Aramark

Previous wording

The following discussion and analysis of Aramark's (the "Company," "we," "our" and "us") financial condition and results of operations for the three months ended January 2, 2026 and December 27, 2024 should be read in conjunction with our audited consolidated financial statements and the notes to those statements for the fiscal year ended October 3, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on November 25, 2025.

Current wording

The following discussion and analysis of Aramark's (the "Company," "we," "our" and "us") financial condition and results of operations for the three and six months ended April 3, 2026 and March 28, 2025 should be read in conjunction with our audited consolidated financial statements and the notes to those statements for the fiscal year ended October 3, 2025 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on November 25, 2025.

Previous wording

Recent developments regarding tariffs and global trade have resulted in increased volatility and uncertainty for macroeconomic conditions. Given the uncertainty of tariff policy and the resulting impact on current and future macroeconomic conditions, we may see continued volatility in foreign currencies as well as fluctuating trends in global inflationary costs and market interest rates in the near term. We regularly evaluate and believe we take appropriate actions when necessary to mitigate the risk in these areas. These actions include management of operating costs, including supply chain initiatives and pricing actions, and managing interest rate risk through the use of interest rate swaps and other risk mitigation strategies.

Current wording

Recent developments related to the conflict in the Middle East and evolving tariff policies have increased volatility and uncertainty in the global macroeconomic environment. While we have not experienced material impacts to date, given this elevated level of uncertainty and its potential impact on current and future economic conditions, we may continue to experience fluctuations in global inflationary pressures and market interest rates, as well as volatility in foreign currency markets in the near term. We regularly monitor these conditions and believe we take appropriate actions, as necessary, to mitigate related risks. These actions include actively managing operating costs through supply chain initiatives and pricing strategies, as well as managing interest rate exposure through the use of interest rate swaps and other risk mitigation strategies.

Previous wording

The following table presents an overview of our results on a consolidated basis with the amount of and percentage change between periods for the three months ended January 2, 2026 and December 27, 2024 (in millions).

Current wording

The following tables present an overview of our results on a consolidated basis with the amount of and percentage change between periods for the three and six months ended April 3, 2026 and March 28, 2025 (in millions).

Previous wording

Revenue increased by approximately 6.1% or $279.4 million during the three month period of fiscal 2026 compared to the prior year period. The increase was primarily attributable to base business growth and net new business. Additionally, foreign currency translation favorably impacted revenue by 1.1%. The increase was partially offset by the estimated impact of the reduced number of operational service days in the first quarter of fiscal 2026 from the calendar shift related to the fifty-third week in fiscal 2025 (approximately 3%).

Current wording

During the three and six month periods of fiscal 2026, revenue increased by approximately 14.7% or $628.0 million and 10.3% or $907.5 million compared to the prior year periods, respectively. The increase was primarily attributable to base business growth and net new business. Additionally, foreign currency translation favorably impacted revenue by 2.4% and 1.7% for the three and six month periods, respectively. The increase for the three month period of fiscal 2026 was also due to the estimated benefit of the increased number of operational service days in the second quarter of fiscal 2026 from the calendar shift related to the fifty-third week in fiscal 2025 (approximately 3%).

Previous wording

The following table presents the components in cost of services provided (exclusive of depreciation and amortization) and as a percentage of revenue for the three months ended January 2, 2026 and December 27, 2024 (in millions).

Current wording

The following tables present the components in cost of services provided (exclusive of depreciation and amortization) and as a percentage of revenue for the three and six month periods ended April 3, 2026 and March 28, 2025 (in millions).

Previous wording

Cost of services provided (exclusive of depreciation and amortization) increased by $264.2 million during the three month period of fiscal 2026 compared to the prior year period, primarily driven by an increase in revenue as discussed above. Key drivers of the year-over-year increase include:

Current wording

Cost of services provided (exclusive of depreciation and amortization) increased by $561.2 million and $825.4 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively, principally attributable to the revenue growth described above. Key drivers of the year-over-year increase include:

Previous wording

•Food and support service costs increased by $63.6 million, primarily due to food and beverage costs associated with business growth, partially offset by supply chain efficiencies.

Current wording

•Food and support service costs increased by $180.5 million and $244.1 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively, primarily due to food and beverage costs associated with business growth, partially offset by supply chain efficiencies.

Previous wording

•Personnel costs rose by $170.5 million, reflecting overall business expansion, higher medical claims ($7.5 million) and a multiemployer pension plan withdrawal charge ($5.6 million). In addition, the calendar shift related to the fifty‑third week in fiscal 2025 resulted in a reduced number of operational service days during the current period. As a portion of personnel costs is fixed, these costs did not decrease in line with the lower level of service days, leading to an increase in personnel costs as a percentage of revenue compared to the prior year period.

Current wording

•Personnel costs rose by $217.5 million and $387.9 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively, reflecting overall business expansion and severance charges ($5.5 million). The increase was partially offset by lower medical costs ($6.9 million) during the three month period of fiscal 2026. Furthermore, the calendar shift related to the fifty‑third week in fiscal 2025 resulted in an increased number of operational service days during the three month period of fiscal 2026. As a portion of personnel costs is fixed, these costs did not increase in line with the higher level of service days, leading to a decrease in personnel costs as a percentage of revenue compared to the three month prior year period. The increase during the six month period was also attributable to a multiemployer pension plan withdrawal charge ($5.6 million).

Previous wording

•Other direct costs grew by $30.1 million, driven by business growth and a non-cash charge for the impairment of certain assets related to a business held-for-sale ($6.1 million). This increase was partially offset by the absence of a prior-year charge related to contingent consideration liabilities from acquisition earn-outs ($11.1 million) and lower commissions primarily within our Higher Education business due to the reduced number of operational service days in the first quarter of fiscal 2026 from the calendar shift related to the fifty-third week in fiscal 2025 ($8.1 million).

Current wording

•Other direct costs grew by $163.2 million and $193.4 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively, driven by business growth. The increase during the three and six month periods was also attributable to higher commissions ($51.3 million and $43.2 million, respectively), primarily within our Sports & Entertainment and Higher Education businesses. The increase during the six month period was also attributable to a non-cash charge for the impairment of certain assets related to a business held-for-sale ($6.1 million) that was partially offset by the absence of a prior-year charge related to contingent consideration liabilities from acquisition earn-outs ($11.1 million).

Previous wording

Depreciation and amortization expenses increased by $12.7 million during the three month period of fiscal 2026 compared to the prior year period. The increase was driven by a higher depreciation expense on property and equipment ($10.1 million) and higher amortization expense, primarily from acquisition related intangible assets ($2.6 million).

Current wording

Depreciation and amortization expenses increased by $15.1 million and $27.8 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively. The increase during the three and six month periods of fiscal 2026 was driven by a higher depreciation expense on property and equipment ($11.4 million and $21.5 million, respectively) and higher amortization expense, primarily from acquisition related intangible assets ($3.7 million and $6.3 million, respectively).

Previous wording

Selling and general corporate expenses increased by $2.3 million during the three month period of fiscal 2026 compared to the prior year period. The increase was primarily driven by higher share-based compensation expenses compared to the prior year period.

Current wording

Selling and general corporate expenses increased by $6.1 million and $8.4 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively. The increase was primarily driven by higher share-based compensation expense compared to the prior year periods.

Previous wording

Operating income increased by $0.2 million during the three month period of fiscal 2026 compared to the prior year period as a result of the aforementioned changes. The reduced number of operational service days from the calendar shift related to the fifty-third week in fiscal 2025 negatively impacted the first quarter of fiscal 2026 operating income by an estimated $25 million.

Current wording

Operating income increased by $45.6 million and $45.9 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively, as a result of the aforementioned changes. The increased number of operational service days from the calendar shift related to the fifty-third week in fiscal 2025 positively impacted the second quarter of fiscal 2026 operating income by an estimated $25 million.

Previous wording

Interest Expense, net, increased by $6.1 million during the three month period of fiscal 2026 compared to the prior year period due to recently executed interest rate swaps with higher fixed rates replacing maturing swaps that were entered into during a lower interest rate environment and higher borrowings on the Receivables Facilities. The increase was also due to the payment of $0.7 million of transaction costs and a $0.4 million non-cash loss for the write-off of unamortized deferred financing costs and discount, both relating to the repricing of the U.S. Term B-8 Loans due 2030. These increases were partially offset by lower interest expense resulting from refinancing of term loan and senior note balances and repayments on term loan balances.

Current wording

Interest Expense, net, decreased by $7.5 million and $1.3 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively. The decrease during the three and six month periods was due to the prior year payment of $5.8 million of transaction costs related to the refinancing of the United States dollar denominated Term B-8 Loans due 2030 (the “U.S. Term B-8 Loans due 2030”), the prior year $2.5 million non-cash loss for the write-off of unamortized deferred financing costs and discount on the United States dollar denominated Term B-4 Loans due 2027 (the “U.S. Term B-4 Loans due 2027”) and 5.000% Senior Notes due April 2025 Notes (the “5.000% 2025 Notes”) and lower interest expense resulting from the refinancing of term loan and senior note balances and repayments on term loan balances. The decrease during both the three and six month periods was partially offset by recently executed interest rate swaps with higher fixed rates replacing maturing swaps that were entered into during a lower interest rate environment and higher interest rates, in particular on the euro denominated Senior Notes. The decrease during the six month period was partially offset by a payment of $0.7 million of transaction costs and a $0.4 million non-cash loss for the write-off of unamortized deferred financing costs and discount, both relating to the repricing of the United States dollar denominated Term B-10 Loans due 2030.

Previous wording

The Provision for Income Taxes for the three month periods of fiscal 2026 and fiscal 2025 were recorded at an effective tax rate of 28.8% and 25.3%, respectively, resulting in an increase of $3.3 million. During the three months ended January 2, 2026, we recorded a valuation allowance to the “Provision for Income Taxes” on the Condensed Consolidated Statements of Income of $3.4 million against foreign tax credits, as it is more likely than not a tax benefit will not be realized (see Note 6 to the condensed consolidated financial statements).

Current wording

The Provision for Income Taxes for the three and six month periods of fiscal 2026 was recorded at an effective tax rate of 25.7% and 27.3%, respectively, resulting in an increase of $13.0 million and $16.3 million, respectively, compared to the prior year periods. The Provision for Income Taxes for the three and six month periods of fiscal 2025 was recorded at an effective tax rate of 26.6% and 25.8%, respectively. During the six months ended April 3, 2026, we recorded a valuation allowance to the “Provision for Income Taxes” on the Condensed Consolidated Statements of Income of $3.4 million against foreign tax credits, as it is more likely than not a tax benefit will not be realized (see Note 6 to the condensed consolidated financial statements).

Previous wording

The following table presents segment adjusted operating results for the three month periods of fiscal 2026 and fiscal 2025 (in millions)(1):

Current wording

The following tables present segment adjusted operating results for the three and six month periods of fiscal 2026 and fiscal 2025 (in millions)(1)(2):

Previous wording

FSS United States segment revenue increased by approximately 1.9% during the three month period of fiscal 2026 compared to the prior year period, primarily driven by base business growth and new business. Growth in the Business & Industry sector was attributable to new business wins and base business growth, while the Healthcare and Facilities & Other sectors benefited from continued base business growth. The Sports, Leisure & Corrections sector experienced growth primarily from new business. The increase in segment revenue was partially offset by the estimated impact of the reduced number of operational service days in the first quarter of fiscal 2026 compared to the prior year period from the calendar shift related to the fifty-third week in fiscal 2025 (approximately 3%). The impact of the calendar shift was most evident in the Education, Sports, Leisure & Corrections and Business & Industry sectors.

Current wording

FSS United States segment revenue increased by approximately 12.2% and 6.8% during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively, primarily driven by base business growth and net new business. Growth for both the three and six month periods in the Business & Industry, Healthcare and Education sectors was attributable to new business wins and base business growth, while the Sports, Leisure & Corrections benefited from continued base business growth. Furthermore, the increase in segment revenue during the three month period of fiscal 2026 was also attributable to the estimated benefit due to the increased number of operational service days from the calendar shift related to the fifty-third week in fiscal 2025 (approximately 4%).

Previous wording

The Education and Facilities & Other sectors had adjusted operating income margins over ten percent in both the three month period of fiscal 2026 and the prior year period. The Healthcare sector had high-single digit adjusted operating income margins in both the three month period of fiscal 2026 and the prior year period. The Business & Industry sector had mid-single digit adjusted operating income margins in both the three month period of fiscal 2026 and the prior year period. The Sports, Leisure & Corrections sector had low-single digit adjusted operating income margins in both the three month period of fiscal 2026 and the prior year period.

Current wording

The Facilities & Other sector had adjusted operating income margins over ten percent in both the three and six month periods of fiscal 2026 and the prior year periods. The Education sector had adjusted operating income margins over ten percent in both the three and six month periods of fiscal 2026 and the six month prior year period; the three month prior year period had a high-single digit adjusted operating income margin. The Healthcare sector had high-single digit adjusted operating income margins in both the three and six month periods of fiscal 2026 and the prior year periods. The Business & Industry sector had high-single digit adjusted operating income margins in both the three and six month periods of fiscal 2026; the prior year periods had mid-single digit adjusted operating income margins. The Sports, Leisure & Corrections sector had low-single digit adjusted operating income margins in both the three and six month periods of fiscal 2026 and the prior year periods.

Previous wording

Adjusted operating income decreased by $3.2 million during the three month period of fiscal 2026 compared to the prior year period. The decrease was primarily attributable to the estimated impact of the reduced number of operational service days in the first quarter of fiscal 2026 from the calendar shift related to the fifty-third week in fiscal 2025 (approximately $24 million) and higher costs related to medical claims ($7.5 million), largely offset by higher base business volume and strengthened supply chain economics from revenue growth.

Current wording

Adjusted operating income increased by $47.3 million and $44.2 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively. The increase during the three and six month periods was driven by higher base business volume and strengthened supply chain economics from revenue growth. The increase in the three month period of fiscal 2026 was also attributable to the estimated benefit due to the increased number of operational service days from the calendar shift related to the fifty-third week in fiscal 2025 (approximately $24 million), as well as lower medical costs ($6.9 million).

Previous wording

The following table presents segment adjusted operating results for the three month periods of fiscal 2026 and fiscal 2025 (in millions)(1):

Current wording

The following tables present segment adjusted operating results for the three and six month periods of fiscal 2026 and fiscal 2025 (in millions)(1)(2):

Previous wording

FSS International segment revenue increased by approximately 17.4% during the three month period of fiscal 2026 compared to the prior year period. The increase was primarily attributable to base business growth and net new business, driven largely by performance in the U.K., Chile, Germany and Spain and the favorable impact of foreign currency translation of approximately 4.1%. The increase was partially offset by the estimated impact of the reduced number of operational service days in the first quarter of fiscal 2026 from the calendar shift related to the fifty-third week in fiscal 2025 (approximately 1%).

Current wording

FSS International segment revenue increased by approximately 20.8% and 19.1% during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively. The increase was primarily attributable to base business growth and net new business, driven largely by performance in the U.K., Spain, Chile and Germany and the favorable impact of foreign currency translation (approximately 8.1% and 6.1% for the three and six month periods, respectively).

Previous wording

Adjusted operating income increased by $9.5 million during the three month period of fiscal 2026 compared to the prior year period. The increase was primarily attributable to higher base business volume and strengthened supply chain economics from revenue growth.

Current wording

Adjusted operating income increased by $10.7 million and $20.2 million during the three and six month periods of fiscal 2026 compared to the prior year periods, respectively. The increase was primarily attributable to higher base business volume, net new business and strengthened supply chain economics from revenue growth.

Previous wording

As of January 2, 2026, we had $439.6 million of cash and cash equivalents and $936.2 million of availability under our senior secured revolving credit facility. A significant portion of our cash and cash equivalents are held in mature, liquid geographies where we have operations. As of January 2, 2026, we had $1.1 billion of outstanding foreign currency borrowings.

Current wording

As of April 3, 2026, we had $475.7 million of cash and cash equivalents and $961.7 million of availability under our senior secured revolving credit facility. A significant portion of our cash and cash equivalents are held in mature, liquid geographies where we have operations. As of April 3, 2026, we had $1.1 billion of outstanding foreign currency borrowings.

Previous wording

Cash used in operating activities increased by $195.0 million during the three month period of fiscal 2026 compared to the prior year period. The increase was primarily driven by a greater use of cash from the change in operating assets and liabilities as compared to the prior year period ($159.3 million) and higher payments made to clients on contracts ($40.4 million).

Current wording

Cash used in operating activities increased by $50.7 million during the six month period of fiscal 2026 compared to the prior year period. The increase was primarily driven by a greater use of cash from the change in operating assets and liabilities as compared to the prior year period ($114.7 million) and higher payments made to clients on contracts ($64.5 million), partially offset by higher net income and non-cash gains and losses.

Previous wording

The unfavorable change in operating assets and liabilities compared to the prior year period was primarily due to:

Current wording

The increase in cash used in operating assets and liabilities compared to the prior year period was primarily due to:

Previous wording

•Receivables by $90.4 million, resulting in a higher use of cash due to base business growth, net new business and the timing of collections; and

Current wording

•Receivables by $91.0 million, resulting in a higher use of cash due to base business growth, net new business and the timing of collections;

Previous wording

The "Other operating activities" caption in both periods reflects a source of cash due to adjustments to net income related to non-cash gains and losses and adjustments to non-operating cash transactions. The source of cash in the three month period of fiscal 2026 was partially offset by a higher use of cash due to the timing of insurance payments.

Current wording

The "Other operating activities" caption in both periods reflects a source of cash due to adjustments to net income related to non-cash gains and losses and adjustments to non-operating cash transactions.

Previous wording

Cash used in investing activities was $77.1 million lower during the three month period of fiscal 2026 compared to the prior year period primarily due to lower acquisitions of certain businesses ($78.6 million).

Current wording

Cash used in investing activities was $166.0 million lower during the six month period of fiscal 2026 compared to the prior year period, primarily due to lower acquisitions of certain businesses ($156.9 million).

Previous wording

During the three month period of fiscal 2026, cash provided by financing activities was primarily impacted by borrowings under the Receivables Facility ($625.0 million) and borrowings under the revolving credit facility ($229.1 million). Cash provided by financing activities more than offset the repurchase of common stock through the share repurchase program and taxes paid by us when we withhold shares upon an employee's exercise or vesting of equity awards to cover income taxes ($41.3 million), payment of dividends and contingent consideration ($31.5 million and $27.1 million, respectively) and repayment of long-term borrowings ($25.5 million).

Current wording

During the six month period of fiscal 2026, cash provided by financing activities was primarily impacted by net borrowings under the Receivables Facility ($625.0 million) and net borrowings under the revolving credit facility ($140.4 million). Cash provided by financing activities more than offset the optional prepayment and repayment of long-term borrowings ($67.7 million and $19.1 million, respectively), the repurchase of common stock through the share repurchase program and taxes paid by us when we withhold shares upon an employee's exercise or vesting of equity awards to cover income taxes ($53.6 million and $12.7 million, respectively), payment of dividends ($63.1 million) and payment of contingent consideration ($33.7 million).

Previous wording

The following is a reconciliation of Net Income Attributable to ASI stockholders, which is a U.S. GAAP measure of ASI's operating results, to Covenant Adjusted EBITDA as defined in our debt agreements. The terms and related calculations are defined in the Credit Agreement and the indentures governing our senior notes. Covenant Adjusted EBITDA is a measure of ASI and its restricted subsidiaries only and does not include the results of Aramark.

Current wording

The following is a reconciliation of Net Income Attributable to ASI stockholders, which is a U.S. GAAP measure of ASI's operating results, to Covenant Adjusted EBITDA as defined in our Credit Agreement. The terms and related calculations are defined in the Credit Agreement. The calculation for the purpose of the indentures governing our senior notes is slightly different. Covenant Adjusted EBITDA is a measure of ASI and its restricted subsidiaries only and does not include the results of Aramark.

Previous wording

(3) Represents the annualizing of net EBITDA from certain acquisitions made during the period.

Current wording

(3) Represents the annualizing of net EBITDA from certain acquisitions made during the period and, for purposes of the Credit Agreement, the net benefit from cost savings initiatives ($16.3 million).

Previous wording

(4) "Other" includes adjustments to remove the impact attributable to the adoption of certain accounting standards that are made to the calculation in accordance with the Credit Agreement and indentures ($54.7 million), severance charges ($36.4 million), non-cash charges for the impairments of assets ($8.9 million), the impact of hyperinflation in Argentina ($5.6 million), multiemployer pension plan withdrawal charge ($5.6 million), merger and integration charges ($4.1 million), legal charges related to an antitrust review ($3.8 million) and other miscellaneous expenses.

Current wording

(4) "Other" includes adjustments to remove the impact attributable to the adoption of certain accounting standards that are made to the calculation in accordance with the Credit Agreement and indentures ($56.4 million), severance charges ($41.9 million), non-cash charges for the impairments of assets ($8.9 million), multiemployer pension plan withdrawal charge ($5.6 million), merger and integration charges ($4.9 million), the impact of hyperinflation in Argentina ($4.0 million), legal charges related to an antitrust review ($3.8 million) and other miscellaneous expenses.

Previous wording

Our business activities do not include the use of unconsolidated special purpose entities and there are no significant business transactions that have not been reflected in the accompanying condensed consolidated financial statements. We insure portions of our risk related to general liability, automobile liability, workers’ compensation liability claims as well as certain property damage risks through a wholly owned captive insurance subsidiary (the "Captive") as part of our approach to risk finance. The Captive is subject to the regulations within its domicile of Bermuda, including regulations established by the Bermuda Monetary Authority (the "BMA") relating to levels of liquidity and solvency as such concepts are defined by the BMA. The Captive was in compliance with these regulations as of January 2, 2026. These regulations may have the effect of limiting our ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of our general liability, automobile liability, workers’ compensation liability, certain property damage and related Captive costs. As of January 2, 2026 and October 3, 2025, cash and cash equivalents at the Captive were $144.5 million and $133.5 million, respectively.

Current wording

Our business activities do not include the use of unconsolidated special purpose entities and there are no significant business transactions that have not been reflected in the accompanying condensed consolidated financial statements. We insure portions of our risk related to general liability, automobile liability, workers’ compensation liability claims as well as certain property damage risks through a wholly owned captive insurance subsidiary (the "Captive") as part of our approach to risk finance. The Captive is subject to the regulations within its domicile of Bermuda, including regulations established by the Bermuda Monetary Authority (the "BMA") relating to levels of liquidity and solvency as such concepts are defined by the BMA. The Captive was in compliance with these regulations as of April 3, 2026. These regulations may have the effect of limiting our ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of our general liability, automobile liability, workers’ compensation liability, certain property damage and related Captive costs. As of April 3, 2026 and October 3, 2025, cash and cash equivalents at the Captive were $144.0 million and $133.5 million, respectively.