ABM INDUSTRIES INC /DE/ (ABM)

CIK: 0000771497. SIC: 7340 Services-To Dwellings & Other Buildings. Latest 10-K as of: 2025-12-19.

SIC breadcrumb: Services > Business Services > SIC 7340 Services-To Dwellings & Other Buildings

SEC company page: https://www.sec.gov/edgar/browse/?CIK=771497. Latest filing source: 0000771497-25-000031.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-12-19. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000771497.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-06-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000771497.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000771497-26-000007.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-06-05. Report date: 2026-04-30.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to facilitate an understanding of the results of operations and financial condition of ABM. This MD&A is provided as a supplement to, and should be read in conjunction with, our Financial Statements and our Annual Report on Form 10-K for the year ended October 31, 2025, which has been filed with the SEC. This MD&A contains forward-looking statements about our business, operations, and industry that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations, and intentions. Our future results and financial condition may be materially different from those we currently anticipate. See “Forward-Looking Statements” for more information.

Throughout the MD&A, amounts and percentages may not recalculate due to rounding. Unless otherwise indicated, all information in the MD&A and references to years are based on our fiscal years, which end on October 31.

Business Overview

ABM is a leading provider of integrated facility solutions, customized by industry, with a mission to make a difference, every person, every day.

In 2021, we launched our multiyear ELEVATE transformation and systems modernization plan to strengthen our industry leadership, enhance our core service capabilities, and modernize our systems, processes, and tools — with a goal of advancing data integrity, technology enablement, and operational consistency to support long-term growth and value creation.

As this work progresses, ABM is entering a phase of turning modernization efforts into measurable performance improvements across our enterprise.

Looking ahead, ABM will continue to advance this transformation and modernization program where appropriate while optimizing systems and processes company-wide that we expect to drive performance, strengthen client trust, and create long-term value for shareholders.

Restructuring Program

In the fourth quarter of 2025, we launched a Restructuring Program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. We recognized $20.1 million of cumulative restructuring charges under this program through the second quarter of 2026. The range of the remaining costs to be incurred related to the Restructuring Program cannot be reasonably estimated at this time.

We will continue to review our overhead and cost structure for efficiency opportunities under this program.

26

Segment Reporting

Our current reportable segments consist of B&I, M&D, Aviation, Education, and Technical Solutions, as further described below.

REPORTABLE SEGMENTS AND DESCRIPTIONS

B&I, our largest reportable segment, encompasses comprehensive facility solutions, including janitorial and maintenance, facilities engineering, and parking and transportation management to a diverse range of clients. Our expertise extends to commercial real estate properties, including corporate offices for high-tech clients, sports and entertainment venues, and both traditional hospitals and non-acute healthcare facilities. We typically provide these services pursuant to monthly fixed-price, square-foot, cost-plus, and parking arrangements (i.e., management reimbursement, leased location, or allowance) that are obtained through a competitive bid process as well as pursuant to work orders.

M&D provides integrated facility services, engineering, janitorial and maintenance, and other specialized solutions to a variety of manufacturing, distribution, and data center, facilities. We typically provide these services pursuant to monthly fixed-price, square-foot, and cost-plus arrangements, that are obtained through a competitive bid process as well as pursuant to work orders.

Aviation provides comprehensive support services to airlines and airports, including parking and transportation management, janitorial and maintenance services, passenger assistance, catering logistics, aircraft cabin maintenance, and transportation solutions. We typically provide services to clients in this segment under master services agreements. These agreements are typically re-bid upon renewal and are generally structured as monthly fixed-price, square-foot, cost-plus, parking, transaction-price, and hourly arrangements.

Education delivers comprehensive facility services to public school districts, private schools, colleges, and universities. Our services include janitorial and custodial services, landscaping and grounds maintenance, facilities engineering, and parking management. These services are typically provided pursuant to monthly fixed-price, square-foot, and cost-plus arrangements that are obtained through either a competitive bid process or re-bid upon renewal as well as pursuant to work orders.

Technical Solutions specializes in comprehensive facility infrastructure services, including mechanical and electrical systems, EV charging station design, installation, and maintenance, as well as microgrid systems encompassing uninterrupted power supply (“UPS”) systems and power distribution units. These offerings are strategically leveraged for cross-selling across all our industry groups, both domestically and internationally. Contracts for this segment are generally structured as electrical contracting services for energy related products such as the installation of solar solutions, battery storage, distributed generation, and other specialized electric trade.

27

Key Financial Highlights

•Revenues increased by $178.3 million, or 8.4%, to $2,290.0 million during the three months ended April 30, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 6.1% and acquisition growth of 2.3%. The organic revenue growth was due to net new business and expansion of business with existing customers, primarily in Aviation, and higher battery energy storage system, and related energy infrastructure projects, as well as microgrid projects within Technical Solutions. Acquisition growth was driven by a $48.5 million revenue increase from the WGNSTAR and LMC acquisitions.

•We had an increase in operating profit of $4.6 million, to $86.9 million, during the three months ended April 30, 2026, as compared to the prior year period. The increase was primarily attributed to increase in revenues and decrease in certain discrete transformational costs under our ELEVATE strategy.

The increase was partially offset by:

◦restructuring charges incurred during the second quarter of 2026 under our Restructuring Program.

•Our effective tax rates for the three months ended April 30, 2026, and April 30, 2025, were 27.9% and 29.4%, respectively, and were not impacted by any significant discrete items. Our effective tax rates for the six months ended April 30, 2026 and April 30, 2025 were 26.8% and 25.6%, respectively. Our effective tax rate for the six months ended April 30, 2026, was reduced by discrete items, primarily share based compensation. Our effective tax rate for the six months ended April 30, 2025, was reduced by discrete items, primarily return to provision adjustments related to our non-U.S. operations.

•Net cash provided by operating activities was $128.2 million for the six months ended April 30, 2026, as compared to cash used in operating activities of $73.9 million for the six months ended April 30, 2025. The $202.1 million improvement was primarily driven by favorable working capital changes, including improved cash collections and timing of payments.

•Dividends of $34.2 million were paid to shareholders, and dividends totaling $0.580 per common share were declared during the six months ended April 30, 2026. Additionally, we repurchased 0.1 million shares for $3.0 million, excluding excise taxes, during the three months ended April 30, 2026.

•At April 30, 2026, total outstanding borrowings under our Amended Credit Facility were $1.9 billion. At April 30, 2026, we had up to $518.9 million of borrowing capacity.

28

Results of Operations

Three Months Ended April 30, 2026, Compared with the Three Months Ended April 30, 2025

Consolidated

Three Months Ended April 30,

(in millions, except per share amounts)

2026

2025

Increase / (Decrease)

Revenues

$

2,290.0 

$

2,111.7 

$

178.3 

8.4%

Operating expenses

2,013.0 

1,841.0 

172.0 

9.3%

Gross margin

12.1

%

12.8

%

(72) bps

Selling, general and administrative expenses

171.1 

175.1 

(4.0)

(2.3)%

Restructuring and related expenses

3.1 

— 

3.1 

NM*

Amortization of intangible assets

15.9 

13.2 

2.7 

20.5%

Operating profit

86.9 

82.3 

4.6 

5.5%

Income from unconsolidated affiliates

1.0 

1.4 

(0.4)

(28.6)%

Interest expense

(28.1)

(23.9)

(4.2)

(17.6)%

Income before income taxes

59.7 

59.8 

(0.1)

(0.1)%

Income tax provision

(16.6)

(17.6)

1.0 

5.3%

Net income

43.1 

42.2 

0.9 

2.1%

Other comprehensive income

Interest rate swaps

(1.6)

(5.4)

3.8 

70.3%

Foreign currency translation and other

(3.8)

14.3 

(18.1)

NM*

Income tax benefit

0.4 

1.4 

(1.0)

(71.4)%

Comprehensive income

$

38.0 

$

52.5 

$

(14.5)

(27.5)%

*Not meaningful

Revenues

Revenues increased by $178.3 million, or 8.4%, to $2,290.0 million during the three months ended April 30, 2026, as compared to the prior year period. Revenue growth was comprised of organic growth of 6.1% and acquisition growth of 2.3%. The organic revenue growth was due to net new business and expansion of business with existing customers, primarily in Aviation, and higher battery energy storage system, and related energy infrastructure projects, as well as microgrid projects within Technical Solutions. Acquisition growth was driven by a $48.5 million revenue increase from the WGNSTAR and LMC acquisitions.

Operating Expenses

Operating expenses increased by $172.0 million, or 9.3%, to $2,013.0 million during the three months ended April 30, 2026, as compared to the prior year period. Gross margin decreased by 72 bps to 12.1% in the three months ended April 30, 2026, from 12.8% in the prior year period. The decrease in gross margin was primarily driven by contract and service mix in B&I,M&D, and Aviation. This was partially offset by operational efficiencies achieved through our Restructuring Program.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by $4.0 million, or 2.3%, to $171.1 million during the three months ended April 30, 2026, as compared to the prior year period. The decrease in selling, general and administrative expenses was primarily attributable to:

•a $5.4 million decrease in certain discrete transformational costs under our ELEVATE strategy for developing the new ERP system, client-facing technology, workforce management tools, and data analytics; and

•a $2.6 million decrease in accruals for potential legal settlements.

29

The decrease was partially offset by:

•a $2.5 million increase in compensation and related expenses primarily due to higher salaries, certain incentive plans, and headcount expansion from WGNSTAR acquisition at M&D; and

•a $2.2 million increase in acquisition and integration costs.

Amortization of Intangible Assets

Amortization of intangible assets increased by $2.7 million, or 20.5%, to $15.9 million during the three months ended April 30, 2026, as compared to the prior year period. The increase was primarily attributable to the amortization of intangibles acquired as part of the WGNSTAR Acquisition.

Interest Expense

Interest expense increased by $4.2 million, or 17.6%, to $28.1 million during the three

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2025-12-19. Report date: 2025-10-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following MD&A is intended to facilitate an understanding of the results of operations and financial condition of ABM. This MD&A is provided as a supplement to, and should be read in conjunction with, our Financial Statements. This MD&A contains both historical and forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. We make forward-looking statements related to future expectations, estimates, and projections that are uncertain and often contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “should,” “target,” or other similar words or phrases. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and assumptions that are difficult to predict. Factors that might cause such differences include, but are not limited to, those discussed in Part 1. of this Form 10-K under Item 1A., “Risk Factors,” which are incorporated herein by reference. Our future results and financial condition may be materially different from those we currently anticipate. Throughout the MD&A, amounts and percentages may not recalculate due to rounding. Unless otherwise indicated, all information in the MD&A and references to years are based on our fiscal year, which ends on October 31.

Business Overview

ABM is a leading provider of integrated facility solutions, customized by industry, with a mission to make a difference, every person, every day. Our principal operations are in the United States, and in 2025 our U.S. operations generated approximately 92% of our revenues.

Strategic Growth

We remain focused on long-term, profitable growth by delivering valued service offerings to both new and existing clients within our industry groups and across our many service lines. Our revenue growth strategy is predicated on pursuing new sales and targeting a favorable retention rate among existing contracts. Cross-selling and up-selling projects and services is also an integral part of our strategy. We believe our strategic growth initiatives, coupled with our continued focus on marketing, capital, and sales resources, will increase profitability.

ELEVATE Transformation

Through our ELEVATE strategy, as described in Item 1., “Business,” we continue to focus our efforts on:

•the client experience, by serving as a trusted advisor who can provide innovative multiservice solutions and consistent service delivery;

•the team member experience, by investing in workforce management, training, developing the next generation of ABM leaders, and building on our inclusive culture; and

•our use of technology and data to power client and employee experiences with cutting-edge data and analytics, processes, and tools that we expect to fundamentally change how we operate our business.

We believe that our technology and data investments will enable: the development and deployment of client-facing technology to improve service delivery to our clients; the use of advanced data analytics for sales targeting, employee retention, and recruiting; and the upgrade of our Enterprise Resource Planning and payroll systems.

23

Developments and Trends

Restructuring Program

In the fourth quarter of 2025, we launched a restructuring program to further streamline our operations and improve the efficiency of our support functions. This initiative is intended to enhance overall organizational effectiveness and ensure alignment between our cost structure and strategic growth objectives. Once fully implemented in 2026, this program is expected to deliver approximately $35.0 million of annualized cost savings. During the fourth quarter of 2025, we recorded $13.4 million in restructuring charges related to these actions and expect to record additional $2.0 - $3.0 million in 2026.

We will continue to review our overhead and cost structure for efficiency opportunities under this program.

24

Key Financial Highlights

•Revenues increased by $386.5 million, or 4.6%, to $8,745.9 million during 2025, as compared to 2024. Revenue growth was comprised of organic growth of 3.8% and acquisition growth of 0.8%. The organic revenue growth was due to the net new business and expansion of business with existing customers within Aviation, B&I, M&D, and Education and higher microgrid projects within Technical Solutions. The increase in revenues was partially offset by strategic pricing decisions, including for contract rebids within B&I. Acquisition growth of $68.4 million was driven by revenue from the Quality Uptime and LMC acquisitions.

•Operating profit increased by $99.7 million to $311.7 million during 2025, as compared to 2024. The increase in operating profit was attributable to:

•respective revenue increases for all industry groups,

•operational efficiencies within Aviation and Education, and

•service mix within Technical Solutions.

The increase was partially offset by:

•strategic pricing decisions for contract rebids and proactive extensions, combined with managing the timing of contract escalations to maintain and expand certain customer accounts within B&I, and

•strategic pricing on select new wins within M&D.

•Our effective tax rate on income was 26.2% for 2025, as compared to 39.1% during 2024. Our effective tax rate for 2024 was negatively impacted by a $95.7 million non-taxable change to increase the fair value of the contingent consideration related to the RavenVolt Acquisition.

•Net cash provided by operating activities was $234.4 million during 2025. Our net cash provided by operating cash activities was higher than prior year, primarily due to the timing of certain working capital requirements.

•Dividends of $65.6 million were paid to shareholders, and dividends totaling $1.06 per common share were declared during 2025. Additionally, we repurchased 2.6 million shares for $121.3 million, excluding excise taxes, during 2025.

•At October 31, 2025, total outstanding borrowings under our Amended Credit Facility were $1,569.0 million, and we had up to $577.5 million of borrowing capacity.

25

Results of Operations

Consolidated

Years Ended October 31,

2025 vs. 2024

($ in millions)

2025

2024

2023

Increase/(Decrease)

Revenues

$

8,745.9 

$

8,359.4 

$

8,096.4 

$

386.5 

4.6%

Operating expenses

7,670.8 

7,325.9 

7,037.6 

344.9 

4.7%

Gross margin

12.3 

%

12.4 

%

13.1 

%

(7) bps

Selling, general and administrative expenses

697.4 

765.3 

572.8 

(67.9)

(8.9)%

Restructuring and related expenses

13.4 

— 

— 

13.4 

NM*

Amortization of intangible assets

52.5 

56.1 

76.5 

(3.6)

(6.4)%

Operating profit

311.7 

212.0 

409.5 

99.7 

47.0%

Income from unconsolidated affiliates

4.6 

6.5 

3.9 

(1.9)

(29.3)%

Interest expense

(96.4)

(85.0)

(82.3)

(11.4)

(13.4)%

Income before income taxes

219.9 

133.6 

331.1 

86.3 

64.6%

Income tax provision

(57.6)

(52.2)

(79.7)

(5.4)

(10.2)%

Net income

162.4 

81.4 

251.3 

81.0 

99.6%

Other comprehensive (loss)/income

Interest rate swaps

(9.3)

(22.9)

(0.5)

13.6 

(59.3)%

Foreign currency translation and other

5.5 

6.8 

7.3 

(1.3)

(19.5)%

Income tax provision

2.4 

6.3 

0.1 

(3.9)

(62.0)%

Comprehensive income

$

161.0 

$

71.6 

$

258.1 

$

89.4 

NM*

*Not meaningful

The Year Ended October 31, 2025, Compared with the Year Ended October 31, 2024

Revenues

Revenues increased by $386.5 million, or 4.6%, to $8,745.9 million during 2025, as compared to 2024. Revenue growth was comprised of organic growth of 3.8% and acquisition growth of 0.8%. The organic revenue growth was due to the net new business and expansion of business with existing customers within Aviation, B&I, M&D, and Education and higher microgrid projects within Technical Solutions. The increase in revenues was partially offset by strategic pricing decisions on contract rebids within B&I. Acquisition growth of $68.4 million was driven by revenue from the Quality Uptime and LMC acquisitions.

Operating Expenses

Operating expenses increased by $344.9 million, or 4.7%, to $7,670.8 million during 2025, as compared to 2024. Gross margin decreased by 7 bps to 12.3% in 2025, as compared to 12.4% in 2024. The decrease in gross margin was primarily driven by strategic pricing decisions within M&D and B&I as well as the management of contract escalation timing to maintain and expand certain customer accounts within B&I. This was partially offset by operational efficiencies within Education and service mix within ATS.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased by $67.9 million, or 8.9%, to $697.4 million during 2025, as compared to 2024. The decrease in selling, general and administrative expenses was primarily attributable to:

•an absence of a $95.7 million adjustment to increase the fair value of the contingent consideration related to the RavenVolt Acquisition in 2024, compared to a $1.6 million adjustment to decrease the fair value in 2025.

This decrease was partially offset by:

•an $18.9 million increase in compensation and related expenses primarily due to headcount expansion from recent acquisitions; and

26

•a $6.6 million increase in costs associated with systems’ go-live.

Amortization of Intangible Assets

Amortization of intangible assets decreased by $3.6 million, or 6.4%, to $52.5 million during 2025, as compared to 2024. This decrease was due to lower amortization of intangibles, primarily intangibles acquired as part of the Able and GCA acquisitions, partially offset by amortization of intangibles from the Quality Uptime and LMC acquisitions.

Interest Expense

Interest expense increased by $11.4 million, or 13.4%, to $96.4 million during 2025, as compared to 2024. This increase was primarily driven by higher borrowings from our Amended Credit Facility to fund working capital requirements due to the transition to the Company’s new ERP system for our B&I and M&D segments that temporarily delayed invoicing to certain clients within these industry groups in the first half of 2025, and payment of the $75.0 million contingent consideration liability related to the RavenVolt Acquisition.

Income Taxes

During 2025 and 2024, we had effective tax rates of 26.2% and 39.1%, respectively, resulting in an income tax provision of $57.6 million and $52.2 million, respectively. Our effective tax rate for 2025 was benefited by a $3.1 million return to provision adjustment related to our non-U.S. operations. Our effective tax rate for 2024 was negatively impacted by a $95.7 million non-taxable change to increase the fair value of the contingent consideration related to the RavenVolt Acquisition, partially offset by a $7.3 million tax benefit for return to provision adjustments related to our non-U.S. operations, and a $5.5 million benefit related to energy efficiency incentives.

Interest Rate Swaps

We had a loss of $9.3 million and $22.9 million on interest rate swaps during the years ended October 31, 2025 and October 31, 2024, respectively, primarily due to underlying changes in the fair value of our interest rate swaps. Our interest rate swaps will mature in 2026.

Foreign Currency Translation and Other

We had a foreign currency translation gain of $5.5 million and $6.8 million during the years ended October 31, 2025 and October 31, 2024, respectively. This change was due to fluctuations in the exchange rate between the U.S. Dollar (“USD”), the British pound sterling (“GBP”), and the euro (“EUR”). Future gains and losses on foreign currency translation will be dependent upon changes in the relative value of foreign currencies to the USD and the extent of our foreign assets and liabilities.

The Year Ended October 31, 2024, Compared with the Year Ended October 31, 2023

For a comparison of our Results of Operations for the year ended October 31, 2024, to the year ended October 31, 2023, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended October 31, 2024, filed with the SEC on December 19, 2024.

27

Segment Information

Our current reportable segments consist of B&I, M&D, Aviation, Education, and Technical Solutions.

Financial Information for Each Reportable Segment

Year Ended October 31,

2025 vs. 2024

($ in millions)

2025

2024

2023

Increase/(Decrease)

Revenues

Business & Industry

$

4,126.0 

$

4,059.1 

$

4,089.4 

$

66.9 

1.6%

Manufacturing & Distribution

1,618.6 

1,554.3 

1,526.7 

64.3 

4.1%

Aviation

1,118.7 

1,032.6 

925.7 

86.1 

8.3%

Education

922.0 

904.0 

880.4 

18.0 

2.0%

Technical Solutions

960.6 

809.3 

674.2 

151.3 

18.7%

$

8,745.9 

$

8,359.4 

$

8,096.4 

$

386.5 

4.6%

Operating profit (loss)

Business & Industry

$

316.9 

$

307.0 

$

315.6 

$

9.9 

3.2%

Operating profit margin

7.7

%

7.6

%

7.7

%

12 bps

Manufacturing & Distribution

151.4 

166.3 

161.7 

(14.9)

(8.9)%

Operating profit margin

9.4

%

10.7

%

10.6

%

(134) bps

Aviation

65.2 

59.1 

60.0 

6.1 

10.3%

Operating profit margin

5.8 

%

5.7 

%

6.5

%

10 bps

Education

67.7 

55.3 

49.7 

12.4 

22.2%

Operating profit margin

7.3 

%

6.1 

%

5.6

%

122 bps

Technical Solutions

86.5 

69.4 

53.2 

17.1 

24.6%

Operating profit margin

9.0

%

8.6

%

7.9

%

42 bps

Corporate

(370.5)

(433.1)

(226.6)

(62.6)

14.5%

Adjustment for income from unconsolidated

affiliates, included in Aviation and Technical Solutions

(4.6)

(6.5)

(3.9)

1.9 

29.3%

Adjustment for tax deductions for energy

   efficient government buildings, included in

   Technical Solutions

(0.8)

(5.5)

(0.3)

4.7 

84.9%

$

311.7 

$

212.0 

$

409.5 

$

99.7 

47.0%

*Not meaningful

28

The Year Ended October 31, 2025, Compared with the Year Ended October 31, 2024

Business & Industry

Year Ended October 31,

($ in millions)

2025

2024

Increase

Revenues

$

4,126.0 

$

4,059.1 

$

66.9 

1.6%

Operating profit

316.9 

307.0 

9.9 

3.2%

Operating profit margin

7.7

%

7.6

%

12 bps

B&I revenues increased by $66.9 million, or 1.6%, to $4,126.0 million during 2025, as compared to 2024. The revenue increase was primarily driven by client expansions both domestic and international, partially offset by strategic pricing decisions on contract rebids and attrition of certain engineering clients. Management reimbursement revenues for this segment totaled $291.4 million and $281.4 million during 2025 and 2024, respectively.

Operating profit increased by $9.9 million, or 3.2%, to $316.9 million during 2025, as compared to 2024. Operating profit margin increased by 12 bps to 7.7% in 2025 from 7.6% in 2024. The increase in operating profit margin was primarily driven by geographic mix and operational efficiencies achieved through our Restructuring Program. The increase was partially offset by strategic pricing decisions on contract rebids and proactive extensions, combined with managing contract escalation timing to maintain and expand certain customer accounts.

Manufacturing & Distribution

Year Ended October 31,

($ in millions)

2025

2024

Increase/(Decrease)

Revenues

$

1,618.6 

$

1,554.3 

$

64.3 

4.1%

Operating profit

151.4 

166.3 

(14.9)

(8.9)%

Operating profit margin

9.4 

%

10.7

%

(134) bps

M&D revenues increased by $64.3 million, or 4.1%, to $1,618.6 million during 2025, as compared to 2024. The increase was primarily attributable to the expansion of business with existing clients and new business wins, including strategic pricing decisions for select new wins. This was partially offset by the loss of a certain customer in the first quarter of 2025.

Operating profit decreased by $14.9 million, or 8.9%, to $151.4 million during 2025, as compared to 2024. Operating profit margin decreased by 134 bps to 9.4% in 2025 from 10.7% in 2024. The decrease in operating profit margin was primarily attributable to strategic pricing for select new wins and additional investments made in the second half of 2025 to hire certain technical expertise to support future growth.

Aviation

Year Ended October 31,

($ in millions)

2025

2024

Increase

Revenues

$

1,118.7 

$

1,032.6 

$

86.1 

8.3%

Operating profit

65.2 

59.1 

6.1 

10.3%

Operating profit margin

5.8

%

5.7 

%

10 bps

Aviation revenues increased by $86.1 million, or 8.3% to $1,118.7 million, during 2025, as compared to 2024. The increase was primarily attributable to new business and scope expansions with the existing clients as well as an increase in travel volume. Management reimbursement revenues for this segment totaled $50.2 million and $36.3 million during 2025 and 2024, respectively.

Operating profit increased by $6.1 million, or 10.3%, to $65.2 million during 2025, as compared to 2024. Operating profit margin increased by 10 bps to 5.8% in 2025, from 5.7% in 2024. The increase in operating profit margin was primarily attributable to operational efficiencies, particularly in managing overhead costs.

29

Education

Year Ended October 31,

($ in millions)

2025

2024

Increase

Revenues

$

922.0 

$

904.0 

$

18.0 

2.0%

Operating profit

67.7 

55.3 

12.4 

22.2%

Operating profit margin

7.3

%

6.1 

%

122 bps

Education revenues increased by $18.0 million, or 2.0%, to $922.0 million during 2025, as compared to 2024. The increase was primarily attributable to net new business wins.

Operating profit increased by $12.4 million, or 22.2% to $67.7 million during 2025, as compared to 2024. Operating profit margin increased by 122 bps to 7.3% in 2025 from 6.1% in 2024. The operating profit margin was primarily attributable to operational efficiencies, particularly in managing overtime, materials and supplies, and general and administrative headcount.

Technical Solutions

Year Ended October 31,

($ in millions)

2025

2024

Increase

Revenues

$

960.6 

$

809.3 

$

151.3 

18.7%

Operating profit

86.5 

69.4 

17.1 

24.6%

Operating profit margin

9.0

%

8.6

%

42 bps

Technical Solutions revenues increased by $151.3 million, or 18.7%, to $960.6 million during 2025, as compared to 2024. Revenue growth was comprised of organic growth of 10.2% and acquisition growth of 8.5%. The organic revenue increase was primarily driven by higher project revenues due to higher microgrid systems projects, partially offset by a decrease in electric vehicle charging station revenues. Acquisition growth was driven by $68.4 million of revenue from the Quality Uptime and LMC acquisitions.

Operating profit increased by $17.1 million, or 24.6%, to $86.5 million during 2025, as compared to 2024. Operating profit margin increased by 42 bps to 9.0% in 2025 from 8.6% in 2024. The increase in operating profit margin was primarily attributable to the service mix, partially offset by higher amortization of intangible assets from recent acquisitions.

Corporate

Year Ended October 31,

($ in millions)

2025

2024

Decrease

Corporate expenses

$

(370.5)

$

(433.1)

$

(62.6)

14.5%

Corporate expenses decreased by $62.6 million, or 14.5%, to $370.5 million during 2025, as compared to 2024. The decrease in corporate expenses was primarily related to:

•an absence of a $95.7 million adjustment to increase fair value of the contingent consideration related to the RavenVolt Acquisition in 2024, compared to a $1.6 million adjustment to decrease the fair value in 2025.

This decrease was partially offset by:

•a $7.5 million increase in compensation and related expenses primarily due to higher salaries and certain incentive plans;

•a $6.3 million increase in acquisition and integration costs; and

•a $5.2 million increase in costs associated with systems’ go-live.

30

The Year Ended October 31, 2024, Compared with the Year Ended October 31, 2023

For a comparison of our Segment Information for the year ended October 31, 2024, to the year ended October 31, 2023, see “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended October 31, 2024, filed with the SEC on December 19, 2024.

31

Liquidity and Capital Resources

Our primary sources of liquidity are operating cash flows and borrowing capacity under our credit facility. We assess our liquidity in terms of our ability to generate cash to fund our short- and long-term cash requirements. As such, we project our anticipated cash requirements as well as cash flows generated from operating activities to meet those needs.

In addition to normal working capital requirements, we anticipate that our short- and long-term cash requirements will include funding insurance claims, dividend payments, capital expenditures, share repurchases, mandatory loan repayments, contingent consideration payments from acquisitions, and systems and technology transformation initiatives under our ELEVATE strategy. We anticipate long-term cash uses may also include strategic acquisitions. On a long-term basis, we will continue to rely on our credit facility for any long-term funding not provided by operating cash flows.

We believe that our operating cash flows and borrowing capacity under our credit facility are sufficient to fund our cash requirements for at least a 12-month period from the issuance of these financial statements. In the event that our plans change or our cash requirements are greater than we anticipate, we may need to access the capital markets to finance future cash requirements. However, there can be no assurance that such financing will be available to us should we need it or, if available, that the terms will be satisfactory to us and not dilutive to existing shareholders.

Credit Facility

On September 1, 2017, we refinanced and replaced our then-existing $800.0 million credit facility with a new senior, secured five-year syndicated credit facility (the “Credit Facility”), consisting of a $900.0 million revolving line of credit and an $800.0 million amortizing term loan. In accordance with the terms of the Credit Facility, the revolving line of credit was reduced to $800.0 million on September 1, 2018.

On February 26, 2025, we amended and restated the Credit Facility (the “Amended Credit Facility”), extending the maturity date to February 26, 2030, and increasing the capacity of the revolving credit facility from $1.3 billion to $1.6 billion and the then-remaining term loan outstanding from $528.1 million to $600.0 million. The Amended Credit Facility provides for the issuance of up to $250.0 million for standby letters of credit and the issuance of up to $100.0 million in swingline advances. The obligations under the Amended Credit Facility are guaranteed by the material, domestic wholly owned subsidiaries of ABM and are secured by a pledge of substantially all of the existing and future property and assets of ABM and the guarantors, including a pledge of the capital stock of the wholly owned domestic subsidiaries held by ABM and the guarantors and 65% of the capital stock of the first-tier foreign subsidiaries held by ABM and the guarantors, in each case subject to exceptions. Additionally, we may repay amounts borrowed under the Amended Credit Facility at any time without penalty.

The Amended Credit Facility contains certain covenants, including a maximum total net leverage ratio of 5.00 to 1.00, a maximum secured net leverage ratio of 4.00 to 1.00, and a minimum interest coverage ratio of 1.50 to 1.00, as well as other financial and non-financial covenants. In the event of a material acquisition, as defined in the Amended Credit Facility, we may elect to increase the maximum total net leverage ratio to 5.50 to 1.00 for a total of four fiscal quarters and increase the maximum secured net leverage ratio to 4.50 to 1.00 for a total of four fiscal quarters. Our borrowing capacity is subject to, and limited by, compliance with the covenants described above. At October 31, 2025, we were in compliance with these covenants and expect to be in compliance in the foreseeable future.

During 2025, we made $23.1 million of principal payments under the term loan. At October 31, 2025, the total outstanding borrowings and standby letters of credit were $1,569.0 million and $23.5 million, respectively. At October 31, 2025, we had up to $577.5 million of borrowing capacity.

Reinvestment of Foreign Earnings

We plan to reinvest our foreign earnings to fund future non-U.S. growth and expansion, and we do not anticipate remitting such earnings to the United States. While U.S. federal tax expense had been recognized as a result of the Tax Cuts and Jobs Act of 2017, no deferred tax liabilities with respect to federal and state income taxes or foreign withholding taxes have been recognized. We believe that our cash on hand in the United States, along

32

with our Amended Credit Facility and future domestic cash flows, are sufficient to satisfy our domestic liquidity requirements.

Share Repurchases

Effective September 3, 2025, our Board of Directors expanded our existing share repurchase program by an additional $150.0 million of our common stock. We repurchased shares under the share repurchase program during the year ended October 31, 2025, as summarized below. At October 31, 2025, authorization for $183.1 million of repurchases remained under the Share Repurchase Program.

Years Ended October 31,

(in millions, except per share amounts)

2025

2024

Total number of shares purchased

2.56 

1.17 

Average price paid per share(1)

$

47.35 

$

47.86 

Total cash paid for share repurchases(1)

$

121.3 

$

55.8 

(1) Average price paid per share and total cash paid for share repurchases do not include any excise tax for share repurchases as part of the Inflation Reduction Act of 2022.

Effect of Inflation

The rates of inflation experienced in recent years have not had a material impact on our Financial Statements. We attempt to recover increased costs by increasing prices for our services to the extent permitted by contracts and competition.

Regulatory Environment

Our operations are subject to various federal, state, and/or local laws, rules, and regulations regulating among other things, labor, wages, and health and safety matters, as well as laws and regulations relating to the discharge of materials into the environment or otherwise relating to the protection of the environment. Historically, the cost of complying with these laws, rules, and regulations has not had a material adverse effect on our financial position, results of operations, or cash flows.

Cash Flows

    In addition to revenues and operating profit, our management views operating cash flows as a good indicator of financial performance, because strong operating cash flows provide opportunities for growth both organically and through acquisitions. Operating cash flows primarily depend on: revenue levels; profitability levels of our jobs; the quality and timing of collections of accounts receivable; the timing of payments to suppliers and other vendors; the timing and amount of income tax payments; the actual payments of contingent consideration made in excess of the acquisition-date fair value; and the timing and amount of payments on insurance claims and legal settlements.

Year Ended October 31,

(in millions)

2025

2024

2023

Net cash provided by operating activities

234.4 

226.7 

243.3 

Net cash used in investing activities

(115.6)

(171.9)

(62.1)

Net cash used in financing activities

(80.2)

(61.5)

(186.3)

Operating Activities

Net cash provided by operating activities increased by $7.7 million during 2025, as compared to 2024. The increase was primarily driven by the timing of working capital requirements. The increase was partially offset by the $75.0 million payment for contingent consideration related to the RavenVolt Acquisition, of which $16.0 million was classified as an operating cash outflow.

Net cash provided by operating activities decreased by $16.6 million during 2024, as compared to 2023. The decrease was primarily driven by the timing of working capital requirements. The decrease was partially offset by the absence of a $66.0 million payment of deferred payroll taxes done in 2023.

33

Investing Activities

Net cash used in investing activities decreased by $56.3 million during 2025, as compared to 2024. The decrease was primarily related to lower cash outflows for acquisitions in 2025.

Net cash used in investing activities increased by $109.8 million during 2024, as compared to 2023. The change was primarily related to the Quality Uptime Acquisition, completed in 2024.

Financing Activities

Net cash used in financing activities was $80.2 million in 2025, as compared to $61.5 million in 2024. The increase in net cash used was primarily related to higher share buyback repurchases and a $75.0 million payment for contingent consideration related to the RavenVolt Acquisition, of which $59.0 million was classified as a financing cash outflow. This was partially offset by higher net borrowings from our Amended Credit Facility.

Net cash used in financing activities was $61.5 million in 2024, as compared to $186.3 million in 2023. The decrease in net cash used was primarily related to lower share buyback repurchases in 2024 and an increase in our book cash overdrafts.

Dividends

On December 17, 2025, we announced a quarterly cash dividend of $0.29 per share on our common stock, payable on February 2, 2026, to shareholders of record on January 14, 2026. We declared a quarterly cash dividend on our common stock every quarter during 2025, 2024, and 2023. We paid total annual dividends of $65.6 million, $56.5 million, and $57.5 million during 2025, 2024, and 2023, respectively.

Material Cash Requirements from Contractual and Other Obligations

As of October 31, 2025, our material cash requirements for our known contractual and other obligations were as follows:

•Debt Obligations and Interest Payments – Outstanding payments on our Amended Credit Facility were $1,569.0 million, with $30.0 million payable within 12 months. We have future interest payments based on our hedged borrowings under our Amended Credit Facility of $10.0 million, which is payable within 12 months. The interest payments on our remaining borrowings under the Amended Credit Facility will be determined based upon the average outstanding balance of our borrowings and the prevailing interest rate during that time. See Note 12, “Credit Facility,” in the Financial Statements for further detail of our debt and the timing of expected future principal and interest payments.

•Operating and Finance Leases – We enter into various noncancelable lease agreements for office space, parking facilities, warehouses, vehicles, and equipment used in the normal course of business. Operating and finance lease obligations were $148.4 million, with $38.1 million payable within 12 months. See Note 5, “Leases,” in the Financial Statements for further detail of our obligations and the timing of expected future payments.

•Service Concession Arrangements – As defined under ASU No. 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services, our leased location parking arrangements are represented as service concession arrangements. We had contractual payments for these arrangements of $50.9 million, with $17.9 million payable within 12 months.

•Information Technology Service Agreements – Information technology service agreements represent outsourced services and licensing costs pursuant to our information technology agreements. We had contractual payments for these agreements of $147.7 million, with $68.9 million payable within 12 months.

•Benefit Obligations – Expected future payments relating to our defined benefit, postretirement, and deferred compensation plans were $38.8 million, with $3.5 million payable in 12 months. These amounts are based on expected future service and were calculated using the same assumptions used to measure our benefit obligation at October 31, 2025.

34

•Contingent Consideration Payable in Connection with Our Acquisition of RavenVolt and LMC – At October 31, 2025, contingent consideration related to the RavenVolt Acquisition of up to $205.0 million in cash may be paid in calendar year 2026 if the RavenVolt business achieves certain financial targets in calendar year 2025 or cumulative targets for calendar years 2023-2025, as defined in the merger agreement. We expect the RavenVolt business to achieve the financial target that would require a $32.5 million payment for calendar year 2025, and as such, we currently expect to make this payment in May 2026. At October 31, 2025, contingent consideration related to the LMC Acquisition of up to $5.8 million in cash may be paid in calendar year 2027 upon the retention of the top two customers.

In addition, our material cash requirements for other obligations, for which we cannot reasonably estimate future payments, include the following:

•Multiemployer Benefit Plans – In addition to our company sponsored benefit plans, we participate in certain multiemployer pension and other postretirement plans. The cost of these plans is equal to the annual required contributions determined in accordance with the provisions of negotiated collective bargaining arrangements. During 2025, 2024, and 2023, contributions made to these plans were $588.0 million, $565.9 million, and $574.6 million, respectively; however, our future contributions to the multiemployer plans are dependent upon a number of factors, including the funded status of the plans, the ability of other participating companies to meet ongoing funding obligations, and the level of our ongoing participation in these plans. Amounts of future contributions that we would be contractually obligated to make pursuant to these plans cannot be reasonably estimated. See Note 13, “Employee Benefit Plans,” in the Financial Statements for more information.

•Self-Insurance Obligations – We may make payments for exposures for which we are self-insured, including workers’ compensation, general liability, automobile liability, property damage, and other insurable risks. At October 31, 2025, our self-insurance reserves, net of recoverables, were $558.6 million. As these obligations do not have scheduled maturities, we are unable to make a reliable estimate of the amount or timing of cash that may be required to settle these matters. See Note 11, “Insurance,” in the Financial Statements for further detail.

•Unrecognized Tax Benefits – At October 31, 2025, our total liability for unrecognized tax benefits was $8.0 million. The resolution or settlement of these tax positions with the taxing authorities is subject to significant uncertainty, and therefore we are unable to make a reliable estimate of the amount or timing of cash that may be required to settle these matters. In addition, certain of these matters may not require cash settlements due to the utilization of credits and net operating loss carryforwards as well as other offsets, including the indirect benefit from other taxing jurisdictions that may be available.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements other than unrecorded standby letters of credit and surety bonds. We use letters of credit and surety bonds in the ordinary course of business to ensure the performance of contractual obligations and to collateralize self-insurance obligations in the event we are unable to meet our claim payment obligations. As we already have reserves on our books for the claims costs, these do not represent additional liabilities. The surety bonds typically remain in force for one to five years and may include optional renewal periods. As of October 31, 2025, these letters of credit totaled $23.5 million, and surety bonds and surety-backed letters of credit totaled $1,026.6 million, respectively. Neither of these arrangements has a material current effect, or is reasonably likely to have a material future effect, on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

35

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in accordance with United States generally accepted accounting principles (“U.S. GAAP”) requires our management to make certain estimates that affect the reported amounts. We base our estimates on historical experience, known or expected trends, independent valuations, and various other assumptions that we believe to be reasonable under the circumstances. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. There have been no significant changes to our critical accounting policies and estimates for the year ended October 31, 2025. We believe the following critical accounting policies govern the more significant judgments and estimates used in the preparation of our Financial Statements.

36

Description

Judgments and Uncertainties

Effect if Actual Results Differ from Assumptions

Valuation of Long-Lived Assets

We evaluate our fixed assets and amortizable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. These events and circumstances include, but are not limited to: higher than expected attrition for customer relationships; a current expectation that a long-lived asset will be disposed of significantly before the end of its previously estimated useful life, such as when we classify a business as held for sale; a significant adverse change in the extent or manner in which we use a long-lived asset; or a change in the physical condition of a long-lived asset. Undiscounted cash flow analyses are used to determine if impairment exists; if impairment is determined to exist, the loss is calculated based on estimated fair value. Goodwill is not amortized but rather tested at least annually for impairment or more often if events or changes in circumstances indicate it is more likely than not that the carrying amount of the asset may not be recoverable. Goodwill is tested for impairment at the reporting unit level, which represents an operating segment or a component of an operating segment. Goodwill is tested for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. We may elect not to perform the qualitative assessment for some or all of our reporting units and instead perform a quantitative impairment test.

Our impairment evaluations require us to apply judgment in determining whether a triggering event has occurred, including the evaluation of whether it is more likely than not that a long-lived asset will be disposed of significantly before the end of its previously estimated useful life. Incorrect estimation of useful lives may result in inaccurate depreciation and amortization charges over future periods leading to future impairment.

Our impairment loss calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flows and asset fair values, including forecasting useful lives of the assets and selecting the discount rate that reflects the risk inherent in future cash flows.

We estimate the fair value of each reporting unit using a combination of the income approach and the 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 valuation of our reporting units requires significant judgment in evaluation of 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.

The market approach estimates fair value of a reporting unit by using market comparables for reasonably similar public companies.

During the last three years, we have not made any changes in the accounting methodology used to evaluate the impairment of long-lived assets or to estimate the useful lives of our long-lived assets. Additionally, we have not made any changes in the accounting methodology used to evaluate impairment of goodwill during the last three years.

At October 31, 2025, we had $2.6 billion of goodwill. Our goodwill is included in the following segments:

$1.1 billion — B&I

$502.2 million — M&D

$459.3 million — Education

$69.6 million — Aviation

$461.4 million — Technical Solutions

A goodwill impairment analysis was performed for each of our reporting units on August 1, 2025. Based on these studies, the implied fair value of each reporting units was substantially in excess of its carrying value. Therefore, we concluded there were no indicators of impairment. A 10% decrease in the estimated fair value of any of our reporting units would not have resulted in a different conclusion.

37

Description

Judgments and Uncertainties

Effect if Actual Results Differ from Assumptions

Insurance Reserves

We use a combination of insured and self-insurance programs to cover workers’ compensation, general liability, automobile liability, property damage, and other insurable risks.

Insurance claim liabilities represent our estimate of retained risks without regard to insurance coverage. We retain a substantial portion of the risk related to certain workers’ compensation and medical claims. Liabilities associated with these losses include estimates of both claims filed and incurred but not reported (“IBNR”) Claims.

With the assistance of third-party actuaries, we periodically review our estimate of ultimate losses for IBNR Claims and adjust our required self-insurance reserves as appropriate. As part of this evaluation, we review the status of existing and new claim reserves as established by our third-party claims administrators.

The third-party claims administrators establish the case reserves based upon known factors related to the type and severity of the claims, demographic data, legislative matters, and case law, as appropriate. 

We compare actual trends to expected trends and monitor claims development.

The specific case reserves estimated by the third-party administrators are provided to an actuary who assists us in projecting an actuarial estimate of the overall ultimate losses for our self-insured or high deductible programs. The projection includes the case reserves plus an actuarial estimate of reserves required for additional developments, including IBNR Claims.

We utilize the results of actuarial studies to estimate our insurance rates and insurance reserves for future periods and to adjust reserves, if appropriate, for prior years.

Our self-insurance liabilities contain uncertainties due to assumptions required and judgment used.

Costs to settle our obligations, including legal and healthcare costs, could fluctuate and cause estimates of our self-insurance liabilities to change.

Incident rates, including frequency and severity, could fluctuate and cause the estimates in our self-insurance liabilities to change.

These estimates are subject to: changes in the regulatory environment; fluctuations in projected exposures, including payroll, revenues, and the number of vehicle units; and the frequency, lag, and severity of claims.

The full extent of certain claims, especially workers’ compensation and general liability claims, may not be fully determined for several years.

In addition, if the reserves related to self-insurance or high deductible programs from acquired businesses are not adequate to cover damages resulting from future accidents or other incidents, we may be exposed to substantial losses arising from future claim developments.

We have not made any changes in the accounting methodology used to establish our self-insurance liabilities during the past three years.

After analyzing recent loss development patterns, comparing the loss development patterns against benchmarks, and applying actuarial projection methods to estimate the ultimate losses, we increased our total reserves related to prior years for known claims as well as our estimate of the loss amounts associated with IBNR Claims during 2025 by $23.3 million. In 2024, we increased our total reserves related to prior years claims by $20.3 million.

It is possible that actual results could differ from recorded self-insurance liabilities. Our insurance claims liabilities as of October 31, 2025, amounted to $660.1 million. A 10% change in our projected ultimate losses would have affected net income by approximately $40.4 million for 2025.

38

Accounting Pronouncements

Accounting Standard Updates

Topic

Summary

Effective Date/

Method of Adoption

2023-09

Income Taxes (Topic 740): Improvements to Income Tax Disclosures

This ASU, issued in December 2023, is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. We are currently evaluating the impact of implementing this guidance on our financial statements.

This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

2024-03

Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses

This ASU, issued in November 2024, is intended to improve financial reporting by requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. We are currently evaluating the impact of implementing this guidance on our financial statements.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

2025-06

Intangibles — Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software

This ASU, issued in September 2025, removes all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40 and requires the capitalization of software costs to begin when 1) management has authorized and committed to funding the software project and 2) it is probable that the project will be completed and the software will be used to perform the function intended.

This ASU is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.

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