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Goodwill and Other Intangible Assets
 12 Months Ended
Oct. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets GOODWILL AND OTHER INTANGIBLE ASSETS
During the second quarter of 2020, given the general deterioration in economic and market conditions arising from the Pandemic, we identified a triggering event which resulted in impairment of goodwill and intangible assets.
Goodwill
(in millions)Business & IndustryTechnology & ManufacturingEducationAviationTechnical SolutionsHealthcareTotal
Balance at October 31, 2018$527.9 $407.2 $557.4 $124.9 $158.7 $58.7 $1,834.8 
Reallocation(1)
45.7 — 1.2 — 11.8 (58.7)— 
Foreign currency translation
0.3 — — 0.1 0.3 — 0.6 
Balance at October 31, 2019$573.9 $407.2 $558.6 $125.0 $170.7 $— $1,835.4 
Foreign currency translation
0.1 — — — (0.3)— (0.2)
Impairment loss(2)
— — (99.3)(55.5)(9.0)(163.8)
Balance at October 31, 2020$574.0 $407.2 $459.3 $69.5 $161.5 $— $1,671.4 
(1) Goodwill associated with our Healthcare business was reallocated in connection with the reorganization of this business during the third quarter of 2019.
(2) The impairment charge is included in “Impairment loss” on our Consolidated Statements of Comprehensive (Loss) Income for the year ended October 31, 2020, and is not tax deductible.
Due to the triggering event identified above arising from the impact of the Pandemic, we first performed a qualitative assessment of goodwill to determine whether it was more likely than not that impairment occurred within our goodwill reporting units in the second quarter of 2020. Based on this qualitative assessment, we determined that goodwill impairment was not more likely than not in our goodwill reporting units, except in Education, Aviation, and our U.K. Technical Solutions business. As a result, we performed an interim quantitative impairment test as of March 31, 2020, on these three goodwill reporting units.
For the three goodwill reporting units tested quantitatively, we estimated the fair value using a weighting of fair values derived from an income approach and a market approach. The income approach incorporates the use of a discounted cash flow method in which the estimated future cash flows and terminal value are calculated for each reporting unit and then discounted to present value using an appropriate discount rate. The discount rates utilized in the income approach valuation method are summarized in the table below.
Discount
Rates
Education10.0%
Aviation10.5%
Technical Solutions11.0%
The market approach estimates the fair value of a reporting unit by using market comparables for reasonably similar public companies and a control premium of 15.0%.
The valuation of our reporting units requires significant judgment in evaluating recent indicators of market activity and estimated future cash flows, discount rates, and other factors. Our impairment analyses contain inherent uncertainties due to uncontrollable events that could positively or negatively impact anticipated future economic and operating conditions. In making these estimates, the weighted-average cost of capital is utilized to calculate the present value of future cash flows and terminal value. Many variables go into estimating future cash flows, including estimates of our future revenue growth and operating results. When estimating our projected revenue growth and future operating results, we consider industry trends, economic data, and our competitive advantage. If future cash flows or future growth rates vary from what is expected, including those assumptions relating to the duration and severity of the Pandemic, this may reduce the underlying cash flows used to estimate fair values and result in a further decline in fair value, which may trigger future impairment charges.
Other Intangible Assets
October 31, 2020October 31, 2019
(in millions)Gross Carrying AmountAccumulated AmortizationTotalGross Carrying AmountAccumulated AmortizationTotal
Customer contracts and relationships(1)
$573.1 $(333.6)$239.6 $595.9 $(298.9)$297.0 
Trademarks and trade names9.8 (9.8)— 9.8 (9.8)0.1 
Contract rights and other0.5 (0.4)0.1 0.5 (0.4)0.1 
Total(2)
$583.5 $(343.8)$239.7 $606.2 $(309.0)$297.2 
(1) Reflects a net impairment charge of $9.0 million recorded in 2020 as a result of the triggering event described above. We recognized net impairment charges of $5.6 million related to Aviation (consisting of a $13.8 million reduction in the gross carrying amount of the underlying customer relationships less $8.2 million of accumulated amortization) and $3.4 million related to our U.K. Technical Solutions business (consisting of an $8.7 million reduction in the gross carrying amount of the underlying customer relationships less $5.3 million of accumulated amortization). These impairment charges are included in “Impairment loss” on our Consolidated Statements of Comprehensive (Loss) Income for the year ended October 31, 2020. We did not record impairment charges on other intangible assets during 2019.
(2) These intangible assets are being amortized over the expected period of benefit, with a weighted average life of approximately 11 years.
Estimated Annual Amortization Expense For Each of the Next Five Years
(in millions)20212022202320242025
Estimated amortization expense(1)
$42.1 $36.8 $32.2 $28.0 $23.9 
(1) These amounts could vary as acquisitions of additional intangible assets occur in the future.
The estimates of future cash flows used in determining the fair value of goodwill and other intangible assets involve significant management judgment and are based upon assumptions about expected future operating performance, economic conditions, market conditions, and cost of capital. Inherent in estimating the future cash flows are uncertainties beyond our control, such as changes in capital markets. The actual cash flows could differ materially from management’s estimates due to changes in business conditions, operating performance, and economic conditions.