Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES.
a. Disclosure Controls and Procedures.
As of the end of the period covered by this report, our Principal Executive Officer and Principal Financial Officer evaluated our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, to allow timely decisions regarding required disclosure.
b. Management’s Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the framework in Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of October 31, 2022.
Audit Report on Internal Controls over Financial Reporting of the Registered Public Accounting Firm
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of our internal control over financial reporting.
c. Changes in Internal Control Over Financial Reporting.
To support the growth of our financial shared service capabilities and standardize our financial systems, we continue to update several key platforms, including our HR information systems, enterprise resource planning system, and labor management system. The implementation of several key platforms involves changes in the systems that include internal controls. Although some of the transitions have proceeded to date without material adverse effects, the possibility exists that they could adversely affect our internal controls over financial reporting and procedures.
There were no other changes in our internal control over financial reporting during the fiscal year 2022 identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 9B. OTHER INFORMATION.
Disclosure Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act
Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012 (“ITRA”), effective August 10, 2012, added a new subsection (r) to Section 13 of the Exchange Act, which requires issuers that file periodic reports with the SEC to disclose in their annual and quarterly reports whether, during the reporting period, they or any of their “affiliates” (as defined in Rule 12b-2 under the Exchange Act) have knowingly engaged in specified activities or transactions relating to Iran, including activities not prohibited by U.S. law and conducted outside the United States by non-U.S. affiliates in compliance with applicable laws. Issuers must also file a notice with the SEC if any disclosable activity under ITRA has been included in an annual or quarterly report.
In the fourth quarter of fiscal year 2021, the Company discovered that one of its UK subsidiaries had been providing aircraft cleaning services to Iran Air since April 2020. The UK subsidiary terminated its relationship with Iran Air on August 30, 2021. The aggregate amount of payments received by the UK subsidiary in return for its services was approximately GBP 64,000, and the aggregated profits were GBP 6,400.
The Company submitted a preliminary self-disclosure and investigation report of the UK subsidiary’s transactions with the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”).
On March 30, 2022, OFAC issued to the Company a cautionary letter indicating that OFAC is not pursuing any civil monetary penalties or other enforcement action against the Company.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
Information about our executive officers is found in Part I, Item 1, of this Annual Report on Form 10-K under “Executive Officers of Registrant.” Additional information required by this Item will be set forth under the captions “Proposal No. 1—Election of Directors,” “Corporate Governance and Board Matters,” and “Audit-Related Matters” in our Definitive Proxy Statement for our 2023 Annual Meeting of Stockholders (the “2023 Proxy Statement”). Such information is incorporated herein by reference. Our 2023 Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the conclusion of our fiscal year ended October 31, 2022.
O n March 25, 2022, we filed our Annual CEO Certification as required by Section 303A.12 of the NYSE Listed Company Manual.
Code of Business Conduct
We have adopted and posted on our website (www.abm.com) the ABM Code of Business Conduct. Our Code of Business Conduct qualifies as a “code of ethics” within the meaning of Item 406 of Regulation S-K. Our Code of Business Conduct applies to all of our directors, officers, and employees, including our Principal Executive Officer, Principal Financial Officer, and Principal Accounting Officer. If any amendments are made to the Code of Business Conduct or if any waiver, including any implicit waiver, from a provision of the Code of Business Conduct is granted to our Principal Executive Officer, Principal Financial Officer, or Principal Accounting Officer, we will disclose the nature of such amendment or waiver on our website at the address specified above.
ITEM 11. EXECUTIVE COMPENSATION.
Information with respect to executive compensation required by this Item will be set forth under the captions “Director Compensation for Fiscal Year 2022,” “Executive Compensation,” and “Corporate Governance and Board Matters—Compensation Committee Interlocks and Insider Participation” in our 2023 Proxy Statement and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Information with respect to security ownership of certain beneficial owners and management and equity compensation plan information and related stockholder matters required by this Item will be set forth under the captions “General Information—Security Ownership of Certain Beneficial Owners,” “General Information—Security Ownership of Directors and Executive Officers,” and “General Information—Equity Compensation Plan Information” in our 2023 Proxy Statement and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Information with respect to certain relationships and related transactions and with respect to director independence required by this Item will be set forth under the captions “General Information—Certain Relationships and Transactions with Related Persons” and “Corporate Governance and Board Matters” in our 2023 Proxy Statement and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Information with respect to our Audit Committee’s pre-approval policy for audit services performed by KPMG LLP (PCAOB ID 185 ) and our principal accounting fees and services required by this Item will be set forth under the caption “Audit-Related Matters” in our 2023 Proxy Statement and is incorporated herein by reference.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) The following documents are filed as part of this report:
1 . Financial Statements : Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
43
Consolidated Balance Sheets at October 31, 20 2 2 and 20 21
48
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended October 31, 202 2 , 202 1 , and 20 20
49
Consolidated Statements of Stockholders’ Equity for the Years Ended October 31, 202 2 , 202 1 , and 20 20
50
Consolidated Statements of Cash Flows for the Years Ended October 31, 202 2 , 202 1 , and 20 2 0
51
2. Financial Statement Schedule
Valuation and Qualifying Accounts for the Years Ended October 31, 202 2 , 20 21 , and 20 20
97
3. Exhibits
Exhibit Index
98
97
ABM INDUSTRIES INCORPORATED AND SUBSIDIARIES
SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(in millions) Balance
Beginning of Year Additions from Acquisitions Charges to
Costs and Expenses Write-offs (1) / Allowance Taken
Balance
End of Year
Accounts receivable and sales allowances
2022 $ 32.7 1.4 60.6 ( 72.1 ) $ 22.6
2021 35.5 1.3 44.3 ( 48.4 ) 32.7
2020 22.4 — 96.3 ( 83.2 ) 35.5
(1) Write-offs are net of recoveries.
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EXHIBIT INDEX
Exhibit Exhibit Description Incorporated by Reference
No. Form File No. Exhibit Filing Date
1.1 Underwriting Agreement, dated March 14, 2018, among ABM Industries Incorporated, Goldman Sachs & Co LLC, and UBS Securities LLC
8-K 001-08929 1.1 March 19, 2018
2.1 Agreement and Plan of Merger, dated July 11, 2017, among GCA Holding Corp., ABM Industries Incorporated, Grade Sub One, Inc., Grade Sub Two, LLC and Thomas H. Lee Equity Fund VII, L.P. and Broad Street Principal Investments Holdings, L.P., acting jointly as the Securityholder Representative
8-K 001-08929 2.1 July 14, 2017
2.2 Purchase Agreement, dated August 25, 2021, among Crown Building Maintenance Co., Crown Energy Services, Inc., ABM Industries Incorporated and the sellers and sellers’ representative party thereto
8-K 001-08929 2.1 August 25, 2021
2.3 Agreement and Plan of Merger, dated August 17, 2022, by and among ABM Industries Incorporated, RavenVolt Merger Sub, Inc., RavenVolt, Inc. and Jonathan Hinton, as shareholders’ representative
8-K 001-08929 2.1 August 18, 2022
3.1 Restated Certificate of Incorporation of ABM Industries Incorporated, dated March 26, 2020
8-K 001-08929 3.1 March 27, 2020
3.2 Amended and Restated Bylaws of ABM Industries Incorporated, dated March 26, 2020
8-K 001-08929 3.2 March 27, 2020
4.1 Description of Registrant’s Securities
10-K 001-08929 4.1 December 17, 2020
10.1 Credit Agreement, dated as of September 1, 2017, by and among ABM Industries Incorporated, a Delaware corporation, certain subsidiaries of ABM Industries Incorporated from time to time party thereto, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent
8-K 001-08929 10.2 September 8, 2017
10.2 Letter Agreement, dated November 6, 2017, between ABM Industries Incorporated and Bank of America, N.A., as Swingline Lender with respect to the Credit Agreement dated as of September 1, 2017, among ABM Industries Incorporated, the Designated Borrowers party thereto, the Lenders party thereto and Bank of America, N.A., as administrative agent
10-K 001-08929 10.3 December 22, 2017
10.3 First Amendment, dated as of July 3, 2018, to the Credit Agreement dated September 1, 2017, by and among ABM Industries Incorporated, a Delaware corporation, the Designated Borrowers identified on the signature pages thereto, the Guarantors identified on the signature pages thereto, the Lenders identified on the signature pages thereto, and Bank of America, N.A., as administrative agent
10-Q 001-08929 10.1 September 7, 2018
99
10.4 Second Amendment, dated as of September 5, 2018, to the Credit Agreement dated September 1, 2017, by and among ABM Industries Incorporated, a Delaware corporation, the Designated Borrowers identified on the signature pages thereto, the Guarantors identified on the signature pages thereto, the Lenders identified on the signature pages thereto, and Bank of America, N.A., as administrative agent
10-Q 001-08929 10.2 September 7, 2018
10.5 Third Amendment, dated as of May 28, 2020, to the Credit Agreement dated September 1, 2017, by and among ABM Industries Incorporated, a Delaware corporation, the Designated Borrowers identified on the signature pages thereto, the Guarantors identified on the signature pages thereto, the Lenders identified on the signatures pages thereto and Bank of America, N.A., as administrative agent
10-Q 001-08929 10.1 June 18, 2020
10.6 Fourth Amendment, dated as of June 28, 2021, to the Credit Agreement dated September 1, 2017, by and among ABM Industries Incorporated, a Delaware corporation, the Designated Borrowers identified on the signature pages thereto, the Guarantors identified on the signature pages thereto, the Lenders identified on the signature pages thereto and Bank of America, N.A., as administrative agent
10-Q 001-08929 10.1 September 9, 2021
10.7‡ Fifth Amendment, dated as of November 1, 2022, to the Credit Agreement dated September 1, 2017, by and among ABM Industries Incorporated, a Delaware corporation, the Designated Borrowers identified on the signature pages thereto, the Subsidiary Guarantors identified on the signature pages thereto, the Lenders identified on the signature pages thereto and Bank of America, N.A., as administrative agent
10.8‡ LIBOR Transition Amendment, dated as of November 1, 2022, by and among ABM Industries Incorporated, a Delaware corporation, the Designated Borrowers identified on the signature pages thereto, the Subsidiary Guarantors identified on the signature pages thereto, the Lenders identified on the signature pages thereto and Bank of America, N.A., as administrative agent
10.9* ABM Executive Retiree Healthcare and Dental Plan
10-K 001-08929 10.17 January 14, 2005
10.10* Director Retirement Plan Distribution Election Form, as revised June 16, 2006
10-Q 001-08929 10.1 September 8, 2006
10.11* Deferred Compensation Plan for Non-Employee Directors, as amended and restated December 13, 2010
10-K 001-08929 10.7 December 23, 2010
10.12* Form of Director’s Indemnification Agreement
10-K 001-08929 10.9 December 21, 2018
10.13* 2006 Equity Incentive Plan, as amended and restated March 7, 2018
8-K 001-08929 10.1 March 8, 2018
10.14* ABM Industries Incorporated 2021 Equity and Incentive Compensation Plan
8-K 001-08929 10.1 March 26, 2021
100
10.15* Statement of Terms and Conditions Applicable to Options, Restricted Stock and Restricted Stock Units, and Performance Shares Granted to Employees Pursuant to the 2006 Equity Incentive Plan, for Awards Granted on or after March 4, 2015
10-Q 001-08929 10.2 June 3, 2015
10.16* Statement of Terms and Conditions Applicable to Options, Restricted Stock and Restricted Stock Units, and Performance Shares Granted to Employees Pursuant to the 2006 Equity Incentive Plan, for Awards Granted on or after January 1, 2020
10-Q 001-08929 10.1 March 5, 2020
10.17* Statement of Terms and Conditions Applicable to Options, Restricted Stock, Restricted Stock Units, and Performance Shares Granted to Employees Pursuant to the 2006 Equity Incentive Plan, for Awards Granted on July 14, 2020
10-K 001-08929 10.16 December 17, 2020
10.18* Statement of Terms and Conditions Applicable to Options, Restricted Stock, Restricted Stock Units and Performance Shares Granted to Employees Pursuant to the 2006 Equity Incentive Plan, for Awards Granted with a Two-Year Vesting Schedule
10-K 001-08929 10.17 December 17, 2020
10.19* Statement of Terms and Conditions Applicable to Awards Granted to Employees Pursuant to the 2021 Equity and Incentive Compensation Plan
10-Q 001-08929 10.1 June 9, 2021
10.20*‡ Statement of Terms and Conditions Applicable to Awards Granted to UK Employees Pursuant to the 2021 Equity and Incentive Compensation Plan
10.21* Statement of Terms and Conditions Applicable to Awards Granted to Employees Pursuant to the 2021 Equity and Incentive Compensation Plan, for Awards Granted on or after January 1, 2022
10-Q 001-08929 10.1 March 9, 2022
10.22* Statement of Terms and Conditions Applicable to Options, Restricted Stock, and Restricted Stock Units Granted to Directors Pursuant to the 2006 Equity Incentive Plan, for Awards Granted on or after March 4, 2015
10-Q 001-08929 10.3 June 3, 2015
10.23* Statement of Terms and Conditions Applicable to Options, Restricted Stock, and Restricted Stock Units Granted to Directors Pursuant to the 2006 Equity Incentive Plan, for Awards Granted on or after January 1, 2020
10-Q 001-08929 10.2 March 5, 2020
10.24* Statement of Terms and Conditions Applicable to Awards Granted to Non-Employee Directors Pursuant to the 2021 Equity and Incentive Compensation Plan
10-Q 008-08929 10.2 June 9, 2021
10.25* Form of Restricted Stock Unit Agreement - 2006 Equity Plan
10-K 001-08929 10.18 December 20, 2019
10.26* Form of Restricted Stock Unit Agreement for Employees – 2021 Equity and Incentive Compensation Plan
10-Q 001-08929 10.2 March 9, 2022
10.27* Form of Performance Share Agreement - 2006 Equity Plan
10-K 001-08929 10.19 December 20, 2019
10.28* Form of Performance Share Agreement for Employees - 2021 Equity and Incentive Compensation Plan
10-Q 001-08929 10.3 March 9, 2022
101
10.29* Executive Stock Option Plan (aka Age-Vested Career Stock Option Plan), as amended and restated June 4, 2012
10-Q 001-08929 10.1 September 6, 2012
10.30* Deferred Compensation Plan for Executives, amended and restated October 25, 2010
10-K 001-08929 10.22 December 23, 2010
10.31* Supplemental Executive Retirement Plan, as amended and restated June 3, 2008
10-Q 001-08929 10.4 September 8, 2008
10.32* Service Award Benefit Plan, as amended and restated June 3, 2008
10-Q 001-08929 10.5 September 8, 2008
10.33* Executive Severance Pay Policy, as amended and restated March 7, 2011
10-Q 001-08929 10.1 March 10, 2011
10.34* Amended and Restated Executive Employment Agreement, dated as of September 22, 2017, by and between ABM Industries Incorporated and Scott Salmirs
10-K 001-08929 10.28 December 22, 2017
10.35* Amended and Restated Change in Control Agreement, dated as of September 22, 2017, by and between ABM Industries Incorporated and Scott Salmirs
10-K 001-08929 10.29 December 22, 2017
10.36* Executive Employment Agreement, dated as of November 1, 2017, by and between ABM Industries Incorporated and Scott Giacobbe
10-Q 001-08929 10.1 March 7, 2018
10.37* Amendment to Executive Employment Agreement, dated as of November 1, 2017, by and between ABM Industries Incorporated and Scott Giacobbe
10-Q 001-08929 10.5 June 9, 2021
10.38* Release Agreement, dated as of May 27, 2021, by and between ABM Industries Incorporated and Scott Giacobbe
10-Q 001-08929 10.8 June 9, 2021
10.39* Executive Employment Agreement, dated as of January 1, 2018, by and between ABM Industries Incorporated and Rene Jacobsen
10-Q 001-08929 10.3 March 7, 2018
10.40* Change in Control Agreement, dated as of January 1, 2018, by and between ABM Industries Incorporated and Rene Jacobsen
10-Q 001-08929 10.4 March 7, 2018
10.41* Executive Employment Agreement, dated as of March 1, 2018, by and between ABM Industries Incorporated and Andrea Newborn
10-Q 001-08929 10.1 March 7, 2019
10.42* Change in Control Agreement, dated as of March 1, 2018, by and between ABM Industries Incorporated and Andrea Newborn
10-Q 001-08929 10.2 March 7, 2019
10.43* Executive Employment Agreement, dated as of October 28, 2019, by and between ABM Industries Incorporated and Joshua H. Feinberg
10-K 001-08929 10.35 December 20, 2019
10.44* Change in Control Agreement, dated as of February 8, 2020, by and between ABM Industries Incorporated and Joshua H. Feinberg
10-Q 001-08929 10.4 June 9, 2021
10.45* Executive Employment Agreement, dated as of November 1, 2020, by and between ABM Industries Incorporated and Earl R. Ellis
10-Q 001-08929 10.6 June 9, 2021
10.46* Change in Control Agreement, dated as of November 30, 2020, by and between ABM Industries Incorporated and Earl R. Ellis
10-Q 001-08929 10.7 June 9, 2021
10.47* Change in Control Agreement, dated as of April 1, 2011, by and between ABM Industries Incorporated and Dean A. Chin
10-Q 001-08929 10.3 June 9, 2021
10.48* Senior Executive Severance Pay Policy, as amended and restated March 7, 2011
10-Q 001-08929 10.4 March 9, 2022
102
21.1‡ Subsidiaries of the Registrant
23.1‡ Consent of Independent Registered Public Accounting Firm
31.1‡ Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2‡ Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1† Certifications pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
101.INS ‡ Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH ‡ Inline XBRL Taxonomy Extension Schema Document
101.CAL‡ Inline XBRL Taxonomy Calculation Linkbase Document
101.LAB ‡ Inline XBRL Taxonomy Label Linkbase Document
101.PRE ‡ Inline XBRL Presentation Linkbase Document
101.DEF ‡ Inline XBRL Taxonomy Extension Definition Linkbase Document
104† Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
* Indicates management contract or compensatory plan, contract, or arrangement
‡ Indicates filed herewith
† Indicates furnished herewith
103
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ABM Industries Incorporated
By: /s/ Scott Salmirs
Scott Salmirs
President and Chief Executive Officer and Director
December 21, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of ABM Industries and in the capacities and on the dates indicated.
By: /s/ Scott Salmirs
Scott Salmirs
President and Chief Executive Officer and Director
(Principal Executive Officer)
December 21, 2022
/s/ Earl R. Ellis /s/ Dean A. Chin
Earl R. Ellis
Executive Vice President and
Chief Financial Officer
Dean A. Chin
Senior Vice President, Chief Accounting Officer,
Corporate Controller and Treasurer
(Principal Financial Officer) (Principal Accounting Officer)
December 21, 2022 December 21, 2022
/s/ Sudhakar Kesavan /s/ Quincy L. Allen
Sudhakar Kesavan Quincy L. Allen, Director
Chairman of the Board and Director December 21, 2022
December 21, 2022
/s/ LeighAnne G. Baker /s/ Linda Chavez
LeighAnne G. Baker, Director Linda Chavez, Director
December 21, 2022 December 21, 2022
/s/ Donald F. Colleran /s/ James D. DeVries
Donald F. Colleran, Director James D. DeVries, Director
December 21, 2022 December 21, 2022
/s/ Art A. Garcia /s/ Thomas M. Gartland
Art A. Garcia, Director Thomas M. Gartland, Director
December 21, 2022 December 21, 2022
/s/ Jill M. Golder /s/ Winifred M. Webb
Jill M. Golder, Director Winifred M. Webb, Director
December 21, 2022 December 21, 2022