Good morning, and welcome to Aramark's Third Quarter 2022 Earnings Results Conference Call. My name is Livia, and I'll be your operator for today's 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 remarks. I will now turn the call over to Felise Kissell, Vice President of Investor Relations and Corporate Affairs. Ms. Kissell, please proceed. Thank you, and welcome to Aramark's Third Quarter Fiscal 2022 Earnings Conference Call and Webcast. Hope all of you are doing well. This morning, we will be hearing from our Chief Executive Officer, John Zillmer, as well as our Chief Financial Officer, Tom Ondrof. As a reminder, our notice regarding forward-looking statements is included in our press release this morning, which can be found on our website. 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 annual report on Form 10-K and our other SEC filings. Additionally, we will be discussing certain non-GAAP financial measures. A reconciliation of these items to U.S. GAAP can be found in this morning's press release as well as on our website. With that, I will now turn the call over to John. Thanks, Felise, and thanks to all of you for joining us. As you know, over the past couple of years, we've been focused on several actions to transform the company, including reigniting a hospitality culture and instilling a growth mindset, all while navigating through major macroeconomic challenges. This morning, I will review our progress in those areas, all of which have led to strong business performance in the quarter. I'll also provide an update on the planned spin-off of Aramark Uniform Services, which is intended to be tax-free to Aramark and its stockholders. Against the tough backdrop, I couldn't be more pleased with the team's delivery of the early stages of our strategic growth plan, which continues to drive momentum across our organization and create long-term value for Aramark shareholders. Our results in the third quarter reflected an acceleration of new business growth and effective cost management across the business. We have reached a significant milestone with revenue now surpassing pre-COVID fiscal 2019 levels across all segments. Business and Industry, which had been slower in its return, demonstrated continued progress over the course of the quarter, and we believe is well poised for ongoing recovery. Net new business through the first three quarters has already surpassed last year's record-breaking full year number, and we expect to capitalize on a robust sales pipeline through the remainder of the year, positioning us well to achieve our raised net new business target this fiscal year and carrying that momentum into next year. While global inflation trends remain elevated, we are operating with a heightened focus to reduce the impact on the business. As we have previously discussed, we believe that we have extensive resources to efficiently manage this inflationary environment, including menu reengineering, labor optimization, and technology deployment, among others. Revenue in the quarter also included 5% growth from pricing compared to the prior year as we work closely with clients to mitigate costs and navigate through this inflationary period. Our supply chain team is providing real-time insights for effective client pricing strategies tailored to specific clients, sectors, and geographies. Each of the three business segments continue to gain momentum, both on the top and bottom line, reflecting the hard work our teams have put into driving the business forward. Within U.S. Food and Facilities, organic revenue grew by 45% year-over-year, with all lines of business contributing. Education performed strongly through the end of the academic year, with our teams currently preparing for the new school season in both Collegiate Hospitality and student nutrition, our newly branded higher education and K- 12 businesses. We have begun implementing enhanced pricing strategies for upcoming board plans and on-campus retail outlets in higher education. Sports, leisure, and corrections significantly improved compared to the prior year, led by strong attendance levels. Sports and entertainment drove increased per capita spending led by Major League Baseball, as well as benefited from the return of a more robust concert schedule at our client venues. Our destinations portfolio experienced greater guest activity, particularly in the national parks. Corrections, once again performed above pre-COVID levels due to a strong portfolio of new business wins. Business and Industry, now branded as the Workplace Experience Group, continued to show gradual progress as return to office levels remain specific to client culture and geography. In speaking with clients, we remain optimistic for even greater in-person interactions in the fall. Clients are already more active in employee engagement events, including social gatherings, networking opportunities, and wellness sessions, a testament to the continued value and importance of in-person engagement. Facilities and other drove success through ongoing demand in core business offerings with an added focus on new engineering solutions and client project services. We are advancing innovation and adding capabilities, including robotics, as an example. Healthcare+ exhibited growth led by increased client activity related to elective surgeries and clinical care. The team has successfully renewed several significant marquee accounts and established new offerings, including in ambulatory surgical centers. We've made great progress and have created industry excitement by introducing a new healthcare model focused on patient post-care in partnership with patient engagement advisors. International grew organic revenue 49% year-over-year. This performance was led by new business wins and increased event activity, particularly in sports and entertainment within Europe, as well as improvement in B&I across the countries we serve. The international team continued to drive consistent net growth that was broad-based in both geography and size, particularly in Chile, Germany, Canada, and the U.K., from healthcare to education to B&I. Uniforms performance surpassed pre-COVID levels for a second consecutive quarter as momentum builds towards its debut as an independent, publicly traded company. Organic revenue grew 11%, driven by rental revenue growth, as well as strength in adjacency services, and the team is beginning to execute on the many value-creating opportunities available to the business. Since our Uniforms spin announcement last quarter, we've made progress in the operational separation and have added leaders with extensive public company experience to complement the deep industry expertise of the team already in place. We are on track to complete the transaction in the second half of fiscal 2023, and we will continue to provide updates as appropriate. I would now like to spend a moment sharing some initiatives taking place at Aramark that speak volumes about the character of our team and the special culture we've been able to create across the company. It's no secret that people are the cornerstone of everything we do. Building an inclusive, accessible, and equitable workplace where all employees can thrive and grow their careers is essential to Aramark's success. With that, I am proud to have signed the CEO Letter on Disability Inclusion, and I am even more proud that Aramark was again named one of the best places to work for disability inclusion by the 2022 Disability Equality Index. Moreover, our vision for the future focuses on positively impacting people and the planet, and as we serve our client partners, employees, shareholders, and other stakeholders. Our progress in this effort continues as we just committed to significantly reduce greenhouse gas emissions associated with the food we serve in the U.S. by 25% by 2030, in conjunction with our World Resources Institute's Cool Food Pledge. We also plan to significantly expand the availability of plant-based, lower carbon footprint meals across our portfolio, offering healthier, more client-friendly solutions. I'd now like to turn the call over to Tom for a detailed financial review of the business. Thanks, John, and good morning, everyone. Our performance in the third quarter took another step forward as we continue to execute on strategies to drive both revenue growth and margin progression. We have a clear line of sight for continued improvement for the remainder of the year. Before reviewing our updated fiscal 2022 outlook, I first want to discuss our financial results in the quarter. For the total company, organic revenue of $4.2 billion was up 39% over prior year and exceeded pre-COVID levels for the first time, driven by strong net new business and pricing pass-through, as well as the continued recovery of COVID-related volumes, which reached about 93% of pre-COVID levels, compared to roughly 88% last quarter. More than half of the remaining volume to be recovered is attributable to white-collar B&I, with the rest associated with ancillary service offerings and other lines of business, including conference and convention centers in sports and leisure, and retail and catering in higher ed and healthcare. We expect these revenue streams will continue to improve into the fourth quarter and throughout fiscal 2023. As a reminder, we anticipate the returning volumes to carry higher than average incremental AOI margins of approximately 15%-20%. In the third quarter, adjusted operating income was $178 million on a constant currency basis, growing 73% year-over-year, resulting in an AOI margin increase of 85 basis points to 4.4%. This progression was due to operating leverage from increased revenue levels and tight cost management, particularly on the labor line, where the use of agency and temp labor has been reduced. We've also seen a slight improvement in supply chain fill rates, allowing us to start to move back to negotiated products from preferred suppliers. Margin improvement in the quarter was impacted by increased inflation, as well as the effect of significantly higher levels of new business with related startup costs and the natural profitability ramp over the life of contract. While inflation, startup costs, and new contract inefficiencies have a short-term drag on margins as we accelerate our top line growth, these factors add to dollar profit growth today, and we expect in time will benefit margin as well, giving us confidence in our ability to exceed pre-COVID AOI margin levels. Our results in the quarter led to adjusted EPS of $0.25 compared to an adjusted EPS of $0.03 in Q3 last year. On a GAAP basis, Aramark reported consolidated revenue of $4.1 billion, operating income of $148 million, and diluted earnings per share of $0.16. Compared to organic revenue, GAAP results included $85 million in revenue associated with two months of Next Level Hospitality and the first month of Union Supply Group, which closed in early June. Next Level is now part of our organic revenue and AOI metrics as we have lapped the acquisition date. Now turning to cash flow. In line with the normal quarterly cadence of the business, net cash used in operating activities was $14 million, and free cash flow was a use of $96 million. The increase in working capital, specifically accounts receivable, was the result of significantly increased revenue in the quarter as new business began operating and COVID-based volumes continued to recover. At quarter end, we had approximately $1.3 billion of cash availability and no significant debt maturities due until 2025. In this period of rising interest rates, we will be strategic and opportunistic in debt repayment and refinancing. While we will continue to invest to drive performance in existing accounts and support growing new business activity, we remain committed to achieve a leverage ratio below 3.5x by fiscal 2025. Let me wrap up by reviewing the latest outlook for fiscal 2022. We raised both our organic revenue growth and annualized net new business expectations. Organic revenue growth is now expected to be 31%-32% for the full year, which would indicate the fourth quarter reaches 107%-108% of pre-COVID fourth quarter fiscal 2019 levels. We had previously provided an outlook of 27% year-over-year organic growth. Annualized net new business is now anticipated to be between $725 million and $775 million, compared to our previous outlook of $650 million-$750 million, and our initial outlook at the beginning of the fiscal year of $550 million-$650 million. This twice-raised outlook is being driven by strong performance year-to-date, improved close rates, and a robust sales pipeline that we expect to carry into fiscal 2023. We maintain our full-year outlook for AOI margin of at or near 5%, with a Q4 margin of mid-6% and free cash flow outlook between $300 million and $350 million that will include a significant cash inflow in Q4, in line with the company's standard seasonality. Like John, I'm very proud of our teams as they continue to deliver great service for our clients and improving results for our stakeholders. Fueled by annualized net new business at levels never before reached at Aramark, we've now surpassed pre-COVID revenue levels and believe we are poised for fiscal 2023's top line to be approximately $18 billion, inclusive of AUS. AOI margin continues to progress as our full-year outlook for this fiscal year is more than double fiscal 2021's performance of 2.4%, with ongoing improvement expected as we move toward our fiscal 2025 target of 7%-7.5%. I'm extremely excited about where we are now and where we are heading as we work to wrap up fiscal 2022 and prepare for the new fiscal year. John? Thanks, Tom. As we move into the fourth quarter with a revenue run rate that exceeds pre-COVID levels, I'm excited about the opportunities ahead. Our growth-minded culture has created a foundation for consistent net new business. The breadth and resilience of our portfolio across sectors and geographies reinforces our ability to drive results while also benefiting from heightened outsourcing and other positive industry trends. Margin has progressed since fiscal 2021, and our leverage ratio continues to improve. We are making value-enhancing decisions that include strategic acquisitions and partnerships as well as the planned spin-off of Uniforms. I'm extremely proud of what we've accomplished as a global team to position Aramark for success as we execute against our strategic growth plan, working to transform our business to achieve our fiscal 2025 targets. I couldn't be more confident in our people, our clients, our purpose, and our future. Operator, we'd now like to open the line for questions. Thank you. We will now begin the question-and-answer session. If you have a question, please press star one one on your touch-tone phone. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. In order to accommodate participants in the question queue, please limit yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Toni Kaplan from Morgan Stanley is on the line with a question. Your line is open. Thank you. Congrats on a really outstanding quarter on the organic growth front across the board. Wanted to just find out if you're seeing any sort of change in the new business environment as a result of, you know, the increased uncertainty in the macro, just any change in client conversations. Obviously, the new business was very, very strong in the quarter, so, you know, it didn't seem like you are, but just, you know, just give us an update on the most recent that you're seeing. You bet. Thanks, Toni. Our sales pipeline is very robust going into the fourth quarter and into next fiscal year. We don't really see any change in client-related activity as it relates to new business. We see continued emphasis on clients that are currently self-operated continuing outsourcing for the first time. We believe the trajectory for next year is also going to be very, very strong. Nothing from a macro perspective that seems to be impacting the new business results. Terrific. Just shifting to margins, could you give us a little detail on how much inflation is impacting you, maybe with regard to supply chain, food costs, and, you know, looking forward with commodity prices down pretty meaningfully since May, should that be less of a headwind in future quarters? Maybe that starts to dissipate a little bit. Thanks. Yeah, Toni, I think Tom and I will both take this. You know, I think we are beginning to see, as you indicated, some commodity price softening, which is very favorable for us, particularly as it relates to several of the commodities that we purchase and utilize in our locations. So we do believe that if that, like, phenomenon continues, that will help mitigate the impacts of inflation. I think our teams have done a very good job of offsetting inflation to date in operations through both pricing strategies and other operational improvements, and we expect to continue to be able to do that, whatever happens in the overall macro inflationary environment. you know, we have seen in the quarter, we saw significant new account openings in a number of businesses that impacted margin and just a touch in the quarter. We expect as we continue to open those new accounts and as those accounts mature for the margins to come along with it. So, you know, we're very pleased about the progress. We're very pleased about the way people are managing and executing at the unit operating level, the way we're serving our clients, the things and the actions that we're taking to go ahead and do that. We've got terrific data that we provide to our people on the inflation front. So, they're managing in a very real time basis and able to recover those costs as they occur. Tom, anything to add? No, just a reminder that, you know, that the input costs are just a portion of what we experience on the product cost line. As John said, you know, a lot of levers in there that we continue to pull, and our teams continue to work on. You know, pre-production waste, post-production waste, you know, menu engineering, portion control, you know, all of those things are in addition to just the pure input costs. You know, a lot of levers there, and the team's doing well. Super. Thank you. Thank you. Now, next question coming from the line of Ian Zaffino from Oppenheimer. Your line is open. Hi, thank you very much. Good quarter, guys. Thanks for taking my question. Question would be on. I kinda have to put you guys at $18 billion of organic revenues for next year. It's clearly higher than what we had, you know, by over $1 billion. I think across the street, that's the same case. What's basically where is that growth coming from? Maybe give us a little bit of color on that. You know, why is it so strong, you know, vis-a-vis kind of what the street's expecting? Thanks. You know, a few things. Probably the bigger driver is the confidence in the continued recovery of the COVID base. I mean, we've talked about exiting this year with roughly $1.6 billion unrecovered. You know, that flows into next year as B&I continues its trajectory, conference convention centers, even concerts, you know, weren't very strong at the beginning of the year, obviously stronger right now. And that base recovery combined with the net growth, and our confidence in that sales funnel, what we book this year, you know, what we're already seeing as we move, you know, we're already into next year's selling season, really. And what we see in that pipeline, you know, all very confident. And then pricing. Obviously, as pricing kicks in and has throughout the year, you know, that's helping the revenue cause as well. I think it's all those factors combined, you know, that give us confidence on the $18 billion, roughly. You know, I don't know where the market has missed, but I think, you know, potentially it's been in the net growth, being able to continue that for what will be a third year at record levels as well as the COVID recovery. Okay, thank you. You know, just sticking on the net new business, much stronger than you predicted just, you know, three months ago. How much of that, I guess, that would effectively be all new customer additions because there probably isn't a whole lot of inflation in there, you know, given quarter-over-quarter, because I don't know how much inflation necessarily change quarter-over-quarter, right? That entire increase is effectively either new customers or renegotiation, et cetera. Correct? Is that the way to think about that? Well, it's all new customers. There is no inflation and there's no renegotiation component in the net new. That is a new business, new client number. Those results have been exceedingly strong and continuing to get stronger throughout the year. That's the reason for the guidance raise now for the second time. You know, we had record results last year. Our guidance for this year was to top that, and we've been able to actually exceed our expectations. The team has done a great job of delivering on the net new business side. Very strong retention numbers, you know, roughly equivalent to last year and terrific new business wins. Very impressive, guys. Thank you very much. Thank you. Thank you. Our next question coming from the line of Heather Balsky from Bank of America. Your line is open. Hi. Thank you for taking my question. I realize we're a quarter away from you guys guiding next year, and your guidance for the fourth quarter this year, you know, implies a pretty healthy margin. I was hoping you could talk about next year. Just help us think about the give and take, the impact from new businesses maturing, inflation. How should we think about margins for 2023? Thanks. As we said, we'll continue to progress those forward on our path to the 7%-7.5% in fiscal 2025. As you just mentioned, lots of puts and takes as we move into fiscal 2023. We'll certainly be able to build on the doubling of the margin from last year at 2.4% to this year, and then again, progressing into 2023. There's a few factors that we still are not completely sure of. I think we, as we sat here a year ago, we thought, we all thought inflation was transitory, and that proved differently. We do, as John just mentioned before, start to see a little bit of an easing in both availability and input costs. That's good news and will help the margin. The contract maturity of accounts that we booked in 2021 last year will continue to progress as well as the accounts this year. That starts to add to the mix. The COVID revenue recovery and that incremental margin flow through is gonna help the cause. We're continuing to manage our above unit cost very, very tightly. All those things are gonna work in our favor to progress the margin and keep us on track for that 25% margin goal. Yeah, I would only add that, you know, we are, you know, we're just a couple of months away from the close of the fiscal year. We will be working very diligently on our fourth quarter disclosures to give you chapter and verse on net new business wins and how that will shake out for the year, and our expectations for the profitability ramp up in those components, and what the impacts are for margin next year. You know, we'll be able to reflect more accurately, I think, at that point on what our expectations are. You know, this quarter, the fourth quarter, as we've talked about, we expect mid-sixes. That is seasonally our strongest quarter, and we expect to have very, we expect to finish the year very favorably in the quarter. Then given the nature of the business, we would expect that we'll show continued improvement. There's a degree of uncertainty with respect to supply chain. You know, we believe inflation is showing the tendency to potentially moderate over the back half of the year, but it remains to be seen how that impacts next year's results. I would say we're just a little bit early from giving guidance for next year, but we're very confident in the trajectory. I would say that this year is unfolding exactly as we had predicted from an earnings perspective, a margin perspective, a growth perspective, and that we feel like our teams really have a handle on the expectations for the business. We're very confident in the trajectory, as Tom said, running into 2025. Great. Thank you. Just one housekeeping question. You know, you talked last quarter about, you know, sort of your expectations for inflation in terms of how it would be running. I think it was in the high single digit range. I'm curious just sort of, you know, you talked about some easing. How is it kind of lining up right now with what you had forecasted for? You know, well, I would say at present, it's lining up pretty close to our expectations. Really nothing yet that gives us a strong signal one way or the other. We've had, as we said, some easing in the commodity markets on certain categories which potentially bodes well. As you saw in the Tyson announcement yesterday, the continued impact on their supply chain with protein availability and the like. We're still navigating and managing through that, but we expect to be able to manage the impacts on our business, which is really what I'm most concerned about. Do I have the capability of either passing through on pricing or re-engineering or all those other levers that we have to pull so that we can hit our targeted expectations? We believe that we are fully in control of the business that we operate and that we have that ability. Great. Thank you so much. Thank you. Our next question coming from the line of Harry Martin from Bernstein. Your line is open. Hi. Good morning, everyone, and thanks for the question. I hope we could dig into the drivers of the uplift in the net new guidance a little bit more detailed. You know, is it more on the gross win side, or is, you know, retention running a little bit better than expected? In, you know, in the sort of international business versus the U.S., I mean, last year and kind of at the start of this year, the U.S. was really the big game changer compared to the sort of prior average. Is, you know, the international business starting to accelerate a lot faster as well? You know, any sort of more color we can get on that uplift in new win guidance would be very helpful. Thanks. Sure. I think broadly speaking, the gross wins are driving it a little more than retention. Retention will probably end up being relatively consistent with last year, when the dust settles on the fiscal year, but the gross wins will be, again, another record level built on last year's record level. You know, it's coming pretty broad-based. You know, international certainly benefited from the Merlin win, but they've also, you know, had an extraordinary year across almost all the geographies in terms of the bread-and-butter wins as well, which we really like to see. As we talked about before, they take a little less time to ramp and work the inefficiencies out. The U.S. does continue to, you know, gain good traction, fairly broad-based, Facilities and Corrections have had extraordinarily good years. Then again, there's just a steady engine with Uniforms, based on the investment made in the sales force starting back in 2019. That just continues to gain traction, and they continue to push forward on their new business wins. Again, I think it's pretty broad-based, driven primarily from the gross wins, you know, with consistent retention levels. Great. Thanks. As a related follow-up, can you give us a little bit of help in thinking about the phasing of those annualized new wins, you know, turning into revenues? The $505 million from last year, you know, what's gonna shake out at around $750 at the midpoint this year. How much of those translate into revenues for 2023, and how much it really will take 2024 and beyond to get to full annualized volume? Yeah. If you go back, ordinarily it's sort of a 40% in year and 60% roll into the following year is the typical split. Right now, it's a little off just because of the COVID ramp up, particularly, you know, in a couple areas, business dining being the primary one, where you know, the ramp up to full populations is still taking a little bit of time. But I think if you generally use sort of a 40%-50% in year and then the balance rolling into the following year with maybe a bit of a tail, beyond that'll work for you. Great. Thanks very much. Thank you. Our next question coming from the line of Andrew Steinerman from JP Morgan. Your line is open. Hi. I was, you know, backing into the fourth quarter revenue of about $3.9 billion-$4 billion, and it's about an organic constant currency revenue growth of 9%-13%. I was just wondering, Tom, if you could just give a little color since we're so, you know, far into the quarter already on the three segments of, you know, how you think the three segments will perform on an organic constant currency basis. Even if you're not gonna give a number, just directionally, you know, where do you think the momentum is amongst the three segments in the fourth quarter? Yeah. It's pretty broad-based and consistent across each as I just was talking about, Andrew. I think Uniforms is continuing to show progress, you know, trending as they have in the last couple of quarters. Uniforms I think could even have a little bit better. I mean, sorry, AUS could have a little bit better fourth quarter, given the rollout of a couple of big accounts, again, within Corrections and Facilities in particular. International just keeps chugging along. So I think they'll continue to show the pace and trend that they've shown in the previous couple of quarters. Okay. Thank you. One moment for our next question. Our next question coming from the line of Shlomo Rosenbaum with Stifel. Your line is open. Hi. Thank you very much for taking my questions. I wanna focus a little bit on the Uniforms division. John, with the revenue coming back to pre-COVID levels and pretty much finished with the routing software you know implementation, when should we start to see really those you know 200–300 basis points of margin expansion versus what the company was doing in that unit prior to COVID? It seems like the setup is already there. We're just you know how long is it gonna take you to harvest that in order to get you know that significant margin expansion? Yeah. Thanks for the question, Shlomo. You know, first of all, I think the business itself has shown remarkable resilience this year. You know, the third quarter performance was truly extraordinary, but from both a growth perspective as well as a retention perspective, outperforming its competitors on the top line growth side, significantly. Really pleased with the job that they're doing. We are continuing to see the margin expansion start to flow through on the business. The implementation is complete, the optimization stage is ongoing. Kim has a harvesting plan, if you will, she'll talk about with investors as we begin to go through the process of the spin and begin to have dialogue with the shareholder community and the investment community. You know, we'll have greater detail after quarter four, but we believe very strongly in the trajectory of the business and the performance. As I said earlier, the business is basically doing exactly what we thought it would do under the circumstances and given the investments we've made. One of the things that's most encouraging is we continue to see sales force productivity ramping up. That's a result of the ABS implementation as well as the increased staffing levels leading to that 11% growth year-over-year. That is part of the investment of that in that system. The implementation of the various recovery mechanisms that we've been able to undertake during this inflationary environment. I feel very strongly that as we go through the spin process and begin to add disclosure about the business, that it will be very apparent going forward. We'll get into more specifics as we close out this year and get into the first quarter of next year. Okay, great. Then, this one may be for Tom. As we see like interest rates fluctuating but generally have been heading higher, does it make it more challenging for the company to achieve the targeted leverage ratios over time on a pro forma for the spin-off? I mean, typically, you're gonna have to kind of reduce some of the debt, assign some of it to the, you know, the spin-off company to, you know, upstream a dividend. If the interest rates are higher, you know, does that impact the way that we should think about it? Well, it's not helpful. You know, we certainly would like a more, you know, a calmer market. We have the benefit of time. You know, we've talked about the second half of next fiscal year. We're continuing to keep an eye on the markets. You know, we'll refinance, you know, opportunistically as we move through into the fall and through the winter. You know, we'll work it out. Yeah, it would be nice to have the market settle. Okay, thank you. I would add that, you know, the most important thing as we move forward with both the execution of the spin strategy and the core business is the continued earnings improvement from both elements of the business. We have multiple levers to manage with respect to cash flow, and we're very confident in our ability to go ahead. You know, our debt trades very well. We're confident in our ability to refinance on an appropriate basis. Don't see the macro environment as a significant impact item with respect to our strategy moving forward and/or ability to go ahead and get down to that 3.5x level that we've modeled for 2025. Thank you. Thank you. Our next question coming from the line of Andrew Wittmann from Baird. Your line is open. Yes, great. Thanks for taking my question, guys. Excuse me. I was hoping you could talk a little bit about the margins implicit in all these great new wins that you're announcing today. Maybe talk a little bit about the capital, if anything has changed on the needs there, or if the mix of customers that you're winning are capital heavier or capital lighter customers? Sure. On the capital, you know, no real mix. As a matter of fact, I think it's actually probably a little lighter than normal. You know, we've got fortunately a pretty robust pipeline in sports Entertainment going into next year and Higher Ed, which do, you know, use or tend to use a little more CapEx. You know, we love to use it. It generally brings higher margins and longer term contracts when we're able to invest in clients. I think this year overall, it's probably been a little lighter use of CapEx than we would normally see with these wins. You know, margin wise, you know, again, nothing extraordinary. I think, you know, typical sort of, you know, startup margins, which we continue to feel confident in the 2021 wins are ramping. 2022, you know, nothing out of the ordinary there, so feel good about that. Then, you know, what we're looking at going forward, you know, again, an overall testament to the market in general, and the, you know, general push to outsourcing and look. I think we as an industry have, you know, benefited in the last couple of years, you know, coming out of the pandemic. It's certainly increased activity, you know, made people look at outsourcing, you know, more robustly. And, you know, we're all benefiting from it. You know, again, the idea that we're really having to chase price, or, you know, to race to the bottom, so to speak, is just not in the mix. This is, you know, a good, robust process. This is a good, you know, strong industry in terms of growth potential. We're getting more and more disciplined in what we did. As I've said many times, I'd rather win three out of five than two out of 10, and we're gonna continue that pace. Yeah. I would just add generally, that our return requirements for the company have not changed. We still have very high expectations for the internal rate of return as we grow the business. We still have very strong pro forma development practices. The pro formas for these larger accounts come all the way up to Tom and I. There is, you know, a very significant process in place to make sure that we are selling business that is profitable new growth, and our margin and return requirements have not changed. We have high expectations that as we sell this new business, it will help us to continue to grow the margins going forward, not deteriorate the margins. While we have the short-term effects of new account openings and investment in the early stages of a new account, our expectation is that over the life cycle of the account, those returns are very close to or higher than company average and will contribute to expanding margins. That's helpful context. For my follow-up question, I wanted to ask about the Uniform segment margins in a little bit more detail. I think, John, you made the comment that, you know, kind of above peers, and I think that's true here. Obviously, you had a very good growth rate here. Honestly, on the margin side, you know, flat margins was probably a pretty good outcome for most companies, but you guys were up pretty materially. I was wondering, if you could talk about what some of the drivers were of those margins. Certainly, price has got to be one component, but I would imagine there's other factors. Maybe you could talk about either merchandise cost, labor expense, or maybe it's just an easy comp. I think some color around that would be helpful. Thank you. Well, absolutely. We are excited about the margin improvement, and I think the cost discipline in that business has been extraordinary. I think they've worked very diligently on the merchandise side, and particularly, they've worked very aggressively on the plant labor side to make sure that as they have staffing issues, they're able to mitigate the use of contract labor or temporary labor to make sure that they've got full-time employees in place to eliminate those additional costs. I think they've done a very good job on the operational execution front. You know, you have the natural margin leverage of that growth rate. There is, you know, as we add those new accounts, particularly the average rental revenue accounts, the weekly rental revenues, contribute to margin almost immediately. You have the natural margin leverage of that growth rate. They've made very good progress there. You know, we're very encouraged. They've been able to go ahead and recover the inflationary costs of fuel as well, and that's contributing to that margin improvement. You have multiple elements. You have the ABS implementation, you have new account wins. That's contributing to that margin improvement. You have multiple elements. You have the ABS implementation, you have new account wins, you have a very high level of cost control in the operations and a lot of discipline contributing to that margin improvement and performance. Okay. Thank you very much. Thank you. Our next question coming from the line of Leo Carrington from Citi. Your line is open. Good morning. Thank you. Can I just ask a follow-up, two follow-up questions on the drivers of net new business and the guidance range. Firstly, the magnitude of trends you're seeing in Uniforms versus Catering. I know you said Catering was positive, Uniforms was positive, but is there any real difference in terms of magnitude or source of the wins to call out between the two businesses? Secondly on this, it was good to see the emissions reduction targets announced in June. I mean, aside from the environmental benefits of this, to what extent are environmental considerations being informally or specifically specified in tenders now? I'll take the second question first. You know, there is increasing importance placed on ESG, as you know, initiatives and the company's approach to various issues in many tenders these days, particularly anything related to government entities. Obviously, we're all dealing with what the SEC might ultimately do with respect to reporting requirements. There is heavy emphasis and a lot of attention being paid on both the sustainability side and the governance side as well. We are very attuned to it, and we are very committed to doing what's right for our people and planet. We've got a great leader in Ash Hanson focusing on those efforts and a gentleman named Alan Horowitz, who is focused on the sustainability efforts. It is something that has the attention of everyone, including the board. It does come with heightened attention and bid processes these days. I would say Ash spends a very significant component of her time working on the sales process and the proposal process with and presentation process in the sales arena. It is an important element. Tom, do you want to? Yeah. I think on your first question, the momentum between Uniforms, and Food and Facilities on the gross business wins is pretty equivalent. Again, with the investment made in Uniforms a few years back, you know, they're chugging away and delivering a result that I think is just gonna continue to get better. I know Kim intends to continue to make incremental investment in that sales team to continue to drive the business forward. Then the same on the food side. You know, a little bit later reinvestment in that sales team on the Food and Facility side, you know, into fiscal 2020 and early stages of the pandemic. Great momentum started to be shown there as well, you know, as we move that forward, you know, record level last year, you know, already setting a new record this year, and the pipeline's robust going into next year. Both sides of the business are performing well. It's in terms of new business wins. Okay, thank you very much both. Thank you. Our next question coming from the line of Hamza Mazari from Jefferies. Your line is open. Hey, good morning. I just had one two-part question. Maybe if you could just talk about where you are in terms of labor optimization and tech deployment. You mentioned those aside from pricing in terms of managing, you know, inflation. How much more room is there to go on tech deployment and labor optimization? That's the first part. Then secondly, as part of that, could you walk us through how much of your pricing kind of adjusts in real time versus what piece of the portfolio has a lag? Just remind us how long that lag is. Thank you. Sure. You know, there are a couple of businesses that have very specific timing elements to them with respect to pricing. One of which is the Corrections business. Those contracts are with government entities. They typically have contract renewal date pricing opportunities in that we're focused on, a very significant portion of that occurs in the fourth quarter. Then there's obviously the Higher Education or the Collegiate Hospitality business that is focused on pricing that comes in the fall. Obviously, board plan pricing is set almost a year ahead. The board plan prices, you know, essentially are fixed throughout the operating year. We have an expectation that pricing increases rather significantly in Collegiate Hospitality starting in the fourth quarter. You know, the rest of the business is more real time. Again, each and every account is a client negotiation because we are guests in our customers' houses. When we raise prices, we do it with the approval and the negotiation with our clients. But as a general rule, we find it to be a very cooperative environment and hence, the ability to go ahead and pass through pretty directly those prices when we need to. But as Thomas said many times, we're always focused on delivering value first. Managing the business aggressively, those other levers in terms of technology, the other levers in terms of labor optimization, are important elements of our cost containment strategy. Pricing is important, but we manage all the levers at the same time. With respect to deployment of technology, I would say we're in the early stages. You know, payment technologies are largely deployed, but there are other opportunities to look for technology deployment, in particular, on the facility side, that can be value enhancing and labor cost re-reducing. You know, I would say that we have plenty of opportunities for deployment left. We don't have what I would characterize as a significant gap or a technology debt, if you will. Any of these deployments that we decide to make are optimization decisions, not technology debt decisions. We don't have some backed up capital deployment requirement in order to implement these technologies. We make these decisions on an individual basis based on what's best for the business, and the client and customer, and that's how we deploy it. Yeah. I think the only thing I'd add on that last point around labor and technology deployment is it's an evolutionary process in our business, not a revolutionary one. We continue to move at the pace of our consumers' taste with technology. At our core, as John has said many times, you know, we're a hospitality, people engagement, experience business. You know, technology can add to that, but it can also subtract. We've got to be careful about, you know, the pace at which we move and make sure it's appropriate with what our, you know, what our clients want. While it's a bottom-line enhancer at times, you know, we're mostly doing it to speed queues and increase the customer experience, not just simply to drive out cost. Thank you. Thank you. Our next question coming from the line of John Mazzoni from RBC Capital. Your line is open. Hi. Thanks for taking my question. Maybe quickly to some Higher Education. Can you give us more color on the recent rebranding to Aramark Collegiate Hospitality, especially around the fact that you've had the increased emphasis on sustainability, farm-to-table, as well as other ESG concerns. Is that helping you capture more value or drive higher pricing? Thanks. Yeah. I would say it's, absolutely. As we develop our approaches in individual client locations, we are always speaking to all the audiences, in particular students, administrations, and really understanding their unique needs and desires for their individual campuses. We think of it as a collegiate ecosystem that they're managing for a particular customer and set of constituents, and clients, and customers. It's a very deliberative process. It's one that you know, our frontline managers, our district managers, our RVPs are all intimately engaged in. It has the focus of our entire leadership team, Jack Donovan, and Trevor Ferguson, the people who really lead Collegiate Hospitality, you know, really look at this business very holistically and very differently than most operators. They are constantly assessing the marketplace needs, constantly assessing the impact of the change in student behavior and client expectations, and adapting their locations constantly. It is very important. As you would expect, students are at the forefront. Young people are at the forefront of many of the desired changes in the way we operate, and we're always focused on doing what's best for serving those customers. Great, thank you. Maybe just a quick follow-up on the B&I sector. Can you maybe just touch on what percentage of those lost volumes you're baking in to return in 2023, or any other information around just kind of the continued recovery? That would be great. Thanks. I'll park that answer to next quarter when we give guidance. We're still, you know, working through the full recovery of B&I into, you know, 2023, and what our view is there. More to come on that. Okay, thanks. Thank you. I will now turn the call back over to Mr. Zillmer for closing remarks. Again, thank you all for joining us this morning. We're extremely excited about the performance of the quarter and the expectations for the balance of the year. We have I think the best team in the industry. We love what we do and we're really excited about the future of the organization and couldn't be more pleased with the progress we've made and the expectations for the business going forward. Thank you very much and appreciate your support and of the company and I look forward to further conversations. Take care. Ladies and gentlemen, thank you for participating. This concludes today's conference. You may now disconnect. Good day.