Note B. Acquisitions

On October 2, 2012 ("Closing Date"), we completed our acquisition (the "Central Merger" or "Merger") of 100% of the outstanding common shares of KCPC Holdings, Inc., which is the ultimate parent of Central Parking Corporation ("Central") for 6,161,332 shares of our common stock and the assumption of approximately $217,675 of Central's debt net of cash acquired. Additionally, Central's former stockholders will be entitled to receive cash consideration of $27,000, subject to adjustment, to be paid three years after closing to the extent it is not used to satisfy certain obligations that the Company has been indemnified for the former Central shareholders.

Based on certain conditions of the Merger Agreement, the cash consideration was adjusted because Central's Combined Net Debt and absolute value of net Working Capital ("Net Debt Working Capital") exceeds the threshold of $285,000 by $15,546 as of September 30, 2012, its stockholders are required to settle their obligation with the Company. The settlement was agreed to by reducing the $27,000 as shown in the following table:


Central Net Debt Working Capital at September 30, 2012 as defined in the Merger Agreement	$	(300,546	)
Threshold		285,000

Excess over the threshold		(15,546	)
Cash consideration payable in three years		27,000

Settled cash consideration	$	11,454

Present value of cash consideration at the acquisition date	$	8,943

Accordingly, the fair value of the final consideration transferred to acquire all of Central's outstanding stock at the acquisition date is as follows:


Stock consideration	$	140,726
Present value of cash consideration to be issued		8,943

Total consideration transferred	$	149,669

The Company incurred certain acquisition and integration costs associated with the transaction that were expensed as incurred and are reflected in the Consolidated Statements of Income. The Company recognized $26,783 of these costs in its Consolidated Statement of Income for the year ended December 31, 2012 in General and Administrative Expenses. The Company has incurred costs of $10,332, related to the Credit Agreement. Of the total costs of $10,332, $5,149 has been included in other assets and $5,183 was recognized as a discount to borrowings. The entire cost is being amortized to interest expense over the term of the loan.

The acquisition has been accounted for using the acquisition method of accounting (in accordance with the provisions of ASC 805, Business Combinations) which requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The table below summarizes the preliminary amounts recognized for assets acquired and liabilities assumed as of the acquisition date. Certain estimated values are not yet finalized (see below) and are subject to change, which could be significant. The Company will finalize the amounts recognized as information necessary to complete the analyses is obtained. The Company expects to finalize these amounts as soon as possible but no later than one year from the acquisition date.

The Company financed the acquisition through additional term borrowings under the Senior Credit Facility and consisting of a revolving credit facility up to $200,000 and a term loan of $250,000. The results of operations of this acquisition is included in the Company's consolidated statement of income from the date of acquisition.

The following table summarizes the preliminary values of assets acquired and liabilities assumed as of the acquisition date:

	Amounts recorded as of the acquisition date

Net current liabilities	$	(52,475	)
Leasehold improvements, equipment, land and construction in progress, net		24,154
Identified intangible assets:
Management contracts		81,000
Favorable lease contracts		51,650
Trade name / Trademarks		14,900
Existing Technology		34,000
Non-competition Agreements		2,600
Other noncurrent assets		17,748
Long-term debt		(237,223	)
Unfavorable lease contracts		(69,316	)
Other noncurrent liabilities		(19,523	)
Net deferred tax liability		(82	)

Net assets acquired		(152,567	)
Goodwill		302,236

Total consideration transferred	$	149,669

The acquired management contracts are being amortized over a weighted average life of 16 years. The favorable and unfavorable lease contracts are being amortized over a weighted average life of 10 and 7 years, respectively. The trade names and trademarks are being amortized over 7 years. The non-compete agreements are being amortized over 1 year. The existing technology is being amortized over 4.5 years. See Note F for amortization and accretion of the intangible assets and liabilities.

The unfavorable lease contract liability, including current portion, is $59,337 and the expected future accretion of unfavorable lease contracts is as follows:

	Unfavorable lease contract accretion

2013	$	15,002
2014		10,668
2015		7,084
2016		5,885
2017		5,038
2018 and Thereafter		15,660

Total	$	59,337

Goodwill is calculated as the excess of the consideration transferred over the net assets acquired. Goodwill is not amortized and is not deductible for tax purposes. Goodwill represents expected synergies with the Company's existing operations which include growth of new and existing customers, elimination of corporate overhead redundancies, and logistical improvements.

The recorded amounts are preliminary and subject to change. The following items are still subject to change:

•

Amounts for intangible assets, unfavorable lease contracts, existing technology, leasehold improvements, equipment, land and construction in progress, pending finalization of valuation efforts.

•

Amounts for deferred tax assets and liabilities pending the finalization of the valuations of assets acquired, liabilities assumed and resulting goodwill.

A single estimate of fair value results from a complex series of the Company's judgments about future events and uncertainties and relies heavily on estimates and assumptions. The Company's judgments used to determine the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact the Company's results of operations.

The results of Central's operations have been included in the Company's consolidated financial statements from the acquisition date. The following table presents information for Central that is included in the Company's Consolidated Statements of Income for the year ended December 31, 2012:

	Central's operations included in the Company's results for the year ended December 31, 2012

Total revenue	$	190,008
Operating loss(1)	$	(9,263	)

(1): Includes amortization and depreciation related to identifiable intangible and tangible assets of $ 5,944 and acquisition and integration costs of $10,007.

The following unaudited pro forma consolidated results of operations for 2012 and 2011 assume that the acquisition of Central was completed as of January 1, 2011:

	2012			2011

Revenue, excluding reimbursed management contract revenue	$	859,366		$	866,513
Net loss from continuing operations attributable to Standard stockholders	$	(28,484	)	$	(7,534	)

Earnings per share from continuing operations attributable to Standard stockholders
Basic	$	(1.31	)		(0.34	)
Diluted	$	(1.31	)	$	(0.34	)

The unaudited pro forma consolidated results were prepared using the acquisition method of accounting and are based on the historical financial information of the Company and Central. The historical financial information has been adjusted to give effect to the pro forma adjustments that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results. The unaudited pro forma consolidated results are not necessarily indicative of what the Company's consolidated results of operations actually would have been had it completed the acquisition on January 1, 2011. In addition, the unaudited pro forma consolidated results do not purport to project the future results of operations of the combined company nor do they reflect the expected realization of any cost savings associated with the acquisition. The unaudited pro forma consolidated results reflect primarily the following pro forma pre-tax adjustments:

•

Elimination of Central's historical intangible asset amortization and depreciation expense of $30,805 in 2012 and $25,839 in 2011;

•

Additional amortization and depreciation expense of $18,751 in 2012 and $14,591 in 2011 related to the fair value of intangible assets acquired;

•

Elimination of interest expense of $21,046 in 2012 and $24,608 in 2011 related to former credit facilities that were retired in connection with the Merger.

•

Additional interest expense of $17,486 in 2012 and 17,729 in 2011 associated with the incremental debt issued by the Company to partially finance the acquisition and the early retirement of debt;

•

The elimination of Central's equity based compensation expense of $430 in 2012 and $579 in 2011. Immediately prior to the closing, all outstanding equity awards of Central were terminated.

•

The elimination of long-lived asset impairment of $3,159 in 2012 and 2,599 in 2011.

•

Elimination of $26,784 and $2,658 of costs incurred in 2012 and 2011, respectively, which are directly attributable to the Merger, and which do not have a continuing impact on the combined Company's operating results. Included in these costs are advisory, legal and regulatory, integration, and costs to retire certain debt obligations assumed in the Merger.

In addition, all of the above adjustments were adjusted for the applicable tax impact. The Company has assumed a 42% combined statutory federal and state tax rate when estimating the tax effects of the adjustments to the unaudited pro forma combined statements of income.