Revenue

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

Revenue

4. Revenue

The Company recognizes revenue when control of the promised goods or services is transferred to customers at an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services.

Contracts with customers and clients

The Company accounts for a contract when it has the approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Once a contract is identified, the Company evaluates whether the contract should be accounted for as more than one performance obligation. Substantially all of the Company’s revenues come from the following two types of arrangements: Management type and Lease type contracts.

Management type contracts

Management type contract revenue consists of management fees, including both fixed and performance-based fees, and in some cases e-commerce technology fees, customer convenience fees and monthly subscription fees related to the use of the Company's technology solutions. In exchange for this consideration, the Company may have a bundle of integrated services that comprise one performance obligation and include services such as managing the facility, as well as ancillary services such as accounting, equipment leasing, consulting, insurance and other value-added services. Management type contract revenues do not include gross customer collections at the managed facilities as these revenues belong to the property owners rather than the Company. Management type contracts generally provide the Company with management fees regardless of the operating performance of the underlying facilities. Revenue is recognized over time as the Company provides services over the term of the contract.

Lease type contracts

Lease type contract revenue includes gross receipts (net of local taxes), e-commerce technology fees and customer convenience fees. Performance obligations related to lease type contracts include parking for transient and monthly parkers. Revenue is recognized over time as the Company provides services. Under lease type arrangements, the Company pays the property owner a fixed base rent, percentage rent that is tied to the facility’s financial performance, or a combination of both. The Company operates the parking facility and is responsible for most operating expenses, but typically is not responsible for major maintenance, capital expenditures or real estate taxes.

Service concession arrangements

Certain expenses (primarily rental expense), as well as depreciation and amortization, related to service concession arrangements for lease type contracts, are recorded as a reduction of Service revenue – lease type contracts.

The Company recorded $2.7 million and $2.9 million of cost concessions related to service concession arrangements (recognized as an increase to revenue) during the three months ended March 31, 2024 and 2023, respectively.

Disaggregation of revenue

The Company disaggregates its revenue from contracts with customers by type of arrangement for each of the reportable segments. The Company has concluded that such disaggregation of revenue best depicts the overall economic nature, timing and uncertainty of the Company's revenue and cash flows affected by the economic factors of the respective contractual arrangement. See Note 13. Segment Information for further information on disaggregation of the Company's revenue by segment.

Performance obligations

As of March 31, 2024, the Company had $193.7 million related to performance obligations that were unsatisfied or partially unsatisfied for which the Company expects to recognize revenue. This amount excludes variable consideration primarily related to contracts where the Company and customer share the gross revenues or operating profit for the location and contracts where transaction prices include performance incentives that are constrained at contract inception. These performance incentives are

based on measures that are ascertained exclusively by future performance and therefore cannot be estimated at contract inception by the Company. The Company applies the practical expedient that permits exclusion of information about the remaining performance obligations that have original expected durations of one year or less.

The Company expects to recognize the remaining performance obligations as revenue in future periods as follows:

(millions) (unaudited)	Remaining Performance Obligations
2024	$	58.6
2025		51.1
2026		37.6
2027		23.1
2028		10.1
2029 and thereafter		13.2
Total	$	193.7

Contract balances

Contract assets and liabilities are reported on a contract-by-contract basis and are included in Accounts receivable, net and Accrued and other current liabilities, respectively, within the Condensed Consolidated Balance Sheets.

The following table provides information about accounts receivable, contract assets and contract liabilities with customers and clients as of March 31, 2024 (unaudited) and December 31, 2023:

(millions)	March 31, 2024			December 31, 2023
Accounts receivable	$	180.7		$	181.9
Contract assets		0.3			1.2
Contract liabilities		(9.4	)		(17.5	)

Changes in contract assets, which include the recognition of additional consideration due from the client, are offset by reclassifications of contract asset balances to accounts receivable when the Company obtains an unconditional right to consideration, thereby establishing an accounts receivable. The following table provides information about changes to contract assets during the three months ended March 31, 2024 and 2023 (unaudited):

	Three Months Ended
(millions)	March 31, 2024			March 31, 2023
Balance, beginning of year	$	1.2		$	1.8
Additional contract assets		0.3			0.5
Reclassification to accounts receivable		(1.2	)		(1.8	)
Balance, end of period	$	0.3		$	0.5

Changes in contract liabilities primarily include additional contract liabilities and reductions of contract liabilities when revenue is recognized. The following table provides information about changes to contract liabilities during the three months ended March 31, 2024 and 2023 (unaudited):

	Three Months Ended
(millions)	March 31, 2024			March 31, 2023
Balance, beginning of year	$	(17.5	)	$	(17.4	)
Additional contract liabilities		(8.5	)		(9.6	)
Recognition of revenue from contract liabilities		16.6			17.1
Balance, end of period	$	(9.4	)	$	(9.9	)

Cost of contracts, net

Cost of contracts expense related to service concession arrangements and certain management type contracts are recorded as a reduction of revenue. Cost of contracts expense during the three months ended March 31, 2024 and 2023 (unaudited), which was included as a reduction to Services revenue – management type contracts within the Condensed Consolidated Statements of Income, was as follows:

	Three Months Ended
(millions)	March 31, 2024		March 31, 2023
Cost of contracts expense	$	0.2	$	0.2

As of March 31, 2024 (unaudited) and December 31, 2023, cost of contracts, net of accumulated amortization, included in Other noncurrent assets within the Condensed Consolidated Balance Sheets was $2.0 million and $2.2 million, respectively.