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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Oct. 31, 2010	Dec. 10, 2010	Apr. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	ABM INDUSTRIES INC /DE/
Entity Central Index Key	0000771497
Document Type	10-K
Document Period End Date	Oct. 31, 2010
Amendment Flag	false
Document Fiscal Year Focus	2010
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--10-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,100,912,951
Entity Common Stock, Shares Outstanding		52,659,190

Consolidated Balance Sheets - USD ($) $ in Thousands	12 Months Ended
Consolidated Balance Sheets - USD ($) $ in Thousands	Oct. 31, 2010	Oct. 31, 2009
Current assets
Cash and cash equivalents	$ 39,446	$ 34,153
Trade accounts receivable, net of allowances of $10,672 and $10,772 at October 31, 2010 and 2009, respectively	450,513	445,241
Prepaid income taxes	1,498	13,473
Current assets of discontinued operations	4,260	10,787
Prepaid expenses	41,306	38,781
Notes receivable and other	20,402	21,374
Deferred income taxes, net	46,193	52,171
Insurance recoverables	5,138	5,017
Total current assets	608,756	620,997
Non-current assets of discontinued operations	1,392	4,567
Insurance deposits	36,164	42,500
Other investments and long-term receivables	4,445	6,240
Deferred income taxes, net	51,068	63,444
Insurance recoverables	70,960	67,100
Other assets	37,869	32,446
Investments in auction rate securities	20,171	19,531
Property, plant and equipment, net of accumulated depreciation of $98,884 and $92,563 at October 31, 2010 and 2009, respectively	58,088	56,892
Other intangible assets, net of accumulated amortization of $54,889 and $43,464 at October 31, 2010 and 2009, respectively	65,774	60,199
Goodwill	593,983	547,237
Total assets	1,548,670	1,521,153
Current liabilities
Trade accounts payable	78,928	84,701
Accrued liabilities
Compensation	89,063	93,095
Taxes - other than income	17,663	17,539
Insurance claims	77,101	78,144
Other	70,048	66,279
Income taxes payable	977	1,871
Current liabilities of discontinued operations	71	1,065
Total current liabilities	333,851	342,694
Income taxes payable	29,455	17,763
Line of credit	140,500	172,500
Retirement plans and other	34,626	32,963
Insurance claims	271,213	268,183
Total liabilities	$ 809,645	$ 834,103
STOCKHOLDERS' EQUITY
Commitment and Contingencies
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; 52,635,343 and 51,688,218 shares issued and outstanding at October 31, 2010 and 2009, respectively	526	517
Additional paid-in capital	192,418	176,480
Accumulated other comprehensive loss, net of taxes	(1,863)	(2,423)
Retained earnings	547,944	512,476
Total stockholders' equity	739,025	687,050
Total liabilities and stockholders' equity	$ 1,548,670	$ 1,521,153

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 31, 2010	Oct. 31, 2009	Oct. 31, 2008
Consolidated Statements of Income [Abstract]
Revenues	$ 3,495,747	$ 3,481,823	$ 3,623,590
Expenses
Operating	3,134,018	3,114,699	3,224,696
Selling, general and administrative	241,526	263,633	287,650
Amortization of intangible assets	11,364	11,384	11,735
Total expenses	3,386,908	3,389,716	3,524,081
Operating profit	108,839	92,107	99,509
Credit losses on auction rate security:
Gross other-than-temporary impairment losses ("OTTI")		3,695
OTTI recognized in earnings (other comprehensive income)	127	(2,129)
Interest expense	4,639	5,881	15,193
Income from continuing operations before income taxes	104,073	84,660	84,316
Provision for income taxes	40,203	29,170	31,585
Income from continuing operations	63,870	55,490	52,731
Discontinued Operations
Income (loss) from discontinued operations, net of taxes	251	(1,197)	(3,776)
Loss on sale of discontinued operations, net of taxes of $1,008			(3,521)
Income (loss) from discontinued operations, net of taxes	251	(1,197)	(7,297)
Net income	$ 64,121	$ 54,293	$ 45,434
Net income per common share - Basic
Income from continuing operations	$ 1.23	$ 1.08	$ 1.04
Loss from discontinued operations		(0.02)	(0.14)
Net Income	1.23	1.06	0.90
Net income per common share - Diluted
Income from continuing operations	1.21	1.07	1.03
Loss from discontinued operations		(0.02)	(0.15)
Net Income	$ 1.21	$ 1.05	$ 0.88
Weighted-average common and common equivalent shares outstanding
Basic	52,117	51,373	50,519
Diluted	52,908	51,845	51,386
Dividends declared per common share	$ 0.54	$ 0.52	$ 0.50

Consolidated Statements of Stockholders' Equity and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Oct. 31, 2010	Oct. 31, 2009	Oct. 31, 2008
Statement [Line Items]
Beginning Balance	$ 687,050	$ 644,051	$ 605,758
Comprehensive income:
Net income	64,121	54,293	45,434
Unrealized gain (loss) on auction rate securities, net of taxes	461	297	(3,621)
Reclass adjustment for credit losses recognized in earnings, net of taxes	74	930
Foreign currency translation, net of taxes	68	577	(909)
Actuarial gain (loss) - Adjustments to pension and other post-retirement benefit plans, net of taxes	(381)	(203)	228
Unrealized gain (loss) on interest rate swaps, net of taxes	338	(602)
Comprehensive income	64,681	55,292	41,132
Dividends:
Common stock	(28,152)	(26,727)	(25,271)
Excess tax benefit from exercise of stock options	383	(1,314)	899
Stock issued under employees' stock purchase and option plans	10,992	8,337	14,338
Share-based compensation expense	4,071	7,411	7,195
Ending Balance	739,025	687,050	644,051
Common Stock
Statement [Line Items]
Beginning Balance	$ 517	$ 581	$ 571
Beginning Balance, Shares	51,688	57,992	57,048
Dividends:
Stock issued under employees' stock purchase and option plans	$ 9	$ 6	$ 10
Stock issued under employees' stock purchase and option plans, Shares	947	724	944
Treasury stock retirement		$ (70)
Treasury stock retirement, Shares		(7,028)
Ending Balance	$ 526	$ 517	$ 581
Ending Balance, Shares	52,635	51,688	57,992
Treasury Stock
Statement [Line Items]
Beginning Balance	$ 0	$ (122,338)	$ (122,338)
Beginning Balance, Shares	0	(7,028)	(7,028)
Dividends:
Treasury stock retirement		$ 122,338
Treasury stock retirement, Shares		7,028
Ending Balance	$ 0	$ 0	$ (122,338)
Ending Balance, Shares	0	0	(7,028)
Additional Paid-in Capital
Statement [Line Items]
Beginning Balance	$ 176,480	$ 284,094	$ 261,182
Dividends:
Excess tax benefit from exercise of stock options	383	(1,314)	899
Stock issued under employees' stock purchase and option plans	11,484	8,557	14,818
Share-based compensation expense	4,071	7,411	7,195
Treasury stock retirement		(122,268)
Ending Balance	192,418	176,480	284,094
Accumulated Other Comprehensive Income (Loss)
Statement [Line Items]
Beginning Balance	(2,423)	(3,422)	880
Comprehensive income:
Unrealized gain (loss) on auction rate securities, net of taxes	461	297	(3,621)
Reclass adjustment for credit losses recognized in earnings, net of taxes	74	930
Foreign currency translation, net of taxes	68	577	(909)
Actuarial gain (loss) - Adjustments to pension and other post-retirement benefit plans, net of taxes	(381)	(203)	228
Unrealized gain (loss) on interest rate swaps, net of taxes	338	(602)
Dividends:
Ending Balance	(1,863)	(2,423)	(3,422)
Retained Earnings
Statement [Line Items]
Beginning Balance	512,476	485,136	465,463
Comprehensive income:
Net income	64,121	54,293	45,434
Dividends:
Common stock	(28,152)	(26,727)	(25,271)
Stock issued under employees' stock purchase and option plans	(501)	(226)	(490)
Ending Balance	$ 547,944	$ 512,476	$ 485,136

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2010	Oct. 31, 2009	Oct. 31, 2008
Cash flows from operating activities:
Net income	$ 64,121	$ 54,293	$ 45,434
Income (loss) from discontinued operations, net of taxes	251	(1,197)	(7,297)
Income from continuing operations	63,870	55,490	52,731
Adjustments to reconcile income from continuing operations to net cash provided by continuing operating activities:
Depreciation and amortization of intangible assets	36,315	33,325	28,075
Deferred income taxes	17,654	16,191	28,156
Share-based compensation expense	4,071	7,411	7,195
Provision for bad debt	2,636	3,960	4,954
Discount accretion on insurance claims	912	1,248	1,766
Auction rate security credit loss impairment	127	1,566
Gain on sale of assets	(1,059)	(941)	(23)
Changes in assets and liabilities, net of effects of acquisitions:
Trade accounts receivable	1,976	19,931	(34,333)
Prepaid expenses and other current assets	(297)	(1,431)	6,942
Insurance recoverables	(3,981)	(500)	3,401
Other assets and long-term receivables	3,856	(8,764)	1,424
Income taxes payable	22,629	12,623	(1,053)
Retirement plans and other non-current liabilities	(317)	(5,144)	(6,659)
Insurance claims	(247)	(1,497)	(17,900)
Trade accounts payable and other accrued liabilities	(7,399)	(12,213)	(12,401)
Total adjustments	76,876	65,765	9,544
Net cash provided by continuing operating activities	140,746	121,255	62,275
Net cash provided by discontinued operating activities	9,118	19,616	6,032
Net cash provided by operating activities	149,864	140,871	68,307
Cash flows from investing activities:
Additions to property, plant and equipment	(23,942)	(18,582)	(34,063)
Proceeds from sale of assets and other	1,512	2,165	1,784
Purchase of businesses, net of cash acquired	(65,430)	(21,050)	(422,883)
Net cash used in continuing investing activities	(87,860)	(37,467)	(455,162)
Net cash provided by discontinued investing activities			33,640
Net cash used in investing activities	(87,860)	(37,467)	(421,522)
Cash flows from financing activities:
Proceeds from exercises of stock options (including income tax benefit)	11,376	6,331	14,620
Dividends paid	(28,152)	(26,727)	(25,271)
Deferred financing costs paid			(1,616)
Borrowings from line of credit	448,000	638,000	810,500
Repayment of borrowings from line of credit	(480,000)	(695,500)	(580,500)
Net (decrease) increase in book cash overdraft	(7,935)	(18,096)	14,506
Net cash (used in) provided by financing activities	(56,711)	(95,992)	232,239
Net increase (decrease) in cash and cash equivalents	5,293	7,412	(120,976)
Cash and cash equivalents at beginning of year	34,153	26,741	147,717
Cash and cash equivalents at end of year	39,446	34,153	26,741
Supplemental Data:
Cash (refunded) paid for income taxes, net of refunds received	(108)	1,426	3,529
Excess tax benefit from exercise of options	383	57	28
Cash received from exercise of options	10,993	7,145	13,721
Cash interest paid	$ 3,398	4,740	12,626
Non-cash investing activities:
Common stock issued for business acquired		$ 1,198	$ 621

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Oct. 31, 2010

Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


2.	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying consolidated financial statements include the accounts of ABM Industries Incorporated and its consolidated subsidiaries and are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation.

The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates its estimates, including those related to self-insurance reserves, allowance for doubtful accounts, sales allowances, deferred income tax assets and valuation allowances, estimate of useful lives of intangible assets, impairment of goodwill and other intangibles, fair value of auction rate securities, cash flow forecasts, share-based compensation expense, and contingencies and litigation liabilities. The Company bases its estimates on historical experience, known or expected trends, independent valuations and various other assumptions that are believed to be reasonable under the circumstances based on information available as of the date of the issuance of these financial statements. The results of such assumptions form the basis for making estimates about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The current economic environment and its potential effect on the Company and its clients have combined to increase the uncertainty inherent in such estimates and assumptions. Future results could be significantly affected if actual results were to be different from these estimates and assumptions.

Significant Accounting Policies

Cash and Cash Equivalents. The Company considers all highly liquid instruments with original maturities of three months or less at the date of purchase to be cash equivalents. The Company presents the change in book cash overdrafts (i.e., negative book cash balances that have not been presented to the bank for payment) as cash flows from financing activities.

Investments in Auction Rate Securities. The Company considers its investments in auction rate securities as “available for sale.” Accordingly, auction rate securities are presented at fair value with changes in fair value recorded within other comprehensive income (“OCI”), unless a decline in fair value is determined to be other-than-temporary. The credit loss component of an other-than-temporary decline in fair value is recorded in earnings in the period identified. See Note 5, “Auction Rate Securities,” for additional information.

Revenue Recognition. The Company earns revenues primarily under service contracts that are fixed price, cost-plus, or time and materials based. Revenues are recognized when earned, normally when services are performed. In all forms of service provided by the Company, revenue recognition follows the guidelines under Staff Accounting Bulletin (“SAB”) No. 104, unless another form of guidance takes precedence over SAB No. 104. Revenues are reported net of applicable sales and use tax imposed on the related transaction.

The Janitorial segment primarily earns revenues from the following types of arrangements: fixed price, cost-plus, and tag (extra service) work. Fixed price arrangements are contracts in which the client agrees to pay a fixed fee every month over the specified contract term. A variation of a fixed price arrangement is a square-foot arrangement. Square-foot arrangements are ones in which monthly billings are fixed, however, the client is given a credit based on vacant square footage that is not serviced. Cost-plus arrangements are ones in which the client agrees to reimburse the Company for the agreed upon amount of wages and benefits, payroll taxes, insurance charges and other expenses plus a profit percentage. Tag revenues are additional services requested by the client outside of the standard contract terms. This work is usually performed on short notice due to unforeseen events. The Janitorial segment recognizes revenues on each type of arrangement when services are performed.

The Parking segment earns revenues from parking and transportation services. There are three types of arrangements for parking services: managed lot, leased lot and allowance arrangements. Under managed lot arrangements, the Company manages the parking lot for the owner in exchange for a management fee. The revenues and expenses are passed through by the Company to the owner under the terms and conditions of the management contract. The management fee revenues are recognized when services are performed. The Company reports revenues and expenses, in equal amounts, for costs directly reimbursed from its managed parking lot clients. Such amounts totaled $231.5 million, $231.0 million and $253.7 million for the years ended October 31, 2010, 2009 and 2008, respectively. Under leased lot arrangements, the Company leases the parking lot from the owner and is responsible for all expenses incurred, retains all revenues from monthly and transient parkers, and pays rent to the owner per the terms and conditions of the lease. Revenues are recognized when services are performed. Under allowance arrangements, the Company is paid a fixed or hourly fee to provide parking and/or transportation services. The Company is then responsible for operating expenses. Revenues are recognized when services are performed.

The Security segment primarily performs scheduled post assignments under one-year service arrangements. Security services for special events are generally performed under temporary service agreements. Scheduled post assignments and temporary service agreements are billed based on actual hours of service at contractually specified rates. Revenues for both types of arrangements are recognized when services are performed.

The Engineering segment provides services primarily under cost-plus arrangements in which the client agrees to reimburse the Company for the full amount of wages, payroll taxes, insurance charges and other expenses plus a profit percentage. Revenues are recognized for these contracts when services are performed.

Self-Insurance Reserves. The Company is subject to certain insurable risks, such as workers’ compensation, general liability, automobile and property damage. The Company maintains commercial insurance policies that provide $150.0 million (or $75.0 million with respect to claims acquired from OneSource Services, Inc. (“OneSource”) in the year ended October 31, 2008) of coverage for certain risk exposures above the Company’s deductibles (i.e., self-insurance retention limits). The Company’s deductibles, currently and historically, have generally ranged from $0.5 million to $1.0 million per occurrence (in some cases somewhat higher in California). The Company is also responsible for claims in excess of its insurance coverage. A material change in the Company’s insurance costs due to a change in the number of claims, costs or premiums, or changes in laws or other factors could have a material effect on operating results. Should the Company be unable to renew its umbrella and other commercial insurance policies at competitive rates, it would have an adverse impact on the Company’s business, as would the incurrence of catastrophic uninsured claims or the inability or refusal of the insurance carriers to pay otherwise insured claims. Further, to the extent that the Company self-insures, deterioration in claims management could increase claim costs. Additionally, although the Company engages third-party experts to assist in estimating appropriate self-insurance accounting reserves, the determination of those reserves is dependent upon significant actuarial judgments that have a material impact on the Company’s reserves. Changes in the Company’s insurance reserves, as a result of periodic evaluations of the related liabilities, will likely cause significant volatility in the Company’s operating results that might not be indicative of the operations of the Company’s ongoing business.

Liabilities for claims under the Company’s self-insurance program are recorded on an undiscounted, claims-incurred basis. Associated amounts that are expected to be recovered by insurance are presented as “insurance recoverables.” Assets and liabilities related to the Company’s insurance programs are classified based upon the timing of expected payment or recovery. The Company allocates current-year insurance expense to its operating segments based upon their underlying exposures.

In connection with the OneSource acquisition (see Note 3, “Acquisitions”), acquired insurance claims liabilities were recorded at their fair values at the acquisition date, which was based on the present value of the expected future cash flows. These discounted liabilities are being accreted through charges to interest expense as the carrying amounts are brought to an undiscounted amount. The method of accretion approximates the effective interest yield method using the rate a market participant would use in determining the current fair value of the insurance claim liabilities. Included in interest expense in the years ended October 31, 2010 and 2009 were $0.9 million and $1.2 million of interest accretion related to insurance claims liabilities, respectively.

Trade Accounts Receivable Allowances

Allowance for Doubtful Accounts

Trade accounts receivable arise from services provided to the Company’s clients and are generally due and payable on terms varying from receipt of the invoice to net thirty days. The Company records an allowance for doubtful accounts to provide for losses on accounts receivable due to a client’s inability to pay. The allowance is typically estimated based on an analysis of the historical rate of credit losses or write-offs (due to a client bankruptcy or failure of a former client to pay), specific client concerns and known or expected trends. Such analysis is inherently subjective. The Company’s earnings will be impacted in the future to the extent that actual credit loss experience differs from amounts estimated. Changes in the financial condition of the Company’s clients or adverse developments in negotiations or legal proceedings to obtain payment could result in the actual loss exceeding the estimated allowance. The Company does not believe that it has any material exposure due to either industry or regional concentrations of credit risk.

Sales Allowance

Sales allowance is an estimate for losses on client receivables resulting from client credits. Credits result from, among other things, client vacancy discounts, job cancellations and property damage. The sales allowance estimate is based on an analysis of the historical rate of sales adjustments (credit memos, net of re-bills) and considers known current or expected trends. Such analysis is inherently subjective. The Company’s earnings will be impacted in the future to the extent that actual credit experience differs from amounts estimated.

Property, Plant and Equipment. Property, plant and equipment is recorded at historical cost. Depreciation and amortization are recognized on a straight-line basis over estimated useful lives, ranging from: 3 to 5 years for transportation equipment and capitalized internal-use software costs; 2 to 20 years for machinery and equipment; and 20 to 40 years for buildings. Leasehold improvements are amortized over the shorter of their estimated useful lives or the remaining lease term (including renewals that are deemed to be reasonably assured at the date that the leasehold improvements are purchased).

Long-Lived Assets Other Than Goodwill. The Company reviews its long-lived assets for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. When such events or changes in circumstances occur, a recoverability test is performed comparing projected undiscounted cash flows from the use and eventual disposition of an asset or asset group to its carrying amount. If the projected undiscounted cash flows are less than the carrying amount, an impairment is recorded for the excess of the carrying amount over the estimated fair value, which is generally determined using discounted future cash flows.

The Company’s intangible assets consist of acquired customer contracts and relationships, trademarks and trade names, and contract rights. Acquired customer relationship intangible assets are being amortized using the sum-of-the-years-digits method over their useful lives consistent with the estimated useful life considerations used in the determination of their fair values. The accelerated method of amortization reflects the pattern in which the economic benefits of the customer relationship intangible assets are expected to be realized. Trademarks and trade names are being amortized over their useful lives using the straight-line method. Contract rights are being amortized over the contract periods using the straight-line method.

Goodwill. Goodwill represents the excess of costs over the fair value of net assets of acquired businesses. The Company assesses impairment of goodwill at least annually as of August 1 at the reporting unit level (which for the Company is represented by each operating segment). The impairment test is performed in two steps: (i) the Company determines whether impairment exists by comparing the estimated fair value of each reporting unit with its carrying amount; and (ii) if an indication of impairment exists, the Company measures the amount of impairment loss by comparing the implied fair value of goodwill with its carrying amount.

Other Accrued Liabilities. Other accrued liabilities as of October 31, 2010 and 2009 primarily consists of employee benefits, dividends payable, loss contingencies, rent payable, and unclaimed property.

Share-Based Compensation. Share-based compensation expense is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite employee service period (generally the vesting period) for awards expected to vest (considering estimated forfeitures). The Company estimates the fair value of stock options using the Black-Scholes option-pricing model. The fair value of restricted stock and performance awards is determined based on the number of shares granted and the grant date fair value of the award. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. The Company considers many factors when estimating expected forfeitures, including types of awards, employee class, and historical experience. Stock option exercises and restricted stock and performance award issuances are expected to be fulfilled with new shares of common stock. Share-based compensation expense is included in selling, general and administrative expenses and is amortized on a straight-line basis over the vesting term.

Income Taxes. The Company’s deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, and applying enacted tax rates expected to be in effect for the year in which the differences are expected to reverse. If management determines it is more-likely-than-not that a portion of the Company’s deferred tax assets will not be realized, a valuation allowance is recorded. The provision for income taxes is based on domestic (including federal and state) and international statutory income tax rates in the tax jurisdictions where the Company operates, permanent differences between financial reporting and tax reporting, and available credits and incentives. Interest and penalties related to uncertain tax positions are recognized in income tax expense. The U.S federal government is the Company’s most significant income tax jurisdiction.

Significant judgment is required in determining income tax provisions and tax positions. The Company may be challenged upon review by the applicable taxing authorities and positions taken may not be sustained. All, or a portion of, the benefit of income tax positions are recognized only when the Company has made a determination that it is more-likely-than-not that the tax position will be sustained upon examination, based upon the technical merits of the position and other factors. For tax positions that are determined as more-likely-than-not to be sustained upon examination, the tax benefit recognized is the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The development of reserves for income tax positions requires consideration of timing and judgments about tax issues and potential outcomes, and is a subjective critical estimate. In certain circumstances, the ultimate outcome of exposures and risks involves significant uncertainties. If actual outcomes differ materially from these estimates, they could have a material impact on the Company’s results of operations and financial condition.

Net Income per Common Share. Basic net income per common share is net income divided by the weighted average number of shares outstanding during the period. Diluted net income per common share is based on the weighted average number of shares outstanding during the period, adjusted to include the assumed exercise and conversion of certain stock options, restricted stock units (“RSUs”) and performance shares. The calculations of basic and diluted net income per common share are as follows:



Years Ended October 31,
(In thousands, except per share data)	2010		2009			2008


Income from continuing operations	$	63,870	$	55,490		$	52,731
Income (loss) from discontinued operations, net of taxes		251		(1,197	)		(7,297	)


Net income	$	64,121	$	54,293		$	45,434


Weighted-average common shares outstanding — Basic		52,117		51,373			50,519
Effect of dilutive securities:
Stock options		446		241			652
Restricted stock units		261		180			145
Performance shares		84		51			70


Weighted-average common shares outstanding — Diluted		52,908		51,845			51,386


Net income per common share
Basic	$	1.23	$	1.06		$	0.90
Diluted	$	1.21	$	1.05		$	0.88

The diluted net income per common share excludes certain stock options and RSUs since the effect of including these stock options and restricted stock units would have been anti-dilutive as follows:



Years Ended October 31,
(In thousands)	2010		2009		2008


Stock options		744		2,017		781
Restricted stock units		29		206		98

Contingencies and Litigation. Loss contingencies are recorded as liabilities when they are both: (1) probable or known that a liability has been incurred and (2) the amount of the loss is reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. If the Company believes that a loss in litigation is not probable, then no liability will be recorded unless the parties agree upon a settlement, which may occur because the Company wishes to avoid the costs of litigation. Expected costs of resolving contingencies, which include the use of third-party service providers, are accrued as the services are rendered.

Accumulated Other Comprehensive Income (Loss). Comprehensive income consists of (i) net income and (ii) other related gains and losses affecting stockholders’ equity that, under GAAP, are excluded from net income. For the Company, such OCI items consist primarily of unrealized gains and losses on auction rate securities, unrealized losses on interest rate swaps, actuarial adjustments to pension and other post-retirement benefit plans, and unrealized foreign currency translation gains and losses, net of tax effects where appropriate.

Adoption of Accounting Standards

Effective November 1, 2009, the Company adopted the Financial Accounting Standards Board (“FASB”) updated authoritative standard for accounting for business combinations, which is included in Accounting Standards Codification^tm (“ASC”) Topic 805 “Business Combinations” (“ASC 805”). Upon adoption, on November 1, 2009, the Company expensed approximately $1.0 million of deferred acquisition costs for acquisitions then being pursued. In addition, during 2010 the Company incurred an additional $1.3 million of acquisition costs related to the acquisitions of Five Star Parking, Network Parking Company Ltd. and System Parking Inc. (“L&R”) and Diversco, Inc. (“Diversco”) and other acquisitions currently being pursued.

Effective November 1, 2009, the Company adopted the FASB updated authoritative standard for determining the useful life of intangible assets, which is included in ASC Topic 350-30 “General Intangibles Other than Goodwill” (“ASC 350-30”). This authoritative standard amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset and requires additional disclosures. This authoritative standard must be applied prospectively to all intangible assets recognized as of the effective date. This authoritative standard had no impact on the Company’s consolidated financial statements, but could impact the way in which the useful lives of intangible assets acquired in business combinations will be determined, if renewal or extension terms are apparent.

Effective November 1, 2009, the Company adopted the FASB updated authoritative standard on employers’ disclosures about post-retirement benefit plan assets, which is included in ASC Topic 715 “Compensation — Retirement Benefits” (“ASC 715”). This authoritative standard expands the annual disclosures by requiring additional disclosures about how investment allocation decisions are made by management, major categories of plan assets and significant concentrations of risk. Additionally, an employer is now required to disclose information about the valuation of plan assets similar to the disclosure required under ASC Topic 820 “Fair Value Measurements and Disclosures” (“ASC 820”). This authoritative standard did not have an impact on the Company’s consolidated financial statements as it only amended required annual disclosures. See Note 10, “Employee Benefit Plans,” for the required disclosures.

Effective November 1, 2009, the Company adopted the FASB authoritative standard on fair value measurements for non-financial assets and non-financial liabilities measured on a non-recurring basis, which is included in ASC 820. The Company’s non-financial assets and non-financial liabilities principally consist of intangible assets acquired through business combinations and long-lived assets. During the year ended October 31, 2010, the Company did not re-measure any non-financial assets or non-financial liabilities to fair value, therefore, this authoritative standard did not have any impact on the Company’s consolidated financial statements.

Effective February 1, 2010, the Company adopted FASB accounting standard update No. 2010-6, “Improving Disclosures about Fair Value Measurements,” issued in January 2010 related to fair value measurements and disclosures, except for the additional gross presentation disclosure requirements for Level 3 changes which will be adopted in the first quarter of 2012. The update requires entities to make new disclosures about recurring or non-recurring fair value measurements of assets and liabilities, including: (1) the amounts of significant transfers between Level 1 and Level 2 fair value measurements and the reasons for the transfers; (2) the reasons for any transfers in or out of Level 3; and (3) information on purchases, sales, issuances and settlements on a gross basis in the reconciliation of recurring Level 3 fair value measurements. The FASB also clarified existing fair value measurement disclosure guidance about the level of disaggregation of assets and liabilities, and information about the valuation techniques and inputs used in estimating Level 2 and Level 3 fair value measurements. The Company did not have transfers of assets and liabilities between Level 1, Level 2 and/or Level 3 during 2010, and the required additional disclosures had no impact on the Company’s financial position or results of operations. See Note 4, “Fair Value Measurements” and Note 5, “Auction Rate Securities” for the required disclosures.

Acquisitions

12 Months Ended

Oct. 31, 2010

Acquisitions [Abstract]

ACQUISITIONS


3.	ACQUISITIONS

The operating results generated by businesses acquired have been included in the accompanying consolidated financial statements from their respective dates of acquisition. The excess of the purchase price (including subsequent contingent purchase price considerations for acquisitions made prior to the adoption of the FASB updated authoritative standard for accounting for business combinations on November 1, 2009) over the fair value of the net tangible and intangible assets acquired is included in goodwill. Some of the Company’s purchase agreements provide for initial payments and contingent payments based on the annual pre-tax income or other financial parameters for subsequent periods, ranging generally from two to five years.

The Company made the following acquisitions during the year ended October 31, 2010:

Diversco

On June 30, 2010, the Company acquired all of the outstanding shares of Diversco from DHI Holdings, Inc. for $30.6 million in cash and incurred direct acquisition costs of $0.2 million, which were expensed as incurred. The purchase price was subsequently adjusted to $30.4 million in connection with a working capital adjustment. Diversco is a national provider of outsourced facility services. The acquisition expands the geographic reach of the Company’s janitorial and security businesses, particularly in the Southeast, Midwest and Mid-Atlantic regions of the United States. The results of operations for Diversco are included in the Company’s Janitorial and Security segments as of the acquisition date. The amounts of Diversco’s revenues and operating profit included in the Company’s consolidated statements of income for 2010 were $28.1 million and $1.2 million, respectively. Pro forma financial information for this acquisition is not provided as this acquisition is not material to the Company’s financial statements.

The allocation of the purchase price to the underlying net assets acquired and liabilities assumed was based on their estimated fair values as of the acquisition date, June 30, 2010, with any excess of the purchase price allocated to goodwill. During the three months ended October 31, 2010, the Company further adjusted goodwill related to its acquisition of Diversco by $0.4 million for a self-insurance reserve adjustment based on the final actuarial analysis of assumed insurance liabilities obtained.

The final purchase price and related allocations are summarized as follows:



(In thousands)


Purchase price:


Total cash consideration	$	30,390


Allocated to:
Cash and cash equivalents	$	2,758
Trade accounts receivable		9,884
Other assets		1,244
Property, plant and equipment		3,063
Identifiable intangible assets		10,800
Trade accounts payable		(1,327	)
Accrued liabilities		(7,366	)
Insurance claims		(1,322	)
Other liabilities		(450	)
Goodwill		13,106


Net assets acquired	$	30,390

The acquired customer contracts and relationships, included in identifiable intangible assets, will be amortized using the sum-of-the-years-digits method over their useful lives of 11 years, which is consistent with the estimated useful life considerations used in the determination of their fair values. Intangible assets of $10.8 million were assigned to the Janitorial and Security segments in the amounts of $9.2 million and $1.6 million, respectively. Goodwill of $13.1 million was assigned to the Janitorial and Security segments in the amounts of $11.1 million and $2.0 million, respectively, and is deductible for tax purposes. The amounts of intangible assets and goodwill have been assigned to the Janitorial and Security segments based on the respective profit margins of the acquired customer contracts. The transaction was taxable for income tax purposes and all assets and liabilities have been recorded at fair value for both book and income tax purposes. Therefore, no deferred taxes have been recorded.

L&R

On October 1, 2010, the Company acquired select assets of L&R from the L&R Group of Companies for an aggregate purchase price of $34.7 million, including $0.2 million of assets distributed as consideration. The Company incurred $0.4 million of direct acquisition costs, which were expensed as incurred. The acquisition extends and expands the Company’s parking business in major cities. The acquisition also expands the Company’s presence at airports. The results of operations of L&R are included in the Company’s Parking segment as of the acquisition date. The amounts of L&R revenues and operating profit included in the Company’s consolidated statements of income for 2010 were $14.9 million and $0.4 million, respectively. Pro forma financial information for this acquisition is not provided as this acquisition is not material to the Company’s financial statements.

The allocation of the purchase price to the underlying net assets acquired and liabilities assumed was based on their estimated fair values as of the acquisition date, with any excess of the purchase price allocated to goodwill.

The final purchase price and related allocations are summarized as follows:



(In thousands)


Purchase price:
Cash	$	34,500
Fair value of assets distributed		164


Total consideration	$	34,664


Allocated to:
Identifiable intangible assets (including favorable leases)	$	6,200
Property, plant and equipment		762
Other assets		142
Unfavorable leases		(2,600	)
Goodwill		30,160


Net assets acquired	$	34,664

The acquired intangible assets and unfavorable leases will be amortized using the sum-of-the-years-digits method, or where appropriate the straight-line method, over their useful lives: 11 years for managed customer contracts, 4 years for favorable leases, 6 years for unfavorable leases and 10 years for the non-compete agreement, which is consistent with the estimated useful life considerations used in the determination of their fair values. The goodwill of $30.2 million is deductible for tax purposes.

Contingent Payments

Total additional consideration paid during the year ended October 31, 2010 related to prior years acquisitions totaled $3.3 million. The additional consideration represents contingent amounts based on financial performance subsequent to the respective acquisition dates and has been recorded as goodwill.

The Company made the following acquisition during the year ended October 31, 2009:

Control Building Services, Inc., Control Engineering Services, Inc. and TTF, Inc. (“Control”)

Effective May 1, 2009, the Company acquired certain assets (primarily customer contracts and relationships) of Control for $15.1 million in cash, which includes direct acquisition costs of $0.1 million, plus additional consideration of up to $1.6 million, payable in three equal installments of $0.5 million, contingent upon the achievement of certain revenue targets during the three year period commencing on May 1, 2009. The acquisition closed on May 8, 2009 and was accounted for under the purchase method of accounting. The acquisition expands the Company’s janitorial and engineering service offerings to clients in the Northeast region.

The final purchase price and related allocations are summarized as follows:



(In thousands)


Purchase price:
Initial payment	$	15,000
Acquisition costs		81


Total cash consideration	$	15,081


Allocated to:
Identifiable intangible assets	$	9,080
Property, plant and equipment		407
Goodwill		5,594


Net assets acquired	$	15,081

The acquired customer contracts and relationships, classified as intangible assets, are amortized using the sum-of-the-years-digits method over their useful lives of 12 years, which is consistent with the estimated useful life considerations used in the determination of their fair values. Goodwill of $5.6 million was assigned to the Janitorial and Engineering segments in the amounts of $4.4 million and $1.2 million, respectively. Intangible assets were assigned to the Janitorial and Engineering segments in the amounts of $7.2 million and $1.9 million, respectively. Pro forma financial information for this acquisition is not provided as this acquisition is not material to the Company’s financial statements.

The Company made the following acquisitions during the year ended October 31, 2008:

OneSource Services, Inc. (“OneSource”)

On November 14, 2007, the Company acquired OneSource for an aggregate purchase price of $390.5 million, including payment of OneSource’s $21.5 million line of credit and direct acquisition costs of $4.0 million. OneSource provides facilities services, including janitorial, landscaping, general repair and maintenance, and other specialized services, for commercial, industrial, institutional and retail client facilities, primarily in the United States. OneSource’s operations are included in the Company’s Janitorial segment from the date of acquisition. The OneSource acquisition was accounted for using the purchase method of accounting. During the year ended October 31, 2009, the Company further adjusted goodwill related to its acquisition of OneSource by $1.2 million for professional fees, legal reserves for litigation that commenced prior to the acquisition, additional workers’ compensation insurance liabilities and certain deferred income taxes.

The final purchase price and related allocations are summarized as follows:



(In thousands)


Purchase price:
Paid to OneSource shareholders	$	365,000
Payment of OneSource’s pre-existing line of credit		21,474
Acquisition costs		4,017


Total cash consideration	$	390,491


Allocated to:
Trade accounts receivable	$	94,552
Other current assets		12,223
Insurance recoverables		19,118
Insurance deposits		42,502
Property, plant and equipment		9,510
Identifiable intangible assets		48,700
Net deferred income tax assets		78,095
Other non-current assets		10,389
Current liabilities		(70,289	)
Insurance claims		(101,666	)
Other non-current liabilities		(21,026	)
Minority interest		(5,384	)
Goodwill		273,767


Net assets acquired	$	390,491

The following unaudited pro forma financial information shows the combined results of continuing operations of the Company, including OneSource, as if the acquisition had occurred as of the beginning of the period presented. The unaudited pro forma financial information is not intended to represent or be indicative of the Company’s consolidated financial results of continuing operations that would have been reported had the business combination been completed as of the beginning of the period presented and should not be taken as indicative of the Company’s future consolidated results of continuing operations.



	Year Ended
	October 31,
(In thousands, except per share data)	2008


Revenues	$	3,653,452
Income from continuing operations	$	52,343
Income from continuing operations per common share
Basic	$	1.04
Diluted	$	1.02

Southern Management Company (“Southern Management”)

OneSource owned a controlling 50% of Southern Management, a facility services company based in Chattanooga, Tennessee. On January 4, 2008, the Company acquired the remaining equity of Southern Management for $24.4 million, including direct acquisition costs of $0.4 million. Of the $24.4 million purchase price, $18.7 million was allocated to goodwill and the remaining $5.7 million eliminated the minority interest. An additional $2.9 million was paid in March 2008 to the other shareholders of Southern Management with respect to undistributed 2007 earnings. This amount was allocated to goodwill. Southern Management’s operations are included in the Janitorial segment.

Auction Rate Securities

12 Months Ended

Oct. 31, 2010

Auction Rate Securities [Abstract]

AUCTION RATE SECURITIES


5.	AUCTION RATE SECURITIES

As of October 31, 2010, the Company held investments in auction rate securities from five different issuers having an original principal amount of $5.0 million each (aggregating $25.0 million). At October 31, 2010 and October 31, 2009, the estimated fair value of these securities, in total, was approximately $20.2 million and $19.5 million, respectively. These auction rate securities are debt instruments with stated maturities ranging from 2025 to 2050, for which the interest rate is designed to be reset through Dutch auctions approximately every 30 days. Auctions for these securities have not occurred since August 2007.

The Company estimates the fair values of auction rate securities it holds utilizing a discounted cash flow model, which considers, among other factors, assumptions about: (1) the underlying collateral; (2) credit risks associated with the issuer; (3) contractual maturity; (4) credit enhancements associated with financial insurance guarantees, if any; and (5) assumptions about when, if ever, the security might be re-financed by the issuer or have a successful auction. Since there can be no assurance that auctions for these securities will be successful in the near future, the Company has classified its auction rate securities as long-term investments.

The following table presents the significant assumptions used to determine the fair value of the Company’s auction rate securities at October 31, 2010 and October 31, 2009:



Assumption	October 31, 2010	October 31, 2009


Discount rates	L + 2.50% - L + 18.59%	L + 0.34% - L + 24.43%
Yields	L + 2.0% - L + 3.5%	L + 2.0% - L + 3.5%
Average expected lives	4 - 10 years	4 - 8 years
L — London Interbank Offered Rate

The Company’s determination of whether impairments of its auction rate securities are other-than-temporary is based on an evaluation of several factors, circumstances and known or reasonably supportable trends including, but not limited to: (1) the Company’s intent to not sell the securities; (2) the Company’s assessment that it is not more likely than not that the Company will be required to sell the securities before recovering its cost basis; (3) expected defaults; (4) available ratings for the securities or the underlying collateral; (5) the rating of the associated guarantor (where applicable); (6) the nature and value of the underlying collateral expected to service the investment; (7) actual historical performance of the security in servicing its obligations; and (8) actuarial experience of the underlying re-insurance arrangement (where applicable), which in certain circumstances may have preferential rights to the underlying collateral.

Based primarily on an unfavorable development in the Company’s assumption about the expected life for one security, at April 30, 2010 the Company recognized an additional OTTI credit loss of $0.1 million. The Company had previously recognized an OTTI credit loss of $1.6 million for this security in the year ended October 31, 2009. The credit losses were based upon the difference between the present value of the expected cash flows to be collected and the amortized cost basis of the security. Significant assumptions used in estimating the credit loss include: (1) default rates for the security and the mono-line insurer, if any (which were based on published historical default rates of similar securities and consideration of current market trends); and (2) the expected life of the security (which represents the Company’s view of when market efficiencies for securities may be restored). Adverse changes in any of these factors could result in additional declines in fair value and further other-than-temporary impairments in the future. No further OTTI were identified.

The following tables present the changes in the cost basis and fair value of the Company’s auction rate securities for the years ended October 31, 2010 and 2009:



				Fair Value
(In thousands)	Cost Basis			(Level 3)


Balance at beginning of year	$	23,434		$	19,531
Unrealized gains		—			1,075
Unrealized losses		—			(435	)
Other-than-temporary credit loss recognized in earnings		(127	)		—


Balance at October 31, 2010	$	23,307		$	20,171



				Fair Value
(In thousands)	Cost Basis			(Level 3)


Balance at beginning of year	$	25,000		$	19,031
Unrealized gains		—			2,544
Unrealized losses		—			(2,044	)
Other-than-temporary credit loss recognized in earnings		(1,566	)		—


Balance at October 31, 2009	$	23,434		$	19,531

The OTTI related to credit losses recognized in earnings for the year ended October 31, 2010 is as follows:

Beginning balance of

Ending balance

OTTI credit losses

Additions for

Additional

of the amount

recognized for the

the amount

increases to the

Reductions for

related to credit

auction rate security

related to

amount related to

increases in cash

losses held at

held at the beginning

credit loss for

flows expected to

the end of the

of the period for

which OTTI

which an

be collected that

period for which

which a portion of

was not

OTTI was

are recognized over

a portion of OTTI

OTTI was recognized

previously

the remaining life

was recognized

(in thousands)

in OCI

recognized

of the security

in OCI

OTTI credit loss recognized for auction rate security

1,566

—

127

—

1,693

At October 31, 2010 and 2009, unrealized losses of $3.1 million ($1.9 million net of tax) and $3.9 million ($2.3 million net of tax) were recorded in accumulated other comprehensive loss, respectively.

Line of Credit Facility

12 Months Ended

Oct. 31, 2010

Line of Credit Facility [Abstract]

LINE OF CREDIT FACILITY


9.	LINE OF CREDIT FACILITY

In 2008, the Company entered into a $450.0 million five-year syndicated line of credit that was scheduled to expire on November 14, 2012 (the “old Facility”). The old Facility was available for working capital, the issuance of standby letters of credit, the financing of capital expenditures, and other general corporate purposes.

Under the old Facility, no compensating balances were required and the interest rate was determined at the time of borrowing based on the London Interbank Offered Rate (“LIBOR”) plus a spread of 0.625% to 1.375% or, at the Company’s election, at the higher of the federal funds rate plus 0.5% and the Bank of America prime rate (“Alternate Base Rate”) plus a spread of 0.000% to 0.375%. The old Facility called for a non-use fee payable quarterly, in arrears, of 0.125% to 0.250% of the average daily unused portion of the old Facility. For purposes of this calculation, irrevocable standby letters of credit issued primarily in conjunction with the Company’s self-insurance program and cash borrowings were included as usage of the old Facility. The spreads for LIBOR, Alternate Base Rate and IBOR borrowings and the non-use fee percentage were based on the Company’s leverage ratio. The old Facility permitted the Company to request an increase in the amount of the line of credit by up to $100.0 million (subject to receipt of commitments for the increased amount from existing and new lenders).

As of October 31, 2010, the total outstanding amounts under the old Facility in the form of cash borrowings and standby letters of credit were $140.5 million and $100.8 million, respectively.

The old Facility included covenants limiting liens, dispositions, fundamental changes, investments, indebtedness, and certain transactions and payments. In addition, the Facility also required that the Company maintain three financial covenants: (1) a fixed charge coverage ratio greater than or equal to 1.50 to 1.0 at any time; (2) a leverage ratio of less than or equal to 3.25 to 1.0 at each fiscal quarter-end; and (3) a consolidated net worth of greater than or equal to the sum of (i) $475.0 million, (ii) an amount equal to 50% of the consolidated net income earned in each full fiscal quarter ending after November 14, 2007 (with no deduction for a net loss in any such fiscal quarter), and (iii) an amount equal to 100% of the aggregate increases in stockholders’ equity of the Company after November 14, 2007 by reason of the issuance and sale of capital stock or other equity interests of the Company or any subsidiary, including upon any conversion of debt securities of the Company into such capital stock or other equity interests, but excluding by reason of the issuance and sale of capital stock pursuant to the Company’s employee stock purchase plans, employee stock option plans and similar programs. The Company was in compliance with all covenants under the old Facility as of October 31, 2010.

On February 19, 2009, the Company entered into a two-year interest rate swap agreement with an underlying notional amount of $100.0 million, pursuant to which the Company receives variable interest payments based on LIBOR and pays fixed interest at a rate of 1.47%.

On October 19, 2010, the Company entered into a three-year forward starting interest rate swap agreement with an underlying notional amount of $25.0 million, pursuant to which the Company receives variable interest payments based on LIBOR and pays fixed interest at a rate of 0.89%. The effective date of the hedge is February 24, 2011.

These swaps are intended to hedge the interest risk associated with the Company’s forecasted floating-rate, LIBOR-based debt. As of October 31, 2010, the critical terms of the swaps match the terms of the debt, resulting in no hedge ineffectiveness. On an ongoing basis (no less than once each quarter), the Company assesses whether its LIBOR-based interest payments are probable of being paid during the life of the hedging relationship. The Company also assesses the counterparty credit risk, including credit ratings and potential non-performance of the counterparties, when determining the fair value of the swaps.

As of October 31, 2010, the fair value of the interest rate swaps was a $0.4 million liability, of which $0.3 million and $0.1 million were included in Other accrued liabilities and Retirement plans and other, respectively, on the accompanying consolidated balance sheet. The effective portion of these cash flow hedges is recorded as accumulated other comprehensive loss in the Company’s accompanying consolidated balance sheet and reclassified into interest expense in the Company’s accompanying consolidated statements of income in the same period during which the hedged transactions affect earnings. Any ineffective portion of the hedges is recorded immediately to interest expense. No ineffectiveness existed at October 31, 2010. The amount included in accumulated other comprehensive loss is $0.4 million ($0.3 million, net of taxes).

Employee Benefit Plans

12 Months Ended

Oct. 31, 2010

Employee Benefit Plans [Abstract]

EMPLOYEE BENEFIT PLANS


10.	EMPLOYEE BENEFIT PLANS

As of October 31, 2010, the Company had the following defined benefit and other post-retirement benefit plans, which provide benefits based primarily on years of service and employee earnings and which have been previously amended to preclude new participants:

Supplemental Executive Retirement Plan. The Company has unfunded retirement agreements for certain current and former senior executives. The retirement agreements provide for monthly benefits for ten years commencing at the later of the respective retirement dates of those executives or age 65. The benefits are accrued over the vesting period. Effective December 31, 2002, this plan was amended to preclude new participants.

Service Award Benefit Plan. The Company has an unfunded service award benefit plan that meets the definition of a “severance pay plan” as defined by the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and covers certain qualified employees. The plan provides participants, upon termination, with a guaranteed seven days pay for each year of employment subsequent to November 1, 1989. Effective January 1, 2002, no new participants were permitted under this plan. The Company will continue to incur interest costs related to this plan as the value of the previously earned benefits continues to increase.

OneSource Employees’ Retirement Pension Plan (“OneSource Pension Plan”). The Company acquired OneSource on November 14, 2007, which sponsored a funded, qualified employee retirement plan. The plan was amended to preclude participation and benefit accruals several years prior to the acquisition.

Death Benefit Plan. The Company’s unfunded Death Benefit Plan covers certain qualified employees upon retirement on, or after, the employee’s 62nd birthday. This plan provides 50% of the death benefit that the employee was entitled to prior to retirement, subject to a maximum of $150,000. Coverage commencing upon retirement, or 62nd birthday, continues until death for retired employees hired before September 2, 1980. On March 1, 2003, the post-retirement death benefit for any active employees hired after September 1, 1980 was eliminated. Active employees hired before September 1, 1980 who retire on or after their 62nd birthday will continue to be covered between retirement and death. For certain plan participants who retired before March 1, 2003, the post-retirement death benefit continues until the retired employee’s 70th birthday. An exemption to the “age 62” retirement rule has been made for certain employees who were terminated as a result of the Company’s restructuring to a corporate shared service center.

OneSource Post-Retirement Medical and Life Benefit Plan. OneSource sponsored a post-retirement benefit plan that provides medical and life insurance benefits to certain OneSource retirees. Since the date of acquisition, new participants have been precluded from participation.

Benefit Obligation and Net Obligation Recognized in Financial Statements

The significant components of the above mentioned plans as of and for the years ended October 31, 2010 and 2009 are summarized as follows:



	Defined Benefit Plans at October 31,						Post-Retirement Benefit Plan at October 31,
(in thousands)	2010			2009			2010			2009


Change in benefit obligation
Benefit obligation at beginning of year	$	11,528		$	12,468		$	5,273		$	4,076
Service cost		44			42			15			12
Interest cost		592			811			281			276
Actuarial loss		1,126			27			143			1,024
Benefits and expenses paid		(1,272	)		(1,820	)		(415	)		(115	)


Benefit obligation at end of year	$	12,018		$	11,528		$	5,297		$	5,273


Change in Plan Assets
Fair value of plan assets at beginning of year	$	4,736		$	3,748		$	—		$	—
Actual return on plan assets		615			636			—			—
Employer contributions		1,510			2,172			415			115
Benefits and expenses paid		(1,272	)		(1,820	)		(415	)		(115	)


Fair value of plan assets at end of year	$	5,589		$	4,736		$	—		$	—


Unfunded status at end of year	$	(6,429	)	$	(6,792	)	$	(5,297	)	$	(5,273	)


Current liabilities		(1,001	)		(1,135	)		(277	)		(347	)
Non-current liabilities		(5,428	)		(5,657	)		(5,020	)		(4,926	)


Net obligation	$	(6,429	)	$	(6,792	)	$	(5,297	)	$	(5,273	)


Total affecting retained earnings	$	(4,936	)	$	(6,052	)	$	(5,347	)	$	(5,466	)
Amount recognized in accumulated other comprehensive income		(1,493	)		(740	)		50			193


Net obligation	$	(6,429	)	$	(6,792	)	$	(5,297	)	$	(5,273	)

Components of Net Periodic Benefit Cost Recognized in the Accompanying Consolidated Statement of Income

The components of net periodic benefit cost of the defined benefit and other post-retirement benefit plans for the years ended October 31, 2010, 2009 and 2008 were as follows:



(in thousands)	2010			2009			2008


Defined Benefit Plans
Service cost	$	44		$	42		$	43
Interest		592			811			820
Expected return on assets		(399	)		(321	)		(386	)
Amortization of actuarial loss		66			115			119
Settlement loss recognized		91			349			—


Net expense	$	394		$	996		$	596


Post-Retirement Benefit Plans
Service cost	$	15		$	12		$	19
Interest		281			276			266
Amortization of actuarial gain		—			(202	)		(99	)


Net expense	$	296		$	86		$	186

In the year ending October 31, 2011, the Company expects to recognize, on a pre-tax basis, less than $0.1 million of net actuarial gains as a component of net periodic benefit cost.

Assumptions

The weighted average assumptions used to determine benefit obligations and net periodic benefit cost for the years ended October 31, 2010, 2009 and 2008 were as follows:



							Post-Retirement Benefit
	Defined Benefit Plans						Plan
	2010		2009		2008		2010		2009		2008



Assumptions to measure net periodic cost

Discount rate		5.50%		7.00%		6.00%		5.50%		7.00%		6.00%

Rate of health care cost increase		NA		NA		NA		5.50%		6.00%		6.00%

Rate of compensation increase		3.50%		3.50%		3.50%		3.50%		3.50%		3.50%

Rate of return on plan assets		8.00%		8.00%		8.00%		NA		NA		NA



Assumptions to measure obligation at year end



Discount rate		4.50% - 4.98%		5.50%		7.00%		4.31% - 5.02%		5.50%		7.00%

The discount rate is used for determining future net periodic benefit cost. The Company’s discount rates were determined, as of the October 31, 2010 measurement date, using the individual cash flows of each plan. In determining the long-term rate of return for a plan, the Company considers the nature of the plan’s investments, historical rates of return, and an expectation for the plan’s investment strategies. All defined benefit and post-retirement plans have been amended to preclude new participants. The Company believes changes in assumptions would not have a material impact on the Company’s financial position and operating performance. The Company expects to fund payments required under the plans with cash flows from operating activities when due in accordance with the plan.

Expected Future Benefit Payments

The expected future benefit payments were calculated using the same assumptions used to measure the Company’s benefit obligation as of October 31, 2010. This expectation is based upon expected future service:



	Defined		Post-Retirement
(In thousands)	Benefit Plans		Benefit Plan


2011	$	1,444	$	277
2012		972		287
2013		892		297
2014		781		309
2015		853		320
2016 through 2020	$	3,823	$	1,777

OneSource Pension Plan

The OneSource Pension Plan is a funded benefit plan that requires an estimate of the long-term rate of return on plan assets to measure benefit obligations. The expected long-term rate of return on plan assets represents the rate of earnings expected in the funds invested to provide for anticipated benefit payments. With input from the Company’s investment advisors and actuaries, the Company has analyzed the expected rates of return on assets and determined that an estimated long-term rate of return of 8.0% is reasonable based on: (1) the current and expected asset allocations; (2) the plan’s historical investment performance; and (3) best estimates for future investment performance. The obligation attributable to medical benefits is small, as is the future obligation that varies with changes in compensation. Accordingly, changes in the health care trend assumption rate and the compensation increase assumption have an immaterial impact on measuring the obligation.

The investment objectives for the assets associated with the OneSource Pension Plan are to maintain acceptable levels of risk through the diversification of assets among asset classes and to optimize long-term returns. The Company is responsible for selecting investment managers, setting asset allocation targets and monitoring asset allocations and investment performance. The Company’s external investment professionals have the authority to manage assets within pre-established asset allocation ranges set by the Company. The OneSource Pension Plan is the Company’s only funded defined benefit plan.

The target allocation ranges and asset allocations for the year ended October 31, 2010 were:



	Target	Percentage of
Asset Category	Allocation	Plan Assets


Equity	53% - 73%	53%
Fixed Income	27% - 47%	47%


		100%

The following table presents the Company’s hierarchy for the assets associated with the OneSource Pension Plan measured at fair value as of October 31, 2010:



			Fair Value Measurements
			Using Inputs Considered
	Fair Value at		as
(In thousands)	October 31, 2010		Level 1		Level 2		Level 3


Cash and cash equivalents	$	924	$	924	$	—	$	—
Equity
Large-Cap Growth		1,095		1,095		—		—
Large-Cap Value		1,095		1,095		—		—
Small/Mid-Cap Growth		140		140		—		—
Small/Mid-Cap Value		140		140		—		—
International Equity		466		466		—		—
Fixed Income
Long-Term Bond		159		159		—		—
Intermediate Bond		794		794		—		—
Short-Term Bond		776		776		—		—


	$	5,589	$	5,589	$	—	$	—

Deferred Compensation Plans

The Company accounts for deferred compensation and accrues interest thereon for employees who elect to participate in one of the following Company plans:

Employee Deferred Compensation Plan. This plan is available to executive, management, administrative and sales employees who have an annualized base salary that equals or exceeds $135,000 for the year ended October 31, 2010. This plan allows employees to defer 1% to 50% of their pre-tax compensation. The average rate of interest earned by the employees in this plan was 3.25%, 3.31% and 5.09% for the years ending October 31, 2010, 2009 and 2008, respectively.

Director Deferred Compensation Plan. This plan allows directors to defer receipt of all or any portion of the compensation that he or she would otherwise receive from the Company. The average rate of interest earned by the directors in this plan was 3.25%, 3.31%, and 5.09% for the years ending October 31, 2010, 2009, and 2008, respectively.

The deferred compensation under both the Employee and Director Deferred Compensation Plans earns interest equal to the prime interest rate on the last day of the calendar quarter. If the prime rate exceeds 6%, the interest rate is equal to 6% plus one half of the excess over 6%. Interest earned under both deferred compensation plans is capped at 120% of the long-term applicable federal rate as discussed in the plans.

OneSource Deferred Compensation Plan. The Company acquired OneSource on November 14, 2007, which sponsored a deferred compensation plan. Under this deferred compensation plan, a Rabbi Trust was created to fund the obligation. The plan requires the Company to contribute 50% of the participant’s deferred compensation contributions but only to the extent that the deferred contribution does not exceed 5% of the participant’s compensation for the contribution allocation period. This liability is adjusted, with a corresponding charge (or credit) to the deferred compensation cost, to reflect changes in the fair value. On December 31, 2008, the plan was amended to preclude new participants. The assets of $5.7 million held in the rabbi trust are not available for general corporate purposes.

Aggregate expense recognized under these deferred compensation plans for the years ended October 31, 2010, 2009 and 2008 were $0.4 million, $0.3 million and $0.5 million, respectively. The total long-term liability of all deferred compensation plans at October 31, 2010 and 2009 was $15.3 million and $15.0 million, respectively, and is included in Retirement plans and other on the accompanying consolidated balance sheet.

401(k) Plan

The Company has two 401(k) savings plans covering certain employees, as set forth in the respective plan documents. These 401(k) plans are subject to the applicable provisions of ERISA. The Company matches a portion of the participant’s contributions after the participant has met the eligibility requirements under a predetermined formula based on the participant’s contribution level. The Company made matching 401(k) contributions required by the 401(k) plans during the years ended October 31, 2010, 2009 and 2008 in the amounts of $6.2 million, $6.2 million and $5.9 million, respectively.

Pension Plans Under Collective Bargaining

Certain qualified employees of the Company are covered under union-sponsored multi-employer defined benefit plans. Contributions paid for these plans were $58.2 million, $47.9 million and $47.7 million during the years ended October 31, 2010, 2009 and 2008, respectively. These plans are not administered by the Company and contributions are determined in accordance with provisions of negotiated labor contracts.

Commitments and Contingencies

12 Months Ended

Oct. 31, 2010

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES


11.	COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company is contractually obligated to make future payments under non-cancelable operating lease agreements for various facilities, vehicles, and other equipment. As of October 31, 2010, future minimum lease commitments (excluding contingent rentals) under non-cancelable operating leases for the fiscal years ending October 31 are as follows:



(in thousands)


2011	$	59,480
2012		46,759
2013		37,657
2014		27,394
2015		15,412
Thereafter		17,626


Total minimum lease commitments	$	204,328

Rental expense for continuing operations for the years ended October 31, 2010, 2009 and 2008 was as follows:



(in thousands)	2010		2009		2008


Minimum rentals	$	69,571	$	63,774	$	60,546
Contingent rentals		36,631		38,522		39,642


	$	106,202	$	102,296	$	100,188

Contingent rentals are applicable to leases of parking lots and garages and are primarily based on percentages of the gross receipts or other financial parameters attributable to the related facilities.

IBM Master Professional Services Agreement

On September 29, 2006, the Company entered into a Master Professional Services Agreement (the “Services Agreement”) with International Business Machines Corporation (“IBM”) that became effective October 1, 2006. Under the Services Agreement, IBM was responsible for substantially all of the Company’s information technology infrastructure and support services. In 2007, the Company entered into additional agreements with IBM to provide assistance, support and post-implementation services relating to the upgrade of the Company’s accounting systems and the implementation of a new payroll system and human resources information system. The Company entered into additional agreements with IBM to provide information technology systems integration and data center support services through 2009. During the fourth quarter of 2008, the Company assessed the services provided by IBM to determine whether the services provided and the level of support was consistent with the Company’s strategic objectives. Based upon this assessment, the Company determined that some or all of the services provided under the Services Agreement would be transitioned from IBM. In connection with this assessment, the Company wrote off $6.3 million of deferred costs in 2008.

On January 20, 2009, the Company and IBM entered into a binding Memorandum of Understanding (the “MOU”), pursuant to which the Company and IBM agreed to: (1) terminate certain services then provided by IBM to the Company under the Services Agreement; (2) transition the terminated services to the Company and/or its designee; (3) resolve certain other disputes arising under the Services Agreement; and (4) modify certain terms applicable to services that IBM will continue to provide to the Company. In connection with the execution of the MOU, the Company delivered to IBM a formal notice terminating for convenience certain information technology and support services effective immediately (the “Termination”). Notwithstanding the Termination, the MOU contemplated (1) IBM would assist the Company with the transition of the terminated services to the Company or its designee pursuant to an agreement (the “Transition Agreement”) to be executed by the Company and IBM and (2) the continued provision by IBM of certain data center support services. On February 24, 2009, the Company and IBM entered into an amended and restated agreement, which amended the Services Agreement (the “Amended Agreement”), and the Transition Agreement, which memorializes the termination-related provisions of the MOU as well as other terms related to the transition services. Under the Amended Agreement, the base fee for the provision of the defined data center support services is $18.8 million payable over the service term (March 2009 through December 2013).

In connection with the Termination, the Company agreed to: (1) reimburse IBM for certain actual employee severance costs, up to a maximum of $0.7 million, provided the Company extended comparable offers of employment to a minimum number of IBM employees; (2) reimburse IBM for certain early termination costs, as defined, including third-party termination fees and/or wind-down costs totaling approximately $0.4 million associated with software, equipment and/or third-party contracts used by IBM in performing the terminated services; and (3) pay IBM fees and expenses for requested transition assistance, which were estimated to be approximately $0.4 million.

As of October 31, 2010, future commitments related to the IBM Amended Agreement for the succeeding fiscal years were as follows:



(in thousands)


2011	$	3,977
2012		3,332
2013		3,007
2014		495
2015		—
Thereafter		—


Total	$	10,811

Guarantees/Indemnifications

The Company has applied the measurement and disclosure provisions outlined in the FASB guidance related to guarantor’s accounting and disclosure requirements for guarantees, including indirect guarantees of the indebtedness of others, included in ASC 460 “Guarantees” (“ASC 460”) to agreements that contain guarantee and certain indemnification clauses. ASC 460 requires that upon issuance of a guarantee, the guarantor must disclose and recognize a liability for the fair value of the obligation it assumes under the guarantee. As of October 31, 2010 and 2009, the Company did not have any material guarantees that were issued or modified subsequent to October 31, 2002.

However, the Company is party to a variety of agreements under which it may be obligated to indemnify the other party for certain matters. Primarily, these agreements are standard indemnification arrangements in its ordinary course of business. Pursuant to these arrangements, the Company may agree to indemnify, hold harmless and reimburse the indemnified parties for losses suffered or incurred by the indemnified party, generally its clients, in connection with any claims arising out of the services that the Company provides. The Company also incurs costs to defend lawsuits or settle claims related to these indemnification arrangements and in most cases these costs are paid from its insurance program. The terms of these indemnification arrangements are generally perpetual. Although the Company attempts to place limits on this indemnification reasonably related to the size of the contract, the maximum obligation may not be explicitly stated and, as a result, the maximum potential amount of future payments the Company could be required to make under these arrangements is not determinable.

The Company’s certificate of incorporation and bylaws may require it to indemnify Company directors and officers against liabilities that may arise by reason of their status as such and to advance their expenses incurred as a result of any legal proceeding against them as to which they could be indemnified. The Company has also entered into indemnification agreements with its directors to this effect. The overall amount of these obligations cannot be reasonably estimated; however, the Company believes that any loss under these obligations would not have a material adverse effect on the Company’s financial position, results of operations or cash flows. The Company currently has directors’ and officers’ insurance, which has a deductible of up to $1.0 million.

Contingencies

The Company has been named a defendant in certain proceedings arising in the ordinary course of business. Litigation outcomes are often difficult to predict and often are resolved over long periods of time. Estimating probable losses requires the analysis of multiple possible outcomes that often depend on judgments about potential actions by third parties. Loss contingencies are recorded as liabilities in the accompanying consolidated financial statements when it is both: (1) probable or known that a liability has been incurred and (2) the amount of the loss is reasonably estimable. If the reasonable estimate of the loss is a range and no amount within the range is a better estimate, the minimum amount of the range is recorded as a liability. Legal costs associated with loss contingencies are expensed as incurred.

The Company is a defendant in several purported class action lawsuits related to alleged violations of federal or state wage-and-hour laws. The named plaintiffs in these lawsuits are current or former employees of ABM subsidiaries who allege, among other things, that they were required to work “off the clock,” were not paid for all overtime, were not provided work breaks or other benefits, and/or that they received pay stubs not conforming to state law. In all cases, the plaintiffs generally seek unspecified monetary damages, injunctive relief or both.

The Company accrues amounts it believes are adequate to address any liabilities related to litigation and arbitration proceedings and to other contingencies that the Company believes will result in a probable loss. However, the ultimate resolution of such matters is always uncertain. It is possible that any such proceeding brought against the Company could have a material adverse impact on its financial condition and results of operations. The total amount accrued for probable losses at October 31, 2010 was $4.2 million.

The Company was a defendant in a lawsuit filed July 19, 2007 in the United States District Court, Eastern District of California, entitled U.S. Equal Employment Opportunity Commission, Plaintiff Erika Morales and Anonymous Plaintiffs One through Eight v. ABM Industries Incorporated et. al. (the “Morales case”). The plaintiffs in the Morales case alleged sexual harassment and retaliation. The case involved both Title VII federal law claims and California state law claims. In June 2010, the Company agreed to a settlement of $5.8 million for the Morales case. On September 27, 2010, the court accepted the settlement agreement and dismissed the case. Under the terms of the settlement, ABM also agreed to enter into a consent decree requiring a subsidiary to, among other things, track sexual harassment claims and monitor compliance with certain applicable laws.

Share-Based Compensation Plans

12 Months Ended

Oct. 31, 2010

Share-Based Compensation Plans [Abstract]

SHARE-BASED COMPENSATION PLANS


12.	SHARE-BASED COMPENSATION PLANS

Compensation expense and related income tax benefit in connection with the Company’s share-based compensation plans for the years ended October 31, 2010, 2009 and 2008 were as follows:



	Years Ended October 31,
(in thousands)	2010			2009			2008


Share-based compensation expense recognized in selling, general and administrative expenses before income taxes	$	4,071		$	7,411		$	7,195
Income tax benefit		(1,691	)		(3,025	)		(2,764	)


Total share-based compensation expense after income taxes	$	2,380		$	4,386		$	4,431

In July 2010, the Company determined that the financial performance targets, which were established in connection with certain performance share grants, were no longer probable of achievement. As a result, the Company reversed approximately $3.4 million ($2.0 million, net of taxes) of previously recorded share-based compensation expense in July 2010. This adjustment was recorded in selling, general and administrative expenses.

The total shares exercised for all share-based compensation plans was 850,855, 494,843 and 728,332 during the years ended October 31, 2010, 2009 and 2008, respectively. The total intrinsic value of the shares exercised was $8.4 million, $3.0 million and $6.3 million for the years ended October 31, 2010, 2009 and 2008, respectively. The total fair value of shares that vested during the years ended October 31, 2010, 2009 and 2008 was $8.1 million, $3.8 million and $3.1 million, respectively.

The Company has five share-based compensation plans and an employee stock purchase plan which are described below.

2006 Equity Incentive Plan

On May 2, 2006, the stockholders of the Company approved the 2006 Equity Incentive Plan (the “2006 Equity Plan”). Prior to the adoption of the 2006 Equity Plan, stock option awards were made under the Time-Vested Incentive Stock Option Plan (the “Time-Vested Plan”), the 1996 Price-Vested Performance Stock Option Plan (the “1996 Price-Vested Plan”) and the 2002 Price-Vested Performance Stock Option Plan (the “2002 Price-Vested Plan” and collectively with the Time-Vested Plan and the 1996 Price-Vested Plan, the “Prior Plans”). The 2006 Equity Plan provides for the issuance of awards for 2,500,000 shares of the Company’s common stock plus the remaining shares authorized but not issued under the Prior Plans as of May 2, 2006, plus forfeitures under the Prior Plans after that date. No further grants can be made under the Prior Plans. On March 3, 2009, the shareholders authorized an additional 2,750,000 shares to be issued under the 2006 Equity Plan. At October 31, 2010, 1,720,692 shares were available for award under the 2006 Equity Plan. The terms and conditions governing existing options under the Prior Plans will continue to apply to the options outstanding under those plans. The 2006 Equity Plan is an “omnibus” plan that provides for a variety of equity and equity-based award vehicles, including stock options, stock appreciation rights, restricted stock units (“RSUs”), performance shares, and other share-based awards. Shares subject to awards that terminate without vesting or exercise may be reissued. Certain of the awards available under the 2006 Equity Plan may qualify as “performance-based” compensation under Internal Revenue Code Section 162(m) (“Section 162(m)”). The status of the stock options, RSUs and performance shares granted under the 2006 Equity Plan as of October 31, 2010 are summarized below.

Stock Options

The nonqualified stock options issued under the 2006 Equity Plan vest and become exercisable either at a rate of 25% per year beginning one year after date of grant or 100% on the fifth anniversary of the award and expire seven years after the date of grant, depending on the terms of the awards granted. Stock options granted to certain executive officers on March 31, 2010 will vest on the fifth anniversary of the award.

Stock option activity in the year ended October 31, 2010 is summarized below:



						Weighted-
				Weighted-		Average		Aggregate
	Number of			Average		Remaining		Intrinsic
	Shares			Exercise Price		Contractual Term		Value
	(In thousands)			per Share		(in years)		(In thousands)


Outstanding at October 31, 2009		710		$	19.85
Granted		510			21.34
Exercised		(11	)		19.61
Forfeited or expired		(10	)		19.58


Outstanding at October 31, 2010		1,199		$	20.49		5.14	$	2,767


Vested and exercisable at October 31, 2010		398		$	20.17		3.75	$	1,164

As of October 31, 2010, there was $3.4 million of total unrecognized compensation cost (net of estimated forfeitures) related to unvested stock options under the 2006 Equity Plan. The cost is expected to be recognized on a straight-line basis over a weighted-average vesting period of 2.47 years.

The Company estimates the fair value of each option award on the date of grant using the Black-Scholes option valuation model. The Company estimates forfeiture rates based on historical data and adjusts the rates periodically or as needed. The adjustment of the forfeiture rate may result in a cumulative adjustment in any period in which the forfeiture rate estimate is changed. During the year ended October 31, 2010, the Company adjusted its forfeiture rate to align the estimate with expected forfeitures, and the effect of such adjustment was immaterial.

The assumptions used in the option valuation model for the years ended October 31, 2010, 2009 and 2008 are shown in the table below:



	2010		2009			2008


Expected life from the date of grant (1)		5.6 years		5.7 years			5.7 years
Expected stock price volatility (2)		38.5% - 39.0%		35.2	%		30.4	%
Expected dividend yield (3)		2.6% - 2.7%		2.5	%		2.4	%
Risk-free interest rate (4)		1.7% - 2.6%		1.7	%		3.2	%
Weighted average fair value of option grants	$	6.37	$	4.82		$	5.06


(1)		The expected life for options granted under the 2006 Equity Plan is based on observed historical exercise patterns of the previously granted options adjusted to reflect the change in vesting and expiration dates.

(2)		The expected volatility is based on considerations of implied volatility from publicly traded and quoted options on the Company’s common stock and the historical volatility of the Company’s common stock.

(3)		The dividend yield is based on the historical dividend yield over the expected term of the options granted.

(4)		The risk-free interest rate is based on the continuous compounded yield on U.S. Treasury Constant Maturity Rates with a remaining term equal to the expected term of the option.

RSUs

RSUs granted to directors will be settled in shares of the Company’s common stock with respect to one-third of the underlying shares on the first, second and third anniversaries of the annual shareholders’ meeting, which in several cases vary from the anniversaries of the award. In general, RSUs granted to persons other than directors will be settled in shares of the Company’s common stock with respect to 50% of the underlying shares on the second anniversary of the award and 50% on the fourth anniversary of the award or 100% on the fifth anniversary of the award, depending on the terms of the awards granted. RSUs granted to certain executive officers on March 31, 2010 will vest on the fifth anniversary of the award.

RSU activity in the year ended October 31, 2010 is summarized below:



				Weighted-
				Average
	Number of			Grant Date
	Shares			Fair Value
	(In thousands)			per Share


Outstanding at October 31, 2009		688		$	19.50
Granted		305			21.05
Issued (including 73 shares withheld for income taxes)		(221	)		19.34
Forfeited		(37	)		19.53


Outstanding at October 31, 2010		735		$	20.19


Vested at October 31, 2010		221		$	19.34

As of October 31, 2010, there was $8.6 million of total unrecognized compensation cost (net of estimated forfeitures) related to RSUs under the 2006 Equity Plan. The cost is expected to be recognized on a straight-line basis over a weighted-average vesting period of 1.99 years.

Performance Shares

Performance shares consist of a contingent right to acquire shares of the Company’s common stock based on performance targets adopted by the Compensation Committee. The number of performance shares that will vest is based on pre-established financial performance targets for one year, two year or three year periods ending October 31, 2010, 2011 or 2012. Vesting of 0% to 150% of the indicated shares will occur depending on the achieved targets.

Performance share activity in the year ended October 31, 2010 is summarized below:



				Weighted-
				Average
	Number of			Grant Date
	Shares			Fair Value
	(In thousands)			per Share


Outstanding at October 31, 2009		407		$	19.34
Granted		268			19.49
Change in units based on performance		(235	)		19.35
Issued (including 8 shares withheld for income taxes)		(36	)		24.51
Forfeited		(23	)		18.83


Outstanding at October 31, 2010		381		$	18.98


Vested at October 31, 2010		—		$	—

As of October 31, 2010, there was $4.2 million of total unrecognized compensation cost (net of estimated forfeitures) related to performance shares. The cost is expected to be recognized on a straight-line basis over a weighted average vesting period of 1.87 years. These costs are based on estimated achievement of performance criteria and estimated costs will be reevaluated periodically.

Dividend Equivalent Rights

RSUs are credited with dividend equivalent rights that are converted to RSUs at the fair market value of the Company’s common stock on the dates the dividend payments are declared and are subject to the same terms and conditions as the underlying award. Performance shares granted prior to January 13, 2009 are credited with dividend equivalent rights that will be converted to performance shares at the fair market value of the Company’s common stock on the dates the dividend payments are declared and are subject to the same terms and conditions as the underlying award. Performance shares granted on or after January 13, 2009 are credited with dividend equivalent rights that will be converted to performance shares at the fair market value of the Company’s common stock beginning after the performance targets have been satisfied and are subject to the same terms and conditions as the underlying award.

Time-Vested Plan

Under the Time-Vested Plan, the options become exercisable at a rate of 20% of the shares per year beginning one year after the date of grant and expire ten years plus one month after the date of grant.

The Time-Vested Plan activity in the year ended October 31, 2010 is summarized below:



						Weighted-
				Weighted-		Average		Aggregate
	Number of			Average		Remaining		Intrinsic
	Shares			Exercise Price		Contractual Term		Value
	(In thousands)			per Share		(in years)		(In thousands)


Outstanding at October 31, 2009		1,065		$	17.47
Exercised		(337	)		15.46
Forfeited or expired		(27	)		18.46


Outstanding at October 31, 2010		701		$	18.40		3.54	$	2,909


Vested and exercisable at October 31, 2010		666		$	18.30		3.46	$	2,827

As of October 31, 2010, there was an immaterial amount of total unrecognized compensation cost (net of estimated forfeitures) related to unvested stock options under the Time-Vested Plan. The cost is expected to be recognized on a straight-line basis over a weighted-average vesting period of less than one year.

1996 and 2002 Price-Vested Plans

The Company has two Price-Vested Plans: (1) the 1996 Price-Vested Plan and (2) the 2002 Price-Vested Plan. The two plans are substantially similar as each plan has pre-defined vesting prices that provide for accelerated vesting. Under each form of option agreement, if at the end of four years any of the stock price performance targets are not achieved, then the remaining options vest at the end of eight years from the date the options were granted. There have been no grants under this plan since the year ended October 31, 2005, therefore the remaining outstanding options under this plan will vest on the eighth anniversary of the award. Options vesting during the first year following grant do not become exercisable until after the first anniversary of grant. The options expire ten years after the date of grant.

Activity for the 1996 and 2002 Price-Vested Plans in the year ended October 31, 2010 is summarized below:



						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
	(In thousands)			per Share		(in years)		(In thousands)



Outstanding at October 31, 2009		1,249		$	17.13

Exercised		(230	)		15.83

Forfeited or expired		(6	)		16.43



Outstanding at October 31, 2010		1,013		$	17.43		3.15	$	5,181



Vested and exercisable at October 31, 2010		977		$	17.51		3.18	$	4,922

As of October 31, 2010, there was an immaterial amount of total unrecognized compensation cost (net of estimated forfeitures) related to unvested stock options under the Price-Vested Plans. The cost is expected to be recognized on a straight-line basis over a weighted-average vesting period of less than one year.

Executive Stock Option Plan (“Age-Vested Plan”)

Under the Age-Vested Plan, options are exercisable for 50% of the shares when the option holders reach their 61st birthdays and the remaining 50% become exercisable on their 64th birthdays. To the extent vested, the options may be exercised at any time prior to one year after termination of employment. Effective as of December 9, 2003, no further grants may be made under the plan.

The Age-Vested Plan activity in the year ended October 31, 2010, is summarized below:



						Weighted-
				Weighted-		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Contractual		Intrinsic
	Shares			Price		Term		Value
	(In thousands)			per Share		(in years)		(In thousands)



Outstanding at October 31, 2009		423		$	13.70

Exercised		(16	)		11.57

Forfeited or expired		(5	)		15.94



Outstanding at October 31, 2010		402		$	13.75		43.90	$	3,541



Vested and exercisable at October 31, 2010		72		$	11.49		45.93	$	791

As of October 31, 2010, there was $0.6 million of total unrecognized compensation cost (net of estimated forfeitures) related to unvested stock options under the Age-Vested Plan, which is expected to be recognized on a straight-line basis over a weighted-average vesting period of 8.50 years.

Employee Stock Purchase Plan

On March 9, 2004, the stockholders of the Company approved the 2004 Employee Stock Purchase Plan under which an aggregate of 2,000,000 shares may be issued. Effective May 1, 2006, the purchase price became 95% (from 85%) of the fair market value of the Company’s common stock on the last trading day of the month. After that date, the plan is no longer considered compensatory and the values of the awards are no longer treated as share-based compensation expense. Employees may designate up to 10% of their compensation for the purchase of stock, subject to a $25,000 annual limit. Employees are required to hold their shares for a minimum of six months from the date of purchase.

The weighted average fair values of the purchase rights granted in the years ended October 31, 2010, 2009 and 2008 under the new plan were $1.03, $0.86 and $1.05, respectively. During the years ended October 31, 2010, 2009 and 2008, 190,340, 219,067 and 222,648 shares of stock were issued under the plan at a weighted average price of $19.65, $16.29 and $20.00, respectively. The aggregate purchases in the years ended October 31, 2010, 2009 and 2008 were $3.7 million, $3.6 million and $4.5 million, respectively. On March 4, 2010, the shareholders authorized an additional 1,000,000 shares to be issued under the 2004 Employee Stock Purchase Plan. At October 31, 2010, 1,102,834 shares remained unissued under the plan.

Income Taxes

12 Months Ended

Oct. 31, 2010

Income Taxes [Abstract]

INCOME TAXES


13.	INCOME TAXES

The income taxes provision for continuing operations consists of the following components for each of the fiscal years ended October 31, 2010, 2009 and 2008:



(In thousands)	2010			2009			2008


Current
Federal	$	14,394		$	5,542		$	(254	)
State		8,072			6,486			3,665
Foreign		83			951			18
Deferred
Federal		17,341			19,722			26,022
State		319			(2,652	)		1,893
Foreign		(6	)		(879	)		241


	$	40,203		$	29,170		$	31,585

The income tax provision for the year ended October 31, 2010 consists of both current and deferred income tax expense. The income tax provision for the years ended October 31, 2009 and 2008 consists primarily of deferred income tax expense. The deferred income tax expense for all three years primarily relates to the use of net operating losses and other tax attributes acquired from OneSource in the year ended October 31, 2008, which resulted in a reduction of current tax expense.

Income tax expense attributable to income from continuing operations differs from the amounts computed by applying the U.S. statutory rates to pre-tax income from continuing operations as a result of the following for the years ended October 31, 2010, 2009 and 2008:



	2010			2009			2008


Statutory rate		35.0	%		35.0	%		35.0	%
State and local income taxes, net of federal tax benefit		6.5	%		6.5	%		5.1	%
Federal and state tax credits		(4.6	)%		(5.8	)%		(4.2	)%
Impact of change in state tax rate		(0.1	)%		(3.7	)%		(0.3	)%
Tax liabilities no longer required		(0.5	)%		(0.4	)%		(0.6	)%
Nondeductible expenses and other, net		2.3	%		2.9	%		2.5	%


		38.6	%		34.5	%		37.5	%

The effective tax rate for the year ended October 31, 2010 is higher than the effective tax rate for the year ended October 31, 2009 primarily due to a decrease in discrete federal and state tax benefits recorded in the year ended October 31, 2009. These tax benefits included the benefits of state tax rate increases on the carrying value of the Company’s state deferred tax assets and employment based credits.

The effective tax rate for the year ended October 31, 2009 is lower than the effective tax rate for the year ended October 31, 2008 primarily due to nonrecurring favorable federal and state tax benefits recorded in the year ended October 31, 2009. These tax benefits include the benefits of state tax rate increases on the carrying value of the Company’s state deferred tax assets and employment based tax credits.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and deferred tax liabilities at October 31, 2010 and 2009 are presented below:



(In thousands)	2010			2009


Deferred tax assets:
Self-insurance claims (net of recoverables)	$	109,439		$	111,473
Deferred and other compensation		25,516			26,202
Accounts receivable allowances		4,245			4,891
Settlement liabilities		1,306			1,278
State taxes		712			447
Federal net operating loss carryforwards		19,961			25,412
State net operating loss carryforwards		9,184			8,858
Tax credits		6,602			5,815
Other		7,872			9,708


		184,837			194,084
Valuation allowance		(6,290	)		(6,147	)


Total gross deferred tax assets		178,547			187,937


Deferred tax liabilities:
Property, plant and equipment		(2,426	)		(4,224	)
Goodwill and other acquired intangibles		(78,860	)		(68,094	)
Deferred software development costs		—			(4	)


Total gross deferred tax liabilities		(81,286	)		(72,322	)


Net deferred tax assets	$	97,261		$	115,615

At October 31, 2010, the Company’s net deferred tax assets included a tax benefit from federal net operating loss carryforwards of $57.0 million. The federal net operating loss carryforwards will expire between 2014 and 2029. State net operating loss carryforwards will expire between the years 2011 and 2030.

The Company periodically reviews its deferred tax assets for recoverability. The valuation allowance represents the amount of tax benefits related to state net operating loss carryforwards that management believes are not likely to be realized. The Company believes the gross deferred tax assets are more likely than not to be realizable based on estimates of future taxable income.

Changes to the deferred tax asset valuation allowance for the years ended October 31, 2010 and 2009 are as follows:



(In thousands)	2010		2009


Valuation allowance at the beginning of the year	$	6,147	$	6,800
Other, net		143		(653	)


Valuation allowance at the end of the year	$	6,290	$	6,147

In the year ended October 31, 2010, $0.1 million of the increase in valuation allowance was charged to income tax expense for deferred tax assets that were not expected to be ultimately realized. In the year ended October 31, 2009, the valuation allowance decreased (through a reduction of the tax provision) by $0.1 million for state net operating losses that became more-likely-than-not realizable based on updated assessments of future taxable income. In the year ended October 31, 2009, the valuation allowance also decreased by a goodwill adjustment of $0.6 million as a result of the interactions of tax positions associated with the acquisition of OneSource.

At October 31, 2010, we had unrecognized tax benefits of $101.7 million, all of which, if recognized in the future, would impact the Company’s effective tax rate. The Company includes interest and penalties related to unrecognized tax benefits in income tax expense. As of October 31, 2010, the Company had accrued interest and penalties related to uncertain tax positions of $0.7 million. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



(In thousands)	2010			2009


Balance at beginning of year	$	102,291		$	100,398
Additions for tax positions related to the current year		445			1,883
Additions for tax positions related to prior years		—			317
Reductions for tax positions related to prior years		(125	)		(37	)
Reductions for expiration of statue of limitations		(930	)		(270	)


Balance as of October 31	$	101,681		$	102,291

The Company’s major tax jurisdiction is the United States. ABM and OneSource U.S. federal income tax returns remain open for examination for the periods ending October 31, 2006 through October 31, 2010 and March 31, 2000 through November 14, 2007, respectively. ABM is currently being examined by the Internal Revenue Service for the tax years 2006-2008. The Company does business in all 50 states, significantly in California, Texas and New York, as well as Puerto Rico and Canada. In major state jurisdictions, the tax years 2006-2010 remain open and subject to examination by the appropriate tax authorities. The Company is currently being examined by Illinois, Maryland, Utah, New Jersey, Massachusetts, New York, California and Puerto Rico. An estimate of the range of possible changes in unrecognized tax benefits over the next 12 months cannot be made at this time.

Subsequent Events

12 Months Ended

Oct. 31, 2010

Subsequent Events [Abstract]

SUBSEQUENT EVENTS


16.	SUBSEQUENT EVENTS

Acquisition of Linc

On December 1, 2010, the Company acquired Linc pursuant to an Agreement and Plan of Merger, dated as of December 1, 2010 (the “Merger Agreement”), by and among ABM, Linc, GI Manager LP, as the Members Representative, and Lightning Services, LLC, a wholly-owned subsidiary of ABM (“Merger Sub”). Pursuant to the Merger Agreement, Merger Sub merged with and into Linc, and Linc continued as the surviving corporation and as a wholly owned subsidiary of ABM. The aggregate purchase price for all of the outstanding limited liability company interests of Linc was approximately $301.0 million, subject to certain adjustments as set forth in the Merger Agreement. In connection with the Linc acquisition, the Company acquired $98.4 million of outstanding surety bonds and $11.9 million of standby letters of credit as of the acquisition date. Linc provides end-to-end integrated facilities management services that improve operating efficiencies, reduce energy consumption and lower overall operational costs for facilities in the governmental, commercial and residential markets throughout the United States and select international markets. The operations of Linc will be included in the Engineering segment as of the acquisition date.

Line of Credit Facility

On November 30, 2010, the Company terminated the old Facility and replaced it with a new $650 million five year syndicated line of credit (the “new Facility”). The new Facility is scheduled to expire on November 30, 2015, with the option to increase the size of the new Facility to $850 million at any time prior to the expiration (subject to receipt of commitments for the increased amount from existing and new lenders). Borrowings under the new Facility were used in part to acquire Linc on December 1, 2010, as well as pay down the outstanding balances under the old Facility. The new Facility is available for working capital, the issuance of standby letters of credit, the financing of capital expenditures and other general corporate purposes, including acquisitions.

Under the new Facility, no compensating balances are required and the interest rate is determined at the time of borrowing based on the London Interbank Offered Rate (“LIBOR”) plus a spread of 1.5% to 2.5% or, at the Company’s election, at the higher of: the federal funds rate plus 0.5%; the Bank of America prime rate (“Alternate Base Rate”) plus a spread of 0.5% to 1.5%; and the Eurodollar rate plus 1.0%. The new Facility calls for a non-use fee payable quarterly, in arrears, of 0.25% to 0.50% of the average, daily, unused portion of the new Facility. For purposes of this calculation, irrevocable standby letters of credit issued primarily in conjunction with the Company’s self-insurance program and cash borrowings are included as usage of the new Facility. The spreads for LIBOR and the Alternate Base Rate and the non-use fee percentage are based on the Company’s leverage ratio.

The new Facility includes covenants limiting liens, dispositions, fundamental changes, investments, indebtedness, and certain transactions and payments. In addition, the new Facility also requires that the Company maintain three financial covenants: (1) a fixed charge coverage ratio greater than or equal to 1.50 to 1.0 at any time; (2) a leverage ratio of less than or equal to 3.25 to 1.0 at each fiscal quarter-end; and (3) a consolidated net worth of greater than or equal to the sum of (i) $570.0 million, (ii) an amount equal to 50% of the consolidated net income earned in each full fiscal quarter ending after November 30, 2010 (with no deduction for a net loss in any such fiscal quarter), and (iii) an amount equal to 100% of the aggregate increases in stockholders’ equity of the Company after November 30, 2010 by reason of the issuance and sale of capital stock or other equity interests of the Company or any subsidiary, including upon any conversion of debt securities of the Company into such capital stock or other equity interests, but excluding by reason of the issuance and sale of capital stock pursuant to the Company’s employee stock purchase plans, employee stock option plans and similar programs.

If an event of default occurs under the new Facility, including certain cross-defaults, insolvency, change in control, and violation of specific covenants, among others, the lenders can terminate or suspend the Company’s access to the new Facility, declare all amounts outstanding under the new Facility, including all accrued interest and unpaid fees, to be immediately due and payable, and/or require that the Company cash collateralize the outstanding letter of credit obligations.

Consolidated Balance Sheets (Parenthetical) - USD ($)	Oct. 31, 2010	Oct. 31, 2009
Current assets
Allowances for trade accounts receivable	$ 10,672,000	$ 10,772,000
Accumulated depreciation on property, plant and equipment	98,884,000	92,563,000
Accumulated amortization on other intangible assets	54,889,000	43,464,000
STOCKHOLDERS' EQUITY
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	52,635,343	51,688,218

Consolidated Statements of Stockholders' Equity and Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Oct. 31, 2010	Oct. 31, 2009	Oct. 31, 2008
Comprehensive income:
Unrealized gain (loss) on auction rate securities, tax effect	$ 179	$ 203	$ 2,348
Reclass adjustment for credit losses recognized in earnings, tax effect	53	636
Foreign currency translation, tax effect		241	590
Actuarial gain (loss) - Adjustments to pension & other post-retirement benefit plans, tax effect	108	139	148
Unrealized gain (loss) on interest rate swaps, tax effect	230	412
Accumulated Other Comprehensive Income (Loss)
Comprehensive income:
Unrealized gain (loss) on auction rate securities, tax effect	179	203	2,348
Reclass adjustment for credit losses recognized in earnings, tax effect	53	636
Foreign currency translation, tax effect		241	590
Actuarial gain (loss) - Adjustments to pension & other post-retirement benefit plans, tax effect	108	139	$ 148
Unrealized gain (loss) on interest rate swaps, tax effect	$ 230	$ 412