Revenue (Tables)

3 Months Ended

Jan. 31, 2019

Revenue from Contract with Customer [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles

The impacts of adopting Topic 606 and Topic 853 on our unaudited consolidated statements of comprehensive income for the three months ended January 31, 2019 were as follows:



	Three Months Ended January 31, 2019
(in millions, except per share amounts)	Under Historical Guidance			Effect of Adoption			As Reported
Revenues	$	1,617.9		$	(10.0	)	$	1,607.9
Operating expenses	1,457.3			(11.3		)	1,446.0
Selling, general and administrative expenses	113.6			(0.9		)	112.7
Income tax (provision) benefit	(4.2		)	(0.6		)	(4.7		)
Net income	11.3			1.7			13.0

Net income per common share — Basic	$	0.17		$	0.03		$	0.20
Net income per common share — Diluted	$	0.17		$	0.03		$	0.19



(in millions)	Balance at October 31, 2018		Adjustments Due to Adoption of Topic 606			Balance at November 1, 2018
ASSETS
Current assets
Trade accounts receivable, net	$	1,014.1	$	(40.1	)	$	974.0
Costs incurred in excess of amounts billed	—		40.1			40.1
Other current assets	37.0		3.6			40.6
Other noncurrent assets	109.6		11.5			121.1

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Other accrued liabilities	$	152.7	$	6.0		$	158.9
Deferred income tax liability, net	37.8		2.6			40.3
Retained earnings	771.2		6.5			777.6

The impact of adopting Topic 606 on our unaudited consolidated balance sheet as of January 31, 2019 was as follows:



	As of January 31, 2019
(in millions)	Under Historical Guidance		Effect of Adoption		As Reported
ASSETS
Current assets
Other current assets	$	38.9	$	4.8	$	43.7
Other noncurrent assets	111.4		11.3		122.7

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Other accrued liabilities	$	170.9	$	4.8	$	175.7
Deferred income tax liability, net	27.3		1.9		29.2
Retained earnings	769.2		9.4		778.6

Revenue from External Customers by Products and Services



	Three Months Ended January 31, 2019
(in millions)	B&I		Aviation		T&M		Education		Technical Solutions		Healthcare		Total
Major Service Line
Janitorial⁽¹⁾	$	549.7	$	31.1	$	187.8	$	183.3	$	—	$	38.0	$	989.9
Parking⁽²⁾	114.4		85.8		7.4		0.8		—		13.7		222.1
Facility Services⁽³⁾	110.2		18.0		40.8		20.7		—		15.0		204.7
Airline Services⁽⁴⁾	0.2		117.5		—		—		—		—		117.7
Building & Energy Solutions⁽⁵⁾	—		—		—		—		107.9		—		107.9
	$	774.5	$	252.4	$	236.1	$	204.7	$	107.9	$	66.7	$	1,642.3
Elimination of inter-segment revenues													(34.4		)
Total													$	1,607.9

⁽¹⁾Janitorial arrangements provide a wide range of essential cleaning services for commercial office buildings, airports and other transportation centers, educational institutions, government buildings, health facilities, industrial buildings, retail stores, and stadiums and arenas.

⁽²⁾ Parking arrangements provide parking and transportation services for clients at various locations, including airports and other transportation centers, commercial office buildings, educational institutions, health facilities, hotels, and stadiums and arenas. Certain of our management reimbursement, leased, and allowance location arrangements are considered service concession agreements and are accounted for under the guidance of Topic 853. For the three months ended January 31, 2019, rent expense related to service concession arrangements, previously recorded within operating expenses, has been recorded as a reduction of the related parking service revenues.

⁽³⁾ Facility Services arrangements provide onsite mechanical engineering and technical services and solutions relating to a broad range of facilities and infrastructure systems that are designed to extend the useful life of facility fixed assets, improve equipment operating efficiencies, reduce energy consumption, lower overall operational costs for clients, and enhance the sustainability of client locations.

⁽⁴⁾ Airline Services arrangements support airlines and airports with services ranging from passenger assistance, catering logistics, and airplane cabin maintenance.

⁽⁵⁾ Building & Energy Solutions arrangements provide custom energy solutions, electrical, HVAC, lighting, and other general maintenance and repair services for clients in the public and private sectors. We also franchise certain operations under franchise agreements relating to our Linc Network and TEGG brands.

Contract with Customer, Asset and Liability

The following tables present the balances in our contract assets and contract liabilities:



(in millions)	January 31, 2019		November 1, 2018
Contract assets
Billed trade receivables⁽¹⁾	$	971.5	$	918.9
Unbilled trade receivables⁽¹⁾	91.1		74.3
Costs incurred in excess of amounts billed⁽²⁾	40.2		40.1
Capitalized commissions⁽³⁾	16.1		15.1

⁽¹⁾Included in trade accounts receivable, net, on the consolidated balance sheets. The fluctuation correlates directly to the execution of new customer contracts and invoicing and collections from customers in the normal course of business.

⁽²⁾Increase is primarily due to the timing of payments on our contracts measured using the cost-to-cost method of revenue recognition.

⁽³⁾Included in other current assets and other noncurrent assets on the consolidated balance sheets. During the three months ended January 31, 2019, we capitalized $2.1 million of new costs and amortized $1.2 million of previously capitalized costs. There was no impairment loss recorded on the costs capitalized.



(in millions)	Three Months Ended January 31, 2019
Contract liabilities⁽¹⁾
Balance at beginning of period	$	41.7
Additional contract liabilities	92.6
Recognition of deferred revenue	(91.7		)
Balance at end of period	$	42.6

⁽¹⁾ Included in other accrued liabilities on the consolidated balance sheets.