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Basis of Presentation and Significant Accounting Policies | 6 Months Ended
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Apr. 30, 2020
Accounting Policies [Abstract] |
Basis of Presentation and Significant Accounting Policies | BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of our management, our unaudited consolidated financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations are not necessarily indicative of results for the full year. The Financial Statements should be read in conjunction with our audited consolidated financial statements (and notes thereto) in our Annual Report on Form 10-K for the year ended October 31, 2019 (“Annual Report”). Unless otherwise indicated, all references to years are to our fiscal years, which end on October 31. Impact of the Novel Coronavirus Pandemic A novel strain of coronavirus (“COVID-19”) has resulted in a worldwide health pandemic (the “Pandemic”). To date, the Pandemic has surfaced in nearly all regions around the world and resulted in business slowdowns and shutdowns, as well as global travel restrictions. In these financial statements and related disclosures we have assessed the current impact of the Pandemic on our financial condition, results of operations, and cash flows, as well as our estimates, forecasts, and accounting policies. We have made additional disclosures of these assessments, as necessary. Given the unprecedented nature of this situation, we cannot reasonably estimate the full extent of impact the Pandemic will have on our financial condition, results of operations, or cash flows in the foreseeable future. The ultimate impact of the Pandemic on our company is highly uncertain and will depend on future developments, and such impacts could exist for an extended period of time, even after the Pandemic subsides. The Pandemic continues to create a dynamic client environment, and we are working diligently to ensure our clients’ changing staffing and service needs are met while actively managing direct labor and related personnel costs, including furloughs or reduced hours for certain service employees in markets significantly impacted by shutdowns. In addition, we have taken various other human capital management actions to help align our organization operationally and help mitigate the financial impact of the Pandemic on our business, including temporary furloughs for certain staff and management employees. To continue supporting our furloughed staff and management employees during the Pandemic, we are paying 100% of health insurance premiums during the furlough period (estimated to be between one and three months) for those enrolled in health benefit plans. We have accrued $0.4 million associated with these costs as of and for the three months ended April 30, 2020, which is recorded within “Accrued compensation” on the accompanying unaudited Consolidated Balance Sheets and within “Selling, general and administrative expenses” on the accompanying unaudited Consolidated Statements of Comprehensive Income (Loss). Refer to additional discussion regarding the Pandemic and the impact on our business throughout this document, including Note 7, “Fair Value of Financial Instruments,” Note 9, “Credit Facility,” Item 2., “Management’s Discussion and Analysis of Financial Conditions and Results of Operations,” and Part II., Item 1A., “Risk Factors.” Prior Year Reclassifications During the third quarter of 2019, we made changes to our operating structure to better align the services and expertise of our Healthcare business with our other industry groups, allowing us to leverage our existing branch network to support the long-term growth of this business. As a result, our former Healthcare portfolio is now included primarily in our Business & Industry segment. Our prior period segment data in Note 13, “Segment Information,” has been reclassified to conform with our current period presentation. This change had no impact on our previously reported consolidated financial statements. Rounding We round amounts in the Financial Statements to millions and calculate all percentages and per-share data from the underlying whole-dollar amounts. Thus, certain amounts may not foot, crossfoot, or recalculate based on reported numbers due to rounding. Discontinued Operations Following the sale of our Security business in 2015, we record all costs associated with this former business in discontinued operations. Such costs generally relate to litigation we retained and insurance reserves. Management Reimbursement Revenue by Segment We operate certain parking facilities under management reimbursement arrangements. Under these arrangements, we manage the parking facilities for management fees and pass through the revenues and expenses associated with the facilities to the owners. These revenues and expenses are reported in equal amounts as costs reimbursed from our managed locations:
| Three Months Ended April 30, |  |  |  | Six Months Ended April 30, |  |
(in millions) | 2020 |  | 2019 |  | 2020 |  | 2019
Business & Industry | $ | 61.7 |  |  | $ | 69.3 |  |  | $ | 135.4 |  |  | $ | 140.3 |
Aviation | 20.7 |  |  | 23.5 |  |  | 46.6 |  |  | 47.6 |
Total | $ | 82.4 |  |  | $ | 92.8 |  |  | $ | 182.0 |  |  | $ | 188.0 |
Recently Adopted Accounting Standards Our significant accounting policies are described in Note 2, “Basis of Presentation and Significant Accounting Policies,” in our Annual Report. There have been no material changes to our significant accounting policies during the six months ended April 30, 2020, other than as described below. Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). Since the release of ASU 2016-02, the FASB issued the following additional ASUs further updating Topic 842: •In January 2018, ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 842 •In July 2018, ASU 2018-10, Codification Improvements to Topic 842 •In July 2018, ASU 2018-11, Leases (Topic 842): Targeted Improvements •In March 2019, ASU 2019-01, Leases (Topic 842): Codification Improvements Topic 842 replaced existing lease accounting guidance and is intended to provide enhanced transparency and comparability by requiring lessees to record most leases on the balance sheet. Under Topic 842, lessees are required to record on the balance sheet right-of-use (“ROU”) assets (the right to use an underlying asset for the lease term) and the corresponding lease liabilities (the obligation to make lease payments arising from the lease). The new guidance requires us to continue classifying leases as either operating or financing, with classification affecting the pattern of expense recognition in the Consolidated Statements of Comprehensive Income (Loss). In addition, the new standard requires enhanced disclosures surrounding the amount, timing, and uncertainty of cash flows arising from leasing arrangements. We adopted Topic 842 on November 1, 2019 on a modified retrospective basis using the optional transition method permitted under ASU 2018-11 and have used this effective date as the initial application date. Comparative prior period financial statements have not been restated and continue to be reported under the accounting standards in effect for those prior periods presented. Upon adoption, we elected the package of transition practical expedients that allowed us to carry forward prior conclusions related to: (i) whether any expired or existing contracts are or contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for existing leases. Additionally, we elected the practical expedient of not separating lease components from non-lease components for all asset classes. We also made an accounting policy election to not record ROU assets or lease liabilities for leases with an initial term of 12 months or less and will recognize payments for such leases in our Consolidated Statements of Comprehensive Income (Loss) on a straight-line basis over the lease term. We did not elect the use of hindsight for determining the reasonably certain lease term. The adoption of Topic 842 had a significant impact on our unaudited Consolidated Balance Sheet, but did not have a significant impact on our unaudited Consolidated Statement of Comprehensive Income (Loss), our unaudited Consolidated Statement of Stockholders' Equity, our unaudited Consolidated Statement of Cash Flows, our liquidity, or our compliance with the various covenants contained within our credit facility, as further described in Note 9, “Credit Facility.” The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for finance leases remained substantially unchanged. See Note 4, “Leases,” for additional information on our lease arrangements. The impact of adoption of Topic 842 on our unaudited Consolidated Balance Sheet was as follows:
(in millions) |  | Balance at October 31, 2019 |  | Adjustments Due to Adoption of Topic 842 |  | Balance at November 1, 2019
ASSETS |  |  |  |  |  |
Right-of-use assets(1) |  | $ | — |  |  | $ | 167.5 |  |  | $ | 167.5 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |
Current portion of lease liabilities(2) |  | $ | — |  |  | $ | 36.3 |  |  | $ | 36.3 |
Other accrued liabilities(3) |  | 158.2 |  |  | (3.0) |  |  | 155.2 |
Long-term lease liabilities(4) |  | — |  |  | 154.2 |  |  | 154.2 |
Other noncurrent liabilities(5) |  | 78.8 |  |  | (20.0) |  |  | 58.8 |
(1) Represents capitalization of operating lease assets and reclassification of prepaid rent, deferred rent, lease exit impairment liabilities, and lease incentives and tenant improvements on operating leases. (2) Represents the recognition of short-term operating lease liabilities. (3) Represents short-term deferred rent reclassified to ROU assets. (4) Represents the recognition of long-term operating lease liabilities. (5) Represents long-term deferred rent, lease incentives and tenant improvements, and lease exit impairment liabilities reclassified to ROU assets. In April 2020, the FASB issued a question and answer document focused on the application of lease accounting guidance to lease concessions provided as a result of the Pandemic (the “Lease Modification Q&A”). The Lease Modification Q&A provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease when the total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. We have elected this practical expedient for Pandemic-related rent concessions, primarily rent deferrals or rent abatements, and we have elected not to remeasure the related lease liability and ROU asset for those leases. These concessions will be recognized as a reduction of rent expense in the month they occur. This election will continue while these concessions are in effect. Pandemic-related lease concessions were not material for the three months ended April 30, 2020. We do not expect there to be a significant impact on our fiscal 2021 consolidated financial statements from any recently issued accounting pronouncements that we have not yet adopted.

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