Condensed Consolidating Financial Statements of Aramark and Subsidiaries

9 Months Ended

Jun. 28, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Statements of Aramark and Subsidiaries

CONDENSED CONSOLIDATING FINANCIAL STATEMENTS OF ARAMARK AND SUBSIDIARIES:

The following condensed consolidating financial statements of the Company have been prepared pursuant to Rule 3-10 of Regulation S-X.

The condensed consolidating financial statements are presented for: (i) Aramark (the "Parent"); (ii) Aramark Services, Inc. and Aramark International Finance S.à r.l. (the "Issuers"); (iii) the guarantors; (iv) the non guarantors; (v) elimination entries necessary to consolidate the Parent with the Issuers, the guarantors and non guarantors; and (vi) the Company on a consolidated basis. Each of the guarantors is wholly-owned, directly or indirectly, by the Company. The 5.125% Senior Notes due 2024 (the "2024 Notes"), 5.000% Senior Notes due April 1, 2025 (the "5.000% 2025 Notes"), 3.125% Senior Notes due April 1, 2025 (the "3.125% 2025 Notes" and, together with the 5.000% 2025 Notes, the "2025 Notes"), 4.75% Senior Notes due June 1, 2026 ("2026 Notes") and 5.000% Senior Notes due February 1, 2028 (the "2028 Notes") are obligations of the Company's wholly-owned subsidiary, Aramark Services, Inc., (other than the 3.125% 2025 Notes, which are obligations of the Company's wholly owned subsidiary, Aramark International Finance S.a.r.l) and are each jointly and severally guaranteed on a senior unsecured basis by the Company and substantially all of the Company's existing and future domestic subsidiaries (excluding the Receivables Facility subsidiary) ("Guarantors"). All other subsidiaries of the Company, either direct or indirect, do not guarantee the 2024 Notes, 2025 Notes, 2026 Notes or 2028 Notes ("Non Guarantors"). The Guarantors also guarantee certain other debt. These condensed consolidating financial statements have been prepared from the Company's financial information on the same basis of accounting as the condensed consolidated financial statements. Interest expense and certain other costs are partially allocated to all of the subsidiaries of the Company. Goodwill and other intangible assets have been allocated to the subsidiaries based on management's estimates.

CONDENSED CONSOLIDATING BALANCE SHEETS

June 28, 2019

(in thousands)



	Aramark (Parent)		Issuers		Guarantors		Non Guarantors		Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	5	$	46,698	$	23,405	$	149,947	$	—		$	220,055
Receivables	—		2,111		588,382		1,242,418		—			1,832,911
Inventories	—		15,984		281,530		95,601		—			393,115
Prepayments and other current assets	—		40,392		74,367		81,285		—			196,044
Total current assets	5		105,185		967,684		1,569,251		—			2,642,125
Property and Equipment, net	—		43,599		1,739,272		360,894		—			2,143,765
Goodwill	—		173,104		4,702,583		650,614		—			5,526,301
Investment in and Advances to Subsidiaries	3,285,917		6,865,245		—		762,770		(10,913,932		)	—
Other Intangible Assets	—		29,684		1,834,974		199,979		—			2,064,637
Other Assets	—		20,885		973,747		360,044		(2,002		)	1,352,674
	$	3,285,922	$	7,237,702	$	10,218,260	$	3,903,552	$	(10,915,934	)	$	13,729,502
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term borrowings	$	—	$	3,756	$	27,845	$	22,148	$	—		$	53,749
Accounts payable	—		119,826		383,399		316,697		—			819,922
Accrued expenses and other current liabilities	—		177,816		737,534		370,287		88			1,285,725
Total current liabilities	—		301,398		1,148,778		709,132		88			2,159,396
Long-term Borrowings	—		6,368,352		77,240		753,326		—			7,198,918
Deferred Income Taxes and Other Noncurrent Liabilities	—		421,092		529,391		124,715		—			1,075,198
Intercompany Payable	—		—		4,710,831		419,352		(5,130,183		)	—
Redeemable Noncontrolling Interest	—		—		10,068		—		—			10,068
Total Stockholders' Equity	3,285,922		146,860		3,741,952		1,897,027		(5,785,839		)	3,285,922
	$	3,285,922	$	7,237,702	$	10,218,260	$	3,903,552	$	(10,915,934	)	$	13,729,502

CONDENSED CONSOLIDATING BALANCE SHEETS

September 28, 2018

(in thousands)



	Aramark (Parent)		Issuers		Guarantors		Non Guarantors		Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	5	$	50,716	$	29,844	$	134,460	$	—		$	215,025
Receivables	—		1,038		443,599		1,345,796		—			1,790,433
Inventories	—		15,857		592,259		116,686		—			724,802
Prepayments and other current assets	—		21,411		86,100		63,654		—			171,165
Total current assets	5		89,022		1,151,802		1,660,596		—			2,901,425
Property and Equipment, net	—		28,341		1,013,523		336,230		—			1,378,094
Goodwill	—		173,104		4,783,547		653,917		—			5,610,568
Investment in and Advances to Subsidiaries	3,029,553		7,441,605		90,049		844,245		(11,405,452		)	—
Other Intangible Assets	—		29,684		1,919,795		187,365		—			2,136,844
Other Assets	—		100,754		1,264,976		329,443		(2,002		)	1,693,171
	$	3,029,558	$	7,862,510	$	10,223,692	$	4,011,796	$	(11,407,454	)	$	13,720,102
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term borrowings	$	—	$	—	$	26,564	$	4,343	$	—		$	30,907
Accounts payable	—		128,460		483,606		406,854		—			1,018,920
Accrued expenses and other current liabilities	—		205,807		926,794		307,643		88			1,440,332
Total current liabilities	—		334,267		1,436,964		718,840		88			2,490,159
Long-term Borrowings	—		6,651,110		82,097		479,870		—			7,213,077
Deferred Income Taxes and Other Noncurrent Liabilities	—		432,583		466,331		78,301		—			977,215
Intercompany Payable	—		—		4,827,084		955,407		(5,782,491		)	—
Redeemable Noncontrolling Interest	—		—		10,093		—		—			10,093
Total Stockholders' Equity	3,029,558		444,550		3,401,123		1,779,378		(5,625,051		)	3,029,558
	$	3,029,558	$	7,862,510	$	10,223,692	$	4,011,796	$	(11,407,454	)	$	13,720,102

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the three months ended June 28, 2019

(in thousands)



	Aramark (Parent)			Issuers			Guarantors		Non Guarantors		Eliminations			Consolidated
Revenue	$	—		$	271,186		$	2,589,449	$	1,150,126	$	—		$	4,010,761
Costs and Expenses:
Cost of services provided	—			257,515			2,285,548		1,051,915		—			3,594,978
Depreciation and amortization	—			4,090			119,529		25,160		—			148,779
Selling and general corporate expenses	—			26,038			44,838		7,309		—			78,185
Interest and other financing costs, net	—			77,896			532		3,792		—			82,220
Expense allocations	—			(70,854		)	67,384		3,470		—			—
	—			294,685			2,517,831		1,091,646		—			3,904,162
Income (Loss) before Income Tax	—			(23,499		)	71,618		58,480		—			106,599
Provision (Benefit) for Income Taxes	—			(6,381		)	15,406		14,510		—			23,535
Equity in Net Income of Subsidiaries	82,955			—			—		—		(82,955		)	—
Net income (loss)	82,955			(17,118		)	56,212		43,970		(82,955		)	83,064
Less: Net income attributable to noncontrolling interest	—			—			109		—		—			109
Net income (loss) attributable to Aramark stockholders	82,955			(17,118		)	56,103		43,970		(82,955		)	82,955
Other comprehensive (loss), net of tax	(29,187		)	(30,062		)	—		20,060		10,002			(29,187		)
Comprehensive income (loss) attributable to Aramark stockholders	$	53,768		$	(47,180	)	$	56,103	$	64,030	$	(72,953	)	$	53,768

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the nine months ended June 28, 2019

(in thousands)



	Aramark (Parent)			Issuers			Guarantors			Non Guarantors			Eliminations			Consolidated
Revenue	$	—		$	799,765		$	8,067,783		$	3,408,549		$	—		$	12,276,097
Costs and Expenses:
Cost of services provided	—			738,608			7,125,488			3,165,286			—			11,029,382
Depreciation and amortization	—			12,379			358,772			76,257			—			447,408
Selling and general corporate expenses	—			117,650			131,764			21,186			—			270,600
Gain on sale of Healthcare Technologies	—			—			(156,309		)	—			—			(156,309		)
Interest and other financing costs, net	—			234,808			2,539			12,028			—			249,375
Expense allocations	—			(215,792		)	203,680			12,112			—			—
	—			887,653			7,665,934			3,286,869			—			11,840,456
Income (Loss) before Income Taxes	—			(87,888		)	401,849			121,680			—			435,641
Provision (Benefit) for Income Taxes	—			(33,398		)	75,704			30,283			—			72,589
Equity in Net Income of Subsidiaries	362,992			—			—			—			(362,992		)	—
Net income (loss)	362,992			(54,490		)	326,145			91,397			(362,992		)	363,052
Less: Net income attributable to noncontrolling interest	—			—			60			—			—			60
Net income (loss) attributable to Aramark stockholders	362,992			(54,490		)	326,085			91,397			(362,992		)	362,992
Other comprehensive (loss), net of tax	(79,615		)	(74,487		)	—			(30,781		)	105,268			(79,615		)
Comprehensive income (loss) attributable to Aramark stockholders	$	283,377		$	(128,977	)	$	326,085		$	60,616		$	(257,724	)	$	283,377

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the three months ended June 29, 2018

(in thousands)



	Aramark (Parent)			Issuers			Guarantors			Non Guarantors			Eliminations			Consolidated
Revenue	$	—		$	261,383		$	2,580,276		$	1,129,947		$	—		$	3,971,606
Costs and Expenses:
Cost of services provided	—			235,789			2,262,103			1,028,401			—			3,526,293
Depreciation and amortization	—			4,771			127,321			24,842			—			156,934
Selling and general corporate expenses	—			51,310			43,179			7,226			—			101,715
Interest and other financing costs	—			85,080			(330		)	5,026			—			89,776
Expense allocations	—			(77,642		)	73,564			4,078			—			—
	—			299,308			2,505,837			1,069,573			—			3,874,718
Income (Loss) before Income Tax	—			(37,925		)	74,439			60,374			—			96,888
Provision (Benefit) for Income Taxes	—			(9,612		)	17,470			16,314			—			24,172
Equity in Net Income of Subsidiaries	72,577			—			—			—			(72,577		)	—
Net income (loss)	72,577			(28,313		)	56,969			44,060			(72,577		)	72,716
Less: Net income attributable to noncontrolling interest	—			—			139			—			—			139
Net income (loss) attributable to Aramark stockholders	72,577			(28,313		)	56,830			44,060			(72,577		)	72,577
Other comprehensive income (loss), net of tax	(35,371		)	13,521			—			(100,736		)	87,215			(35,371		)
Comprehensive income (loss) attributable to Aramark stockholders	$	37,206		$	(14,792	)	$	56,830		$	(56,676	)	$	14,638		$	37,206

CONDENSED CONSOLIDATING STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the nine months ended June 29, 2018

(in thousands)



	Aramark (Parent)		Issuers			Guarantors			Non Guarantors			Eliminations			Consolidated
Revenue	$	—	$	772,008		$	7,828,692		$	3,275,335		$	—		$	11,876,035
Costs and Expenses:
Cost of services provided	—		681,761			6,889,070			3,040,701			—			10,611,532
Depreciation and amortization	—		14,645			360,485			68,516			—			443,646
Selling and general corporate expenses	—		153,434			111,383			17,510			—			282,327
Interest and other financing costs	—		244,475			207			11,880			—			256,562
Expense allocations	—		(223,650		)	210,863			12,787			—			—
	—		870,665			7,572,008			3,151,394			—			11,594,067
Income (Loss) before Income Tax	—		(98,657		)	256,684			123,941			—			281,968
Provision (Benefit) for Income Taxes	—		(37,516		)	(112,920		)	39,532			—			(110,904		)
Equity in Net Income of Subsidiaries	392,430		—			—			—			(392,430		)	—
Net income (loss)	392,430		(61,141		)	369,604			84,409			(392,430		)	392,872
Less: Net income attributable to noncontrolling interest	—		—			442			—			—			442
Net income (loss) attributable to Aramark stockholders	392,430		(61,141		)	369,162			84,409			(392,430		)	392,430
Other comprehensive income (loss), net of tax	25,694		36,344			2,181			(33,859		)	(4,666		)	25,694
Comprehensive income (loss) attributable to Aramark stockholders	$	418,124	$	(24,797	)	$	371,343		$	50,550		$	(397,096	)	$	418,124

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the nine months ended June 28, 2019

(in thousands)



	Aramark (Parent)		Issuers			Guarantors			Non Guarantors			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	—	$	(92,905	)	$	70,557		$	241,852		$	(11,317	)	$	208,187
Cash flows from investing activities:
Purchases of property and equipment and other	—		(37,891		)	(247,277		)	(55,281		)	—			(340,449		)
Disposals of property and equipment	—		6,040			1,730			3,250			—			11,020
Proceeds from divestiture	—		—			293,711			—			—			293,711
Acquisitions of businesses, net of cash acquired	—		—			(13,843		)	(21,672		)	—			(35,515		)
Other investing activities	—		(46		)	24,239			(2,352		)	—			21,841
Net cash provided by (used in) investing activities	—		(31,897		)	58,560			(76,055		)	—			(49,392		)
Cash flows from financing activities:
Proceeds from long-term borrowings	—		—			—			107,796			—			107,796
Payments of long-term borrowings	—		(280,809		)	(25,858		)	(65,501		)	—			(372,168		)
Net change in funding under the Receivables Facility	—		—			—			255,000			—			255,000
Payments of dividends	—		(81,305		)	—			—			—			(81,305		)
Proceeds from issuance of common stock	—		21,339			—			—			—			21,339
Repurchase of stock	—		(50,000		)	—			—			—			(50,000		)
Other financing activities	—		(29,581		)	(1,628		)	(113		)	—			(31,322		)
Change in intercompany, net	—		541,140			(108,070		)	(444,387		)	11,317			—
Net cash provided by (used in) financing activities	—		120,784			(135,556		)	(147,205		)	11,317			(150,660		)
Effect of foreign exchange rates on cash and cash equivalents	—		—			—			(3,105		)	—			(3,105		)
Increase (decrease) in cash and cash equivalents	—		(4,018		)	(6,439		)	15,487			—			5,030
Cash and cash equivalents, beginning of period	5		50,716			29,844			134,460			—			215,025
Cash and cash equivalents, end of period	$	5	$	46,698		$	23,405		$	149,947		$	—		$	220,055

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

For the nine months ended June 29, 2018

(in thousands)



	Aramark (Parent)		Issuers			Guarantors			Non Guarantors			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	—	$	(11,280	)	$	(2,707	)	$	194,501		$	(35,002	)	$	145,512
Cash flows from investing activities:
Purchases of property and equipment and other	—		(8,926		)	(367,388		)	(56,465		)	—			(432,779		)
Disposals of property and equipment	—		2,142			2,393			3,151			—			7,686
Acquisitions of businesses, net of cash acquired	—		(2,381,800		)	236,613			(94,414		)	—			(2,239,601		)
Other investing activities	—		(4,214		)	512			(3,783		)	—			(7,485		)
Net cash used in investing activities	—		(2,392,798		)	(127,870		)	(151,511		)	—			(2,672,179		)
Cash flows from financing activities:
Proceeds from long-term borrowings	—		2,982,209			—			163,860			—			3,146,069
Payments of long-term borrowings	—		(639,731		)	(19,962		)	(41,369		)	—			(701,062		)
Net change in funding under the Receivables Facility	—		—			—			145,800			—			145,800
Payments of dividends	—		(77,317		)	—			—			—			(77,317		)
Proceeds from issuance of common stock	—		15,961			—			—			—			15,961
Repurchase of stock	—		(24,410		)	—			—			—			(24,410		)
Other financing activities	—		(44,037		)	(2,686		)	(390		)	—			(47,113		)
Change in intercompany, net	—		107,363			141,746			(284,111		)	35,002			—
Net cash provided by (used in) financing activities	—		2,320,038			119,098			(16,210		)	35,002			2,457,928
Effect of foreign exchange rates on cash and cash equivalents	—		—			—			(4,090		)	—			(4,090		)
Increase (decrease) in cash and cash equivalents	—		(84,040		)	(11,479		)	22,690			—			(72,829		)
Cash and cash equivalents, beginning of period	5		111,512			37,513			89,767			—			238,797
Cash and cash equivalents, end of period	$	5	$	27,472		$	26,034		$	112,457		$	—		$	165,968