We are pleased to report that ARAMARK is strong, stable and extremely well positioned for growth. Our portfolio of managed services has never been broader. Our ability to build trust relationships with our outsourcing clients has never been stronger. Our disciplined leadership team has never been better.

Today, our company is focused on what matters most to those we serve: innovation, new offerings, superior service and true differentiation. We worked hard in 2003 to align our capabilities to take full advantage of clear trends: worldwide growth in outsourcing of food and facilities management, clients focusing on their core competencies while seeking high-value and cost-effective partners and – importantly – clients’ increasing interest in a single partner for their outsourcing needs.

In this brief message, we will highlight a number of issues, particularly the tremendous opportunity in our Mission One strategic initiative.

Mission One, now in its second year, is a major catalyst for our people to expand our base business, retain our valued clients and create new business opportunities.

A CLOSER LOOK
From our beginnings in 1936... through our modern launch that extended our national reach in 1959... our taking the company private in 1984 to control our own destiny... and our re-entry into the public equity markets in 2001, we have remained true to our foundation of delivering service and value in trusting partnership with our clients.

In fiscal 2003, this time-tested approach helped us produce record financial results. We achieved worldwide sales from continuing operations of $9.4 billion, 13% higher than the prior year, and our diluted earnings per share increased to $1.34. You can review the details by clicking on the Financial Highlights tab above.

This outstanding performance again validates the strength of our service partnerships and the power of our unique business model. In thousands of hospitals, schools, stadiums, businesses and many other venues, we are helping our clients to focus on their core mission, as we partner with them on food, facilities and uniforms. We are able to achieve our mission, while helping our clients achieve theirs.

Our model is to provide service by embedding thousands of our people directly into our clients’ organizations. These ARAMARK managers become an integral part of our partners’ teams, part of their culture, on-site every day. This approach gives us a distinct ability to create value, and enables us to identify new ways we can serve clients.

These deep relationships are our brand equity; our goal remains to create enduring business partnerships that broaden and deepen over time. We’re proud that many of these “unlimited partnerships” – as we call them – across all our lines of business are still going strong after 30, 40, in some cases 50 years.

Of course, not all of our clients have been with us for decades. Just this past year, we were pleased to be awarded new contracts to serve the United Nations, NATO, Bloomberg and the 2004 Summer Olympic Games in Athens, Greece, among dozens more. Even as we prepare to offer a range of services at the 2004 National Football League Super Bowl, we were gratified to have managed food services for both teams in the 2003 National Hockey League Stanley Cup Finals, and for both teams in the 2003 National Basketball Association Championship Series.

In this Annual Report, you will find a series of profiles that provide a closer look at how we build partnerships – based on trust, value and service. In healthcare, The Mount Sinai Hospital. In sports and entertainment, Reliant Stadium. On campuses, the University of Pennsylvania. In business and industry, UnitedHealth Group. In uniforms, Wendy’s. In K-12 schools, the Duval County Public Schools. These are just a few of the thousands of valued clients we service each day – touching millions of customers.

DELIVERING ON FINANCIAL COMMITMENTS
From a financial perspective, our top priorities remain consistent: increasing organic growth rates, improving operating margins and generating strong cash flow. Against those three criteria, our people delivered solid results for 2003.

As we progress toward our Mission One organic sales objectives, we have achieved a good balance of economically sensitive and economically non-sensitive businesses, which we believe will serve us well in the coming years. Importantly, we sold a record-high level of annualized new business – nearly $850 million – in 2003, while our worldwide client retention rates across the company increased two full percentage points to 95 percent.

Cash flow from continuing operations rose to more than $600 million in fiscal 2003. Consistent with our model, we demonstrated our ability again this year to grow our business without requiring significant investments in working capital. Overall company operating margin remained stable year-over-year, a significant accomplishment given the challenges posed by global economic conditions.

MISSION ONE PROGRESS
Much of our success in 2003 is directly attributable to the traction we have achieved with our Mission One program. We see dozens of clear examples of the impressive “Mission One momentum” that is increasing in size and importance. This corporate-wide initiative has four pillars: increasing our client retention, accelerating our base business growth, developing more new business and building the one best team. To illustrate just how fast Mission One innovation is spreading, to meet increasing demands of our clients, there are now locations where we bring six… eight… even 10 separate ARAMARK service offerings to bear.

Right now we’re intensifying our efforts in both new businesses and fast-expanding geographies. In fact, we are now addressing such growing opportunities as senior living centers and multi-site healthcare systems – while directing even greater resources toward our broad range of business in the United Kingdom, Japan, Germany, Spain and Canada, where we see attractive growth trends.

Already, we have seen an increase in new sales activity by offering additional services to an existing client, and by establishing new relationships where we perform multiple services for a new client. During 2003, these client wins represented more than 10% of new sales company-wide, a positive indicator of the future health of our business.

Also this year, we invested to continue developing our leadership team, and with excellent results. In 2003, as in 2002, we were named the Number One Diversified Outsourcing Services company in FORTUNE magazine’s ranking of America’s Most Admired Companies. We achieved one of the top 10 scores of any company in any industry, as evaluated by our peers. We also were rewarded with one of the top scores overall for the quality of our management team. These honors have proven to us once again that ARAMARK people are the business.

IMPORTANT TRANSITION
At fiscal year-end, our Board of Directors took two important steps, both from a position of strength and stability.

First, the Board announced new roles for the two of us, which you can see summarized at right. This is a great time for our company to be making this transition. We have a cohesive senior team, the business is sound, our clients are being well served, and we continue to develop a deep pool of management talent. We have worked together for more than 20 years, and have been partners in leading ARAMARK for the past decade. We are looking forward to continuing our collaboration, and we are excited about our company’s prospects for continued growth and success under this new structure.

Second, the Board initiated a quarterly cash dividend of 5 cents per share – our first since returning to the public equity markets. The Board made its decision based on our continued solid financial performance, strong cash generation, and the recently enacted tax law changes. We are pleased that the strength of ARAMARK’s cash flow enables us to provide this additional value to our shareholders.

PARTNERSHIPS BASED ON TRUST
We have built strong partnerships with thousands of clients worldwide, including many of the world’s most respected, most recognizable organizations.

Each day we serve our clients in more than 1,800 colleges and school districts serving over 11 million students, more than 1,500 hospitals and health facilities serving more than seven million patients, more than 200 sports and entertainment venues, plus thousands of business locations.

As we move into 2004, many experts value the worldwide outsourcing market at more than $600 billion. Our analysis and experience show that – while the trends are clear and encouraging – many market segments are still as much as 75% unpenetrated. So the opportunity is enormous.

We are proud of the efforts of our team, and we thank them. We are 200,000 strong in 18 countries on five continents. We thank our Board of Directors for its outstanding leadership. And most importantly, we thank our clients, customers and investors for placing their trust in us.

There is an undeniable enthusiasm today at ARAMARK, an entrepreneurial energy that comes from thousands of people creating partnerships, providing great service and seeing huge new opportunities. We have the right capabilities, the right business model and the right people. We believe we do, and we will, deliver better service and greater value for our clients, our communities and our investors.

JOSEPH NEUBAUER Chairman and Chief Executive Officer

WILLIAM LEONARD President and Chief Operating Officer

December 2003