AramarkARMK
Aramark Leases Disclosure
LEASES:
The Company has lease arrangements primarily related to real estate, vehicles and equipment, which generally have terms of one year to 25 years. In addition, there can be leases identified in the Company's revenue contracts with customers, which generally include fixed or variable lease payments. The Company assesses whether an arrangement is a lease, or contains a lease, upon inception of the related contract. A right-of-use asset and corresponding lease liability are not recorded for leases with an initial term of 12 months or less ("short-term leases"). Certain of the Company's lease arrangements, primarily vehicle leases, with terms of to 8 years, contain provisions related to residual value guarantees. The maximum potential liability to the Company under such arrangements was approximately $34.6 million at October 3, 2025 if the terminal fair value of vehicles coming off lease was zero. Consistent with past experience, management does not expect any significant payments will be required pursuant to these arrangements. No amounts have been accrued for guarantee arrangements at October 3, 2025.
The Company recognizes operating lease liabilities and operating lease right-of-use assets on its Consolidated Balance Sheets. Operating lease right-of-use assets represent the Company’s right to use the underlying assets for the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease liabilities and operating lease right-of-use assets are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. Deferred rent, tenant improvement allowances and prepaid rent are included in the operating lease right-of-use asset balances. Lease expense is recognized on a straight-line basis over the expected lease term. The Company has lease agreements with lease and non-lease components. Non-lease components are combined with the related lease components and accounted for as lease components for all classes of underlying assets.
Variable lease payments, which primarily consist of leases associated with the Company's revenue contracts with customers, real estate taxes, common area maintenance charges, insurance costs and other operating expenses, are not included in the operating lease right-of-use asset or operating lease liability balances and are recognized in the period in which the expenses are incurred. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain they will be exercised or not, respectively. Options to extend lease terms that are reasonably certain of exercise are recognized as part of the operating lease right-of-use asset and operating lease liability balances.
The Company is required to discount its future minimum lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. The Company primarily uses its incremental borrowing rate as the discount rate. The Company uses a portfolio approach to determine the incremental borrowing rate based on the geographic location of the lease and the remaining lease term. The incremental borrowing rate is calculated using a base line rate plus an applicable margin.
The following table summarizes the location of the operating leases in the Company’s Consolidated Balance Sheets (in thousands), as well as the weighted average remaining lease term and weighted average discount rate:
| October 3, 2025 | September 27, 2024 | |||||||||||||
| Assets: | ||||||||||||||
| $ | 701,839 | $ | 638,659 | |||||||||||
| Liabilities: | ||||||||||||||
| Current operating lease liabilities | $ | 60,744 | $ | 54,163 | ||||||||||
| Noncurrent Operating Lease Liabilities | 255,305 | 241,012 | ||||||||||||
| Total operating lease liabilities | $ | 316,049 | $ | 295,175 | ||||||||||
| Weighted average remaining lease term (in years) | 6.3 | 6.9 | ||||||||||||
| Weighted average discount rate | 4.8 | % | 4.6 | % | ||||||||||
| (1) | Includes $420.9 million and $384.1 million of long-term prepaid rent as of October 3, 2025 and September 27, 2024, respectively. | ||||
The following table summarizes the location of operating lease related costs on the Consolidated Statements of Income (in thousands):
| Fiscal Year Ended | ||||||||||||||||||||||||||
| Lease Cost | Income Statement Location | October 3, 2025 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||||||
Operating lease cost(1): | ||||||||||||||||||||||||||
| Fixed lease costs | Cost of services provided (exclusive of depreciation and amortization) | $ | 127,953 | $ | 117,584 | $ | 110,393 | |||||||||||||||||||
Variable lease costs(2) | Cost of services provided (exclusive of depreciation and amortization) | 1,080,782 | 1,052,310 | 922,334 | ||||||||||||||||||||||
| Short-term lease costs | Cost of services provided (exclusive of depreciation and amortization) | 82,245 | 80,816 | 79,788 | ||||||||||||||||||||||
Net operating lease cost | $ | 1,290,980 | $ | 1,250,710 | $ | 1,112,515 | ||||||||||||||||||||
| (1) | Excludes sublease income, which is immaterial. | ||||
| (2) | Includes $1,054.4 million, $1,027.9 million and $903.4 million of costs related to leases associated with revenue contracts with customers for fiscal 2025, fiscal 2024 and fiscal 2023, respectively. These costs represent the rent the Company pays its clients to operate at their locations, typically based on a percentage of sales. | ||||
Supplemental cash flow information related to operating leases for the periods reported is as follows (in thousands):
| Fiscal Year Ended | ||||||||||||||||||||
| October 3, 2025 | September 27, 2024 | September 29, 2023 | ||||||||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities(1) | $ | 168,490 | $ | 192,391 | $ | 170,457 | ||||||||||||||
Lease assets obtained in exchange for operating lease obligations | 88,657 | 59,780 | 52,215 | |||||||||||||||||
| (1) | For fiscal 2025, excludes cash paid for variable and short-term lease costs of $1,070.7 million and $82.2 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2024, excludes cash paid for variable and short-term lease costs of $1,039.0 million and $80.8 million, respectively, that are not included within the measurement of lease liabilities. For fiscal 2023, excludes cash paid for variable and short-term lease costs of $909.1 million and $79.8 million, respectively, that are not included within the measurement of lease liabilities. | ||||
Future minimum lease payments under non-cancelable leases as of October 3, 2025 are as follows (in thousands):
| Operating leases | |||||
| 2026 | $ | 74,298 | |||
| 2027 | 65,622 | ||||
| 2028 | 55,855 | ||||
| 2029 | 45,931 | ||||
| 2030 | 36,454 | ||||
| Thereafter | 86,807 | ||||
| Total future minimum lease payments | 364,967 | ||||
| Less: Interest | (48,918) | ||||
| Present value of lease liabilities | $ | 316,049 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 25, 2025 | Showing above |
| 2024 | Nov 19, 2024 | |
| 2023 | Nov 21, 2023 | |
| 2022 | Nov 22, 2022 | |
| 2021 | Nov 23, 2021 | |
| 2020 | Nov 24, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.