Business Unit Segment Information

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Business Unit Segment Information

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 (“CODM”) 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 discrete financial information is available and evaluated regularly by the Company’s CODM in deciding how to allocate resources and in assessing 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 Company’s CODM. The CODM is the Company’s 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 three operating segments. The CODM assesses the performance of each operating segment using information about its revenue and gross profit as its primary measure of performance, 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.

Effective January 1, 2016, the Company began certain organizational and executive leadership changes to align with how the CODM reviews performance and makes decisions in managing the Company and, therefore, changed certain internal operating segment information reported to the CODM. Specifically, the previous internally reported operating segments known as Region One (North), Region Two (South), and Region Three (New York Metropolitan tri-state area of New York, New Jersey, and Connecticut) were aggregated into a single operating segment now known as Region One (Urban). Region Two (Airport transportation operations nationwide) and Region Three (other operating segments of USA Parking and event planning and transportation services), previously known as Region Four and Region Five, respectively, will continue to be reported to the CODM unchanged. All prior periods presented have been restated to reflect the new internal reporting to the CODM.

Region One (Urban) encompasses operations in Alabama, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, West Virginia, Wisconsin, Puerto Rico, and three Canadian provinces of Alberta, Ontario and Quebec.

Region Two (Airport transportation) encompasses all major airport and transportation operations nationwide.

Region Three encompasses other reporting units of USA Parking and event planning and transportation services.

Other consists of ancillary revenue that is not specifically identifiable to a region and certain unallocated insurance reserve adjustments.

The business is managed based on regions administered by executive vice presidents. The following is a summary of revenues (excluding reimbursed management contract revenue) and gross profit by regions for the three months ended March 31, 2016 and 2015 (unaudited):

	Three Months Ended
(millions)	March 31, 2016			Gross Margin %		March 31, 2015			Gross Margin %
Parking Services Revenue
Region One
Lease contracts	$	106.6				$	104.8
Management contracts	46.4					47.3
Total Region One	153.0					152.1
Region Two
Lease contracts	30.5					29.7
Management contracts	24.2					25.5
Total Region Two	54.7					55.2
Region Three
Lease contracts	1.3					1.2
Management contracts	17.2					17.6
Total Region Three	18.5					18.8
Other
Lease contracts	0.1					0.1
Management contracts	3.4					3.7
Total Other	3.5					3.8
Reimbursed management contract revenue	167.9					174.3
Total Revenues	$	397.6				$	404.2
Gross Profit
Region One
Lease contracts	7.2			7	%	$	5.5		5	%
Management contracts	19.5			42	%	20.8			44	%
Total Region One	26.7					26.3
Region Two
Lease contracts	0.8			3	%	0.9			3	%
Management contracts	5.8			24	%	5.5			22	%
Total Region Two	6.6					6.4
Region Three
Lease contracts	0.2			15	%	0.2			17	%
Management contracts	3.9			23	%	3.8			22	%
Total Region Three	4.1					4.0
Other
Lease contracts	(0.3		)	(300	)%	0.5			500	%
Management contracts	1.3			38	%	4.0			108	%
Total Other	1.0					4.5
Total gross profit	38.4					$	41.2
General and administrative expenses	24.6					25.7
General and administrative expense percentage of gross profit	64		%			62		%
Depreciation and amortization	9.2					7.9
Operating income	4.6					7.6

	Three Months Ended
	March 31, 2016			Gross Margin %	March 31, 2015			Gross Margin %
Other expenses (income)
Interest expense	2.8				4.1
Interest income	(0.2		)		(0.1		)
Equity in losses from investment in unconsolidated entity	0.5				0.5
Total other expenses (income)	3.1				4.5
Income before income taxes	1.5				3.1
Income tax expense	0.9				1.3
Net income	0.6				1.8
Less: Net income attributable to noncontrolling interest	0.6				0.5
Net income attributable to SP Plus Corporation	$	—			$	1.3