Business Unit Segment Information

6 Months Ended

Jun. 30, 2013

Business Unit Segment Information

Business Unit Segment Information

12. 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 separate financial information is available and evaluated regularly by our 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 our CODM. Our CODM 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 CODM 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.

Our business is managed based on regions administered by executive vice presidents. The following is summary of revenues (excluding reimbursed management contract revenue) and gross profit by regions for the three and six months ended June 30, 2013 and 2012 with information related to prior periods recast to conform to the current regional alignment (unaudited):

	For the three months ended										For the six months ended
	June 30, 2013			Gross Margin %		June 30, 2012			Gross Margin %		June 30, 2013			Gross Margin %		June 30, 2012			Gross Margin %
Revenues(a):
Region One
Lease contracts(b)	$	76,252				$	18,327				$	151,292				$	35,469
Management contracts	26,466					12,718					52,357					24,727
Total Region One	102,718					31,045					203,649					60,196
Region Two
Lease contracts	1,031					—					2,357					—
Management contracts	5,742					1,044					15,963					8,146
Total Region Two	6,773					1,044					18,320					8,146
Region Three
Lease contracts	12,614					5,882					24,903					11,299
Management contracts	18,537					13,585					36,513					27,065
Total Region Three	31,151					19,467					61,416					38,364
Region Four
Lease contracts	11,208					10,702					22,473					21,539
Management contracts	24,248					12,213					48,962					24,224
Total Region Four	35,456					22,915					71,435					45,763
Region Five
Lease contracts	22,227					7,503					45,494					11,651
Management contracts	8,805					4,526					17,884					7,593
Total Region Five	31,032					12,029					63,378					19,244
Other
Lease contracts	(100		)			—					(151		)			—
Management contracts	4,861					286					4,375					581
Total Other	4,761					286					4,224					581
Reimbursed management contract revenue	158,402					104,160					317,879					208,097
Total revenues	370,293					$	190,946				740,301					$	380,391
Gross Profit
Region One
Lease contracts	5,270			7	%	1,269			7	%	10,424			7	%	1,878			5	%
Management contracts	11,711			44	%	7,107			56	%	22,959			44	%	13,412			54	%
Total Region One	16,981					8,376					33,383					15,290
Region Two
Lease contracts	63			6	%	—			0	%	329			14	%	—			0	%
Management contracts	1,918			33	%	273			26	%	4,199			26	%	1,470			18	%
Total Region Two	1,981					273					4,528					1,470
Region Three
Lease contracts	1,144			9	%	555			9	%	1,925			8	%	1,001			9	%
Management contracts	6,993			38	%	5,764			42	%	13,678			37	%	11,260			42	%
Total Region Three	8,137					6,319					15,603			8	%	12,261
Region Four
Lease contracts	1,098			10	%	809			8	%	1,849			8	%	1,568			7	%
Management contracts	6,351			26	%	4,324			35	%	12,254			25	%	8,285			34	%
Total Region Four	7,449					5,133					14,103					9,853
Region Five
Lease contracts	3,937			18	%	621			8	%	8,605			19	%	978			8	%
Management contracts	3,391			39	%	1,586			35	%	7,170			40	%	3,035			40	%
Total Region Five	7,328					2,207					15,774					4,013
Other
Lease contracts	153			-153	%	1,160			100	%	170			-113	%	1,146			100	%
Management contracts	3,643			75	%	1,300			454	%	2,807			64	%	2,363			407	%
Total Other	3,796					2,460					2,977					3,509
Total gross profit	45,672					24,768					86,369					46,397
General and administrative expenses	26,869					14,868					54,694					29,913
General and administrative expense percentage of gross profit	59		%			60		%			63		%			64		%
Depreciation and amortization	8,074					1,807					15,382					3,535
Operating income	10,729					8,093					16,293					12,949
Other expenses (income):
Interest expense	4,763					1,132					9,770					2,262
Interest income	(188		)			(135		)			(299		)			(205		)
	4,575					997					9,471					2,057
Income before income taxes	6,154					7,096					6,822					10,892
Income tax expense	2,049					2,856					2,095					4,384
Net income	4,105					4,240					4,727					6,508
Less: Net income attributable to noncontrolling interest	780					85					1,349					157
Net income attributable to Standard Parking Corporation	$	3,325				$	4,155				$	3,378				$	6,351

(a)	Excludes reimbursed management contract revenue.
(b)	The six months ended June 30, 2013 includes a net gain of $2,101 related to the sale of rights associated with certain contracts.  There were no similar payments received in 2012.

Region One encompasses operations in Connecticut, Delaware, District of Columbia, Illinois, Indiana, Kansas, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Virginia, West Virginia and Wisconsin.

Region Two encompasses event planning and transportation, our acquired valet business and our technology-based parking and traffic management systems.

Region Three encompasses operations in Canada, Arizona, California, Colorado, Hawaii, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

Region Four encompasses all major airport and transportation operations nationwide.

Region Five encompasses Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Puerto Rico, Tennessee, and Texas.

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

Our CODM does not evaluate segments using discrete asset information.