Cover Page
Cover Page - shares | 3 Months Ended | |
Jan. 31, 2022 | Mar. 08, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jan. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-8929 | |
Entity Registrant Name | ABM INDUSTRIES INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-1369354 | |
Entity Address, Address Line One | One Liberty Plaza | |
Entity Address, Address Line Two | 7th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10006 | |
City Area Code | 212 | |
Local Phone Number | 297-0200 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | ABM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 66,869,057 | |
Entity Central Index Key | 0000771497 | |
Current Fiscal Year End Date | --10-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jan. 31, 2022 | Oct. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 46.6 | $ 62.8 |
Trade accounts receivable, net of allowances of $34.0 and $32.7 at January 31, 2022 and October 31, 2021, respectively | 1,210 | 1,137.1 |
Costs incurred in excess of amounts billed | 69.1 | 52.5 |
Prepaid expenses | 88 | 88.7 |
Other current assets | 63.8 | 60 |
Total current assets | 1,477.5 | 1,401.2 |
Other investments | 15.3 | 11.8 |
Property, plant and equipment, net of accumulated depreciation of $283.6 and $274.7 at January 31, 2022 and October 31, 2021, respectively | 110.9 | 111.9 |
Right-of-use assets | 124.2 | 126.5 |
Other intangible assets, net of accumulated amortization of $406.5 and $389.3 at January 31, 2022 and October 31, 2021, respectively | 407.3 | 424.8 |
Goodwill | 2,237.1 | 2,228.9 |
Other noncurrent assets | 132.7 | 131.2 |
Total assets | 4,504.9 | 4,436.2 |
Current liabilities | ||
Current portion of long-term debt, net | 31.4 | 31.4 |
Trade accounts payable | 261.5 | 289.4 |
Accrued compensation | 196.6 | 238 |
Accrued taxes — other than income | 129.1 | 124.9 |
Insurance claims | 169.1 | 171.4 |
Income taxes payable | 21.8 | 11.4 |
Current portion of lease liabilities | 31.1 | 31.8 |
Other accrued liabilities | 427.3 | 387.4 |
Total current liabilities | 1,267.8 | 1,285.8 |
Long-term debt, net | 971.9 | 852.8 |
Long-term lease liabilities | 114.4 | 116.6 |
Deferred income tax liability, net | 32 | 22.5 |
Noncurrent insurance claims | 398.2 | 413.3 |
Other noncurrent liabilities | 56.6 | 123.5 |
Noncurrent income taxes payable | 8.7 | 12.5 |
Total liabilities | 2,849.7 | 2,827 |
Commitments and contingencies | ||
Stockholders’ Equity | ||
Preferred stock, $0.01 par value; 500,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.01 par value; 100,000,000 shares authorized; 67,443,112 and 67,302,449 shares issued and outstanding at January 31, 2022 and October 31, 2021, respectively | 0.7 | 0.7 |
Additional paid-in capital | 737 | 750.9 |
Accumulated other comprehensive loss, net of taxes | (24.6) | (22.5) |
Retained earnings | 942.1 | 880.2 |
Total stockholders’ equity | 1,655.2 | 1,609.2 |
Total liabilities and stockholders’ equity | $ 4,504.9 | $ 4,436.2 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jan. 31, 2022 | Oct. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance | $ 34 | $ 32.7 |
Property, plant and equipment, accumulated depreciation | 283.6 | 274.7 |
Other intangible assets, accumulated amortization | $ 406.5 | $ 389.3 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 67,443,112 | 67,302,449 |
Common stock, shares outstanding (in shares) | 67,443,112 | 67,302,449 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Income Statement [Abstract] | ||
Revenues | $ 1,936.2 | $ 1,492.4 |
Operating expenses | 1,659.6 | 1,249.4 |
Selling, general and administrative expenses | 153.1 | 122.6 |
Amortization of intangible assets | 17.5 | 10.8 |
Operating profit | 106 | 109.7 |
Income from unconsolidated affiliates | 0.5 | 0.6 |
Interest expense | (6.2) | (8.5) |
Income before income taxes | 100.3 | 101.9 |
Income tax provision | (24.3) | (27.2) |
Net income | 76 | 74.6 |
Other comprehensive income (loss) | ||
Interest rate swaps | 0.6 | 1.2 |
Foreign currency translation and other | (2.4) | 4 |
Income tax provision | (0.2) | (0.4) |
Comprehensive income | $ 74 | $ 79.5 |
Net income per common share | ||
Basic (in USD per share) | $ 1.12 | $ 1.11 |
Diluted (in USD per share) | $ 1.11 | $ 1.10 |
Weighted-average common and common equivalent shares outstanding | ||
Basic (in shares) | 67.9 | 67.2 |
Diluted (in shares) | 68.3 | 67.6 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss, Net of Taxes | Retained Earnings |
Balance, beginning of period (in shares) at Oct. 31, 2020 | 66.7 | ||||
Balance, beginning of period at Oct. 31, 2020 | $ 0.7 | $ 724.1 | $ (30.8) | $ 806.4 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock issued under employee stock purchase and share-based compensation plans (in shares) | 0.3 | ||||
Taxes withheld under employee stock purchase and share-based compensation plans, net | $ 0 | (5.6) | |||
Repurchase of common stock (in shares) | 0 | ||||
Repurchase of common stock | $ 0 | 0 | |||
Share-based compensation expense | 8.5 | ||||
Other comprehensive (loss) income | 4.9 | ||||
Net income | $ 74.6 | 74.6 | |||
Dividends | |||||
Common stock ($0.195 and $0.190 per share) | (12.7) | ||||
Stock issued under share-based compensation plans | (0.9) | ||||
Balance, end of period (in shares) at Jan. 31, 2021 | 67.1 | ||||
Balance, end of period at Jan. 31, 2021 | 1,569.1 | $ 0.7 | 726.9 | (25.9) | 867.5 |
Balance, beginning of period (in shares) at Oct. 31, 2021 | 67.3 | ||||
Balance, beginning of period at Oct. 31, 2021 | $ 1,609.2 | $ 0.7 | 750.9 | (22.5) | 880.2 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock issued under employee stock purchase and share-based compensation plans (in shares) | 0.4 | ||||
Taxes withheld under employee stock purchase and share-based compensation plans, net | $ 0 | (9) | |||
Repurchase of common stock (in shares) | (0.3) | (0.3) | |||
Repurchase of common stock | $ (13.3) | $ 0 | (13.3) | ||
Share-based compensation expense | 8.5 | ||||
Other comprehensive (loss) income | (2.1) | ||||
Net income | 76 | 76 | |||
Dividends | |||||
Common stock ($0.195 and $0.190 per share) | (13.1) | ||||
Stock issued under share-based compensation plans | (1) | ||||
Balance, end of period (in shares) at Jan. 31, 2022 | 67.4 | ||||
Balance, end of period at Jan. 31, 2022 | $ 1,655.2 | $ 0.7 | $ 737 | $ (24.6) | $ 942.1 |
Consolidated Statements of St_2
Consolidated Statements of Stockholder's' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, dividends (in USD per share) | $ 0.195 | $ 0.190 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 76 | $ 74.6 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 27.7 | 22.3 |
Deferred income taxes | 9.3 | (7.4) |
Share-based compensation expense | 8.5 | 8.5 |
Provision for bad debt | 0.9 | 3 |
Amortization of accumulated other comprehensive gain on interest rate swaps | (1.4) | (1.6) |
(Gain)/Loss on sale of assets | (0.3) | 1 |
Income from unconsolidated affiliates | (0.5) | (0.6) |
Changes in operating assets and liabilities | ||
Trade accounts receivable and costs incurred in excess of amounts billed | (90.3) | (52.3) |
Prepaid expenses and other current assets | (1.1) | 0.8 |
Right-of-use assets | 2.3 | 6.9 |
Other noncurrent assets | (1.3) | 5.9 |
Trade accounts payable and other accrued liabilities | (41.8) | (3) |
Long-term lease liabilities | (2.1) | (6.1) |
Insurance claims | (17.5) | (4.6) |
Income taxes payable | 4.7 | 32.5 |
Other noncurrent liabilities | (66.5) | (34.5) |
Total adjustments | (169.6) | (29.3) |
Net cash (used in) provided by operating activities | (93.6) | 45.3 |
Cash flows from investing activities | ||
Additions to property, plant and equipment | (9.6) | (6.6) |
Proceeds from sale of assets | 0.2 | 1.4 |
Investments in equity securities | (3) | 0 |
Net cash used in investing activities | (12.4) | (5.2) |
Cash flows from financing activities | ||
Taxes withheld from issuance of share-based compensation awards, net | (10) | (6.5) |
Repurchases of common stock | (13.3) | 0 |
Dividends paid | (13.1) | (12.7) |
Borrowings from credit facility | 475.5 | 2.6 |
Repayment of borrowings from credit facility | (356.6) | (32.6) |
Changes in book cash overdrafts | 5.9 | (12) |
Financing of energy savings performance contracts | 2.6 | 4 |
Repayment of finance lease obligations | (0.6) | (0.7) |
Net cash provided by (used in) financing activities | 90.3 | (57.8) |
Effect of exchange rate changes on cash and cash equivalents | (0.6) | 1.9 |
Net decrease in cash and cash equivalents | (16.2) | (15.9) |
Cash and cash equivalents at beginning of year | 62.8 | 394.2 |
Cash and cash equivalents at end of period | $ 46.6 | $ 378.3 |
THE COMPANY AND NATURE OF OPERA
THE COMPANY AND NATURE OF OPERATIONS | 3 Months Ended |
Jan. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
THE COMPANY AND NATURE OF OPERATIONS | THE COMPANY AND NATURE OF OPERATIONS ABM is a leading provider of integrated facility services with a mission to make a difference, every person, every day. We are organized into four industry groups and one Technical Solutions segment: |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the year ended October 31, 2021. Unless otherwise indicated, all references to years are to our fiscal years, which end on October 31. Reorganization of Our Business Effective November 1, 2021, the Manufacturing & Distribution (“M&D”) industry group replaced our Technology and Manufacturing (“T&M”) industry group as part of our strategic transformation initiative ELEVATE . M&D retained our large manufacturing clients from T&M and added clients in the distribution sector from our Business and Industry (“B&I”) group. Technology clients with commercial real estate properties serviced by T&M shifted into B&I. Additionally, we have modified the presentation of segment revenues as inter-segment revenues are now allocated at the segment level. Our prior period segment data in Note 4, “Revenues,” and Note 12, “Segment Information,” has been reclassified to conform with our current period presentation. These changes had no impact on our previously reported consolidated financial statements. Impact of the Pandemic COVID-19 has resulted in a worldwide health Pandemic. To date, the Pandemic has surfaced in regions all around the world and resulted in business slowdowns and shutdowns, as well as global travel restrictions. In these Financial Statements, we have assessed the current impact of the Pandemic on our financial condition, results of operations, and cash flows as well as on our estimates, forecasts, and accounting policies. We have made additional disclosures of these assessments, as necessary. Given the unprecedented nature of this situation, we cannot reasonably estimate the full impact the Pandemic will have on our financial condition, results of operations, or cash flows in the foreseeable future. The ultimate impact of the Pandemic on our company is highly uncertain and will depend on future developments, and such impacts could exist for an extended period of time, even after the Pandemic subsides. Rounding We round amounts in the Financial Statements to millions and calculate all percentages and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Management Reimbursement Revenue by Segment We operate certain parking facilities under management reimbursement arrangements. Under these arrangements, we manage the parking facilities for management fees and pass through the revenues and expenses associated with the facilities to the owners. These revenues and expenses are reported in equal amounts as costs reimbursed from our managed locations: Three Months Ended January 31, (in millions) 2022 2021 Business & Industry $ 52.5 $ 43.4 Aviation 12.3 13.7 Total $ 64.9 $ 57.0 Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) . This accounting update simplifies the accounting for income taxes and clarifies and amends existing income tax guidance. Impacted areas include intraperiod tax allocations, interim period taxes, deferred tax liabilities with outside basis differences, franchise taxes, and transactions that result in the “step-up” of goodwill. We adopted this standard, effective November 1, 2021, on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments–Equity Securities (Topic 321), Investments–Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) . This accounting update clarifies the interaction between the accounting for investments in equity securities under Topic 321, investments accounted for under the equity method under Topic 323, and certain derivatives instruments under Topic 815. We adopted this standard, effective November 1, 2021, on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements. No other recently adopted accounting standards have had a significant impact on our fiscal 2022 consolidated financial statements. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 3 Months Ended |
Jan. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS AND DISPOSITIONS | ACQUISITIONS AND DISPOSITIONS Acquisition of Able On September 30, 2021, we acquired Able, a leading facilities services company headquartered in San Francisco, California, for a preliminary net cash purchase price of $741.7 million (the “Able Acquisition”). Pursuant to the terms of the purchase agreement, approximately $12.1 million of the cash consideration was placed into escrow accounts, of which approximately $8.2 million was placed into escrow to satisfy any applicable indemnification claims for a period of 12 months. Preliminary Purchase Price Allocation Our preliminary purchase price allocation is based on information that is currently available, and we are continuing to evaluate the underlying inputs and assumptions used in our valuations. Accordingly, the purchase price consideration and allocations are subject to, among other items: working capital adjustments, further analysis of tax accounts, legal matters, and the final valuation of insurance claims reserves. During the three months ended January 31, 2022, we adjusted our purchase price allocation for probable litigation losses, as described below, and refined certain other estimates. The following table summarizes the preliminary acquisition accounting on the date of acquisition as previously reported at year-end 2021 and at the end of the first quarter of 2022: (in millions) Preliminary Purchase Price Allocation Adjustments Updated Preliminary Purchase Price Allocation Cash and cash equivalents $ 31.5 $ — $ 31.5 Trade accounts receivable (1) 159.3 — 159.3 Other assets 24.9 (1.1) 23.8 Customer relationships (2) 220.0 — 220.0 Trade names (2) 10.0 — 10.0 Goodwill (3) 554.0 9.8 563.8 Trade accounts payable (27.0) (0.2) (27.1) Accrued compensation (38.2) — (38.2) Insurance claims (91.6) — (91.6) Other liabilities (41.7) (8.5) (50.3) Deferred income tax liability, net (59.5) — (59.5) Net assets acquired $ 741.7 $ — $ 741.7 (1) The gross amount of trade accounts receivable was $160.6 million, of which $1.3 million was deemed uncollectible. (2) The amortization periods for the acquired intangible assets are 15 years for customer relationships and two years for trade names. (3) Goodwill is largely attributable to value we expect to obtain from long-term business growth, the established workforce, and buyer-specific synergies. This goodwill is not deductible for income tax purposes. Financial Information The unaudited Consolidated Statements of Comprehensive Income (Loss) for the three months ended January 31, 2022, includes $307.7 million of revenue and $14.4 million of operating income attributable to the operations of Able, which are included in our B&I segment. We also incurred $4.1 million of acquisition-related costs and $4.2 million of integration costs during the three months ended January 31, 2022, which are included in selling, general and administrative expenses in the accompanying unaudited Consolidated Statements of Comprehensive Income (Loss). The following table presents our unaudited pro forma results as though the acquisition occurred on November 1, 2020. These results include adjustments for the estimated amortization of intangible assets, interest expense, and the income tax impact of the pro forma adjustments at the statutory rate of 28%. These unaudited pro forma results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. (in millions) Three Months Ended January 31, 2021 Pro forma revenue $ 1,768.2 Pro forma income from operations 76.1 Legal Matters Related to Legacy Able Able is a party to a number of lawsuits, claims, and proceedings incident to the operation of the business, including those pertaining to labor and employment, contracts, personal injury, and other matters, some of which allege substantial monetary damages. Some of these actions may be brought as class actions on behalf of a class or purported class of employees. If, during the purchase price allocation period, we can reasonably determine the fair values of a pre-acquisition contingency, then we will include that amount in the purchase price allocation. If we are unable to determine the fair value of a pre-acquisition contingency at the end of the measurement period, then we will evaluate whether to include an amount in the purchase price allocation based on whether it is probable a liability had been incurred and whether an amount can be reasonably estimated. Subsequent to the end of the measurement period, any adjustment to amounts recorded for a pre-acquisition contingency will be included within acquisition-related costs in the period in which the adjustment is determined. During the three months ended January 31, 2022, we adjusted our purchase price allocation for probable litigation losses in Able legal matters where a reasonable estimate of the loss could be made from $0.9 million to $12.3 million. We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. The estimation of reasonably possible losses also requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. Our management currently estimates the range of loss for all reasonably possible losses for which a reasonable estimate of the loss can be made for Able legal matters is between zero and $1.9 million. In some cases, although a loss is probable or reasonably possible, we cannot reasonably estimate the maximum potential losses for probable matters or the range of losses for reasonably possible matters. Therefore, our accrual for probable losses and our estimated range of loss for reasonably possible losses do not represent our maximum possible exposure. Disposition of Assets On January 31, 2022, the Company sold a group of customer contracts for healthcare technology management within our Technical Solutions segment for $8.5 million and recognized a gain of $7.7 million during the three months ended January 31, 2022, which is included in selling, general and administrative expenses in the accompanying unaudited Consolidated Statements of Comprehensive Income (Loss). |
REVENUES
REVENUES | 3 Months Ended |
Jan. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
REVENUES | REVENUES Disaggregation of Revenues We generate revenues under several types of contracts, which are further explained below. Generally, the type of contract is determined by the nature of the services provided by each of our major service lines throughout our reportable segments; therefore, we disaggregate revenues from contracts with customers into major service lines. We have determined that disaggregating revenues into these categories best depicts how the nature, amount, timing, and uncertainty of revenues and cash flows are affected by economic factors. Our reportable segments are B&I, M&D, Education, Aviation, and Technical Solutions, as described in Note 12, “Segment Information.” Three Months Ended January 31, 2022 (in millions) B&I M&D Education Aviation Technical Total Major Service Line Janitorial (1) $ 677.9 $ 304.2 $ 178.3 $ 29.8 $ — $ 1,190.2 Parking (2) 83.2 10.7 0.3 77.7 — 172.0 Facility Services (3) 268.4 44.1 27.1 6.5 — 346.0 Building & Energy Solutions (4) — — — — 141.8 141.8 Airline Services (5) — — — 86.3 — 86.3 Total $ 1,029.5 $ 359.1 $ 205.7 $ 200.3 $ 141.8 $ 1,936.2 Three Months Ended January 31, 2021 (in millions) B&I M&D Education Aviation Technical Total Major Service Line Janitorial (1) $ 533.0 $ 287.4 $ 183.1 $ 29.1 $ — $ 1,032.6 Parking (2) 68.9 11.7 0.2 54.2 — 134.9 Facility Services (3) 88.2 41.7 24.8 5.9 — 160.6 Building & Energy Solutions (4) — — — 112.6 112.6 Airline Services (5) — — — 51.7 — 51.7 Total $ 690.1 $ 340.8 $ 208.0 $ 140.9 $ 112.6 $ 1,492.4 (1) Janitorial arrangements provide a wide range of essential cleaning services for commercial office buildings, airports and other transportation centers, educational institutions, government buildings, health facilities, industrial buildings, retail stores, and stadiums and arenas. These arrangements are often structured as monthly fixed-price, square-foot, cost-plus, and work order contracts. (2) Parking arrangements provide parking and transportation services for clients at various locations, including airports and other transportation centers, commercial office buildings, educational institutions, health facilities, hotels, and stadiums and arenas. These arrangements are structured as management reimbursement, leased location, and allowance contracts. Certain of these arrangements are considered service concession agreements. Rent is paid to the grantor, which is the customer in the arrangement; accordingly, rent expense related to these arrangements is recorded as a reduction of the related parking service revenues. . (3) Facility Services arrangements provide onsite mechanical engineering and technical services and solutions relating to a broad range of facilities and infrastructure systems that are designed to extend the useful life of facility fixed assets, improve equipment operating efficiencies, reduce energy consumption, lower overall operational costs for clients, and enhance the sustainability of client locations. These arrangements are generally structured as monthly fixed-price, cost-plus, and work order contracts. (4) Building & Energy Solutions arrangements provide custom energy solutions, electrical, HVAC, lighting, electric vehicle charging station installation, and other general maintenance and repair services for clients in the public and private sectors and are generally structured as energy savings, fixed-price repair, and refurbishment contracts. We also franchise certain operations under franchise agreements relating to our Linc Network and TEGG brands, pursuant to franchise contracts. (5) Airline Services arrangements support airlines and airports with services such as passenger assistance, catering logistics, and airplane cabin maintenance. These arrangements are often structured as monthly fixed-price, cost-plus, transaction price, and hourly contracts. Contract Types We have arrangements under various contract types, as described in Note 2, “Basis of Presentation and Significant Accounting Policies,” in our Annual Report on Form 10-K for the year ended October 31, 2021. Certain arrangements involve variable consideration (primarily per transaction fees, reimbursable expenses, and sales-based royalties). We do not estimate the variable consideration for these arrangements; rather, we recognize these variable fees as they are earned. Some of our contracts, often related to Airline Services, may also include performance incentives based on variable performance measures that are ascertained exclusively by future performance and therefore cannot be estimated at contract inception and are recognized as revenue once known and mutually agreed upon. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current, and forecasted) that is reasonably available to us. The majority of our contracts include performance obligations that are primarily satisfied over time as we provide the related services. These contract types include: monthly fixed-price; square-foot; cost-plus; work orders; transaction-price; hourly; management reimbursement; leased location; allowance; energy savings contracts; and fixed-price repair and refurbishment contracts, as well as our franchise and royalty fee arrangements. We recognize revenue as the services are performed using a measure of progress that is determined by the contract type. Generally, most of our contracts are cancellable by either party without a substantive penalty, and the majority have a notification period of 30 to 60 days. We primarily account for our performance obligations under the series guidance, using the as-invoiced practical expedient when applicable. We apply the as-invoiced practical expedient to record revenue as the services are provided, given the nature of the services provided and the frequency of billing under the customer contracts. Under this practical expedient, we recognize revenue in an amount that corresponds directly with the value to the customer of our performance completed to date and for which we have the right to invoice the customer. Remaining Performance Obligations At January 31, 2022, performance obligations that were unsatisfied or partially unsatisfied for which we expect to recognize revenue totaled $310.7 million. We expect to recognize revenue on approximately 80% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter, based on our estimates of project timing. These amounts exclude variable consideration primarily related to: (i) contracts where we have determined that the contract consists of a series of distinct service periods and revenues are based on future performance that cannot be estimated at contract inception; (ii) parking contracts where we and the customer share the gross revenues or operating profit for the location; and (iii) contracts where transaction prices include performance incentives that are based on future performance and therefore cannot be estimated at contract inception. We apply the practical expedient that permits exclusion of information about the remaining performance obligations with original expected durations of one year or less. Contract Balances The timing of revenue recognition, billings, and cash collections results in contract assets and contract liabilities, as further explained below. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets primarily consist of billed trade receivables, unbilled trade receivables, and costs incurred in excess of amounts billed. Billed and unbilled trade receivables represent amounts from work completed in which we have an unconditional right to bill our customer. Costs incurred in excess of amounts billed typically arise when the revenue recognized on projects exceeds the amount billed to the customer. These amounts are transferred to billed trade receivables when the rights become unconditional. Contract assets also include the capitalization of incremental costs of obtaining a contract with a customer, primarily commissions. Commissions expense is recognized on a straight-line basis over a weighted average expected customer relationship period. Contract liabilities consist of deferred revenue and advance payments and billings in excess of revenue recognized. We generally classify contract liabilities as current since the related contracts are generally for a period of one year or less. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation. The following tables present the balances in our contract assets and contract liabilities: (in millions) January 31, 2022 October 31, 2021 Contract assets Billed trade receivables (1) $ 1,102.7 $ 1,057.6 Unbilled trade receivables (1) 141.3 112.1 Costs incurred in excess of amounts billed (2) 69.1 52.5 Capitalized commissions (3) 27.9 27.8 (1) Included in trade accounts receivable, net, on the unaudited Consolidated Balance Sheets. The fluctuations correlate directly to the execution of new customer contracts and to invoicing and collections from customers in the normal course of business. (2) Fluctuation is primarily due to the timing of payments on our contracts measured using the cost-to-cost method of revenue recognition. (3) Included in other current assets and other noncurrent assets on the unaudited Consolidated Balance Sheets. During the three months ended January 31, 2022, we capitalized $3.5 million of new costs and amortized $3.5 million of previously capitalized costs. There was no impairment loss recorded on the costs capitalized. (in millions) Three Months Ended Contract liabilities (1) Balance at beginning of period $ 58.5 Additional contract liabilities 72.7 Recognition of deferred revenue (63.2) Balance at end of period $ 68.0 |
NET INCOME (LOSS) PER COMMON SH
NET INCOME (LOSS) PER COMMON SHARE | 3 Months Ended |
Jan. 31, 2022 | |
Earnings Per Share [Abstract] | |
NET INCOME (LOSS) PER COMMON SHARE | NET INCOME (LOSS) PER COMMON SHARE Basic and Diluted Net Income (Loss) Per Common Share Calculations Three Months Ended January 31, (in millions, except per share amounts) 2022 2021 Net income $ 76.0 $ 74.6 Weighted-average common and common equivalent shares outstanding — Basic 67.9 67.2 Effect of dilutive securities (1) Restricted stock units 0.2 0.2 Stock options — 0.1 Performance shares 0.2 0.2 Weighted-average common and common equivalent shares outstanding — Diluted 68.3 67.6 Net income per common share Basic $ 1.12 $ 1.11 Diluted 1.11 1.10 (1) Excludes the impact of potentially dilutive outstanding share-based securities that are excluded from the calculation of diluted loss per share in periods when we have a loss, as their inclusion would have an anti-dilutive effect. Such impact is included in the table below. Anti-Dilutive Outstanding Stock Awards Issued Under Share-Based Compensation Plans Three Months Ended January 31, (in millions) 2022 2021 Anti-dilutive — 0.1 |
FAIR VALE OF FINANCIAL INSTRUME
FAIR VALE OF FINANCIAL INSTRUMENTS | 3 Months Ended |
Jan. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS Fair Value Hierarchy of Our Financial Instruments Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (in millions) Fair Value Hierarchy January 31, 2022 October 31, 2021 Cash and cash equivalents (1) 1 $ 46.6 $ 62.8 Insurance deposits (2) 1 0.7 0.7 Assets held in funded deferred compensation plan (3) 1 4.6 4.9 Credit facility (4) 2 1,007.6 888.8 Interest rate swap liabilities (5) 2 2.6 4.6 Preferred equity securities (6) 3 3.0 — (1) Cash and cash equivalents are stated at nominal value, which equals fair value. (2) Represents restricted deposits that are used to collateralize our insurance obligations and are stated at nominal value, which equals fair value. These insurance deposits are included in “Other noncurrent assets” on the accompanying unaudited Consolidated Balance Sheets. See Note 7, “Insurance,” for further information. (3) Represents investments held in a Rabbi trust associated with one of our deferred compensation plans, which we include in “Other noncurrent assets” on the accompanying unaudited Consolidated Balance Sheets. The fair value of the assets held in the funded deferred compensation plan is based on quoted market prices. (4) Represents gross outstanding borrowings under our syndicated line of credit and term loan. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit and term loan approximates the fair value. See Note 8, “Credit Facility,” for further information. (5) Represents interest rate swap derivatives designated as cash flow hedges. The fair values of the interest rate swaps are estimated based on the present value of the difference between expected cash flows calculated at the contracted interest rates and the expected cash flows at current market interest rates using observable benchmarks for the London Interbank Offered Rate (“LIBOR”) forward rates at the end of the period. At January 31, 2022, and October 31, 2021, our interest rate swaps are included in “Other noncurrent liabilities” on the accompanying unaudited Consolidated Balance Sheets. See Note 8, “Credit Facility,” for further information. (6) The Company purchased $3.0 million in a preferred equity investment of a privately held company during the three months ended January 31, 2022, which we include in “Other investments” on the accompanying unaudited Consolidated Balance Sheet. Our investment does not have a readily determinable fair value; therefore, we account for the investment using the measurement alternative under Topic 321 and measure the investment at initial cost less impairment, if any. Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain items at fair value on a non-recurring basis. These assets can include: goodwill; intangible assets; property, plant and equipment; lease-related ROU assets; and long-lived assets that have been reduced to fair value when they are held for sale. If certain triggering events occur, or if an annual impairment test is required, then we would evaluate these non-financial assets for impairment. If an impairment were to occur, then the asset would be recorded at the estimated fair value, using primarily unobservable Level 3 inputs. In connection with the reorganization of our T&M segment as discussed in Note 2, “Basis of Presentation and Significant Accounting Policies ,” |
INSURANCE
INSURANCE | 3 Months Ended |
Jan. 31, 2022 | |
Insurance [Abstract] | |
INSURANCE | INSURANCE We use a combination of insured and self-insurance programs to cover workers’ compensation, general liability, automobile liability, property damage, and other insurable risks. For the majority of these insurance programs, we retain the initial $1.0 million to $1.5 million of exposure on a per-occurrence basis, either through deductibles or self-insured retentions. Beyond the retained exposures, we have varying primary policy limits ranging between $1.0 million and $5.0 million per occurrence. To cover general liability and automobile liability losses above these primary limits, we maintain commercial umbrella insurance policies that provide aggregate limits of $200.0 million. Our insurance policies generally cover workers’ compensation losses to the full extent of statutory requirements. Additionally, to cover property damage risks above our retained limits, we maintain policies that provide per occurrence limits of $75.0 million. We are also self-insured for certain employee medical and dental plans. We maintain stop-loss insurance for our self-insured medical plan under which we retain up to $0.5 million of exposure on a per-participant, per-year basis with respect to claims. We maintain our reserves for workers’ compensation, general liability, automobile liability, and property damage insurance claims based upon known trends and events and the actuarial estimates of required reserves considering the most recently completed actuarial reports. We use all available information to develop our best estimate of insurance claims reserves as information is obtained. The results of actuarial reviews are used to estimate our insurance rates and insurance reserves for future periods and to adjust reserves, if appropriate, for prior years. Actuarial Review Performed During the First Quarter 2022 We review our self-insurance liabilities on a regular basis and adjust our accruals accordingly. Actual claims activity or development may vary from our assumptions and estimates, which may result in material losses or gains. As we obtain additional information that affects the assumptions and estimates used in our reserve liability calculations, we adjust our self-insurance rates and reserves for future periods and, if appropriate, adjust our reserves for claims incurred in prior accounting periods. During the first quarter of 2022, we performed a comprehensive actuarial review of the majority of our casualty insurance programs to evaluate changes made to claims reserves and claims payment activity for the period of May 1, 2021, through October 31, 2021 (the “Actuarial Review”). The Actuarial Review was comprehensive in nature and was based on loss development patterns, trend assumptions, and underlying expected loss costs during the period analyzed. Based on the results of the Actuarial Review, we decreased our total reserves related to prior periods for known claims as well as our estimate of the loss amounts associated with incurred but not reported claims (“IBNR claims”) by $25.2 million during the three months ended January 31, 2022. During the three months ended January 31, 2021, we decreased our total reserves related to prior periods by $11.4 million. We will continue to assess ongoing developments, which may result in further adjustments to reserves. Insurance Related Balances and Activity (in millions) January 31, 2022 October 31, 2021 Insurance claim reserves, excluding medical and dental $ 556.8 $ 574.8 Medical and dental claim reserves 10.5 9.9 Insurance recoverables 66.5 66.5 At January 31, 2022, and October 31, 2021, insurance recoverables are included in both “Other current assets” and “Other noncurrent assets” on the accompanying unaudited Consolidated Balance Sheets. Instruments Used to Collateralize Our Insurance Obligations (in millions) January 31, 2022 October 31, 2021 Standby letters of credit $ 157.5 $ 157.9 Surety bonds 84.2 83.8 Restricted insurance deposits 0.7 0.7 Total $ 242.4 $ 242.3 |
CREDIT FACILITY
CREDIT FACILITY | 3 Months Ended |
Jan. 31, 2022 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY On September 1, 2017, we refinanced and replaced our then-existing $800.0 million credit facility with a new senior, secured five-year syndicated credit facility (the “Credit Facility”), consisting of a $900.0 million revolving line of credit (the “revolver”) and an $800.0 million amortizing term loan, both of which were scheduled to mature on September 1, 2022. In accordance with terms of the Credit Facility, the revolver was reduced to $800.0 million on September 1, 2018. On June 28, 2021, the Company amended and restated the Credit Facility (the “Amended Credit Facility”), extending the maturity date to June 28, 2026, and increasing the capacity of the revolving credit facility from $800.0 million to $1.3 billion and the then-remaining term loan outstanding from $620.0 million to $650.0 million. The Amended Credit Facility provides for the issuance of up to $350.0 million for standby letters of credit and the issuance of up to $75.0 million in swingline advances. The obligations under the Amended Credit Facility are secured on a first-priority basis by a lien on substantially all of our assets and properties, subject to certain exceptions. Additionally, we may repay amounts borrowed under the Amended Credit Facility at any time without penalty. The term loan and U.S.-dollar-denominated borrowings under the revolver bear interest at a rate equal to one-month LIBOR plus a spread based upon our leverage ratio. Euro- and sterling-denominated borrowings under the revolver bear at the interest rate of the Euro Interbank Offered Rate (“EURIBOR”) and the daily Sterling Overnight Index Average (“SONIA”) reference rate, respectively, plus a spread that is based upon our leverage ratio. The spread ranges from 1.375% to 2.250% for Eurocurrency loans and 0.375% to 1.250% for base rate loans. At January 31, 2022, the weighted average interest rate on our outstanding borrowings was 1.60%. We also pay a commitment fee, based on our leverage ratio and payable quarterly in arrears, ranging from 0.20% to 0.40% on the average daily unused portion of the line of credit. For purposes of this calculation, irrevocable standby letters of credit, which are issued primarily in conjunction with our insurance programs, and cash borrowings are included as outstanding under the line of credit. The Amended Credit Facility contains certain covenants, including a maximum total net leverage ratio of 5.00 to 1.00, a maximum secured net leverage ratio of 4.00 to 1.00, and a minimum interest coverage ratio of 1.50 to 1.00, as well as other financial and non-financial covenants. In the event of a material acquisition, as defined in the Amended Credit Facility, we may elect to increase the maximum total net leverage ratio to 5.50 to 1.00 for a total of four fiscal quarters and increase the maximum secured net leverage ratio to 4.50 to 1.00 for a total of four fiscal quarters. Our borrowing capacity is subject to, and limited by, compliance with the covenants described above. At January 31, 2022, we were in compliance with these covenants. The Amended Credit Facility also includes customary events of default, including: failure to pay principal, interest, or fees when due; failure to comply with covenants; the occurrence of certain material judgments; and a change in control of the Company. If certain events of default occur, including certain cross-defaults, insolvency, change in control, or violation of specific covenants, then the lenders can terminate or suspend our access to the Amended Credit Facility, declare all amounts outstanding (including all accrued interest and unpaid fees) to be immediately due and payable, and require that we cash collateralize the outstanding standby letters of credit. We incurred deferred financing costs of $6.4 million in conjunction with the execution of the Amended Credit Facility and carried over $6.2 million of unamortized deferred financing from initial execution and previous amendments of the Credit Facility. Total deferred financing costs of $12.6 million, consisting of $4.9 million related to the term loan and $7.7 million related to the revolver, are being amortized to interest expense over the term of the Amended Credit Facility. Credit Facility Information (in millions) January 31, 2022 October 31, 2021 Current portion of long-term debt Gross term loan $ 32.5 $ 32.5 Unamortized deferred financing costs (1.1) (1.1) Current portion of term loan $ 31.4 $ 31.4 Long-term debt Gross term loan $ 593.1 $ 601.3 Unamortized deferred financing costs (3.2) (3.5) Total noncurrent portion of term loan 589.9 597.8 Revolving line of credit (1)(2) 382.0 255.0 Long-term debt $ 971.9 $ 852.8 (1) Standby letters of credit amounted to $166.9 million at January 31, 2022. (2) At January 31, 2022, we had borrowing capacity of $749.3 million. Term Loan Maturities During the three months ended January 31, 2022, we made principal payments under the term loan of $8.1 million. As of January 31, 2022, the following principal payments are required under the term loan. (in millions) 2022 2023 2024 2025 2026 Debt maturities $ 24.4 $ 32.5 $ 32.5 $ 32.5 $ 503.8 Interest Rate Swaps We enter into interest rate swaps to manage the interest rate risk associated with our floating-rate, LIBOR-based borrowings. Under these arrangements, we typically pay a fixed interest rate in exchange for LIBOR-based variable interest throughout the life of the agreement. We initially report the mark-to-market gain or loss on a derivative as a component of accumulated other comprehensive loss (“AOCL”) and subsequently reclassify the gain or loss into earnings when the hedged transactions occur and affect earnings. Interest payables and receivables under the swap agreements are accrued and recorded as adjustments to interest expense. All of our interest rate swaps have been designated and accounted for as cash flow hedges from inception. See Note 6, “Fair Value of Financial Instruments,” regarding the valuation of our interest rate swaps. Notional Amount Fixed Interest Rate Effective Date Maturity Date $ 130.0 million 2.86% November 1, 2018 April 30, 2022 $ 130.0 million 2.84% November 1, 2018 September 1, 2022 At January 31, 2022 and October 31, 2021, amounts recorded in AOCL for interest rate swaps were a gain of $0.3 million, net of taxes of $0.5 million, and a loss of $0.2 million, net of taxes of $0.3 million, respectively. These amounts included the gain associated with the interest rate swaps we terminated in 2018, which is being amortized to interest expense over the original term of our Credit Facility ending September 1, 2022. During the three months ended January 31, 2022, we amortized $1.1 million of this gain, net of taxes of $0.4 million, to interest expense. During the three months ended January 31, 2021, we amortized $1.2 million, net of taxes of $0.4 million. At January 31, 2022, the total amount expected to be reclassified from AOCL to earnings during the next 12 months is a gain of $0.5 million, net of taxes of $0.3 million. |
COMMON STOCK
COMMON STOCK | 3 Months Ended |
Jan. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
COMMON STOCK | COMMON STOCK Effective December 18, 2019, our Board of Directors replaced our then-existing share repurchase program with a new share repurchase program under which we may repurchase up to $150.0 million of our common stock (the “2019 Share Repurchase Program”). We repurchased shares under the 2019 Share Repurchase Program during the first quarter of 2022, as summarized below. At January 31, 2022, authorization for $131.6 million of repurchases remained under the 2019 Share Repurchase Program. Repurchase Activity Three Months Ended (in millions, except per share amounts) January 31, 2022 Total number of shares purchased 0.3 Average price paid per share $ 44.23 Total cash paid for share repurchases $ 13.3 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Jan. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Letters of Credit and Surety Bonds We use letters of credit and surety bonds to secure certain commitments related to insurance programs and for other purposes. As of January 31, 2022, these letters of credit and surety bonds totaled $166.9 million and $700.4 million, respectively. Guarantees In some instances, we offer clients guaranteed energy savings under certain energy savings contracts. At January 31, 2022, total guarantees were $236.4 million and extend through 2042. We include the estimated costs of guarantees in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current, and forecasted) that is reasonably available to us. Historically, we have not incurred any material losses in connection with these guarantees. Legal Matters We are a party to a number of lawsuits, claims, and proceedings incident to the operation of our business, including those pertaining to labor and employment, contracts, personal injury, and other matters, some of which allege substantial monetary damages. Some of these actions may be brought as class actions on behalf of a class or purported class of employees. At January 31, 2022, the total amount accrued for probable litigation losses where a reasonable estimate of the loss could be made was $28.7 million, including probable litigation losses of $12.3 million related to the Able Acquisition as described in Note 3, “Acquisition and Dispositions.” We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. The estimation of reasonably possible losses also requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. Our management currently estimates the range of loss for all reasonably possible losses for which a reasonable estimate of the loss can be made is between zero and $5 million, including $1.9 million related to the Able Acquisition as described in Note 3, “Acquisition and Dispositions.” Factors underlying this estimated range of loss may change from time to time, and actual results may vary significantly from this estimate. The amounts above do not include any accrual or loss estimates with respect to the Bucio case, described below. Litigation outcomes are difficult to predict, and the estimation of probable losses requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. If one or more matters are resolved in a particular period in an amount in excess of or in a manner different than what we anticipated, this could have a material adverse effect on our financial position, results of operations, or cash flows. In some cases, although a loss is probable or reasonably possible, we cannot reasonably estimate the maximum potential losses for probable matters or the range of losses for reasonably possible matters. Therefore, our accrual for probable losses and our estimated range of loss for reasonably possible losses do not represent our maximum possible exposure. Certain Legal Proceedings In determining whether to include any particular lawsuit or other proceeding in our disclosure below, we consider both quantitative and qualitative factors. These factors include, but are not limited to: the amount of damages and the nature of any other relief sought in the proceeding; if such damages and other relief are specified, our view of the merits of the claims; whether the action is or purports to be a class action, and our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; and the potential impact of the proceeding on our reputation. The Consolidated Cases of Bucio and Martinez v. ABM Janitorial Services filed on April 7, 2006, pending in the Superior Court of California, County of San Francisco (the “Bucio case”) The Bucio case is a class action pending in San Francisco Superior Court that alleges we failed to provide legally required meal periods and make additional premium payments for such meal periods, pay split shift premiums when owed, and reimburse janitors for travel expenses. There is also a claim for penalties under the California Labor Code Private Attorneys General Act (“PAGA”). On April 19, 2011, the trial court held a hearing on plaintiffs’ motion to certify the class. At the conclusion of that hearing, the trial court denied plaintiffs’ motion to certify the class. On May 11, 2011, the plaintiffs filed a motion to reconsider, which was denied. The plaintiffs appealed the class certification issues. The trial court stayed the underlying lawsuit pending the decision in the appeal. The Court of Appeal of the State of California, First Appellate District (the “Court of Appeal”), heard oral arguments on November 7, 2017. On December 11, 2017, the Court of Appeal reversed the trial court’s order denying class certification and remanded the matter for certification of a meal period, travel expense reimbursement, and split shift class. The case was remitted to the trial court for further proceedings on class certification, discovery, dispositive motions, and trial. On September 20, 2018, the trial court entered an order defining four certified subclasses of janitors who were employed by the legacy ABM janitorial companies in California at any time between April 7, 2002, and April 30, 2013, on claims based on alleged previous automatic deduction practices for meal breaks, unpaid meal premiums, unpaid split shift premiums, and unreimbursed business expenses, such as mileage reimbursement for use of personal vehicles to travel between worksites. On February 1, 2019, the trial court held that the discovery related to PAGA claims allegedly arising after April 30, 2013, would be stayed until after the class and PAGA claims accruing prior to April 30, 2013, had been tried. The parties engaged in mediation in July 2019, which did not result in settlement of the case. On October 17, 2019, the plaintiffs filed a motion asking the trial court to certify additional classes based on an alleged failure to maintain time records, an alleged failure to provide accurate wage statements, and an alleged practice of combining meal and rest breaks. The trial court denied the plaintiffs’ motion to certify additional classes on December 26, 2019. The case was reassigned to a new judge on January 6, 2020. ABM filed motions for summary adjudication as to certain of plaintiffs’ class claims, and the trial court denied those motions in November 2020. The parties engaged in another mediation in January 2021, which did not result in a settlement of the case. Plaintiffs filed motions for summary adjudication and/or summary judgment on some claims in December 2020. In February and March 2021, the parties engaged in expert discovery that provided detailed information regarding the plaintiffs’ damage calculations on the class claims. On February 25, 2021, the California Supreme Court issued an opinion in Donohue v. AMN Services , which addresses the standard for adjudicating meal period claims under California law and we believe is supportive of ABM’s legal position in the Bucio case. On May 5, 2021, the trial court denied all of the plaintiffs’ December 2020 motions for summary adjudication and/or summary judgment, and the case was assigned to a new judge. On May 5, 2021, the trial court ordered the parties to attend a mandatory settlement conference before a separate judge on June 11, 2021. The trial date was scheduled for July 12, 2021. On July 7, 2021, the Company entered into a class action settlement and release agreement to settle the Bucio case for $140 million and to obtain a release of the certified class claims that were asserted in the Bucio case. The settlement will also resolve the PAGA claim. The release of the certified class claims covers the time period from April 7, 2002, through April 30, 2013. The release of the PAGA claim covers the time period from November 15, 2005, through July 18, 2021. Any attorneys’ fees awarded by the trial court and all costs of notice and claims administration will be paid from the $140 million settlement fund. Employees who will be a part of the settlement will receive payments based on the number of pay periods they worked. The settlement agreement is contingent upon the approval of the trial court. On August 11, 2021, the plaintiffs filed the motion for preliminary approval of class action settlement with the trial court. On December 7, 2021, the trial court issued its order granting preliminary approval of the class action settlement. Members of the class will receive notice of the settlement, and there will be an opportunity for them to object to the settlement before the trial court grants final approval of the settlement. On February 1, 2022, plaintiffs’ counsel filed a motion requesting that $46.7 million in attorneys’ fees be paid from the $140.0 million settlement fund. On February 16, 2022, a motion to intervene in the action was filed by proposed intervenor Rashad Jefferson, who had previously filed a separate PAGA action in Alameda County Superior Court that is currently pending. As a part of the motion to intervene, a stay was requested so that the proposed intervenor can investigate the settlement. Proposed intervenor also filed an objection to the PAGA settlement on February 14, 2022. A hearing for the motion to intervene is scheduled for March 14, 2022. Plaintiffs filed a motion for final approval of the class settlement on February 24, 2022. The final approval hearing for the settlement is currently scheduled to take place on March 16, 2022. No payments will be made to employees until after the settlement is finally approved by the trial court. As of January 31, 2022, the Company has recorded a $142.9 million settlement accrual, which includes an accrual of $2.9 million of related payroll taxes, for the Bucio case within “Other current liabilities” on the unaudited Consolidated Balance Sheet. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Jan. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our quarterly tax provision is calculated using an estimated annual tax rate that is adjusted for discrete items occurring during the period to arrive at our effective tax rate. During the three months ended January 31, 2022 and 2021, we had effective tax rates of 24.2% and 26.7%, respectively, resulting in provisions for taxes of $24.3 million and $27.2 million, respectively. The difference between the effective tax rate and statutory rate is primarily related to tax credits and reserves. Our effective tax rate for the three months ended January 31, 2022, was impacted by a $3.5 million benefit from change in tax reserves. Our effective tax rate for the three months ended January 31, 2021, was not impacted by any significant discrete items. In response to COVID-19, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) on March 27, 2020. The CARES Act provides various tax provisions, including payroll tax provisions, which we have evaluated for applicability. Through December 2020, we deferred approximately $132 million of payroll tax, of which $66 million was paid in December 2021 with the remaining $66 million due by December 31, 2022 as required under the CARES Act. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Jan. 31, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Effective November 1, 2021, we reorganized our reportable segments to reflect our M&D industry group replacing our T&M industry group. Our current reportable segments consist of B&I, M&D, Education, Aviation, and Technical Solutions, as further described below. Refer to Note 2, “Basis of Presentation and Significant Accounting Policies,” for information related to our segment reorganization. REPORTABLE SEGMENTS AND DESCRIPTIONS B&I B&I, our largest reportable segment, encompasses janitorial, facilities engineering, and parking services for commercial real estate properties (including corporate offices for high tech clients), sports and entertainment venues, and traditional hospitals and non-acute healthcare facilities. B&I also provides vehicle maintenance and other services to rental car providers. M&D M&D provides integrated facility services, engineering, janitorial, and other specialized services in different types of manufacturing, distribution, and data center facilities. Manufacturing facilities include traditional motor vehicles, electric vehicles, batteries, pharmaceuticals, steel, semiconductors, chemicals, and many others. Distribution facilities include e-commerce, cold storage, logistics, general warehousing, and others. Education Education delivers janitorial, custodial, landscaping and grounds, facilities engineering, and parking services for public school districts, private schools, colleges, and universities. Aviation Aviation supports airlines and airports with services ranging from parking and janitorial to passenger assistance, catering logistics, air cabin maintenance, and transportation. Technical Solutions Technical Solutions specializes in mechanical and electrical services (including electric vehicle charging station installation). These services can also be leveraged for cross-selling across all of our industry groups, both domestically and internationally. Financial Information by Reportable Segment Three Months Ended January 31, (in millions) 2022 2021 Revenues Business & Industry $ 1,029.5 $ 690.1 Manufacturing & Distribution 359.1 340.8 Education 205.7 208.0 Aviation 200.3 140.9 Technical Solutions 141.8 112.6 $ 1,936.2 $ 1,492.4 Operating profit Business & Industry $ 83.3 $ 72.7 Manufacturing & Distribution 40.6 39.7 Education 12.6 21.7 Aviation 8.9 3.1 Technical Solutions (1) 16.9 6.0 Government Services (0.1) (0.1) Corporate (55.8) (32.6) Adjustment for income from unconsolidated affiliates, included in Aviation and Technical Solutions (0.5) (0.6) Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions — (0.2) 106.0 109.7 Income from unconsolidated affiliates 0.5 0.6 Interest expense (6.2) (8.5) Income before income taxes $ 100.3 $ 101.9 (1) Reflects a $7.7 million gain on the sale of assets during the three months ended January 31, 2022. The accounting policies for our segments are the same as those disclosed within our significant accounting policies in Note 2, “Basis of Presentation and Significant Accounting Policies.” Our management evaluates the performance of each reportable segment based on its respective operating profit results, which include the allocation of certain centrally incurred costs. Corporate expenses not allocated to segments include certain CEO and other finance and human resource departmental expenses, certain information technology costs, share-based compensation, certain legal costs and settlements, certain actuarial adjustments to self-insurance reserves, and acquisition and integration costs. Management does not review asset information by segment, therefore we do not present assets in this note. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the year ended October 31, 2021. Unless otherwise indicated, all references to years are to our fiscal years, which end on October 31. |
Reorganization of Our Business | Reorganization of Our Business Effective November 1, 2021, the Manufacturing & Distribution (“M&D”) industry group replaced our Technology and Manufacturing (“T&M”) industry group as part of our strategic transformation initiative ELEVATE . M&D retained our large manufacturing clients from T&M and added clients in the distribution sector from our Business and Industry (“B&I”) group. Technology clients with commercial real estate properties serviced by T&M shifted into B&I. Additionally, we have modified the presentation of segment revenues as inter-segment revenues are now allocated at the segment level. Our prior period segment data in Note 4, “Revenues,” and Note 12, “Segment Information,” has been reclassified to conform with our current period presentation. These changes had no impact on our previously reported consolidated financial statements. |
Management Reimbursement Revenue by Segment and Remaining Performance Obligations | Management Reimbursement Revenue by Segment We operate certain parking facilities under management reimbursement arrangements. Under these arrangements, we manage the parking facilities for management fees and pass through the revenues and expenses associated with the facilities to the owners. These revenues and expenses are reported in equal amounts as costs reimbursed from our managed locations: Three Months Ended January 31, (in millions) 2022 2021 Business & Industry $ 52.5 $ 43.4 Aviation 12.3 13.7 Total $ 64.9 $ 57.0 Remaining Performance Obligations At January 31, 2022, performance obligations that were unsatisfied or partially unsatisfied for which we expect to recognize revenue totaled $310.7 million. We expect to recognize revenue on approximately 80% of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter, based on our estimates of project timing. These amounts exclude variable consideration primarily related to: (i) contracts where we have determined that the contract consists of a series of distinct service periods and revenues are based on future performance that cannot be estimated at contract inception; (ii) parking contracts where we and the customer share the gross revenues or operating profit for the location; and (iii) contracts where transaction prices include performance incentives that are based on future performance and therefore cannot be estimated at contract inception. We apply the practical expedient that permits exclusion of information about the remaining performance obligations with original expected durations of one year or less. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes (Topic 740) . This accounting update simplifies the accounting for income taxes and clarifies and amends existing income tax guidance. Impacted areas include intraperiod tax allocations, interim period taxes, deferred tax liabilities with outside basis differences, franchise taxes, and transactions that result in the “step-up” of goodwill. We adopted this standard, effective November 1, 2021, on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments–Equity Securities (Topic 321), Investments–Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) . This accounting update clarifies the interaction between the accounting for investments in equity securities under Topic 321, investments accounted for under the equity method under Topic 323, and certain derivatives instruments under Topic 815. We adopted this standard, effective November 1, 2021, on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements. No other recently adopted accounting standards have had a significant impact on our fiscal 2022 consolidated financial statements. |
Contract Types and Contract Balances | Contract Types We have arrangements under various contract types, as described in Note 2, “Basis of Presentation and Significant Accounting Policies,” in our Annual Report on Form 10-K for the year ended October 31, 2021. Certain arrangements involve variable consideration (primarily per transaction fees, reimbursable expenses, and sales-based royalties). We do not estimate the variable consideration for these arrangements; rather, we recognize these variable fees as they are earned. Some of our contracts, often related to Airline Services, may also include performance incentives based on variable performance measures that are ascertained exclusively by future performance and therefore cannot be estimated at contract inception and are recognized as revenue once known and mutually agreed upon. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current, and forecasted) that is reasonably available to us. The majority of our contracts include performance obligations that are primarily satisfied over time as we provide the related services. These contract types include: monthly fixed-price; square-foot; cost-plus; work orders; transaction-price; hourly; management reimbursement; leased location; allowance; energy savings contracts; and fixed-price repair and refurbishment contracts, as well as our franchise and royalty fee arrangements. We recognize revenue as the services are performed using a measure of progress that is determined by the contract type. Generally, most of our contracts are cancellable by either party without a substantive penalty, and the majority have a notification period of 30 to 60 days. Contract Balances The timing of revenue recognition, billings, and cash collections results in contract assets and contract liabilities, as further explained below. The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets primarily consist of billed trade receivables, unbilled trade receivables, and costs incurred in excess of amounts billed. Billed and unbilled trade receivables represent amounts from work completed in which we have an unconditional right to bill our customer. Costs incurred in excess of amounts billed typically arise when the revenue recognized on projects exceeds the amount billed to the customer. These amounts are transferred to billed trade receivables when the rights become unconditional. Contract assets also include the capitalization of incremental costs of obtaining a contract with a customer, primarily commissions. Commissions expense is recognized on a straight-line basis over a weighted average expected customer relationship period. Contract liabilities consist of deferred revenue and advance payments and billings in excess of revenue recognized. We generally classify contract liabilities as current since the related contracts are generally for a period |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Management Reimbursement Revenue by Segment | These revenues and expenses are reported in equal amounts as costs reimbursed from our managed locations: Three Months Ended January 31, (in millions) 2022 2021 Business & Industry $ 52.5 $ 43.4 Aviation 12.3 13.7 Total $ 64.9 $ 57.0 |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Preliminary Purchase Price Allocation | The following table summarizes the preliminary acquisition accounting on the date of acquisition as previously reported at year-end 2021 and at the end of the first quarter of 2022: (in millions) Preliminary Purchase Price Allocation Adjustments Updated Preliminary Purchase Price Allocation Cash and cash equivalents $ 31.5 $ — $ 31.5 Trade accounts receivable (1) 159.3 — 159.3 Other assets 24.9 (1.1) 23.8 Customer relationships (2) 220.0 — 220.0 Trade names (2) 10.0 — 10.0 Goodwill (3) 554.0 9.8 563.8 Trade accounts payable (27.0) (0.2) (27.1) Accrued compensation (38.2) — (38.2) Insurance claims (91.6) — (91.6) Other liabilities (41.7) (8.5) (50.3) Deferred income tax liability, net (59.5) — (59.5) Net assets acquired $ 741.7 $ — $ 741.7 (1) The gross amount of trade accounts receivable was $160.6 million, of which $1.3 million was deemed uncollectible. (2) The amortization periods for the acquired intangible assets are 15 years for customer relationships and two years for trade names. (3) Goodwill is largely attributable to value we expect to obtain from long-term business growth, the established workforce, and buyer-specific synergies. This goodwill is not deductible for income tax purposes. |
Schedule of Pro Forma Financial Information | The following table presents our unaudited pro forma results as though the acquisition occurred on November 1, 2020. These results include adjustments for the estimated amortization of intangible assets, interest expense, and the income tax impact of the pro forma adjustments at the statutory rate of 28%. These unaudited pro forma results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. (in millions) Three Months Ended January 31, 2021 Pro forma revenue $ 1,768.2 Pro forma income from operations 76.1 |
REVENUES (Tables)
REVENUES (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from External Customers by Major Service Lines and Segments | Three Months Ended January 31, 2022 (in millions) B&I M&D Education Aviation Technical Total Major Service Line Janitorial (1) $ 677.9 $ 304.2 $ 178.3 $ 29.8 $ — $ 1,190.2 Parking (2) 83.2 10.7 0.3 77.7 — 172.0 Facility Services (3) 268.4 44.1 27.1 6.5 — 346.0 Building & Energy Solutions (4) — — — — 141.8 141.8 Airline Services (5) — — — 86.3 — 86.3 Total $ 1,029.5 $ 359.1 $ 205.7 $ 200.3 $ 141.8 $ 1,936.2 Three Months Ended January 31, 2021 (in millions) B&I M&D Education Aviation Technical Total Major Service Line Janitorial (1) $ 533.0 $ 287.4 $ 183.1 $ 29.1 $ — $ 1,032.6 Parking (2) 68.9 11.7 0.2 54.2 — 134.9 Facility Services (3) 88.2 41.7 24.8 5.9 — 160.6 Building & Energy Solutions (4) — — — 112.6 112.6 Airline Services (5) — — — 51.7 — 51.7 Total $ 690.1 $ 340.8 $ 208.0 $ 140.9 $ 112.6 $ 1,492.4 (1) Janitorial arrangements provide a wide range of essential cleaning services for commercial office buildings, airports and other transportation centers, educational institutions, government buildings, health facilities, industrial buildings, retail stores, and stadiums and arenas. These arrangements are often structured as monthly fixed-price, square-foot, cost-plus, and work order contracts. (2) Parking arrangements provide parking and transportation services for clients at various locations, including airports and other transportation centers, commercial office buildings, educational institutions, health facilities, hotels, and stadiums and arenas. These arrangements are structured as management reimbursement, leased location, and allowance contracts. Certain of these arrangements are considered service concession agreements. Rent is paid to the grantor, which is the customer in the arrangement; accordingly, rent expense related to these arrangements is recorded as a reduction of the related parking service revenues. . (3) Facility Services arrangements provide onsite mechanical engineering and technical services and solutions relating to a broad range of facilities and infrastructure systems that are designed to extend the useful life of facility fixed assets, improve equipment operating efficiencies, reduce energy consumption, lower overall operational costs for clients, and enhance the sustainability of client locations. These arrangements are generally structured as monthly fixed-price, cost-plus, and work order contracts. (4) Building & Energy Solutions arrangements provide custom energy solutions, electrical, HVAC, lighting, electric vehicle charging station installation, and other general maintenance and repair services for clients in the public and private sectors and are generally structured as energy savings, fixed-price repair, and refurbishment contracts. We also franchise certain operations under franchise agreements relating to our Linc Network and TEGG brands, pursuant to franchise contracts. (5) Airline Services arrangements support airlines and airports with services such as passenger assistance, catering logistics, and airplane cabin maintenance. These arrangements are often structured as monthly fixed-price, cost-plus, transaction price, and hourly contracts. |
Contract with Customer, Asset and Liability | The following tables present the balances in our contract assets and contract liabilities: (in millions) January 31, 2022 October 31, 2021 Contract assets Billed trade receivables (1) $ 1,102.7 $ 1,057.6 Unbilled trade receivables (1) 141.3 112.1 Costs incurred in excess of amounts billed (2) 69.1 52.5 Capitalized commissions (3) 27.9 27.8 (1) Included in trade accounts receivable, net, on the unaudited Consolidated Balance Sheets. The fluctuations correlate directly to the execution of new customer contracts and to invoicing and collections from customers in the normal course of business. (2) Fluctuation is primarily due to the timing of payments on our contracts measured using the cost-to-cost method of revenue recognition. (3) Included in other current assets and other noncurrent assets on the unaudited Consolidated Balance Sheets. During the three months ended January 31, 2022, we capitalized $3.5 million of new costs and amortized $3.5 million of previously capitalized costs. There was no impairment loss recorded on the costs capitalized. (in millions) Three Months Ended Contract liabilities (1) Balance at beginning of period $ 58.5 Additional contract liabilities 72.7 Recognition of deferred revenue (63.2) Balance at end of period $ 68.0 |
NET INCOME (LOSS) PER COMMON _2
NET INCOME (LOSS) PER COMMON SHARE (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Common Share Calculations | Basic and Diluted Net Income (Loss) Per Common Share Calculations Three Months Ended January 31, (in millions, except per share amounts) 2022 2021 Net income $ 76.0 $ 74.6 Weighted-average common and common equivalent shares outstanding — Basic 67.9 67.2 Effect of dilutive securities (1) Restricted stock units 0.2 0.2 Stock options — 0.1 Performance shares 0.2 0.2 Weighted-average common and common equivalent shares outstanding — Diluted 68.3 67.6 Net income per common share Basic $ 1.12 $ 1.11 Diluted 1.11 1.10 |
Schedule of Anti-Dilutive Outstanding Stock Awards Issued Under Share-Based Compensation Plans | Anti-Dilutive Outstanding Stock Awards Issued Under Share-Based Compensation Plans Three Months Ended January 31, (in millions) 2022 2021 Anti-dilutive — 0.1 |
FAIR VALE OF FINANCIAL INSTRU_2
FAIR VALE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (in millions) Fair Value Hierarchy January 31, 2022 October 31, 2021 Cash and cash equivalents (1) 1 $ 46.6 $ 62.8 Insurance deposits (2) 1 0.7 0.7 Assets held in funded deferred compensation plan (3) 1 4.6 4.9 Credit facility (4) 2 1,007.6 888.8 Interest rate swap liabilities (5) 2 2.6 4.6 Preferred equity securities (6) 3 3.0 — (1) Cash and cash equivalents are stated at nominal value, which equals fair value. (2) Represents restricted deposits that are used to collateralize our insurance obligations and are stated at nominal value, which equals fair value. These insurance deposits are included in “Other noncurrent assets” on the accompanying unaudited Consolidated Balance Sheets. See Note 7, “Insurance,” for further information. (3) Represents investments held in a Rabbi trust associated with one of our deferred compensation plans, which we include in “Other noncurrent assets” on the accompanying unaudited Consolidated Balance Sheets. The fair value of the assets held in the funded deferred compensation plan is based on quoted market prices. (4) Represents gross outstanding borrowings under our syndicated line of credit and term loan. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit and term loan approximates the fair value. See Note 8, “Credit Facility,” for further information. (5) Represents interest rate swap derivatives designated as cash flow hedges. The fair values of the interest rate swaps are estimated based on the present value of the difference between expected cash flows calculated at the contracted interest rates and the expected cash flows at current market interest rates using observable benchmarks for the London Interbank Offered Rate (“LIBOR”) forward rates at the end of the period. At January 31, 2022, and October 31, 2021, our interest rate swaps are included in “Other noncurrent liabilities” on the accompanying unaudited Consolidated Balance Sheets. See Note 8, “Credit Facility,” for further information. (6) The Company purchased $3.0 million in a preferred equity investment of a privately held company during the three months ended January 31, 2022, which we include in “Other investments” on the accompanying unaudited Consolidated Balance Sheet. Our investment does not have a readily determinable fair value; therefore, we account for the investment using the measurement alternative under Topic 321 and measure the investment at initial cost less impairment, if any. |
INSURANCE (Tables)
INSURANCE (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Insurance [Abstract] | |
Schedule of Insurance Related Balances and Activity | Insurance Related Balances and Activity (in millions) January 31, 2022 October 31, 2021 Insurance claim reserves, excluding medical and dental $ 556.8 $ 574.8 Medical and dental claim reserves 10.5 9.9 Insurance recoverables 66.5 66.5 |
Schedule of Instruments Used to Collateralize Insurance Obligations | Instruments Used to Collateralize Our Insurance Obligations (in millions) January 31, 2022 October 31, 2021 Standby letters of credit $ 157.5 $ 157.9 Surety bonds 84.2 83.8 Restricted insurance deposits 0.7 0.7 Total $ 242.4 $ 242.3 |
CREDIT FACILITY (Tables)
CREDIT FACILITY (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facility Information | Credit Facility Information (in millions) January 31, 2022 October 31, 2021 Current portion of long-term debt Gross term loan $ 32.5 $ 32.5 Unamortized deferred financing costs (1.1) (1.1) Current portion of term loan $ 31.4 $ 31.4 Long-term debt Gross term loan $ 593.1 $ 601.3 Unamortized deferred financing costs (3.2) (3.5) Total noncurrent portion of term loan 589.9 597.8 Revolving line of credit (1)(2) 382.0 255.0 Long-term debt $ 971.9 $ 852.8 (1) Standby letters of credit amounted to $166.9 million at January 31, 2022. (2) At January 31, 2022, we had borrowing capacity of $749.3 million. |
Schedule of Term Loan Maturities | As of January 31, 2022, the following principal payments are required under the term loan. (in millions) 2022 2023 2024 2025 2026 Debt maturities $ 24.4 $ 32.5 $ 32.5 $ 32.5 $ 503.8 |
Schedule of Interest Rate Swap Information | Notional Amount Fixed Interest Rate Effective Date Maturity Date $ 130.0 million 2.86% November 1, 2018 April 30, 2022 $ 130.0 million 2.84% November 1, 2018 September 1, 2022 |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Share Repurchase Activity | Three Months Ended (in millions, except per share amounts) January 31, 2022 Total number of shares purchased 0.3 Average price paid per share $ 44.23 Total cash paid for share repurchases $ 13.3 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended |
Jan. 31, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Reportable Segment | Financial Information by Reportable Segment Three Months Ended January 31, (in millions) 2022 2021 Revenues Business & Industry $ 1,029.5 $ 690.1 Manufacturing & Distribution 359.1 340.8 Education 205.7 208.0 Aviation 200.3 140.9 Technical Solutions 141.8 112.6 $ 1,936.2 $ 1,492.4 Operating profit Business & Industry $ 83.3 $ 72.7 Manufacturing & Distribution 40.6 39.7 Education 12.6 21.7 Aviation 8.9 3.1 Technical Solutions (1) 16.9 6.0 Government Services (0.1) (0.1) Corporate (55.8) (32.6) Adjustment for income from unconsolidated affiliates, included in Aviation and Technical Solutions (0.5) (0.6) Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions — (0.2) 106.0 109.7 Income from unconsolidated affiliates 0.5 0.6 Interest expense (6.2) (8.5) Income before income taxes $ 100.3 $ 101.9 (1) Reflects a $7.7 million gain on the sale of assets during the three months ended January 31, 2022. |
THE COMPANY AND NATURE OF OPE_2
THE COMPANY AND NATURE OF OPERATIONS (Details) | 3 Months Ended |
Jan. 31, 2022segmentindustryGroup | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of industry groups | industryGroup | 4 |
Number of technical solutions segments | segment | 1 |
BASIS OF PRESENTATION AND SIG_4
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 1,936.2 | $ 1,492.4 |
Management Reimbursement Revenue | ||
Segment Reporting Information [Line Items] | ||
Revenues | 64.9 | 57 |
Management Reimbursement Revenue | Business & Industry | ||
Segment Reporting Information [Line Items] | ||
Revenues | 52.5 | 43.4 |
Management Reimbursement Revenue | Aviation | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 12.3 | $ 13.7 |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - Narrative (Details) - USD ($) | Sep. 30, 2021 | Jan. 31, 2022 | Oct. 31, 2021 |
Customer Contracts for Healthcare Technology Management | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Technical Solutions | |||
Business Acquisition [Line Items] | |||
Sale of customer contracts for clinical engineering services, consideration | $ 8,500,000 | ||
Gain on sale of customer contracts for clinical engineering services | 7,700,000 | ||
Minimum | |||
Business Acquisition [Line Items] | |||
Amount of reasonably possible loss | 0 | ||
Minimum | Able Legal Matters | |||
Business Acquisition [Line Items] | |||
Amount of reasonably possible loss | 0 | ||
Maximum | |||
Business Acquisition [Line Items] | |||
Amount of reasonably possible loss | 5,000,000 | ||
Maximum | Able Legal Matters | |||
Business Acquisition [Line Items] | |||
Amount of reasonably possible loss | 1,900,000 | ||
Able | |||
Business Acquisition [Line Items] | |||
Purchase price | $ 741,700,000 | ||
Cash consideration placed in escrow | 12,100,000 | ||
Cash consideration placed in escrow for indemnification asset | $ 8,200,000 | ||
Revenues associated with acquisition | 307,700,000 | ||
Net income associated with acquisition | 14,400,000 | ||
Acquisition-related costs | 4,100,000 | ||
Integration costs | 4,200,000 | ||
Loss contingency accrual | $ 12,300,000 | $ 900,000 |
ACQUISITIONS AND DISPOSITIONS_2
ACQUISITIONS AND DISPOSITIONS - Purchase Price Allocation (Details) - USD ($) $ in Millions | Sep. 30, 2021 | Jan. 31, 2022 | Oct. 31, 2021 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,237.1 | $ 2,228.9 | |
Able | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 31.5 | 31.5 | |
Trade accounts receivable | 159.3 | 159.3 | |
Other assets | 24.9 | 23.8 | |
Adjustment, other assets | (1.1) | ||
Goodwill | 554 | 563.8 | |
Adjustment, goodwill | 9.8 | ||
Trade accounts payable | (27) | (27.1) | |
Adjustments, trade accounts payable | (0.2) | ||
Accrued compensation | (38.2) | (38.2) | |
Insurance claims | (91.6) | (91.6) | |
Other liabilities | (41.7) | (50.3) | |
Adjustments, other liabilities | (8.5) | ||
Deferred income tax liability, net | (59.5) | (59.5) | |
Net assets acquired | 741.7 | 741.7 | |
Adjustments, net assets acquired | 0 | ||
Trade accounts receivable, gross | 160.6 | ||
Estimated uncollectible trade accounts receivable | 1.3 | ||
Able | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 220 | 220 | |
Amortization period for acquired intangible assets | 15 years | ||
Able | Trade names | |||
Business Acquisition [Line Items] | |||
Intangible assets | $ 10 | $ 10 | |
Amortization period for acquired intangible assets | 2 years |
ACQUISITIONS AND DISPOSITIONS_3
ACQUISITIONS AND DISPOSITIONS - Pro Forma Financial Information (Details) - Able - USD ($) $ in Millions | Sep. 30, 2021 | Jan. 31, 2022 |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Pro forma statutory tax rate (percent) | 28.00% | |
Pro forma revenue | $ 1,768.2 | |
Pro forma income from operations | $ 76.1 |
REVENUES - Disaggregation of Re
REVENUES - Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Revenue from External Customer [Line Items] | ||
Revenues | $ 1,936.2 | $ 1,492.4 |
Operating Segments | ||
Revenue from External Customer [Line Items] | ||
Revenues | 1,936.2 | 1,492.4 |
Operating Segments | Business & Industry | ||
Revenue from External Customer [Line Items] | ||
Revenues | 1,029.5 | 690.1 |
Operating Segments | Manufacturing & Distribution | ||
Revenue from External Customer [Line Items] | ||
Revenues | 359.1 | 340.8 |
Operating Segments | Education | ||
Revenue from External Customer [Line Items] | ||
Revenues | 205.7 | 208 |
Operating Segments | Aviation | ||
Revenue from External Customer [Line Items] | ||
Revenues | 200.3 | 140.9 |
Operating Segments | Technical Solutions | ||
Revenue from External Customer [Line Items] | ||
Revenues | 141.8 | 112.6 |
Operating Segments | Janitorial | ||
Revenue from External Customer [Line Items] | ||
Revenues | 1,190.2 | 1,032.6 |
Operating Segments | Janitorial | Business & Industry | ||
Revenue from External Customer [Line Items] | ||
Revenues | 677.9 | 533 |
Operating Segments | Janitorial | Manufacturing & Distribution | ||
Revenue from External Customer [Line Items] | ||
Revenues | 304.2 | 287.4 |
Operating Segments | Janitorial | Education | ||
Revenue from External Customer [Line Items] | ||
Revenues | 178.3 | 183.1 |
Operating Segments | Janitorial | Aviation | ||
Revenue from External Customer [Line Items] | ||
Revenues | 29.8 | 29.1 |
Operating Segments | Janitorial | Technical Solutions | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Parking | ||
Revenue from External Customer [Line Items] | ||
Revenues | 172 | 134.9 |
Operating Segments | Parking | Business & Industry | ||
Revenue from External Customer [Line Items] | ||
Revenues | 83.2 | 68.9 |
Operating Segments | Parking | Manufacturing & Distribution | ||
Revenue from External Customer [Line Items] | ||
Revenues | 10.7 | 11.7 |
Operating Segments | Parking | Education | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0.3 | 0.2 |
Operating Segments | Parking | Aviation | ||
Revenue from External Customer [Line Items] | ||
Revenues | 77.7 | 54.2 |
Operating Segments | Parking | Technical Solutions | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Facility Services | ||
Revenue from External Customer [Line Items] | ||
Revenues | 346 | 160.6 |
Operating Segments | Facility Services | Business & Industry | ||
Revenue from External Customer [Line Items] | ||
Revenues | 268.4 | 88.2 |
Operating Segments | Facility Services | Manufacturing & Distribution | ||
Revenue from External Customer [Line Items] | ||
Revenues | 44.1 | 41.7 |
Operating Segments | Facility Services | Education | ||
Revenue from External Customer [Line Items] | ||
Revenues | 27.1 | 24.8 |
Operating Segments | Facility Services | Aviation | ||
Revenue from External Customer [Line Items] | ||
Revenues | 6.5 | 5.9 |
Operating Segments | Facility Services | Technical Solutions | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Building & Energy Solutions | ||
Revenue from External Customer [Line Items] | ||
Revenues | 141.8 | 112.6 |
Operating Segments | Building & Energy Solutions | Business & Industry | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Building & Energy Solutions | Manufacturing & Distribution | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Building & Energy Solutions | Education | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Building & Energy Solutions | Aviation | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | |
Operating Segments | Building & Energy Solutions | Technical Solutions | ||
Revenue from External Customer [Line Items] | ||
Revenues | 141.8 | 112.6 |
Operating Segments | Airline Services | ||
Revenue from External Customer [Line Items] | ||
Revenues | 86.3 | 51.7 |
Operating Segments | Airline Services | Business & Industry | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Airline Services | Manufacturing & Distribution | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Airline Services | Education | ||
Revenue from External Customer [Line Items] | ||
Revenues | 0 | 0 |
Operating Segments | Airline Services | Aviation | ||
Revenue from External Customer [Line Items] | ||
Revenues | 86.3 | 51.7 |
Operating Segments | Airline Services | Technical Solutions | ||
Revenue from External Customer [Line Items] | ||
Revenues | $ 0 | $ 0 |
REVENUES - Remaining Performanc
REVENUES - Remaining Performance Obligations Narrative (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-02-01 $ in Millions | Jan. 31, 2022USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, amount | $ 310.7 |
Revenue, remaining performance obligation, percentage | 80.00% |
Revenue, remaining performance obligation, period | 12 months |
REVENUES - Contract with Custom
REVENUES - Contract with Customer, Asset and Liability (Details) - USD ($) | 3 Months Ended | |
Jan. 31, 2022 | Oct. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Billed trade receivables | $ 1,102,700,000 | $ 1,057,600,000 |
Unbilled trade receivables | 141,300,000 | 112,100,000 |
Costs incurred in excess of amounts billed | 69,100,000 | 52,500,000 |
Capitalized commissions | 27,900,000 | $ 27,800,000 |
Capitalized contract price | 3,500,000 | |
Capitalized contract cost, amortization | (3,500,000) | |
Capitalized contract cost, impairment loss | 0 | |
Contract with Customer, Liabilities [Roll Forward] | ||
Contract liabilities, balance at beginning of period | 58,500,000 | |
Additional contract liabilities | 72,700,000 | |
Recognition of deferred revenue | (63,200,000) | |
Contract liabilities, balance at end of period | $ 68,000,000 |
NET INCOME (LOSS) PER COMMON _3
NET INCOME (LOSS) PER COMMON SHARE - Calculations of Basic and Diluted Net Income Per Common Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||
Net income | $ 76 | $ 74.6 |
Weighted-average common and common equivalent shares outstanding — Basic (in shares) | 67.9 | 67.2 |
Effect of dilutive securities | ||
Weighted-average common and common equivalent shares outstanding — Diluted (in shares) | 68.3 | 67.6 |
Net income per common share | ||
Basic (in USD per share) | $ 1.12 | $ 1.11 |
Diluted (in USD per share) | $ 1.11 | $ 1.10 |
Restricted stock units | ||
Effect of dilutive securities | ||
Effect of dilutive securities (in shares) | 0.2 | 0.2 |
Stock options | ||
Effect of dilutive securities | ||
Effect of dilutive securities (in shares) | 0 | 0.1 |
Performance shares | ||
Effect of dilutive securities | ||
Effect of dilutive securities (in shares) | 0.2 | 0.2 |
NET INCOME (LOSS) PER COMMON _4
NET INCOME (LOSS) PER COMMON SHARE - Anti-Dilutive Outstanding Stock Awards Issued Under Share-Based Compensation Plans (Details) - shares shares in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive (in shares) | 0 | 0.1 |
FAIR VALE OF FINANCIAL INSTRU_3
FAIR VALE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Millions | Jan. 31, 2022 | Nov. 02, 2021 | Nov. 01, 2021 | Oct. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | $ 2,237.1 | $ 2,228.9 | ||
Manufacturing & Distribution | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | $ 502.2 | |||
Manufacturing & Distribution | Reorganization of Business Segments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 407.2 | $ 95 | ||
Business & Industry | Reorganization of Business Segments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | $ (95) | |||
Technology And Manufacturing | Reorganization of Business Segments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | $ (407.2) | |||
Privately Held Company | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Preferred equity securities | 3 | |||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Cash and cash equivalents | 46.6 | 62.8 | ||
Insurance deposits | 0.7 | 0.7 | ||
Assets held in funded deferred compensation plan | 4.6 | 4.9 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Credit facility | 1,007.6 | 888.8 | ||
Interest rate swap liabilities | 2.6 | 4.6 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Preferred equity securities | $ 3 | $ 0 |
INSURANCE - Narrative (Details)
INSURANCE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Schedule of Other Liabilities [Line Items] | ||
Insurance policy coverage, general and automobile liability losses | $ 200 | |
Insurance policy coverage, property damage | 75 | |
Change in case reserves plus IBNR Claims — prior years | (25.2) | $ (11.4) |
Minimum | ||
Schedule of Other Liabilities [Line Items] | ||
Self insurance retention amount per-claim | 1 | |
Primary policy limit | 1 | |
Maximum | ||
Schedule of Other Liabilities [Line Items] | ||
Self insurance retention amount per-claim | 1.5 | |
Primary policy limit | 5 | |
Self insurance retention amount per-claim, medical plan | $ 0.5 |
INSURANCE - Insurance Related B
INSURANCE - Insurance Related Balances and Activity (Details) - USD ($) $ in Millions | Jan. 31, 2022 | Oct. 31, 2021 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance recoverables | $ 66.5 | $ 66.5 |
Insurance claim reserves, excluding medical and dental | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance claim reserves | 556.8 | 574.8 |
Medical and dental claim reserves | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance claim reserves | $ 10.5 | $ 9.9 |
INSURANCE - Instruments Used to
INSURANCE - Instruments Used to Collateralize Insurance Obligations (Details) - USD ($) $ in Millions | Jan. 31, 2022 | Oct. 31, 2021 |
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | $ 242.4 | $ 242.3 |
Standby letters of credit | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | 157.5 | 157.9 |
Surety bonds | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | 84.2 | 83.8 |
Restricted insurance deposits | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | $ 0.7 | $ 0.7 |
CREDIT FACILITY - Narrative (De
CREDIT FACILITY - Narrative (Details) | Jun. 28, 2021USD ($) | Sep. 01, 2017USD ($) | Jan. 31, 2022USD ($) | Jan. 31, 2021USD ($) | Oct. 31, 2021USD ($) | Jun. 27, 2021USD ($) | Sep. 01, 2018USD ($) | Aug. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||||||||
Deferred financing costs | $ 12,600,000 | |||||||
Debt instrument, periodic payment, principal | $ 8,100,000 | |||||||
Interest expense | 6,200,000 | $ 8,500,000 | ||||||
Interest rate cash flow hedge gain to be reclassified during next 12 months, net | 500,000 | |||||||
Tax to be reclassified during the next 12 months | 300,000 | |||||||
Accumulated Gain (Loss), Net, Cash Flow Hedge, Parent | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Net gain (loss) from cash flow hedges recorded in accumulated other comprehensive loss, net of tax | 300,000 | $ (200,000) | ||||||
Tax related to amounts in accumulated other comprehensive loss | 500,000 | $ 300,000 | ||||||
Interest expense | 1,100,000 | 1,200,000 | ||||||
Interest expense, tax | $ 400,000 | $ 400,000 | ||||||
Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Deferred financing costs | 7,700,000 | |||||||
Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Deferred financing costs | 4,900,000 | |||||||
Prior Credit Facility | Revolving Credit Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 800,000,000 | |||||||
Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, term | 5 years | |||||||
Deferred financing costs | 6,400,000 | |||||||
Credit Facility | Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, face amount | $ 800,000,000 | $ 620,000,000 | ||||||
Deferred financing costs | $ 6,200,000 | |||||||
Credit Facility | Revolving Credit Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 900,000,000 | $ 800,000,000 | $ 800,000,000 | |||||
Amendment | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Weighted average interest rate | 1.60% | |||||||
Total net leverage ratio | 5 | |||||||
Secured net leverage ratio | 4 | |||||||
Interest coverage ratio | 1.50 | |||||||
Amendment | Scenario, Material Acquisition | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Total net leverage ratio | 5.50 | |||||||
Secured net leverage ratio | 4.50 | |||||||
Amendment | Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, face amount | $ 650,000,000 | |||||||
Amendment | Revolving Credit Facility | Line of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | 1,300,000,000 | |||||||
Amendment | Standby Letters of Credit | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | 350,000,000 | |||||||
Amendment | Swing Line Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit facility, borrowing capacity | $ 75,000,000 | |||||||
Amendment | Minimum | Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fee percentage on unused portion of the Facility | 0.20% | |||||||
Amendment | Maximum | Revolving Credit Facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fee percentage on unused portion of the Facility | 0.40% | |||||||
Amendment | Eurodollar | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on variable rate | 1.375% | |||||||
Amendment | Eurodollar | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on variable rate | 2.25% | |||||||
Amendment | Base Rate | Minimum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on variable rate | 0.375% | |||||||
Amendment | Base Rate | Maximum | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Basis spread on variable rate | 1.25% |
CREDIT FACILITY - Credit Facili
CREDIT FACILITY - Credit Facility Information (Details) - USD ($) $ in Millions | Jan. 31, 2022 | Oct. 31, 2021 |
Current portion of long-term debt | ||
Gross term loan | $ 32.5 | $ 32.5 |
Unamortized deferred financing costs | (1.1) | (1.1) |
Current portion of term loan | 31.4 | 31.4 |
Long-term debt | ||
Gross term loan | 593.1 | 601.3 |
Unamortized deferred financing costs | (3.2) | (3.5) |
Total noncurrent portion of term loan | 589.9 | 597.8 |
Revolving line of credit | 382 | 255 |
Long-term debt | 971.9 | $ 852.8 |
Standby letters of credit | 166.9 | |
Borrowing capacity | $ 749.3 |
CREDIT FACILITY - Term Loan Mat
CREDIT FACILITY - Term Loan Maturities (Details) - Term Loan $ in Millions | Jan. 31, 2022USD ($) |
Term Loan Maturities | |
2022 | $ 24.4 |
2023 | 32.5 |
2024 | 32.5 |
2025 | 32.5 |
2026 | $ 503.8 |
CREDIT FACILITY - Interest Rate
CREDIT FACILITY - Interest Rate Swaps (Details) | Nov. 01, 2018USD ($) |
Interest Rate Swap, Maturity 4/30/2022 | |
Line of Credit Facility [Line Items] | |
Notional Amount | $ 130,000,000 |
Fixed Interest Rate | 2.86% |
Interest Rate Swap, Maturity 9/1/2022 | |
Line of Credit Facility [Line Items] | |
Notional Amount | $ 130,000,000 |
Fixed Interest Rate | 2.84% |
COMMON STOCK - Narrative (Detai
COMMON STOCK - Narrative (Details) - USD ($) | Jan. 31, 2022 | Dec. 18, 2019 |
Stockholders' Equity Note [Abstract] | ||
Share repurchase program, authorized amount | $ 150,000,000 | |
Share repurchase program, remaining authorized amount | $ 131,600,000 |
COMMON STOCK - Schedule of Repu
COMMON STOCK - Schedule of Repurchase Activity (Details) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended |
Jan. 31, 2022USD ($)$ / sharesshares | |
Stockholders' Equity Note [Abstract] | |
Total number of shares repurchased (in shares) | shares | 0.3 |
Average price paid per share (in USD per share) | $ / shares | $ 44.23 |
Total cash paid for share repurchases | $ | $ 13.3 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | Feb. 01, 2022USD ($) | Jul. 07, 2021USD ($) | Sep. 20, 2018subclass | Jan. 31, 2022USD ($) | Oct. 31, 2021USD ($) |
Loss Contingencies [Line Items] | |||||
Standby letters of credit | $ 166,900,000 | ||||
Surety bonds | 700,400,000 | ||||
Bucio | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency, number of certified subclasses | subclass | 4 | ||||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Amount of reasonably possible loss | 0 | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Amount of reasonably possible loss | 5,000,000 | ||||
Able | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency accrual | 12,300,000 | $ 900,000 | |||
Pending Litigation | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency accrual | 28,700,000 | ||||
Settled Litigation | Bucio | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency accrual | 142,900,000 | ||||
Settlement amount | $ 140,000,000 | ||||
Settled Litigation | Bucio | Subsequent Event | |||||
Loss Contingencies [Line Items] | |||||
Motion requesting attorney fees to be paid | $ 46,700,000 | ||||
Settled Litigation | Bucio | Other Current Liabilities | |||||
Loss Contingencies [Line Items] | |||||
Loss contingency accrual | 2,900,000 | ||||
Energy Savings Contracts | |||||
Loss Contingencies [Line Items] | |||||
Guarantee obligation | $ 236,400,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jan. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 24.20% | 26.70% | ||
Provisions for taxes | $ 24.3 | $ 27.2 | ||
Effected tax rate, benefit from change of tax reserve | 3.5 | |||
Social security tax, employer, deferral, CARES Act | $ 66 | $ 132 | ||
Social security tax, employer, payment, CARES Act | $ 66 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | |
Revenues | ||
Revenues | $ 1,936.2 | $ 1,492.4 |
Operating profit | ||
Operating profit | 106 | 109.7 |
Income from unconsolidated affiliates | 0.5 | 0.6 |
Interest expense | (6.2) | (8.5) |
Income before income taxes | 100.3 | 101.9 |
Technical Solutions | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Customer Contracts for Healthcare Technology Management | ||
Operating profit | ||
Gain on sale of assets | 7.7 | |
Operating Segments | ||
Revenues | ||
Revenues | 1,936.2 | 1,492.4 |
Operating Segments | Business & Industry | ||
Revenues | ||
Revenues | 1,029.5 | 690.1 |
Operating profit | ||
Operating profit | 83.3 | 72.7 |
Operating Segments | Manufacturing & Distribution | ||
Revenues | ||
Revenues | 359.1 | 340.8 |
Operating profit | ||
Operating profit | 40.6 | 39.7 |
Operating Segments | Education | ||
Revenues | ||
Revenues | 205.7 | 208 |
Operating profit | ||
Operating profit | 12.6 | 21.7 |
Operating Segments | Aviation | ||
Revenues | ||
Revenues | 200.3 | 140.9 |
Operating profit | ||
Operating profit | 8.9 | 3.1 |
Operating Segments | Technical Solutions | ||
Revenues | ||
Revenues | 141.8 | 112.6 |
Operating profit | ||
Operating profit | 16.9 | 6 |
Operating Segments | Government Services | ||
Operating profit | ||
Operating profit | (0.1) | (0.1) |
Corporate | ||
Operating profit | ||
Operating profit | (55.8) | (32.6) |
Segment Reconciling Items | ||
Operating profit | ||
Income from unconsolidated affiliates | (0.5) | (0.6) |
Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions | $ 0 | $ (0.2) |