Significant Accounting Policies and Practices (Tables)

6 Months Ended

Jun. 30, 2018

Schedule of Contract with Customer, Asset and Liability

The Company adopted the provisions of Topic 853 on January 1, 2018 and upon the adoption, the Company was required to reclassify certain assets used in service concession arrangements that were previously included in Leasehold improvements, equipment and construction in progress, net, to Other assets, net within the Condensed Consolidated Balance Sheet for June 30, 2018 (as discussed previously, the prior period presented has not been recasted).

In addition, the Company has the contractual right to invoice a customer prior to the performance obligation being satisfied in certain contractual arrangements, primarily related to monthly parking arrangements, and therefore effective January 1, 2018; the Company established a contract asset with a corresponding contract liability for the performance obligation expected to be satisfied at a future date. The impact of this change on the Condensed Consolidated Balance Sheets as of June 30, 2018 is as follows:



	Impact of Changes in Accounting Policies as of June 30, 2018
(millions, unaudited)	As Reported		Balances without Adoption of Topics 606 and 853		Impact of Adoption Increase/(Decrease)
Assets
Notes and accounts receivable, net (1)	$	130.9	$	119.9	$	11.0
Leasehold improvements, equipment and construction in progress, net (2)	26.0		26.6		(0.6		)
Other assets, net (2)	18.6		18.0		0.6
Liabilities
Accrued expenses (1)	$	30.0	$	19.0	$	11.0

(1) Approximately $11.0 million and $11.0 million of contract assets and contract liabilities, respectively, were recognized as of June 30, 2018.

(2) Leasehold improvements used in service concession arrangements of approximately $0.6 million were reclassified from Leasehold improvements, equipment and construction in progress to Other assets, net, as of June 30, 2018.

The following table provides information about changes to contract asset balances for the six-month period ended June 30, 2018:



(millions, unaudited)	Contract Asset
Balance as of January 1, 2018	$	12.2
Additional contract assets	68.4
Reclassification to accounts receivable	(69.6		)
Balance as of June 30, 2018	$	11.0

The following table provides information about contract assets and contract liabilities with customers and clients as of June 30, 2018:



(millions, unaudited)	June 30, 2018
Accounts receivable	$	119.9
Contract asset	$	11.0
Contract liability	$	15.5

The following table provides information about changes to contract liability balances for the six month period ended June 30, 2018:



(millions, unaudited)	Contract Liability
Balance as of January 1, 2018	$	20.5
Additional contract liabilities	87.7
Recognition of revenue from contract liabilities	(92.7		)
Balance as of June 30, 2018	$	15.5

Schedule of Disaggregation of Revenue

The adoption of Topics 606 and 853 had no impact to the Company’s Operating income or Net income for the three and six months ended June 30, 2018. Certain expenses, primarily rental expense for the contractual arrangements that meet the definition of service concession arrangements under Topic 853, have been recorded as a reduction of revenue for the three and six months ended June 30, 2018 (as discussed above, prior periods have not been recasted).

The impact of this change to gross profit and depreciation and amortization for the three and six months ended June 30, 2018 was as follows:



	Impact of Changes in Accounting Policies for the Three Months Ended June 30, 2018							Impact of Changes in Accounting Policies for the Six Months Ended June 30, 2018
(millions, unaudited)	As Reported		Balances without Adoption of Topics 853 and 606		Impact of Adoption Increase/(Decrease)			As Reported		Balances without Adoption of Topics 853 and 606		Impact of Adoption Increase/(Decrease)
Parking services revenue
Lease type contracts (1)	$	107.4	$	141.5	$	(34.1	)	$	206.9	$	272.6	$	(65.7	)
Management type contracts	87.7		87.7		—			182.2		182.2		—
	195.1		229.2		(34.1		)	389.1		454.8		(65.7		)
Reimbursed management type contract revenue	167.1		167.1		—			339.9		339.9		—
Total parking services revenue	362.2		396.3		(34.1		)	729.0		794.7		(65.7		)
Cost of parking services
Lease type contracts (1)	94.5		128.6		(34.1		)	189.0		254.6		(65.6		)
Management type contracts	49.5		49.5		—			109.5		109.5		—
	144.0		178.1		(34.1		)	298.5		364.1		(65.6		)
Reimbursed management type contract expense	167.1		167.1		—			339.9		339.9		—
Total cost of parking services	311.1		345.2		(34.1		)	638.4		704.0		(65.6		)
Gross profit
Lease type contracts	12.9		12.9		—			17.9		18.0		(0.1		)
Management type contracts	38.2		38.2		—			72.7		72.7		—
Total gross profit	$	51.1	$	51.1	$	—		$	90.6	$	90.7	$	(0.1	)

Depreciation and amortization	$	4.5	$	4.6	$	(0.1	)	$	8.5	$	8.6	$	(0.1	)

(1) Certain expenses, primarily rental expense for contractual arrangements that meet the definition of a service concession arrangement under Topic 853, of approximately $34.1 million and $65.6 million that would have been previously classified as Cost of parking services - lease type contracts have been classified as a reduction of revenue and included in Parking services revenue - lease type contracts for the three and six months ended June 30, 2018, respectively.

The table below shows amortization expense related to cost of contracts for the three and six months ended June 30, 2018 and 2017, respectively. Amortization expense of cost of contracts related to service concession arrangements within the scope of Topic 853 is recorded as a reduction of revenue and was not significant for the three and six months ended June 30, 2018 and 2017, respectively.



	Three Months Ended				Six Months Ended
(millions, unaudited)	June 30, 2018		June 30, 2017		June 30, 2018		June 30, 2017
Amortization expense related to cost of contract included in depreciation and amortization	$	0.8	$	0.8	$	1.5	$	1.7