Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Apr. 30, 2018 | Jun. 01, 2018 | |
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 | Apr. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ABM | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 65,742,160 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Apr. 30, 2018 | Oct. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 69.7 | $ 62.8 |
Trade accounts receivable, net of allowances of $16.4 and $25.5 at April 30, 2018 and October 31, 2017, respectively | 1,005.7 | 1,038.1 |
Prepaid expenses | 107 | 101.8 |
Other current assets | 33.3 | 32.8 |
Total current assets | 1,215.7 | 1,235.5 |
Other investments | 19.4 | 17.6 |
Property, plant and equipment, net of accumulated depreciation of $156.2 and $136.4 at April 30, 2018 and October 31, 2017, respectively | 140.7 | 143.1 |
Other intangible assets, net of accumulated amortization of $222.4 and $189.1 at April 30, 2018 and October 31, 2017, respectively | 387.1 | 430.1 |
Goodwill | 1,867.5 | 1,864.2 |
Other noncurrent assets | 119.4 | 122.1 |
Total assets | 3,749.9 | 3,812.6 |
Current liabilities | ||
Current portion of long-term debt, net | 17 | 16.9 |
Trade accounts payable | 213.9 | 230.8 |
Accrued compensation | 142.5 | 159.9 |
Accrued taxes—other than income | 52.3 | 52.5 |
Insurance claims | 114.7 | 112.5 |
Income taxes payable | 5.3 | 13.4 |
Other accrued liabilities | 158.5 | 171.8 |
Total current liabilities | 704.2 | 757.8 |
Long-term debt, net | 1,090.3 | 1,161.3 |
Deferred income tax liability, net | 39.9 | 57.3 |
Noncurrent insurance claims | 391 | 382.9 |
Other noncurrent liabilities | 62.9 | 61.3 |
Noncurrent income taxes payable | 24.9 | 16.3 |
Total liabilities | 2,313.3 | 2,436.9 |
Commitments and contingencies | ||
Stockholders’ Equity | ||
Preferred stock, $0.01 par value; 500,000 shares authorized; none issued | 0 | 0 |
Common stock, $0.01 par value; 100,000,000 shares authorized; 65,729,949 and 65,502,568 shares issued and outstanding at April 30, 2018 and October 31, 2017, respectively | 0.7 | 0.7 |
Additional paid-in capital | 683.1 | 675.2 |
Accumulated other comprehensive income (loss), net of taxes | 1.6 | (20.3) |
Retained earnings | 751.2 | 720.1 |
Total stockholders’ equity | 1,436.6 | 1,375.7 |
Total liabilities and stockholders’ equity | $ 3,749.9 | $ 3,812.6 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Apr. 30, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance | $ 16.4 | $ 25.5 |
Property, plant and equipment, accumulated depreciation | 156.2 | 136.4 |
Other intangible assets, accumulated amortization | $ 222.4 | $ 189.1 |
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 500,000 | 500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 65,729,949 | 65,502,568 |
Common stock, shares outstanding (in shares) | 65,729,949 | 65,502,568 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | ||
Income Statement [Abstract] | |||||
Revenues | $ 1,580.8 | $ 1,310.5 | $ 3,169.2 | $ 2,637.2 | |
Operating expenses | 1,405.8 | 1,164.6 | 2,835.1 | 2,359.7 | |
Selling, general and administrative expenses | 107.8 | 100.7 | 216.8 | 198 | |
Restructuring and related expenses | 5.3 | 5.8 | 19.6 | [1] | 10.8 |
Amortization of intangible assets | 16.7 | 5.8 | 32.9 | 11.3 | |
Impairment recovery | 0 | (17.4) | 0 | (17.4) | |
Operating profit | 45.3 | 51 | 64.8 | 74.8 | |
Income from unconsolidated affiliates, net | 1 | 0.9 | 1.6 | 2.3 | |
Interest expense | (13.8) | (3) | (28.1) | (6.3) | |
Income from continuing operations before income taxes | 32.5 | 48.9 | 38.2 | 70.9 | |
Income tax (provision) benefit | (7.1) | (17.3) | 15.1 | (23.2) | |
Income from continuing operations | 25.4 | 31.6 | 53.3 | 47.7 | |
Income (loss) from discontinued operations, net of taxes | 1.2 | (0.4) | 1.1 | (73.2) | |
Net income (loss) | 26.6 | 31.3 | 54.4 | (25.5) | |
Other comprehensive income (loss) | |||||
Change in fair value of interest rate swaps | 4.6 | 0 | 23.2 | 2.6 | |
Foreign currency translation | (4.5) | 3 | 5 | 6.3 | |
Income tax provision | (1.2) | 0 | (6.3) | (1.1) | |
Comprehensive income (loss) | $ 25.5 | $ 34.3 | $ 76.3 | $ (17.6) | |
Net income (loss) per common share — Basic | |||||
Income from continuing operations (in usd per share) | $ 0.38 | $ 0.56 | $ 0.81 | $ 0.85 | |
Loss from discontinued operations (in usd per share) | 0.02 | (0.01) | 0.02 | (1.31) | |
Net income (loss) (in usd per share) | 0.40 | 0.56 | 0.83 | (0.46) | |
Net income (loss) per common share — Diluted | |||||
Income from continuing operations (in usd per share) | 0.38 | 0.56 | 0.80 | 0.84 | |
Loss from discontinued operations (in usd per share) | 0.02 | (0.01) | 0.02 | (1.29) | |
Net income (loss) (in usd per share) | $ 0.40 | $ 0.55 | $ 0.82 | $ (0.45) | |
Weighted-average common and common equivalent shares outstanding | |||||
Basic (in shares) | 66 | 56 | 66 | 56 | |
Diluted (in shares) | 66.2 | 56.5 | 66.3 | 56.6 | |
Dividends declared per common share (in usd per share) | $ 0.175 | $ 0.170 | $ 0.350 | $ 0.340 | |
[1] | We include these costs within corporate expenses. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 6 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Cash flows from operating activities | ||
Net income (loss) | $ 54.4 | $ (25.5) |
(Income) loss from discontinued operations, net of taxes | (1.1) | 73.2 |
Income from continuing operations | 53.3 | 47.7 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities of continuing operations | ||
Depreciation and amortization | 57.5 | 28.5 |
Proceeds from termination of interest rate swaps | 25.9 | 0 |
Impairment recovery | 0 | (17.4) |
Deferred income taxes | (23.3) | 9.7 |
Share-based compensation expense | 8.3 | 7.3 |
Provision for bad debt | 3.9 | 2 |
Discount accretion on insurance claims | 0.4 | 0.1 |
Loss (gain) on sale of assets | 0.4 | (0.1) |
Income from unconsolidated affiliates, net | (1.6) | (2.3) |
Distributions from unconsolidated affiliates | 0.1 | 0.8 |
Changes in operating assets and liabilities, net of effects of acquisitions | ||
Trade accounts receivable | 28.7 | (47.3) |
Prepaid expenses and other current assets | 0.4 | (2.7) |
Other noncurrent assets | 1.3 | (6.4) |
Trade accounts payable and other accrued liabilities | (37.2) | 1.1 |
Insurance claims | 9.7 | 15.6 |
Income taxes payable | 2.6 | 5.1 |
Other noncurrent liabilities | 1.7 | 8.4 |
Total adjustments | 78.8 | 2.4 |
Net cash provided by operating activities of continuing operations | 132.2 | 50.1 |
Net cash provided by (used in) operating activities of discontinued operations | 1.1 | (2) |
Net cash provided by operating activities | 133.3 | 48.1 |
Cash flows from investing activities | ||
Additions to property, plant and equipment | (22.1) | (27.8) |
Proceeds from sale of assets | 0.2 | 0.4 |
Adjustments to purchase and sale of business | (1.8) | 0 |
Purchase of businesses, net of cash acquired | 0 | (18.6) |
Investments in unconsolidated affiliates | (0.6) | 0 |
Net cash used in investing activities | (24.4) | (46) |
Cash flows from financing activities | ||
(Taxes withheld) and proceeds from issuance of share-based compensation awards, net | (0.7) | |
Proceeds from issuance of share-based compensation awards, net | 0.8 | |
Repurchases of common stock | 0 | (7.9) |
Dividends paid | (23) | (18.9) |
Deferred financing costs paid | (0.1) | 0 |
Borrowings from credit facility | 468.5 | 441.9 |
Repayment of borrowings from credit facility | (541) | (432.3) |
Changes in book cash overdrafts | (4.8) | 17.2 |
Financing of energy savings performance contracts | 0 | 2.6 |
Payment for Contingent Consideration Liability, Financing Activities | 0 | 3.8 |
Repayment of capital lease obligations | (1.7) | (0.1) |
Net cash used in financing activities | (102.7) | (0.5) |
Effect of exchange rate changes on cash and cash equivalents | 0.8 | 0.6 |
Net increase in cash and cash equivalents | 6.9 | 2.2 |
Cash and cash equivalents at beginning of year | 62.8 | 53.5 |
Cash and cash equivalents at end of period | $ 69.7 | $ 55.7 |
The Company and Nature of Opera
The Company and Nature of Operations | 6 Months Ended |
Apr. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 services with a mission to make a difference, every person, every day . We are organized into five industry groups and one Technical Solutions segment: Through these groups, we offer janitorial, facilities engineering, parking, and specialized mechanical and electrical technical solutions, on a standalone basis or in combination with other services. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 6 Months Ended |
Apr. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the fiscal year ended October 31, 2017 . Unless otherwise indicated, all references to years are to our fiscal year, which ends on October 31 . Acquisition of GCA Services Group On September 1, 2017 (the “Acquisition Date”), we completed the acquisition of GCA Services Group (“GCA”). Accordingly, our consolidated statements of comprehensive income (loss) and statements of cash flows include GCA’s results of operations in the three and six months ended April 30, 2018 , but exclude GCA’s results of operations in the three and six months ended April 30, 2017 , as that was prior to the Acquisition Date. See Note 3 , “Acquisitions,” for further information on the acquisition of GCA. Government Services On May 31, 2017, we sold our Government Services business for $35.5 million and recorded a pre-tax gain of $1.2 million during the third quarter of 2017. The reported results for this business are through the date of sale. Future results could include run-off costs associated with this former business. 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. Prior Year Reclassifications Effective November 1, 2017, we made changes to our operating structure as a result of the GCA acquisition. To reflect these changes, certain prior year amounts, including operating segment data, have been reclassified to conform with our fiscal 2018 presentation. These changes had no impact on our previously reported consolidated balance sheets, statements of comprehensive income (loss), or statements of cash flows. See Note 12 , “Segment Information,” for further details. 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 April 30, Six Months Ended April 30, (in millions) 2018 2017 2018 2017 Business & Industry $ 63.5 $ 58.1 $ 126.5 $ 115.9 Aviation 27.6 16.2 53.1 32.7 Healthcare 5.0 4.8 9.9 9.4 Total $ 96.1 $ 79.1 $ 189.4 $ 158.0 Impact of New Revenue Recognition Standard In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers . The FASB subsequently issued several clarifying ASUs, collectively referred to as “ASC 606,” that introduce a new principles-based framework for revenue recognition and disclosure. The core requirement of the standard is when an entity transfers goods or services to customers it will recognize revenue in an amount that reflects the consideration the entity expects to be entitled to for those goods or services. ASC 606 allows either a full retrospective adoption to all periods presented or a modified retrospective adoption approach with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. To assess the impact of this standard, we have established a cross-functional implementation team consisting of representatives from all of our operating segments. The implementation team is analyzing our contract portfolio to identify potential differences that would result from applying the requirements of this new standard. In addition, we are in the process of identifying and implementing the appropriate changes to our business processes and controls to support recognition and disclosure under this new standard. We expect the largest impact to our consolidated financial statements will result from the new qualitative and quantitative disclosures that will be required upon adoption of the new standard. Additionally, the accounting for certain direct and incremental contract costs is significantly different from our current capitalization policy; however, the impact of this difference is currently unknown. We are continuing to evaluate the impact of this standard and an estimate of the impact to our consolidated financial statements cannot be made at this time. We expect to adopt ASC 606 on November 1, 2018 using the modified retrospective approach, under which we will present the cumulative effect of adoption as an adjustment to the opening balance of retained earnings at the adoption date. No other recently issued standards are expected to have a significant impact on our fiscal 2019 consolidated financial statements. |
Acquisitions
Acquisitions | 6 Months Ended |
Apr. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisitions | 3. ACQUISITIONS Acquisition of GCA during 2017 On September 1, 2017, we acquired all of the outstanding stock of GCA, a provider of integrated facility services to educational institutions and commercial facilities, for a purchase price of approximately $1.3 billion . As described in Note 12 , “Segment Information,” we integrated GCA’s operations into our industry group model effective November 1, 2017. As a result of the acquisition, we are now a leading facilities services provider in the education market. Consideration Transferred (in millions, except per share data) Shares of ABM common stock, net of shares withheld for taxes 9.4 ABM common stock closing market price at acquisition date $ 44.63 Fair value of ABM common stock at closing 421.3 Cash consideration (1) 837.5 Total consideration transferred $ 1,258.8 (1) Revised during the second quarter of 2018 to reflect a post-closing purchase price adjustment related to a net working capital settlement. Preliminary Purchase Price Allocation Our preliminary purchase price allocation is based on information that is currently available, and we are continuing to evaluate the underlying inputs and assumptions used in our valuations. Accordingly, the purchase price allocation is subject to, among other items: further analysis of tax accounts, including deferred tax liabilities, and final valuation of identifiable intangible assets. During the six months ended April 30, 2018 , we refined our valuation of customer relationships and certain other estimates. The following table presents our preliminary estimates of fair values of the assets we acquired and the liabilities we assumed on the date of acquisition as previously reported at year-end 2017 and at the end of the second quarter of 2018 . As reported at As reported at (in millions) October 31, 2017 Adjustments April 30, 2018 Cash and cash equivalents $ 2.5 $ (2.3 ) $ 0.2 Trade accounts receivable (1) 118.1 118.1 Prepaid expenses and other current assets 10.3 10.3 Property, plant and equipment 41.4 0.1 41.5 Customer relationships (2) 340.0 (10.0 ) 330.0 Trade names (2) 9.0 9.0 Goodwill (3) 933.9 (0.5 ) 933.4 Other assets 4.2 (0.2 ) 4.0 Trade accounts payable (9.1 ) (0.4 ) (9.6 ) Insurance reserves (35.5 ) (0.2 ) (35.6 ) Income taxes payable (16.5 ) 8.2 (8.3 ) Accrued liabilities (36.5 ) 2.9 (33.5 ) Deferred income tax liability, net (92.6 ) (92.6 ) Other liabilities (8.1 ) (8.1 ) Net assets acquired $ 1,261.3 $ (2.4 ) $ 1,258.8 (1) The gross amount of trade accounts receivable was $122.0 million , of which $3.9 million is expected to be uncollectible. (2) The amortization periods for the acquired intangible assets are 15 years for customer relationships and 2 years for trade names. (3) Goodwill is largely attributable to value we expect to obtain from long-term business growth, the established workforce, and buyer-specific synergies. This goodwill is not deductible for income tax purposes. Financial Information For the three and six months ended April 30, 2018 , we recorded revenue related to GCA of $256.4 million and $508.0 million , respectively, and operating profit of $7.5 million and $12.5 million , respectively. The following table presents our unaudited pro forma results as though the GCA acquisition occurred on November 1, 2015 . The pro forma results include adjustments for the estimated amortization of intangible assets, interest expense, and the income tax impact of the pro forma adjustments at the statutory rate of 41% . These pro forma results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on November 1, 2015 . Three Months Ended Six Months Ended (in millions) April 30, 2017 April 30, 2017 Pro forma revenue $ 1,560.5 $ 3,139.4 Pro forma income from continuing operations 31.9 46.5 Other 2017 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 6 , “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. Pro Forma and Other Supplemental Financial Information Except for GCA, we do not present pro forma and other financial information for our other acquisitions, as they are not considered material business combinations individually or on a combined basis. |
Restructuring and Related Costs
Restructuring and Related Costs | 6 Months Ended |
Apr. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | 4. RESTRUCTURING AND RELATED COSTS GCA Restructuring Following the acquisition of GCA, during the first quarter of 2018 we initiated a restructuring program to achieve cost synergies from our combined operations. We incurred the majority of our anticipated severance expense associated with this restructuring program in the first half of 2018. We expect to incur additional charges related to other project fees and rebranding activities in the second half of 2018. 2020 Vision Restructuring 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 incurred additional expenses primarily related to external support fees and other project fees during the six months ended April 30, 2018 relating to this strategy. We do not expect to incur significant 2020 Vision restructuring and related expenses in the future, other than in connection with the continued consolidation of our real estate leases. Rollforward of Restructuring and Related Liabilities (in millions) Balance, October 31, 2017 Costs Recognized (1) Payments Non-Cash Items Balance, April 30, 2018 Employee severance $ 2.7 $ 9.3 $ (6.5 ) $ — $ 5.5 Lease exit costs and asset impairment 2.8 2.5 (0.3 ) (1.1 ) 3.9 Other project fees 0.4 3.8 (1.6 ) — 2.5 External support fees 2.5 4.0 (6.5 ) — — Total $ 8.4 $ 19.6 $ (14.9 ) $ (1.1 ) $ 11.9 (1) We include these costs within corporate expenses. Cumulative Restructuring and Related Charges (in millions) External Support Fees Employee Severance Other Project Fees Lease Exit Costs Asset Impairment Total GCA $ 2.0 $ 11.2 $ 3.5 $ — $ — $ 16.6 2020 Vision 30.0 13.6 10.7 7.7 5.2 67.1 Total $ 32.0 $ 24.7 $ 14.2 $ 7.7 $ 5.2 $ 83.8 |
Net Income Per Common Share
Net Income Per Common Share | 6 Months Ended |
Apr. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share | 5. NET INCOME PER COMMON SHARE Basic and Diluted Net Income Per Common Share Calculations Three Months Ended April 30, Six Months Ended April 30, (in millions, except per share amounts) 2018 2017 2018 2017 Income from continuing operations $ 25.4 $ 31.6 $ 53.3 $ 47.7 Income (loss) from discontinued operations, net of taxes 1.2 (0.4 ) 1.1 (73.2 ) Net income (loss) $ 26.6 $ 31.3 $ 54.4 $ (25.5 ) Weighted-average common and common equivalent shares outstanding — Basic 66.0 56.0 66.0 56.0 Effect of dilutive securities Restricted stock units 0.1 0.3 0.1 0.3 Stock options 0.1 0.2 0.1 0.2 Performance shares — — — 0.1 Weighted-average common and common equivalent shares outstanding — Diluted 66.2 56.5 66.3 56.6 Net income (loss) per common share — Basic Income from continuing operations $ 0.38 $ 0.56 $ 0.81 $ 0.85 Income (loss) from discontinued operations 0.02 (0.01 ) 0.02 (1.31 ) Net income (loss) $ 0.40 $ 0.56 $ 0.83 $ (0.46 ) Net income (loss) per common share — Diluted Income from continuing operations $ 0.38 $ 0.56 $ 0.80 $ 0.84 Income (loss) from discontinued operations 0.02 (0.01 ) 0.02 (1.29 ) Net income (loss) $ 0.40 $ 0.55 $ 0.82 $ (0.45 ) Anti-Dilutive Outstanding Stock Awards Issued Under Share-Based Compensation Plans Three Months Ended April 30, Six Months Ended April 30, (in millions) 2018 2017 2018 2017 Anti-dilutive 0.5 — 0.3 — |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Apr. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 6. 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 April 30, 2018 October 31, 2017 Cash and cash equivalents (1) 1 $ 69.7 $ 62.8 Insurance deposits (2) 1 10.4 11.2 Assets held in funded deferred compensation plan (3) 1 4.1 4.6 Credit facility (4) 2 1,118.7 1,191.2 Interest rate swaps (5) 2 — 2.9 Investments in auction rate securities (6) 3 8.0 8.0 Contingent consideration liability (7) 3 0.9 0.9 (1) Cash and cash equivalents are stated at nominal value, which equals fair value. (2) Represents restricted deposits that are used to collateralize our insurance obligations and are stated at nominal value, which equals fair value. These insurance deposits are included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. See Note 8 , “Insurance,” for further information. (3) Represents investments held in a Rabbi trust associated with one of our deferred compensation plans, which we include in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. The fair value of the assets held in the funded deferred compensation plan is based on quoted market prices. (4) Represents gross outstanding borrowings under our syndicated line of credit and term loan. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit and term loan approximates the fair value. See Note 9 , “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. At October 31, 2017, these interest rate swaps were included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. During April 2018, we elected to terminate our interest rate swaps. See Note 9 , “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. On May 16, 2018, we sold one of these securities. See Note 7 , “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. Our contingent consideration liability is included in “Other accrued liabilities” and “Other noncurrent liabilities” on the accompanying unaudited consolidated balance sheets. During the six months ended April 30, 2018 , we had no transfers of assets or liabilities between any of the above hierarchy levels. Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis I n certain circumstances we measure certain assets that are subject to fair value adjustments at fair value on a non-recurring basis. 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. On November 1, 2017, we reorganized our reportable segments and goodwill reporting units. In connection with this reorganization, we performed a qualitative goodwill impairment test immediately before and after the segment realignment. In analyzing the results of operations and business conditions of the goodwill reporting units, we determined the likelihood of a goodwill impairment did not reach the more-likely-than-not threshold specified in U.S. GAAP for any of the reporting units that were evaluated. Accordingly, we concluded that goodwill related to those reporting units was not impaired and further quantitative testing was not required. |
Auction Rate Securities
Auction Rate Securities | 6 Months Ended |
Apr. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Auction Rate Securities | 7. AUCTION RATE SECURITIES At April 30, 2018 and October 31, 2017 , 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 . On May 16, 2018, we sold one of our auction rate securities with an original par value of $5.0 million and an amortized cost basis of $3.0 million for proceeds of $2.9 million . At April 30, 2018 and October 31, 2017 , there were no unrealized gains or losses on our auction rate securities included in accumulated other comprehensive income (loss), net of taxes (“AOCI”), 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 April 30, 2018 October 31, 2017 Discount rates L + 0.47% and L + 0.74% L + 0.42% and L + 0.79% 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 | 6 Months Ended |
Apr. 30, 2018 | |
Insurance [Abstract] | |
Insurance | 8. 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 use all available information to develop our best estimate of insurance claims reserves as information is obtained. 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. Actuarial Review Performed During the First Quarter of 2018 During the three months ended January 31, 2018 , we performed an actuarial review of the majority of our casualty insurance programs that considered changes in claim developments and claim payment activity for the period commencing May 1, 2017 and ending October 31, 2017 for all policy years in which open claims existed. The actuarial review indicated the claims reduction and safety initiatives we implemented have had a positive impact on our claims costs in the most recent years. Most notably, over the past two years there has been a decrease in claim frequency for workers’ compensation lost-time claims and general liability bodily injury claims. However, there have been unfavorable developments in ultimate losses beyond our estimates for general liability and workers’ compensation claims related to prior years, as described below. The actuarial review indicated a continued 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. However, in prior year claims we experienced adverse developments that 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 in certain prior fiscal years, in the first quarter of 2018 we increased our estimate of ultimate losses for workers’ compensation claims. Statutory, regulatory, and legal developments have contributed to the increase in our estimated losses. Based on the results of the actuarial review and subsequent developments, at January 31, 2018 we increased our total reserves for known claims as well as our estimate of the loss amounts associated with incurred but not reported claims for prior periods by $2.0 million . As we continue to see a similar trend in adverse developments, at April 30, 2018 we increased our reserves by an additional $2.0 million . For the six months ended April 30, 2018, the total increase to our reserves for claims related to prior periods was $4.0 million . This adjustment was $6.0 million lower than the total adjustment related to prior year claims of $10.0 million during the six months ended April 30, 2017. During the third quarter of 2018, comprehensive actuarial evaluations are expected to be completed for our significant insurance programs using updated claims data, and these evaluations may lead to further adjustments to our insurance reserves. Insurance Related Balances and Activity (in millions) April 30, 2018 October 31, 2017 Insurance claim reserves excluding medical and dental $ 495.7 $ 485.6 Medical and dental claim reserves 10.0 9.8 Insurance recoverables 74.9 73.1 At April 30, 2018 and October 31, 2017 , 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) April 30, 2018 October 31, 2017 Standby letters of credit $ 136.7 $ 137.6 Surety bonds 78.2 77.5 Restricted insurance deposits 10.4 11.2 Total $ 225.3 $ 226.3 |
Credit Facility
Credit Facility | 6 Months Ended |
Apr. 30, 2018 | |
Debt Disclosure [Abstract] | |
Credit Facility | 9. CREDIT FACILITY On September 1, 2017, we refinanced and replaced our then-existing $800.0 million credit facility with a new senior, secured five-year syndicated credit facility (the “ Credit Facility ”), consisting of a $900.0 million revolving line of credit and an $800.0 million amortizing term loan, scheduled to mature on September 1, 2022. The line of credit reduces to $800.0 million after one year. The Credit Facility also provides for the issuance of up to $300.0 million for standby letters of credit and the issuance of up to $75.0 million in swingline advances. The obligations under the Credit Facility are secured on a first-priority basis by a lien on substantially all of our assets and properties, subject to certain exceptions. Borrowings under the Credit Facility bear interest at a rate equal to 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 0.00% to 1.25% for base rate loans. At April 30, 2018 , the weighted average interest rate on our outstanding borrowings was 4.02% . We also pay a commitment fee, based on our leverage ratio and payable quarterly in arrears, ranging from 0.200% to 0.350% on the average daily unused portion of the line of credit. For purposes of this calculation, irrevocable standby letters of credit, which are issued primarily in conjunction with our insurance programs, and cash borrowings are included as outstanding under the line of credit. The Credit Facility contains certain covenants, including a maximum leverage ratio of 4.75 to 1.0 , which steps down to 3.50 to 1.0 by July 2020, and a minimum fixed charge coverage ratio of 1.50 to 1.0 , as well as other financial and non-financial covenants. In the event of a material acquisition, as defined in the Credit Facility, we may elect to increase the leverage ratio to 3.75 to 1.0 for a total of four fiscal quarters, provided the leverage ratio had already been reduced to 3.50 to 1.0. Our borrowing capacity is subject to, and limited by, compliance with the covenants described above. At April 30, 2018 , we were in compliance with these covenants. The Credit Facility also includes customary events of default, including failure to pay principal, interest, or fees when due, failure to comply with covenants, the occurrence of certain material judgments, or a change in control of the Company. If certain events of default occur, including certain cross-defaults, insolvency, change in control, or violation of specific covenants, the lenders can terminate or suspend our access to the Credit Facility and declare all amounts outstanding (including all accrued interest and unpaid fees) to be immediately due and payable, and require that we cash collateralize the outstanding standby letters of credit. Total deferred financing costs related to the Credit Facility were $18.7 million , consisting of $13.4 million related to the term loan and $5.2 million related to the line of credit, which are being amortized to interest expense over the term of the Credit Facility . Credit Facility Information (in millions) April 30, 2018 October 31, 2017 Current portion of long-term debt Gross term loan $ 20.0 $ 20.0 Less: unamortized deferred financing costs (3.0 ) (3.1 ) Current portion of term loan $ 17.0 $ 16.9 Long-term debt Gross term loan $ 760.0 $ 780.0 Less: unamortized deferred financing costs (8.4 ) (9.9 ) Total noncurrent portion of term loan 751.6 770.1 Line of credit (1)(2) 338.7 391.2 Long-term debt $ 1,090.3 $ 1,161.3 (1) Standby letters of credit amounted to $145.5 million at April 30, 2018 . (2) At April 30, 2018 , we had borrowing capacity of $404.5 million , however covenant restrictions limited our actual borrowing capacity to $313.4 million . Term Loan Maturities During the first quarter, we made $20.0 million of principal payments. As of April 30, 2018 , the following principal payments are required under the term loan. (in millions) 2019 2020 2021 2022 Debt maturities $ 40.0 $ 60.0 $ 120.0 $ 560.0 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 Credit Facility . Under these arrangements, we typically pay a fixed interest rate in exchange for LIBOR-based variable interest throughout the life of the agreement. We initially report the derivative’s mark-to-market gain or loss as a component of AOCI and subsequently reclassify the gain or loss into earnings when the hedged transactions occur and affect earnings. Interest payables and receivables under the swap agreements are accrued and recorded as adjustments to interest expense. All of our interest rate swaps were designated and accounted for as cash flow hedges from inception. See Note 6 , “Fair Value of Financial Instruments,” regarding the valuation of our interest rate swaps. During April 2018, we elected to terminate all of our interest rate swaps and received cash proceeds of $25.9 million from the swap counterparties upon termination. We classified the cash proceeds as an operating activity on our consolidated statements of cash flows. We subsequently entered into new forward-starting interest rate swaps, as summarized below. Notional Amounts Fixed Interest Rates Effective Dates Maturity Dates $ 90.0 million 2.83% November 1, 2018 April 30, 2021 $ 90.0 million 2.84% November 1, 2018 October 31, 2021 $ 130.0 million 2.86% November 1, 2018 April 30, 2022 $ 130.0 million 2.84% November 1, 2018 September 1, 2022 At April 30, 2018 , the realized gain recorded in AOCI was $18.6 million , net of taxes of $7.4 million , which will be amortized to interest expense as interest payments are made over the term of our Credit Facility. At October 31, 2017 , amounts recorded in AOCI were $1.7 million , net of taxes of $1.2 million . Additionally, at April 30, 2018 , the amount expected to be reclassified from AOCI to earnings during the next twelve months was $3.8 million , net of taxes of $1.5 million . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Apr. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. 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 April 30, 2018 , these letters of credit and surety bonds totaled $145.5 million and $465.7 million , respectively. Guarantees In some instances, we offer clients guaranteed energy savings under certain energy savings contracts. At April 30, 2018 , total guarantees were $179.4 million and extend through 2038 . 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 April 30, 2018 , the total amount accrued for all probable litigation losses where a reasonable estimate of the loss could be made was $8.4 million , including $3.1 million accrued during the three months ended April 30, 2018 . This $8.4 million also includes an accrual of $3.8 million in connection with the Hussein case discussed below. Litigation outcomes are difficult to predict and the estimation of probable losses requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. If one or more matters are resolved in a particular period in an amount in excess of, or in a manner different than, what we anticipated, this could have a material adverse effect on our financial position, results of operations, or cash flows. We do not accrue for contingent losses that, in our judgment, are considered to be reasonably possible but not probable. The estimation of reasonably possible losses also requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. Our management currently estimates the range of loss for all reasonably possible losses for which a reasonable estimate of the loss can be made is between zero and $5 million . 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 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 class action pending in San Francisco Superior Court that alleges we failed to provide legally required meal periods and make additional premium payments for such meal periods, pay split shift premiums when owed, and reimburse janitors for travel expenses. On April 19, 2011 , the trial court held a hearing on plaintiffs’ motion to certify the class. At the conclusion of that hearing, the trial court denied plaintiffs’ motion to certify the class. On May 11, 2011 , the plaintiffs filed a motion to reconsider, which was denied. The plaintiffs appealed the class certification issues. The trial court stayed the underlying lawsuit pending the decision in the appeal. The Court of Appeal of the State of California, First Appellate District (the “Court of Appeal”), heard oral arguments on November 7, 2017. On December 11, 2017, the Court of Appeal reversed the trial court’s order denying class certification and remanded the matter for certification of a meal period, travel expense reimbursement, and split shift class. The case was remitted to the trial court for further proceedings on class certification, discovery, dispositive motions, and trial. 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”) and Isse et al. v. Air Serv Corporation filed on February 7, 2017 in the Superior Court of Washington for King County (the “Isse” case) The Hussein case was a certified class action involving a class of certain hourly Air Serv employees at Seattle-Tacoma International Airport in SeaTac, Washington. The plaintiffs alleged that Air Serv violated a minimum wage requirement in an ordinance applicable to certain employers in the local city of SeaTac (the “Ordinance”). Plaintiffs sought 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. On February 7, 2017, the Isse case was filed against Air Serv on behalf of 60 individual plaintiffs (who would otherwise be members of the Hussein class), who alleged failure to comply with both the minimum wage provision and the sick and safe time provision of the Ordinance. The Isse plaintiffs sought retroactive wages and sick benefits, double damages for wages and sick benefits, interest, and attorneys’ fees. The Isse case later expanded to approximately 220 individual plaintiffs. In mediations on November 2 and 3, 2017, and without admitting liability in either matter, we agreed to settle the Hussein and Isse cases for a combined total o f $8.3 million , inclusive of damages, interest, attorneys’ fees, and employer payroll taxes. Eligible employees will be able to participate in either the Hussein or Isse settlements, but cannot recover in both settlements. The settlements in both cases require court approval because of the nature of the claims being released. On December 8, 2017, the Superior Court of Washington for King County approved the settlement agreement for the 220 Isse plaintiffs, and we subsequently made a settlement payment of $4.5 million to the Isse plaintiffs in January 2018. The Hussein settlement documents have been presented to the district court for approval. Castro and Marmolejo v. ABM Industries, Inc., et al., filed on October 24, 2014, pending in the United States District Court for the Northern District of California (the “Castro” case) On October 24, 2014, Plaintiff Marley Castro filed a class action lawsuit alleging that ABM did not reimburse janitorial employees in California for using their personal cell phones for work-related purposes, in violation of California Labor Code section 2802. On January 23, 2015, Plaintiff Lucia Marmolejo was added to the case as a named plaintiff. On October 27, 2017, plaintiffs moved for class certification seeking to represent a class of all employees who were, are, or will be employed by ABM in the State of California with the Employee Master Job Description Code “Cleaner” (hereafter referred to as “ Cleaner Employees ”) beginning from October 24, 2010. ABM filed its opposition to class certification on November 27, 2017. On January 26, 2018, the district court granted plaintiffs’ motion for class certification. The court rejected plaintiffs’ proposed class, instead certifying three classes that the court formulated on its own: (1) all employees who were, are, or will be employed by ABM in the State of California as Cleaner Employees who used a personal cell phone to punch in and out of the EPAY system and who (a) worked at an ABM facility that did not provide a biometric clock and (b) were not offered an ABM-provided cell phone during the period beginning on January 1, 2012, through the date of notice to the Class Members that a class has been certified in this action; (2) all employees who were, are, or will be employed by ABM in the State of California as Cleaner Employees who used a personal cell phone to report unusual or suspicious circumstances to supervisors and were not offered (a) an ABM-provided cell phone or (b) a two-way radio during the period beginning four years prior to the filing of the original complaint, October 24, 2014, through the date of notice to the Class Members that a class has been certified in this action; and (3) all employees who were, are, or will be employed by ABM in the State of California as Cleaner Employees who used a personal cell phone to respond to communications from supervisors and were not offered (a) an ABM-provided cell phone or (b) a two-way radio during the period beginning four years prior to the filing of the original complaint, October 24, 2014, through the date of notice to the Class Members that a class has been certified in this action. On February 9, 2018, ABM filed a petition for permission to appeal the district court’s order granting class certification with the United States Court of Appeals for the Ninth Circuit, which was denied on April 30, 2018. On March 20, 2018, ABM moved to compel arbitration of the claims of certain absent class members pursuant to the terms of three collective bargaining agreements. In response to that motion, the district court on May 14, 2018 modified the class definition to exclude all claims arising after the operative date(s) of the applicable collective bargaining agreements (which is June 1, 2016 for one agreement and May 1, 2016 for the other two agreements), but otherwise denied the motion. |
Income Taxes
Income Taxes | 6 Months Ended |
Apr. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. INCOME TAXES The Tax Cuts and Jobs Act (the “ Tax Act ”), which was enacted on December 22, 2017, represents the most significant overhaul of the U.S. tax code in more than 30 years. Among other provisions, the Tax Act provides for a reduction of the federal corporate income tax rate from 35% to 21% and a “transition tax” to be levied on the deemed repatriation of indefinitely reinvested earnings of international subsidiaries. Since we have an October 31 fiscal year-end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of 23.3% for fiscal 2018 and 21% for subsequent fiscal years. Other provisions under the Tax Act will not be effective for us until fiscal 2019, including limitations on deductibility of interest and executive compensation as well as a new minimum tax on Global Intangible Low-Taxed Income (“GILTI”). Due to the complexities of implementing the provisions of the Tax Act , the staff of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin 118 (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act and permits a measurement period not to exceed one year from the enactment date for companies to complete the required analyses and accounting. As permitted under SAB 118, some elements of the tax adjustments recorded in the first quarter of 2018 due to the enactment of the Tax Act , including the remeasurement of deferred tax assets and liabilities and the transition tax, are based on reasonable estimates and are considered provisional. During the three months ended January 31, 2018 we remeasured certain deferred tax assets and liabilities based on the new rates at which they are expected to reverse in the future and recorded a net discrete tax benefit of $28.7 million . In addition, we recorded an expense of $7.0 million for the one-time transition tax on the deemed repatriation of indefinitely reinvested earnings of our international subsidiaries. We plan to reinvest our foreign earnings to fund future non-U.S. growth and expansion, and we do not anticipate remitting such earnings to the United States. While U.S. federal tax expense has been recognized as a result of the Tax Act, no deferred tax liabilities with respect to state income taxes or foreign withholding taxes have been recognized. We continue to analyze certain aspects of the Tax Act and refine our calculation of the impact on our deferred tax balances, which could potentially affect the measurement of these balances. The provisional amount recorded is based on our estimate of the expected reversals of certain tax assets and liabilities, which may be revised in future quarters during the one-year measurement period as additional information becomes available. The final impact related to the one-time transition tax may differ from our current estimate due to the complexity of calculating and supporting U.S. tax attributes involved in foreign tax credit calculations, such as accumulated foreign earnings and profits, foreign tax paid, and other tax components. Changes to our estimates over the one-year measurement period could be material due to, among other things: changes in interpretations of the Tax Act; future legislative action to address questions that arise from the Tax Act; changes in accounting standards for income taxes or related interpretations in response to the Tax Act; or any updates or changes to estimates we have utilized to calculate the provisional amounts. We did not record any changes to the provisional amounts during the three months ended April 30, 2018 . Beginning in fiscal year 2019, provisions under GILTI could result in incremental U.S. federal tax on our foreign subsidiaries’ income in excess of an allowed return on certain tangible property. The Financial Accounting Standards Board has determined that filers have a policy choice to account for this tax on either a period basis or a deferred tax basis. We are still evaluating the impacts of GILTI on our business model and have not yet made any accounting adjustments or policy decisions regarding this new source of incremental U.S. taxable income. 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 months ended April 30, 2018 were favorably impacted by the reduction of the federal corporate income tax rate as a result of the Tax Act and by a discrete tax benefit of $2.0 million related to tax deductions on energy efficient government buildings, partially offset by a $1.5 million reduction in certain tax credits, including the prior year Work Opportunity Tax Credits (“WOTC”) for new hires. Our income taxes for the six months ended April 30, 2018 were favorably impacted by a net discrete tax benefit of $21.7 million related to the enactment of the Tax Act , $2.3 million related to tax deductions on energy efficient government buildings, and $1.5 million of excess tax benefits related to the vesting of share-based compensation awards. These benefits were partially offset by a $1.5 million reduction in certain tax credits, including the prior year WOTC for new hires. Our income taxes for the three and six months ended April 30, 2017 were favorably impacted by $2.1 million of excess tax benefits related to the vesting of share-based compensation awards and the 2017 WOTC for new hires. |
Segment Information
Segment Information | 6 Months Ended |
Apr. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 12. SEGMENT INFORMATION Effective November 1, 2017, we reorganized our reportable segments to reflect the integration of GCA into our industry group model. Our reportable segments consist of Business & Industry (“B&I”), Aviation, Technology & Manufacturing (“T&M”), Education, Technical Solutions, and Healthcare, as further described below. Refer to Note 2 , “Basis of Presentation and Significant Accounting Policies,” for information related to our former Government Services business. REPORTABLE SEGMENTS AND DESCRIPTIONS B&I B&I, our largest reportable segment, encompasses janitorial, facilities engineering, and parking services for commercial real estate properties and sports and entertainment venues. B&I also provides vehicle maintenance and other services to rental car providers (“Vehicle Services Contracts”). Aviation Aviation supports airlines and airports with services ranging from parking and janitorial to passenger assistance, catering logistics, air cabin maintenance, and transportation. T&M T&M combines our legacy Industrial & Manufacturing business, which was previously included in our B&I segment, with our legacy High Tech industry group, which was previously reported as part of our legacy Emerging Industries Group. T&M provides janitorial, facilities engineering, and parking services. Education Education delivers janitorial, custodial, landscaping and grounds, facilities engineering, and parking services for public school districts, private schools, colleges, and universities. This business was previously reported as part of our legacy Emerging Industries Group. Technical Solutions Technical Solutions specializes in mechanical and electrical services. These services can also be leveraged for cross-selling across all of our industry groups, both domestically and internationally. Healthcare Healthcare offers janitorial, facilities management, clinical engineering, food and nutrition, laundry and linen, parking and guest services, and patient transportation services at traditional hospitals and non-acute facilities. This business was previously reported as part of our legacy Emerging Industries Group. Financial Information by Reportable Segment Three Months Ended April 30, Six Months Ended April 30, (in millions) 2018 2017 2018 2017 Revenues Business & Industry $ 723.2 $ 637.5 $ 1,445.3 $ 1,293.0 Aviation 245.4 232.1 501.6 464.0 Technology & Manufacturing 227.5 161.4 459.5 332.9 Education 206.3 65.2 412.6 132.2 Technical Solutions 108.5 110.8 212.5 218.5 Healthcare 69.9 60.6 137.6 122.3 Government Services — 42.9 — 74.3 $ 1,580.8 $ 1,310.5 $ 3,169.2 $ 2,637.2 Operating profit (loss) Business & Industry $ 43.5 $ 36.0 $ 72.0 $ 63.2 Aviation 5.1 6.8 10.9 11.4 Technology & Manufacturing 16.0 12.1 32.9 24.8 Education 10.6 3.6 19.8 7.2 Technical Solutions 7.5 10.2 13.0 18.1 Healthcare 2.7 2.4 5.4 4.9 Government Services — 18.2 (0.8 ) 20.0 Corporate (37.1 ) (36.4 ) (84.5 ) (71.0 ) Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services (1.0 ) (1.1 ) (1.6 ) (2.4 ) Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions (2.0 ) (0.8 ) (2.3 ) (1.4 ) 45.3 51.0 64.8 74.8 Income from unconsolidated affiliates, net 1.0 0.9 1.6 2.3 Interest expense (13.8 ) (3.0 ) (28.1 ) (6.3 ) Income from continuing operations before income taxes $ 32.5 $ 48.9 $ 38.2 $ 70.9 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. |
Basis of Presentation and Sig18
Basis of Presentation and Significant Accounting Policies (Policies) | 6 Months Ended |
Apr. 30, 2018 | |
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, 2017 . Unless otherwise indicated, 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 |
New accounting pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, establishing Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers . The FASB subsequently issued several clarifying ASUs, collectively referred to as “ASC 606,” that introduce a new principles-based framework for revenue recognition and disclosure. The core requirement of the standard is when an entity transfers goods or services to customers it will recognize revenue in an amount that reflects the consideration the entity expects to be entitled to for those goods or services. ASC 606 allows either a full retrospective adoption to all periods presented or a modified retrospective adoption approach with a cumulative-effect adjustment to retained earnings as of the beginning of the year of adoption. To assess the impact of this standard, we have established a cross-functional implementation team consisting of representatives from all of our operating segments. The implementation team is analyzing our contract portfolio to identify potential differences that would result from applying the requirements of this new standard. In addition, we are in the process of identifying and implementing the appropriate changes to our business processes and controls to support recognition and disclosure under this new standard. We expect the largest impact to our consolidated financial statements will result from the new qualitative and quantitative disclosures that will be required upon adoption of the new standard. Additionally, the accounting for certain direct and incremental contract costs is significantly different from our current capitalization policy; however, the impact of this difference is currently unknown. We are continuing to evaluate the impact of this standard and an estimate of the impact to our consolidated financial statements cannot be made at this time. We expect to adopt ASC 606 on November 1, 2018 using the modified retrospective approach, under which we will present the cumulative effect of adoption as an adjustment to the opening balance of retained earnings at the adoption date. No other recently issued standards are expected to have a significant impact on our fiscal 2019 consolidated financial statements. |
Basis of Presentation and Sig19
Basis of Presentation and Significant Accounting Policies (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
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 April 30, Six Months Ended April 30, (in millions) 2018 2017 2018 2017 Business & Industry $ 63.5 $ 58.1 $ 126.5 $ 115.9 Aviation 27.6 16.2 53.1 32.7 Healthcare 5.0 4.8 9.9 9.4 Total $ 96.1 $ 79.1 $ 189.4 $ 158.0 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule of Consideration Transferred | Consideration Transferred (in millions, except per share data) Shares of ABM common stock, net of shares withheld for taxes 9.4 ABM common stock closing market price at acquisition date $ 44.63 Fair value of ABM common stock at closing 421.3 Cash consideration (1) 837.5 Total consideration transferred $ 1,258.8 (1) Revised during the second quarter of 2018 to reflect a post-closing purchase price adjustment related to a net working capital settlement. |
Schedule of Preliminary Purchase Price Allocation | The following table presents our preliminary estimates of fair values of the assets we acquired and the liabilities we assumed on the date of acquisition as previously reported at year-end 2017 and at the end of the second quarter of 2018 . As reported at As reported at (in millions) October 31, 2017 Adjustments April 30, 2018 Cash and cash equivalents $ 2.5 $ (2.3 ) $ 0.2 Trade accounts receivable (1) 118.1 118.1 Prepaid expenses and other current assets 10.3 10.3 Property, plant and equipment 41.4 0.1 41.5 Customer relationships (2) 340.0 (10.0 ) 330.0 Trade names (2) 9.0 9.0 Goodwill (3) 933.9 (0.5 ) 933.4 Other assets 4.2 (0.2 ) 4.0 Trade accounts payable (9.1 ) (0.4 ) (9.6 ) Insurance reserves (35.5 ) (0.2 ) (35.6 ) Income taxes payable (16.5 ) 8.2 (8.3 ) Accrued liabilities (36.5 ) 2.9 (33.5 ) Deferred income tax liability, net (92.6 ) (92.6 ) Other liabilities (8.1 ) (8.1 ) Net assets acquired $ 1,261.3 $ (2.4 ) $ 1,258.8 (1) The gross amount of trade accounts receivable was $122.0 million , of which $3.9 million is expected to be uncollectible. (2) The amortization periods for the acquired intangible assets are 15 years for customer relationships and 2 years for trade names. (3) Goodwill is largely attributable to value we expect to obtain from long-term business growth, the established workforce, and buyer-specific synergies. This goodwill is not deductible for income tax purposes. |
Schedule of Pro Forma Financial Information | For the three and six months ended April 30, 2018 , we recorded revenue related to GCA of $256.4 million and $508.0 million , respectively, and operating profit of $7.5 million and $12.5 million , respectively. The following table presents our unaudited pro forma results as though the GCA acquisition occurred on November 1, 2015 . The pro forma results include adjustments for the estimated amortization of intangible assets, interest expense, and the income tax impact of the pro forma adjustments at the statutory rate of 41% . These pro forma results do not reflect the cost of integration activities or benefits from expected revenue enhancements and synergies. Accordingly, the pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on November 1, 2015 . Three Months Ended Six Months Ended (in millions) April 30, 2017 April 30, 2017 Pro forma revenue $ 1,560.5 $ 3,139.4 Pro forma income from continuing operations 31.9 46.5 |
Restructuring and Related Cos21
Restructuring and Related Costs (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Liabilities | Rollforward of Restructuring and Related Liabilities (in millions) Balance, October 31, 2017 Costs Recognized (1) Payments Non-Cash Items Balance, April 30, 2018 Employee severance $ 2.7 $ 9.3 $ (6.5 ) $ — $ 5.5 Lease exit costs and asset impairment 2.8 2.5 (0.3 ) (1.1 ) 3.9 Other project fees 0.4 3.8 (1.6 ) — 2.5 External support fees 2.5 4.0 (6.5 ) — — Total $ 8.4 $ 19.6 $ (14.9 ) $ (1.1 ) $ 11.9 (1) We include these costs within corporate expenses. Cumulative Restructuring and Related Charges (in millions) External Support Fees Employee Severance Other Project Fees Lease Exit Costs Asset Impairment Total GCA $ 2.0 $ 11.2 $ 3.5 $ — $ — $ 16.6 2020 Vision 30.0 13.6 10.7 7.7 5.2 67.1 Total $ 32.0 $ 24.7 $ 14.2 $ 7.7 $ 5.2 $ 83.8 |
Net Income Per Common Share (Ta
Net Income Per Common Share (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
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 April 30, Six Months Ended April 30, (in millions, except per share amounts) 2018 2017 2018 2017 Income from continuing operations $ 25.4 $ 31.6 $ 53.3 $ 47.7 Income (loss) from discontinued operations, net of taxes 1.2 (0.4 ) 1.1 (73.2 ) Net income (loss) $ 26.6 $ 31.3 $ 54.4 $ (25.5 ) Weighted-average common and common equivalent shares outstanding — Basic 66.0 56.0 66.0 56.0 Effect of dilutive securities Restricted stock units 0.1 0.3 0.1 0.3 Stock options 0.1 0.2 0.1 0.2 Performance shares — — — 0.1 Weighted-average common and common equivalent shares outstanding — Diluted 66.2 56.5 66.3 56.6 Net income (loss) per common share — Basic Income from continuing operations $ 0.38 $ 0.56 $ 0.81 $ 0.85 Income (loss) from discontinued operations 0.02 (0.01 ) 0.02 (1.31 ) Net income (loss) $ 0.40 $ 0.56 $ 0.83 $ (0.46 ) Net income (loss) per common share — Diluted Income from continuing operations $ 0.38 $ 0.56 $ 0.80 $ 0.84 Income (loss) from discontinued operations 0.02 (0.01 ) 0.02 (1.29 ) Net income (loss) $ 0.40 $ 0.55 $ 0.82 $ (0.45 ) |
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 April 30, Six Months Ended April 30, (in millions) 2018 2017 2018 2017 Anti-dilutive 0.5 — 0.3 — |
Fair Value of Financial Instr23
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
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 April 30, 2018 October 31, 2017 Cash and cash equivalents (1) 1 $ 69.7 $ 62.8 Insurance deposits (2) 1 10.4 11.2 Assets held in funded deferred compensation plan (3) 1 4.1 4.6 Credit facility (4) 2 1,118.7 1,191.2 Interest rate swaps (5) 2 — 2.9 Investments in auction rate securities (6) 3 8.0 8.0 Contingent consideration liability (7) 3 0.9 0.9 (1) Cash and cash equivalents are stated at nominal value, which equals fair value. (2) Represents restricted deposits that are used to collateralize our insurance obligations and are stated at nominal value, which equals fair value. These insurance deposits are included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. See Note 8 , “Insurance,” for further information. (3) Represents investments held in a Rabbi trust associated with one of our deferred compensation plans, which we include in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. The fair value of the assets held in the funded deferred compensation plan is based on quoted market prices. (4) Represents gross outstanding borrowings under our syndicated line of credit and term loan. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit and term loan approximates the fair value. See Note 9 , “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. At October 31, 2017, these interest rate swaps were included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. During April 2018, we elected to terminate our interest rate swaps. See Note 9 , “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. On May 16, 2018, we sold one of these securities. See Note 7 , “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. Our contingent consideration liability is included in “Other accrued liabilities” and “Other noncurrent liabilities” on the accompanying unaudited consolidated balance sheets. |
Auction Rate Securities (Tables
Auction Rate Securities (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
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 April 30, 2018 October 31, 2017 Discount rates L + 0.47% and L + 0.74% L + 0.42% and L + 0.79% 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) | 6 Months Ended |
Apr. 30, 2018 | |
Insurance [Abstract] | |
Schedule of Insurance Related Balances and Activity | Insurance Related Balances and Activity (in millions) April 30, 2018 October 31, 2017 Insurance claim reserves excluding medical and dental $ 495.7 $ 485.6 Medical and dental claim reserves 10.0 9.8 Insurance recoverables 74.9 73.1 |
Schedule of Instruments Used to Collateralize Insurance Obligations | Instruments Used to Collateralize Our Insurance Obligations (in millions) April 30, 2018 October 31, 2017 Standby letters of credit $ 136.7 $ 137.6 Surety bonds 78.2 77.5 Restricted insurance deposits 10.4 11.2 Total $ 225.3 $ 226.3 |
Credit Facility (Tables)
Credit Facility (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facility Information | Credit Facility Information (in millions) April 30, 2018 October 31, 2017 Current portion of long-term debt Gross term loan $ 20.0 $ 20.0 Less: unamortized deferred financing costs (3.0 ) (3.1 ) Current portion of term loan $ 17.0 $ 16.9 Long-term debt Gross term loan $ 760.0 $ 780.0 Less: unamortized deferred financing costs (8.4 ) (9.9 ) Total noncurrent portion of term loan 751.6 770.1 Line of credit (1)(2) 338.7 391.2 Long-term debt $ 1,090.3 $ 1,161.3 (1) Standby letters of credit amounted to $145.5 million at April 30, 2018 . (2) At April 30, 2018 , we had borrowing capacity of $404.5 million , however covenant restrictions limited our actual borrowing capacity to $313.4 million . |
Schedule of Term Loan Maturities | During the first quarter, we made $20.0 million of principal payments. As of April 30, 2018 , the following principal payments are required under the term loan. (in millions) 2019 2020 2021 2022 Debt maturities $ 40.0 $ 60.0 $ 120.0 $ 560.0 |
Schedule of Interest Rate Swap Information | We subsequently entered into new forward-starting interest rate swaps, as summarized below. Notional Amounts Fixed Interest Rates Effective Dates Maturity Dates $ 90.0 million 2.83% November 1, 2018 April 30, 2021 $ 90.0 million 2.84% November 1, 2018 October 31, 2021 $ 130.0 million 2.86% November 1, 2018 April 30, 2022 $ 130.0 million 2.84% November 1, 2018 September 1, 2022 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information by Reportable Segment | Financial Information by Reportable Segment Three Months Ended April 30, Six Months Ended April 30, (in millions) 2018 2017 2018 2017 Revenues Business & Industry $ 723.2 $ 637.5 $ 1,445.3 $ 1,293.0 Aviation 245.4 232.1 501.6 464.0 Technology & Manufacturing 227.5 161.4 459.5 332.9 Education 206.3 65.2 412.6 132.2 Technical Solutions 108.5 110.8 212.5 218.5 Healthcare 69.9 60.6 137.6 122.3 Government Services — 42.9 — 74.3 $ 1,580.8 $ 1,310.5 $ 3,169.2 $ 2,637.2 Operating profit (loss) Business & Industry $ 43.5 $ 36.0 $ 72.0 $ 63.2 Aviation 5.1 6.8 10.9 11.4 Technology & Manufacturing 16.0 12.1 32.9 24.8 Education 10.6 3.6 19.8 7.2 Technical Solutions 7.5 10.2 13.0 18.1 Healthcare 2.7 2.4 5.4 4.9 Government Services — 18.2 (0.8 ) 20.0 Corporate (37.1 ) (36.4 ) (84.5 ) (71.0 ) Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services (1.0 ) (1.1 ) (1.6 ) (2.4 ) Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions (2.0 ) (0.8 ) (2.3 ) (1.4 ) 45.3 51.0 64.8 74.8 Income from unconsolidated affiliates, net 1.0 0.9 1.6 2.3 Interest expense (13.8 ) (3.0 ) (28.1 ) (6.3 ) Income from continuing operations before income taxes $ 32.5 $ 48.9 $ 38.2 $ 70.9 |
The Company and Nature of Ope28
The Company and Nature of Operations - Narrative (Details) | 6 Months Ended |
Apr. 30, 2018segmentindustry_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 Sig29
Basis of Presentation and Significant Accounting Policies - Government Services (Details) - Disposed of by sale, not discontinued operations - Government Services - USD ($) $ in Millions | May 31, 2017 | Jul. 31, 2017 |
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 | $ 1.2 |
Basis of Presentation and Sig30
Basis of Presentation and Significant Accounting Policies - Management Reimbursement Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | $ 96.1 | $ 79.1 | $ 189.4 | $ 158 |
Business & Industry | ||||
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | 63.5 | 58.1 | 126.5 | 115.9 |
Aviation | ||||
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | 27.6 | 16.2 | 53.1 | 32.7 |
Healthcare | ||||
Segment Reporting Information [Line Items] | ||||
Parking facility management fee revenue | $ 5 | $ 4.8 | $ 9.9 | $ 9.4 |
Acquisitions - GCA Consideratio
Acquisitions - GCA Consideration Transferred (Details) - GCA Holding Corp. $ / shares in Units, shares in Millions, $ in Millions | Sep. 01, 2017USD ($)$ / sharesshares |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |
Fair value of ABM common stock at closing | $ 421.3 |
Cash consideration | 837.5 |
Total consideration transferred | $ 1,258.8 |
Common Stock | |
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |
Shares of ABM common stock, net of shares withheld for taxes (in shares) | shares | 9.4 |
ABM common stock closing market price at acquisition date (usd per share) | $ / shares | $ 44.63 |
Acquisitions - GCA Preliminary
Acquisitions - GCA Preliminary Purchase Price Allocation (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Apr. 30, 2018 | Oct. 31, 2017 | ||
Business Acquisition [Line Items] | |||
Goodwill | $ 1,867.5 | $ 1,864.2 | |
GCA Holding Corp. | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | 0.2 | 2.5 | |
Adjustment, Cash and cash equivalents | (2.3) | ||
Trade accounts receivable | [1] | 118.1 | 118.1 |
Prepaid expenses and other current assets | 10.3 | 10.3 | |
Property, plant and equipment | 41.5 | 41.4 | |
Adjustment, Property, plant and equipment | 0.1 | ||
Goodwill | [2] | 933.4 | 933.9 |
Adjustment, Goodwill | [2] | (0.5) | |
Other assets | 4 | 4.2 | |
Adjustment, Other assets | (0.2) | ||
Trade accounts payable | (9.6) | (9.1) | |
Adjustment, Trade accounts payable | (0.4) | ||
Insurance reserves | (35.6) | (35.5) | |
Adjustment, Insurance reserves | (0.2) | ||
Income taxes payable | (8.3) | (16.5) | |
Adjustment, Income taxes payable | 8.2 | ||
Accrued liabilities | (33.5) | (36.5) | |
Adjustment, Accrued liabilities | 2.9 | ||
Deferred income tax liability, net | (92.6) | (92.6) | |
Adjustment, Deferred income tax liability, net | |||
Other liabilities | (8.1) | (8.1) | |
Net assets acquired | 1,258.8 | 1,261.3 | |
Adjustment, Net assets acquired | (2.4) | ||
Acquired Receivables | |||
Trade accounts receivable, gross | 122 | ||
Estimated uncollectible trade accounts receivable | 3.9 | ||
GCA Holding Corp. | Customer relationships | |||
Business Acquisition [Line Items] | |||
Intangible assets | [3] | 330 | 340 |
Adjustment, Intangible assets | [3] | $ (10) | |
Acquired Intangible Assets | |||
Amortization period for acquired intangible assets | 15 years | ||
GCA Holding Corp. | Trade names | |||
Business Acquisition [Line Items] | |||
Intangible assets | [3] | $ 9 | $ 9 |
Acquired Intangible Assets | |||
Amortization period for acquired intangible assets | 2 years | ||
[1] | The gross amount of trade accounts receivable was $122.0 million, of which $3.9 million is expected to be uncollectible. | ||
[2] | Goodwill is largely attributable to value we expect to obtain from long-term business growth, the established workforce, and buyer-specific synergies. This goodwill is not deductible for income tax purposes. | ||
[3] | The amortization periods for the acquired intangible assets are 15 years for customer relationships and 2 years for trade names. |
Acquisitions - GCA Pro Forma Fi
Acquisitions - GCA Pro Forma Financial Information (Details) - GCA Holding Corp. - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Revenue related to GCA recorded in reporting period | $ 256.4 | $ 508 | ||
Operating profit related to GCA recorded in reporting period | $ 7.5 | $ 12.5 | ||
Pro forma statutory tax rate (percent) | 41.00% | |||
Pro forma revenue | $ 1,560.5 | $ 3,139.4 | ||
Pro forma income from continuing operations | $ 31.9 | $ 46.5 |
Acquisitions - Other 2017 Acqui
Acquisitions - Other 2017 Acquisitions (Details) $ in Millions | Dec. 01, 2016USD ($) |
Mechanical Solutions Inc (MSI) | |
Business Acquisition [Line Items] | |
Purchase price | $ 12.6 |
Contingent consideration liability | 1 |
OFJ Connections Ltd (OFJ) | |
Business Acquisition [Line Items] | |
Purchase price | $ 6.3 |
Restructuring and Related Cos35
Restructuring and Related Costs - Restructuring and Related Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |||
Restructuring Reserve [Roll Forward] | ||||||
Balance, beginning of period | $ 8.4 | |||||
Costs recognized | $ 5.3 | $ 5.8 | 19.6 | [1] | $ 10.8 | |
Payments | (14.9) | |||||
Non-cash charges | (1.1) | |||||
Balance, end of period | 11.9 | 11.9 | ||||
Employee Severance | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance, beginning of period | 2.7 | |||||
Costs recognized | [1] | 9.3 | ||||
Payments | (6.5) | |||||
Non-cash charges | 0 | |||||
Balance, end of period | 5.5 | 5.5 | ||||
External Support Fees | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance, beginning of period | 2.5 | |||||
Costs recognized | [1] | 4 | ||||
Payments | (6.5) | |||||
Non-cash charges | 0 | |||||
Balance, end of period | 0 | 0 | ||||
Lease Exit | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance, beginning of period | 2.8 | |||||
Costs recognized | [1] | 2.5 | ||||
Payments | (0.3) | |||||
Non-cash charges | (1.1) | |||||
Balance, end of period | 3.9 | 3.9 | ||||
Other Project Fees | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance, beginning of period | 0.4 | |||||
Costs recognized | [1] | 3.8 | ||||
Payments | (1.6) | |||||
Non-cash charges | 0 | |||||
Balance, end of period | $ 2.5 | $ 2.5 | ||||
[1] | We include these costs within corporate expenses. |
Restructuring and Related Cos36
Restructuring and Related Costs - Cumulative Restructuring and Related Charges (Details) $ in Millions | Apr. 30, 2018USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | $ 83.8 |
GCA Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 16.6 |
2020 Vision Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 67.1 |
External Support Fees | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 32 |
External Support Fees | GCA Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 2 |
External Support Fees | 2020 Vision Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 30 |
Employee Severance | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 24.7 |
Employee Severance | GCA Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 11.2 |
Employee Severance | 2020 Vision Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 13.6 |
Other Project Fees | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 14.2 |
Other Project Fees | GCA Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 3.5 |
Other Project Fees | 2020 Vision Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 10.7 |
Lease Exit | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 7.7 |
Lease Exit | GCA Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 0 |
Lease Exit | 2020 Vision Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 7.7 |
Asset Impairment | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 5.2 |
Asset Impairment | GCA Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | 0 |
Asset Impairment | 2020 Vision Restructuring Program | |
Restructuring Cost and Reserve [Line Items] | |
Cumulative charges | $ 5.2 |
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 | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Schedule of Earnings Per Share, Basic and Diluted, by Common Class [Line Items] | ||||
Income from continuing operations | $ 25.4 | $ 31.6 | $ 53.3 | $ 47.7 |
Income (loss) from discontinued operations, net of taxes | 1.2 | (0.4) | 1.1 | (73.2) |
Net income (loss) | $ 26.6 | $ 31.3 | $ 54.4 | $ (25.5) |
Weighted-average common and common equivalent shares outstanding - Basic (in shares) | 66 | 56 | 66 | 56 |
Effect of dilutive securities | ||||
Weighted-average common and common equivalent shares outstanding - Diluted (in shares) | 66.2 | 56.5 | 66.3 | 56.6 |
Net income (loss) per common share — Basic | ||||
Income from continuing operations (in usd per share) | $ 0.38 | $ 0.56 | $ 0.81 | $ 0.85 |
Loss from discontinued operations (in usd per share) | 0.02 | (0.01) | 0.02 | (1.31) |
Net income (loss) (in usd per share) | 0.40 | 0.56 | 0.83 | (0.46) |
Net income (loss) per common share — Diluted | ||||
Income from continuing operations (in usd per share) | 0.38 | 0.56 | 0.80 | 0.84 |
Loss from discontinued operations (in usd per share) | 0.02 | (0.01) | 0.02 | (1.29) |
Net income (loss) (in usd per share) | $ 0.40 | $ 0.55 | $ 0.82 | $ (0.45) |
Restricted stock units | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities (in shares) | 0.1 | 0.3 | 0.1 | 0.2 |
Stock options | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities (in shares) | 0.1 | 0.2 | 0.1 | 0.3 |
Performance shares | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities (in shares) | 0 | 0 | 0 | 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 | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Anti-dilutive (in shares) | 0 | 0 | 0 | 0 |
Fair Value of Financial Instr39
Fair Value of Financial Instruments - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Apr. 30, 2018 | Oct. 31, 2017 | |
Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | [1] | $ 69.7 | $ 62.8 |
Insurance deposits | [2] | 10.4 | 11.2 |
Assets held in funded deferred compensation plan | [3] | 4.1 | 4.6 |
Fair Value, Inputs, Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Credit facility | [4] | 1,118.7 | 1,191.2 |
Interest rate swaps | [5] | 0 | 2.9 |
Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Investments in auction rate securities | [6] | 8 | 8 |
Contingent consideration liability | [7] | $ 0.9 | $ 0.9 |
[1] | Cash and cash equivalents are stated at nominal value, which equals fair value. | ||
[2] | Represents restricted deposits that are used to collateralize our insurance obligations and are stated at nominal value, which equals fair value. These insurance deposits are included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. See Note 8, “Insurance,” for further information. | ||
[3] | Represents investments held in a Rabbi trust associated with one of our deferred compensation plans, which we include in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. The fair value of the assets held in the funded deferred compensation plan is based on quoted market prices. | ||
[4] | Represents gross outstanding borrowings under our syndicated line of credit and term loan. Due to variable interest rates, the carrying value of outstanding borrowings under our line of credit and term loan approximates the fair value. See Note 9, “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. At October 31, 2017, these interest rate swaps were included in “Other noncurrent assets” on the accompanying unaudited consolidated balance sheets. During April 2018, we elected to terminate our interest rate swaps. See Note 9, “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. On May 16, 2018, we sold one of these securities. See Note 7, “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. Our contingent consideration liability is included in “Other accrued liabilities” and “Other noncurrent liabilities” on the accompanying unaudited consolidated balance sheets. |
Auction Rate Securities - Narra
Auction Rate Securities - Narrative (Details) | May 16, 2018USD ($) | Apr. 30, 2018USD ($)institution | Oct. 31, 2017USD ($)institution |
Schedule of Available-for-sale Securities [Line Items] | |||
Number of different auction rate securities issuers | 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 | |
Subsequent Event | Auction Rate Securities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment in auction rate securities, amortized cost basis | $ 3,000,000 | ||
Available-for-sale debt securities, original par value | 5,000,000 | ||
Proceeds from sale of AFS securities, debt | $ 2,900,000 |
Auction Rate Securities - Signi
Auction Rate Securities - Significant Assumptions Used to Determine Fair Value of Auction Rate Securities (Details) | 6 Months Ended | 12 Months Ended |
Apr. 30, 2018 | Oct. 31, 2017 | |
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 | 0.47% | 0.42% |
Average expected lives | 4 years | 4 years |
Maximum | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Discount rates | 0.74% | 0.79% |
Average expected lives | 10 years | 10 years |
Insurance - Narrative (Details)
Insurance - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Jan. 31, 2018 | Apr. 30, 2018 | Apr. 30, 2017 | |
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 | 2,000,000 | $ 2,000,000 | $ 10,000,000 | |
Increase in Claims Reserve | 4,000,000 | 4,000,000 | ||
Insurance reserve adjustment, amount less than prior year adjustment | (6,000,000) | |||
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 | Apr. 30, 2018 | Oct. 31, 2017 |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance recoverables | $ 74.9 | $ 73.1 |
Claim Types Excluding Medical and Dental | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance claim reserves | 495.7 | 485.6 |
Medical and Dental Claims | ||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||
Insurance claim reserves | $ 10 | $ 9.8 |
Insurance - Instruments Used to
Insurance - Instruments Used to Collateralize Insurance Obligations (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Oct. 31, 2017 |
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | $ 225.3 | $ 226.3 |
Standby letters of credit | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | 136.7 | 137.6 |
Surety bonds | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | 78.2 | 77.5 |
Restricted insurance deposits | ||
Letters Of Credit [Line Items] | ||
Instruments used to collateralize insurance obligations | $ 10.4 | $ 11.2 |
Credit Facility - Narrative (De
Credit Facility - Narrative (Details) | Sep. 01, 2017USD ($) | Jul. 31, 2020 | Apr. 30, 2018 | Aug. 31, 2017USD ($) |
Minimum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee percentage on unused portion of the Facility | 0.20% | |||
Maximum | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Commitment fee percentage on unused portion of the Facility | 0.35% | |||
Prior Credit Facility | Revolving Credit Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | $ 800,000,000 | |||
Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, term | 5 years | |||
Weighted average interest rate | 4.02% | |||
Deferred financing costs | $ 18,700,000 | |||
Credit Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Deferred financing costs | 5,200,000 | |||
Credit Facility | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Debt instrument, face amount | 800,000,000 | |||
Deferred financing costs | 13,400,000 | |||
Credit Facility | Revolving Credit Facility | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | 900,000,000 | |||
Borrowing capacity after initial year of term | 800,000,000 | |||
Credit Facility | Standby Letters of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | 300,000,000 | |||
Credit Facility | Swing Line Loan | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit facility, borrowing capacity | $ 75,000,000 | |||
Credit Facility | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Fixed charge coverage ratio | 1.50 | |||
Credit Facility | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Leverage ratio | 4.75 | |||
Leverage ratio election option for four fiscal quarters in event of material acquisition | 3.75 | |||
Credit Facility | Maximum | Forecast | ||||
Line of Credit Facility [Line Items] | ||||
Leverage ratio | 3.50 | |||
Credit Facility | Eurodollar | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.00% | |||
Credit Facility | Eurodollar | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 2.25% | |||
Credit Facility | Base Rate | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 0.00% | |||
Credit Facility | Base Rate | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Basis spread on variable rate | 1.25% |
Credit Facility - Credit Facili
Credit Facility - Credit Facility Information (Details) - USD ($) $ in Millions | Apr. 30, 2018 | Oct. 31, 2017 | |
Current portion of long-term debt | |||
Gross term loan | $ 20 | $ 20 | |
Less: unamortized deferred financing costs | (3) | (3.1) | |
Current portion of term loan | 17 | 16.9 | |
Long-term debt | |||
Gross term loan | 760 | 780 | |
Less: unamortized deferred financing costs | (8.4) | (9.9) | |
Total noncurrent portion of term loan | 751.6 | 770.1 | |
Line of credit | [1],[2] | 338.7 | 391.2 |
Long-term debt | 1,090.3 | $ 1,161.3 | |
Standby letters of credit | 145.5 | ||
Borrowing capacity | 404.5 | ||
Borrowing capacity after covenant restrictions | $ 313.4 | ||
[1] | At April 30, 2018, we had borrowing capacity of $404.5 million, however covenant restrictions limited our actual borrowing capacity to $313.4 million. | ||
[2] | Standby letters of credit amounted to $145.5 million at April 30, 2018. |
Credit Facility - Term Loan Mat
Credit Facility - Term Loan Maturities (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jan. 31, 2018 | Apr. 30, 2018 | |
Debt Instrument [Line Items] | ||
Debt instrument, periodic payment, principal | $ 20 | |
Term Loan | ||
Term Loan Maturities | ||
Debt maturities, 2019 | $ 40 | |
Debt maturities, 2020 | 60 | |
Debt maturities, 2021 | 120 | |
Debt maturities, 2022 | $ 560 |
Credit Facility - Interest Rate
Credit Facility - Interest Rate Swaps (Details) - USD ($) | 6 Months Ended | |||
Apr. 30, 2018 | Apr. 30, 2017 | Nov. 01, 2018 | Oct. 31, 2017 | |
Line of Credit Facility [Line Items] | ||||
Proceeds from termination of interest rate swaps | $ 25,900,000 | $ 0 | ||
Net gains from cash flow hedges recorded in accumulated other comprehensive loss, net of tax | 18,600,000 | $ 1,700,000 | ||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, gross | 3,800,000 | |||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, net | 1,500,000 | |||
Accumulated Net Gain (Loss) from Cash Flow Hedges | ||||
Line of Credit Facility [Line Items] | ||||
Tax related to amounts in accumulated other comprehensive loss | $ 7,400,000 | $ 1,200,000 | ||
Subsequent Event | Interest Rate Swap, Maturity 4/30/2021 | ||||
Line of Credit Facility [Line Items] | ||||
Notional amount | $ 90,000,000 | |||
Derivative, fixed interest rate (percent) | 2.8275% | |||
Subsequent Event | Interest Rate Swap, Maturity 10/31/2021 | ||||
Line of Credit Facility [Line Items] | ||||
Notional amount | $ 90,000,000 | |||
Derivative, fixed interest rate (percent) | 2.84% | |||
Subsequent Event | Interest Rate Swap, Maturity 4/30/2022 | ||||
Line of Credit Facility [Line Items] | ||||
Notional amount | $ 130,000,000 | |||
Derivative, fixed interest rate (percent) | 2.86% | |||
Subsequent Event | Interest Rate Swap, Maturity 9/1/2022 | ||||
Line of Credit Facility [Line Items] | ||||
Notional amount | $ 130,000,000 | |||
Derivative, fixed interest rate (percent) | 2.84% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Dec. 08, 2017USD ($) | Nov. 03, 2017USD ($)plaintiff | Feb. 07, 2017plaintiff | Apr. 30, 2018USD ($) |
Loss Contingencies [Line Items] | ||||
Standby letters of credit | $ 145,500,000 | |||
Surety bonds | $ 465,700,000 | |||
Subsidiary ownership interest (in percent) | 33.00% | |||
Loss contingency amount accrued for probable losses | $ 8,400,000 | |||
Litigation losses | 3,100,000 | |||
Energy Savings Contracts | ||||
Loss Contingencies [Line Items] | ||||
Guarantee obligation | 179,400,000 | |||
Performance Guarantee | Joint Venture | ||||
Loss Contingencies [Line Items] | ||||
Total guarantees | 35,000,000 | |||
Hussein And Isse | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency amount accrued for probable losses | 3,800,000 | |||
Settlement amount | $ 8,300,000 | |||
Isse | ||||
Loss Contingencies [Line Items] | ||||
Number of plaintiffs | plaintiff | 220 | 60 | ||
Payments for legal settlements | $ 4,500,000 | |||
Minimum | ||||
Loss Contingencies [Line Items] | ||||
Amount of reasonably possible loss | 0 | |||
Maximum | ||||
Loss Contingencies [Line Items] | ||||
Amount of reasonably possible loss | $ 5,000,000 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Apr. 30, 2018 | Jan. 31, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Oct. 31, 2018 | |
Income Taxes [Line Items] | ||||||
Net discrete tax benefit from remeasurement of deferred taxes at new rate due to Tax Act | $ 28,700,000 | |||||
One-time transition tax on deemed repatriation of indefinitely reinvested earnings | $ 7,000,000 | |||||
Tax deductions for energy efficient government buildings | $ 2,000,000 | $ 2,300,000 | ||||
Increase (decrease) in tax credits, work opportunity tax credit | $ 1,500,000 | 1,500,000 | ||||
Discrete tax benefit related to enactment of Tax Act | 21,700,000 | |||||
Income tax benefit related to vesting of share-based compensation awards | $ 2,100,000 | $ 1,500,000 | $ 2,100,000 | |||
Forecast | ||||||
Income Taxes [Line Items] | ||||||
U.S. statutory federal rate (percent) | 23.30% |
Segment Information - Financial
Segment Information - Financial Information by Reportable Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Revenues | ||||
Revenues | $ 1,580.8 | $ 1,310.5 | $ 3,169.2 | $ 2,637.2 |
Operating profit (loss) | ||||
Operating profit (loss) | 45.3 | 51 | 64.8 | 74.8 |
Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services | 1 | 0.9 | 1.6 | 2.3 |
Interest expense | (13.8) | (3) | (28.1) | (6.3) |
Income from continuing operations before income taxes | 32.5 | 48.9 | 38.2 | 70.9 |
Corporate | ||||
Operating profit (loss) | ||||
Operating profit (loss) | (37.1) | (36.4) | (84.5) | (71) |
Segment Reconciling Items | ||||
Operating profit (loss) | ||||
Adjustment for tax deductions for energy efficient government buildings, included in Technical Solutions | (2) | (0.8) | (2.3) | (1.4) |
Adjustment for income from unconsolidated affiliates, net, included in Aviation and Government Services | (1) | (1.1) | (1.6) | (2.4) |
Business & Industry | Operating Segments | ||||
Revenues | ||||
Revenues | 723.2 | 637.5 | 1,445.3 | 1,293 |
Operating profit (loss) | ||||
Operating profit (loss) | 43.5 | 36 | 72 | 63.2 |
Aviation | Operating Segments | ||||
Revenues | ||||
Revenues | 245.4 | 232.1 | 501.6 | 464 |
Operating profit (loss) | ||||
Operating profit (loss) | 5.1 | 6.8 | 10.9 | 11.4 |
Technology & Manufacturing | Operating Segments | ||||
Revenues | ||||
Revenues | 227.5 | 161.4 | 459.5 | 332.9 |
Operating profit (loss) | ||||
Operating profit (loss) | 16 | 12.1 | 32.9 | 24.8 |
Education | Operating Segments | ||||
Revenues | ||||
Revenues | 206.3 | 65.2 | 412.6 | 132.2 |
Operating profit (loss) | ||||
Operating profit (loss) | 10.6 | 3.6 | 19.8 | 7.2 |
Technical Solutions | Operating Segments | ||||
Revenues | ||||
Revenues | 108.5 | 110.8 | 212.5 | 218.5 |
Operating profit (loss) | ||||
Operating profit (loss) | 7.5 | 10.2 | 13 | 18.1 |
Healthcare | Operating Segments | ||||
Revenues | ||||
Revenues | 69.9 | 60.6 | 137.6 | 122.3 |
Operating profit (loss) | ||||
Operating profit (loss) | 2.7 | 2.4 | 5.4 | 4.9 |
Government Services | Operating Segments | ||||
Revenues | ||||
Revenues | 0 | 42.9 | 0 | 74.3 |
Operating profit (loss) | ||||
Operating profit (loss) | $ 0 | $ 18.2 | $ (0.8) | $ 20 |