Business Segments

9 Months Ended

Jul. 01, 2011

Business Segments

Business Segments

(12) BUSINESS SEGMENTS:

Sales and operating income by reportable segment follow (in thousands):

Sales	Three  Months Ended July 1, 2011			Three  Months Ended July 2, 2010
Food and Support Services—North America	$	2,253,908		$	2,163,013
Food and Support Services—International		697,966			589,975
Uniform and Career Apparel		373,383			367,956
	$	3,325,257		$	3,120,944
Operating Income	Three  Months Ended July 1, 2011			Three  Months Ended July 2, 2010
Food and Support Services—North America	$	69,153		$	57,803
Food and Support Services—International		22,841			19,114
Uniform and Career Apparel		29,928			26,423
		121,922			103,340
Corporate		(12,637	)		(8,008	)
Operating Income		109,285			95,332
Interest and Other Financing Costs, net		(113,262	)		(108,811	)
Loss Before Income Taxes	$	(3,977	)	$	(13,479	)
Sales	Nine Months Ended July 1, 2011			Nine Months Ended July 2, 2010
Food and Support Services—North America	$	6,734,251		$	6,455,864
Food and Support Services—International		2,047,682			1,849,054
Uniform and Career Apparel		1,129,453			1,108,744
	$	9,911,386		$	9,413,662
Operating Income	Nine Months Ended July 1, 2011			Nine Months Ended July 2, 2010
Food and Support Services—North America	$	285,989		$	250,778
Food and Support Services—International		55,296			58,544
Uniform and Career Apparel		90,189			69,442
		431,474			378,764
Corporate		(35,504	)		(40,126	)
Operating Income		395,970			338,638
Interest and Other Financing Costs, net		(315,173	)		(335,766	)
Income Before Income Taxes	$	80,797		$	2,872

In the first and second fiscal quarters, within the "Food and Support Services—North America" segment, historically there has been a lower level of activity at the higher margin sports, entertainment and recreational food service operations which is partly offset by increased activity in the educational operations. However, in the third and fourth fiscal quarters, historically there has been a significant increase at sports, entertainment and recreational accounts which is partially offset by the effect of summer recess on the educational accounts.

In the first quarter of fiscal 2011, the segment reporting structure was modified to align the segment reporting more closely with the Company's management and internal reporting structure. Specifically, the Mexican operations have been combined with the Food and Support Services—North America segment. Previously, the Mexican operations were included in the Food and Support Services—International segment. All prior period segment information has been restated to reflect the new reporting structure. Management believes this new presentation enhances the utility of the segment information, as it reflects the Company's current management structure and operating organization. The financial effect of this segment realignment was not material.

Food and Support Services—North America operating income for the nine months ended July 1, 2011 includes other income recognized of $7.8 million related to a compensation agreement signed with the National Park Service (NPS) under which the NPS agreed to pay down a portion of the Company's investment (possessory interest) in certain assets at one of the Company's NPS sites in the Sports & Entertainment sector, severance related expenses of $3.2 million and a favorable risk insurance adjustment of $0.9 million related to favorable claims experience.

Food and Support Services—International operating income for the three months ended July 1, 2011 includes a gain on the sale of land in Chile of $1.7 million and severance related expenses of $1.7 million. Operating income for the nine months ended July 1, 2011 includes a gain of $6.4 million related to the divestiture of the Company's 67% ownership interest in the security business of its Chilean subsidiary (see Note 2), favorable non-income tax settlements in the U.K. of $5.3 million, a goodwill and other intangible assets impairment charge of $5.3 million related to the India operations (see Note 5), a gain on the sale of land in Chile of $1.7 million and severance related expenses of $11.4 million. Operating income for the nine months ended July 2, 2010 includes favorable non-income tax settlements in the U.K. of $3.2 million.

Uniform and Career Apparel operating income for the nine months ended July 1, 2011 includes a gain of $2.6 million related to a property settlement pursuant to an eminent domain claim, a favorable risk insurance adjustment of $4.8 million related to favorable claims experience and severance related expenses of $1.3 million.

Corporate expenses for the nine months ended July 1, 2011 include severance related expenses of $1.0 million and share-based compensation expense (see Note 9).

Interest and Other Financing Costs, net, for the three and nine months ended July 1, 2011 includes a write-off of deferred financing fees of $2.1 million related to the amendment that extended the U.S. dollar denominated portion of the revolving credit facility (see Note 6). For the nine months ended July 1, 2011, Interest and Other Financing Costs, net, also includes interest income of $14.1 million related to favorable non-income tax settlements in the U.K. For the nine months ended July 2, 2010, Interest and Other Financing Costs, net, includes $8.3 million of third-party costs related to the amendment of the senior secured credit agreement that extended the maturity date of $1,407.4 million of outstanding U.S. denominated term loan and interest income of approximately $4.3 million related to favorable non-income tax settlements in the U.K.