Domestic and Foreign Operations

12 Months Ended

Dec. 31, 2014

Domestic and Foreign Operations

Domestic and Foreign Operations

19. 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. The business is managed based on regions administered by executive vice presidents. Each of the operating segments are 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.

        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. The following includes the current internal reporting for which 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, 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, Colorado, 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, 2014, 2013 and 2012 (in thousands):

	Year Ended December 31,
	2014			Gross Margin			2013			Gross Margin			2012			Gross Margin
Revenues(a):
Region One
Lease contracts	$	303,973					$	299,280					$	134,851
Management contracts		100,906						109,846						69,144
Total Region One		404,879						409,126						203,995
Region Two
Lease contracts		4,658						4,418						1,425
Management contracts		30,424						31,213						21,599
Total Region Two		35,082						35,631						23,024
Region Three
Lease contracts		49,098						46,281						27,116
Management contracts		58,941						63,673						51,313
Total Region Three		106,219						109,954						78,429
Region Four
Lease contracts		48,469						43,532						42,986
Management contracts		105,591						99,841						61,454
Total Region Four		151,875						143,373						104,440
Region Five
Lease contracts		90,892						94,663						44,070
Management contracts		42,507						42,410						26,796
Total Region Five		133,399						137,073						70,866
Other
Lease contracts		(466	)					1,400						(93	)
Management contracts		(86	)					364						195
Total Other		(552	)					1,764						102
Reimbursed management contract revenue		679,785						629,878						473,082
Total revenues	$	1,514,692					$	1,466,799					$	953,938
Gross Profit
Region One
Lease contracts		15,550			5	%		12,291			4	%	$	5,617			4	%
Management contracts		49,107			49	%		50,987			46	%		32,612			47	%
Total Region One		64,657						63,278						38,229
Region Two
Lease contracts		371			8	%		162			4	%		51			4	%
Management contracts		12,854			42	%		9,810			31	%		3,772			17	%
Total Region Two		13,225						9,972						3,823
Region Three
Lease contracts		5,018			10	%		3,643			8	%		2,245			8	%
Management contracts		23,860			40	%		26,001			41	%		20,760			40	%
Total Region Three		28,878						29,643						23,005
Region Four
Lease contracts		3,626			7	%		3,024			7	%		2,918			7	%
Management contracts		28,648			27	%		26,543			27	%		16,820			27	%
Total Region Four		32,274						29,558						19,738
Region Five
Lease contracts		16,269			18	%		15,626			17	%		5,242			12	%
Management contracts		20,662			49	%		20,737			49	%		10,249			38	%
Total Region Five		36,931						36,363						15,491
Other
Lease contracts		130			N/A			(1,261	)		N/A			2,502			N/A
Management contracts		(4,759	)		N/A			4,547			N/A			4,338			N/A
Total Other		(4,629	)					3,286						6,840
Total gross profit		171,336						172,101						107,126
General and administrative expenses		101,516						98,931						86,540
General and administrative expense percentage of gross profit		59	%					57	%					81	%
Depreciation and amortization		30,349						31,193						13,513
Operating income		39,471						41,977						7,073
Other expenses (income):
Interest expense		17,815						19,034						8,616
Interest income		(402	)					(643	)					(297	)
Gain on contribution of a business to an unconsolidated entity		(4,161	)					—						—
Equity in losses from investment in unconsolidated entity		283						—						—
		13,535						18,391						8,319
Income before income taxes		25,936						23,586						(1,246	)
Income tax (benefit) expense		(197	)					8,821						(3,620	)
Net income		26,133						14,765						2,374
Less: Net income attributable to noncontrolling interest		3,035						2,676						1,034
Net income attributable to SP Plus Corporation	$	23,098					$	12,089					$	1,340

        On January 1, 2015, the Company changed its internal reporting segment information reported to its CODM. The Company will prospectively report on the following regions beginning in 2015 and restate prior periods presented to reflect the internal reporting to the CODM:

• Region One encompasses operations in Connecticut, Delaware, District of Columbia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Northern California, Ohio, Oregon, Pennsylvania, Rhode Island, Virginia, Washington, West Virginia, Wisconsin and four Canadian provinces of Alberta, Manitoba, Ontario and Quebec.

• Region Two encompasses operations in Alabama, Arizona, Colorado, Florida, Georgia, Hawaii, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, North Carolina, Oklahoma, South Carolina, Southern California, Tennessee, Texas Utah and Puerto Rico.

• Region Three encompasses operations in the New York metropolitan tri-state area of New York, New Jersey and Connecticut.

• Region Four encompasses all major airport and transportation operations nationwide.

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

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