Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Jul. 31, 2017 | Sep. 01, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | ABM INDUSTRIES INC /DE/ | |
Entity Central Index Key | 771,497 | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ABM | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 65,135,908 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Jul. 31, 2017 | Oct. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 47.7 | $ 53.5 |
Trade accounts receivable, net of allowances of $21.5 and $15.9 at July 31, 2017 and October 31, 2016, respectively | 875.3 | 803.7 |
Prepaid expenses | 94.7 | 68 |
Other current assets | 31.3 | 30 |
Assets held for sale | 0 | 36.1 |
Total current assets | 1,049 | 991.3 |
Other investments | 16.3 | 17.4 |
Property, plant and equipment, net of accumulated depreciation of $185.0 and $163.4 at July 31, 2017 and October 31, 2016, respectively | 100.9 | 81.8 |
Other intangible assets, net of accumulated amortization of $174.9 and $157.0 at July 31, 2017 and October 31, 2016, respectively | 95.9 | 103.8 |
Goodwill | 926.9 | 912.8 |
Deferred income taxes, net | 52.5 | 37.4 |
Other noncurrent assets | 111.6 | 134.3 |
Total assets | 2,352.9 | 2,278.8 |
Current liabilities | ||
Trade accounts payable | 202.5 | 174.3 |
Accrued compensation | 132 | 130.7 |
Accrued taxes—other than income | 49 | 40.6 |
Insurance claims | 102.1 | 92.2 |
Income taxes payable | 2.1 | 6.3 |
Legal settlements from discontinued operations | 65.3 | 0 |
Other accrued liabilities | 137.1 | 135.9 |
Liabilities held for sale | 0 | 16.8 |
Total current liabilities | 690.1 | 596.8 |
Noncurrent income taxes payable | 15.6 | 33.4 |
Line of credit | 264.7 | 268.3 |
Deferred income tax liability, net | 3.2 | 3.5 |
Noncurrent insurance claims | 355.5 | 331.6 |
Other noncurrent liabilities | 55.2 | 71.2 |
Total liabilities | 1,384.3 | 1,304.8 |
Commitments and contingencies | 0 | 0 |
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; 55,793,807 and 55,599,322 shares issued and outstanding at July 31, 2017 and October 31, 2016, respectively | 0.6 | 0.6 |
Additional paid-in capital | 253.6 | 248.6 |
Accumulated other comprehensive loss, net of taxes | (20.4) | (31.6) |
Retained earnings | 734.9 | 756.4 |
Total stockholders’ equity | 968.6 | 974 |
Total liabilities and stockholders’ equity | $ 2,352.9 | $ 2,278.8 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Jul. 31, 2017 | Oct. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance | $ 21.5 | $ 15.9 |
Property, plant and equipment, accumulated depreciation | 185 | 163.4 |
Other intangible assets, accumulated amortization | $ 174.9 | $ 157 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 500,000 | 500,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 55,793,807 | 55,599,322 |
Common stock, shares outstanding | 55,793,807 | 55,599,322 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 1,318.4 | $ 1,296.9 | $ 3,955.6 | $ 3,822.4 |
Operating expenses | 1,184.5 | 1,161.3 | 3,544.1 | 3,430.1 |
Selling, general and administrative expenses | 101.3 | 108 | 299.2 | 310.2 |
Amortization of intangible assets | 6.1 | 5.8 | 17.4 | 18.8 |
Restructuring and related expenses | 5.2 | 3.3 | 16 | 19.3 |
Impairment recovery and gain on sale | (1.1) | 0 | (18.5) | 0 |
Operating profit | 22.6 | 18.5 | 97.4 | 44 |
Income from unconsolidated affiliates, net | 1.2 | 2.1 | 3.6 | 5.3 |
Interest expense | (2.8) | (2.6) | (9.1) | (7.7) |
Income from continuing operations before income taxes | 21 | 18 | 91.9 | 41.6 |
Income tax benefit (provision) | 11.9 | 14.9 | (11.3) | 11.7 |
Income from continuing operations | 32.9 | 32.9 | 80.6 | 53.3 |
Net loss from discontinued operations | 0 | (1.8) | (73.2) | (3.9) |
Net income | 32.9 | 31.1 | 7.4 | 49.4 |
Other comprehensive income (loss) | ||||
Foreign currency translation | 3.6 | (12.6) | 9.8 | (17) |
Other, net of taxes | (0.2) | (0.6) | 1.4 | (0.5) |
Comprehensive income | $ 36.3 | $ 17.9 | $ 18.6 | $ 31.9 |
Net income per common share — Basic | ||||
Income from continuing operations (in usd per share) | $ 0.59 | $ 0.58 | $ 1.44 | $ 0.94 |
Loss from discontinued operations (in usd per share) | 0 | (0.03) | (1.31) | (0.06) |
Net income (in usd per share) | 0.59 | 0.55 | 0.13 | 0.88 |
Net income per common share — Diluted | ||||
Income from continuing operations (in usd per share) | 0.58 | 0.58 | 1.42 | 0.94 |
Loss from discontinued operations (in usd per share) | 0 | (0.03) | (1.29) | (0.07) |
Net income (in usd per share) | $ 0.58 | $ 0.55 | $ 0.13 | $ 0.87 |
Weighted-average common and common equivalent shares outstanding | ||||
Basic (in shares) | 56.1 | 56.2 | 56 | 56.4 |
Diluted (in shares) | 56.6 | 56.8 | 56.6 | 56.9 |
Dividends declared per common share (in usd per share) | $ 0.170 | $ 0.165 | $ 0.51 | $ 0.495 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Cash flows from operating activities | ||
Net income | $ 7.4 | $ 49.4 |
Net loss from discontinued operations | 73.2 | 3.9 |
Income from continuing operations | 80.6 | 53.3 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities of continuing operations | ||
Depreciation and amortization | 43.4 | 43.1 |
Impairment recovery and gain on sale | (18.5) | 0 |
Deferred income taxes | 8.9 | 2.1 |
Share-based compensation expense | 10.3 | 11.7 |
Provision for bad debt | 2.7 | 11.5 |
Discount accretion on insurance claims | 0.1 | 0.2 |
Gain on sale of assets | (2.4) | (0.1) |
Income from unconsolidated affiliates, net | (3.6) | (5.3) |
Distributions from unconsolidated affiliates | 5.7 | 6.4 |
Changes in operating assets and liabilities, net of effects of acquisitions | ||
Trade accounts receivable | (69.5) | (26.7) |
Prepaid expenses and other current assets | (14.9) | (4.2) |
Other noncurrent assets | (8.3) | (19.5) |
Trade accounts payable and other accrued liabilities | 15.6 | 9.7 |
Insurance claims | 32.5 | 32.5 |
Income taxes payable | (7.7) | (20) |
Other noncurrent liabilities | 7.6 | 6 |
Total adjustments | 2 | 47.4 |
Net cash provided by operating activities of continuing operations | 82.6 | 100.7 |
Net cash used in operating activities of discontinued operations | (57.2) | (25.6) |
Net cash provided by operating activities | 25.3 | 75.1 |
Cash flows from investing activities | ||
Additions to property, plant and equipment | (42.2) | (27.4) |
Proceeds from sale of assets | 1.4 | 0.6 |
Proceeds from sale of business | 35.5 | 0 |
Purchase of businesses, net of cash acquired | (18.6) | (81) |
Proceeds from redemption of auction rate security | 0 | 5 |
Net cash used in investing activities of continuing operations | (23.9) | (102.8) |
Net cash used in investing activities of discontinued operations | 0 | (3.1) |
Net cash used in investing activities | (23.9) | (105.9) |
Cash flows from financing activities | ||
Proceeds from issuance of share-based compensation awards, net of taxes withheld | 2 | 5.7 |
Repurchases of common stock | (7.9) | (31.2) |
Dividends paid | (28.4) | (27.7) |
Deferred financing costs paid | 0 | (0.1) |
Borrowings from line of credit | 671 | 779.3 |
Repayment of borrowings from line of credit | (674.6) | (713) |
Financing of energy savings performance contracts | 6.8 | 15.3 |
Changes in book cash overdrafts | 26.5 | 1.8 |
Payment of contingent consideration | (3.8) | 0 |
Repayment of capital lease obligations | (0.3) | (1) |
Net cash (used in) provided by financing activities | (8.7) | 29.1 |
Effect of exchange rate changes on cash and cash equivalents | 1.5 | (2.2) |
Net decrease in cash and cash equivalents | (5.8) | (3.9) |
Cash and cash equivalents at beginning of year | 53.5 | 55.5 |
Cash and cash equivalents at end of period | $ 47.7 | $ 51.6 |
The Company and Nature of Opera
The Company and Nature of Operations | 9 Months Ended |
Jul. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Nature of Operations | THE COMPANY AND NATURE OF OPERATIONS ABM Industries Incorporated, which operates through its subsidiaries (collectively referred to as “ABM,” “we,” “us,” “our,” or the “Company”), is a leading provider of integrated facility solutions, customized by industry, that enable our clients to deliver exceptional facilities experiences. We are organized into five industry groups and one Technical Solutions segment: Through these groups, we offer a full complement of solutions, including janitorial, facilities engineering, and parking, on a stand-alone basis or in combination with each other or with specialized mechanical and electrical technical solutions. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Jul. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES 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 fiscal year ended October 31, 2016 . Unless otherwise noted, all references to years are to our fiscal year, which ends on October 31 . Government Services As of October 31, 2016 , the assets and liabilities of our Government Services business were classified as held-for-sale. On May 31, 2017, we sold our Government Services business for $35.5 million . In connection with the sale, during the third quarter of 2017, we recorded a pre-tax gain of $1.1 million , subject to final working capital adjustments. The reported results for this business are through the date of sale. Future results could include run-off costs associated with this former business. Based on the terms of the agreement to sell this business, we reclassified certain of the prior year balances from held-for-sale to held-and-used. Prior Year Reclassifications Effective November 1, 2016, we reorganized our reportable segments to reflect how we now manage our business by industry group. We have revised our prior period segment information to reflect this reorganization and a related reclassification of certain Corporate expenses. See Note 14 , “Segment Information,” for further information. Concurrent with the reorganization, we recategorized certain expenses that were historically included in operating expenses to selling, general and administrative expenses. To conform to the new categorization, we reclassified operating expenses of $5.2 million and $15.1 million for the three- and nine-month periods ended July 31, 2016 , respectively, to selling, general and administrative expenses. In addition, certain amounts in the statements of cash flows have been reclassified to conform with the current year presentation. 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 managed location arrangements. Under these arrangements, we manage the parking facility for a management fee and pass through the revenue and expenses associated with the facility to the owner. These revenues and expenses are reported in equal amounts as costs reimbursed from our managed locations: Three Months Ended July 31, Nine Months Ended July 31, (in millions) 2017 2016 2017 2016 Business & Industry $ 59.3 $ 57.4 $ 175.3 $ 171.1 Aviation 21.9 19.4 54.7 60.2 Emerging Industries Group 4.5 4.5 13.9 12.6 Total $ 85.8 $ 81.3 $ 243.8 $ 243.8 |
Restructuring and Related Costs
Restructuring and Related Costs | 9 Months Ended |
Jul. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | RESTRUCTURING AND RELATED COSTS During the fourth quarter of 2015, our Board of Directors approved a comprehensive strategy intended to have a positive transformative effect on ABM (the “ 2020 Vision ”). As part of the 2020 Vision , we identified key priorities to differentiate ABM in the marketplace, accelerate revenue growth for certain industry groups, and improve our margin profile. We expect our 2020 Vision restructuring and related activities to be complete by the end of 2017, with remaining costs primarily related to external support fees and office consolidations. As described in Note 14 , “Segment Information,” we include restructuring and related costs within corporate expenses. Rollforward of Restructuring and Related Liabilities (in millions) External Support Fees Employee Severance Other Project Fees Lease Exit Total Balance, October 31, 2016 $ 1.2 $ 3.8 $ 0.5 $ 2.5 $ 8.0 Costs recognized 8.6 1.0 4.8 1.6 16.0 Payments (9.8 ) (3.2 ) (4.9 ) (2.3 ) (20.2 ) Non-cash charges — — — (0.2 ) (0.2 ) Balance, July 31, 2017 $ — $ 1.6 $ 0.4 $ 1.6 $ 3.7 We have incurred cumulative 2020 Vision restructuring and related charges of $57.6 million , including external support fees of $24.5 million , employee severance costs of $14.3 million , other project fees of $9.4 million , and asset impairment and lease exit costs each in the amount of $4.7 million . |
Acquisitions
Acquisitions | 9 Months Ended |
Jul. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS Acquisition of GCA Services Group On July 11, 2017, we entered into an Agreement and Plan of Merger with GCA Holding Corp. (the “Merger Agreement”) to acquire GCA Services Group. On September 1, 2017, we completed the acquisition pursuant to the Merger Agreement. Refer to Note 15 , “Subsequent Events,” for additional details. Other Acquisitions Effective December 1, 2016, we acquired all of the outstanding stock of Mechanical Solutions, Inc. (“MSI”), a provider of specialized HVAC, chiller, and plumbing services, for a purchase price of $12.6 million . The purchase price includes up to $1.0 million of undiscounted contingent consideration that is based on the expected achievement of certain pre-established revenue goals. See Note 7 , “Fair Value of Financial Instruments,” regarding our valuation of contingent consideration liabilities. As of December 1, 2016, the operations of MSI are included in our Technical Solutions segment. Effective December 1, 2016, we also acquired all of the outstanding stock of OFJ Connections Ltd (“OFJ”), a provider of airport transportation services in the United Kingdom, for a purchase price of $6.3 million . As of December 1, 2016, the operations of OFJ are included in our Aviation segment. Effective September 30, 2016, we acquired all of the outstanding stock of BRBIBR Limited, a company which holds all of the outstanding shares of 8 Solutions Ltd. (“8 Solutions”), a provider of technical cleaning services to data centers in the United Kingdom and certain other locations, for a purchase price of $16.1 million . As of September 30, 2016, the operations of 8 Solutions are included in our Business & Industry segment. 8 Solutions has been renamed ABM Critical Solutions Limited. Effective December 1, 2015, we acquired all of the outstanding stock of Westway Services Holdings (2014) Ltd. (“Westway”), a provider of technical services to clients in the United Kingdom, for a purchase price of $81.0 million . This acquisition expanded the geographical reach of our technical solutions business to the United Kingdom, resulting in the allocation of a significant portion of the purchase price to goodwill. As such, we recorded goodwill and intangible assets of $53.8 million and $22.5 million , respectively. The goodwill associated with this acquisition is not deductible for tax purposes. As of December 1, 2015, the operations of Westway are included in our Technical Solutions segment. Pro Forma and Other Supplemental Financial Information Pro forma and other supplemental financial information is not presented for our other acquisitions, as they are not considered material business combinations individually or on a combined basis. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Jul. 31, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS Following the sale of our Security business in 2015, we record all costs associated with this former business in discontinued operations. Such costs generally relate to litigation we retained and insurance reserves. For the nine months ended July 31, 2017 , we incurred a net loss from discontinued operations of $73.2 million (a pretax loss of $123.7 million ). As described in Note 11 , “Commitments and Contingencies,” this loss primarily relates to the settlements of the Augustus and Karapetyan cases. We recorded the liability for these settlements within “Legal settlements from discontinued operations” on the accompanying unaudited consolidated balance sheets. |
Net Income Per Common Share
Net Income Per Common Share | 9 Months Ended |
Jul. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | NET INCOME PER COMMON SHARE Basic and Diluted Net Income Per Common Share Calculations Three Months Ended July 31, Nine Months Ended July 31, (in millions, except per share amounts) 2017 2016 2017 2016 Income from continuing operations $ 32.9 $ 32.9 $ 80.6 $ 53.3 Net loss from discontinued operations — (1.8 ) (73.2 ) (3.9 ) Net income $ 32.9 $ 31.1 $ 7.4 $ 49.4 Weighted-average common and common equivalent shares outstanding — Basic 56.1 56.2 56.0 56.4 Effect of dilutive securities Restricted stock units 0.3 0.3 0.3 0.2 Stock options 0.2 0.2 0.2 0.2 Performance shares — 0.1 0.1 0.1 Weighted-average common and common equivalent shares outstanding — Diluted 56.6 56.8 56.6 56.9 Net income per common share — Basic Income from continuing operations $ 0.59 $ 0.58 $ 1.44 $ 0.94 Loss from discontinued operations — (0.03 ) (1.31 ) (0.06 ) Net income $ 0.59 $ 0.55 $ 0.13 $ 0.88 Net income per common share — Diluted Income from continuing operations $ 0.58 $ 0.58 $ 1.42 $ 0.94 Loss from discontinued operations — (0.03 ) (1.29 ) (0.07 ) Net income $ 0.58 $ 0.55 $ 0.13 $ 0.87 Anti-Dilutive Outstanding Stock Awards Issued Under Share-Based Compensation Plans Three Months Ended July 31, Nine Months Ended July 31, (in millions) 2017 2016 2017 2016 Anti-dilutive — — — 0.1 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Jul. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value 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 July 31, 2017 October 31, 2016 Assets held in funded deferred compensation plan (1) 1 $ 4.5 $ 4.9 Investments in auction rate securities (2) 3 8.0 8.0 Interest rate swaps (3) 2 2.4 0.2 Cash and cash equivalents (4) 1 47.7 53.5 Insurance deposits (5) 1 11.2 11.2 Contingent consideration liability (6) 3 0.9 3.8 Line of credit (7) 2 264.7 268.3 (1) 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. (2) The fair value of investments in auction rate securities is based on discounted cash flow valuation models, primarily utilizing unobservable inputs, including assumptions about the underlying collateral, credit risks associated with the issuer, credit enhancements associated with financial insurance guarantees, and the possibility of the security being re-financed by the issuer or having a successful auction. These amounts are included in “Other investments” on the accompanying unaudited consolidated balance sheets. See Note 8 , “Auction Rate Securities,” for further information. (3) 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 LIBOR forward rates at the end of the period. These interest rate swaps are included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. See Note 10 , “Credit Facility,” for further information. (4) Cash and cash equivalents are stated at nominal value, which equals fair value. (5) 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 9 , “Insurance,” for further information. (6) Certain of our acquisitions involve the payment of contingent consideration. The fair value of these liabilities is based on the expected achievement of certain pre-established revenue goals. At October 31, 2016, we had one contingent consideration liability included in “Other accrued liabilities” on the accompanying unaudited consolidated balance sheets. During the nine months ended July 31, 2017 , the revenue-related target for that acquisition was achieved, resulting in the payment of $3.8 million to the seller. In connection with the MSI acquisition, we recorded one new contingent consideration liability during 2017, which is included in “Other noncurrent liabilities” on the accompanying unaudited consolidated balance sheets. (7) Represents outstanding borrowings under our syndicated line of credit. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit approximates the fair value. See Note 10 , “Credit Facility,” for further information. During the nine months ended July 31, 2017 , we had no transfers of assets or liabilities between any of the hierarchy levels. Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis We measure certain assets at fair value on a non-recurring basis, which are subject to fair value adjustments in certain circumstances. These assets can include: goodwill; intangible assets; property, plant and equipment; and long-lived assets that have been reduced to fair value when they are held for sale. During the second quarter of 2017, we received an offer from a strategic buyer to purchase our Government Services business for approximately $35.0 million , which was higher than our previous estimate of fair value less costs to sell. As a result, during the second quarter of 2017, we recorded a $17.4 million impairment recovery to adjust the fair value of certain previously impaired assets to the valuation of the assets as implied by the agreed-upon sales price, less estimated costs to sell. The initial measurement of the impairment recovery represented a Level 3 input under the fair value hierarchy. In addition, on November 1, 2016, we reorganized our reportable segments and goodwill reporting units. In connection with this reorganization, we performed a goodwill impairment test immediately before and after the segment realignment. We estimated the fair value of goodwill using the income and market approaches, which utilize expected cash flows using Level 3 inputs. This analysis required the exercise of significant judgments, including the identification of reporting units as well as the evaluation of recent indicators of market activity, estimated future cash flows, discount rates, and other factors. As a result of this analysis, we concluded that the estimated fair value of each reporting unit substantially exceeded its carrying value and that no further evaluation of impairment was necessary. |
Auction Rate Securities
Auction Rate Securities | 9 Months Ended |
Jul. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Auction Rate Securities | AUCTION RATE SECURITIES At July 31, 2017 and October 31, 2016 , we held investments in auction rate securities from two different issuers that had an aggregate original principal amount of $10.0 million and an amortized cost and fair value of $8.0 million . These two auction rate securities are debt instruments with stated maturities in 2036 and 2050 . The interest rates for these securities are designed to be reset through Dutch auctions approximately every thirty days, but auctions for these securities have not occurred since August 2007 . At July 31, 2017 and October 31, 2016 , there were no unrealized gains or losses on our auction rate securities included in accumulated other comprehensive loss, net of taxes (“AOCL”), and the total amount of other-than-temporary impairment credit loss on our auction rate security investments included in our retained earnings was $2.0 million . Significant Assumptions Used to Determine the Fair Values of Our Auction Rate Securities Assumption July 31, 2017 October 31, 2016 Discount rates L + 0.33% and L + 0.62% L + 0.46% and L + 1.30% Yields 2.15%, L + 2.00% 2.15%, L + 2.00% Average expected lives 4 – 10 years 4 – 10 years L – One Month LIBOR |
Insurance
Insurance | 9 Months Ended |
Jul. 31, 2017 | |
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 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 $0.4 million of exposure on a per-participant, per-year basis with respect to claims. The adequacy of our reserves for workers’ compensation, general liability, automobile liability, and property damage insurance claims is based upon known trends and events and the actuarial estimates of required reserves considering the most recently completed actuarial reports. We refine our best estimate of insurance claims reserves as information becomes available. The results of actuarial studies are used to estimate our insurance rates and insurance reserves for future periods and to adjust reserves, if appropriate, for prior years. During 2017, we performed both an actuarial review and an annual actuarial evaluation. As a result of these studies, we increased our reserves for claims related to prior periods by $22.3 million during 2017, as described below. Actuarial Studies Performed During 2017 During the three months ended January 31, 2017, we performed an actuarial review of the majority of our casualty insurance programs, considering changes in claim developments and claim payment activity for the period commencing May 1, 2016 and ending October 31, 2016. During the three months ended July 31, 2017, we performed an annual actuarial evaluation of the majority of our casualty insurance programs, evaluating all changes made to claims reserves and claim payment activity for the period commencing May 1, 2016 and ending April 30, 2017 for all policy years having open claims. The studies excluded claims relating to certain previously acquired businesses, which we expect to evaluate during the fourth quarter of 2017. Both the actuarial review and annual actuarial evaluation indicated safety initiatives we have implemented have had a modest impact on our claim costs in the most recent years, however there have been unfavorable developments in ultimate losses that we estimated for general liability and workers’ compensation claims related to prior years, as described below. The actuarial studies indicated a decrease over the most recent years in the total number of reported claims related to our general liability program, particularly with respect to bodily injury claims, in addition to property damage claims. However, we experienced adverse developments in prior year claims, which are largely attributable to adjustments related to certain bodily injury claims and to losses for property damage. We are experiencing a reduced frequency of claims in our workers’ compensation program. However, due to increases in projected costs and severity of claims for a number of prior year claims in California and New York, we increased our estimate of ultimate losses for workers’ compensation. Statutory, regulatory, and legal developments have contributed to the increase in our estimated losses. Based on the results of the actuarial studies performed during 2017, which included analyzing recent loss development patterns, comparing the loss development against benchmarks, and applying actuarial projection methods to determine the estimate of ultimate losses, we increased our total reserves for known claims as well as our estimate of the loss amounts associated with incurred but not reported claims by $10.0 million during the first half of 2017 and by an additional $12.3 million during the third quarter of 2017, for a total adjustment related to prior year claims of $22.3 million during 2017. This adjustment was $9.5 million lower than the total adjustment related to prior year claims of $31.8 million in 2016. Insurance Related Balances and Activity (in millions) July 31, 2017 October 31, 2016 Insurance claim reserves excluding medical and dental $ 449.3 $ 417.9 Medical and dental claim reserves 8.3 5.9 Insurance recoverables 74.6 69.7 At July 31, 2017 and October 31, 2016 , insurance recoverables are included in “Other current assets” and “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. Instruments Used to Collateralize Our Insurance Obligations (in millions) July 31, 2017 October 31, 2016 Standby letters of credit $ 118.8 $ 118.3 Surety bonds 59.9 57.2 Restricted insurance deposits 11.2 11.2 Total $ 189.9 $ 186.7 |
Credit Facility
Credit Facility | 9 Months Ended |
Jul. 31, 2017 | |
Debt Disclosure [Abstract] | |
Credit Facility | CREDIT FACILITY On November 30, 2010 , we entered into a $800.0 million syndicated credit agreement pursuant to which we obtained an unsecured revolving credit facility (the “ 2010 Facility ”). This credit agreement, as amended from time to time, is referred to as the “ 2010 Credit Agreement .” The 2010 Credit Agreement contained certain financial covenants that included a maximum leverage ratio of 3.25 to 1.0 and a minimum fixed charge coverage ratio of 1.50 to 1.0 . In addition, we were required to maintain a consolidated net worth in an amount not less than the sum of (i) $570.0 million , (ii) 50% of our consolidated net income (with no deduction for net loss), and (iii) 100% of our aggregate increases in stockholders’ equity beginning on November 30, 2010 . As of July 31, 2017 , we were in compliance with the covenants under our 2010 Credit Agreement . On September 1, 2017, we refinanced and replaced our 2010 Facility with a new syndicated secured credit facility. Refer to Note 15 , “Subsequent Events,” for additional details. 2010 Facility Information (in millions) July 31, 2017 October 31, 2016 Cash borrowings $ 264.7 $ 268.3 Standby letters of credit 127.7 130.9 Interest Rate Swaps We enter into interest rate swaps to manage the interest rate risk associated with our floating-rate, LIBOR-based borrowings under our 2010 Facility . Under these arrangements, we typically pay a fixed interest rate in exchange for LIBOR-based variable interest throughout the life of the agreement. During 2016, we entered into three interest rate swap agreements with effective dates of April 7, 2016 and May 11, 2016, an underlying aggregate notional amount of $105.0 million , and a fixed interest rate of 1.05% . These swaps were designated and accounted for as cash flow hedges from inception and mature on April 7, 2021 and May 11, 2021. See Note 7 , “Fair Value of Financial Instruments,” regarding the valuation of our interest rate swaps. We initially report the effective portion of a derivative’s mark-to-market gain or loss as a component of AOCL and subsequently reclassify the gain or loss into earnings when the hedged transactions occur and affect earnings. The ineffective portion of the gain or loss is reported in earnings immediately. Interest payables and receivables under the swap agreements are accrued and recorded as adjustments to interest expense. At July 31, 2017 and October 31, 2016 , the amounts recorded in AOCL were $1.4 million and $0.2 million , respectively. At July 31, 2017 , the amount expected to be reclassified from AOCL to earnings during the next twelve months was $0.6 million . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Jul. 31, 2017 | |
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 July 31, 2017 , these letters of credit and surety bonds totaled $127.7 million and $523.0 million , respectively. Guarantees In some instances, we offer clients guaranteed energy savings under certain energy savings contracts. At July 31, 2017 and October 31, 2016 , total guarantees were $127.7 million and $60.9 million , respectively, and these guarantees extend through 2036 and 2031 , respectively. We accrue for the estimated cost of guarantees when it is probable that a liability has been incurred and the amount can be reasonably estimated. Historically, we have not incurred any material losses in connection with these guarantees. In connection with an unconsolidated joint venture in which one of our subsidiaries has a 33% ownership interest, that subsidiary and the other joint venture partners have each jointly and severally guaranteed the obligations of the joint venture to perform under certain contracts extending through 2019. Annual revenues relating to the underlying contracts are approximately $35 million . Should the joint venture be unable to perform under these contracts, the joint venture partners would be jointly and severally liable for any losses incurred by the client due to the failure to perform. Sales Tax Audits We collect sales tax from clients and remit those collections to the applicable states. When clients fail to pay their invoices, including the amount of any sales tax that we paid on their behalf, in some cases we are entitled to seek a refund of that amount of sales tax from the applicable state. Sales tax laws and regulations enacted by the various states are subject to interpretation, and our compliance with such laws is routinely subject to audit and review by such states. Audit risk is concentrated in several states, and these states are conducting ongoing audits. The outcomes of ongoing and any future audits and changes in the states’ interpretation of the sales tax laws and regulations could materially adversely impact our results of operations. 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 July 31, 2017 , the total amount accrued for all probable litigation losses where a reasonable estimate of the loss could be made was $71.7 million . This $71.7 million includes the remaining accrual of $60.0 million in connection with the unpaid portion of the $115.0 million settlement of the Augustus and Karapetyan cases discussed below, as well as an accrual of $4.8 million for payroll taxes related to the Augustus settlement. The remaining payments under the Augustus settlement were made on August 29, 2017. 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. 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 $18 million . Factors underlying this estimated range of loss may change from time to time, and actual results may vary significantly from this estimate. 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. While the results of these lawsuits, claims, and proceedings cannot be predicted with any certainty, our management believes that the final outcome of these matters will not have a material adverse effect on our financial position, results of operations, or cash flows. Certain Legal Proceedings Certain lawsuits to which we are a party are discussed below. In determining whether to include any particular lawsuit or other proceeding, 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 Augustus, Hall, and Davis, et al. v. American Commercial Security Services, filed July 12, 2005, in the Superior Court of California, Los Angeles County (the “Augustus case”) The Augustus case is a certified class action involving violations of certain California state laws relating to rest breaks. The case centered on whether requiring security guards to remain on call during rest breaks violated Section 226.7 of the California Labor Code. On July 31, 2012, the Superior Court of California, Los Angeles County (the “Superior Court”), entered summary judgment in favor of plaintiffs in the amount of approximately $89.7 million (the “common fund”). Subsequently, the Superior Court also awarded plaintiffs’ attorneys’ fees of approximately $4.5 million in addition to approximately 30% of the common fund. Under California law, post-judgment interest on a judgment accrues at a rate of 10% simple interest per year from the date the judgment is entered until it is satisfied. We appealed the Superior Court’s rulings to the Court of Appeals of the State of California, Second Appellate District (the “Appeals Court”). On December 31, 2014 , the Appeals Court issued its opinion, reversing the judgment in favor of the plaintiffs and vacating the award of $89.7 million in damages and the attorneys’ fees award. The plaintiffs filed a petition for review with the California Supreme Court on March 4, 2015, and on April 29, 2015, the California Supreme Court granted the plaintiffs’ petition. On December 22, 2016, the California Supreme Court rendered its decision, holding that on-call and on-duty rest breaks are prohibited by California law, and reversed the Appeals Court judgment on this issue. The amount of post-judgment interest as of December 22, 2016 was approximately $41.2 million . On February 6, 2017, ABM Security Services, Inc., a wholly-owned subsidiary of ABM Industries Incorporated, entered into a Class Action Settlement and Release with plaintiffs Jennifer Augustus, Delores Hall, Emanuel Davis, and Carlton Anthony Waite, on behalf of themselves and the settlement class members, to settle the Augustus case on a class-wide basis for $110.0 million (the “Augustus Settlement Agreement”). On March 17, 2017, the Augustus Settlement Agreement was amended to address certain procedural matters, and it received final approval of the Superior Court on July 6, 2017. The Augustus Settlement Agreement called for two payments of $55.0 million each. The first payment was made on July 19, 2017, and the second payment, plus an additional payment of $4.8 million for payroll taxes, was made on August 29, 2017 . Karapetyan v. ABM Industries Incorporated and ABM Security Services, Inc., et al. filed on October 23, 2015, pending in the United States District Court for the Central District of California (the “Karapetyan case”) The Karapetyan case is a putative class action in which the plaintiff seeks to represent a class of security guards who worked during time periods subsequent to the class period in the Augustus case. The plaintiff alleges that ABM violated certain California state laws relating to meal and rest breaks and other wage and hour claims. On April 17, 2017, ABM Industries Incorporated, ABM Security Services, Inc., ABM Onsite Services, Inc., and ABM Onsite Services – West, Inc. entered into a Class Action Settlement and Release with plaintiff Vardan Karapetyan, on behalf of himself and the settlement class members, to settle the Karapetyan case (the “Karapetyan Settlement Agreement”) on a class-wide basis for $5.0 million . This settlement is contingent upon the final approval by the United States District Court for the Central District of California. The Consolidated Cases of Bucio and Martinez v. ABM Janitorial Services filed on April 7, 2006, in the Superior Court of California, County of San Francisco (the “Bucio case”) The Bucio case is a purported class action involving allegations that we failed to track work time and provide breaks. 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 have appealed the class certification issues. The trial court stayed the underlying lawsuit pending the decision in the appeal. On August 30, 2012 , the plaintiffs filed their appellate brief on the class certification issues. We filed our responsive brief on November 15, 2012 . On January 18, 2017, the appeals court invited the parties to file supplemental letter briefs. ABM and plaintiffs each filed their respective supplemental letter briefs with the court on February 8, 2017. Hussein and Hirsi v. Air Serv Corporation filed on January 20, 2016, pending in the United States District Court for the Western District of Washington at Seattle (the “Hussein case”) The Hussein case is a certified class action involving a class of certain hourly Air Serv employees at Seattle-Tacoma International Airport in SeaTac, Washington. The plaintiffs allege that Air Serv violated a minimum wage requirement in an ordinance applicable to certain employers in the local city of SeaTac (the “Ordinance”). Plaintiffs seek retroactive wages, double damages, interest, and attorneys’ fees. This matter was removed to federal court. In a separate lawsuit brought by Filo Foods, LLC, Alaska Airlines, and several other employers at SeaTac airport, the King County Superior Court issued a decision that invalidated the Ordinance as it applied to workers at SeaTac airport. Subsequently, the Washington Supreme Court reversed the Superior Court’s decision. There are disputes in federal court concerning the legality of the Ordinance, its applicability to employers at SeaTac airport, and whether the plaintiffs are entitled to retroactive wages, double damages, interest, and attorneys’ fees. On February 7, 2017, a new lawsuit styled Abdirizak Isse et al. v. Air Serv Corporation (the “Isse case”) , pending in the Superior Court of Washington for King County, was filed against Air Serv on behalf of sixty individual plaintiffs (who would otherwise be members of the Hussein class), who allege failure to comply with both the minimum wage provision and the sick and safe time provision of the Ordinance. The plaintiffs seek retroactive wages and sick benefits, double damages for wages and sick benefits, interest, and attorneys’ fees. The Isse case has since been expanded to approximately two hundred twenty individual plaintiffs. In the event of a judgment against us in the Hussein case or the Isse case, we intend to seek reimbursement from our clients. |
Common Stock
Common Stock | 9 Months Ended |
Jul. 31, 2017 | |
Equity [Abstract] | |
Common Stock | COMMON STOCK On September 2, 2015, our Board of Directors authorized a program to repurchase up to $200.0 million shares of our common stock. Purchases may take place on the open market or otherwise, and all or part of the repurchases may be made pursuant to Rule 10b5-1 plans or in privately negotiated transactions. The timing of repurchases is at our discretion and will depend upon several factors, including market and business conditions, future cash flows, share price, and share availability. Repurchased shares are retired and returned to an authorized but unissued status. The repurchase program may be suspended or discontinued at any time without prior notice. At July 31, 2017 , authorization for $134.1 million of repurchases remained under our share repurchase program. We do not anticipate additional repurchases in the near future. Repurchase Activity Nine Months Ended July 31, (in millions, except per share amounts) 2017 2016 Total number of shares purchased 0.2 1.0 Average price paid per share $ 40.07 $ 31.42 Total cash paid for share repurchases $ 7.9 $ 31.2 |
Income Taxes
Income Taxes | 9 Months Ended |
Jul. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our quarterly provision for income taxes from continuing operations is calculated using an estimated annual effective income tax rate, which is adjusted for discrete items that occur during the reporting period. Our income taxes for the three and nine months ended July 31, 2017 were favorably impacted by a benefit of $15.8 million , including interest of $1.2 million , related to expiring statute of limitations for an uncertain tax position. In addition, the nine months ended July 31, 2017 also benefited from $2.7 million of excess tax benefits related to the vesting of share-based compensation awards, $1.8 million of tax deductions for energy efficient government buildings, and the 2017 Work Opportunity Tax Credits (“WOTC”) for new hires. Our income taxes for the three and nine months ended July 31, 2016 were favorably impacted by a benefit of $19.0 million , including interest of $1.0 million , related to expiring statutes of limitations for uncertain tax positions, $1.8 million of excess tax benefits related to the vesting of share-based compensation awards, and the 2016 WOTC for new hires. In addition, the nine months ended July 31, 2016 also benefited from $4.9 million of WOTC from the retroactive reinstatement of the WOTC for calendar year 2015 and $1.2 million of tax deductions for energy efficient government buildings. |
Segment Information
Segment Information | 9 Months Ended |
Jul. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Effective November 1, 2016, we reorganized our reportable segments to reflect how we now manage our business by industry group. After establishing this industry-based structure, our reportable segments consist of Business & Industry (“B&I”), Aviation, Emerging Industries Group, and Technical Solutions, as further described below. Refer to Note 2 , “Basis of Presentation and Significant Accounting Policies,” for information related to our former Government Services business. ONGOING REPORTABLE SEGMENTS AND DESCRIPTIONS B&I B&I, our largest reportable segment, encompasses janitorial, facilities engineering, and parking services for commercial real estate properties, sports and entertainment venues, and industrial and manufacturing sites. Aviation Aviation includes services supporting airlines and airports ranging from parking and janitorial to passenger assistance, catering, air cabin maintenance, and transportation. Aviation also includes an investment in an unconsolidated affiliate that was previously part of our government business under our legacy Building & Energy Solutions segment. Emerging Industries Group Our Emerging Industries Group is comprised of our Education, Healthcare, and High Tech industry groups. Services include janitorial, facilities engineering, and parking services for clients in these industries. Technical Solutions Technical Solutions provides specialized mechanical and electrical services. These services can also be leveraged for cross-selling within B&I, Aviation, and the Emerging Industries Group, both domestically and internationally. Financial Information by Reportable Segment Three Months Ended July 31, Nine Months Ended July 31, (in millions) 2017 2016 2017 2016 Revenues Business & Industry $ 749.9 $ 733.4 $ 2,237.5 $ 2,207.4 Aviation 259.1 219.1 723.3 625.9 Emerging Industries Group 190.5 200.6 583.2 594.7 Technical Solutions 106.7 115.4 325.2 309.8 Government Services 12.3 28.3 86.5 84.6 $ 1,318.4 $ 1,296.9 $ 3,955.6 $ 3,822.4 Operating profit (loss) Business & Industry $ 42.2 $ 40.7 $ 115.6 $ 101.8 Aviation 6.2 8.3 19.2 17.7 Emerging Industries Group 11.6 16.9 36.0 44.7 Technical Solutions 9.8 10.0 28.6 18.4 Government Services 1.7 (1.0 ) 21.8 (2.3 ) Corporate (47.5 ) (55.0 ) (118.5 ) (130.5 ) Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services (1.0 ) (1.3 ) (3.4 ) (4.6 ) Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions (0.4 ) (0.1 ) (1.8 ) (1.2 ) 22.6 18.5 97.4 44.0 Income from unconsolidated affiliates, net 1.2 2.1 3.6 5.3 Interest expense (2.8 ) (2.6 ) (9.1 ) (7.7 ) Income from continuing operations before income taxes $ 21.0 $ 18.0 $ 91.9 $ 41.6 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, restructuring and related costs, certain adjustments resulting from actuarial developments of self-insurance reserves, and direct acquisition costs. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Jul. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Acquisition of GCA Services Group On September 1, 2017, we acquired GCA Holding Corp., the parent company of GCA Services Group (“GCA”), from affiliates of Thomas H. Lee Partners, L.P., Goldman Sachs Merchant Banking Division, and other GCA shareholders. GCA is a provider of integrated facility services to educational institutions and commercial facilities. We acquired this business for approximately $1.25 billion , consisting of $851.0 million in cash, subject to certain adjustments as set forth in the Merger Agreement, and approximately 9.5 million shares of ABM common stock. As a result of this transaction, affiliates of Thomas H. Lee Partners, L.P. and Goldman Sachs Merchant Banking Division own, in the aggregate, approximately 14% of our outstanding shares. Due to the timing of the acquisition and subsequent integration of GCA’s standalone operations, GCA will be separately managed and reported for the fourth quarter of 2017. We will begin to integrate GCA into our industry group model in the first quarter of 2018. While we are currently evaluating the impact of this acquisition on our reportable segments, we anticipate our Education industry group will become a reportable segment in the first quarter of 2018. We will account for this acquisition under the acquisition method of accounting. The accounting for this acquisition was incomplete at the time the Financial Statements were issued. Credit Facility In connection with the GCA acquisition, we refinanced and replaced our 2010 Facility with a new syndicated secured credit facility (the “New Credit Facility”) consisting of a $900 million revolving credit facility and an $800 million amortizing term loan with a five -year term. The revolving credit facility reduces to $800 million after one year and has an expiration date of September 1, 2022. The interest rate on the revolving credit facility and the term loan is 1-month LIBOR plus a spread that is based upon our leverage ratio. The spread ranges from 1.00% to 2.25% for Eurocurrency loans and zero to 1.25% for base rate loans. We also pay a commitment fee, ranging from 0.200% to 0.350% , based upon our leverage ratio, on the average daily unused portion of the revolving credit facility. Financial covenants under the New Credit Facility include a maximum leverage ratio of 4.75 to 1.0 , which adjusts to 3.50 to 1.0 by July 2020, and a minimum fixed charge ratio of 1.50 to 1.0 . We expect to be in compliance with the covenants under the New Credit Facility. The obligations under the New Credit Facility are guaranteed by the material, domestic wholly owned subsidiaries of ABM, and are secured by a pledge of substantially all of the existing and future property and assets of ABM and the subsidiary guarantors, including a pledge of the capital stock of the domestic subsidiaries of ABM and 65% of the capital stock of certain foreign subsidiaries held by ABM and the subsidiary guarantors, subject to certain exceptions. Hurricane Harvey Hurricane Harvey made landfall near Corpus Christi, Texas, on Friday, August 25, 2017 and also impacted the Houston area as a tropical storm with significant rain and flooding. The impact of Hurricane Harvey on our business is currently unknown, as the flooding it caused has disrupted operations at our Shared Services Center in Sugar Land, Texas, and impacted services we provide to clients in the Houston area, and the timeframe to resume operations and provision of services to impacted clients is uncertain. We have begun to mobilize continuity plans and set up both satellite and regional offices to minimize Hurricane Harvey’s impact on our business processes. |
Basis of Presentation and Sig21
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Jul. 31, 2017 | |
Accounting Policies [Abstract] | |
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 fiscal year ended October 31, 2016 . Unless otherwise noted, all references to years are to our fiscal year, which ends on October 31 . |
Management Reimbursement Revenue by Segment | We operate certain parking facilities under managed location arrangements. Under these arrangements, we manage the parking facility for a management fee and pass through the revenue and expenses associated with the facility to the owner. These revenues and expenses are reported in equal amounts as costs reimbursed from our managed locations |
Basis of Presentation and Sig22
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
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 July 31, Nine Months Ended July 31, (in millions) 2017 2016 2017 2016 Business & Industry $ 59.3 $ 57.4 $ 175.3 $ 171.1 Aviation 21.9 19.4 54.7 60.2 Emerging Industries Group 4.5 4.5 13.9 12.6 Total $ 85.8 $ 81.3 $ 243.8 $ 243.8 |
Restructuring and Related Cos23
Restructuring and Related Costs (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Liabilities | Rollforward of Restructuring and Related Liabilities (in millions) External Support Fees Employee Severance Other Project Fees Lease Exit Total Balance, October 31, 2016 $ 1.2 $ 3.8 $ 0.5 $ 2.5 $ 8.0 Costs recognized 8.6 1.0 4.8 1.6 16.0 Payments (9.8 ) (3.2 ) (4.9 ) (2.3 ) (20.2 ) Non-cash charges — — — (0.2 ) (0.2 ) Balance, July 31, 2017 $ — $ 1.6 $ 0.4 $ 1.6 $ 3.7 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income Per Common Share Calculations | Basic and Diluted Net Income Per Common Share Calculations Three Months Ended July 31, Nine Months Ended July 31, (in millions, except per share amounts) 2017 2016 2017 2016 Income from continuing operations $ 32.9 $ 32.9 $ 80.6 $ 53.3 Net loss from discontinued operations — (1.8 ) (73.2 ) (3.9 ) Net income $ 32.9 $ 31.1 $ 7.4 $ 49.4 Weighted-average common and common equivalent shares outstanding — Basic 56.1 56.2 56.0 56.4 Effect of dilutive securities Restricted stock units 0.3 0.3 0.3 0.2 Stock options 0.2 0.2 0.2 0.2 Performance shares — 0.1 0.1 0.1 Weighted-average common and common equivalent shares outstanding — Diluted 56.6 56.8 56.6 56.9 Net income per common share — Basic Income from continuing operations $ 0.59 $ 0.58 $ 1.44 $ 0.94 Loss from discontinued operations — (0.03 ) (1.31 ) (0.06 ) Net income $ 0.59 $ 0.55 $ 0.13 $ 0.88 Net income per common share — Diluted Income from continuing operations $ 0.58 $ 0.58 $ 1.42 $ 0.94 Loss from discontinued operations — (0.03 ) (1.29 ) (0.07 ) Net income $ 0.58 $ 0.55 $ 0.13 $ 0.87 |
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 July 31, Nine Months Ended July 31, (in millions) 2017 2016 2017 2016 Anti-dilutive — — — 0.1 |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
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 July 31, 2017 October 31, 2016 Assets held in funded deferred compensation plan (1) 1 $ 4.5 $ 4.9 Investments in auction rate securities (2) 3 8.0 8.0 Interest rate swaps (3) 2 2.4 0.2 Cash and cash equivalents (4) 1 47.7 53.5 Insurance deposits (5) 1 11.2 11.2 Contingent consideration liability (6) 3 0.9 3.8 Line of credit (7) 2 264.7 268.3 (1) 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. (2) The fair value of investments in auction rate securities is based on discounted cash flow valuation models, primarily utilizing unobservable inputs, including assumptions about the underlying collateral, credit risks associated with the issuer, credit enhancements associated with financial insurance guarantees, and the possibility of the security being re-financed by the issuer or having a successful auction. These amounts are included in “Other investments” on the accompanying unaudited consolidated balance sheets. See Note 8 , “Auction Rate Securities,” for further information. (3) 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 LIBOR forward rates at the end of the period. These interest rate swaps are included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. See Note 10 , “Credit Facility,” for further information. (4) Cash and cash equivalents are stated at nominal value, which equals fair value. (5) 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 9 , “Insurance,” for further information. (6) Certain of our acquisitions involve the payment of contingent consideration. The fair value of these liabilities is based on the expected achievement of certain pre-established revenue goals. At October 31, 2016, we had one contingent consideration liability included in “Other accrued liabilities” on the accompanying unaudited consolidated balance sheets. During the nine months ended July 31, 2017 , the revenue-related target for that acquisition was achieved, resulting in the payment of $3.8 million to the seller. In connection with the MSI acquisition, we recorded one new contingent consideration liability during 2017, which is included in “Other noncurrent liabilities” on the accompanying unaudited consolidated balance sheets. (7) Represents outstanding borrowings under our syndicated line of credit. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit approximates the fair value. See Note 10 , “Credit Facility,” for further information. |
Auction Rate Securities (Tables
Auction Rate Securities (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Significant Assumptions Used to Determine Fair Value of Auction Rate Securities | Significant Assumptions Used to Determine the Fair Values of Our Auction Rate Securities Assumption July 31, 2017 October 31, 2016 Discount rates L + 0.33% and L + 0.62% L + 0.46% and L + 1.30% Yields 2.15%, L + 2.00% 2.15%, L + 2.00% Average expected lives 4 – 10 years 4 – 10 years L – One Month LIBOR |
Insurance (Tables)
Insurance (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
Insurance [Abstract] | |
Schedule of Insurance Related Balances and Activity | Insurance Related Balances and Activity (in millions) July 31, 2017 October 31, 2016 Insurance claim reserves excluding medical and dental $ 449.3 $ 417.9 Medical and dental claim reserves 8.3 5.9 Insurance recoverables 74.6 69.7 |
Schedule of Instruments Used to Collateralize Insurance Obligations | Instruments Used to Collateralize Our Insurance Obligations (in millions) July 31, 2017 October 31, 2016 Standby letters of credit $ 118.8 $ 118.3 Surety bonds 59.9 57.2 Restricted insurance deposits 11.2 11.2 Total $ 189.9 $ 186.7 |
Credit Facility (Tables)
Credit Facility (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Line of Credit Facilities | 2010 Facility Information (in millions) July 31, 2017 October 31, 2016 Cash borrowings $ 264.7 $ 268.3 Standby letters of credit 127.7 130.9 |
Common Stock (Tables)
Common Stock (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
Equity [Abstract] | |
Schedule of Share Repurchase Activity | Repurchase Activity Nine Months Ended July 31, (in millions, except per share amounts) 2017 2016 Total number of shares purchased 0.2 1.0 Average price paid per share $ 40.07 $ 31.42 Total cash paid for share repurchases $ 7.9 $ 31.2 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Jul. 31, 2017 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenues and Operating Profit (Loss) from Segments to Consolidated | Financial Information by Reportable Segment Three Months Ended July 31, Nine Months Ended July 31, (in millions) 2017 2016 2017 2016 Revenues Business & Industry $ 749.9 $ 733.4 $ 2,237.5 $ 2,207.4 Aviation 259.1 219.1 723.3 625.9 Emerging Industries Group 190.5 200.6 583.2 594.7 Technical Solutions 106.7 115.4 325.2 309.8 Government Services 12.3 28.3 86.5 84.6 $ 1,318.4 $ 1,296.9 $ 3,955.6 $ 3,822.4 Operating profit (loss) Business & Industry $ 42.2 $ 40.7 $ 115.6 $ 101.8 Aviation 6.2 8.3 19.2 17.7 Emerging Industries Group 11.6 16.9 36.0 44.7 Technical Solutions 9.8 10.0 28.6 18.4 Government Services 1.7 (1.0 ) 21.8 (2.3 ) Corporate (47.5 ) (55.0 ) (118.5 ) (130.5 ) Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services (1.0 ) (1.3 ) (3.4 ) (4.6 ) Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions (0.4 ) (0.1 ) (1.8 ) (1.2 ) 22.6 18.5 97.4 44.0 Income from unconsolidated affiliates, net 1.2 2.1 3.6 5.3 Interest expense (2.8 ) (2.6 ) (9.1 ) (7.7 ) Income from continuing operations before income taxes $ 21.0 $ 18.0 $ 91.9 $ 41.6 |
The Company and Nature of Ope31
The Company and Nature of Operations - Narrative (Details) | 9 Months Ended |
Jul. 31, 2017segmentindustry_group | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of industry groups | industry_group | 5 |
Number of Technical Solutions segments | segment | 1 |
Basis of Presentation and Sig32
Basis of Presentation and Significant Accounting Policies - Government Services (Details) - USD ($) $ in Millions | May 31, 2017 | Jul. 31, 2017 | Jul. 31, 2017 | Jul. 31, 2016 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of Government Services business, consideration | $ 35.5 | $ 0 | ||
Disposal Group, Held-for-sale, Not Discontinued Operations | Government Services | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Sale of Government Services business, consideration | $ 35.5 | |||
Gain on sale of Government Services business | $ (1.1) |
Basis of Presentation and Sig33
Basis of Presentation and Significant Accounting Policies - Prior Year Reclassifications (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Prior Year Reclassifications [Line Items] | ||||
Operating expenses | $ 1,184.5 | $ 1,161.3 | $ 3,544.1 | $ 3,430.1 |
Selling, general and administrative expenses | $ 101.3 | 108 | $ 299.2 | 310.2 |
Reclassification adjustment | ||||
Prior Year Reclassifications [Line Items] | ||||
Operating expenses | (5.2) | (15.1) | ||
Selling, general and administrative expenses | $ 5.2 | $ 15.1 |
Basis of Presentation and Sig34
Basis of Presentation and Significant Accounting Policies - Management Reimbursement Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | $ 85.8 | $ 81.3 | $ 243.8 | $ 243.8 |
Business & Industry | ||||
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | 59.3 | 57.4 | 175.3 | 171.1 |
Aviation | ||||
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | 21.9 | 19.4 | 54.7 | 60.2 |
Emerging Industries Group | ||||
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | $ 4.5 | $ 4.5 | $ 13.9 | $ 12.6 |
Restructuring and Related Cos35
Restructuring and Related Costs - Restructuring and Related Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative charges | $ 57.6 | $ 57.6 | ||
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 8 | |||
Costs recognized | 5.2 | $ 3.3 | 16 | $ 19.3 |
Payments | (20.2) | |||
Non-cash charges | (0.2) | |||
Balance, end of period | 3.7 | 3.7 | ||
External Support Fees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative charges | 24.5 | 24.5 | ||
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 1.2 | |||
Costs recognized | 8.6 | |||
Payments | (9.8) | |||
Non-cash charges | 0 | |||
Balance, end of period | 0 | 0 | ||
Employee Severance | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative charges | 14.3 | 14.3 | ||
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 3.8 | |||
Costs recognized | 1 | |||
Payments | (3.2) | |||
Non-cash charges | 0 | |||
Balance, end of period | 1.6 | 1.6 | ||
Other Project Fees | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative charges | 9.4 | 9.4 | ||
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 0.5 | |||
Costs recognized | 4.8 | |||
Payments | (4.9) | |||
Non-cash charges | 0 | |||
Balance, end of period | 0.4 | 0.4 | ||
Lease Exit | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative charges | 4.7 | 4.7 | ||
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | 2.5 | |||
Costs recognized | 1.6 | |||
Payments | (2.3) | |||
Balance, end of period | 1.6 | 1.6 | ||
Asset Impairment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Cumulative charges | $ 4.7 | $ 4.7 |
Acquisitions - Other Acquisitio
Acquisitions - Other Acquisitions (Details) - USD ($) $ in Millions | Dec. 01, 2016 | Sep. 30, 2016 | Dec. 01, 2015 | Jul. 31, 2017 | Oct. 31, 2016 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 926.9 | $ 912.8 | |||
Mechanical Solutions Inc | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 12.6 | ||||
Contingent consideration liability | 1 | ||||
OFJ Connections Ltd | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 6.3 | ||||
8 Solutions Ltd | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 16.1 | ||||
Westway Services Holdings | |||||
Business Acquisition [Line Items] | |||||
Purchase price | $ 81 | ||||
Goodwill | 53.8 | ||||
Intangible assets, other than goodwill | $ 22.5 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Net loss from discontinued operations | $ 0 | $ 1.8 | $ 73.2 | $ 3.9 |
Pretax loss from discontinued operations | $ 123.7 |
Net Income Per Common Share - C
Net Income 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 | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||||
Income from continuing operations | $ 32.9 | $ 32.9 | $ 80.6 | $ 53.3 |
Net loss from discontinued operations | 0 | (1.8) | (73.2) | (3.9) |
Net income | $ 32.9 | $ 31.1 | $ 7.4 | $ 49.4 |
Weighted-average common and common equivalent shares outstanding - Basic (in shares) | 56.1 | 56.2 | 56 | 56.4 |
Effect of dilutive securities | ||||
Weighted-average common and common equivalent shares outstanding - Diluted (in shares) | 56.6 | 56.8 | 56.6 | 56.9 |
Net income per common share — Basic | ||||
Income from continuing operations (in usd per share) | $ 0.59 | $ 0.58 | $ 1.44 | $ 0.94 |
Loss from discontinued operations (in usd per share) | 0 | (0.03) | (1.31) | (0.06) |
Net income (in usd per share) | 0.59 | 0.55 | 0.13 | 0.88 |
Net income per common share — Diluted | ||||
Income from continuing operations (in usd per share) | 0.58 | 0.58 | 1.42 | 0.94 |
Loss from discontinued operations (in usd per share) | 0 | (0.03) | (1.29) | (0.07) |
Net income (in usd per share) | $ 0.58 | $ 0.55 | $ 0.13 | $ 0.87 |
Restricted stock units | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities (in shares) | 0.3 | 0.3 | 0.3 | 0.2 |
Stock options | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities (in shares) | 0.2 | 0.2 | 0.2 | 0.2 |
Performance shares | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities (in shares) | 0 | 0.1 | 0.1 | 0.1 |
Net Income Per Common Share - A
Net Income Per Common Share - Anti-Dilutive Outstanding Stock Awards Issued Under Share-Based Compensation Plans (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive (in shares) | 0 | 0 | 0 | 0.1 |
Fair Value of Financial Instr40
Fair Value of Financial Instruments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) $ in Millions | 9 Months Ended | |||
Jul. 31, 2017USD ($)contingent_consideration_liability | Jul. 31, 2016USD ($) | Oct. 31, 2016USD ($)contingent_consideration_liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Number of contingent consideration liabilities | contingent_consideration_liability | 1 | |||
Payment for contingent consideration | $ 3.8 | $ 0 | ||
Number of contingent consideration liabilities recorded during period | contingent_consideration_liability | 1 | |||
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 | [1] | $ 47.7 | $ 53.5 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1 | Other Noncurrent Assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets held in funded deferred compensation plan | [2] | 4.5 | 4.9 | |
Insurance deposits | [3] | 11.2 | 11.2 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Line of credit | [4] | 264.7 | 268.3 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Other Noncurrent Assets | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate swaps | [5] | 2.4 | 0.2 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Other Investments | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Investments in auction rate securities | [6] | 8 | 8 | |
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Other Noncurrent Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liability | [7] | $ 0.9 | ||
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 3 | Other Accrued Liabilities | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration liability | [7] | $ 3.8 | ||
[1] | Cash and cash equivalents are stated at nominal value, which equals fair value. | |||
[2] | 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. | |||
[3] | 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 9, “Insurance,” for further information. | |||
[4] | Represents outstanding borrowings under our syndicated line of credit. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit approximates the fair value. See Note 10, “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 LIBOR forward rates at the end of the period. These interest rate swaps are included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. See Note 10, “Credit Facility,” for further information. | |||
[6] | The fair value of investments in auction rate securities is based on discounted cash flow valuation models, primarily utilizing unobservable inputs, including assumptions about the underlying collateral, credit risks associated with the issuer, credit enhancements associated with financial insurance guarantees, and the possibility of the security being re-financed by the issuer or having a successful auction. These amounts are included in “Other investments” on the accompanying unaudited consolidated balance sheets. See Note 8, “Auction Rate Securities,” for further information. | |||
[7] | Certain of our acquisitions involve the payment of contingent consideration. The fair value of these liabilities is based on the expected achievement of certain pre-established revenue goals. At October 31, 2016, we had one contingent consideration liability included in “Other accrued liabilities” on the accompanying unaudited consolidated balance sheets. During the nine months ended July 31, 2017, the revenue-related target for that acquisition was achieved, resulting in the payment of $3.8 million to the seller. In connection with the MSI acquisition, we recorded one new contingent consideration liability during 2017, which is included in “Other noncurrent liabilities” on the accompanying unaudited consolidated balance sheets. |
Fair Value of Financial Instr41
Fair Value of Financial Instruments - Non-Financial Assets Measured at Fair Value on Non-Recurring Basis (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations $ in Millions | 3 Months Ended |
Apr. 30, 2017USD ($) | |
Government Services | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Offer from strategic buyer for sale of business | $ 35 |
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Impairment recovery | $ 17.4 |
Auction Rate Securities - Narra
Auction Rate Securities - Narrative (Details) | 9 Months Ended | 12 Months Ended |
Jul. 31, 2017USD ($)institution | Oct. 31, 2016USD ($)institution | |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of financial institution | institution | 2 | 2 |
Interest rate reset interval | 30 days | |
Auction Rate Securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Investment in auction rate securities, original principal amount | $ 10,000,000 | $ 10,000,000 |
Investment in auction rate securities, amortized cost basis | 8,000,000 | 8,000,000 |
Investment in auction rate securities, fair value | 8,000,000 | 8,000,000 |
Unrealized holding gain (loss) on securities | 0 | 0 |
Auction Rate Securities | Retained Earnings | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Total amount of other-than-temporary impairment (OTTI) credit loss recognized | $ 2,000,000 | $ 2,000,000 |
Auction Rate Securities - Signi
Auction Rate Securities - Significant Assumptions Used to Determine Fair Value of Auction Rate Securities (Details) | 9 Months Ended | 12 Months Ended |
Jul. 31, 2017 | Oct. 31, 2016 | |
Schedule of Available-for-sale Securities [Line Items] | ||
Libor plus stated yield | 2.00% | 2.00% |
Yields | 2.15% | 2.15% |
Minimum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rates | 0.33% | 0.46% |
Average expected lives | 4 years | 4 years |
Maximum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rates | 0.62% | 1.30% |
Average expected lives | 10 years | 10 years |
Insurance - Narrative (Details)
Insurance - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Jul. 31, 2017 | Apr. 30, 2017 | Jul. 31, 2017 | Jul. 31, 2016 | |
Schedule of Other Liabilities [Line Items] | ||||
Self insurance retention amount per-claim | $ 1,000,000 | $ 1,000,000 | ||
Insurance policy coverage, general and automobile liability losses | 200,000,000 | 200,000,000 | ||
Insurance policy coverage, property damage | 75,000,000 | 75,000,000 | ||
Change in reserves for insurance claims | 12,300,000 | $ 10,000,000 | 22,300,000 | $ 31,800,000 |
Insurance reserve adjustment, amount less than prior year adjustment | 9,500,000 | |||
Minimum | ||||
Schedule of Other Liabilities [Line Items] | ||||
Primary policy limit | 1,000,000 | 1,000,000 | ||
Maximum | ||||
Schedule of Other Liabilities [Line Items] | ||||
Primary policy limit | 5,000,000 | 5,000,000 | ||
Self insurance retention amount per-claim, medical plan | $ 400,000 | $ 400,000 |
Insurance - Insurance Related B
Insurance - Insurance Related Balances and Activity (Details) - USD ($) $ in Millions | Jul. 31, 2017 | Oct. 31, 2016 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance recoverables | $ 74.6 | $ 69.7 |
Claim Types Excluding Medical and Dental | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance claim reserves | 449.3 | 417.9 |
Medical and Dental Claims | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance claim reserves | $ 8.3 | $ 5.9 |
Insurance - Instruments Used to
Insurance - Instruments Used to Collateralize Insurance Obligations (Details) - USD ($) $ in Millions | Jul. 31, 2017 | Oct. 31, 2016 |
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | $ 189.9 | $ 186.7 |
Standby letters of credit | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | 118.8 | 118.3 |
Surety bonds | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | 59.9 | 57.2 |
Restricted insurance deposits | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | $ 11.2 | $ 11.2 |
Credit Facility - Narrative (De
Credit Facility - Narrative (Details) | Nov. 30, 2010USD ($) | Jul. 31, 2017USD ($) | Oct. 31, 2016USD ($)instrument |
Line of Credit Facility [Line Items] | |||
Net gains from cash flow hedges recorded in accumulated other comprehensive loss | $ 1,400,000 | $ 200,000 | |
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, net | $ 600,000 | ||
Interest Rate Swap | |||
Line of Credit Facility [Line Items] | |||
Number of instruments held | instrument | 3 | ||
Notional amount | $ 105,000,000 | ||
Derivative, fixed interest rate | 1.05% | ||
2010 Facility | |||
Line of Credit Facility [Line Items] | |||
Syndicated line of credit, maximum borrowing capacity | $ 800,000,000 | ||
Consolidated net worth requirement | $ 570,000,000 | ||
Consolidated net income earned requirement | 50.00% | ||
Aggregate increases in stockholders' equity requirement | 100.00% | ||
2010 Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Debt covenant fixed charge coverage ratio | 1.50 | ||
2010 Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Debt covenant leverage ratio | 3.25 |
Credit Facility - 2010 Facility
Credit Facility - 2010 Facility Information (Details) - USD ($) $ in Millions | Jul. 31, 2017 | Oct. 31, 2016 |
Debt Disclosure [Abstract] | ||
Cash borrowings | $ 264.7 | $ 268.3 |
Standby letters of credit | $ 127.7 | $ 130.9 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Aug. 29, 2017USD ($) | Jul. 19, 2017USD ($) | Apr. 17, 2017USD ($) | Feb. 07, 2017plaintiff | Feb. 06, 2017USD ($) | Dec. 22, 2016USD ($) | Aug. 01, 2012USD ($) | Jul. 31, 2012USD ($) | Jul. 31, 2017USD ($)plaintiff | Jul. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Dec. 31, 2014USD ($) |
Loss Contingencies [Line Items] | ||||||||||||
Standby letters of credit | $ 127,700,000 | $ 127,700,000 | $ 130,900,000 | |||||||||
Surety bonds | $ 523,000,000 | $ 523,000,000 | ||||||||||
Subsidiary ownership interest percentage | 33.00% | 33.00% | ||||||||||
Loss contingency amount accrued for probable losses | $ 71,700,000 | $ 71,700,000 | ||||||||||
Energy Savings Contracts | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Guarantee obligation | 127,700,000 | 127,700,000 | $ 60,900,000 | |||||||||
Performance Guarantee | Joint Venture | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Total guarantees | 35,000,000 | 35,000,000 | ||||||||||
Augustus and Karapetyan | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency amount accrued for probable losses | 60,000,000 | 60,000,000 | ||||||||||
Settlement amount | 115,000,000 | |||||||||||
Augustus | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency amount accrued for probable losses | $ 4,800,000 | 4,800,000 | ||||||||||
Payment awarded to plaintiffs | $ 4,500,000 | $ 89,700,000 | ||||||||||
Percentage of damages awarded | 30.00% | |||||||||||
Reversal of initial award | $ 89,700,000 | |||||||||||
Settlement interest | $ 41,200,000 | |||||||||||
Settlement amount | $ 110,000,000 | |||||||||||
Payments for legal settlements | $ 55,000,000 | |||||||||||
Karapetyan | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Settlement amount | $ 5,000,000 | |||||||||||
Isse | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of plaintiffs | plaintiff | 60 | 220 | ||||||||||
Minimum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Amount of reasonably possible loss | $ 0 | 0 | ||||||||||
Maximum | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Amount of reasonably possible loss | $ 18,000,000 | $ 18,000,000 | ||||||||||
Subsequent Event | Augustus | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Payments for legal settlements | $ 55,000,000 | |||||||||||
Payments for payroll taxes related to settlement | $ 4,800,000 |
Common Stock - Narrative (Detai
Common Stock - Narrative (Details) - Share repurchase program approved September 2, 2015 - USD ($) | Jul. 31, 2017 | Sep. 02, 2015 |
Equity, Class of Treasury Stock [Line Items] | ||
Share repurchase program authorized amount | $ 200,000,000 | |
Remaining authorized repurchase amount | $ 134,100,000 |
Common Stock - Repurchase Activ
Common Stock - Repurchase Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Equity [Abstract] | ||
Total number of shares purchased (in shares) | 0.2 | 1 |
Average price paid per share (in usd per share) | $ 40.07 | $ 31.42 |
Total cash paid for share repurchases | $ 7.9 | $ 31.2 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit related to expiring statute of limitations | $ 15.8 | $ 19 | $ 15.8 | $ 19 |
Unrecognized tax benefits, interest on income taxes | $ 1.2 | 1 | 1.2 | 1 |
Income tax benefit related to vesting of share-based compensation awards | $ 1.8 | 2.7 | 1.8 | |
Income tax benefit related to deduction for energy efficient government buildings | $ 1.8 | 1.2 | ||
Income tax benefit related to Work Opportunity Tax Credit | $ 4.9 |
Segment Information - Financial
Segment Information - Financial Information by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jul. 31, 2017 | Jul. 31, 2016 | Jul. 31, 2017 | Jul. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 1,318.4 | $ 1,296.9 | $ 3,955.6 | $ 3,822.4 |
Operating profit (loss) | 22.6 | 18.5 | 97.4 | 44 |
Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services | 1.2 | 2.1 | 3.6 | 5.3 |
Income from unconsolidated affiliates, net | 1.2 | 2.1 | 3.6 | 5.3 |
Interest expense | (2.8) | (2.6) | (9.1) | (7.7) |
Income from continuing operations before income taxes | 21 | 18 | 91.9 | 41.6 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating profit (loss) | (47.5) | (55) | (118.5) | (130.5) |
Segment Reconciling Items | ||||
Segment Reporting Information [Line Items] | ||||
Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services | (1) | (1.3) | (3.4) | (4.6) |
Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions | (0.4) | (0.1) | (1.8) | (1.2) |
Income from unconsolidated affiliates, net | (1) | (1.3) | (3.4) | (4.6) |
Business & Industry | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 749.9 | 733.4 | 2,237.5 | 2,207.4 |
Operating profit (loss) | 42.2 | 40.7 | 115.6 | 101.8 |
Aviation | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 259.1 | 219.1 | 723.3 | 625.9 |
Operating profit (loss) | 6.2 | 8.3 | 19.2 | 17.7 |
Emerging Industries Group | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 190.5 | 200.6 | 583.2 | 594.7 |
Operating profit (loss) | 11.6 | 16.9 | 36 | 44.7 |
Technical Solutions | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 106.7 | 115.4 | 325.2 | 309.8 |
Operating profit (loss) | 9.8 | 10 | 28.6 | 18.4 |
Government Services | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 12.3 | 28.3 | 86.5 | 84.6 |
Operating profit (loss) | $ 1.7 | $ (1) | $ 21.8 | $ (2.3) |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) shares in Millions | Sep. 01, 2017USD ($)shares | Nov. 30, 2010USD ($) |
GCA Holding Corp. | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Purchase price | $ 1,250,000,000 | |
Cash payments in acquisition | $ 851,000,000 | |
Shares issued in acquisition (in shares) | shares | 9.5 | |
Sellers ownership of entity after transaction (percentage) | 14.00% | |
Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 800,000,000 | |
Revolving Credit Facility | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 900,000,000 | |
Line of credit facility, maximum borrowing capacity after initial year | 800,000,000 | |
Term Loan | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt instrument, face amount | $ 800,000,000 | |
Debt instrument, term | 5 years | |
Minimum | Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Debt covenant fixed charge coverage ratio | 1.50 | |
Minimum | Revolving Credit Facility | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Line of credit facility, commitment fee percentage on unused portion | 0.20% | |
Debt covenant fixed charge coverage ratio | 1.50 | |
Maximum | Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Debt covenant leverage ratio | 3.25 | |
Maximum | Revolving Credit Facility | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Line of credit facility, commitment fee percentage on unused portion | 0.35% | |
Debt covenant leverage ratio | 4.75 | |
New Credit Facility | Minimum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Pledge stock of certain foreign subsidiaries (percentage) | 65.00% | |
Eurocurrency Loans | New Credit Facility | Minimum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Spread on variable rate | 1.00% | |
Eurocurrency Loans | New Credit Facility | Maximum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Spread on variable rate | 2.25% | |
Base Rate Loans | New Credit Facility | Minimum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Spread on variable rate | 0.00% | |
Base Rate Loans | New Credit Facility | Maximum | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Spread on variable rate | 1.25% |