Aramark (ARMK)

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of Aramark's (the "Company," "we," "our" and "us") financial condition and results of operations for the fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022 should be read in conjunction with our audited consolidated financial statements and the notes to those statements.

Our discussion contains forward-looking statements, such as our plans, objectives, opinions, expectations, anticipations, intentions and beliefs, that are based upon our current expectations but that involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in those forward-looking statements as a result of a number of factors, including those set forth under "Risk Factors," "Special Note About Forward-looking Statements" and "Business" sections and elsewhere in this Annual Report on Form 10-K ("Annual Report"). In the following discussion and analysis of financial condition and results of operations, certain financial measures may be considered “non-GAAP financial measures” under the Securities and Exchange Commission ("SEC") rules. These rules require supplemental explanation and reconciliation, which is provided elsewhere in this Annual Report.

Overview

We are a leading global provider of food and facilities services to education, healthcare, business & industry and sports, leisure & corrections clients. Our largest market is the United States, which is supplemented by an additional 15-country footprint. We also provide our services on a more limited basis in several additional countries and in offshore locations. Through our established brand, broad geographic presence and employees, we anchor our business in our partnerships with thousands of clients. Through these partnerships we serve millions of consumers including students, patients, employees, sports fans and guests worldwide.

We operate our business in two geographic reportable segments:

•Food and Support Services United States ("FSS United States") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities within the United States.

•Food and Support Services International ("FSS International") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities outside of the United States with the largest operations within Canada, Chile, China, Germany, Spain and the United Kingdom.

Our operations focus on serving clients in five principal sectors: Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other. Our FSS International reportable segment provides a similar range of services as those provided to our FSS United States clients and operates in the same sectors. Administrative expenses not allocated to our reportable segments are presented separately as corporate expenses.

Current Business Environment

We continue to see improving inflation trends where inflationary costs in product, energy and labor have moderated over fiscal 2024, particularly in the United States. In addition, we continue to see elevated market interest rates and significant changes in foreign currencies. We expect these conditions to continue in the near-term, and we regularly evaluate and believe we take appropriate actions to mitigate 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.

Sale of San Antonio Spurs NBA Franchise Equity Investment

During fiscal 2024 and fiscal 2023, we sold our ownership interest in the San Antonio Spurs NBA franchise for $101.2 million and $98.2 million, respectively, in cash in taxable transactions resulting in a pre-tax gain of $25.1 million ($19.6 million gain net of tax) in fiscal 2024 and a pre-tax loss of $1.1 million ($2.2 million loss net of tax) in fiscal 2023. See Note 1 to the audited consolidated financial statements.

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Separation and Distribution of Aramark Uniform and Career Apparel

On September 30, 2023, we completed the separation and distribution of our Aramark Uniform and Career Apparel ("Uniform") segment into an independent publicly traded company, Vestis Corporation ("Vestis"). The separation of our Uniform segment was structured as a tax free spin-off, which occurred by way of a pro rata distribution to Aramark stockholders. Each of the Aramark stockholders received one share of Vestis common stock for every two shares of Aramark common stock held of record as of the close of business on September 20, 2023. Vestis is now an independent public company under the symbol “VSTS” on the NYSE. The historical results of the Uniform segment have been reflected as discontinued operations in our audited consolidated financial statements for all periods prior to the separation and distribution. Assets and liabilities associated to the Uniform segment are classified as assets and liabilities of discontinued operations in our audited Consolidated Balance Sheet as of September 29, 2023. Additional disclosures regarding the separation and distribution are provided in Note 2 to the audited consolidated financial statements.

Sale of AIM Services Co., Ltd Equity Investment

During fiscal 2023, we sold our 50% ownership interest in AIM Services Co., Ltd., a leading Japanese food services company, to Mitsui & Co., Ltd. for $535.0 million in cash in a taxable transaction resulting in a pre-tax gain on sale of this equity investment of $377.1 million ($278.7 million gain net of tax) (see Note 1 to the audited consolidated financial statements).

Acquisition of Union Supply

During fiscal 2022, we completed the acquisition of Union Supply Group Inc. ("Union Supply"), a commissary goods and services supplier, for cash consideration of $199.6 million, plus contingent consideration (see Note 3 and Note 17 to the audited consolidated financial statements).

Sources of Revenue

Our clients engage us, generally through written contracts, to provide our services at their locations. Depending on the type of client and service, we are paid either by our client or directly by the customer to whom we have been provided access by our client. We typically use either profit and loss contracts or client interest contracts. These contracts differ in their provision for the amount of financial risk we bear and, accordingly, the potential compensation, profits or fees we may receive. Under profit and loss contracts, we receive all of the revenue from, and bear all of the expenses of, the provision of our services at a client location. For fiscal 2024, approximately two-thirds of our revenue was derived from profit and loss contracts. Client interest contracts include management fee contracts, under which our clients reimburse our operating costs and pay us a management fee, which may be calculated as a fixed dollar amount or a percentage of revenue or operating costs. Some management fee contracts entitle us to receive incentive fees based upon our performance under the contract, as measured by factors such as revenue, operating costs and customer satisfaction surveys. For fiscal 2024, approximately one-third of our revenue was derived from client interest contracts.

Costs and Expenses

Our costs and expenses are comprised of cost of services provided (exclusive of depreciation and amortization), depreciation and amortization and selling and general corporate expenses. Cost of services provided (exclusive of depreciation and amortization) consists of direct expenses associated with our operations, which includes food costs, wages, other labor-related expenses (including workers' compensation, severance, state unemployment insurance and federal or state mandated health benefits and other healthcare costs), insurance, fuel, utilities, clothing and equipment. Direct expense related to food costs within cost of services provided (exclusive of depreciation and amortization) are offset by rebates, vendor allowances and volume discounts. Depreciation and amortization expenses mainly relate to assets used in generating revenue. Selling and general corporate expenses include sales commissions, severance, share-based compensation and other unallocated costs related to administrative functions including finance, legal and human resources.

Interest Expense, net

Interest Expense, net, relates primarily to interest expense on long-term borrowings. Interest Expense, net also includes third-party costs associated with long-term borrowings that were capitalized and are being amortized over the term of the borrowing.

Provision for Income Taxes

The Provision for Income Taxes represents federal, foreign, state and local income taxes. Our effective tax rate differs from the statutory United States income tax rate due to the effect of state and local income taxes, tax rates in foreign jurisdictions, tax credits and certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, the geographical mix of earnings, state and local income taxes, tax audit settlements, share-based award exercise activity and enacted tax legislation, including certain business tax credits. Changes in judgment due to the evaluation of new information resulting in the recognition, derecognition or remeasurement of a tax position taken in a prior annual period are recognized separately in the quarter of the change.

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Foreign Currency Fluctuations

The impact from foreign currency translation assumes constant foreign currency exchange rates based on the rates in effect for the prior year period being used in translation for the comparable current year period. We believe that providing the impact of fluctuations in foreign currency rates on certain financial results can facilitate analysis of period-to-period comparisons of business performance.

Fiscal Year

Our fiscal year is the fifty-two or fifty-three week period which ends on the Friday nearest to September 30th. The fiscal years ended September 27, 2024, September 29, 2023 and September 30, 2022 were each a fifty-two week period.

Results of Operations

Fiscal 2024 Compared to Fiscal 2023

The following tables present an overview of our results on a consolidated and segment basis with the amount of and percentage change between periods for the fiscal years 2024 and 2023 (dollars in millions).

(1) As a percentage of total revenue, FSS United States represented 72.3% and 72.9% and FSS International represented 27.7% and 27.1% for fiscal 2024 and fiscal 2023, respectively.

Consolidated Overview

Revenue increased by 8.2% during fiscal 2024 compared to the prior year period, which was primarily attributable to base business growth, including volume growth and contract price increases, and net new business. Foreign currency translation unfavorably impacted revenue during fiscal 2024 by 1.7%.

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The following table presents the cost of services provided (exclusive of depreciation and amortization) by segment and as a percent of revenue for fiscal 2024 and fiscal 2023.

The following table presents the percentages attributable to the components in cost of services provided (exclusive of depreciation and amortization) for fiscal 2024 and fiscal 2023.

(1) Personnel costs decreased as a percentage of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2024 compared to the prior year period due to other direct costs increasing at a higher proportion as compared to personnel costs, lower net severance charges ($19.9 million) and moderation of labor inflationary costs.

(2) Other direct costs represented a higher proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2024 compared to the prior year period driven by increased payments made to clients related to business volume growth in the current year. In addition, fiscal 2024 and fiscal 2023 were impacted by non-cash income related to the reduction of contingent consideration liabilities related to acquisition earn outs, net of expense ($8.2 million and $85.7 million, respectively) (see Note 17 to the audited consolidated financial statements).

Operating income increased by $81.5 million during fiscal 2024 compared to the prior year period, which was driven by base business volume growth, cost management, improved supply chain economics and favorable recovery of inflationary costs as compared to the prior year period. The increase in operating income was also attributable to lower net severance charges ($19.9 million), prior year non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements) and lower share-based compensation expense ($13.7 million) (see Note 13 to the audited consolidated financial statements).

These increases in operating income more than offset:

•lower non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($77.5 million) (see Note 17 to the audited consolidated financial statements);

•prior year income from proceeds associated with possessory interest at one of the National Park sites ($36.3 million) (see Note 1 to the audited consolidated financial statements);

•higher personnel costs from incentive expenses related to the annual bonus;

•lower income related to favorable loss experience under our general liability, automobile liability and workers' compensation liability programs when compared to the prior year ($21.1 million);

•non-cash inventory adjustment based on expected usage for certain products within the Corrections business ($18.2 million);

•prior year labor related tax credits provided from governmental assistance programs ($12.5 million); and

•negative impact of foreign currency translation ($12.0 million).

During fiscal 2024, we sold our remaining equity investment ownership interest in the San Antonio Spurs NBA franchise in a taxable transaction resulting in a pre-tax gain on sale of this equity investment of $25.1 million, which is included in "Gain on Equity Investments, net" on the Consolidated Statements of Income (see Note 1 to the audited consolidated financial statements).

During fiscal 2023, we recognized a $377.1 million pre-tax gain on the sale of our 50% ownership interest in AIM Services Co., Ltd., which was partially offset by a $1.1 million pre-tax loss from the sale of a portion of our equity investment in the San

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Antonio Spurs NBA franchise. The net amount of these transactions is included in "Gain on Equity Investments, net" on the Consolidated Statements of Income (see Note 1 to the audited consolidated financial statements).

Interest Expense, net, decreased 16.2% during fiscal 2024 compared to the prior year period. The decrease was primarily due to lower interest expense related to the repayment of the 6.375% Senior Notes due May 1, 2025 ("6.375% 2025 Notes"). Additionally, the decrease was partially offset by the payment of a $23.9 million call premium, $8.3 million of higher non-cash losses for the write-off of unamortized deferred financing costs and transaction costs related to the refinancing and repricing transactions in fiscal 2024 (see Note 6 to the audited consolidated financial statements) and higher borrowings on the Receivables Facility throughout fiscal 2024.

The Provision for Income Taxes for fiscal 2024 and fiscal 2023 was recorded at an effective tax rate of 28.2% and 20.7%, respectively. The higher effective tax rate in the current year compared to the prior year was driven by prior year favorable tax effects from the sale of our equity investment in AIM Services Co., Ltd. (see Note 1 to the audited consolidated financial statements) and a higher prior year reversal of a portion of the Union Supply contingent consideration liability (see Note 17 to the audited consolidated financial statements), as the majority of the gains from these transactions were not subject to tax.

Segment Results

FSS United States Segment

The FSS United States reportable segment consists of five sectors which have similar economic characteristics and comprise a single operating segment. The five sectors of the FSS United States reportable segment are Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other.

Revenue for each of these sectors is summarized as follows (in millions):

(1) In fiscal 2024, management began reporting results for healthcare facility services within "Healthcare," whereas the results were previously reported within "Facilities & Other." As such, the "Healthcare" and "Facilities & Other" results for the fiscal year ended September 29, 2023 were recast to reflect this change.

The Facilities & Other and Healthcare sectors had high-single digit operating income margins, consistent with prior year. The Education sector had high-single digit operating income margins compared to mid-single digit operating income margins in the prior year. The Sports, Leisure & Corrections sector had mid-single digit operating income margins, consistent with prior year. The Business & Industry sector had mid-single digit operating income margins compared to low-single digit operating income margins in the prior year.

FSS United States segment revenue increased by approximately 7.3% during fiscal 2024 compared to the prior year period. The increase was primarily attributable to base business growth, including higher volume within our Business & Industry and Sports, Leisure & Corrections sectors. Additionally, contract price increases, especially within our Higher Education and Corrections businesses, contributed to year-over-year growth. The Facilities & Other sector increase was attributable to base business growth, which was partially offset by lost business occurring late in fiscal 2024. The Healthcare sector decrease was primarily attributable to portfolio optimization occurring late in fiscal 2023.

Operating income increased by $9.9 million during fiscal 2024 compared to the prior year period. The increase was attributable to:

•base business volume growth, cost management and improved supply chain economics;

•favorable recovery of inflationary costs as compared to prior year period;

•prior year non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements); and

•prior year non-cash charges related to information technology assets ($8.2 million).

These increases in operating income more than offset the following:

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•lower non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($77.5 million) (see Note 17 to the audited consolidated financial statements);

•prior year income from proceeds associated with possessory interest at one of the National Park sites ($36.3 million) (see Note 1 to the audited consolidated financial statements);

•lower income related to favorable loss experience under our general liability, automobile liability and workers' compensation liability programs ($21.1 million);

•higher personnel costs from incentive expenses related to the annual bonus; and

•non-cash inventory adjustment based on expected usage for certain products within the Corrections business ($18.2 million).

FSS International Segment

FSS International segment revenue increased by approximately 10.6% during fiscal 2024 compared to the prior year period. The increase was primarily attributable to base business growth, including volume growth and contract price increases, and net new business growth. The growth in revenue was offset by the unfavorable impact of foreign currency translation by 6.3%.

Operating income increased by $72.8 million during fiscal 2024 compared to the prior year period. The increase was mainly attributable to the volume growth in base business, net new business and improved supply chain economics. The increase was also attributable to lower net severance charges ($30.0 million), a prior year non-cash charge for the impairment of certain assets related to a business held-for-sale ($5.2 million) and lower currency translation losses from Argentina hyperinflation ($5.0 million) (see Note 1 to the audited consolidated financial statements). These increases in operating income more than offset the following:

•prior year labor related tax credits provided from governmental assistance programs ($12.5 million);

•unfavorable impact of foreign currency translation ($11.6 million);

•decline in profit related to the sale of our 50% ownership interest in AIM Services Co., Ltd.;

•charges related to a ruling on a foreign tax matter ($6.8 million); and

•higher personnel costs from incentive expenses related to the annual bonus.

Corporate

Corporate expenses, those administrative expenses not allocated to the business segments, increased by $1.2 million during fiscal 2024 compared to the prior year period. The increase was attributable to higher expenses related to the separation and distribution of the Uniform segment ($9.1 million) (see Note 2 to the audited consolidated financial statements) and higher personnel costs from incentive expenses related to the annual bonus, partially offset by lower share-based compensation expense ($13.7 million) compared to the prior year period (see Note 13 to the audited consolidated financial statements).

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Fiscal 2023 Compared to Fiscal 2022

The following tables present an overview of our results on a consolidated and segment basis with the amount of and percentage change between periods for the fiscal years 2023 and 2022 (dollars in millions).

*** Not meaningful

(1) As a percentage of total revenue, FSS United States represented 72.9% and 73.3% and FSS International represented 27.1% and 26.7% for fiscal 2023 and fiscal 2022, respectively.

Consolidated Overview

Revenue increased by 17.5% during fiscal 2023 compared to fiscal 2022, which was primarily attributable to growth in base business, including pricing pass-throughs, and net new business. In addition, the Union Supply acquisition contributed an additional 1.5% of revenue in fiscal year 2023 compared to fiscal year 2022. Foreign currency translation unfavorably impacted revenue during fiscal 2023 by 1.4%.

The following table presents the cost of services provided (exclusive of depreciation and amortization) by segment and as a percent of revenue for fiscal 2023 and fiscal 2022.

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The following table presents the percentages attributable to the components in cost of services provided (exclusive of depreciation and amortization) for fiscal 2023 and fiscal 2022.

(1) Food and support service costs represented a higher proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to fiscal 2022 mainly from product cost inflation and volume increases due to revenue growth.

(2) Personnel costs decreased as a percentage of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to fiscal 2022 due to food and support service costs increasing at a higher proportion as compared to personnel costs.

(3) Other direct costs represented a lower proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to fiscal 2022 driven by food and support service costs increasing at a higher proportion as compared to other direct costs. Fiscal 2023 and fiscal 2022 were impacted by non-cash income related to the reduction of contingent consideration liabilities related to acquisition earn outs, net of expense ($85.7 million and $15.1 million, respectively) (see Note 17 to the audited consolidated financial statements).

Operating income increased by $209.6 million during fiscal 2023 compared to fiscal 2022, which was driven by base business growth, including volume recovery from COVID-19, and effective cost management. The increase in operating income also benefited from higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 17 to the audited consolidated financial statements), from higher income related to favorable loss experience under our general liability, automobile liability and workers' compensation liability programs in fiscal 2023 when compared to fiscal 2022 ($19.1 million) and higher income from proceeds associated with possessory interest at one of the National Park sites in fiscal 2023 when compared to fiscal 2022 ($17.3 million) (see Note 1 to the audited consolidated financial statements).

These increases in operating income more than offset:

•increased inflationary costs in product, energy and labor;

•greater labor related tax credits provided from governmental assistance programs in fiscal 2022 as compared to fiscal 2023 ($24.1 million);

•impairment charges of operating lease right-of-use assets and property and equipment and other costs related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements);

•higher expenses related to the spin-off of the Uniform segment ($14.8 million);

•higher net severance charges ($13.2 million); and

•negative impact of foreign currency translation ($9.6 million).

During fiscal 2023, we recognized a $377.1 million pre-tax gain on the sale of our 50% ownership interest in AIM Services Co., Ltd., which was partially offset by a $1.1 million pre-tax loss from the sale of a portion of our equity investment in the San Antonio Spurs NBA franchise. The net amount of these transactions is included in "Gain on Equity Investments, net" on the Consolidated Statements of Income (see Note 1 to the audited consolidated financial statements).

Interest Expense, net increased 18.8% during fiscal 2023 compared to fiscal 2022. The increase was primarily due to higher interest rates related to our senior secured term loan facilities, our Receivables Facility and our revolving credit facility.

The Provision for Income Taxes for fiscal 2023 and fiscal 2022 was recorded at an effective tax rate of 20.7% and 17.9%, respectively. During fiscal 2023 and fiscal 2022, we recorded an income tax benefit of $3.8 million and $8.5 million, respectively, for the reversal of a valuation allowance at a subsidiary in the FSS International segment driven by our ability to utilize deferred tax assets based on future taxable income expected due to business acquisitions. We also recorded a benefit to

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the Provision for Income Taxes of $3.8 million during fiscal 2022 due to a state tax law change. The effective tax rate in fiscal 2023 was benefited by the favorable tax effects from the sale of our equity investment in AIM Services Co., Ltd. (see Note 1 to the audited consolidated financial statements) and the reversal of a portion of the Union Supply contingent consideration liability (see Note 17 to the audited consolidated financial statements), as the majority of the gains from these transactions were not subject to tax.

Segment Results

FSS United States Segment

The FSS United States reportable segment consists of five sectors which have similar economic characteristics and comprise a single operating segment. The five sectors of the FSS United States reportable segment are Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other.

Revenue for each of these sectors is summarized as follows (in millions):

(1) In fiscal 2024, management began reporting results for healthcare facility services within "Healthcare," whereas the results were previously reported within "Facilities & Other." As such, the "Healthcare" and "Facilities & Other" results for the fiscal years ended September 29, 2023 and September 30, 2022 were recast to reflect this change.

The Healthcare and Facilities & Other sectors had high-single digit operating income margins, consistent in both fiscal 2023 and fiscal 2022. The Education and Sports, Leisure & Corrections sectors had mid-single digit operating income margins, consistent in both fiscal 2023 and fiscal 2022. The Business & Industry sector had low-single digit operating income margins in fiscal 2023 compared to negative low-single digit operating income margins in fiscal 2022. During the COVID-19 pandemic and in following periods, operating income margin in certain sectors within the FSS United States reportable segment have differed from our otherwise historical patterns, particularly in the Business & Industry sector.

FSS United States segment revenue increased by approximately 16.9% during fiscal 2023 compared to fiscal 2022. The increase was primarily attributable to base business growth, including contract price increases mainly within the Corrections and Higher Education businesses, and net new business growth. The Sports, Leisure & Corrections sector increased due to higher per capita customer spending in stadiums and arenas and the acquisition of Union Supply, which contributed an additional 2.0% of revenue during fiscal 2023 as compared to fiscal 2022. The Business & Industry sector increased due to client personnel continuing to return to office locations.

Operating income increased by $214.9 million during fiscal 2023 compared to fiscal 2022. The increase was attributable to:

•base business growth, including volume recovery from COVID-19, and effective cost management;

•higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 17 to the audited consolidated financial statements);

•higher income related to favorable loss experience under our general liability, automobile liability and workers' compensation liability programs when compared to fiscal 2022 ($19.1 million);

•higher income from proceeds associated with possessory interest at one of the National Park sites when compared to fiscal 2022 ($17.3 million) (see Note 1 to the audited consolidated financial statements); and

•higher income attributed to the Union Supply acquisition as compared to fiscal 2022 ($10.6 million).

These increases in operating income more than offset the following:

•increased inflationary costs in food and labor;

•non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements); and

•non-cash charge for the impairment of computer software assets ($8.2 million).

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FSS International Segment

FSS International segment revenue increased by approximately 19.3% during fiscal 2023 compared to fiscal 2022. The increase was primarily attributable to base business growth, including contract price increases, and net new business growth. The growth in revenue was offset by the unfavorable impact of foreign currency translation by 5.0%.

Operating income increased by $2.0 million during fiscal 2023 compared to fiscal 2022. The increase was attributable to growth in base and net new business and lower personnel costs from headcount reductions taken during the second quarter of fiscal 2023 and late fiscal 2022. These increases in operating income more than offset the following:

•increased inflationary costs in product and labor;

•greater labor related tax credits provided from governmental assistance programs in fiscal 2022 as compared to fiscal 2023 ($24.1 million);

•higher net severance charges ($18.0 million);

•favorable impact related to a client contract dispute in fiscal 2022 ($9.6 million);

•unfavorable impact of foreign currency translation ($7.8 million);

•decline in profit related to the sale of our 50% ownership interest in AIM Services Co., Ltd.;

•higher currency translation losses from Argentina hyperinflation ($7.0 million) (see Note 1 to the audited consolidated financial statements); and

•non-cash charges for the impairment of certain assets related to a business that was sold ($5.2 million).

Corporate

Corporate expenses, those administrative expenses not allocated to the business segments, increased by $7.3 million during fiscal 2023 compared to fiscal 2022. The increase in corporate expenses was attributable to higher expenses related to the separation and distribution of the Uniform segment compared to prior year period ($14.8 million). These increases in corporate expenses were partially offset by lower share-based compensation expenses ($6.0 million) when compared to fiscal 2022 (see Note 13 to the audited consolidated financial statements).

Liquidity and Capital Resources

Overview

Our principal sources of liquidity are cash generated from operating activities, funds from borrowings, investments in marketable securities and existing cash on hand. As of September 27, 2024, we had $672.5 million of cash and cash equivalents, $42.3 million of marketable securities, $1,341.6 million of availability under our senior secured revolving credit facility and $600.0 million of availability under the Receivables Facility. A significant portion of our cash and cash equivalents are held in mature, liquid geographies where we have operations. As of September 27, 2024, there were $733.3 million of outstanding foreign currency borrowings. As of September 27, 2024, the 5.000% Senior Notes due April 1, 2025 and 3.125% Senior Notes due April 1, 2025 mature within one year. We intend to repay, redeem or otherwise refinance the outstanding obligations related to these securities.

On August 2, 2024, we entered into Amendment No. 15 to the Credit Agreement, which refinanced and replaced our approximately $1.2 billion multi-currency revolving credit facility and approximately $225 million Term A Loans due April 2026 into an amended $1.4 billion multi-currency revolving credit facility and $500 million Term A Loans, extending the maturity to August 2029. In addition, Amendment No. 15 increases the revolving credit facility capacity by approximately $250 million and reduces the applicable margin. We utilized the net proceeds from the increased principal amount of Term A Loans to reduce the outstanding revolving credit facility balance by approximately $275 million (see Note 6 to the audited consolidated financial statements).

On November 5, 2024, the Board of Directors approved a share repurchase program under which we are authorized to repurchase up to $500 million of Aramark's outstanding common stock. The share repurchase program does not have a fixed expiration date.

We believe that our cash and cash equivalents, marketable securities and availability under our revolving credit facility and Receivables Facility will be adequate to meet anticipated cash requirements for the foreseeable future to fund working capital, capital spending, debt service obligations, refinancings, dividends and other cash needs. We also have flexibility to optimize working capital and defer certain capital expenditures as appropriate without a material impact to the business. We believe that our assumptions used to estimate our liquidity and working capital requirements are reasonable. For additional information regarding the risks associated with our liquidity and capital resources, see Part I, Item 1A, "Risk Factors."

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The table below summarizes our cash activity (in millions):

Reference to the audited Consolidated Statements of Cash Flows will facilitate understanding of the discussion that follows.

Fiscal 2024 Compared to Fiscal 2023

Cash Flows Provided by Operating Activities

Cash provided by operating activities increased by $214.9 million during fiscal 2024 compared to the prior year period. The change was driven by higher net income, inclusive of the add-back of non-cash gains and losses and adjustments to non-operating cash transactions, in fiscal 2024 compared to the prior year period, as discussed in "Results of Operations" above. Additionally, cash provided by operating activities was favorably impacted by the change in operating assets and liabilities compared to the prior year period by $33.9 million, which was primarily due to:

•Receivables by $78.1 million, resulting in a lower use of cash during fiscal 2024 compared to the prior year period due to higher revenue growth in the prior year period as compared to fiscal 2024 and timing of collections; and

•Inventories by $31.5 million, resulting in a lower use of cash during fiscal 2024 compared to the prior year period due to improved inventory management in the Sports, Leisure & Corrections sector.

These changes in operating assets and liabilities more than offset accrued expenses by $72.8 million resulting in a lower source of cash during fiscal 2024 compared to the prior year period primarily due to the increase in income tax payments, higher commission payments in our Sports & Entertainment business, timing of interest payments on lower borrowings, lower advances received in our Higher Education business, the timing of insurance and other payments; partially offset by lower payments related to the annual bonus and timing of payroll taxes.

During fiscal 2024 and fiscal 2023, we received proceeds of $6.5 million and $21.4 million, respectively, related to favorable loss experience in older insurance years under our general liability, automobile liability and workers' compensation programs. "Payments made to clients on contracts" generated a higher use of cash during fiscal 2024 compared to the prior year period primarily due to contract renewals and new business. The "Other operating activities" caption in both periods reflects adjustments to net income in the current year and prior year periods related to non-cash gains and losses and adjustments to non-operating cash transactions.

Cash Flows (Used in) Provided by Investing Activities

The net cash flows used in investing activities during fiscal 2024 was primarily impacted by purchases of property and equipment and other ($427.4 million), acquisitions of certain businesses ($148.7 million) and purchases of United States Treasury securities related to our captive insurance subsidiary ($113.3 million), partially offset by proceeds from the maturity of United States Treasury securities related to our captive insurance subsidiary ($186.4 million) and proceeds from sale of equity investments ($101.2 million) (see Note 1 to the audited consolidated financial statements).

The net cash flows provided by investing activities during fiscal 2023 was primarily impacted by proceeds from the sales of equity investments ($633.2 million) (see Note 1 to the audited consolidated financial statements) and proceeds from the maturity of United States Treasury securities related to our captive insurance subsidiary ($80.0 million), partially offset by purchases of property and equipment and other ($383.5 million), purchases of United States Treasury securities related to our captive insurance subsidiary ($110.0 million) and acquisitions of certain businesses ($50.2 million).

The "Other investing activities" caption during fiscal 2023 includes $37.6 million of proceeds received relating to possessory interest at one of the National Park sites within our Sports, Leisure & Corrections sector.

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Cash Flows (Used in) Provided by Financing Activities

During fiscal 2024, cash used in financing activities was impacted by the following:

•repayment of the 6.375% 2025 Notes ($1,500.0 million);

•repayment of foreign denominated term loans due 2026 ($259.4 million);

•repayments under the revolving credit facility ($166.1 million); and

•payments of dividends ($99.9 million).

Cash used in financing activities more than offset proceeds from the issuance of new domestic and foreign term loans due 2029 ($499.1 million).

See Note 6 to the audited consolidated financial statements for additional information on borrowing activities during fiscal 2024.

During fiscal 2023, cash provided by financing activities was impacted by the following:

•distribution from Vestis prior to the separation and distribution ($1,456.7 million);

•proceeds from issuance of new United States Term B-6 Loans due 2030 ($1,089.0 million); and

•borrowings under the revolving credit facility ($101.4 million).

Cash provided by financing activities more than offset cash used in the following:

•repayments of United States Term B-3 Loans due 2025 ($1,664.8 million);

•payments of dividends ($114.6 million);

•repayment of borrowing under the Receivables Facility ($104.9 million); and

•repayment of yen denominated term loans due 2026 ($63.0 million).

The "Other financing activities" caption also reflects a use of cash during fiscal 2024 and fiscal 2023, primarily related to taxes paid by us when we withhold shares upon an employee's exercise or vesting of equity awards to cover income taxes. Fiscal 2024 also includes the payment of a call premium on the 6.375% 2025 Notes ($23.9 million) and debt issuance costs mainly related to the refinancing of the revolving credit facility and Term A Loans ($8.5 million). Fiscal 2023 also includes debt issuance costs of $8.2 million related to United States Term B-6 Loans due 2030.

We intend to continue to pay cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements, business prospects and other factors that our Board of Directors may deem relevant. However, the payment of any future dividends will be at the discretion of our Board of Directors and our Board of Directors may, at any time, determine not to continue to declare quarterly dividends.

Fiscal 2023 Compared to Fiscal 2022

Cash Flows Provided by Operating Activities

Cash provided by operating activities increased by $47.7 million during fiscal 2023 compared to fiscal 2022. The change was driven by higher net income, inclusive of non-cash adjustments, in fiscal 2023 compared to fiscal 2022, as discussed in "Results of Operations" above. Additionally, cash provided by operating activities in fiscal 2023 was favorably impacted by the change in operating assets and liabilities compared to fiscal 2022 by $36.4 million, which was primarily due to:

•Receivables by $232.9 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period had a higher use of cash from operations returning following the lifting of COVID-19 restrictions. Both periods were impacted by base and new business growth and timing of collections;

•Accrued expenses by $46.5 million generating a greater source of cash during fiscal 2023 compared to fiscal 2022 primarily due to timing of deferred income payments, growth in business operations, higher net severance charges recorded in fiscal 2023 and timing of other payments, which more than offset higher interest payments on borrowings; and

•Inventories by $42.1 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period was impacted from operations returning following the lifting of COVID-19 restrictions.

These changes in operating assets and liabilities more than offset accounts payable by $276.9 million, resulting in a lower source of cash during fiscal 2023 compared to fiscal 2022 from the timing of disbursements.

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During fiscal 2023 and fiscal 2022, we received proceeds of $21.4 million and $1.9 million, respectively, related to favorable loss experience in older insurance years under our general liability, automobile liability and workers' compensation programs. "Payments made to clients on contracts" generated a higher use of cash during fiscal 2023 compared to fiscal 2022 primarily due to contract renewals and new business. Fiscal 2022 included $51.8 million of proceeds associated with labor related tax credits from many foreign jurisdictions in which we operate as a form of relief from COVID-19. The "Changes in other assets" caption was driven by higher amortization of client investments due to an increase in investments related to base and new business growth, which more than offset higher cash distributions received from our 50% ownership interest in AIM Services Co., Ltd. in fiscal 2022 compared to fiscal 2023. The "Other operating activities" caption reflects mainly adjustments to net income in the current year and prior year periods related to certain non-cash gains and losses and adjustments to non-operating cash gains and losses.

Cash Flows Provided by (Used in) Investing Activities

The net cash flows provided by investing activities during fiscal 2023 was primarily impacted by proceeds from the sales of equity investments ($633.2 million) (see Note 1 to the audited consolidated financial statements) and proceeds from the maturity of United States Treasury securities related to our captive insurance subsidiary ($80.0 million), partially offset by purchases of property and equipment and other ($383.5 million), purchases of United States Treasury securities related to our captive insurance subsidiary ($110.0 million) and acquisitions of certain businesses ($50.2 million).

The net cash flows used in investing activities during fiscal 2022 was impacted by purchases of property and equipment and other ($311.9 million), acquisitions of certain businesses, including Union Supply ($199.6 million) and other acquisitions ($123.2 million) (see Note 3 to the audited consolidated financial statements), purchases of marketable securities ($78.2 million) and the acquisition of equity investments ($64.0 million).

The "Other investing activities" caption includes $37.6 million and $19.0 million of proceeds received during fiscal 2023 and fiscal 2022, respectively, relating to possessory interest at one of the National Park sites within our Sports, Leisure & Corrections sector.

Cash Flows Provided by (Used in) Financing Activities

During fiscal 2023, cash provided by financing activities was impacted by the following:

•distribution from Vestis prior to the separation and distribution ($1,456.7 million);

•proceeds from issuance of new United States Term B-6 Loans due 2030 ($1,089.0 million); and

•borrowings under the revolving credit facility ($101.4 million).

Cash provided by financing activities more than offset cash used in the following:

•repayments of United States Term B-3 Loans due 2025 ($1,664.8 million);

•payments of dividends ($114.6 million);

•repayment of borrowing under the Receivables Facility ($104.9 million); and

•repayment of yen denominated term loans due 2026 ($63.0 million).

See Note 6 to the audited consolidated financial statements for additional information on borrowing activities during fiscal 2023.

During fiscal 2022, cash used in financing activities was driven by payments of dividends ($113.1 million) and the repayment of 5.000% 2025 Senior Notes and foreign term loans ($66.7 million), partially offset by borrowing under the Receivables Facility ($104.9 million).

The "Other financing activities" caption also reflects a use of cash during fiscal 2023 and fiscal 2022, primarily related to taxes paid by us when we withhold shares upon an employee's exercise or vesting of equity awards to cover income taxes. Fiscal 2023 also includes debt issuance costs of $8.2 million related to United States Term B-6 Loans due 2030.

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Covenant Compliance

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends, make distributions or repurchase our capital stock; make investments, loans or advances; repay or repurchase any subordinated debt, except as scheduled or at maturity; create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing our subordinated debt (or any indebtedness that refinances our subordinated debt); and fundamentally change our business. The indentures governing our senior notes contain similar provisions. As of September 27, 2024, we were in compliance with these covenants.

As stated above, the Credit Agreement and the indentures governing our senior notes contain provisions that restrict our ability to pay dividends and repurchase stock (collectively, "Restricted Payments"). In addition to customary exceptions, the Credit Agreement and indentures permit Restricted Payments in the aggregate up to an amount that increases quarterly by 50% of our Consolidated Net Income, as such term is defined in these debt agreements, subject to being in compliance with the interest coverage ratio described below.

Under the Credit Agreement, we are required to satisfy and maintain specified financial ratios and other financial condition tests and covenants. The indentures governing our senior notes also require us to comply with certain financial ratios in order to take certain actions. Our continued ability to meet those financial ratios, tests and covenants can be affected by events beyond our control, and there can be no assurance that we will meet those ratios, tests and covenants.

These financial ratios, tests and covenants involve the calculation of certain measures that we refer to in this discussion as "Covenant Adjusted EBITDA." Covenant Adjusted EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States ("U.S. GAAP"). Covenant Adjusted EBITDA is defined as net income of Aramark Services, Inc. ("ASI") and its restricted subsidiaries plus interest expense, net, provision for income taxes, and depreciation and amortization, further adjusted to give effect to adjustments required in calculating covenant ratios and compliance under our Credit Agreement and the indentures governing our senior notes.

Our presentation of these measures has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. You should not consider these measures as alternatives to net income or operating income determined in accordance with U.S. GAAP. Covenant Adjusted EBITDA, as presented by us, may not be comparable to other similarly titled measures of other companies because not all companies use identical calculations.

The following is a reconciliation of Net income attributable to ASI stockholder, 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. The Covenant Adjusted EBITDA for fiscal 2023 includes the reported results of the Uniform segment prior to the spin-off.

(1)    Represents share-based compensation expense resulting from the application of accounting for stock options, restricted stock units, performance stock units, deferred stock units awards and employee stock purchases (see Note 13 to the audited consolidated financial statements).

(2)    The twelve months ended September 27, 2024 represents the pre-tax gain from the sale of our remaining equity investment in the San Antonio Spurs NBA franchise ($25.1 million) and the non-cash charge for the impairment of

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certain assets related to a business that was sold ($2.3 million). The twelve months ended September 29, 2023 represents the pre-tax gain from the sale of our equity method investment in AIM Services, Co., Ltd. ($377.1 million), the pre-tax gain from the sale of our equity investment in a foreign company ($51.8 million), the non-cash charge for the impairment of certain assets related to a business that was sold ($5.2 million) and the pre-tax loss from the sale of a portion of our equity investment in the San Antonio Spurs NBA franchise ($1.1 million).

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

(4)    "Other" for the twelve months ended September 27, 2024 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 ($52.2 million), charges related to our spin-off of the Uniform segment ($29.0 million), non-cash adjustments to inventory based on expected usage ($21.7 million), severance charges ($13.0 million), the reversal of contingent consideration liabilities related to acquisition earn outs, net of expense ($8.1 million), charges related to a ruling on a foreign tax matter ($6.8 million), the impact of hyperinflation in Argentina ($5.4 million), non-cash charges related to the impairment of a trade name ($3.3 million), income related to non-United States governmental wage subsidies ($1.1 million) and other miscellaneous expenses.

(5)    "Other" for the twelve months ended September 29, 2023 includes the reversal of contingent consideration liabilities related to acquisition earn outs, net of expense ($85.7 million), charges related to our spin-off of the Uniform segment ($51.1 million), 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 ($47.5 million), net severance charges ($37.5 million), non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($29.3 million), income related to non-United States governmental wage subsidies ($12.5 million), the impact of hyperinflation in Argentina ($10.4 million), non-cash charges related to information technology assets ($8.2 million), the gain from the sale of land ($6.8 million), net multiemployer pension plan withdrawal charges ($5.9 million), labor charges and other expenses associated with closed or partially closed locations from adverse weather ($5.4 million), legal settlement charges ($2.7 million), non-cash charges for inventory write-downs ($2.6 million), the gain from the change in fair value related to certain gasoline and diesel agreements ($1.9 million) and other miscellaneous expenses.

Our covenant requirements and actual ratios for the twelve months ended September 27, 2024 are as follows:

(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, not to exceed 5.125x. Consolidated total indebtedness secured by a lien is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, debt in respect of sales-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 sheets 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 the Credit Agreement, which, if ASI's lenders under our Credit Agreement (other than the lenders in respect of ASI's United States Term B Loans, which lenders do not benefit from the maximum Consolidated 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 and does not result in a default under the Credit Agreement or the indentures governing the senior notes. 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 (1) incur additional indebtedness, other than the incremental capacity provided for under the Credit Agreement and pursuant to specified exceptions, and (2) make certain restricted payments, other than pursuant to certain exceptions. However, any failure to maintain the minimum Interest Coverage Ratio would not result in a default or an event of default under either the Credit Agreement or the indentures governing the senior notes. The minimum Interest Coverage Ratio is at least 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 and for certain non-

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cash or nonrecurring interest expense. The indentures governing our senior notes include a similar requirement which is referred to as a Fixed Charge Coverage Ratio.

We and our subsidiaries and affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.

The following table summarizes our future obligations for debt repayments, finance leases, estimated interest payments, future minimum rental and similar commitments under noncancelable operating leases as well as contingent obligations related to outstanding letters of credit and guarantees as of September 27, 2024 (dollars in thousands):

(1)Excludes the $22.7 million reduction to long-term borrowings from debt issuance costs, $8.8 million reduction from the discount on the United States Term B-8 Loans due 2030 and $0.4 million reduction from the discount on the United States Term B-4 Loans due 2027.

(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 and reflect any current hedging arrangements. Payments related to variable debt are based on applicable rates at September 27, 2024 plus the specified margin in the associated debt agreements for each period presented. The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt. The weighted average debt balance for each fiscal year from 2025 through 2030 is $4,835.4 million, $4,316.2 million, $3,854.5 million, $2,272.3 million, $1,284.5 million and $536.6 million, respectively. The weighted average interest rate of our existing debt obligations for each fiscal year from 2025 through 2030 is 2.19%, 2.97%, 3.83%, 5.53%, 6.89% and 6.96%, respectively (see Note 6 to the audited consolidated financial statements for the terms and maturities of existing debt obligations).

(3)Represents mainly the commitments for capital projects to help finance improvements or renovations at the facilities in which we operate.

(4)Includes certain unfunded employee retirement obligations, contingent consideration obligations related to acquisitions, self-insurance obligations, and other obligations.

We have excluded from the table above uncertain tax liabilities due to the uncertainty of the amount and period of payment. As of September 27, 2024, we have gross uncertain tax liabilities of $70.2 million (see Note 11 to the audited consolidated financial statements).

We have a Receivables Facility agreement with four financial institutions where we sell on a continuous basis an undivided interest in all eligible accounts receivable, as defined in the Receivables Facility. The maximum amount available under the Receivables Facility as of September 27, 2024 is $600.0 million. As of September 27, 2024, there are no outstanding borrowings under the Receivables Facility. Amounts borrowed under the Receivables Facility may fluctuate monthly based on our funding requirements and the level of qualified receivables available to collateralize the Receivables Facility.

Pursuant to the Receivables Facility, we formed ARAMARK Receivables, LLC, a wholly-owned, consolidated, bankruptcy-remote subsidiary. ARAMARK Receivables, LLC was formed for the sole purpose of buying and selling receivables generated by certain of our subsidiaries. Under the Receivables Facility, we and certain of our subsidiaries transfer without recourse all of

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our accounts receivable to ARAMARK Receivables, LLC. As collections reduce previously transferred interests, interests in new, eligible receivables are transferred to ARAMARK Receivables, LLC, subject to meeting certain conditions.

Supplemental Consolidating Information

Pursuant to Regulation S-X Rule 13-01, which simplified certain disclosure requirements for guarantors and issuers of guaranteed securities, we are no longer required to provide condensed consolidating financial statements for Aramark and its subsidiaries, including the guarantors and non-guarantors under our Credit Agreement and the indentures governing our senior notes. ASI, the borrower under our Credit Agreement and the indentures governing our senior notes, and its restricted subsidiaries together comprise substantially all of our assets, liabilities and operations, and there are no material differences between the consolidating information related to Aramark and Aramark Intermediate Holdco Corporation, the direct parent of ASI and a guarantor under our Credit Agreement, on the one hand, and ASI and its restricted subsidiaries on a standalone basis, on the other hand.

Other

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 audited 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 September 27, 2024. 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 September 27, 2024 and September 29, 2023, cash and cash equivalents at the Captive were $94.7 million and $32.8 million, respectively. The Captive also invests in United States Treasury securities where the amount of these investments as of September 27, 2024 and September 29, 2023 was $42.3 million and $110.7 million, respectively, and recorded in "Prepayments and other current assets" on the Consolidated Balance Sheets.

Critical Accounting Estimates

Our significant accounting policies are described in the notes to the audited consolidated financial statements included in this Annual Report.

In preparing our financial statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are most significant where they involve levels of subjectivity and judgment necessary to account for highly uncertain matters or matters susceptible to change, and where they can have a material impact on our financial condition and operating performance. If actual results were to differ materially from the estimates made, the reported results could be materially affected.

Critical accounting estimates and the related assumptions are evaluated periodically as conditions warrant, and changes to such estimates are recorded as new information or changed conditions require.

Asset Impairment Determinations

Indefinite lived intangible assets that are not amortized are subject to an impairment test that we conduct annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. For goodwill, we perform the assessment of goodwill at the reporting unit level, which is an operating segment or one level below the operating segment. The impairment test may first consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Examples of qualitative factors include, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, entity-specific events, events affecting reporting units and sustained changes in our stock price. If results of the qualitative assessment indicate a more likely than not determination or if a qualitative assessment is not performed, a quantitative test is performed by comparing the estimated fair value using a discounted cash flow method or market method for each reporting unit with its estimated net book value.

During the fourth quarter of fiscal 2024, we performed the annual impairment test for goodwill for each of our reporting units using a quantitative testing approach. Based on the evaluation performed, we determined that the fair value of each of the reporting units significantly exceeded its respective carrying amount, and therefore, we determined that goodwill was not impaired.

The determination of fair value for each reporting unit includes assumptions, which are considered Level 3 inputs, that are subject to risk and uncertainty. The discounted cash flow calculations are dependent on several subjective factors including the timing of future cash flows, the underlying margin projection assumptions, future growth rates and the discount rate. The

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market based method is dependent on several subjective factors including the determination of market multiples and future cash flows. If our assumptions or estimates in our fair value calculations change or if future cash flows, margin projections or future growth rates vary from what was expected, this may impact our impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges.

With respect to our other long-lived assets, we are required to test for asset impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment are present, we compare the sum of the future expected cash flows from the asset, undiscounted and without interest charges, to the asset’s carrying value. If the sum of the future expected cash flows from the asset is less than the carrying value, an impairment would be recognized for the difference between the estimated fair value and the carrying value of the asset.

In making future cash flow analyses of various assets, we make assumptions relating to the following:

•    the intended use of assets and the expected future cash flows resulting directly from such use;

•    comparable market valuations of businesses similar to Aramark's business segments;

•    industry specific economic conditions;

•    competitor activities and regulatory initiatives; and

•    client and customer preferences and behavior patterns.

We believe that an accounting estimate relating to asset impairment is a critical accounting estimate because the assumptions underlying future cash flow estimates are subject to change from time to time and the recognition of an impairment could have a significant impact on our Consolidated Statements of Income.

Litigation and Claims

From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of our business, including actions by clients, customers, employees, government entities and third parties, including under federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, ESG-related non-financial disclosure laws, false claims or whistleblower statutes, minority, women and disadvantaged business enterprise statutes, tax codes, antitrust and competition laws, consumer protection statutes, procurement regulations, intellectual property laws, food safety and sanitation laws, cost and accounting principles, the Foreign Corrupt Practices Act, the U.K. Bribery Act, other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws and alcohol licensing and service laws, or alleging negligence and/or breach of contractual and other obligations. We consider the measurement of litigation reserves as a critical accounting estimate because of the significant uncertainty in some cases relating to the outcome of potential claims or litigation and the difficulty of predicting the likelihood and range of potential liability involved, coupled with the material impact on our results of operations that could result from litigation or other claims. In determining legal reserves, we consider, among other issues:

•    interpretation of contractual rights and obligations;

•    the status of government regulatory initiatives, interpretations and investigations;

•    the status of settlement negotiations;

•    prior experience with similar types of claims;

•    whether there is available insurance; and

•    advice of counsel.

We were involved in a dispute with a client regarding our provision of services pursuant to a contract. During fiscal 2022, we resolved the matter by entering into a settlement agreement with the client whereby our obligations totaled $13.6 million, resulting in a reversal of previously reserved amounts of $5.7 million, which is included in "Cost of services provided (exclusive of depreciation and amortization)" on the Consolidated Statements of Income.

Self-Insurance Reserves

We self-insure for obligations related to certain risks that we retain under our casualty program, which includes general liability, automobile liability and workers’ compensation liability, as well as for certain property damage risks and employee healthcare benefit programs. The accounting estimates related to our self-insurance reserves are critical accounting estimates because changes in our claim experience, our ability to settle claims or other estimates and judgments we use could potentially have a material impact on our results of operations. Our reserves for retained costs associated with our casualty program are estimated through actuarial methods, with the assistance of third-party actuaries, using loss development assumptions based on

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our claims history. Our casualty program reserves take into account reported claims as well as incurred-but-not-reported losses using loss development factors based upon past experience. In order to determine the loss development factors, we make judgments relating to the nature, frequency, severity, and age of claims, and industry, regulatory and company-specific trends impacting the development of claims. The actual cost to settle our self-insured casualty claim liabilities can differ from our reserve estimates because of a number of uncertainties, including the inherent difficulty in estimating the severity of a claim and the potential amount to defend and settle a claim.

As of September 27, 2024 and September 29, 2023, our self-insurance reserves were $248.6 million and $262.0 million, respectively.

Income Taxes

We are subject to income taxes in the United States and in many foreign jurisdictions. Significant judgment is required in determining our provision for income taxes, our deferred tax assets and liabilities and any valuation allowances recorded against our net deferred tax assets. We record valuation allowances for our net deferred tax assets when it is more likely than not that they will not be realized. We monitor the realizability of our deferred tax assets taking into account all relevant factors at each reporting period. In completing our assessment of realizability of our deferred tax assets, we consider our history of income measured at pre-tax income adjusted for permanent book-tax differences on a jurisdictional basis, volatility in actual earnings, and impacts of the timing of reversal of existing temporary differences. We also rely on our assessment of the Company’s projected future results of business operations, including uncertainty in future operating results relative to historical results, volatility in the market price of our common stock and its performance over time, variable macroeconomic conditions impacting our ability to forecast future taxable income, and changes in business that may affect the existence and magnitude of future taxable income. Our valuation allowance assessment is based on our best estimate of future results considering all available information.

As of September 27, 2024 and September 29, 2023, our valuation allowance reserves recorded against deferred tax assets were $80.6 million and $78.2 million, respectively (see Note 11 to the audited consolidated financial statements).

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New Accounting Standards Updates

See Note 1 to the audited consolidated financial statements for a full description of recent accounting standards updates, including the expected dates of adoption.

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of Aramark's (the "Company," "we," "our" and "us") financial condition and results of operations for the fiscal years ended September 29, 2023 and September 30, 2022 should be read in conjunction with our audited consolidated financial statements and the notes to those statements. Discussion and analysis of our financial condition and results of operations for the fiscal year ended September 30, 2022 compared to the fiscal year ended October 1, 2021 is included under the heading Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Fiscal 2022 Compared to Fiscal 2021 and - Liquidity and Capital Resources” in our Annual Report on Form 10-K filed for the fiscal year ended September 30, 2022 with the Securities and Exchange Commission ("SEC") on November 22, 2022.

Our discussion contains forward-looking statements, such as our plans, objectives, opinions, expectations, anticipations, intentions and beliefs, that are based upon our current expectations but that involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in those forward-looking statements as a result of a number of factors, including those set forth under "Risk Factors," "Special Note About Forward-looking Statements" and "Business" sections and elsewhere in this Annual Report on Form 10-K ("Annual Report"). In the following discussion and analysis of financial condition and results of operations, certain financial measures may be considered “non-GAAP financial measures” under SEC rules. These rules require supplemental explanation and reconciliation, which is provided elsewhere in this Annual Report.

Overview

We are a leading global provider of food and facilities services to education, healthcare, business & industry and sports, leisure & corrections clients. Our core market is the United States, which is supplemented by an additional 14-country footprint. We also provide our services on a more limited basis in several additional countries and in offshore locations. Through our established brand, broad geographic presence and employees, we anchor our business in our partnerships with thousands of clients. Through these partnerships we serve millions of customers including students, patients, employees, sports fans and guests worldwide.

Subsequent to the end of fiscal 2023, we completed the previously announced separation of our Uniform segment into an independent publicly traded company, Vestis Corporation (“Vestis”), on September 30, 2023. Going forward, we plan to operate our remaining Food and Support Services business in two geographic reportable segments split between our United States and International operations.

Prior to the separation, we operated our business in three reportable segments:

•Food and Support Services United States ("FSS United States") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities serving the general public in the United States.

•Food and Support Services International ("FSS International") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities serving the general public. We have operations in 14 countries outside the United States. Our largest international operations are in Canada, Chile, China, Germany, Spain and the United Kingdom, and in a majority of these countries we are one of the leading food and/or facility services providers.

•Uniform and Career Apparel ("Uniform") - Provided a full-service employee uniform solution, resulting in a contracted and recurring revenue model. The customer base was serviced by a leading geographic footprint in the United States and Canada with programs focused on uniforms, floor mats, towels, linens, restroom supplies, first-aid supplies, safety products and other workplace supplies. Customers operated in the United States and Canada in a wide range of industries, including manufacturing, hospitality, retail, food processing, pharmaceuticals, healthcare and automotive.

Our Food and Support Services operations focus on serving clients in five principal sectors: Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other. Our FSS International reportable segment provides a similar range of services as those provided to our FSS United States clients and operates in the same sectors. Administrative expenses not allocated to our reportable segments are presented separately as corporate expenses.

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Aramark’s Spin-off of the Uniform Segment

The separation of our Uniform segment was structured as a tax free spin-off, which occurred by way of a pro rata distribution to Aramark stockholders. Each of the Aramark stockholders received one share of Vestis common stock for every two shares of Aramark common stock held of record as of the close of business on September 20, 2023. Vestis is now an independent public company under the symbol “VSTS” on the New York Stock Exchange. With the completion of the separation and distribution, the historical results of the Uniform segment will be presented as discontinued operations in the Company's consolidated financial statements beginning in the first quarter of fiscal 2024. Refer to Note 15 to the audited consolidated financial statements for Uniform reportable segment financial disclosures.

Business Update

Continued volatility of global economies and financial markets caused by global events and other factors, including the ongoing conflict between Russia and Ukraine and the recent Israel-Hamas War and escalating tensions in the region, has caused inflation in product, energy and labor costs, has increased market interest rates and has driven significant changes in foreign currencies. Although we continue to see a moderation in inflation in some markets around the world, including the United States, we continue to evaluate and react to the effects of global economic disruptions, including inflationary pressures on product and energy costs and greater labor challenges. We expect these challenges to continue in the near-term, and we regularly evaluate and believe we take appropriate actions to mitigate risk in these areas. This includes addressing inflation and global supply chain disruption through management of operating costs, including supply chain initiatives and pricing pass-throughs.

Acquisition

On June 2, 2022, we completed the acquisition of Union Supply Group, Inc. ("Union Supply"), a commissary goods and services supplier, for cash consideration of $199.6 million, plus contingent consideration (see Note 2 and Note 16 to the audited consolidated financial statements).

Sale of AIM Services Co., Ltd Equity Investment

On April 6, 2023, we sold our 50% ownership interest in AIM Services Co., Ltd., a leading Japanese food services company, to Mitsui & Co., Ltd. for $535.0 million in cash in a taxable transaction resulting in a pre-tax gain on sale of this equity investment of $377.1 million ($278.7 million net of tax) during fiscal 2023 (see Note 1 to the audited consolidated financial statements).

Seasonality

Our revenue and operating results have varied, and we expect them to continue to vary, from quarter to quarter as a result of different factors. Historically, within our FSS United States segment, there has been a lower level of activity during our first and second fiscal quarters in operations that provide services to sports and leisure clients. This lower level of activity, historically, has been partially offset during our first and second fiscal quarters by the increased activity levels in our educational operations. Conversely, historically there has been a significant increase in the provision of services to sports and leisure clients during our third and fourth fiscal quarters, which is partially offset by the effect of summer recess at colleges, universities and schools in our educational operations.

Sources of Revenue

Our clients engage us, generally through written contracts, to provide our services at their locations. Depending on the type of client and service, we are paid either by our client or directly by the customer to whom we have been provided access by our client. We typically use either profit and loss contracts or client interest contracts in our FSS United States and FSS International segments. These contracts differ in their provision for the amount of financial risk we bear and, accordingly, the potential compensation, profits or fees we may receive. Under profit and loss contracts, we receive all of the revenue from, and bear all of the expenses of, the provision of our services at a client location. For fiscal 2023, approximately two-thirds of our FSS United States and FSS International segment revenue was derived from profit and loss contracts. Client interest contracts include management fee contracts, under which our clients reimburse our operating costs and pay us a management fee, which may be calculated as a fixed dollar amount or a percentage of revenue or operating costs. Some management fee contracts entitle us to receive incentive fees based upon our performance under the contract, as measured by factors such as revenue, operating costs and customer satisfaction surveys. For fiscal 2023, approximately one-third of our FSS United States and FSS International segment revenue was derived from client interest contracts.

Costs and Expenses

Our costs and expenses are comprised of cost of services provided (exclusive of depreciation and amortization), depreciation and amortization and selling and general corporate expenses. Cost of services provided (exclusive of depreciation and amortization) consists of direct expenses associated with our operations, which includes food costs, wages, other labor-related expenses (including workers' compensation, severance, state unemployment insurance and federal or state mandated health benefits and other healthcare costs), insurance, fuel, utilities, piece goods and clothing and equipment. Direct expense related to

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food costs within Cost of services provided (exclusive of depreciation and amortization) are offset by rebates, vendor allowances and volume discounts. Depreciation and amortization expenses mainly relate to assets used in generating revenue. Selling and general corporate expenses include sales commissions, severance, share-based compensation and other unallocated costs related to administrative functions including finance, legal and human resources.

Interest and Other Financing Costs, net

Interest and other financing costs, net, relates primarily to interest expense on long-term borrowings. Interest and other financing costs, net also includes third-party costs associated with long-term borrowings that were capitalized and are being amortized over the term of the borrowing.

Provision for Income Taxes

The Provision for Income Taxes represents federal, foreign, state and local income taxes. Our effective tax rate differs from the statutory United States income tax rate due to the effect of state and local income taxes, tax rates in foreign jurisdictions, tax credits and certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, the geographical mix of earnings, state and local income taxes, tax audit settlements, share-based award exercise activity and enacted tax legislation, including certain business tax credits. Changes in judgment due to the evaluation of new information resulting in the recognition, derecognition or remeasurement of a tax position taken in a prior annual period are recognized separately in the quarter of the change.

Foreign Currency Fluctuations

The impact from foreign currency translation assumes constant foreign currency exchange rates based on the rates in effect for the prior year period being used in translation for the comparable current year period. We believe that providing the impact of fluctuations in foreign currency rates on certain financial results can facilitate analysis of period-to-period comparisons of business performance.

Fiscal Year

Our fiscal year is the fifty-two or fifty-three week period which ends on the Friday nearest to September 30th. The fiscal years ended September 29, 2023 and September 30, 2022 were each a fifty-two week period.

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Results of Operations

Fiscal 2023 Compared to Fiscal 2022

The following tables present an overview of our results on a consolidated and segment basis with the amount of and percentage change between periods for the fiscal years 2023 and 2022 (dollars in millions).

(1) As a percentage of total revenue, FSS United States represented 62.2% and 61.4%, FSS International represented 23.1% and 22.4% and Uniform represented 14.7% and 16.2% for fiscal 2023 and fiscal 2022, respectively.

Consolidated Overview

Revenue increased by 15.5% during fiscal 2023 compared to the prior year period, which was primarily attributable to growth in base business, including pricing pass-throughs, and net new business. In addition, the Union Supply acquisition contributed an additional 1.2% of revenue compared to the prior year period. Foreign currency translation unfavorably impacted revenue during fiscal 2023 by 1.3%.

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The following table presents the cost of services provided (exclusive of depreciation and amortization) by segment and as a percent of revenue for the fiscal years ended September 29, 2023 and September 30, 2022.

The following table presents the percentages attributable to the components in cost of services provided (exclusive of depreciation and amortization) for fiscal 2023 and fiscal 2022.

(1) Food and support service costs represented a higher proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to the prior year period mainly from product cost inflation and volume increases due to revenue growth.

(2) Personnel costs decreased as a percentage of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 compared to the prior year period due to food and support service costs increasing at a higher proportion as compared to personnel costs.

(3) Other direct costs represented a lower proportion of total cost of services provided (exclusive of depreciation and amortization) during fiscal 2023 driven by food and support service costs increasing at a higher proportion as compared to other direct costs. In addition, fiscal 2023 was impacted by $70.6 million of incremental non-cash income from the reduction of contingent consideration liabilities, net of compensation expense, related to acquisition earn outs as compared to the prior year (see Note 16 to the audited consolidated financial statements) and impairment charges of operating lease right of use assets, property and equipment and other costs related to certain real estate properties of $26.7 million (see Note 1 to the audited consolidated financial statements).

Operating income increased by $234.5 million during fiscal 2023 compared to the prior year period, which was driven by base business growth, including volume recovery from COVID-19, and effective cost management. The increase in operating income during fiscal 2023 also benefited from higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 16 to the audited consolidated financial statements), prior year charge related to inventory write-downs to zero net realizable value for personal protective equipment ($20.5 million) and from higher income related to favorable loss experience under our general liability, automotive liability and workers' compensation liability programs when compared to fiscal 2022 ($19.1 million).

These increases in operating income during fiscal 2023 more than offset:

•increased inflationary costs in product, energy and labor;

•higher personnel and other expenses related to the spin-off of the Uniform segment ($41.8 million);

•impairment charges of operating lease right-of-use assets and property and equipment and other costs related to certain real estate properties ($26.7 million) (see Note 1 to the audited consolidated financial statements);

•prior year labor related tax credits provided from governmental assistance programs ($24.5 million);

•higher severance charges ($20.8 million) (see Note 3 to the audited consolidated financial statements); and

•negative impact of foreign currency translation ($10.2 million).

During fiscal 2023, we recognized a $377.1 million gain on the sale of our 50% ownership interest in AIM Services Co., Ltd. and a $51.8 million gain on the sale of the ownership interest in an equity investment in a foreign company, which is included in "Gain on Equity Investments, net" on the Consolidated Statements of Income (Loss) (see Note 1 to the audited consolidated financial statements). This gain was partially offset by a $1.1 million loss from the sale of a portion of our equity investment in the San Antonio Spurs NBA franchise (see Note 1 to the audited consolidated financial statements).

Interest and Other Financing Costs, net, increased 17.9% during fiscal 2023 compared to the prior year period. The increase for fiscal 2023 was primarily due to higher interest rates related to our senior secured term loan facilities and our Receivables Facility and revolving credit facility.

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The Provision for Income Taxes for fiscal 2023 and fiscal 2022 was recorded at an effective tax rate of 20.9% and 24.0%, respectively. The lower effective tax rate in the current year compared to the prior year was driven by favorable tax effects from the sale of our equity investment in a foreign company (see Note 1 to the audited consolidated financial statements) and the reversal of a portion of the Union Supply contingent consideration liability (see Note 16 to the audited consolidated financial statements), as the majority of the gains from these transactions were not subject to tax. During fiscal 2023 and fiscal 2022, we recorded an income tax benefit of $3.8 million and $8.5 million, respectively, for the reversal of a valuation allowance at a subsidiary in the FSS International segment driven by our ability to utilize deferred tax assets based on future taxable income expected due to business acquisitions. We also recorded a benefit to the Provision for Income Taxes of $4.2 million during fiscal 2022 due to a state tax law change (see Note 10 to the audited consolidated financial statements).

Segment Results

FSS United States Segment

The FSS United States reportable segment consists of five sectors which have similar economic characteristics and comprise a single operating segment. The five sectors of the FSS United States reportable segment are Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other.

Revenue for each of these sectors is summarized as follows (in millions):

The Healthcare and Facilities & Other sectors had high-single digit operating income margins, consistent with prior year. The Education and Sports, Leisure & Corrections sectors had mid-single digit operating income margins, consistent with prior year. The Business & Industry sector had low-single digit operating income margins compared to negative low-single digit operating income margins in the prior year. During the COVID-19 pandemic and in following periods, operating income margin in certain sectors within the FSS United States reportable segment have differed from our otherwise historical patterns, particularly in the Business & Industry sector.

FSS United States segment revenue increased by approximately 16.9% during fiscal 2023 compared to the prior year period. The increase was primarily attributable to base business growth, including contract price increases mainly within the Corrections and Higher Education businesses, and net new business growth. The Sports, Leisure & Corrections sector increased due to higher per capita customer spending in stadiums and arenas and the acquisition of Union Supply, which contributed an additional 2.0% of revenue during fiscal 2023 as compared to the prior year period. The Business & Industry sector increased due to client personnel continuing to return to office locations.

Operating income increased by $220.5 million during fiscal 2023 compared to the prior year period. The increase during fiscal 2023 was attributable to:

•base business growth, including volume recovery from COVID-19, and effective cost management;

•higher non-cash income from the reduction of the contingent consideration liabilities related to acquisition earn outs, net of expense ($70.6 million) (see Note 16 to the audited consolidated financial statements);

•higher income related to favorable loss experience under our general liability, automotive liability and workers' compensation liability programs when compared to fiscal 2022 ($19.1 million); and

•higher income attributed to the Union Supply acquisition as compared to the prior year period ($10.6 million).

These increases in operating income during fiscal 2023 more than offset the following:

•increased inflationary costs in food and labor;

•non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($19.0 million) (see Note 1 to the audited consolidated financial statements); and

•non-cash charge for the impairment of computer software assets ($8.2 million).

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FSS International Segment

FSS International segment revenue increased by approximately 19.3% during fiscal 2023 compared to the prior year period. The increase was primarily attributable to base business growth, including contract price increases, and net new business growth. The growth in revenue was offset by the negative impact of foreign currency translation (5.0%).

Operating income increased by $2.0 million during fiscal 2023 compared to the prior year period. The increase was attributable to growth in base and net new business and lower personnel costs from headcount reductions taken during the second quarter of fiscal 2023 and late fiscal 2022. These increases in operating income during fiscal 2023 more than offset the following:

•increased inflationary costs in product and labor;

•decline in profit related to the sale of our 50% ownership interest in AIM Services Co., Ltd.;

•prior year labor related tax credits provided from governmental assistance programs ($24.1 million);

•higher severance charges ($18.0 million) (see Note 3 to the audited consolidated financial statements);

•prior year favorable impact related to a client contract dispute ($9.6 million);

•unfavorable impact of foreign currency translation ($7.8 million);

•higher currency translation losses from Argentina hyperinflation ($7.0 million) (see Note 1 to the audited consolidated financial statements); and

•non-cash charges for the impairment of certain assets related to a business that was sold ($5.2 million).

Uniform Segment

Uniform segment revenue increased by approximately 5.0% during fiscal 2023 compared to the prior year period. The increase was primarily due to base business growth and contract price increases.

Operating income increased by $9.2 million during fiscal 2023 compared to the prior year period. The increase was mostly attributable to:

•base business growth;

•lower personnel costs from headcount reductions taken during the second quarter of fiscal 2023;

•prior year charge related to inventory write-downs to zero net realizable value for personal protective equipment ($20.5 million); and

•gain from the sale of land ($6.8 million).

These increases in operating income during fiscal 2023 more than offset the following:

•increased inflationary costs in product, energy and labor;

•higher expenses related to the spin-off of the Uniform segment ($27.0 million);

•charges for the impairment of operating lease right-of-use assets and other costs related to certain real estate properties ($7.7 million) (see Note 1 to the audited consolidated financial statements); and

•current year severance charges ($6.6 million) (see Note 3 to the audited consolidated financial statements).

Corporate

Corporate expenses, those administrative expenses not allocated to the business segments, decreased by $2.8 million during fiscal 2023 compared to the prior year period. The decrease was attributable to:

•lower share-based compensation expense ($8.6 million) compared to the prior period (see Note 12 to the audited consolidated financial statements); and

•favorable change in fair value of certain gasoline and diesel agreements ($8.3 million).

These decreases in corporate expenses during fiscal 2023 more than offset higher expenses related to the spin-off of the Uniform segment compared to prior year period ($14.8 million).

Liquidity and Capital Resources

Overview

Our principal sources of liquidity are cash generated from operating activities, funds from borrowings, investments in marketable securities and existing cash on hand. As of September 29, 2023, we had $1,963.1 million of cash and cash

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equivalents, $953.8 million of availability under our senior secured revolving credit facility and $600.0 million of availability under the Receivables Facility. On October 2, 2023, we repaid the $1,500.0 million 6.375% Senior Notes due May 1, 2025 ("6.375% Senior Notes due 2025") from existing cash on hand at year-end in conjunction with the separation and distribution of the Uniform segment. In addition, the Uniform segment United States dollar denominated term loan of $800.0 million, due September 2025 ("United States Term A-1 Loans due September 2025") and United States dollar denominated term loan of $700.0 million, due September 2028 ("United States Term A-2 Loans due September 2028") will be removed from Aramark’s Consolidated Balance Sheets as a result of the separation and distribution of the Uniform segment on September 30, 2023. A significant portion of our cash and cash equivalents are held in mature, liquid geographies where we have operations. As of September 29, 2023, there were $685.7 million of outstanding foreign currency borrowings. See Note 5 to the audited consolidated financial statements for additional information on the Uniform segment's new United States dollar denominated term loan borrowings.

We believe that our cash and cash equivalents, marketable securities and availability under our revolving credit facility and Receivables Facility will be adequate to meet anticipated cash requirements for the foreseeable future to fund working capital, capital spending, debt service obligations, refinancings, dividends and other cash needs. We also have flexibility to optimize working capital and defer certain capital expenditures as appropriate without a material impact to the business. We believe that our assumptions used to estimate our liquidity and working capital requirements are reasonable. For additional information regarding the risks associated with our liquidity and capital resources, see Part I, Item 1A, "Risk Factors."

The table below summarizes our cash activity (in millions):

Reference to the audited Consolidated Statements of Cash Flows will facilitate understanding of the discussion that follows.

Cash Flows Provided by Operating Activities

Cash provided by operating activities increased by $71.9 million during fiscal 2023 compared to fiscal 2022. The change was driven by higher net income, inclusive of non-cash adjustments, in fiscal 2023 compared to fiscal 2022, as discussed in "Results of Operations" above. Additionally, cash provided by operating activities was favorably impacted by the change in operating assets and liabilities compared to the prior year period by $36.1 million, which was primarily due to:

•Receivables by $261.2 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period had a higher use of cash from operations returning following the lifting of COVID-19 restrictions. Both periods were impacted by base and new business growth and timing of collections;

•Accrued expenses by $74.9 million generating a greater source of cash during fiscal 2023 compared to fiscal 2022 primarily due to timing of deferred income payments, growth in business operations, higher severance charges recorded in fiscal 2023 and timing of other payments, which more than offset higher interest payments on borrowings; and

•Inventories by $33.6 million, resulting in a lower use of cash during fiscal 2023 compared to fiscal 2022 as the prior year period was impacted from operations returning following the lifting of COVID-19 restrictions.

These changes in operating assets and liabilities more than offset:

•Accounts payable by $329.1 million, resulting in a lower source of cash during fiscal 2023 compared to fiscal 2022 from the timing of disbursements.

During fiscal 2023 and fiscal 2022, we received proceeds of $21.4 million and $1.9 million, respectively, related to favorable loss experience in older insurance years under our general liability, automobile liability and workers' compensation programs. "Payments made to clients on contracts" generated a higher use of cash during fiscal 2023 compared to fiscal 2022 primarily due to contract renewals and new business. Fiscal 2022 included $57.7 million of proceeds associated with labor related tax credits from many foreign jurisdictions in which we operate as a form of relief from COVID-19. The "Changes in other assets" caption was driven by the prior year increase to in-service rental merchandise from operations returning after COVID-19 restrictions lifted and higher amortization of client investments due to an increase in investments related to base and new business growth, which more than offset higher cash distributions received from our 50% ownership interest in AIM Services Co., Ltd. in fiscal 2022 compared to fiscal 2023. The "Other operating activities" caption reflects mainly adjustments to net

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income in the current year and prior year periods related to certain non-cash gains and losses and adjustments to non-operating cash gains and losses.

Cash Flows Provided by (Used in) Investing Activities

The net cash flows provided by investing activities during fiscal 2023 was primarily impacted by proceeds from the sales of equity investments ($685.0 million) (see Note 1 to the audited consolidated financial statements) and proceeds from the maturity of United States Treasury securities related to our captive insurance subsidiary ($80.0 million), offset by purchases of property and equipment and other ($461.4 million), purchases of United States Treasury securities related to our captive insurance subsidiary ($110.0 million) and acquisitions of certain businesses ($50.2 million).

The net cash flows used in investing activities during fiscal 2022 was impacted by purchases of property and equipment and other ($388.4 million), acquisitions of certain businesses, including Union Supply ($199.6 million) and other acquisitions ($140.4 million) (see Note 2 to the audited consolidated financial statements), purchases of marketable securities ($78.2 million) and the acquisition of equity investments ($64.0 million).

The "Other investing activities" caption includes $37.6 million and $19.0 million of proceeds received during fiscal 2023 and 2022, respectively, relating to the recovery of our investment (possessory interest) at one of the National Park Service sites within our Sports, Leisure & Corrections sector.

Cash Flows Provided by (Used in) Financing Activities

During fiscal 2023, cash provided by financing activities was impacted by the following:

•proceeds from issuance of new United States Term B-6 Loans due 2030 ($1,089.0 million);

•proceeds from Uniform issuance of new United States Term A-1 Loans due 2025 ($800.0 million);

•proceeds from Uniform issuance of new United States Term A-2 Loans due 2028 ($700.0 million); and

•borrowings under the revolving credit facility ($101.4 million).

Cash provided by financing activity more than offset cash used in the following:

•repayments of United States Term B-3 Loans due 2025 ($1,664.8 million);

•payments of dividends ($114.6 million);

•repayment of borrowing under the Receivables Facility ($104.9 million); and

•repayment of yen denominated term loans due 2026 ($63.0 million).

See Note 5 to the audited consolidated financial statements for additional information on borrowing activities during fiscal 2023.

During fiscal 2022, cash used in financing activities was impacted by the following:

•payments of dividends ($113.1 million);

•borrowing under the Receivables Facility ($104.9 million); and

•the repayment of 5.000% 2025 Senior Notes and foreign term loans ($66.7 million).

The "Other financing activities" caption also reflects a use of cash during fiscal 2023 and fiscal 2022, primarily related to taxes paid by us when we withhold shares upon an employee's exercise or vesting of equity awards to cover income taxes. Fiscal 2023 also includes debt issuance costs of $22.6 million mainly related to Uniform's new United States Term A-1 and A-2 loan borrowings and Aramark's new United States Term B-6 Loans due 2030.

We intend to continue to pay cash dividends on our common stock, subject to our compliance with applicable law, and depending on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements, business prospects and other factors that our Board of Directors may deem relevant. However, the payment of any future dividends will be at the discretion of our Board of Directors and our Board of Directors may, at any time, determine not to continue to declare quarterly dividends.

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Covenant Compliance

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability and the ability of our subsidiaries to: incur additional indebtedness; issue preferred stock or provide guarantees; create liens on assets; engage in mergers or consolidations; sell assets; pay dividends, make distributions or repurchase our capital stock; make investments, loans or advances; repay or repurchase any subordinated debt, except as scheduled or at maturity; create restrictions on the payment of dividends or other amounts to us from our restricted subsidiaries; make certain acquisitions; engage in certain transactions with affiliates; amend material agreements governing our subordinated debt (or any indebtedness that refinances our subordinated debt); and fundamentally change our business. The indentures governing our senior notes contain similar provisions. As of September 29, 2023, we were in compliance with these covenants.

As stated above, the Credit Agreement and the indentures governing our senior notes contain provisions that restrict our ability to pay dividends and repurchase stock (collectively, "Restricted Payments"). In addition to customary exceptions, the Credit Agreement and indentures permit Restricted Payments in the aggregate up to an amount that increases quarterly by 50% of our Consolidated Net Income, as such term is defined in these debt agreements, subject to being in compliance with the interest coverage ratio described below.

Under the Credit Agreement, we are required to satisfy and maintain specified financial ratios and other financial condition tests and covenants. The indentures governing our senior notes also require us to comply with certain financial ratios in order to take certain actions. Our continued ability to meet those financial ratios, tests and covenants can be affected by events beyond our control, and there can be no assurance that we will meet those ratios, tests and covenants.

These financial ratios, tests and covenants involve the calculation of certain measures that we refer to in this discussion as "Covenant Adjusted EBITDA." Covenant Adjusted EBITDA is not a measurement of financial performance under generally accepted accounting principles in the United States ("U.S. GAAP"). Covenant Adjusted EBITDA is defined as net income of Aramark Services, Inc. ("ASI") and its restricted subsidiaries plus interest and other financing costs, net, provision for income taxes, and depreciation and amortization, further adjusted to give effect to adjustments required in calculating covenant ratios and compliance under our Credit Agreement and the indentures governing our senior notes.

Our presentation of these measures has limitations as an analytical tool, and should not be considered in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. You should not consider these measures as alternatives to net income or operating income determined in accordance with U.S. GAAP. Covenant Adjusted EBITDA, as presented by us, may not be comparable to other similarly titled measures of other companies because not all companies use identical calculations.

The following is a reconciliation of Net income attributable to ASI stockholder, 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.

(1)    Represents share-based compensation expense resulting from the application of accounting for stock options, restricted stock units, performance stock units, deferred stock units awards and employee stock purchases (see Note 12 to the audited consolidated financial statements).

(2)    The twelve months ended September 29, 2023 represents the fiscal 2023 gain from the sale of our equity method investment in AIM Services, Co., Ltd. ($377.1 million), the fiscal 2023 gain from the sale of our equity investment in a foreign company ($51.8 million), the fiscal 2023 non-cash charge for the impairment of certain assets related to a

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business that was sold ($5.2 million) and the fiscal 2023 loss from the sale of a portion of our equity investment in the San Antonio Spurs NBA franchise ($1.1 million).

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

(4)    "Other" for the twelve months ended September 29, 2023 includes the reversal of contingent consideration liabilities related to acquisition earn outs, net of expense ($85.7 million), charges related to the spin-off of the Uniform segment ($51.1 million), 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 ($47.5 million), net severance charges ($37.5 million), non-cash charges for the impairment of operating lease right-of-use assets and property and equipment related to certain real estate properties ($29.3 million), income related to non-United States governmental wage subsidies ($12.5 million), the impact of hyperinflation in Argentina ($10.4 million), non-cash charges related to information technology assets ($8.2 million), the gain from the sale of land ($6.8 million), net multiemployer pension plan withdrawal charges ($5.9 million), labor charges and other expenses associated with closed or partially closed locations from adverse weather ($5.4 million), legal settlement charges ($2.7 million), non-cash charges for inventory write-downs ($2.6 million), the gain from the change in fair value related to certain gasoline and diesel agreements ($1.9 million) and other miscellaneous expenses.

(5)    "Other" for the twelve months ended September 30, 2022 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 ($34.8 million), non-cash charges for inventory write-downs to net realizable value and fixed asset write-offs related to personal protective equipment ($20.5 million), severance charges ($19.6 million), United States and non-United States governmental labor related tax credits resulting from the COVID-19 pandemic ($17.3 million), the reversal of contingent consideration liabilities related to acquisition earn outs, net of expense ($15.1 million), the favorable impact related to a client contract dispute ($9.6 million), charges related to our spin-off of the Uniform segment ($9.3 million), favorable adjustments for the EBITDA impact attributable to equity investments that are permitted in the calculation in accordance with the Credit Agreement and indentures, primarily from our previous ownership interest in AIM Services Co., Ltd. ($8.4 million), the gain from a funding agreement related to a legal matter ($6.5 million), the loss from the change in fair value related to certain gasoline and diesel agreements ($6.4 million), the gain from insurance proceeds received related to property damage from a tornado in Nashville ($4.0 million), the impact of hyperinflation in Argentina ($3.5 million), due diligence charges related to acquisitions ($2.5 million) and other miscellaneous expenses.

Our covenant requirements and actual ratios for the twelve months ended September 29, 2023 are as follows:

(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, not to exceed 5.125x. Consolidated total indebtedness secured by a lien is defined in the Credit Agreement as total indebtedness consisting of debt for borrowed money, finance leases, debt in respect of sales-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 sheets 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 the Credit Agreement, which, if ASI's lenders under our Credit Agreement (other than the lenders in respect of ASI's United States Term B Loans, which lenders do not benefit from the maximum Consolidated 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 and does not result in a default under the Credit Agreement or the indentures governing the senior notes. 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 (1) incur additional indebtedness, other than the incremental capacity provided for under the Credit Agreement and pursuant to specified exceptions, and (2) make certain restricted payments, other than pursuant to certain exceptions. However, any failure to maintain the minimum Interest Coverage Ratio would not result in a default or an event of default under either the Credit Agreement or the indentures governing the senior notes. The minimum Interest Coverage Ratio is at least 2.000x for the term of the Credit Agreement. Consolidated interest expense is defined in the Credit Agreement as

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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.

We and our subsidiaries and affiliates may from time to time, in our sole discretion, purchase, repay, redeem or retire any of our outstanding debt securities (including any publicly issued debt securities), in privately negotiated or open market transactions, by tender offer or otherwise, or extend or refinance any of our outstanding indebtedness.

The following table summarizes our future obligations for debt repayments, finance leases, estimated interest payments, future minimum rental and similar commitments under noncancelable operating leases as well as contingent obligations related to outstanding letters of credit and guarantees as of September 29, 2023 (dollars in thousands):

(1)Excludes the $47.1 million reduction to long-term borrowings from debt issuance costs, $10.7 million reduction from the discount on the United States Term B-6 Loans due 2030 and $0.5 million reduction from the discount on the United States Term B-4 Loans due 2027. Subsequent to September 29, 2023, Aramark redeemed the 6.375% Senior Notes due 2025 of $1,500.0 million from the proceeds received in conjunction with the separation and distribution of the Uniform segment. In addition, the Uniform segment United States term loan of $800.0 million due 2025 and $700.0 million due 2028 will be removed from Aramark’s Consolidated Balance Sheets as a result of the separation and distribution of the Uniform segment on September 30, 2023.

(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 and reflect any current hedging arrangements. Payments related to variable debt are based on applicable rates at September 29, 2023 plus the specified margin in the associated debt agreements for each period presented. The amounts provided relate only to existing debt obligations and do not assume the refinancing or replacement of such debt. The weighted average debt balance for each fiscal year from 2024 through 2029 is $6,779.3 million, $6,216.8 million, $4,676.6 million, $4,006.0 million, $2,415.9 million and $1,069.7 million, respectively. The weighted average interest rate of our existing debt obligations for each fiscal year from 2024 through 2029 is 3.76%, 4.28%, 4.37%, 4.86%, 6.36% and 7.70%, respectively (see Note 5 to the audited consolidated financial statements for the terms and maturities of existing debt obligations). Subsequent to September 29, 2023, Aramark redeemed the 6.375% Senior Notes due 2025 of $1,500.0 million from the proceeds received in conjunction with the separation and distribution of the Uniform segment. In addition, the Uniform segment United States term loan of $800.0 million due 2025 and $700.0 million due 2028 will be removed from Aramark’s Consolidated Balance Sheets as a result of the separation and distribution of the Uniform segment on September 30, 2023.

(3)Represents mainly the commitments for capital projects to help finance improvements or renovations at the facilities in which we operate.

(4)Includes certain unfunded employee retirement obligations, contingent consideration obligations related to acquisitions, self-insurance obligations, and other obligations.

We have excluded from the table above uncertain tax liabilities due to the uncertainty of the amount and period of payment. As of September 29, 2023, we have gross uncertain tax liabilities of $70.3 million (see Note 10 to the audited consolidated

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financial statements). During fiscal 2023, we made contributions totaling $1.2 million into our defined benefit pension plans. Estimated contributions to our defined benefit pension plans in fiscal 2024 are $1.0 million (see Note 9 to the audited consolidated financial statements).

We have a Receivables Facility agreement with four financial institutions where we sell on a continuous basis an undivided interest in all eligible accounts receivable, as defined in the Receivables Facility. The maximum amount available under the Receivables Facility as of September 29, 2023 is $600.0 million. During the third quarter of fiscal 2023, we increased the purchase limit available under the Receivables Facility from $500.0 million to $600.0 million and extended the scheduled maturity date from June 2024 to July 2026. All other terms and conditions of the agreement remained largely unchanged. As of September 29, 2023, there are no outstanding borrowings under the Receivables Facility. Amounts borrowed under the Receivables Facility may fluctuate monthly based on our funding requirements and the level of qualified receivables available to collateralize the Receivables Facility.

Pursuant to the Receivables Facility, we formed ARAMARK Receivables, LLC, a wholly-owned, consolidated, bankruptcy-remote subsidiary. ARAMARK Receivables, LLC was formed for the sole purpose of buying and selling receivables generated by certain of our subsidiaries. Under the Receivables Facility, we and certain of our subsidiaries transfer without recourse all of our accounts receivable to ARAMARK Receivables, LLC. As collections reduce previously transferred interests, interests in new, eligible receivables are transferred to ARAMARK Receivables, LLC, subject to meeting certain conditions.

Supplemental Consolidating Information

Pursuant to Regulation S-X Rule 13-01, which simplified certain disclosure requirements for guarantors and issuers of guaranteed securities, we are no longer required to provide condensed consolidating financial statements for Aramark and its subsidiaries, including the guarantors and non-guarantors under our Credit Agreement and the indentures governing our senior notes. ASI, the borrower under our Credit Agreement and the indentures governing our senior notes, and its restricted subsidiaries together comprise substantially all of our assets, liabilities and operations, and there are no material differences between the consolidating information related to Aramark and Aramark Intermediate Holdco Corporation, the direct parent of ASI and a guarantor under our Credit Agreement, on the one hand, and ASI and its restricted subsidiaries on a standalone basis, on the other hand.

Other

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 audited 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 September 29, 2023. 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 September 29, 2023 and September 30, 2022, cash and cash equivalents at the Captive were $32.8 million and $23.1 million, respectively. During fiscal 2022, the Captive began investing a portion of its cash and cash equivalents in United States Treasury securities to improve returns on the Captive's assets. The amount of this investment as of September 29, 2023 and September 30, 2022 was $110.7 million and $78.2 million, respectively, and recorded in "Prepayments and other current assets" on the Consolidated Balance Sheets.

Critical Accounting Policies and Estimates

Our significant accounting policies are described in the notes to the audited consolidated financial statements included in this Annual Report.

In preparing our financial statements, management is required to make estimates and assumptions that, among other things, affect the reported amounts of assets, liabilities, revenue and expenses. These estimates and assumptions are most significant where they involve levels of subjectivity and judgment necessary to account for highly uncertain matters or matters susceptible to change, and where they can have a material impact on our financial condition and operating performance. If actual results were to differ materially from the estimates made, the reported results could be materially affected.

Critical accounting estimates and the related assumptions are evaluated periodically as conditions warrant, and changes to such estimates are recorded as new information or changed conditions require.

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Asset Impairment Determinations

Indefinite lived intangible assets that are not amortized are subject to an impairment test that we conduct annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists. For goodwill, the impairment test may first consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Examples of qualitative factors include, macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, entity-specific events, events affecting reporting units and sustained changes in our stock price. If results of the qualitative assessment indicate a more likely than not determination or if a qualitative assessment is not performed, a quantitative test is performed by comparing the estimated fair value using a discounted cash flow method or market method for each reporting unit with its estimated net book value.

We perform the assessment of goodwill at the reporting unit level. Within our FSS International segment, each country or region is evaluated separately since they are relatively autonomous and separate goodwill balances have been recorded for each entity. During the fourth quarter of fiscal 2023, we performed the annual impairment test for goodwill for each of our reporting units using a quantitative testing approach. Based on the evaluation performed, we determined that the fair value of each of the reporting units significantly exceeded its respective carrying amount, and therefore, we determined that goodwill was not impaired.

The determination of fair value for each reporting unit includes assumptions, which are considered Level 3 inputs, that are subject to risk and uncertainty. The discounted cash flow calculations are dependent on several subjective factors including the timing of future cash flows, the underlying margin projection assumptions, future growth rates and the discount rate. The market based method is dependent on several subjective factors including the determination of market multiples and future cash flows. If our assumptions or estimates in our fair value calculations change or if future cash flows, margin projections or future growth rates vary from what was expected, this may impact our impairment analysis and could reduce the underlying cash flows used to estimate fair values and result in a decline in fair value that may trigger future impairment charges.

With respect to our other long-lived assets, we are required to test for asset impairment whenever events or circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment are present, we compare the sum of the future expected cash flows from the asset, undiscounted and without interest charges, to the asset’s carrying value. If the sum of the future expected cash flows from the asset is less than the carrying value, an impairment would be recognized for the difference between the estimated fair value and the carrying value of the asset.

In making future cash flow analyses of various assets, we make assumptions relating to the following:

•    the intended use of assets and the expected future cash flows resulting directly from such use;

•    comparable market valuations of businesses similar to Aramark's business segments;

•    industry specific economic conditions;

•    competitor activities and regulatory initiatives; and

•    client and customer preferences and behavior patterns.

We believe that an accounting estimate relating to asset impairment is a critical accounting estimate because the assumptions underlying future cash flow estimates are subject to change from time to time and the recognition of an impairment could have a significant impact on our Consolidated Statements of Income (Loss).

Litigation and Claims

From time to time, we and our subsidiaries are party to various legal actions, proceedings and investigations involving claims incidental to the conduct of our businesses, including those brought by clients, customers, employees, government entities and third parties under, among others, federal, state, international, national, provincial and local employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, import and export controls and customs laws, environmental laws, false claims or whistleblower statutes, procurement regulations, intellectual property laws, food safety and sanitation laws, cost and accounting principles, the Foreign Corrupt Practices Act, the U.K. Bribery Act, other anti-corruption laws, lobbying laws, motor carrier safety laws, data privacy and security laws and alcohol licensing and service laws, or alleging negligence and/or breach of contractual and other obligations. We consider the measurement of litigation reserves as a critical accounting estimate because of the significant uncertainty in some cases relating to the outcome of potential claims or litigation and the difficulty of predicting the likelihood and range of potential liability involved, coupled with the material impact on our results of operations that could result from litigation or other claims. In determining legal reserves, we consider, among other issues:

•    interpretation of contractual rights and obligations;

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•    the status of government regulatory initiatives, interpretations and investigations;

•    the status of settlement negotiations;

•    prior experience with similar types of claims;

•    whether there is available insurance; and

•    advice of counsel.

We were involved in a dispute with a client regarding our provision of services pursuant to a contract. During fiscal 2022, we resolved the matter by entering into a settlement agreement with the client whereby our obligations totaled $13.6 million, resulting in a reversal of previously reserved amounts of $5.7 million, which is included in "Cost of services provided (exclusive of depreciation and amortization)" on the Consolidated Statements of Income (Loss).

Allowance for Credit Losses

We encounter credit loss risks associated with the collection of receivables. We analyze historical experience, current general and specific industry economic conditions, industry concentrations, such as exposure to small and medium-sized businesses, the non-profit healthcare sector, federal and local governments, and reasonable and supportable forecasts that affect the collectability of the reported amount in estimating credit losses. The accounting estimate related to the allowance for credit losses is a critical accounting estimate because the underlying assumptions used for the allowance can change from time to time and credit losses could potentially have a material impact on our results of operations. We adopted a new accounting standard related to the measurement of expected credit losses as of October 3, 2020 (the first day of fiscal 2021).

As of September 29, 2023 and September 30, 2022, our allowance for credit losses was $56.6 million and $56.4 million, respectively.

Inventory Obsolescence

We record an inventory obsolescence reserve for obsolete, excess and slow-moving inventory, principally in the Uniform segment. In calculating our inventory obsolescence reserve, we analyze historical and projected data regarding customer demand within specific product categories and make assumptions regarding economic conditions within customer specific industries, as well as style and product changes. Our accounting estimate related to inventory obsolescence is a critical accounting estimate because customer demand in certain of our businesses can be variable and changes in our reserve for inventory obsolescence could materially affect our results of operations.

As of September 29, 2023 and September 30, 2022, our reserve for inventory obsolescence was $21.0 million and $51.3 million, respectively. The decrease in the Company's reserve was primarily due to the write-off and disposal of personal protective equipment inventory. The inventory reserve is determined based on history and projected customer consumption and specific identification.

Self-Insurance Reserves

We self-insure for obligations related to certain risks that we retain under our casualty program, which includes general liability, automobile liability and workers’ compensation liability, as well as for certain property damage risks and employee healthcare benefit programs. The accounting estimates related to our self-insurance reserves are critical accounting estimates because changes in our claim experience, our ability to settle claims or other estimates and judgments we use could potentially have a material impact on our results of operations. Our reserves for retained costs associated with our casualty program are estimated through actuarial methods, with the assistance of third-party actuaries, using loss development assumptions based on our claims history. Our casualty program reserves take into account reported claims as well as incurred-but-not-reported losses using loss development factors based upon past experience. In order to determine the loss development factors, we make judgments relating to the nature, frequency, severity, and age of claims, and industry, regulatory and company-specific trends impacting the development of claims. The actual cost to settle our self-insured casualty claim liabilities can differ from our reserve estimates because of a number of uncertainties, including the inherent difficulty in estimating the severity of a claim and the potential amount to defend and settle a claim.

As of September 29, 2023 and September 30, 2022, our self-insurance reserves were $269.8 million and $254.4 million, respectively.

Income Taxes

We use the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of taxes payable or refundable for the current year and for deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. We make assumptions, judgments and estimates to determine the current income tax provision (benefit), deferred tax asset and liabilities

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and valuation allowance recorded against a deferred tax asset. The assumptions, judgments and estimates relative to the current income tax provision (benefit) take into account current tax laws, their interpretation and possible results of foreign and domestic tax audits. Changes in tax law, their interpretation and resolution of tax audits could significantly impact the income taxes provided in our consolidated financial statements. Assumptions, judgments and estimates relative to the amount of deferred income taxes take into account future taxable income. Any of the assumptions, judgments and estimates mentioned above could cause the actual income tax obligations to differ from our estimates.

As of September 29, 2023 and September 30, 2022, our valuation allowance reserves recorded against deferred tax assets were $78.2 million and $83.8 million, respectively (see Note 10 to the audited consolidated financial statements).

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New Accounting Standards Updates

See Note 1 to the audited consolidated financial statements for a full description of recent accounting standards updates, including the expected dates of adoption.

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of Aramark's (the "Company," "we," "our" and "us") financial condition and results of operations for the fiscal years ended September 30, 2022 and October 1, 2021 should be read in conjunction with our audited consolidated financial statements and the notes to those statements. Discussion and analysis of our financial condition and results of operations for the fiscal year ended October 1, 2021 compared to the fiscal year ended October 2, 2020 is included under the heading Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations - Fiscal 2021 Compared to Fiscal 2020 and - Liquidity and Capital Resources” in our Annual Report on Form 10-K filed for the fiscal year ended October 1, 2021 with the Securities and Exchange Commission ("SEC") on November 23, 2021.

Our discussion contains forward-looking statements, such as our plans, objectives, opinions, expectations, anticipations, intentions and beliefs, that are based upon our current expectations but that involve risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in those forward-looking statements as a result of a number of factors, including those set forth under "Risk Factors," "Special Note About Forward-looking Statements" and "Business" sections and elsewhere in this Annual Report on Form 10-K ("Annual Report"). In the following discussion and analysis of financial condition and results of operations, certain financial measures may be considered “non-GAAP financial measures” under SEC rules. These rules require supplemental explanation and reconciliation, which is provided elsewhere in this Annual Report.

Overview

We are a leading global provider of food, facilities and uniform services to education, healthcare, business & industry and sports, leisure & corrections clients. Our core market is the United States, which is supplemented by an additional 18-country footprint. Through our established brand, broad geographic presence and employees, we anchor our business in our partnerships with thousands of clients. Through these partnerships we serve millions of customers including students, patients, employees, sports fans and guests worldwide.

We operate our business in three reportable segments:

•Food and Support Services United States ("FSS United States") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities serving the general public in the United States.

•Food and Support Services International ("FSS International") - Food, refreshment, specialized dietary and support services, including facility maintenance and housekeeping, provided to business, educational and healthcare institutions and in sports, leisure and other facilities serving the general public. We have operations in 18 countries outside the United States. Our largest international operations are in Canada, Chile, China, Germany, Spain and the United Kingdom, and in a majority of these countries we are one of the leading food and/or facility services providers. We also have operations in Japan through our 50% ownership of AIM Services Co., Ltd., which is a leader in providing outsourced food services in Japan.

•Uniform and Career Apparel ("Uniform") - Provides a full-service employee uniform solution, resulting in a contracted and recurring revenue model. The customer base is serviced by a leading geographic footprint in the United States and Canada with programs focused on uniforms, floor mats, towels, linens, managed restroom and first aid services. Customers operate in a wide range of industries in the United States and Canada.

Our Food and Support Services operations focus on serving clients in five principal sectors: Business & Industry, Education, Healthcare, Sports, Leisure & Corrections and Facilities & Other. Our FSS International reportable segment provides a similar range of services as those provided to our FSS United States clients and operates in the same sectors. Administrative expenses not allocated to our three reportable segments are presented separately as corporate expenses.

Business Update

Recent global events, including the COVID-19 pandemic ("COVID-19"), have adversely affected global economies, disrupted global supply chains and labor force participation and created significant volatility and disruption of financial markets. COVID-19 related disruptions negatively impacted our financial and operating results beginning in the second quarter of fiscal 2020 through the first half of fiscal 2021. Our financial results started to improve during the second half of fiscal 2021 and continued to improve throughout fiscal 2022 as COVID-19 restrictions were lifted and operations re-opened. In addition, the

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ongoing conflict between Russia and Ukraine, countries in which we do not have direct operations, further disrupted global supply chains and heightened volatility and disruption of global financial markets. The ongoing volatility and disruption of financial markets caused by these global events, as well as other current global economic factors, triggered inflation in our food and labor costs, increased market interest rates and has driven significant changes in foreign currencies. The impact on our longer-term operational and financial performance will depend on future developments, including our response and governmental response to inflation, our interest rate hedging strategy, the duration and severity of the ongoing volatility and disruption of global financial markets and our ability to effectively hire and retain personnel. Some of these future developments are outside of our control and are highly uncertain.

We continue to remain principally focused on the safety and well-being of our employees, clients and everyone we serve, while simultaneously taking timely, proactive measures to adapt to the current environment. Throughout fiscal 2022, we saw continued improved profitability from clients re-opening as COVID-19 restrictions eased as well as from effective management of operating costs, including supply chain initiatives, and pricing pass-throughs to mitigate the effects of elevated inflation. We continue to evaluate and react to the effects of a prolonged global disruption, including items such as inflationary pressures on food and product costs, greater labor challenges and the financial condition of our clients in certain businesses. We expect these challenges to continue into fiscal 2023, and we regularly evaluate and react in order to take appropriate actions to mitigate the risk in these areas.

In the FSS United States segment, the current environment of our sectors are as follows:

•Education – Education saw strong performance during the start of the new academic year. In Higher Education and K-12, teams implemented enhanced pricing strategies for meal plans and on-campus retail outlets.

•Sports, Leisure & Corrections – Sports saw high attendance levels with better-than-historic per capita spending. Leisure experienced increased guest activity, particularly in National Parks. Corrections revenue growth was led by the Union Supply acquisition and new business wins.

•Business & Industry – Companies continued to experience a steady increase of in-person activity as return-to-office continued, particularly in September 2022. Some clients have implemented customized offerings and meal subsidies, which helped to increase participation rates.

•Facilities & Other – Revenue growth was driven by higher levels of activity at existing clients and new business wins. We continue to offer our core business offerings, with an added focus on new engineering solutions and client project services.

•Healthcare – Revenue growth was led by increased client activity related to elective surgeries, clinical care and retail along with higher net growth from newly awarded contracts, improved retention rates and additional services.

Within the FSS International segment, we continue to recover, returning to pre-pandemic revenue levels. South America continues to experience strong performance in extractive services. Europe and Canada continue to recover with the improved activity levels, especially in sports and entertainment venues driven by higher per capita spending, increased business and industry activity and education due to the start of the fall semester.

In the Uniform segment, our business serves a range of clients, focusing on solution-oriented services driving safety and hygiene. Client operations have resumed, which, combined with increasing levels of net new client wins in both recurring rental and adjacency services and improved pricing, has enabled the segment to continue to surpass pre-pandemic revenue levels.

Aramark’s Intention to Spin-off Uniform Segment

On May 10, 2022, we announced our intention to spin-off our Uniform segment into an independent publicly traded company to our stockholders. The proposed spin-off is intended to be a tax-free transaction to us and our stockholders for United States federal income tax purposes. The proposed spin-off is expected to be completed in the second half of fiscal 2023, subject to certain customary conditions, including final approval of our Board of Directors, receipt of a favorable opinion and Internal Revenue Service ruling with respect to the tax-free nature of the transaction, the effectiveness of a registration statement on Form 10 to be filed with the SEC and the receipt of other regulatory approvals. Refer to Note 15 to the audited consolidated financial statements for the Uniform segment financial disclosures.

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Acquisition

On June 2, 2022, we completed the acquisition of Union Supply Group Inc. ("Union Supply"), a commissary goods and services supplier, for cash consideration of $199.6 million, plus contingent consideration (see Note 2 and Note 16 to the audited consolidated financial statements).

On June 4, 2021, we completed the acquisition of Next Level Hospitality ("Next Level"), a premier provider of culinary and environmental services in the senior living industry, specializing in skilled nursing and rehabilitation facilities, for cash consideration of $226.1 million, plus contingent consideration (see Note 2 and Note 16 to the audited consolidated financial statements).

Seasonality

Our revenue and operating results have varied, and we expect them to continue to vary, from quarter to quarter as a result of different factors. Historically, within our FSS United States segment, there has been a lower level of activity during our first and second fiscal quarters in operations that provide services to sports and leisure clients. This lower level of activity, historically, has been partially offset during our first and second fiscal quarters by the increased activity levels in our educational operations. Conversely, historically there has been a significant increase in the provision of services to sports and leisure clients during our third and fourth fiscal quarters, which is partially offset by the effect of summer recess at colleges, universities and schools in our educational operations. Recently, our business and results of operations have started to resemble our historically typical patterns of seasonality following the disruption caused by COVID-19.

Sources of Revenue

Our clients engage us, generally through written contracts, to provide our services at their locations. Depending on the type of client and service, we are paid either by our client or directly by the customer to whom we have been provided access by our client. We typically use either profit and loss contracts or client interest contracts in our FSS United States and FSS International segments. These contracts differ in their provision for the amount of financial risk we bear and, accordingly, the potential compensation, profits or fees we may receive. Under profit and loss contracts, we receive all of the revenue from, and bear all of the expenses of, the provision of our services at a client location. For fiscal 2022, approximately two-thirds of our FSS United States and FSS International segment revenue was derived from profit and loss contracts. Client interest contracts include management fee contracts, under which our clients reimburse our operating costs and pay us a management fee, which may be calculated as a fixed dollar amount or a percentage of revenue or operating costs. Some management fee contracts entitle us to receive incentive fees based upon our performance under the contract, as measured by factors such as revenue, operating costs and customer satisfaction surveys. For fiscal 2022, approximately one-third of our FSS United States and FSS International segment revenue was derived from client interest contracts. In response to the early stages of the COVID-19 pandemic, in certain instances, mainly within the Business & Industry sector, we renegotiated contract terms by temporarily transitioning from profit and loss contracts to client interest contracts in order to mitigate lost profits. As COVID restrictions lifted and operations re-opened, we are working with our clients to transition back to profit and loss contracts, as appropriate.

For our Uniform segment, we typically serve our rental clients under written service contracts for an initial term of three to five years. As the majority of our clients purchase on a recurring basis, our backlog of orders at any given time consists principally of orders in the process of being filled. With the exception of certain governmental bid business, most of our direct marketing business is conducted under invoice arrangement with repeat clients. To a large degree, our direct marketing business is relationship-driven. While we have long-term relationships with our larger clients, we generally do not have contracts with these clients within our direct marketing business.

Costs and Expenses

Our costs and expenses are comprised of cost of services provided (exclusive of depreciation and amortization), depreciation and amortization and selling and general corporate expenses. Cost of services provided (exclusive of depreciation and amortization) consists of direct expenses associated with our operations, which includes food costs, wages, other labor-related expenses (including workers' compensation, severance, state unemployment insurance and federal or state mandated health benefits and other healthcare costs), insurance, fuel, utilities, piece goods and clothing and equipment. Direct expense related to food costs within Cost of services provided (exclusive of depreciation and amortization) are offset by rebates, vendor allowances and volume discounts. Depreciation and amortization expenses mainly relate to assets used in generating revenue. Selling and general corporate expenses include sales commissions, severance, share-based compensation and other unallocated costs related to administrative functions including finance, legal and human resources.

Interest and Other Financing Costs, net

Interest and other financing costs, net, relates primarily to interest expense on long-term borrowings. Interest and other financing costs, net also includes third-party costs associated with long-term borrowings that were capitalized and are being amortized over the term of the borrowing.

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Provision (Benefit) for Income Taxes

The Provision (Benefit) for Income Taxes represents federal, foreign, state and local income taxes. Our effective tax rate differs from the statutory United States income tax rate due to the effect of state and local income taxes, tax rates in foreign jurisdictions, tax credits and certain nondeductible expenses. Our effective tax rate will change from quarter to quarter based on recurring and nonrecurring factors including, but not limited to, the geographical mix of earnings, state and local income taxes, tax audit settlements, share-based award exercise activity and enacted tax legislation, including certain business tax credits. The Provision (Benefit) for Income Taxes in fiscal 2021 was impacted by governmental programs, such as the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") and Consolidated Appropriations Act of 2021 (see Note 10 to the audited consolidated financial statements). Changes in judgment due to the evaluation of new information resulting in the recognition, derecognition or remeasurement of a tax position taken in a prior annual period are recognized separately in the quarter of the change.

Foreign Currency Fluctuations

The impact from foreign currency translation assumes constant foreign currency exchange rates based on the rates in effect for the prior year period being used in translation for the comparable current year period. We believe that providing the impact of fluctuations in foreign currency rates on certain financial results can facilitate analysis of period-to-period comparisons of business performance.

Fiscal Year

Our fiscal year is the fifty-two or fifty-three week period which ends on the Friday nearest to September 30th. The fiscal years ended September 30, 2022 and October 1, 2021 were each a fifty-two week period.

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Results of Operations

Fiscal 2022 Compared to Fiscal 2021

The following tables present an overview of our results on a consolidated and segment basis with the amount of and percentage change between periods for the fiscal years 2022 and 2021 (dollars in millions).