735,383
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of services provided
|
—
|
|
|
228,812
|
|
|
2,197,649
|
|
|
872,868
|
|
|
—
|
|
|
3,299,329
|
|
||||||
Depreciation and amortization
|
—
|
|
|
4,381
|
|
|
102,183
|
|
|
19,963
|
|
|
—
|
|
|
126,527
|
|
||||||
Selling and general corporate expenses
|
—
|
|
|
28,367
|
|
|
32,481
|
|
|
4,624
|
|
|
—
|
|
|
65,472
|
|
||||||
Interest and other financing costs, net
|
—
|
|
|
61,353
|
|
|
(632
|
)
|
|
4,956
|
|
|
—
|
|
|
65,677
|
|
||||||
Expense allocations
|
—
|
|
|
(76,019
|
)
|
|
73,872
|
|
|
2,147
|
|
|
—
|
|
|
—
|
|
||||||
|
—
|
|
|
246,894
|
|
|
2,405,553
|
|
|
904,558
|
|
|
—
|
|
|
3,557,005
|
|
||||||
Income before Income Taxes
|
—
|
|
|
5,485
|
|
|
122,903
|
|
|
49,990
|
|
|
—
|
|
|
178,378
|
|
||||||
Provision for Income Taxes
|
—
|
|
|
1,477
|
|
|
36,316
|
|
|
15,150
|
|
|
—
|
|
|
52,943
|
|
||||||
Equity in Net Income of Subsidiaries
|
125,339
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(125,339
|
)
|
|
—
|
|
||||||
Net income
|
125,339
|
|
|
4,008
|
|
|
86,587
|
|
|
34,840
|
|
|
(125,339
|
)
|
|
125,435
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
96
|
|
|
—
|
|
|
—
|
|
|
96
|
|
||||||
Net income attributable to Aramark stockholders
|
125,339
|
|
|
4,008
|
|
|
86,491
|
|
|
34,840
|
|
|
(125,339
|
)
|
|
125,339
|
|
||||||
Other comprehensive income (loss), net of tax
|
(24,682
|
)
|
|
25,467
|
|
|
(1,927
|
)
|
|
(68,348
|
)
|
|
44,808
|
|
|
(24,682
|
)
|
||||||
Comprehensive income (loss) attributable to Aramark stockholders
|
$
|
100,657
|
|
|
$
|
29,475
|
|
|
$
|
84,564
|
|
|
$
|
(33,508
|
)
|
|
$
|
(80,531
|
)
|
|
$
|
100,657
|
|
|
Aramark (Parent)
|
|
Issuers
|
|
Guarantors
|
|
Non
Guarantors |
|
Eliminations
|
|
Consolidated
|
||||||||||||
Net cash used in operating activities
|
$
|
—
|
|
|
$
|
(63,662
|
)
|
|
$
|
(191,802
|
)
|
|
$
|
(20,982
|
)
|
|
$
|
(35,003
|
)
|
|
$
|
(311,449
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment, client contract investments and other
|
—
|
|
|
(2,166
|
)
|
|
(101,674
|
)
|
|
(15,067
|
)
|
|
—
|
|
|
(118,907
|
)
|
||||||
Disposals of property and equipment
|
—
|
|
|
112
|
|
|
515
|
|
|
533
|
|
|
—
|
|
|
1,160
|
|
||||||
Acquisitions of businesses, net of cash acquired
|
—
|
|
|
(1,386,378
|
)
|
|
(22,565
|
)
|
|
87,255
|
|
|
—
|
|
|
(1,321,688
|
)
|
||||||
Other investing activities
|
—
|
|
|
342
|
|
|
(61
|
)
|
|
(3,632
|
)
|
|
—
|
|
|
(3,351
|
)
|
||||||
Net cash (used in) provided by investing activities
|
—
|
|
|
(1,388,090
|
)
|
|
(123,785
|
)
|
|
69,089
|
|
|
—
|
|
|
(1,442,786
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from long-term borrowings
|
—
|
|
|
2,270,600
|
|
|
—
|
|
|
8,687
|
|
|
—
|
|
|
2,279,287
|
|
||||||
Payments of long-term borrowings
|
—
|
|
|
(633,997
|
)
|
|
(4,672
|
)
|
|
(8,953
|
)
|
|
—
|
|
|
(647,622
|
)
|
||||||
Net change in funding under the Receivables Facility
|
—
|
|
|
—
|
|
|
—
|
|
|
136,050
|
|
|
—
|
|
|
136,050
|
|
||||||
Payments of dividends
|
—
|
|
|
(25,779
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,779
|
)
|
||||||
Proceeds from issuance of common stock
|
—
|
|
|
4,929
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,929
|
|
||||||
Repurchase of stock
|
—
|
|
|
(24,410
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24,410
|
)
|
||||||
Other financing activities
|
—
|
|
|
(20,859
|
)
|
|
(495
|
)
|
|
—
|
|
|
—
|
|
|
(21,354
|
)
|
||||||
Change in intercompany, net
|
—
|
|
|
(194,568
|
)
|
|
318,705
|
|
|
(159,140
|
)
|
|
35,003
|
|
|
—
|
|
||||||
Net cash provided by (used in) financing activities
|
—
|
|
|
1,375,916
|
|
|
313,538
|
|
|
(23,356
|
)
|
|
35,003
|
|
|
1,701,101
|
|
||||||
(Decrease) increase in cash and cash equivalents
|
—
|
|
|
(75,836
|
)
|
|
(2,049
|
)
|
|
24,751
|
|
|
—
|
|
|
(53,134
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
5
|
|
|
111,512
|
|
|
37,513
|
|
|
89,767
|
|
|
—
|
|
|
238,797
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
5
|
|
|
$
|
35,676
|
|
|
$
|
35,464
|
|
|
$
|
114,518
|
|
|
$
|
—
|
|
|
$
|
185,663
|
|
|
Aramark (Parent)
|
|
Aramark Services, Inc.
|
|
Guarantors
|
|
Non
Guarantors |
|
Eliminations
|
|
Consolidated
|
||||||||||||
Net cash provided by (used in) operating activities
|
$
|
—
|
|
|
$
|
102,805
|
|
|
$
|
(168,396
|
)
|
|
$
|
40,175
|
|
|
$
|
(610
|
)
|
|
$
|
(26,026
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Purchases of property and equipment, client contract investments and other
|
—
|
|
|
(4,921
|
)
|
|
(88,327
|
)
|
|
(13,352
|
)
|
|
—
|
|
|
(106,600
|
)
|
||||||
Disposals of property and equipment
|
—
|
|
|
49
|
|
|
546
|
|
|
754
|
|
|
—
|
|
|
1,349
|
|
||||||
Acquisitions of businesses, net of cash acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,045
|
)
|
|
—
|
|
|
(1,045
|
)
|
||||||
Other investing activities
|
—
|
|
|
(1,836
|
)
|
|
(3,083
|
)
|
|
5,085
|
|
|
—
|
|
|
166
|
|
||||||
Net cash used in investing activities
|
—
|
|
|
(6,708
|
)
|
|
(90,864
|
)
|
|
(8,558
|
)
|
|
—
|
|
|
(106,130
|
)
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from long-term borrowings
|
—
|
|
|
40,900
|
|
|
—
|
|
|
5,087
|
|
|
—
|
|
|
45,987
|
|
||||||
Payments of long-term borrowings
|
—
|
|
|
(5,484
|
)
|
|
(4,591
|
)
|
|
(3,534
|
)
|
|
—
|
|
|
(13,609
|
)
|
||||||
Net change in funding under the Receivables Facility
|
—
|
|
|
—
|
|
|
—
|
|
|
132,000
|
|
|
—
|
|
|
132,000
|
|
||||||
Payments of dividends
|
—
|
|
|
(25,246
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(25,246
|
)
|
||||||
Proceeds from issuance of common stock
|
—
|
|
|
3,121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,121
|
|
||||||
Other financing activities
|
—
|
|
|
(15,300
|
)
|
|
(361
|
)
|
|
(65
|
)
|
|
—
|
|
|
(15,726
|
)
|
||||||
Change in intercompany, net
|
—
|
|
|
(114,454
|
)
|
|
261,852
|
|
|
(148,008
|
)
|
|
610
|
|
|
—
|
|
||||||
Net cash (used in) provided by financing activities
|
—
|
|
|
(116,463
|
)
|
|
256,900
|
|
|
(14,520
|
)
|
|
610
|
|
|
126,527
|
|
||||||
(Decrease) increase in cash and cash equivalents
|
—
|
|
|
(20,366
|
)
|
|
(2,360
|
)
|
|
17,097
|
|
|
—
|
|
|
(5,629
|
)
|
||||||
Cash and cash equivalents, beginning of period
|
5
|
|
|
47,850
|
|
|
31,344
|
|
|
73,381
|
|
|
—
|
|
|
152,580
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
5
|
|
|
$
|
27,484
|
|
|
$
|
28,984
|
|
|
$
|
90,478
|
|
|
$
|
—
|
|
|
$
|
146,951
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
|
December 29, 2017
|
|
December 30, 2016
|
|
$
|
|
%
|
|||||||
Sales
|
$
|
3,965.1
|
|
|
$
|
3,735.4
|
|
|
$
|
229.7
|
|
|
6
|
%
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|||||||
Cost of services provided
|
3,520.1
|
|
|
3,299.3
|
|
|
220.8
|
|
|
7
|
%
|
|||
Other operating expenses
|
226.0
|
|
|
192.0
|
|
|
34.0
|
|
|
18
|
%
|
|||
|
3,746.1
|
|
|
3,491.3
|
|
|
254.8
|
|
|
7
|
%
|
|||
Operating income
|
219.0
|
|
|
244.1
|
|
|
(25.1
|
)
|
|
(10
|
)%
|
|||
Interest and Other Financing Costs, net
|
76.3
|
|
|
65.7
|
|
|
10.6
|
|
|
16
|
%
|
|||
Income Before Income Taxes
|
142.7
|
|
|
178.4
|
|
|
(35.7
|
)
|
|
(20
|
)%
|
|||
(Benefit) Provision for Income Taxes
|
(149.7
|
)
|
|
53.0
|
|
|
(202.7
|
)
|
|
(382
|
)%
|
|||
Net income
|
$
|
292.4
|
|
|
$
|
125.4
|
|
|
$
|
167.0
|
|
|
133
|
%
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
Sales by Segment
(1)
|
|
December 29, 2017
|
|
December 30, 2016
|
|
$
|
|
%
|
|||||||
FSS United States
|
|
$
|
2,649.5
|
|
|
$
|
2,531.2
|
|
|
$
|
118.3
|
|
|
5
|
%
|
FSS International
|
|
913.0
|
|
|
808.7
|
|
|
104.3
|
|
|
13
|
%
|
|||
Uniform
|
|
402.6
|
|
|
395.5
|
|
|
7.1
|
|
|
2
|
%
|
|||
|
|
$
|
3,965.1
|
|
|
$
|
3,735.4
|
|
|
$
|
229.7
|
|
|
6
|
%
|
|
|
|
|||||||||||||
|
|
Three Months Ended
|
|
Change
|
|||||||||||
Operating Income by Segment
|
|
December 29, 2017
|
|
December 30, 2016
|
|
$
|
|
%
|
|||||||
FSS United States
|
|
$
|
180.1
|
|
|
$
|
176.3
|
|
|
3.8
|
|
|
2
|
%
|
|
FSS International
|
|
46.0
|
|
|
40.6
|
|
|
5.4
|
|
|
13
|
%
|
|||
Uniform
|
|
44.5
|
|
|
53.8
|
|
|
(9.3
|
)
|
|
(17
|
)%
|
|||
Corporate
|
|
(51.6
|
)
|
|
(26.6
|
)
|
|
(25.0
|
)
|
|
94
|
%
|
|||
|
|
$
|
219.0
|
|
|
$
|
244.1
|
|
|
$
|
(25.1
|
)
|
|
(10
|
)%
|
•
|
growth in the Business & Industry, Sports, Leisure & Corrections, Education, and Facilities & Other sectors in the FSS United States segment;
|
•
|
growth in Germany and Spain in the FSS International segment; and
|
•
|
the positive impact of foreign currency translation (approximately $55 million or approximately 1%).
|
|
|
Three Months Ended
|
||||
Cost of services provided components
|
|
December 29, 2017
|
|
December 30, 2016
|
||
Food and support service costs
|
|
27
|
%
|
|
27
|
%
|
Personnel costs
|
|
46
|
%
|
|
46
|
%
|
Other direct costs
|
|
27
|
%
|
|
27
|
%
|
|
|
100
|
%
|
|
100
|
%
|
•
|
an increase in merger and integration related costs from the Avendra and AmeriPride acquisitions (approximately $19.4 million);
|
•
|
an increase in
consulting costs related to streamlining initiatives
(approximately $5.8 million); and
|
•
|
a profit decline in the Uniform segment
; which more than offset
|
•
|
an increase in income from prior years' loss experience that were favorable under our casualty insurance program (approximately $6.5 million)
.
|
•
|
productivity improvements in base business, specifically in our Education and Sports, Leisure & Corrections sectors;
|
•
|
an increase in income from prior years' loss experience that were favorable under our casualty insurance program ($5.5 million
); and
|
•
|
a decrease in acquisition-related amortization expense ($2.9 million); partially offset by
|
•
|
a profit decline in our Business & Industry and Healthcare sectors; and
|
•
|
an increase in merger and integration related costs from the Avendra acquisition ($2.9 million).
|
•
|
sales growth broadly across all regions; and
|
•
|
the positive impact of foreign currency translation (approximately $52.6 million or 7%).
|
•
|
profit growth in Canada; and
|
•
|
the positive impact of foreign currency translation (approximately $2.2 million or 5%); which more than offset
|
•
|
a profit decline in Ireland.
|
•
|
pricing compression in the rental market;
|
•
|
an increase in merger related costs from the AmeriPride acquisition ($3.0 million); and
|
•
|
multiemployer pension plan withdrawal charges ($1.6 million); which more than offset
|
•
|
an increase in income from prior years' loss experience that were favorable under our casualty insurance program ($2.0 million)
.
|
•
|
an increase in merger and integration related costs from the Avendra and AmeriPride acquisitions ($13.6 million);
|
•
|
an increase in
consulting costs related to streamlining initiatives ($5.8 million);
|
•
|
a decrease in the gain related to the change in the fair value of certain gasoline and diesel agreements ($2.9 million); and
|
•
|
a decrease in income from prior years' loss experience that were favorable under our casualty insurance program ($1.0 million)
.
|
|
Three Months Ended
|
||||||
|
December 29, 2017
|
|
December 30, 2016
|
||||
Net cash used in operating activities
|
$
|
(311.4
|
)
|
|
$
|
(26.0
|
)
|
Net cash used in investing activities
|
(1,442.8
|
)
|
|
(106.1
|
)
|
||
Net cash provided by financing activities
|
1,701.1
|
|
|
126.5
|
|
•
|
Prepayments were less of a source of cash due to
the timing of prepayments made related to interest, insurance premiums and taxes;
|
•
|
Accrued expenses were a greater use of cash due to the timing of payments for client advances and commissions; and
|
•
|
Receivables were a greater use of cash due to revenue growth and from the timing of collections.
|
•
|
issuance of a new $1.785 billion U.S. Term Loan B due 2025;
|
•
|
proceeds from borrowing on the Revolving Credit Facility ($485.6 million);
|
•
|
repayment of the U.S. dollar denominated term loan to Aramark Services, Inc. ("ASI") due 2022 ($633.8 million of principal); and
|
•
|
payment of fees related to the U.S. Term Loan B due 2025 ($8.9 million).
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||
(in millions)
|
December 29, 2017
|
|
September 29, 2017
|
|
June 30, 2017
|
|
March 31, 2017
|
|
December 29, 2017
|
||||||||||
Net income attributable to ASI stockholder
|
$
|
292.3
|
|
|
$
|
113.1
|
|
|
$
|
65.3
|
|
|
$
|
70.2
|
|
|
$
|
540.9
|
|
Interest and other financing costs, net
|
76.3
|
|
|
62.6
|
|
|
61.5
|
|
|
97.6
|
|
|
298.0
|
|
|||||
(Benefit) Provision for income taxes
|
(149.7
|
)
|
|
42.1
|
|
|
27.8
|
|
|
23.6
|
|
|
(56.2
|
)
|
|||||
Depreciation and amortization
|
133.8
|
|
|
130.0
|
|
|
126.4
|
|
|
125.3
|
|
|
515.5
|
|
|||||
Share-based compensation expense
(1)
|
16.4
|
|
|
14.9
|
|
|
15.6
|
|
|
18.5
|
|
|
65.4
|
|
|||||
Pro forma EBITDA for equity method investees
(2)
|
5.0
|
|
|
4.3
|
|
|
2.0
|
|
|
2.3
|
|
|
13.6
|
|
|||||
Pro forma EBITDA for certain transactions
(3)
|
17.7
|
|
|
21.9
|
|
|
24.5
|
|
|
18.8
|
|
|
82.9
|
|
|||||
Other
(4)
|
20.0
|
|
|
15.6
|
|
|
22.0
|
|
|
2.9
|
|
|
60.5
|
|
|||||
Covenant Adjusted EBITDA
|
$
|
411.8
|
|
|
$
|
404.5
|
|
|
$
|
345.1
|
|
|
$
|
359.2
|
|
|
$
|
1,520.6
|
|
(1)
|
Represents share-based compensation expense resulting from the application of accounting for stock options, restricted stock units, performance stock, performance stock units, and deferred stock unit awards (see Note 9
to the condensed consolidated financial statements
).
|
(2)
|
Represents our estimated share of EBITDA, primarily from our AIM Services Co., Ltd. equity method investment, not already reflected in our Net income attributable to ASI stockholder. EBITDA for this equity method investee is calculated in a manner consistent with consolidated Covenant Adjusted EBITDA but does not represent cash distributions received from this investee.
|
(3)
|
Represents the annualizing of net EBITDA from acquisitions made during the period.
|
(4)
|
Other for the twelve months ended
December 29, 2017
includes organizational streamlining initiatives ($18.4 million), the impact of the change in fair value related to certain gasoline and diesel agreements ($3.3 million loss), expenses related to acquisition costs ($21.7 million), estimated impact of natural disasters ($17.0 million, of which $6.1 million related to asset write-downs) and other miscellaneous expenses.
|
|
Covenant
Requirements |
|
Actual
Ratios |
Consolidated Secured Debt Ratio
(1)
|
5.125x
|
|
2.96x
|
Interest Coverage Ratio (Fixed Charge Coverage Ratio)
(2)
|
2.000x
|
|
5.41x
|
(1)
|
The Credit Agreement requires ASI to maintain a maximum Consolidated Secured Debt Ratio, defined as consolidated total indebtedness secured by a lien to Covenant Adjusted EBITDA, of
5.125x
. Consolidated total indebtedness secured by a lien is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, capital leases, debt in respect of sale-leaseback transactions, disqualified and preferred stock and advances under the Receivables Facility secured by a lien reduced by the amount of cash and cash equivalents on the consolidated balance sheet that is free and clear of any lien. Non-compliance with the maximum Consolidated Secured Debt Ratio could result in the requirement to immediately repay all amounts outstanding under our Credit Agreement, which, if ASI's lenders under the Credit Agreement (other than the lenders in respect of ASI's U.S. Term Loan B, which lenders do not benefit from the maximum Consolidated Secured Debt Ratio covenant) failed to waive any such default, would also constitute a default under the indentures governing our senior notes.
|
(2)
|
Our Credit Agreement establishes an incurrence-based minimum Interest Coverage Ratio, defined as Covenant Adjusted EBITDA to consolidated interest expense, the achievement of which is a condition for us to incur additional indebtedness and to make certain restricted payments. If we do not maintain this minimum Interest Coverage Ratio calculated on a pro forma basis for any such additional indebtedness or restricted payments, we could be prohibited from being able to incur additional indebtedness, other than the incremental capacity provided for under the Credit Agreement and pursuant to specified exceptions, and make certain restricted payments, other than pursuant to certain exceptions. The minimum Interest Coverage Ratio is
2.000x
for the term of the Credit Agreement. Consolidated interest expense is defined in the Credit Agreement as consolidated interest expense excluding interest income, adjusted for acquisitions and dispositions, further adjusted for certain non-cash or nonrecurring interest expense and our estimated share of interest expense from one equity method investee.The indentures governing our senior notes include a similar requirement which is referred to as a Fixed Charge Coverage Ratio.
|
|
Payments Due by Period
|
||||||||||||||||||
Contractual Obligations as of December 29, 2017
|
Total
|
|
Less than
1 year |
|
1-3 years
|
|
3-5 years
|
|
More than
5 years |
||||||||||
Long-term borrowings
(1)
|
$
|
6,967,927
|
|
|
$
|
50,103
|
|
|
$
|
496,208
|
|
|
$
|
938,455
|
|
|
$
|
5,483,161
|
|
Capital lease obligations
|
114,477
|
|
|
21,070
|
|
|
40,024
|
|
|
53,383
|
|
|
—
|
|
|||||
Estimated interest payments
(2)
|
1,616,400
|
|
|
278,700
|
|
|
486,600
|
|
|
434,600
|
|
|
416,500
|
|
|||||
|
$
|
8,698,804
|
|
|
$
|
349,873
|
|
|
$
|
1,022,832
|
|
|
$
|
1,426,438
|
|
|
$
|
5,899,661
|
|
(1)
|
Excludes the
$48.9 million
reduction to long-term borrowings from debt issuance costs and the increase of
$14.2 million
from the premium on the 5.125% Senior Notes due 2024.
|
(2)
|
These amounts represent future interest payments related to our existing debt obligations based on fixed and variable interest rates specified in the associated debt agreements. Payments related to variable debt are based on applicable rates at
December 29, 2017
plus the specified margin in the associated debt agreements for each period presented.
|
(1)
|
On February 7, 2017, we announced a share repurchase program allowing us to repurchase up to $250.0 million of our common stock, expiring in February 2019. We may utilize various methods to effect repurchases of our common stock under the repurchase program, which could include open market repurchases, privately negotiated transactions, block transactions, accelerated share repurchase or open market solicitations for shares, some of which may be effected through Rule 10b5-1 plans. Repurchases will be made at our discretion, based on ongoing assessments of the capital needs of the business, the market price of our common stock and general market conditions.
We do not currently expect to repurchase any additional shares during fiscal 2018.
|
1.
|
Election of each of the following 11 director nominees to the Company’s Board of Directors to serve until the Company’s 2019 Annual Meeting of Shareholders or until his or her respective successor has been duly elected and qualified:
|
Nominees for Director
|
For
|
Withheld
|
Broker Non-Votes
|
Eric J. Foss
|
218,468,764
|
7,284,064
|
2,654,565
|
Pierre-Olivier Beckers-Vieujant
|
225,082,572
|
670,256
|
2,654,565
|
Lisa G. Bisaccia
|
198,835,838
|
26,916,990
|
2,654,565
|
Calvin Darden
|
224,935,256
|
817,572
|
2,654,565
|
Richard W. Dreiling
|
198,408,533
|
27,344,295
|
2,654,565
|
Irene M. Esteves
|
225,061,470
|
691,358
|
2,654,565
|
Daniel J. Heinrich
|
225,131,889
|
620,939
|
2,654,565
|
Sanjeev K. Mehra
|
197,879,514
|
27,873,314
|
2,654,565
|
Patricia B. Morrison
|
225,104,910
|
647,918
|
2,654,565
|
John A. Quelch
|
224,995,877
|
756,951
|
2,654,565
|
Stephen I. Sadove
|
198,577,566
|
27,175,262
|
2,654,565
|
2.
|
Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the Company’s fiscal year ending September 28, 2018:
|
For
|
Against
|
Abstentions
|
Broker Non-Votes
|
226,442,385
|
1,910,826
|
54,182
|
0
|
3.
|
Approval, on a non-binding, advisory basis, of the compensation of the Company’s named executive officers as disclosed in the Company’s definitive proxy statement for the 2018 Annual Meeting of Shareholders filed on December 21, 2017:
|
For
|
Against
|
Abstentions
|
Broker Non-Votes
|
114,486,248
|
111,035,238
|
231,342
|
2,654,565
|
|
|
|
|
Aramark
|
||
|
|
|
|
|||
|
|
|
|
By:
|
|
/s/ B
RIAN
P
RESSLER
|
|
|
|
|
Name:
|
|
Brian Pressler
|
|
|
|
|
Title:
|
|
Senior Vice President and Chief Accounting Officer (Principal Accounting Officer
and Authorized Signatory)
|
Exhibit No.
|
|
|
Description
|
2.1
|
|
|
|
2.2
|
|
|
|
4.1
|
|
|
|
10.1
|
|
|
|
10.2
|
|
|
|
10.3
|
|
|
|
10.4
|
|
|
|
10.5
|
|
|
|
10.6
|
|
|
|
10.7
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.11
|
|
|
|
10.12
|
|
|
10.13
|
|
|
|
10.14
|
|
|
|
10.15
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32.1
|
|
|
|
101
|
|
|
I.
|
Introduction
|
II.
|
Eligibility
|
III.
|
Overall Structure
|
A.
|
A Plan participant’s target bonus award will be based upon the “guideline” or percentage of base salary for each eligible participant.
|
B.
|
Target bonus awards will be determined by performance during the fiscal year as measured by the following:
|
1.
|
Financial Objective
. 90% of a participant’s target bonus shall be based on the achievement of financial measures as described below (the “Financial Objective Target Bonus”).
|
a.
|
For career band 2 participants, the Financial Objective Target Bonus shall be based on the following financial measures in the proportions relative to the overall target bonus indicated in parentheses:
|
(1)
|
Attainment of AOI targets by the business to which the participant is assigned (40%);
|
(2)
|
Attainment of revenue targets by the business to which the participant is assigned (25%); and
|
(3)
|
Attainment of free cash flow targets by the business to which the participant is assigned (25%).
|
b.
|
For career band 3 participants, the Financial Objective Target Bonus shall be based on the following financial measures in the proportions relative to the overall target bonus indicated in parentheses:
|
(1)
|
Attainment of AOI targets by the business to which the participant is assigned. (50%); and
|
(2)
|
Attainment of revenue targets by the business to which the participant is assigned. (40%).
|
2.
|
Individual Objective
.
10% of a participants’ target bonus shall be based on individual or team measures the plan participant is expected to attain during the fiscal year (the “Individual Objective Target Bonus”).
|
C.
|
The apportionment of the target bonus award components is reflected in this diagram:
|
|
|
|
|
Target Bonus Award
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Objective (90%)
|
Individual Objective (10%)
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AOI
|
|
Revenue
|
|
Free Cash Flow
|
|
||||
(40% for Band 2 Participants; 50% for Band 3 Participants)
|
|
(25% for Band 2 Participants; 40% for Band 3 Participants)
|
|
(25% for Band 2 Participants; 0% for Band 3 Participants)
|
|
IV.
|
Determination of Bonus Targets - Financial Objective
|
A.
|
For purposes of determining Financial Objective Target Bonuses, financial measures are defined as follows:
|
1.
|
“
Revenue
”
means sales as reported internally to Corporate Accounting and used for external financial reporting.
|
2.
|
“
AOI”
means adjusted operating income inclusive of Corporate and other overhead allocations determined pursuant to the Corporation’s accounting policies and procedures.
|
3.
|
“
Free
Cash Flow
” means an amount equal to operating cash flow
minus
capital spending.
|
B.
|
If these definitions differ from those included within the final year-end financial statements of the business, the definitions which were used in establishing the relevant targets will be used to evaluate achievement under this Plan.
|
C.
|
In a limited number of cases and where business warrants, the financial measure targets and proportions relative to the overall target bonus award may be other than those shown here. All such changes, however, must be approved by the Chief Executive Officer in advance.
|
V.
|
Determination of Bonus Awards - Financial Objective
|
A.
|
For all financial measures, bonus awards under the financial objective component of this Plan (the “Financial Objective Bonus Award”) vary as financial measure targets are over or under achieved. The minimum bonus award, equal to 25% of the Financial Objective Target Bonus, is awarded provided a minimally acceptable "threshold" level of performance of financial measures is achieved (i.e., no bonus will be awarded for performance below the threshold for that metric.). Financial Objective Bonus Awards may increase from the minimum financial objective bonus award to the Financial Objective Target Bonus amount if financial measure targets are achieved
fully
and may increase up to a maximum ("ceiling") of 150% to 200% of the Financial Objective Bonus Target if performance increasingly exceeds the target levels.
|
B.
|
Financial Objective Bonus Awards for performance between threshold and ceiling will be computed by interpolating between either: (1) the threshold and target awards, or (2) the target and ceiling awards, as appropriate.
|
C.
|
The levels for threshold and maximum Financial Objective Bonus Awards (referred to as the "leverage curve"), may vary among organizations, reflecting financial volatility resulting from the magnitude of the unit's business plan. For example, a lower volatility business may begin to provide Financial Objective Bonus Awards at 90% of target attainment, while a higher volatility business may begin to provide Financial Objective Bonus Awards at 85% of target attainment.
|
VI.
|
Determination of Individual Objective and Related Bonus Awards
|
A.
|
Generally, individual measures will be established for each participant at the start of the fiscal year. The individual measures will not duplicate the measures of annual financial performance addressed under the financial objective of this Plan. Rather, they will address those concerns which most contribute to the business gaining a sustainable competitive advantage. Attainment of these individual measures is measured for and during the fiscal year for which they are set. Unplanned objectives that emerge during the fiscal year and which take priority over the planned objectives may be added (or substituted) as appropriate.
|
B.
|
Bonus awards under the individual objective component of this Plan (the “Individual Objective Bonus Award”) will be awarded at target if performance
fully
meets the target individual measures defined in the individual objective. If performance differs from these target measures, the Individual Objective Bonus Award will vary proportionally with performance, from 0% to 150% of the Individual Objective Target Bonus.
|
VII.
|
Total Plan Bonus Award.
|
VIII.
|
Payment of Bonus Awards
|
A.
|
Final Bonus Awards are paid (minus appropriate tax withholdings), and after taking into account any adjustments pursuant to the Plan, as soon as practicable after receipt of the audited fiscal year-end financial reports, but in no event more than 2.5 months after the end of the calendar year in which it was earned.
|
B.
|
Except in cases of voluntary or involuntary termination (discussed in 2 below), the following provisions apply:
|
1.
|
If a participant has worked at least 6 months, but less than the entire relevant fiscal year and is still employed at the end of the bonus (fiscal) year, the participant will receive a pro-rata share of the Final Bonus Award (e.g., if the participant has worked for 9 months in the relevant fiscal year, 75% of the Final Bonus Award will be payable).
|
2.
|
If the participant has served in two or more components or units covered by this plan, the Financial Objective Bonus Award and Individual Objective Bonus Award will be calculated on full year results for the portion of the year served in each component or unit.
|
3.
|
If the participant was promoted during the year and his or her guideline bonus amount changed, the Financial Objective Target Bonus and Individual Objective Target Bonus for such participant will be prorated. However, if the participant remains in the same position with essentially the same duties and responsibilities, and the participant's guideline amount changed during the fiscal year, the guideline amount at year end will be used in determining the Financial Objective Target Bonus and Individual Objective Target Bonus for the entire year.
|
C.
|
No Final Bonus Award is payable to a participant whose employment terminates, voluntarily or involuntarily, prior to completion of the bonus (fiscal) year except in the event that the participant becomes permanently disabled, retires having reached the age of 60 with at least five years of service or dies while employed. Exceptions in certain cases of involuntary termination may be granted with prior approval of the Chief Executive Officer of Aramark. If a participant becomes permanently disabled, retires having reached the age of 60 with at least five years of service, or dies while employed, he or she will be entitled to receive a pro-rata share of his or her Final Bonus Award at the same time as Final Bonus Awards are otherwise payable to active employees.
|
D.
|
A participant whose employment terminates after the close of the bonus year but before awards are paid will be eligible to receive the Financial Objective Bonus Award. Any Individual Objective Bonus Award in the case of such terminations may be payable at the discretion of the Chief Executive Officer of Aramark.
|
E.
|
In no case, however, will a Final Bonus Award be made to an individual whose employment is terminated at any time for “cause," as defined in the plan participant’s Agreement Relating to Employment and Post Employment Competition.
|
IX.
|
Deferral
|
X.
|
Administration
|
A.
|
This Plan is intended to be provide for compensation that is exempt from the requirements of Section 409A. The Chief Executive Officer of Aramark is the sole interpreter and arbiter of the provisions of this Plan and has the right to amend, withdraw, or revoke them before the beginning of any fiscal year or to grant specific exceptions.
|
B.
|
In administering this Plan, the Chief Executive Officer of Aramark has the final authority to adjust financial performance standards or actual results for unusual non-recurring income, expense or balance sheet items (e.g., non-operating gains/losses, acquisitions, divestitures) so that comparisons between actual and planned performance are consistent. Any Final Bonus Award of any plan participant who, as of the end of a given bonus (fiscal) year is a named executive officer of Aramark may not be greater than the maximum bonus amount that may be earned under the Aramark Senior Executive Annual Performance Bonus Plan or any successor plan, as in effect from time to time.
|
C.
|
Objectives and formulas for all portions of this Plan must be approved by the Chief Executive Officer of Aramark. He or she also must approve any unplanned objectives added during the year.
|
D.
|
Final Bonus Awards for the Chief Executive Officer, his direct reports and Aramark executive officers are reviewed and approved by the Compensation and Human Resources Committee (or any designated sub-committee thereof). Final Bonus Awards for other participants (other than executive officers) may be approved by the Chief Executive Officer or the Executive Vice President, Human Resources.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Aramark for the quarter ended
December 29, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ E
RIC
J. F
OSS
|
|
Eric J. Foss
|
|
Chairman, President and Chief Executive Officer
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Aramark for the quarter ended
December 29, 2017
;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
/s/ S
TEPHEN
P. B
RAMLAGE
, J
R
.
|
Stephen P. Bramlage, Jr.
|
Executive Vice President and
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
/s/ E
RIC
J. F
OSS
|
|
Eric J. Foss
|
|
Chairman, President and Chief Executive Officer
|
|
|
/s/ S
TEPHEN
P. B
RAMLAGE
, J
R
.
|
Stephen P. Bramlage, Jr.
|
Executive Vice President and Chief Financial Officer
|