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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
___________________________________________

For the quarterly period ended March 27, 2020 Commission File Number: 001-36223

cik0-20200327_g1.jpg
Aramark
(Exact name of registrant as specified in its charter)
Delaware20-8236097
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
2400 Market Street
19103
Philadelphia,
Pennsylvania
(Address of principal executive offices)(Zip Code)
(215) 238-3000
(Registrant's telephone number, including area code)
___________________________________________

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on which Registered
Common Stock,
par value $0.01 per share
ARMK
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated fileroNon-accelerated fileroSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   No  x
As of April 24, 2020, the number of shares of the registrant's common stock outstanding is 252,615,882.



        
TABLE OF CONTENTS
Page



Table of Contents
Special Note About Forward-Looking Statements
This report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that reflect our current views as to future events and financial performance with respect to, without limitation, conditions in our industry, our operations, our economic performance and financial condition, including, in particular, with respect to, without limitation, the impact of COVID-19 on our business, financial performance and operating results, anticipated effects of our adoption of new accounting standards, the expected impact of strategic portfolio actions, the benefits and costs of our acquisitions of each of Avendra, LLC ("Avendra") and AmeriPride Services, Inc. ("AmeriPride"), as well as statements regarding these companies' services and products and statements relating to our business and growth strategy. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as "outlook," "aim," "anticipate," "are or remain or continue to be confident," "have confidence," "estimate," "expect," "will be," "will continue," "will likely result," "project," "intend," "plan," "believe," "see," "look to" and other words and terms of similar meaning or the negative versions of such words.
Forward-looking statements speak only as of the date made. All statements we make relating to our estimated and projected earnings, costs, expenditures, cash flows, growth rates, financial results and our estimated benefits and costs of our acquisitions are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Some of the factors that we believe could affect our results or the costs and benefits of the acquisitions include without limitation: the severity and duration of the COVID-19 pandemic; the pandemic's impact on the U.S. and global economies, including particularly the client sectors we serve and governmental responses to the pandemic; unfavorable economic conditions; natural disasters, global calamities, pandemics, sports strikes and other adverse incidents; the failure to retain current clients, renew existing client contracts and obtain new client contracts; the manner and timing of benefits we expect to receive under the CARES Act; a determination by clients to reduce their outsourcing or use of preferred vendors; competition in our industries; increased operating costs and obstacles to cost recovery due to the pricing and cancellation terms of our food and support services contracts; the inability to achieve cost savings through our cost reduction efforts; our expansion strategy; our ability to successfully integrate the businesses of Avendra and AmeriPride and costs and timing related thereto; the risk of unanticipated restructuring costs or assumption of undisclosed liabilities; the risk that we are unable to achieve the anticipated benefits (including tax benefits) and synergies of the acquisition of AmeriPride and Avendra including whether the transactions will be accretive and within the expected timeframes; the availability of sufficient cash to repay certain indebtedness and our decision to utilize the cash for that purpose; the failure to maintain food safety throughout our supply chain, food-borne illness concerns and claims of illness or injury; governmental regulations including those relating to food and beverages, the environment, wage and hour and government contracting; liability associated with noncompliance with applicable law or other governmental regulations; new interpretations of or changes in the enforcement of the government regulatory framework; currency risks and other risks associated with international operations, including Foreign Corrupt Practices Act, U.K. Bribery Act and other anti-corruption law compliance; continued or further unionization of our workforce; liability resulting from our participation in multiemployer defined benefit pension plans; risks associated with suppliers from whom our products are sourced; disruptions to our relationship with, or to the business of, our primary distributor; the inability to hire and retain sufficient qualified personnel or increases in labor costs; healthcare reform legislation; the contract intensive nature of our business, which may lead to client disputes; seasonality; a cybersecurity incident or other disruptions in the availability of our computer systems or privacy breaches; failure to maintain effective internal controls; our leverage, including our recent significantly increased borrowings; the inability to generate sufficient cash to service all of our indebtedness; debt agreements that limit our flexibility in operating our business; our ability to attract new or maintain existing customer and supplier relationships at reasonable cost, our ability to retain key personnel and other factors set forth in this Quarterly Report on Form 10-Q under the headings Part II, Item 1A "Risk Factors" and Part I, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" and under the headings Item 1A "Risk Factors," Item 3 "Legal Proceedings" and Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other sections of our Annual Report on Form 10-K, filed with the SEC on November 26, 2019 as such factors may be updated from time to time in our other periodic filings with the SEC, which are accessible on the SEC's website at www.sec.gov and which may be obtained by contacting Aramark's investor relations department via its website www.aramark.com. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report and in our other filings with the SEC. As a result of these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements included herein or that may be made elsewhere from time to time by, or on behalf of, us. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, changes in our expectations, or otherwise, except as required by law.



PART I
Item 1. Financial Statements
ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share amounts)
March 27, 2020September 27, 2019
ASSETS
Current Assets:
Cash and cash equivalents$1,202,964  $246,643  
Receivables (less allowances: 2020 - $45,283; 2019 - $49,566)
1,850,980  1,806,964  
Inventories403,799  411,319  
Prepayments and other current assets198,592  193,461  
Total current assets3,656,335  2,658,387  
Property and Equipment, net2,129,306  2,181,762  
Goodwill5,319,626  5,518,800  
Other Intangible Assets1,986,079  2,033,566  
Operating Lease Right-of-use Assets (see Note 8)579,719    
Other Assets1,176,433  1,343,806  
$14,847,498  $13,736,321  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term borrowings$103,406  $69,928  
Current operating lease liabilities (see Note 8)75,705    
Accounts payable793,464  999,517  
Accrued expenses and other current liabilities1,325,282  1,635,853  
Total current liabilities2,297,857  2,705,298  
Long-Term Borrowings7,862,587  6,612,239  
Noncurrent Operating Lease Liabilities (see Note 8)354,833    
Deferred Income Taxes and Other Noncurrent Liabilities1,152,550  1,088,822  
Redeemable Noncontrolling Interest10,226  9,915  
Stockholders' Equity:
Common stock, par value $0.01 (authorized: 600,000,000 shares; issued: 2020—290,166,384 shares and 2019—282,919,536 shares; and outstanding: 2020—252,579,469 shares and 2019—247,756,091 shares)
2,902  2,829  
Capital surplus3,384,981  3,236,450  
Retained earnings993,046  1,107,029  
Accumulated other comprehensive loss(304,010) (216,965) 
Treasury stock (shares held in treasury: 2020—37,586,915 shares and 2019—35,163,445 shares)
(907,474) (809,296) 
Total stockholders' equity3,169,445  3,320,047  
$14,847,498  $13,736,321  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME
(Unaudited)
(in thousands, except per share data)
Three Months Ended
March 27, 2020March 29, 2019
Revenue$3,731,559  $3,999,987  
Costs and Expenses:
Cost of services provided3,407,589  3,639,959  
Depreciation and amortization147,975  147,908  
Selling and general corporate expenses75,071  88,285  
Goodwill impairment198,600    
Gain on sale of Healthcare Technologies  1,000  
3,829,235  3,877,152  
Operating (loss) income(97,676) 122,835  
Interest and Other Financing Costs, net99,822  84,178  
(Loss) Income Before Income Taxes(197,498) 38,657  
Provision for Income Taxes4,523  9,347  
Net (loss) income(202,021) 29,310  
Less: Net income (loss) attributable to noncontrolling interest239  (43) 
Net (loss) income attributable to Aramark stockholders$(202,260) $29,353  
(Loss) Earnings per share attributable to Aramark stockholders:
Basic$(0.80) $0.12  
 Diluted$(0.80) $0.12  
Weighted Average Shares Outstanding:
Basic252,354  246,217  
 Diluted252,354  250,347  
Six Months Ended
March 27, 2020March 29, 2019
Revenue$7,985,156  $8,265,336  
Costs and Expenses:
Cost of services provided7,175,702  7,434,404  
Depreciation and amortization295,911  298,629  
Selling and general corporate expenses158,326  192,415  
Goodwill impairment198,600    
Gain on sale of Healthcare Technologies  (156,309) 
7,828,539  7,769,139  
Operating income156,617  496,197  
Interest and Other Financing Costs, net179,407  167,155  
(Loss) Income Before Income Taxes(22,790) 329,042  
Provision for Income Taxes33,348  49,054  
Net (loss) income(56,138) 279,988  
Less: Net income (loss) attributable to noncontrolling interest361  (49) 
Net (loss) income attributable to Aramark stockholders$(56,499) $280,037  
(Loss) Earnings per share attributable to Aramark stockholders:
Basic$(0.23) $1.14  
 Diluted$(0.23) $1.11  
Weighted Average Shares Outstanding:
Basic250,543  246,540  
 Diluted250,543  251,355  
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)
(in thousands)
Three Months Ended
March 27, 2020March 29, 2019
Net (loss) income$(202,021) $29,310  
Other comprehensive loss, net of tax
Pension plan adjustments(286)   
Foreign currency translation adjustments(41,893) 8,973  
Fair value of cash flow hedges(65,921) (17,678) 
         Share of equity investee's comprehensive (loss) income (145) 50  
Other comprehensive loss, net of tax(108,245) (8,655) 
Comprehensive (loss) income(310,266) 20,655  
Less: Net income (loss) attributable to noncontrolling interest239  (43) 
Comprehensive (loss) income attributable to Aramark stockholders$(310,505) $20,698  
Six Months Ended
March 27, 2020March 29, 2019
Net (loss) income$(56,138) $279,988  
Other comprehensive loss, net of tax
Pension plan adjustments(571) 753  
Foreign currency translation adjustments(27,308) (9,034) 
Fair value of cash flow hedges(59,168) (41,917) 
         Share of equity investee's comprehensive income (loss) 2  (230) 
Other comprehensive loss, net of tax(87,045) (50,428) 
Comprehensive (loss) income(143,183) 229,560  
Less: Net income (loss) attributable to noncontrolling interest361  (49) 
Comprehensive (loss) income attributable to Aramark stockholders$(143,544) $229,609  

The accompanying notes are an integral part of these condensed consolidated financial statements.
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ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
March 27, 2020March 29, 2019
Cash flows from operating activities:
Net (loss) income$(56,138) $279,988  
Adjustments to reconcile net income to net cash (used in) provided by operating activities
Depreciation and amortization
295,911  298,629  
Goodwill impairment
198,600    
Deferred income taxes
17,405  3,475  
Share-based compensation expense
4,259  33,241  
            Net gain on sale of Healthcare Technologies
  (139,165) 
Changes in operating assets and liabilities:
Accounts Receivable
(73,677) (137,789) 
Inventories
5,166  (36,224) 
Prepayments and Other Current Assets
(6,951) (223) 
Accounts Payable
(218,211) (86,069) 
Accrued Expenses
(304,053) (100,863) 
Payments made to clients on contracts
(26,355) (26,551) 
Other operating activities
72,418  534  
Net cash (used in) provided by operating activities(91,626) 88,983  
Cash flows from investing activities:
Purchases of property and equipment and other
(213,569) (230,402) 
Disposals of property and equipment
8,238  7,556  
Proceeds from divestiture
  293,711  
Acquisition of certain businesses, net of cash acquired
(14,922) (31,115) 
Proceeds from governmental agencies related to property and equipment
23,550  16,200  
Other investing activities
115  2,245  
Net cash (used in) provided by investing activities(196,588) 58,195  
Cash flows from financing activities:
Proceeds from long-term borrowings
1,822,955  100,071  
Payments of long-term borrowings
(935,258) (345,458) 
Net change in funding under the Receivables Facility
400,000  205,000  
Payments of dividends
(55,257) (54,220) 
Proceeds from issuance of common stock
85,048  10,372  
Repurchase of common stock
(6,540) (50,000) 
Other financing activities
(65,658) (29,120) 
Net cash provided by (used in) financing activities1,245,290  (163,355) 
Effect of foreign exchange rates on cash and cash equivalents  (755) (3,461) 
Increase (decrease) in cash and cash equivalents956,321  (19,638) 
Cash and cash equivalents, beginning of period246,643  215,025  
Cash and cash equivalents, end of period$1,202,964  $195,387  

Six Months Ended
(dollars in millions)March 27, 2020March 29, 2019
Interest paid$179.3  $180.2  
Income taxes paid$36.1  $118.9  
The accompanying notes are an integral part of these condensed consolidated financial statements.
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ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the six months ended March 27, 2020
(Unaudited)
(in thousands)
Total Stockholders' Equity
Common Stock
Capital Surplus
Retained Earnings
Accumulated Other
Comprehensive Loss
Treasury Stock
Balance, September 27, 2019  $3,320,047  $2,829  $3,236,450  $1,107,029  $(216,965) $(809,296) 
Net income attributable to Aramark stockholders  145,761  145,761  
Other comprehensive income  21,200  21,200  
Capital contributions from issuance of common stock  60,623  42  60,581  
Share-based compensation expense  14,116  14,116  
Repurchases of Common Stock  (80,459) (80,459) 
Payments of dividends  (29,712) (29,712) 
Balance, December 27, 2019  $3,451,576  $2,871  $3,311,147  $1,223,078  $(195,765) $(889,755) 
Net loss attributable to Aramark stockholders  (202,260) (202,260) 
Other comprehensive loss  (108,245) (108,245) 
Capital contributions from issuance of common stock  68,908  31  68,877  
Capital contribution from stockholder  14,814  14,814  
Share-based compensation expense reduction  (9,857) (9,857) 
Repurchases of Common Stock  (17,719) (17,719) 
Payments of dividends  (27,772) (27,772) 
Balance, March 27, 2020
$3,169,445  $2,902  $3,384,981  $993,046  $(304,010) $(907,474) 

The accompanying notes are an integral part of these condensed consolidated financial statements.
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ARAMARK AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the six months ended March 29, 2019
(Unaudited)
(in thousands)
Total Stockholders' Equity1
Common Stock
Capital Surplus
Retained Earnings1
Accumulated Other
Comprehensive Loss
Treasury Stock
Balance, September 28, 2018  $3,029,558  $2,793  $3,132,421  $710,519  $(91,223) $(724,952) 
Adoption of new accounting standard  58,395  58,395  
Net income attributable to Aramark stockholders  250,682  250,682  
Other comprehensive loss  (41,773) (41,773) 
Capital contributions from issuance of common stock  3,510  14  3,496  
Share-based compensation expense  18,562  18,562  
Repurchases of Common Stock  (71,884) (71,884) 
Payments of dividends  (29,157) (29,157) 
Balance, December 28, 2018  $3,217,893  $2,807  $3,154,479  $990,439  $(132,996) $(796,836) 
Net income attributable to Aramark stockholders  29,353  29,353  
Other comprehensive loss  (8,655) (8,655) 
Capital contributions from issuance of common stock  11,790  5  11,785  
Share-based compensation expense  14,679  14,679  
Repurchases of Common Stock  (4,324) (4,324) 
Payments of dividends  (27,058) (27,058) 
Balance, March 29, 2019
$3,233,680  $2,812  $3,180,943  $992,736  $(141,651) $(801,160) 
1May not foot due to rounding.

The accompanying notes are an integral part of these condensed consolidated financial statements.
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ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Aramark (the "Company") is a leading global provider of food, facilities and uniform services to education, healthcare, business & industry and sports, leisure & corrections clients. The Company's core market is the United States, which is supplemented by an additional 18-country footprint. The Company operates its business in three reportable segments that share many of the same operating characteristics: Food and Support Services United States ("FSS United States"), Food and Support Services International ("FSS International") and Uniform and Career Apparel ("Uniform").
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 ("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 26, 2019. The Condensed Consolidated Balance Sheet as of September 27, 2019 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 significant intercompany transactions and accounts have been eliminated.
New Accounting Standards Updates
Adopted Standards
In March 2019, the Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") which provided clarification regarding three issues related to the lease recognition standard. The guidance was effective for the Company in the first quarter of fiscal 2020 when the lease accounting standard was adopted. See below for further discussion regarding the impact of this standard.
In July 2018, the FASB issued two ASUs regarding the lease recognition standard. The guidance provided clarification on issues identified regarding the adoption of the standard, provided an additional transition method to adopt the standard and provided an additional practical expedient to lessors. The guidance was effective for the Company in the first quarter of fiscal 2020 when the lease accounting standard was adopted. See below for further discussion regarding the impact of this standard.
In July 2018, the FASB issued an ASU which clarifies, corrects errors in or makes minor improvements to the Accounting Standards Codification. The guidance was effective for the Company either upon issuance or in the first quarter of fiscal 2020, depending on the amendment. There was no impact on the condensed consolidated financial statements related to the amendments that were effective upon issuance of the guidance. The Company adopted the remaining amendments of the pronouncement in the first quarter of fiscal 2020, which did not have a material impact on the condensed consolidated financial statements.
In February 2018, the FASB issued an ASU which allows for the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings. The guidance was effective for the Company in the first quarter of fiscal 2020. The Company adopted the guidance in the first quarter of fiscal 2020, which did not have an impact on the condensed consolidated financial statements. The Company did not elect to reclassify the stranded income tax effects resulting from the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings.
In September 2017, the FASB issued an ASU to provide additional implementation guidance with respect to the lease accounting standard. The guidance was effective for the Company in the first quarter of fiscal 2020. The Company adopted the standard in the first quarter of fiscal 2020 in conjunction with the lease recognition standard. See below for further discussion regarding the impact of the lease accounting provisions related to this standard.
In February 2016, the FASB issued an ASU requiring lessees to recognize most leases on their balance sheets as operating lease liabilities with corresponding operating lease right-of-use assets and to disclose key information about lease arrangements. Recognition of expense on the Condensed Consolidated Statements of (Loss) Income continues in a manner similar to previous guidance. The Company adopted this guidance on September 28, 2019 (first day of fiscal 2020).
In connection with the new lease guidance, the Company completed a comprehensive review of its lease arrangements in order to determine the impact of this ASU on its consolidated financial statements and related disclosures. The Company identified
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ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
and implemented appropriate changes to business processes, controls and systems to support recognition and disclosure under the new standard.
The Company adopted Accounting Standards Codification 842 (“ASC 842” or the "new lease standard") using the modified retrospective transition approach with an adjustment that recognized "Operating Lease Right-of-use Assets," "Current operating lease liabilities" and "Noncurrent Operating Lease Liabilities" on the Condensed Consolidated Balance Sheets on September 28, 2019. Comparative period information and disclosures were not revised as a result of the recognition and measurement of leases. Adoption of the new lease standard resulted in the recognition of operating lease liabilities and associated operating lease right-of-use assets of approximately $416.1 million and $558.5 million, respectively, as of September 28, 2019 on the Condensed Consolidated Balance Sheets. The operating lease right-of-use assets include adjustments for deferred rent, tenant improvement allowances and prepaid rent, including $166.9 million of long-term prepaid rent as of September 28, 2019 associated with certain leases at client locations. There was no material impact to the Condensed Consolidated Statements of (Loss) Income or Condensed Consolidated Statements of Cash Flows as a result of adoption. See Note 8 for further information on the impact of adopting the new lease standard.
Standards Not Yet Adopted (from most to least recent date of issuance)
In March 2020, the FASB issued an ASU which provides optional expedients that may be adopted and applied through December 2022 to assist with the discontinuance of LIBOR. The expedients allow companies to ease the potential accounting burden when modifying contracts and hedging relationships that use LIBOR as a reference rate, if certain criteria are met. During the second quarter of fiscal 2020, the Company adopted the optional expedient to assert probability of forecasted hedged transactions occurring on its interest rate swap derivative contracts regardless of any expected contract modifications related to reference reform. Other optional expedients related to hedging relationships may be contemplated in the future resulting from reference rate reform. The Company is currently evaluating the impact of this standard on other contracts.
In January 2020, the FASB issued an ASU which provides clarification and improvements to existing guidance related to accounting for certain equity securities upon the application or discontinuation of equity method accounting and the measurement of forward contracts and purchased options on certain securities. The guidance is effective for the Company in the first quarter of fiscal 2022 and early adoption is permitted. The Company is currently evaluating the impact of this standard.
In December 2019, the FASB issued an ASU which simplifies the accounting for income taxes and clarifies and amends existing income tax guidance. Impacted areas include intraperiod tax allocations, interim period taxes, deferred tax liabilities with outside basis differences, franchise taxes and transactions which result in the "step-up" of goodwill. The guidance is effective for the Company in the first quarter of fiscal 2022 and early adoption is permitted. The Company is currently evaluating the impact of this standard.
In November 2019, the FASB issued an ASU which provides clarification and improvements to existing guidance related to the credit losses on financial instruments standard. The Company will adopt this guidance in the first quarter of fiscal 2021 when the credit losses on financial instruments standard is adopted. The Company is currently evaluating the impact of this standard.
In May 2019, the FASB issued an ASU which provides the option to irrevocably elect to apply the fair value measurement option on an instrument-by-instrument basis for certain financial instruments within the scope of the credit losses on financial instruments standard. The Company will adopt this guidance in the first quarter of fiscal 2021 when the credit losses on financial instruments standard is adopted. The Company is currently evaluating the impact of this standard.
In April 2019, the FASB issued an ASU which provides clarification, error corrections and improvements to existing guidance related to the credit losses on financial instruments ASU issued in June 2016, the derivatives and hedging ASU issued in August 2017 and the financial instruments ASU issued in January 2016. The guidance related to the credit losses on financial instruments ASU and the financial instruments ASU will be adopted in the first quarter of fiscal 2021. The Company adopted the guidance related to derivatives and hedging in the first quarter of fiscal 2020, which did not have a material impact on the condensed consolidated financial statements. The Company is currently evaluating the impact of the remaining amendments of this standard.
In August 2018, the FASB issued an ASU which adds, modifies and removes several disclosure requirements related to defined benefit pension plans. The guidance is effective for the Company in the first quarter of fiscal 2022 and early adoption is permitted. The Company is currently evaluating the impact of this standard.
In August 2018, the FASB issued an ASU which adds, modifies and removes several disclosure requirements related to fair value measurements. The Company will adopt this guidance in the first quarter of fiscal 2021. The Company is currently evaluating the impact of this standard.
In June 2016, the FASB issued an ASU to require entities to account for expected credit losses on financial instruments including trade receivables. The Company will adopt this guidance in the first quarter of fiscal 2021. The Company is currently evaluating the impact of this standard.
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ARAMARK AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Comprehensive Income (Loss)
Comprehensive income (loss) includes all changes to stockholders' equity during a period, except those resulting from investments by and distributions to stockholders. Components of comprehensive income (loss) include net income (loss), changes in foreign currency translation adjustments (net of tax), pension plan adjustments (net of tax), changes in the fair value of cash flow hedges (net of tax) and changes to the share of any equity investees' comprehensive income (loss) (net of tax).
The summary of the components of comprehensive income (loss) is as follows (in thousands):
Three Months Ended
March 27, 2020March 29, 2019
Pre-Tax AmountTax EffectAfter-Tax AmountPre-Tax AmountTax EffectAfter-Tax Amount
Net (loss) income$(202,021) $29,310  
Pension plan adjustments(286)   (286)       
Foreign currency translation adjustments(41,579) (314) (41,893) 8,842  131  8,973  
Fair value of cash flow hedges(89,083) 23,162  (65,921) (23,851) 6,173  (17,678) 
Share of equity investee's comprehensive (loss) income(145)   (145) 50    50  
Other comprehensive loss(131,093) 22,848  (108,245) (14,959) 6,304  (8,655) 
Comprehensive (loss) income(310,266) 20,655  
Less: Net income (loss) attributable to noncontrolling interest239  (43) 
Comprehensive (loss) income attributable to Aramark stockholders$(310,505) $20,698  
Six Months Ended
March 27, 2020March 29, 2019
Pre-Tax AmountTax EffectAfter-Tax AmountPre-Tax AmountTax EffectAfter-Tax Amount
Net (loss) income$(56,138) $279,988  
Pension plan adjustments(571)   (571) 753    753  
Foreign currency translation adjustments(27,225) (83) (27,308) (9,034)   (9,034) 
Fair value of cash flow hedges(79,957) 20,789  (59,168) (56,553) 14,636  (41,917) 
Share of equity investee's comprehensive income (loss)2    2  (230)   (230) 
Other comprehensive loss(107,751) 20,706  (87,045) (65,064) 14,636  (50,428) 
Comprehensive (loss) income(143,183) 229,560  
Less: Net income (loss) attributable to noncontrolling interest361  (49) 
Comprehensive (loss) income attributable to Aramark stockholders$(143,544) $229,609  
Accumulated other comprehensive loss consists of the following (in thousands):
March 27, 2020September 27, 2019
Pension plan adjustments$(47,793) $(47,222) 
Foreign currency translation adjustments(155,427) (128,119) 
Cash flow hedges(90,224) (31,056) 
Share of equity investee's accumulated other comprehensive loss(10,566) (10,568) 
$(304,010) $(216,965) 
Currency Translation
During 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.
9