Aramark

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Aramark (the "Company") is a leading global provider of food and facilities services to education, healthcare, business & industry and sports, leisure & corrections clients. The Company's largest market is the United States, which is supplemented by an additional 15-country footprint. The Company also provides services on a more limited basis in several additional countries and in offshore locations. The Company operates its business intwo reportable segments that share many of the same operating characteristics: Food and Support Services United States ("FSS United States") and Food and Support Services International ("FSS International").

The condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and should be read in conjunction with the audited consolidated financial statements, and the notes to those statements, included in the Company's Form 10-K filed with the SEC on November 25, 2025. The Condensed Consolidated Balance Sheet as of October 3, 2025 was derived from audited financial statements which have been prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP"). Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. In the opinion of the Company, the statements include all adjustments, which are of a normal, recurring nature, required for a fair presentation for the periods presented. The results of operations for interim periods are not necessarily indicative of the results for a full year, due to the seasonality of some of the Company's business activities and the possibility of changes in general economic conditions.

The condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries in which a controlling financial interest is maintained. All intercompany transactions and accounts have been eliminated.

New Accounting Standards Updates

Standards Not Yet Adopted (from most to least recent date of issuance)

In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40), to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile programming. Under the new guidance, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed, and the software will be used to perform the function intended. The guidance is effective for the Company in the first quarter of fiscal 2029 and early adoption is permitted. The guidance can be applied on a prospective basis, a modified basis for in-process projects or on a retrospective basis. The Company is currently assessing the impact of the new guidance on its financial statement disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The guidance requires disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation and depreciation and amortization included in each income statement line item. The guidance also requires disclosure of the total amount of selling expenses and the Company’s definition of selling expenses. The guidance is effective for the Company for annual periods beginning in fiscal 2028 and for interim periods beginning in fiscal 2029. The Company is currently assessing the impact of the new guidance on its financial statement disclosures.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosuresto enhance the transparency and decision usefulness of income tax disclosures. The guidance will require improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The guidance is effective for the Company's annual disclosures for fiscal 2026 and early adoption is permitted. The Company is currently assessing the impact of the new guidance on its financial statement disclosures.

Other new accounting pronouncements recently issued or newly effective were not applicable to the Company, did not have a material impact nor are expected to have a material impact on the condensed consolidated financial statements.

Comprehensive Income

Comprehensive income includes all changes to stockholders' equity during a period, except those resulting from investments by and distributions to stockholders. Components of comprehensive income include net income, changes in foreign currency translation adjustments (net of tax) and changes in the fair value of cash flow hedges (net of tax).

The summary of the components of comprehensive income is as follows (in thousands):

Accumulated other comprehensive loss consists of the following (in thousands):

Currency Translation

Gains and losses resulting from the translation of financial statements of non-United States subsidiaries are reflected as a component of accumulated other comprehensive loss in stockholders' equity. Beginning in fiscal 2018, Argentina was determined to have a highly inflationary economy. As a result, the Company remeasures the financial statements of Argentina's operations in accordance with the accounting guidance for highly inflationary economies. The impact of the Argentina remeasurement, reflected in the Condensed Consolidated Statements of Income, was a foreign currency transaction loss of $0.5 million and $0.7 million during the three months ended January 2, 2026 and December 27, 2024, respectively. The impact of foreign currency transaction gains and losses exclusive of Argentina's operations included in the Company's operating results during the three month periods of both fiscal 2026 and 2025 were immaterial to the condensed consolidated financial statements.

Current Assets

The Company insures portions of its 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 its approach to risk finance. The Captive is subject to regulations within its domicile of Bermuda, including regulations established by the Bermuda Monetary Authority (the "BMA") relating to levels of liquidity and solvency as such concepts are defined by the BMA. The Captive was in compliance with these regulations as of January 2, 2026. These regulations may have the effect of limiting the Company's ability to access certain cash and cash equivalents held by the Captive for uses other than for the payment of its general liability, automobile liability, workers' compensation liability, certain property damage and related Captive costs. As of January 2, 2026 and October 3, 2025, cash and cash equivalents at the Captive were $144.5 million and $133.5 million, respectively.

Within the FSS International segment, the Company receives certain cash on behalf of the Company's clients, which is contractually restricted from withdrawal and usage. This restricted cash is recorded in "Prepayments and other current assets" on the Condensed Consolidated Balance Sheets.

Other Assets

Other assets consist primarily of costs to obtain or fulfill contracts (including employee sales commissions), long-term receivables, interest rate swaps, investments in 50% or less owned entities and computer software costs.

For investments in 50% or less owned entities accounted for under the equity method of accounting, the carrying amount as of January 2, 2026 and October 3, 2025 was $63.7 million and $70.6 million, respectively.

For investments in 50% or less owned entities, other than those accounted for under the equity method of accounting, the Company measures these investments at cost, less any impairment and adjusted for changes in fair value resulting from observable price changes for an identical or a similar investment of the same issuer due to the lack of readily available fair values related to those investments. The carrying amount of equity investments without readily determinable fair values as of January 2, 2026 and October 3, 2025 was $65.1 million and $59.6 million, respectively.

Supply Chain Finance Program

The Company has agreements with third-party administrators that allow participating vendors to voluntarily elect to sell payment obligations from the Company to financial institutions as part of a Supply Chain Finance Program ("SCF Program"). The Company's payment terms to the financial institutions, including the timing and amount of payments, are based on the original supplier invoices. When participating vendors elect to sell one or more of the Company's payment obligations, the Company's rights and obligations to settle the payable on their contractual due date are not impacted. The Company has no economic or commercial interest in a vendor's decision to sell the Company's payment obligations. The Company agrees on commercial terms with vendors for the goods and services procured, which are consistent with payment terms observed at other peer companies in the industry, and the terms are not impacted by the SCF Program. For the SCF Program, the Company does not provide asset pledges, or other forms of guarantees, as security for the committed payment to the financial institutions. As of January 2, 2026 and October 3, 2025, the Company had $1.8 million and $4.7 million, respectively, of outstanding payment obligations to the financial institutions as part of the SCF Program recorded in "Accounts payable" on the Condensed Consolidated Balance Sheets.

Lease Arrangements

Certain of the Company's lease arrangements, primarily vehicle leases, with terms of one toeight years, contain provisions related to residual value guarantees. The maximum potential liability to the Company under such arrangements was approximately $41.1 million at January 2, 2026 if the terminal fair value of vehicles coming off lease waszero. Consistent with past experience, management does not expect any significant payments will be required pursuant to these arrangements. No amounts have been accrued for the guarantee arrangements at January 2, 2026.

Other Current and Noncurrent Liabilities

The Company is self-insured for certain obligations related to its employee health care benefit programs as well as for certain risks retained under its general liability, automobile liability, workers' compensation liability and certain property damage programs. Reserves for these programs are estimated through actuarial methods, with the assistance of third-party actuaries using loss development assumptions based on the Company's claims history.

NOTE 2. GOODWILL AND OTHER INTANGIBLE ASSETS:

Goodwill represents the excess of the fair value of consideration paid for an acquired entity over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is not amortized and is subject to an impairment test that the Company conducts annually or more frequently if a change in circumstances or the occurrence of events indicates that potential impairment exists, using discounted cash flows.

Changes in total goodwill during the three months ended January 2, 2026 are as follows (in thousands):

Other intangible assets consist of the following (in thousands):

Amortization of intangible assets for the three months ended January 2, 2026 and December 27, 2024 was $32.0 million and $28.5 million, respectively.

NOTE 3. BORROWINGS:

Long-term borrowings, net, are summarized in the following table (in thousands):

As of January 2, 2026, there were $1.1 billion of outstanding foreign currency borrowings.

As of January 2, 2026, there was $936.2 million of availability under the senior secured revolving credit facility.

United States Term B-10 Loans due June 2030 Amendment

Aramark Services, Inc. (“ASI”) and certain of its subsidiaries entered into a credit agreement on March 28, 2017 (as amended, the "Credit Agreement"). On December 11, 2025 (the "Closing Date"), ASI entered into an amendment (“Amendment No.19”) to provide for, among other things, the repricing of all of the United States dollar denominated Term B-8 Loans (“U.S. Term B-8 Loans due 2030”) previously outstanding under the Credit Agreement by refinancing all of the U.S. Term B-8 Loans due 2030 previously outstanding under the Credit Agreement with new United States dollar denominated Term B-10 Loans in an amount equal to $2.4 billion due in June 2030 (“U.S. Term B-10 Loans due 2030”). The U.S. Term B-10 Loans due 2030 were funded in full on the Closing Date and were applied by the Company to refinance the entire principal amount of the U.S. Term B-8 Loans due 2030 previously outstanding under the Credit Agreement.

The U.S. Term B-10 Loans due 2030 bear interest at a rate equal to, at the Company’s election, either (a) a forward-looking term rate based on the Secured Overnight Financing Rate for the applicable interest period (“Term SOFR”) plus an applicable margin set at 1.75% or (b) a base rate determined by reference to the highest of (1) the prime rate of the administrative agent, (2) the federal funds rate plus 0.50% and (3) Term SOFR for a one-month interest period plus 1.00% plus an applicable margin set at 0.75%. The U.S. Term B-10 Loans due 2030 require repayments of principal in quarterly installments of $6.3 million from June 30, 2029 through March 31, 2030 and $2.3 billion at maturity. Except with respect to pricing, the U.S. Term B-10 Loans are subject to substantially similar terms currently relating to guarantees, collateral, mandatory prepayments and covenants that were applicable to the U.S. Term B-8 Loans previously outstanding under the Credit Agreement and are currently applicable to the Company’s other U.S. Term B Loans currently outstanding under the Credit Agreement. Amendment No. 19 also gave effect to the 2024 Refinancing Amendments (as defined in the Credit Agreement), which, among other things, included borrower-favorable changes to basket capacity, thresholds and step-downs.

The Company capitalized $1.3 million of transaction costs directly attributable to the refinancing in Amendment No. 19, which are amortized using the effective interest method over the term of the loans and are presented in “Long-Term Borrowings” on the Condensed Consolidated Balance Sheet as of January 2, 2026 as a direct deduction from the carrying value of the loans. Amounts paid for capitalized transaction costs are included within “Other financing activities” on the Condensed Consolidated Statement of Cash Flows for the three months ended January 2, 2026. Additionally, the Company recorded $1.1 million of charges related to the repricings to "Interest Expense, net" on the Condensed Consolidated Statements of Income for the three months ended January 2, 2026, consisting of $0.7 million in transaction costs and a $0.4 million non-cash loss for the write-off of unamortized deferred financing costs and discount on the U.S. Term B-8 Loans due 2030.

NOTE 4. DERIVATIVE INSTRUMENTS:

The Company enters into contractual derivative arrangements to manage changes in market conditions related to interest on debt obligations, including interest rate swap agreements, that are recognized as either assets or liabilities on the balance sheet at fair value at the end of each quarter. The counterparties to the Company's contractual derivative agreements are all major international financial institutions. The Company is exposed to credit loss in the event of nonperformance by these counterparties. The Company continually monitors its positions and the credit ratings of its counterparties and does not anticipate nonperformance by the counterparties. The Company formally documents the hedging relationship and its risk management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged and how the hedging instrument's effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively for designated hedges. The Company also formally assesses, both at the hedge's inception and on an ongoing basis, whether the derivatives that are used in hedging transactions are highly effective in offsetting cash flows of hedged items.

Cash Flow Hedges

The Company has approximately $2.5 billion notional amount of outstanding interest rate swap agreements as of January 2, 2026, which fix the rate on a like amount of variable rate borrowings with varying maturities through June 2028.

Changes in the fair value of a derivative that is designated as and meets all the required criteria for a cash flow hedge are recorded in accumulated other comprehensive loss and reclassified into earnings as the underlying hedged item affects earnings. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. Cash flows from hedging transactions are classified in the same category as the cash flows from the respective hedged item. As of January 2, 2026 and October 3, 2025, $9.2 million and $12.1 million, respectively, of unrealized net of tax gains related to the interest rate swaps were included in "Accumulated other comprehensive loss" on the Condensed Consolidated Balance Sheets.

The following table summarizes the unrealized gain arising from the Company's derivatives designated as cash flow hedging instruments on Other comprehensive income (loss) (in thousands):

The following table summarizes the location and fair value, using Level 2 inputs (see Note 11 for a description of the fair value levels), of the Company's derivatives designated as hedging instruments on the Condensed Consolidated Balance Sheets (in thousands):

The following table summarizes the location of the gain reclassified from "Accumulated other comprehensive loss" into earnings for derivatives designated as hedging instruments on the Condensed Consolidated Statements of Income (in thousands):

At January 2, 2026, the net of tax gain expected to be reclassified from "Accumulated other comprehensive loss" into earnings over the next twelve months based on current market rates is approximately $9.2 million.

As of January 2, 2026, the Company has a Euro denominated term loan in the amount of €87.0 million. The term loan was designated as a hedge of the Company's net Euro currency exposure represented by certain holdings in the Company's European affiliates.

NOTE 5. REVENUE RECOGNITION:

The Company generates revenue through sales of food and facility services to customers based on written contracts at the locations it serves. The Company provides food and beverage services, including catering and retail services, and facilities services, including plant operations and maintenance, custodial, housekeeping, landscaping and other services. In accordance with Accounting Standards Codification 606, the Company accounts for a customer contract when both parties have approved the arrangement and are committed to perform their respective obligations, each party's rights can be identified, payment terms can be identified, the contract has commercial substance and it is probable the Company will collect substantially all of the consideration to which it is entitled. Revenue is recognized upon the transfer of control of the promised product or service to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods and services.

Performance Obligations

The Company recognizes revenue when its performance obligation is satisfied. Each contract generally hasone performance obligation, which is satisfied over time. The Company primarily accounts for its performance obligations under the series guidance, using the as-invoiced practical expedient when applicable. The Company applies the right to invoice practical expedient to record revenue as the services are provided, given the nature of the services provided and the frequency of billing under the customer contracts. Under this practical expedient, the Company recognizes revenue in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date and for which the Company has the right to invoice the customer. Certain arrangements include performance obligations which include variable consideration (primarily per transaction fees). For these arrangements, the Company does not need to estimate the variable consideration for the contract and allocate to the entire performance obligation; therefore, the variable fees are recognized in the period they are earned.

Disaggregation of Revenue

The following table presents revenue disaggregated by revenue source (in millions):

Contract Balances

Deferred income is recognized in "Accrued expenses and other current liabilities" and "Other Noncurrent Liabilities" on the Condensed Consolidated Balance Sheets when the Company has received consideration, or has the right to receive consideration, in advance of the transfer of the performance obligation of the contract to the customer, primarily prepaid meal plans. The consideration received remains a liability until the goods or services have been provided to the customer. The Company classifies deferred income as current if the deferred income is expected to be recognized in the next 12 months or as noncurrent if the deferred income is expected to be recognized in excess of the next 12 months. If the Company cannot render its performance obligation according to contract terms after receiving the consideration in advance, amounts may be contractually required to be refunded to the customer.

During the three months ended January 2, 2026, deferred income increased related to customer prepayments and decreased related to income recognized during the period as a result of satisfying the performance obligation or return of funds related to non-performance. For the three months ended January 2, 2026, the Company recognized $229.0 million of revenue that was included in deferred income at the beginning of the period. Deferred income balances attributable to consideration received in advance from customers prior to the service being performed are summarized in the following table (in millions):

NOTE 6. INCOME TAXES:

During the three months ended January 2, 2026, the Company recorded a valuation allowance to the “Provision for Income Taxes” on the Condensed Consolidated Statements of Income of $3.4 million against foreign tax credits, as it is more likely than not a tax benefit will not be realized.

In response to the development of the global economy toward digitalization, the Organization for Economic Co-operation & Development (“OECD”) released the Pillar Two Global Anti-Base Erosion Model Rules (“Pillar Two”). Under Pillar Two, multinational companies with consolidated revenue greater than €750 million will be subject to a minimum effective tax rate of 15.0% within each respective country. On January 5, 2026, the OECD published details of a ‘side-by-side’ package which provides additional Pillar Two guidance. The package covers a number of new or extended safe harbors, and the ‘side-by-side’ system, which will allow the US tax regime to sit alongside Pillar Two. As such, and taking into consideration the safe harbor rules, the Pillar Two legislation has had no material impact on the condensed consolidated financial statements, and the Company continues to anticipate that it will not have a material impact on the condensed consolidated financial statements in future periods.

On July 4, 2025, the One Big Beautiful Bill (“OBBB”) Act was signed into law. The OBBB Act contains a broad range of tax reform measures, including modification to limitations on deductions for interest expense, reinstatement of elective 100% first year bonus depreciation and immediate expensing of domestic research and development expenditures. The new law has a range of effective dates. With respect to the provisions of the new law effective in fiscal year 2026, the company expects favorable federal cash tax impact and does not expect material impact on the effective tax rate. The Company also does not expect these provisions to have a material impact on the effective tax rate in future years.

NOTE 7. STOCKHOLDERS' EQUITY:

The Board of Directors declared a $0.12 dividend per share of common stock, payable on March 4, 2026, to stockholders of record at the close of business on February 18, 2026.

On November 5, 2024, the Board of Directors approved a share repurchase program under which the Company is authorized to repurchase up to $500.0 million of Aramark's outstanding common stock. Under the share repurchase program, repurchases can be made from time to time using a variety of methods, including open market purchases, privately negotiated transactions, accelerated share repurchases and Rule 10b5-1 trading plans. The size and timing of any repurchases will depend on a number of factors, including share price, general business and market conditions and other factors. Shares repurchased by the Company are accounted for under the treasury cost method. The value of the repurchased shares includes the 1% excise tax accrual as a result of the Inflation Reduction Act of 2022. The Company made an accounting policy election to record the value of the repurchased shares, including the 1% excise tax accrual, to treasury stock. The share repurchase program does not have a fixed expiration date and may be terminated at any time. During the three months ended January 2, 2026 and December 27, 2024, the Company repurchased 792,445 and 24,743 shares of its common stock for $29.3 million and $0.9 million, respectively.

The Company has 100.0 million shares of preferred stock authorized, with a par value of $0.01 per share. At January 2, 2026 and October 3, 2025, zero shares of preferred stock were issued or outstanding.

NOTE 8. EARNINGS PER SHARE:

Basic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of stock awards.

The following table sets forth the computation of basic and diluted earnings per share attributable to the Company's stockholders (in thousands, except per share data):

The following table represents shares that were outstanding but were not included in the diluted earnings per common share (in millions):

NOTE 9. COMMITMENTS AND CONTINGENCIES:

From time to time, the Company and its subsidiaries are a party to various legal actions, proceedings and investigations involving claims incidental to the conduct of their 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, environmental, social and governance 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 breaches of contractual and other obligations. Based on information currently available, advice of counsel, available insurance coverage, established reserves and other resources, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or cash flows. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company's business, financial condition, results of operations or cash flows.

On May 17, 2024, a purported shareholder of Vestis, the Company's former Uniform segment that was spun-off from Aramark in September 2023, commenced a putative class action lawsuit against Vestis and certain of its officers in the United States District Court for the Northern District of Georgia on behalf of purchasers of Vestis’ common stock between October 2, 2023 and May 1, 2024. The complaint alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, based on allegedly false or misleading statements generally related to Vestis’ business and operations, pricing practices, and financial results and outlook. The lawsuit seeks unspecified damages and other relief. On November 22, 2024, the complaint was amended to add the Company and its Chief Executive Officer as additional defendants. On September 30, 2025, the motion to dismiss the case was denied. The Company intends to vigorously defend this matter.

NOTE 10. BUSINESS SEGMENTS:

The Company's reportable segments are determined based on how the Company's CODM, the Chief Executive Officer, assesses performance and decides how to allocate resources for the Company. Based on the CODM's assessment, the Company hastwo reportable segments: FSS United States and FSS International.

The CODM evaluates each segment’s performance based on financial metrics, including revenue and adjusted operating income. The CODM uses these metrics to assess performance and allocate resources to each segment, primarily through periodic budgeting and segment performance reviews. Segment revenue represents food and facilities services sales. Adjusted operating income represents operating income adjusted to eliminate the impact of amortization of acquisition-related intangible assets, severance and other charges and other items impacting comparability.

Corporate expenses include certain operating and non-operating costs not allocated to the segments. The nature of these expenses may vary but primarily consist of corporate personnel compensation costs, share-based compensation expense and other unallocated costs.

Approximately 85% of the global revenue is related to food services and 15% is related to facilities services. Financial information by segment is as follows (in millions):

1)Adjusted for Gains, Losses, and Settlements impacting comparability consisting of certain transactions that are not indicative of the Company's ongoing operational performance. Adjustment impacting FSS United States Personnel costs includes a charge related to a multiemployer pension plan withdrawal ($5.6 million). Adjustment impacting FSS United States Other direct costs includes a non-cash charge for the impairment of certain assets related to a business held-for-sale ($6.1 million). Adjustments impacting FSS International Other direct costs consist of legal charges related to an antitrust review ($1.3 million) and charges related to hyperinflation in Argentina ($0.5 million).

2)Adjusted for Amortization of Acquisition-Related Intangible Assets of $25.2 million and $6.8 million incurred by FSS United States and FSS International, respectively.

3)Includes certain operating and non-operating costs not allocated to the segments, such as corporate personnel compensation costs, share-based compensation expense and other unallocated costs.

1)Adjusted for Gains, Losses, and Settlements impacting comparability consisting of certain transactions that are not indicative of the Company's ongoing operational performance. Adjustment impacting FSS United States includes a charge for contingent consideration liabilities related to acquisition earn outs ($11.1 million). Adjustment impacting FSS International consists of charges related to hyperinflation in Argentina ($0.7 million).

2)Adjusted for Amortization of Acquisition-Related Intangible Assets of $23.9 million and $4.6 million incurred by FSS United States and FSS International, respectively.

3)Includes certain operating and non-operating costs not allocated to the segments, such as corporate personnel compensation costs, share-based compensation expense and other unallocated costs.

Additional financial information by segment is as follows (in millions):

NOTE 11. FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows:

• Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

• Level 2—inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument

• Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement

Recurring Fair Value Measurements

The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, borrowings and derivatives. Management believes that the carrying value of cash and cash equivalents, accounts receivable and accounts payable are representative of their respective fair values. In conjunction with the fair value measurement of the derivative instruments, the Company made an accounting policy election to measure the credit risk of its derivative instruments that are subject to master netting agreements on a net basis by counterparty portfolio, as the gross values would not be materially different. The fair value of the Company's debt at January 2, 2026 and October 3, 2025 was $6,296.2 million and $5,445.7 million, respectively. The carrying value of the Company's debt at January 2, 2026 and October 3, 2025 was $6,247.1 million and $5,405.9 million, respectively. The fair values were computed using market quotes, if available, or based on discounted cash flows using market interest rates as of the end of the respective periods. The inputs utilized in estimating the fair value of the Company's debt have been classified as Level 2 in the fair value hierarchy levels.

As part of the Union Supply acquisition completed in fiscal 2022, the Company recorded a contingent consideration obligation. During the three months ended December 27, 2024, the Company adjusted the contingent consideration liability, resulting in expense of $11.1 million, which is included in "Cost of services provided (exclusive of depreciation and amortization)" on the Condensed Consolidated Statements of Income. The earnout period has ended with the contingent consideration liability being fully paid out in the second quarter of fiscal 2025.