Domestic and Foreign Operations

12 Months Ended

Dec. 31, 2013

Domestic and Foreign Operations

Domestic and Foreign Operations

Note R. Domestic and Foreign Operations

• Business Unit Segment Information

        Segment information is presented in accordance with a "management approach," which designates the internal reporting used by the chief operating decision maker for making decisions and assessing performance as the source of the Company's reportable segments. The Company's segments are organized in a manner consistent with which separate financial information is available and evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and in assessing the Company's overall performance.

        An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses, and about which separate financial information is regularly evaluated by the chief operating decision maker. The chief operating decision maker is the Company's president and chief executive officer. Each of the operating segments is directly responsible for revenue and expenses related to their operations including direct regional administrative costs. Finance, information technology, human resources, and legal are shared functions that are not allocated back to the four operating segments. The chief operating decision maker assesses the performance of each operating segment using information about its revenue and operating income (loss) before interest, taxes, and depreciation and amortization, but does not evaluate segments using discrete asset information. There are no inter-segment transactions and the Company does not allocate interest and other income, interest expense, depreciation and amortization or taxes to operating segments. The accounting policies for segment reporting are the same as for the Company as a whole.

        The chief operating decision maker does not evaluate segments using discrete asset information. The business is managed based on regions administered by executive vice presidents. On November 1, 2013, the Company changed its internal reporting segment information reported to its CODM. The Company now reports Ontario, Manitoba and Quebec in Region One and Missouri, Nebraska, North Carolina and South Carolina in Region Five. All periods presented have been restated to reflect the new internal reporting to the CODM.

        Region One encompasses operations in Connecticut, Delaware, District of Columbia, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Virginia, West Virginia, Wisconsin and the three Canadian provinces of Manitoba, Ontario, and Quebec.

        Region Two encompasses event planning and transportation, and its technology-based parking and traffic management systems.

        Region Three encompasses operations in Arizona, California, Colorado, Hawaii, New Mexico, Oregon, Utah, Washington and the Canadian province of Alberta.

        Region Four encompasses all major airport and transportation operations nationwide.

        Region Five encompasses Alabama, Florida, Georgia, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, Puerto Rico, South Carolina, Tennessee, and Texas.

        Other consists of ancillary revenue that is not specifically identifiable to a region and insurance reserve adjustments related to prior years.

        The following is a summary of revenues (excluding reimbursed management contract revenue) and gross profit by operating segment for the years ended December 31, 2013, 2012 and 2011 (in thousands):

	Year Ended December 31,
	2013			Gross Margin			2012			Gross Margin			2011			Gross Margin
Revenues(a):
Region One
Lease contracts	$	299,280					$	134,851					$	73,657
Management contracts		109,846						69,144						53,647
Total Region One		409,126						203,995						127,304
Region Two
Lease contracts		4,418						1,425						—
Management contracts		31,213						21,599						9,178
Total Region Two		35,631						23,024						9,178
Region Three
Lease contracts		46,281						27,116						17,373
Management contracts		63,673						51,313						46,103
Total Region Three		109,954						78,429						63,476
Region Four
Lease contracts		43,532						42,986						39,522
Management contracts		99,841						61,454						47,491
Total Region Four		143,373						104,440						87,013
Region Five
Lease contracts		94,663						44,070						16,939
Management contracts		42,410						26,796						16,297
Total Region Five		137,073						70,866						33,236
Other
Lease contracts		1,400						(93	)					18
Management contracts		364						195						1,010
Total Other		1,764						102						1,028
Reimbursed management contract revenue		629,878						473,082						408,427
Total revenues	$	1,466,799					$	953,938					$	729,662
Gross Profit
Region One
Lease contracts	$	12,291			4	%	$	5,617			4	%	$	5,366			7	%
Management contracts		50,987			46	%		32,612			47	%		28,308			53	%
Total Region One		63,278						38,229						33,674
Region Two
Lease contracts		162			4	%		51			4	%		—			0	%
Management contracts		9,810			31	%		3,772			17	%		1,928			21	%
Total Region Two		9,972						3,823						1,928
Region Three
Lease contracts		3,643			8	%		2,245			8	%		1,667			10	%
Management contracts		26,001			41	%		20,760			40	%		20,664			45	%
Total Region Three		29,643						23,005						22,331
Region Four
Lease contracts		3,024			7	%		2,918			7	%		2,743			7	%
Management contracts		26,534			27	%		16,820			27	%		14,813			31	%
Total Region Four		29,558						19,738						17,556
Region Five
Lease contracts		15,626			17	%		5,242			12	%		1,150			7	%
Management contracts		20,737			49	%		10,249			38	%		8,108			50	%
Total Region Five		36,362						15,491						9,258
Other
Lease contracts		(1,261	)		N/A			2,502			N/A			135			N/A
Management contracts		4,547			N/A			4,338			N/A			2,673			N/A
Total Other		3,287						6,840						2,808
Total gross profit		172,101						107,126						87,555
General and administrative expenses		98,931						86,540						48,297
General and administrative expense percentage of gross profit		57	%					81	%					55	%
Depreciation and amortization		31,193						13,513						6,618
Operating income		41,977						7,073						32,640
Other expenses (income):
Interest expense		19,034						8,616						4,691
Interest income		(643	)					(297	)					(227	)
		18,391						8,319						4,464
Income before income taxes		23,586						(1,246	)					28,176
Income tax (benefit) expense		8,821						(3,620	)					10,700
Net income		14,765						2,374						17,476
Less: Net income attributable to noncontrolling interest		2,676						1,034						378
Net income attributable to SP Plus Corporation	$	12,089					$	1,340					$	17,098

(a)

Excludes reimbursed management contract revenue.