GOODWILL AND OTHER INTANGIBLES

12 Months Ended

Oct. 31, 2011

7. GOODWILL AND OTHER INTANGIBLES

Goodwill

The changes in the carrying amount of goodwill for the years ended October 31, 2011 and 2010 were as follows:

		September 30,		September 30,		September 30,			September 30,
			Goodwill Related to
(in thousands)	Balance as of October 31, 2010		Initial Payments for Acquisitions (1)		Contingent Amounts and Other (2)			Balance as of October 31, 2011
Janitorial	$	471,328	$	—	$	(2,096	)	$	469,232
Engineering		3,549		156,134		2,852			162,535
Parking		69,168		—		—			69,168
Security		49,938		—		—			49,938

Total	$	593,983	$	156,134	$	756		$	750,872

(1)	Refer to Note 3, “Acquisitions” for additional discussions regarding acquisitions the Company made in the year ended October 31, 2011.

(2)

Effective November 1, 2010, the Company changed the management reporting responsibility for a subsidiary from the Janitorial segment to the Engineering segment. As a result of the organizational change, the Company reclassified the goodwill associated with this subsidiary from the Janitorial segment to the Engineering segment which amounted to $2.9 million.

		September 30,		September 30,		September 30,		September 30,
			Goodwill Related to
(in thousands)	Balance as of October 31, 2009		Initial Payments for Acquisitions (1)		Contingent Amounts and Other		Balance as of October 31, 2010
Janitorial	$	459,068	$	11,140	$	1,120	$	471,328
Engineering		3,356		—		193		3,549
Parking		36,841		30,160		2,167		69,168
Security		47,972		1,966		—		49,938

Total	$	547,237	$	43,266	$	3,480	$	593,983

(1)	Refer to Note 3, “Acquisitions” for additional discussions regarding acquisitions the Company made in the year ended October 31, 2010

Of the $750.9 million carrying amount of goodwill as of October 31, 2011, $341.3 million was not amortizable for income tax purposes because the related businesses were acquired prior to 1991 or purchased through a tax-free exchange or stock acquisition.

Based on the Company’s annual goodwill impairment test related to its Security reporting unit, the Company has concluded that deterioration in general market conditions, or conditions affecting the security industry, or the Company’s inability to execute its operating plan might result in an impairment of goodwill related to the Security reporting unit in the future.

Intangible Assets

The changes in the gross carrying amount and accumulated amortization of intangibles other than goodwill for the years ended October 31, 2011 and 2010 were as follows:

		September 30,		September 30,		September 30,		September 30,			September 30,			September 30,
	Gross Carrying Amount						Accumulated Amortization
(in thousands)	October 31, 2010		Additions		October 31, 2011		October 31, 2010			Additions			October 31, 2011
Customer contracts and relationships	$	113,822	$	86,000	$	199,822	$	(49,952	)	$	(22,655	)	$	(72,606	)
Trademarks and trade names		4,150		1,000		5,150		(3,445	)		(779	)		(4,224	)
Other (contract rights, etc.)		2,691		—		2,691		(1,492	)		(346	)		(1,838	)

Total	$	120,663	$	87,000	$	207,663	$	(54,889	)	$	(23,780	)	$	(78,669	)

		September 30,		September 30,		September 30,		September 30,			September 30,			September 30,
	Gross Carrying Amount						Accumulated Amortization
(in thousands)	October 31, 2009		Additions		October 31, 2010		October 31, 2009			Additions			October 31, 2010
Customer contracts and relationships	$	97,522	$	16,300	$	113,822	$	(38,853	)	$	(11,099	)	$	(49,952	)
Trademarks and trade names		4,150		—		4,150		(3,335	)		(110	)		(3,445	)
Other (contract rights, etc.)		1,991		700		2,691		(1,276	)		(216	)		(1,492	)

Total	$	103,663	$	17,000	$	120,663	$	(43,464	)	$	(11,425	)	$	(54,889	)

Of the $129.0 million net carrying amount of intangibles other than goodwill as of October 31, 2011, $32.4 million was not amortizable for income tax purposes because the related businesses were purchased through tax-free stock acquisitions.

The weighted average remaining lives as of October 31, 2011 and the amortization expense of intangibles for the years ended October 31, 2011, 2010 and 2009, as well as the estimated amortization expense for such intangibles for each of the five succeeding fiscal years, are as follows:

		September		September		September		September		September		September		September		September		September
	Weighted Average		Amortization Expense						Estimated Amortization Expense
	Remaining Life		Years Ended October 31,						Years Ending October 31,
($ in thousands)	(Years)		2011		2010		2009		2012		2013		2014		2015		2016
Customer contracts and relationships		11.6	$	22,655	$	11,099	$	10,872	$	21,411	$	19,164	$	17,061	$	14,994	$	12,941
Trademarks and tradenames		4.6		779		110		313		198		140		140		140		140
Other (contract rights, etc.)		3.5		346		216		199		298		213		171		27		27

Total		11.5	$	23,780	$	11,425	$	11,384	$	21,907	$	19,517	$	17,372	$	15,161	$	13,108

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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