Ian Bailey – Vice President of Investor Relations Eric Foss – Chairman, President and Chief Executive Officer Steven Bramlage – Executive Vice President and Chief Financial Officer.

Manav Patnaik – Barclays Flavio Campos – Credit Suisse Gary Bisbee – RBC Capital Markets Andrew Steinerman – JP Morgan Andrew Wittmann – Baird Stephen Grambling – Goldman Sachs Denny Galindo – Morgan Stanley Carla Casella – JPMorgan.

Good morning and welcome to Aramark’s Second Quarter 2015 Earnings Results Conference Call. At this time, I would like to inform you that this conference is being recorded for rebroadcast and that all participants are in a listen-only mode. We will open the conference call for questions at the conclusion of the company’s prepared remarks.

In order to accommodate all participants in the question queue, please limit yourself to one question and one follow-up. I will now turn the call over to Ian Bailey, Vice President of Investor Relations. Mr. Bailey, please proceed..

Thank you, Hannah, and welcome to Aramark’s conference call to review operating results for the second quarter of 2015. Here with me today are Eric Foss, our Chairman, President and Chief Executive Officer; and Steve Bramlage, our Executive Vice President and Chief Financial Officer.

You may have noticed from the earnings advisory that we published last week we have begun supplementing this quarterly call with slides. If you’re listening via webcast, this information should appear automatically on your desktop. If you dial into the call, these slides are available on our website on the Investor Relations tab.

I would also like to remind you that our notice regarding forward-looking statements, which is included in our press release this morning, can also be found on our website aramark.com, and is detailed on page two of the earnings slide deck. During this call, we will be making comments that are forward-looking.

Actual results may differ materially from those expressed or implied as a result of various risks, uncertainties and important factors, including those discussed in the Risk Factors, MD&A, and other sections of our SEC filings. We disclaim any duty to update or revise such forward-looking statements whether as a result of future events or otherwise.

Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP can be found both in this morning’s press release and on our website. With that, I’ll turn the call over to Eric.

Eric?.

Thanks, Ian, and good morning and thanks to everyone for joining us. Well as you can see from our release this morning, we delivered another quarter of strong performance as evidenced by meaningful growth in sales, margins and earnings. Adjusted earnings per share were $0.37, an increase of 28% versus prior year.

Our underlying business fundamentals are solid and our outlook remains unchanged for the year on a constant currency basis. This quarter serves as yet another validation that our balanced strategy, sales growth coupled with operating income growth is both attainable and is the right path forward for long-term shareholder value creation.

The second quarter was another quarter of strong performance against all pillars of our 3As strategy, accelerating growth, activating productivity and attracting best talent. Looking at the growth component, total company organic sales increased 6%, with FSS North America up 7%, FSS International up 6% and Uniforms up 4% in the quarter.

The calendar shift increased total company and FSS North America by approximately two and three points respectively. This growth was broad based across geography and across business sectors. In North America our growth was led by our education and healthcare hospitality businesses.

In international, we achieved solid growth in Europe, while in the emerging markets we saw an increase of 9% led by strong growth in China. These gains were driven by a combination of new business wins coupled with good performance on our base business.

Significant new business wins year-to-date reach across our businesses and include emerging market clients like Codelco and Anglo America in South America.

Parts and destination clients like the Bolger Center, medical centers such as Vanderbilt University and Thomas Jefferson University Hospital and education clients like the University of Calgary and Carnegie Mellon.

Our recent win work noting is our sports and entertainment team being named the NFLs retail partner at the NFL experience for the 50th anniversary Super Bowl next year. We serve the NFL successfully in that role at this year’s Super Bowl for the first time and it already earned the full retail rights for Super Bowl 51 in 2017.

We’re very proud of the work we do for the NFL and our business partnerships with 17 of the NFLs 32 teams and we value their business. As these comments indicate, our new business pipeline remains encouraging.

Our retention rates are strong and are tracking consistently with our mid 90% target for the year and we remain bullish on the strong self-up conversion opportunity that exists in the market place. And as I’ve emphasized previously, innovation continues to be a key component to retaining and winning new clients.

It’s also imperative that throughout the transformation we continue to provide exceptional customer service that our clients have come to expect from us as well as deserve. In support of this imperative and consistent with our desire to drive innovation, we recently rolled out our Voice of the Consumer program.

This is a web enabled feedback tool that allows direct consumer impact regarding consumer service levels and product offerings. In accounts where we’ve rolled out this tool including where we’ve implemented standardized menus, we’ve seen meaningful increases in our satisfaction scores.

And we all know that strong satisfaction scores lead to improve retention, higher per cap spending and stronger pricing power with the consumer. In addition to driving innovation by capitalizing on in sights, we continue to invest in building the Aramark brand.

Yesterday we launched an entirely new Aramark website, as the latest stop on our branding campaign. And it goes without saying the digital tools like corporate websites have become one of the most effective ways for companies to communicate with constituents and harness the value or the brand.

And we look to this investment to aid in the selling process again of acquiring new clients, and more broadly just expand the awareness of the Aramark brand. Looking at our second pillar, activating productivity to reinvest in growth and expand margins, productivity gains were a real point of encouragement in the quarter.

Adjusted operating income for the total company increased 11% in the quarter, and as with sales, this profitability improvement was broad based. In our FSS North America saw 9% improvement in profit, FSS International increased 25% and our Uniform adjusted operating income increased double digit at 11%.

The calendar shift contributes approximately 4% and 5% to the total company in FSS North America, AOI respectively. In the quarter, we saw significant savings across food, labor and SG&A cost.

All in that generated a 20 basis point improvement in margins, net of reinvestment and people and technology as well as investments we made in new account start-up costs. We remain focused on these labor cost reductions through the management of both overtime and agency labor and our food cost focus is on effective management of waste.

Again, technology is a meaningful facilitator of these gains and the benefits of our technology investments I think are evident in our results. Reinvestment in growth, people capabilities and technology remain priorities as we continue along this journey.

We continue to focus on balancing this investment dynamic on an annual basis so that while we continue to invest in the business we also maintain momentum in our profitability improvement.

You may recall in the first quarter we saw a bit of lumpiness around adjusted operating income expansion particularly in North America, which is primarily related to start-up cost and transformation related investments. As we talked previously, the facing of these programs will skew heavier in the first several quarters of this year.

North America adjusted operating income and margins started to accelerate in the second quarter and we expect further improvement as the year progresses, particularly in the fourth quarter as we lap certain new account cost openings. Moving to the third pillar of our focus strategy, let me share a few updates on attracting the best talent.

Attracting talent is all about creating the right culture and we continue to make progress by building the company with shared values, to focus on developing a committed, engaged and trained work force that people are proud to be part of. We recently completed our third annual Employee Appreciate Day celebrations.

We also continue to focus on diversity and recently we were recognized and awarded a top spot of Diversity Inc’s prestigious 25 Noteworthy Diversity Companies List. We also recently launched a major commitment to recruit veterans and military personnel.

In addition to dedicated recruiting initiatives focused on veterans, we’ve also entered into a partnership with the veterans recruiting organization where we will participate in this leading support group’s career fairs and events for people who have served in our armed services.

Now these are just a few examples of our ongoing commitment to advance our people and invest in the development of their skills. These continued investments drive higher client and consumer satisfaction levels and improve employee engagement which lowers turnover costs all very important factors in creating shareholder value.

So overall, a very good quarter and first half of the year, coupled with an unchanged and encouraging outlook. We will compete with some well known revenue headwinds in the back half of this year but our productivity results are strong and our commitment to addressing the margin opportunity that lie for us is never been stronger.

On a final and more personal note, as many of you know, Fred Sutherland announced his retirement as CFO last month. Although Fred has agreed to stay on as an advisor through the end of the year, I’d like to thank Fred for his many years of contributions to the company.

Over the course of three decades, 17 of which he served as CFO, Fred has been an invaluable member of our management team that’s built a great company. Over the past three years, I’ve personally looked to Fred for his advice, been the benefactor of his counsel and enjoy both his partnership and his friendship.

And along with the entire Aramark family, I wish Fred and his family all the best in his harder and well deserved retirement. At the same time, we’re fortunate to have a very strong successor to Fred with Steve Bramlage’s appointment as Executive Vice President and Chief Financial Officer.

Steve joined us with an excellent reputation as a season leader with broad experience that includes being a public company’s CFO, operating across global markets and transforming complex businesses.

Steve has been actively engaged since the moment he joined about a month ago and I’m highly confident of the positive impact he is already making and will continue to make. I look forward to partnering with Steve on this transformation journey we have underway to unlock even greater shareholder value here at Aramark.

And with that, let me introduce you to Steve Bramlage.

Steve?.

Thank you, Eric, and good morning. Let me start by expressing how excited I am to be able to Eric and a broader team here at Aramark. I look forward to contributing to an organization that has so much positive momentum and opportunity in front of it.

And I also want to take a moment and acknowledge Fred Sutherland, I cannot imagine someone in his position being more generous with his time and his counsel during my first month with the company. I am grateful and I can see how his passion for this business and his confidence to serve this company so well over the past several decades.

He weighs a deep legacy on this organization and the entire finance team will do our best to uphold and to advance it.

Turning to the numbers for the quarter, I want to start on slide four with the topic that I must admit I’ve needed to spend some time summarizing myself with since I’ve arrived which is how the company’s closing calendar is impacting comparable results for the year.

As most of you realized, the company follows a fiscal calendar ending on the Friday closest to September 30 each year. As a result of this, every five or six years we report a 53rd week of business in the fiscal year. 2014 was such a year and two things happened as a result relative to 2015.

The first as I sense, 2015 will have 52 weeks in it as you would expect, we will report one last week of revenue in earnings in the fourth quarter and for the full year. We will adjust the prior year for this week when we will compare 2015 fourth quarter and full year to 2014 organic results. However, on a U.S.

GAAP basis, the lack of the extra week in 2015 is an approximate 7% and 2% sales and adjusted operating income reduction for the fourth quarter and the full year respectively. The second, less intuitive impact is on the facing of results between the quarters.

Because of the 53rd week in 2014 each quarter in 2015 will begin one week later than normal, which means especially in North America certain businesses will have a strong week of business move between quarters due to professional sport schedules and higher education holiday periods.

That means in the second quarter our reported numbers look a little bit better versus the prior year period, which is the exact opposite of what we experienced in the first quarter.

All of the figures that we discussed today will not be adjusted for this calendar impact, where it’s appropriate we will highlight the estimated impact from this one week shift, but in general I would know it does not have any significant impact on our trends or on our conclusions as to what is happening or what we expect to happen in the underlying business now or in the future.

As you can see from the slide, the first half and the second half net impact are not expected to be remarkable in total, and for the year this phenomenon will create an approximate 1% net headwinds and adjusted operating income. So with that, let’s transition to Q2 results and our outlook in a bit more detail.

On slide five, we provided a revenue bridge. In the prior year, we reported revenues of $3.5 billion. Our current year reported revenues are nearly $3.6 billion, an increase of approximately 2.5%. The stronger U.S. dollar reduced our reported revenue by $125 million in the quarter or 4%.

The two largest contributors to the negative translation we experienced where the euro and the Canadian dollar which were 13% and 10% weaker respectively on a year-over-year basis. The impact from merger and acquisition activity was not significant in the quarterly reconciliation.

Organic sales growth in the quarter was 6% and the estimated revenue benefit from the calendar shift during the quarter was approximately 2% essentially all of which was in North America. Retention levels which were included in our organic growth line here are as Eric mentioned, strong and consistent with our mid 90s target for the year.

On slide six, we used the same format to walkthrough adjusted operating income for AOI. In the prior year, we reported $191 million of adjusted operating income. AOI increased to $213 million in the second quarter this year, growth level 11% of which approximately 4% was related to the calendar shift.

Our prior year AOI figure is already adjusted with currency as shown in the reconciling tables of the press release, but for your benefit it includes an approximately $7 million reduction due to the stronger U.S. dollar, again led by the euro and the Canadian dollar.

As you saw in our press release, adjusted net income was $91 million or $0.37 per share versus adjusted net income of $71 million or $0.29 per share in the second quarter of 2014. The calendar shift is estimated to of increased adjusted EPS by approximately $0.02 a share and adjusted net income by approximately $5 million in the quarter.

The diluted share count average in the second quarter of fiscal 2015 was 246 million shares which is a modest increase from the prior year’s 243 million shares. I’d like to make a comment specifically on the non-GAAP reconciliation that’s contained in the supporting schedules of our press release.

The significant reconciling items consists of incremental amortization related to the 2007 leverage by all transaction, non-cash share based compensation as well as transformation related restructuring expenses, all of which are completely consistent with our prior adjustments to our U.S. GAAP earnings numbers.

On slide seven, we’ll provide a little bit more detail on the second quarter segment results. In our North America food and support services segment, organic sales were $2.5 billion with an increase of 7%.

The North American segment was the most significantly affected by the calendar shift in the quarter which is estimated to of increased the reported sales by approximately 3%.

Sales growth in the healthcare, education and sports leisure and correction sectors were strong as 2014 client wins continue to come on stream, and 2015 second quarter wins remain solid.

As we’ve mentioned previously, we have experienced continue pressure in our Canadian remote services business which from a reporting standpoint falls under the North American business and industry sector. Remote sales are likely to continue to remain under pressure in the second half of the year given the ongoing dynamics in a broader energy markets.

Organic sales in the international segment were $699 million with growth of 6%. Organic sales growth in Europe was in the low single digits and was quite encouraging given the ongoing macroeconomic challenges in that geography. Our team on the ground is doing a great job there moving our business forward, especially in light of those conditions.

We continue to generate nearly double digit organic growth in our emerging markets business. Our emerging market teams are also doing a very good job navigating volatile economic environment, particularly in South America in the face of weakening commodity markets.

In our Uniform and Career Apparel segment, organic sales increased to $375 million with growth of 4% an improvement over the first quarter. The investments that we’re making in capacity expansion and automation are beginning to show traction.

Looking at our business segment adjusted operating income from the right hand side of the slide in a bit more detail. In our North America FSS segment, adjusted operating income was $154 million an increase of 9% versus the prior year.

As we’ve previously noted, this segment was the largest beneficiary of the calendar shift in the quarter, which is estimated to of increased the AOI by approximately 5%.

Productivity gains associated with labor efficiency and food waste initiatives partially offset by reinvestments and the on-boarding of new accounts drove clear improvements in base costs in the quarter.

In the International segment, adjusted operating income increased 25% and in our Uniform and Career Apparel segment adjusted operating income for the segment was up 11%. Neither of these segments were materially impacted by the calendar shift.

Productivity initiatives continue to improve both segments respect of operating results along with the drop through from the higher volumes that we discussed a few minutes ago. Slide eight provides some salient points regarding the company’s balance sheet and capital structure.

Our liquidity remains very strong and as of quarter’s end we had $690 million available through a combination of cash on hand and undrawn committed revolved capacity.

Having already addressed both rates and tanner through two large refinancings which occurred in 2013 and 2014, we’re very well positioned from a debt profile standpoint with no significant maturities until 2019. As of the quarter end, the total debt was $5.6 billion.

The company’s trailing 12 month total debt to adjusted EBITDA ratio was 4.3 times which is an improvement of 30 basis points versus prior year. This improvement resulted from a combination of both adjusted EBITDA growth as well as lower average debt levels.

Our year-to-date free cash flow which we define as cash from operating activities, less purchases of PP&E and client investments while negative at an approximately $142 million use of cash is running nicely ahead of the prior year first half primarily due to much better working capital performance.

Working capital for the business is seasonal with the first quarter generally being a fairly significant use of cash. Second and third quarters tend to be more modest uses and then fourth quarter is a strong source of cash as room in board plan to progress in education and seasonal cash flows from the sports and the leisure businesses are collected.

Year-to-date net capital expenditures and client investments were $221 million which is up from $160 million at the same point in fiscal 2014, mainly a result of several large client account wins and renewals that we have previously discussed.

The company continues to expect capital expenditures for the fiscal year to total between 3% and 3.5% of total sales. As per capital allocation, we will apply the free cash flow that we generate first of course to servicing the dividend and then take the surplus on reduced debt as we have previously committed to do.

Financial flexibility remains important to the company and certainly to me personally.

We will continue to move the balance sheet in the direction of 3.5 times to 3 times leverage ratio through a combination of both EBITDA growth and absolute deleveraging, while always ensuring that we have adequate liquidity and market access to pursue the necessary strategic growth opportunities that we have in front of us.

On slide nine, we summarize our outlook for the second half of the year.

For organic sales, we’re anticipating a slightly negative back half of the year in North America, driven by a large client loss and a significant non-recurring facilities project that occurred in 2014 at another major client site, each of which we have previously discussed in some detail.

Because both of these items fall fully in the second half together they comprise nearly 5% of North America and about 3% of the total company for that period. The Uniform segment is expected to maintain its’ current sales momentum.

And the International segment is expected to continue to show solid, but likely a little more volatile growth in the second half. At the total company level, sales were expected to remain roughly flat largely influenced by the relative size of North America.

As Eric alluded to earlier, we expect sequential improvement in year-over-year adjusted operating income growth from the third to the fourth quarter. This is similar to the pattern that we saw in the first half of the year where the second quarter was stronger than the first. There are three primary contributors to this.

First, also similar to the first half, the calendar shift will penalize the third quarter year-over-year performance comparisons and benefit of the fourth quarter.

Furthermore, the year-over-year AOI performance will be stronger in the fourth quarter than in the third, due to the timing of our reinvestment facing and the fact that we will not be lapping certain start-up accounts until the fourth quarter.

Therefore we expect in total fourth quarter AOI year-on-year growth to be significantly better than the low single digit increase that we’re expecting in the third quarter. Slide 10 recaps our adjusted EPS outlook for the year, which is restated earlier remains unchanged on a constant currency basis.

The company’s initial fiscal 2015 constant currency guidance of $1.60 to $1.70 and adjusted EPS was provided in November 2014. In February of 2015, the strengthening of U.S. dollar was expected to have an approximately $0.07 per share headwind to EPS for the year.

The USD has continued to modestly strength since that time and therefore we’re currently estimating about a dimes impact on a year-over-year basis. The $0.10 impact equates to an approximately 4% headwind both on an as reported sales and as reported operating income basis for the year.

So as a reminder, our International segment sales were about $3 billion annually with approximately 60% of that in Europe and 40% in international or in emerging markets, excuse me. Of the European exposure about a third is in the UK with Sterling exposure and two thirds comes from a Eurozone.

Most of the emerging markets currency exposure comes from South America with Chile being the largest single exposure in that region. Our sales of Canada are contained within our North America business and they represent somewhat less than 10% of that total segments sales.

Taking all of these factors into account along with the averaging that we use within the quarters and based on the current exchange rates, we expect full year adjusted earnings per share to fall within the range of $1.50 to $1.60 per share which again equates to an unchanged constant currency outlook for the year.

With that, I’d like to turn the call back to Eric for some closing remarks.

Eric?.

Great, thanks Steve. So, in summary, we had obviously a very strong second quarter. Again, momentum on both the top line and bottom line and I think encouragingly those momentum in gains were balanced across our portfolio. The business fundamentals are strong, it would get the right strategy in place to leverage the opportunities in the market place.

And this strategy is going to allow us to capture that margin opportunity that we talked to you about and sits before us.

So as we look to the future we remain encouraged, I think the fundamental strength of the business as well as the debt of the market place opportunity, particularly that outsourcing opportunity gives us confidence and our opportunity to continue to create shareholder value overtime as we go forward.

And with that, Hannah, I’d like to turn it back over to you and we can begin the question-and-answer session..

[Operator Instructions] Our first question comes from Manav Patnaik with Barclays..

[Audio Gap] North America growth in the second half year, so just to clarify you said it would be negative on an organic basis.

So what I wanted to clarify was, is that excluding the impact of the 53rd week or does that include that?.

Hi, Manav, can you do me a favor? We only got your question halfway through on our site, can you please ask one more time to make sure we had it..

Yeah, okay. So the question was just around the North America, I guess you said organic growth decline in the second half of the year.

What I was trying to just clarify was does that include the 53rd week impacts in those quarters or are you backing that out when you say organic?.

Yeah. We’ve already adjusted out the 53 week. So our comments were on a 52 week to 52 week organic basis..

All right. And then without those two I guess, the one contract loss and the recurring.

What would be underlying growth be if you were to back those two out?.

Well, if you think of the magnitude of the change we’re talking about the significant individual client account that we referenced as a couple of percent by itself in the second half of the year. And then the one-time facilities work that we did on another client and also about a 1%.

So those two items, if they’re roughly 3% or so of negative headwind in the second half of the year, and we expect the whole thing to be about flat, the rest of the business is going to be growing by a comparable couple of percent, 3% to 4% basis to offset it..

Our next question comes from Flavio Campos with Credit Suisse..

Good morning. Thank you for taking my questions. I just wanted to focus a little bit on the international and on the uniform margins. First half versus this year versus first half of last year, we’ve seen a very nice pickup in margins on those two businesses.

Can you elaborate a little bit on what has been the driver of that and how sustainable that is, and if we should be looking at first half margins or guidance going forward?.

Sure, Flavio its Eric. Good morning. A couple of things, as you mentioned our international margins in the first half of the year showed strong performance as well as the top line revenue growth. If you look at it, it was again very broad based.

So it was strong in Europe, it was strong across the emerging markets, strong in South America, strong in China.

So, we continue to be focused on this as we said I think a while ago, if you look at our margin structure as we think about these emerging market businesses, it’s not just about driving the top line growth, but it’s also about making sure we make progress on the margin side as well.

We think like, all of the geographies including North America, while we’ve made a lot of progress on margins there is a long runway ahead of us.

Again what’s driving it is similar to what’s driving it in North America which is we continue to focus on managing food, labor and SG&A, and the initiatives that we have in place really focus on managing waste in the area of food, it’s focused on managing over time and agency labor, and the in-unit labor model and it’s focused on the above unit SG&A cost.

So I think both on the International side and on the Uniform side, we would expect that to continue.

Again Uniforms had in 2014 and will again have in full-year 2015 a significant ramp-up in our margins, and the reality is you didn’t ask about North America, but I think as Steve highlighted as we look to the second half of the year, you will also see an acceleration of the margins in North America as well..

Perfect. Perfect, very helpful.

And I think on the same theme, the unallocated corporate expenses were a little higher year-on-year, but a significant decline from Q4 and Q1 rates, should we be looking at that – at that continue at the current levels for the rest of the year, and I know that Q2 is seasonally a little bit lower, but if this new $13 million roughly a number as while we should be expecting?.

Yeah. I’ll comment and then Steve can add on. I think you should look at our investment sequencing you’ll continue in third quarter to see us invest, again the three big buckets are technology, capability and selling resources.

And as we look at calendarization of that investment cycle it will continue in third quarter, similar I think to what you – you’ve seen as we get into fourth quarter that will – we’re going to pull back on that a little bit and then I also think as we mentioned, you’ll see some of the startup costs that we lap in fourth quarter began to help as well in falloff.

So I think, you’ll continue to see a similar pattern in third quarter and then based on the investment sequencing as well as the startup costs you’ll see a change in the fourth quarter trajectory..

All right. I would agree with it..

Thanks, Flavio..

Our next question comes from Gary Bisbee with RBC Capital Markets..

Hi, guys. Good morning..

Good morning..

Good morning, Gary..

I want to ask about the investments on a slightly longer term basis.

I know, over the last few quarters you’ve talked a lot about the various technology systems you are implementing and obviously selling another things you’re investing in, but when do we get that sort of the tipping point were a lot of that technology investment has been done the new systems are online and maybe we can get deceleration and the pace of growth of investment.

And I guess as a part of that are there other incremental areas outside of the systems investment which is pretty heavy that you would anticipate bringing on over the next few years or is it a reasonable thesis that we might see the pace of profitability improvement – improve over time once that spending went down? Thanks..

Well, Gary, let me talk about the investments again, I think what you could begin to see if you think about those three buckets is, I think across most of our lines of business, we feel pretty comfortable with the last couple of years, the incremental selling resources and feet on the street, that we’ve deployed that appropriately and are reaching a point where we can look at whether or not we need additional resources on that front.

I do believe on the other two buckets both capability and technology, you will continue to see us over the foreseeable future invest in that area, and while as you mentioned, we’ve talked about some of the technology investments in the area of Kronos to help us schedule labor or salesforce.com to help on the revenue generation front, a variety of others.

We are really playing catch-up on the technology front and that – and because of that, you’ll continue to see us invest. So, I guess my short answer is a continuation on both capability and technology probably a little bit of backing off on that portion of selling resources that you’ve seen us invest the last few years..

Great. And then the follow-up would be just specific to the North America Food business, as you’ve – you talked last quarter about some timing issues as there was initial expense to broaden out some of the pilot programs.

Can you give us a sense how – where you are in that? Should we think that that continues? In order words you go from 20 to 1,000, but you got several more thousand sites. Where are we in the lifecycle of rolling out these labor amortizations and other programs? Thanks you..

Sure. Again, I guess the best way to characterize it is in the early innings. Again if you think about Gary, there is fairly holistic approach relative to how we think about productivity and margin. So let me define how we think about that on the food side and tell you where we are, talk about on the labor side and tell you where we are.

So kind of our holistic approach on the food deals with a couple of big buckets. Everything from strategic sourcing and how we manage suppliers and SKUs; to second, menu optimization; to third, the whole food production process; to fourth, the management of waste.

To a large extent, our efforts in food to date in terms of broad application of those initiatives only rest in the bucket of waste. And while we have some pilot initiatives in those other buckets, those have yet to be rolled out and deployed.

On the labor side again the way we think about managing our labor is making sure we get an effective handle on head count, schedule that head count appropriately, make sure we are managing turnover and other costs.

And if you think about the broad bucket of how we manage labor, most of what we’ve deployed to this point solely focuses on managing over time in agency labor.

So as we begin in the foreseeable future to standup a standardized in-unit labor model, our ability to manage that head count in making sure we are driving head count productivity and scheduling that head count and flexing it appropriately. Our initiatives that again while we’ve got some pilots in motion that also is yet to be deployed.

So that’s why I characterize if you really look at where we’re driving savings, and we did in the quarter, and we have year-to-date across food and labor, it’s largely in the area of waste over time in agency labor..

Our next question comes from Andrew Steinerman with JP Morgan..

Hi. I wanted to look at slide six a little bit which I have the operating income adjusted a year ago for FX, so I definitely understand from this slide that you’re looking at the 20 basis points of margin expansion in the second quarter coming on a constant currency basis.

Could you give us the year-to-date equivalent number and does the guidance imply at least 20 basis points of margin expansion for the year and is that on a constant currency or reported basis?.

Yeah.

Let me start with that one Andrew, so you’re premise correct, this is on a constant currency basis on this slide in general and I would refer you on the first part of the question back to – there is a table, one of the reconciling tables in the back of the press release on a first half of the year basis, it’s about a 10 basis point improvement for the entire entity for the first half of the year versus the 20 that we showed in the second quarter, which is consistent to our comments earlier around this acceleration of momentum generally speaking within the productivity side.

And then could you please repeat the second part of that question for me Eric..

I think I have it Andrew.

I think relative to the full-year I think what I would say is we’ve got a high degree of conviction, and a high degree of confidence, and as I mentioned earlier, we would expect to see margin expansion accelerate in the second half of the year particularly in fourth quarter; and to your question on the full-year, I think you’ll see our full-year margin improvement certainly be very much within the long-term framework that we’ve laid out for you..

Thank you..

Our next question is with Andrew Wittmann with Baird..

Hi, guys. Thanks for taking my questions.

Eric, I wanted to get a sense of the sales productivity that you experienced in the quarter, can you talk about maybe the annualized revenue that’s your folks brought in or maybe if you can’t give that which we prefer, can you give maybe a sense about how to trend in sales force productivity has been over the last year or maybe the last – this year versus the last year or maybe you can sequentially to give us some flavor there would be helpful?.

Sure. So again, if you look at the growth number broadly 4% in the second quarter and about 3.5% year-to-date. It’s really driven, Andy, by two key components. It’s driven by our base business performance, combination of incremental volume and pricing to cover inflation, coupled with strong new business.

And again if you take out the large account loss that we’ve referenced earlier if you look at this year’s new business results, they are very much in line year-to-date with the past two record years. So we continue to see very good sales productivity, and a pay-off of the resources that we are deploying.

I would say in addition to that as we look at the pipeline of selling opportunities, and the pending selling opportunities, we continue to be very encouraged by what we see and again one of the things that’s also pointed out for us is really strong retention rates broadly across our businesses. [indiscernible].

That does and I just wanted to ask in follow-up on that. Thank you.

And just in terms of kind of your close rates, are you seeing any improvement in your close rates on the pipeline that you’re shaping?.

Well, I think it’s fairly steady, is probably the best way I would characterize it.

I think what we do see a continuing momentum is in the pipeline, and but I think our closed rates are probably similar on a percentage basis and again as we manage that productivity on a per head basis also very consistent with what we’ve seen in the last really two and half years very consistent..

Our next question comes from Stephen Grambling with Goldman Sachs..

Hey, good morning. I guess from a high level standpoint, you mentioned brand building, you mentioned online more specifically and it sounds like compass was doing some similar things that relates to social media. Can you just talk to us a little bit about how you think about Aramark’s brand currently as you go into these negotiations.

How it’s viewed and what you want it to be viewed as going forward?.

Sure. Thanks. I think as we think about the whole branding opportunity as you’re aware, we ended up rebranding came out with a new logo and a new tagline, "We Train We Do." And I think that brand message really resonates in terms of what it is, we would like the brand to stand for.

What we dream is really all about innovating and we do is really all about that consistent customer experience.

And so, as we’ve gone through the asset conversation across our vehicles and uniforms and a print ad campaign and the things we’ve done on social media, I think we’re seeing a very good initial response, it’s been well received by consumers and clients. It’s also a part of our employment brand.

And again as we look at brand equity and other awareness type scores over time, we’ll continue to monitor the kind of return we’re seeing on that investment as well as the linkage to the new business results.

But overall, our brand really should stand over time for two things, innovation and that great customer experience, which are two of the most – two things that matter most in terms of winning or retaining business..

Okay, thanks. That’s helpful. And then, I guess, changing gears a little bit.

On the Uniform business, how do you think about the relevance of this business to the core food services platform longer term is there ever a desire to monetizing it somewhere, is it even from a logistic standpoint possible to split up?.

Sure. What we looked at it before we went public, and again one of the things that was important to me was if you really think about the business we’re in, and a lot of people might classify us as a food service company or a facilities company or a uniform company.

At the end of the day, what we do across all of those businesses and across all of those geographies is we’re really in the people and the customer service business, and when you’re in the customer service business, irregardless whether it’s uniforms or food service it’s all about that repeatable model and how you sell, serve and execute at that moment [indiscernible].

And so the business models are actually quite similar, after we answered that question we also then looked at what was the value creation opportunity.

And again, as we looked at that we define it both in terms of the growth potential of the business and the margin expansion potential, and as you’ve seen us play out over the last couple of years there’s a real opportunity that business has really attractive margins and again has performed steadily both in terms of top line increases and actually the margin improvement has been even ahead of what we’ve seen on the food side.

So I think, we’re pleased with what we see from that business and again the team has done an excellent job, focusing on the strategy and what matters. And I think it’s a relevant business for us at Aramark, is really what where we stand at this point..

Our next question comes from Denny Galindo with Morgan Stanley..

Hey, there. Just wanted to delve into little bit on the Canadian impact that you mentioned.

Could you clarify how much that might have affected the top line in Q2, and I guess I’m talking about the remote services impacting more than the currency impact? And then is that impact getting worse or better as we look at the rest of the year, and at what point, will this drag from the remote services kind of be completely behind us, is that 4Q this year, first Q next year, when we will be in the past?.

Yeah. Hi, good morning, Denny. This is Steve. We probably incurred I don’t know $10-ish million of headwind on the top line in the quarter, specifically, from the Canadian side of that remote business, and that was relatively consistent with what would’ve experienced in the first quarter as well.

So, I’ll call it $20-ish million for the first half of the year. We currently don’t see any signs given what’s happening in the markets that that is going to significantly improve in the very near term, but we really from a [ph] lapping standpoint, I think it will run its course in terms of showing negative comps at the current levels.

Certainly through the second half of this year, we really started feeling the pain in the first half and then on the EBIT side, that business has a relatively high drop through for us. So, in absolute terms, it’s not terribly significant, but that’s a good business that is no longer dropping through. So, we certainly notice this.

And the only thing that I would emphasize again, we mentioned in our prepared comments, it is a small percentage of our business, low single-digit percentage of our business..

Okay. And then on CapEx, CapEx was down, is good it ultimately should help margins, but there is also sometimes a connection between CapEx and new wins.

So should we read into this that the new wins declined a little bit last quarter or is 3% kind of more of a steady run rate for what you guys are doing or maybe the recent wins have been less capital intensive than some of the previous ones?.

Maybe let me with that and then I’ll – Eric will give you some context. I wouldn’t read anything into the percentage in the quarter, I would attribute it almost largely through timing, we continue to expect. As I think we indicated earlier, our full year investment is going to be in that 3% to 3.5% range.

So the fact second quarter was a little bit higher or lower than it may have been earlier or versus expectations is really just purely timing..

Okay..

Just to size again, to my point earlier, continued strong new business results consistent with what we’ve seen in the last couple of years, ex the one client that we’ve talked about. And I think it has as much to do with anything as just the decision making process and how that gets calendarized.

I think we’ve mentioned many times that the new business both in terms of the decisions as well as the on-boarding of that can be somewhat lumpy, and so I don’t think there is anything on the new business front that we don’t see that’s quite encouraging..

Our next question comes from Carla Casella with JPMorgan..

Hi.

Just given how strong the cash flow is here and [indiscernible] callable this year, are you considering potentially reducing some of your long-term debt, expanding your cash flow?.

Yeah, hi. Good morning, this is Steve. We’re always going to look at it. We’re always paying attention to it for sure. Clearly, the cash flow has been better than the first half of the year, I would remind you, it’s so quite negative at this point in time. And – yeah, there is a 4% premium on those bonds.

We’re well aware that, which has done in an insignificant cash outflow for us. But obviously, there’s potentially some benefit associated with it.

So we will continue to monitor and if it works out to be the right thing for us to do given the way the rest of the year and beyond unfolds, we certainly would not be averse to calling them if we feel like it’s the right thing, but at this point, it’s a watching way..

Okay. Great. Thanks a lot..

And we’ll take our next question from Denny Galindo..

Hi, guys. I just had one more follow-up. We’ve seen some increases in wages at some of the other retail and restaurant businesses. And I know you guys pay well over a minimum wage.

But can you give us some color about how you think about changes in wages that what metrics would lead you to increased wages like de-monitor things like turnover or how long it takes to fill open positions? And maybe how are those metrics been trending since some of these wage increases have been announced in the industry?.

Sure, Denny, it’s Eric. One, I don’t think we’ve seen any change relative to the turnover number. Again, I think I would say the following. Number one, we’re very committed to pay a fair and competitive wage for all of our employees. As you mentioned, 99% of ours are paid above minimum wage.

There has been a lot of activity on this topic at the state level. I think roughly 30 states are – have either acted or considering acting on the minimum wage question, a number of those that have acted, they’ve been pretty modest.

So, again for us, I think, any change as we look at it has to be weighed hopefully as the decision gets made on the broad economic impact, I think any change that’s out there has been implemented affects all competitors including self-operated accounts the same way. So, as we think about this, I think, we’ll continue to monitor it and look at it.

And again, as we think about it, as you’re talking about a $1 or $2 relative to minimum wage impact, that’s very manageable well within what we’ve – what guidance we’ve provided. And again, remember, one point that should be remembered is if you think about the composition of our business, you’ve got about 20% outside the North America.

Second, you’ve got about 30% of those contracts that are cost plus, so that would get past through immediately and then we have other – a variety of other mechanisms to offset it. So, we feel comfortable with our ability to manage through minimum wage question of factory employees..

And just as turnover, how long it takes to turn up in position, are those the types of things you would look at as a leading indicator to make your decision on wages or is there something else?.

Yeah. I think, those two would be variables. I think, there’s a variety of variables that we would look at, but certainly those two variables if you can either reduce your turnover or if your turnover you saw a spike in turnover attributable with this, that’s certainly something you would look at.

So, but we monitor those on a regular basis and again we feel like from where we sit right now, this is very manageable for us through the planning process..

Okay. Thanks. That’s very helpful..

That concludes today’s question-and-answer session. I would like to turn it back over to Eric Foss at this time for any additional or closing remarks..

Well, thanks Hanna, and thanks for everyone. We appreciate your time, we appreciate your ongoing interest in Aramark and we very much look forward to speaking with you in a few months on our third quarter call. Thanks again..

Thank you for participating and have a nice day. All parties may now disconnect..