Business Unit Segment Information

9 Months Ended

Sep. 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 nine months ended September 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 nine  months ended
	September 30, 2013			Gross Margin %		September 30,2012			Gross Margin %		September 30, 2013			Gross Margin %		September 30, 2012			Gross Margin %
Revenues(a):
Region One
Lease contracts	$	77,857				$	19,544				$	227,097				$	55,013
Management contracts(b)	22,351					12,537					79,241					37,320
Total Region One	100,208					32,081					306,338					92,333
Region Two
Lease contracts	1,039					—					3,396					—
Management contracts	8,585					7,106					24,362					15,252
Total Region Two	9,624					7,106					27,758					15,252
Region Three
Lease contracts	12,614					5,662					37,517					16,962
Management contracts	16,694					13,362					53,823					40,204
Total Region Three	29,308					19,024					91,340					57,166
Region Four
Lease contracts	10,602					10,491					33,075					32,030
Management contracts	22,850					11,965					72,852					36,148
Total Region Four	33,452					22,456					105,927					68,178
Region Five
Lease contracts	21,635					7,271					67,129					18,922
Management contracts	8,115					3,873					27,452					11,484
Total Region Five	29,750					11,144					94,581					30,406
Other
Lease contracts	(976		)			—					(1,127		)			—
Management contracts	(915		)			384					(1,294		)			1,154
Total Other	(1,891		)			384					(2,421		)			1,154
Reimbursed management contract revenue	154,858					100,958					472,737					309,055
Total revenues	$	355,310				$	193,153				$	1,096,260				$	573,544
Gross Profit
Region One
Lease contracts	2,494			3	%	1,533			8	%	9,124			4	%	3,407			6	%
Management contracts	8,877			40	%	6,913			55	%	35,761			45	%	20,444			55	%
Total Region One	11,371					8,446					44,885					23,851
Region Two
Lease contracts	(10		)	(1	)%	—			—		447			14	%	—			—
Management contracts	3,221			38	%	1,408			20	%	6,992			29	%	2,879			19	%
Total Region Two	3,211					1,408					7,439					2,879
Region Three
Lease contracts	1,514			8	%	402			7	%	3,585			10	%	1,404			8	%
Management contracts	5,976			22	%	5,648			72	%	20,010			37	%	16,765			42	%
Total Region Three	7,490					6,050					23,595					18,169
Region Four
Lease contracts	824			8	%	719			7	%	2,690			8	%	2,355			7	%
Management contracts	4,612			20	%	3,471			29	%	17,584			24	%	10,808			30	%
Total Region Four	5,436					4,190					20,274					13,163
Region Five
Lease contracts	3,815			18	%	334			5	%	12,658			19	%	1,312			7	%
Management contracts	3,337			41	%	1,335			34	%	11,782			43	%	4,369			38	%
Total Region Five	7,152					1,669					24,440					5,681
Other
Lease contracts	(1,580		)	162	%	(63		)	(100	)%	(1,273		)	113	%	1,073			100	%
Management contracts	6,996			(765	)%	(326		)	(85	)%	7,085			(548	)%	2,123			186	%
Total Other	5,416					(389		)			5,812					3,196
Total gross profit	40,076					21,374					126,445					66,939
General and administrative expenses	20,494					13,846					75,310					43,759
General and administrative expense percentage of gross profit	51		%			64		%			59		%			64		%
Depreciation and Amortization	7,959					1,723					23,704					5,258
Operating income	11,623					5,805					27,431					17,922
Other expenses (income):
Interest expense	4,818					1,093					14,421					3,355
Interest income	(108		)			(61		)			(347		)			(181		)
	4,710					1,032					14,074					3,174
Income before income taxes	6,913					4,773					13,357					14,748
Income tax expense	2,448					2,504					4,359					6,520
Net income	4,465					2,269					8,998					8,228
Less: Net income attributable to noncontrolling interest	721					75					2,070					232
Net income attributable to Standard Parking Corporation	$	3,744				$	2,194				$	6,928				$	7,996

(a)    Excludes reimbursed management contract revenue.

(b)   The nine months ended September 30, 2013 includes a net gain of $2,700 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 and related costs of parking or gross margin 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.