SP Plus Corporation
SP Plus Corp (Form: 10-Q, Received: 08/07/2014 17:13:34)

Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2014

 

Commission file number: 000-50796

 


 

GRAPHIC

 

SP Plus Corporation

(Exact Name of Registrant as Specified in Its Charter)

 

Delaware

 

16-1171179

(State or Other Jurisdiction of

 

(I.R.S. Employer Identification No.)

Incorporation or Organization)

 

 

 

200 E. Randolph Street, Suite 7700

Chicago, Illinois 60601-7702

(Address of Principal Executive Offices, Including Zip Code)

 

(312) 274-2000

(Registrant’s Telephone Number, Including Area Code)

 

 

(Former Name, Former Address and
Former Fiscal Year, if Changed Since Last Report)

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  YES  x   NO  o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  YES  x   NO  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  o

 

Accelerated filer  x

 

 

 

Non-accelerated filer  o

 

Smaller reporting company  o

(Do not check if a smaller reporting company)

 

 

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES  o   NO  x

 

As of August 1, 2014, there were 21,996,678 shares of common stock of the registrant outstanding.

 

 

 


 


Table of Contents

 

SP PLUS CORPORATION

 

TABLE OF CONTENTS

 

Part I. Financial Information

3

Item 1. Financial Statements:

3

Condensed Consolidated Balance Sheets as of June 30, 2014 (unaudited) and December 31, 2013

3

Condensed Consolidated Statements of Income (unaudited) for the three and six months ended June 30, 2014 and 2013

4

Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended June 30, 2014 and 2013

5

Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2014 and 2013

6

Notes to Condensed Consolidated Interim Financial Statements

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

19

Item 3. Quantitative and Qualitative Disclosures about Market Risk

32

Item 4. Controls and Procedures

32

 

 

Part II. Other Information

33

Item 1. Legal Proceedings

33

Item 1A. Risk Factors

33

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

33

Item 3. Defaults Upon Senior Securities

33

Item 4. Mine Safety Disclosures

33

Item 5. Other Information

33

Item 6. Exhibits

34

 

 

Signatures

35

 

2



Table of Contents

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

SP PLUS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except for share and per share data)

 

 

 

June 30,
2014

 

December 31,
2013

 

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

23,551

 

$

23,158

 

Notes and accounts receivable, net

 

116,510

 

115,126

 

Prepaid expenses and other

 

10,816

 

20,645

 

Deferred taxes

 

10,317

 

10,317

 

Total current assets

 

161,194

 

169,246

 

Leasehold improvements, equipment, land and construction in progress, net

 

46,200

 

44,885

 

Other assets:

 

 

 

 

 

Advances and deposits

 

5,306

 

7,149

 

Intangible assets, net

 

98,625

 

106,222

 

Favorable acquired lease contracts, net

 

53,899

 

60,034

 

Other assets, net

 

25,204

 

24,574

 

Cost of contracts, net

 

11,009

 

10,762

 

Goodwill

 

439,488

 

439,503

 

 

 

633,531

 

648,244

 

Total assets

 

$

840,925

 

$

862,375

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

110,775

 

$

115,493

 

Accrued and other current liabilities

 

98,350

 

102,350

 

Current portion of obligations under senior credit facility and other long-term debt obligations

 

28,551

 

24,632

 

Total current liabilities

 

237,676

 

242,475

 

Deferred taxes

 

10,314

 

17,348

 

Long-term borrowings, excluding current portion:

 

 

 

 

 

Obligations under senior credit facility

 

247,924

 

263,457

 

Other long-term debt obligations

 

717

 

577

 

 

 

248,641

 

264,034

 

Unfavorable lease contracts, net

 

67,194

 

74,130

 

Other long-term liabilities

 

62,113

 

60,677

 

Stockholders’ equity:

 

 

 

 

 

Preferred Stock, par value $0.01 per share; 5,000,000 shares authorized as of June 30, 2014 and December 31, 2013; no shares issued

 

 

 

Common stock, par value $.001 per share; 50,000,000 shares authorized as of June 30, 2014 and December 31, 2013; 21,996,678 and 21,977,311 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively

 

22

 

22

 

Additional paid-in capital

 

242,519

 

240,665

 

Accumulated other comprehensive income (loss)

 

(75

)

118

 

Accumulated deficit

 

(28,069

)

(37,679

)

Total SP Plus Corporation stockholders’ equity

 

214,397

 

203,126

 

Noncontrolling interest

 

590

 

585

 

Total equity

 

214,987

 

203,711

 

Total liabilities and stockholders’ equity

 

$

840,925

 

$

862,375

 

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

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Table of Contents

 

SP PLUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except for share and per share data, unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 2014

 

June 30, 2013

 

June 30, 2014

 

June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Parking services revenue:

 

 

 

 

 

 

 

 

 

Lease contracts

 

$

124,958

 

$

123,232

 

$

241,593

 

$

244,317

 

Management contracts

 

84,931

 

88,659

 

174,886

 

178,754

 

 

 

209,889

 

211,891

 

416,479

 

423,071

 

Reimbursed management contract revenue

 

164,539

 

158,402

 

333,717

 

317,879

 

Total revenue

 

374,428

 

370,293

 

750,196

 

740,950

 

Cost of parking services:

 

 

 

 

 

 

 

 

 

Lease contracts

 

111,979

 

112,014

 

224,063

 

224,132

 

Management contracts

 

50,016

 

53,833

 

109,230

 

112,570

 

 

 

161,995

 

165,847

 

333,293

 

336,702

 

Reimbursed management contract expense

 

164,539

 

158,402

 

333,717

 

317,879

 

Total cost of parking services

 

326,534

 

324,249

 

667,010

 

654,581

 

Gross profit:

 

 

 

 

 

 

 

 

 

Lease contracts

 

12,979

 

11,218

 

17,530

 

20,185

 

Management contracts

 

34,915

 

34,826

 

65,656

 

66,184

 

Total gross profit

 

47,894

 

46,044

 

83,186

 

86,369

 

General and administrative expenses

 

24,996

 

26,868

 

51,062

 

54,816

 

Depreciation and amortization

 

7,730

 

8,252

 

14,893

 

15,745

 

Operating income

 

15,168

 

10,924

 

17,231

 

15,808

 

Other expenses (income):

 

 

 

 

 

 

 

 

 

Interest expense

 

4,811

 

4,763

 

9,620

 

9,603

 

Interest income

 

(94

)

(128

)

(192

)

(239

)

 

 

4,717

 

4,635

 

9,428

 

9,364

 

Income before income taxes

 

10,451

 

6,289

 

7,803

 

6,444

 

Income tax provision (benefit)

 

4,254

 

2,065

 

(3,184

)

1,911

 

Net income

 

6,197

 

4,224

 

10,987

 

4,533

 

Less: Net income attributable to noncontrolling interest

 

890

 

780

 

1,377

 

1,349

 

Net income attributable to SP Plus Corporation

 

$

5,307

 

$

3,444

 

$

9,610

 

$

3,184

 

Common stock data:

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.24

 

$

0.16

 

$

0.44

 

$

0.15

 

Diluted

 

$

0.24

 

$

0.15

 

$

0.43

 

$

0.14

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

21,991,965

 

21,889,777

 

21,984,912

 

21,880,274

 

Diluted

 

22,398,886

 

22,221,102

 

22,375,377

 

22,195,953

 

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

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Table of Contents

 

SP PLUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30, 2014

 

June 30, 2013

 

June 30, 2014

 

June 30, 2013

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

6,197

 

$

4,224

 

$

10,987

 

$

4,533

 

Other comprehensive income (loss)

 

(209

)

870

 

(193

)

889

 

Comprehensive income

 

5,988

 

5,094

 

10,794

 

5,422

 

Less: comprehensive income attributable to noncontrolling interest

 

890

 

780

 

1,377

 

1,349

 

Comprehensive income attributable to SP Plus Corporation

 

$

5,098

 

$

4,314

 

$

9,417

 

$

4,073

 

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

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Table of Contents

 

SP PLUS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

 

Six Months Ended

 

 

 

June 30, 2014

 

June 30, 2013

 

 

 

 

 

 

 

Operating activities:

 

 

 

 

 

Net income

 

$

10,987

 

$

4,533

 

Adjustments to reconcile net income to net cash provided by operations:

 

 

 

 

 

Depreciation and amortization

 

14,885

 

15,170

 

Net accretion of acquired lease contracts

 

(801

)

(3,013

)

Loss on sale and abandonment of assets

 

244

 

590

 

Amortization of debt issuance costs

 

674

 

791

 

Amortization of original discount on borrowings

 

705

 

654

 

Non-cash stock-based compensation

 

1,941

 

2,468

 

Provisions for losses on accounts receivable

 

469

 

149

 

Excess tax benefit related to vesting of restricted stock units

 

87

 

 

Deferred income taxes

 

(6,804

)

(1,052

)

Net change in operating assets and liabilities

 

667

 

(13,283

)

Net cash provided by operating activities

 

23,054

 

7,007

 

Investing activities:

 

 

 

 

 

Purchase of leasehold improvements and equipment

 

(8,149

)

(7,906

)

Cost of contracts purchased

 

(662

)

(337

)

Proceeds from sale of assets

 

146

 

52

 

Capitalized interest

 

(17

)

 

Contingent payments for businesses acquired

 

(260

)

 

Net cash used in investing activities

 

(8,942

)

(8,191

)

Financing activities:

 

 

 

 

 

Tax benefit from vesting of restricted stock units

 

(87

)

 

Contingent payments for businesses acquired

 

(141

)

(142

)

Borrowings from senior credit facility

 

6,800

 

6,850

 

Payments on term loan

 

(19,190

)

(11,250

)

Distribution to noncontrolling interest

 

(1,372

)

(1,612

)

Borrowing (payments) on other long-term debt obligations

 

214

 

(383

)

Net cash provided by financing activities

 

(13,776

)

(6,537

)

Effect of exchange rate changes on cash and cash equivalents

 

57

 

(272

)

Increase (decrease) in cash and cash equivalents

 

393

 

(7,993

)

Cash and cash equivalents at beginning of period

 

23,158

 

28,450

 

Cash and cash equivalents at end of period

 

$

23,551

 

$

20,457

 

Supplemental disclosures:

 

 

 

 

 

Cash paid (received) during the period for:

 

 

 

 

 

Interest

 

$

7,168

 

$

8,179

 

Income taxes, net

 

(3,139

)

1,062

 

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

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Table of Contents

 

SP PLUS CORPORATION

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Dollars in thousands except share and per share data, unaudited)

 

1. The Company

 

SP Plus Corporation (the “Company”) provides parking management, ground transportation and other ancillary services to commercial, institutional and municipal clients in the United States, Puerto Rico and Canada. Its services include a comprehensive set of on-site parking management and ground transportation services, which consist of training, scheduling and supervising all service personnel as well as providing customer service, marketing, maintenance, security and accounting and revenue control functions necessary to facilitate the operation of clients’ parking facilities. The Company also provides a range of ancillary services such as airport shuttle operations, valet services, taxi and livery dispatch services and municipal meter revenue collection and enforcement services.

 

2. Basis of Presentation

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain information and disclosures normally included in the Consolidated Balance Sheet, Statements of Income, and Comprehensive Income and Cash Flows prepared in conformity with U.S. GAAP have been condensed or omitted as permitted by such rules and regulations

 

In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2014 are not necessarily indicative of the results that might be expected for any other interim period or the fiscal year ended December 31, 2014. The financial statements presented in this report should be read in conjunction with the Company’s annual consolidated financial statements and notes thereto included in the Annual Report on Form 10-K filed on March 13, 2014.

 

Adopted Accounting Pronouncements

 

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, Balance Sheet (Topic 210), Disclosures about Offsetting Assets and Liabilities . This update requires additional disclosures about offsetting and related arrangements on assets and liabilities to enable users of financial statements to understand the effect of such arrangements on an entity’s financial position as reported. This amendment is effective for fiscal 2014 and retrospective application is required.  The adoption of this guidance on January 1, 2014 did not have an impact to the Company’s financial position, results of operations or cash flows or financial statement disclosures.

 

In July 2013, the FASB issued ASU No. 2013-11,  Income Taxes (Topic 740), Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists to eliminate diversity in practice. Under this ASU, an unrecognized tax benefit, or a portion of an unrecognized tax benefit that exists at the reporting date, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if certain criteria are met. This amendment is effective for fiscal years and interim periods within those years beginning after December 15, 2013.  The adoption of this guidance on January 1, 2014 did not have an impact to the Company’s financial position, results of operations or cash flows or financial statement disclosures.

 

Recently Issued Accounting Pronouncements

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . The amendments in ASU No. 2014-09 create Topic 606, Revenue from Contracts with Customers , and supersede the revenue recognition requirements in Topic 605, Revenue Recognition , including most industry specific revenue recognition guidance. In addition, the amendments supersede the cost guidance in Subtopic 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts , and create a new Subtopic 340-40, Other Assets and Deferred Costs — Contracts with Customers . The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The amendments are effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2016. Early adoption is not permitted. The Company is currently assessing the impact on the Company’s financial position, results of operations, cash flows and financial statement disclosures.

 

3. Commitments and Contingencies

 

The Company is subject to litigation and other claims in the normal course of its business. The Company applies the provisions as defined in the guidance related to accounting for contingencies in determining the recognition and measurement of expense associated with legal claims against the Company. Management uses guidance from internal and external legal counsel on the potential outcome of litigation in determining the need to record liabilities for potential losses and the disclosure of pending legal claims.

 

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The Company has contractual provisions under certain lease contracts to complete structural or other improvements to leased properties and incur repair costs, including improvements and repairs arising as a result of ordinary wear and tear.  The Company evaluates the nature of those costs when incurred and either capitalizes the costs as leasehold improvements, as applicable, or recognizes the costs as repair expenses within Cost of Parking Services-Leases within the Consolidated Statements of Income.

 

Certain lease contracts acquired in the Central Merger (defined in Note 5. Acquisition ) include provisions allocating to the Company responsibility for all or a defined portion of structural or other improvement and repair costs required on the leased property, including improvement and repair costs arising as a result of ordinary wear and tear. During the three and six months ended June 30, 2014, we recorded $841 and $942, respectively, of costs (net of expected recovery of 80% of the total cost through the applicable indemnity discussed further below and in Note 5. Acquisition) in Cost of Parking Services-Leases within the Consolidated Statement of Income for structural and other improvement and repair costs related to certain lease contracts acquired in the Central Merger, whereby the Company has expensed repair costs for certain leases and has engaged a third-party general contractor to complete certain defined structural and other improvement and repair projects. The Company expects to incur substantial additional costs for certain structural or other improvement and repair costs pursuant to the contractual requirements of certain lease contracts acquired in the Central Merger.    Based on information available at this time, the Company currently estimates the total structural and other improvement and repair costs related to these lease contracts acquired in the Central Merger to be between $12,000 and $23,000; however, the Company is still in the process of determining the full extent of the required repairs and improvements required and estimated costs associated with these lease contracts acquired in the Central Merger.  The Company currently expects to recover at least 80% of the total costs incurred prior to October 1, 2015 through the applicable indemnity discussed further below and in Note 5. Acquisition .  While the Company is unable to estimate with certainty when such costs will be incurred, it is expected that all or a substantial majority of these costs will be incurred in early- to mid-calendar year 2015 and prior to October 1, 2015.

 

4. Intangible Assets, net

 

The following presents a summary of intangible assets, net, as of June 30, 2014 and December 31, 2013:

 

 

 

June 30, 2014

 

December 31, 2013

 

 

 

(Unaudited)

 

 

 

Covenant not to compete

 

$

933

 

$

933

 

Trade names and trademarks

 

9,820

 

9,820

 

Proprietary know how

 

34,650

 

34,650

 

Management contract rights

 

81,000

 

81,000

 

Accumulated amortization

 

(27,778

)

(20,181

)

Intangible assets, net

 

$

98,625

 

$

106,222

 

 

Amortization expense related to intangible assets included in depreciation and amortization was $3,796 and $5,020 for the three months ended June 30, 2014 and 2013, respectively, and $7,597 and $8,975 for the six months ended June 30, 2014 and 2013, respectively.

 

5. Acquisition

 

On October 2, 2012 (“Closing Date”), the Company completed its acquisition (the “Central Merger” or “Merger”) of 100% of the outstanding common shares of KCPC Holdings, Inc., which was the ultimate parent of Central Parking Corporation (collectively, “Central”), for 6,161,332 shares of Company common stock and the assumption of approximately $217,675 of Central’s debt, net of cash acquired. Additionally, Central’s former stockholders will be entitled to receive cash consideration of $27,000 to be paid three years after closing, to the extent the $27,000 is not used to satisfy seller indemnity obligations pursuant to the Agreement and Plan of Merger dated February 28, 2012 (the “Merger Agreement”).  The Company financed the acquisition through the issuance of its common stock and borrowings under the Senior Credit Facility (defined in Note 9. Borrowing Arrangements ).

 

Pursuant to the Merger Agreement, the Company is entitled to indemnification from Central’s former stockholders (i) if and to the extent Central’s combined net debt and the absolute value of Central’s negative working capital (as determined in accordance with the Merger Agreement) (the “Net Debt Working Capital”) exceeded $285,000 as of September 30, 2012 and (ii) for certain defined adverse consequences as set forth in the Merger Agreement.  Pursuant to the Merger Agreement, Central’s former stockholders are required to satisfy certain indemnity obligations, which are capped at $27,000 cash consideration (the “Capped Items”) only through a reduction of the $27,000 cash consideration.  For certain other indemnity obligations set forth in the Merger Agreement which are not capped at the $27,000 cash consideration (the “Uncapped Items”), including the Net Debt Working Capital indemnity obligations

 

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Table of Contents

 

described above, Central’s former stockholders may satisfy their indemnity obligations as follows (provided that the Company reserves the right to reject the cash and stock alternatives and choose to reduce the $27,000 cash consideration):

 

·                   Central’s former stockholders can elect to pay the applicable amount with cash;

 

·                   Central’s former stockholders can elect to pay the applicable amount with the Company’s common stock (valued at $23.64 per share, the market value as of the closing date of the Merger Agreement); or

 

·                   Central’s former stockholders can elect to reduce the $27,000 cash consideration by the applicable amount, subject to the condition that the cash consideration remains at least $17,000 to cover Capped Items.

 

The Company has determined and concluded that the Net Debt Working Capital was $299,979 as of September 30, 2012 and that; accordingly, the Net Debt Working Capital exceeded the threshold by $14,979.  In addition, the Company has determined that it currently has indemnity claims for certain defined adverse consequences, which would reduce the cash consideration payable in three years from the acquisition date by $9,432. In addition, the Company expects to have additional indemnity claims in the future as new matters arise. The Company has periodically given Central’s former stockholders notice regarding indemnification matters since the closing date of the Merger and has made adjustments for known matters, although Central’s former stockholders have not agreed to such adjustments nor made any elections with respect to the payment of any Uncapped Items. Furthermore, following the Company’s notices of indemnification matters, the representative of Central’s former stockholders has indicated that they may make additional inquiries and potentially raise issues with respect to the Company’s indemnification claims (including, specifically, as to the Company’s Net Debt Working Capital calculation) and that they may assert various claims of their own relating to the Merger Agreement.  Under the Merger Agreement, all post-closing claims and disputes, including as to indemnification matters, are ultimately subject to resolution through binding arbitration or, in the case of a dispute as to the calculation of Net Debt Working Capital, resolution by an independent public accounting firm.  The Company intends to pursue these dispute resolution processes, as applicable, in a timely manner.

 

In determining the Net Debt Working Capital as of September 30, 2012 of $14,979 and the indemnity claims for certain defined adverse consequences of $9,432, the Company has evaluated the nature of the costs and related indemnity claims and has concluded that it is probable that such indemnified claims will sustain any challenge from Central’s former stockholders. Additionally and as previously discussed in Note 3. Legal and Other Contingencies, certain lease contracts acquired in the Central Merger include provisions allocating to the Company responsibility for all or a defined portion of structural or other improvement and repair costs required on the property, including improvement and repair costs arising as a result of ordinary wear and tear.  As the Company incurs structural and other improvement and repair costs for these lease contracts acquired in the Central Merger, the Company will seek indemnification for a significant portion of these costs pursuant to the Merger Agreement and reduces the cash consideration payable in three years from the acquisition date by such amounts.

 

The following table sets forth the adjustments to the cash consideration payable by the Company to the former stockholders of Central, based upon the foregoing determinations:

 

Cash consideration payable in three years from the acquisition date, pursuant to the Merger Agreement and prior to Central Net Debt Working Capital and indemnification of certain defined adverse consequences, net

 

 

 

$

27,000

 

 

 

 

 

 

 

Net Debt Working Capital at September 30, 2012 as defined in the Merger Agreement

 

$

(299,979

)

 

 

Threshold of Net Debt Working Capital, pursuant to the Merger Agreement

 

$

285,000

 

 

 

Excess over the threshold of Net Debt Working Capital

 

 

 

(14,979

)

 

 

 

 

 

 

Indemnification of certain defined adverse consequences, net

 

 

 

(9,432

)

 

 

 

 

 

 

Settled cash consideration

 

 

 

$

2,589

 

 

 

 

 

 

 

Present value of cash consideration liability as of June 30, 2014

 

 

 

$

2,151

 

 

The acquisition has been accounted for using the acquisition method of accounting (in accordance with the provisions of Accounting Standards Codification (“ASC”) 805, Business Combinations ), which requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The purchase price has been allocated based on the estimated fair value of net assets acquired and liabilities assumed at the date of the acquisition. The Company finalized the purchase price allocation during the third quarter of 2013, which resulted in revision to the previously reported preliminary amounts, applied retrospectively back to the date of the acquisition.

 

The Company has incurred certain acquisition and integration costs associated with the transaction that have been expensed as incurred and reflected in the Consolidated Statements of Income. The Company recognized $537 and $3,093 of these costs in the Consolidated Statement of Income for the three months ended June 30, 2014 and 2013, respectively, in General and Administrative Expenses. The Company recognized $2,042 and $7,317 of these costs in the Consolidated Statement of Income for the six months ended June 30, 2014 and 2013, respectively, in General and Administrative Expenses.

 

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6. Stock-Based Compensation

 

Stock Options and Grants

 

There were no stock options granted during the six months ended June 30, 2014 and 2013. The Company recognized no stock-based compensation expense related to stock options for the six months ended June 30, 2014 and 2013, as all stock options previously granted were fully vested. As of June 30, 2014, there were no unrecognized compensation costs related to unvested stock options.

 

On April 22, 2014, the Company authorized vested stock grants to certain directors totaling 19,336 common shares. The total value of the grant, based on the fair value of common stock on the grant date, was $491 and is included in General and Administrative Expenses within the Consolidated Statement of Income.  On April 24, 2013, the Company authorized vested stock grants to certain directors totaling 21,949 common shares. The total value of the grant, based on the fair value of common stock on the grant date, was $465 and is included in General and Administrative Expenses within the Consolidated Statement of Income.

 

Restricted Stock Units

 

During the six months ended June 30, 2014, the Company authorized a one-time grant of 7,518 restricted stock units to an executive that vest in March 2019.  During the six months ended June 30, 2014 and 2013, 1,416 restricted stock units and 27,000 restricted stock units vested, respectively. During the six months ended June 30, 2014, 4,124 restricted stock units were forfeited under the amended and restated Long-Term Incentive Plan and became available for reissuance. No restricted stock units were forfeited in the six months ended June 30, 2013.

 

The Company recognized $721 and $1,017 of stock-based compensation expense related to the restricted stock units for the three months ended June 30, 2014 and 2013, respectively, which is included in General and Administrative Expenses within the Consolidated Statement of Income.  The Company recognized $1,450 and $2,059 of stock-based compensation expenses related to restricted stock units for the six months ended June 30, 2014 and 2013, respectively, which is included in General and Administrative expenses within the Consolidated Statements of Income.  As of June 30, 2014, there was $5,845 of unrecognized stock-based compensation costs, net of estimated forfeitures, related to the restricted stock units that are expected to be recognized over a weighted average remaining period of approximately 3.8 years.

 

7. Net Income (Loss) Per Common Share

 

Basic net income per share is computed by dividing net income by the weighted daily average number of shares of common stock outstanding during the period. Diluted net income per share is based upon the weighted daily average number of shares of common stock outstanding for the period plus dilutive potential common shares, including stock options and restricted stock units using the treasury-stock method. A reconciliation of the weighted average basic common shares outstanding to the weighted average diluted common shares outstanding is as follows (unaudited):

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2014

 

2013

 

2014

 

2013

 

Weighted average common basic shares outstanding

 

21,991,965

 

21,889,777

 

21,984,912

 

21,880,274

 

Effect of dilutive stock options and restricted stock units

 

406,921

 

331,325

 

390,465

 

315,679

 

Weighted average common diluted shares outstanding

 

22,398,886

 

22,221,102

 

22,375,377

 

22,195,953

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.24

 

$

0.16

 

$

0.44

 

$

0.15

 

Diluted

 

$

0.24

 

$

0.15

 

$

0.43

 

$

0.14

 

 

There are no additional securities that could dilute basic earnings per share in the future that were not included in the computation of diluted earnings per share, other than those disclosed.

 

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8. Bradley Agreement

 

The Company entered into a 25-year agreement with the State of Connecticut (“State”) that expires on April 6, 2025, under which it operates the surface parking and 3,500 garage parking spaces at Bradley International Airport (“Bradley”) located in the Hartford, Connecticut metropolitan area.

 

The parking garage was financed through the issuance of State of Connecticut special facility revenue bonds and provides that the Company deposits, with the trustee for the bondholders, all gross revenues collected from operations of the surface and garage parking. From these gross revenues, the trustee pays debt service on the special facility revenue bonds outstanding, operating and capital maintenance expense of the surface and garage parking facilities, and specific annual guaranteed minimum payments to the state. Principal and interest on the Bradley special facility revenue bonds increase from approximately $3,600 in contract year 2002 to approximately $4,500 in contract year 2025. Annual guaranteed minimum payments to the State increase from approximately $8,300 in contract year 2002 to approximately $13,200 in contract year 2024. The annual minimum guaranteed payment to the State by the trustee for the twelve months ended December 31, 2014 and 2013 is $10,815 and was $10,593, respectively. All of the cash flow from the parking facilities are pledged to the security of the special facility revenue bonds and are collected and deposited with the bond trustee. Each month the bond trustee makes certain required monthly distributions, which are characterized as “Guaranteed Payments.”  To the extent the monthly gross receipts generated by the parking facilities are not sufficient for the trustee to make the required Guaranteed Payments, the Company is obligated to deliver the deficiency amount to the trustee, with such deficiency payments representing interest bearing advances to the trustee. The Company does not directly guarantee the payment of any principal or interest on any debt obligations of the State of Connecticut or the trustee.

 

The following is the list of Guaranteed Payments:

 

· Garage and surface operating expenses,

· Principal and interest on the special facility revenue bonds,

· Trustee expenses,

· Major maintenance and capital improvement deposits; and

· State minimum guarantee.

 

To the extent sufficient funds are available, the trustee is then directed to reimburse the Company for deficiency payments up to the amount of the calculated surplus, with the Company having the right to be repaid the principal amount of any and all deficiency payments, together with actual interest and premium, not to exceed 10% of the initial deficiency payment. The Company calculates and records interest and premium income along with deficiency principal repayments as a reduction of cost of parking services in the period the associated deficiency repayment is received from the trustee. The Company believes these advances to be fully recoverable as the Bradley Agreement places no time restriction on the Company’s right to reimbursement. The reimbursement of principal, interest and premium will be recognized when received.

 

The total deficiency payments to the State of Connecticut, net of reimbursements, as of June 30, 2014 is are as follows:

 

 

 

2014

 

 

 

(Unaudited)

 

Balance at January 1, 2014

 

$

14,649

 

Deficiency payments made

 

25

 

Deficiency repayment received

 

(1,075

)

Balance at June 30, 2014

 

$

13,599

 

 

During the three months ended June 30, 2014 and 2013, the Company received deficiency repayments (net of payments made) of $957 and $760, respectively, and received and recorded premium income of $104 and $60, respectively, with the net of these amounts recorded as reduction in Cost of Parking Services within the Consolidated Statement of Income. During the six months ended June 30, 2014 and 2013, the Company received deficiency repayments (net of payments made) of $1,050 and $357, respectively, and received and recorded premium of $117 and $60, respectively, with the net of these amounts recorded as reduction in Cost of Parking Services within the Consolidated Statement of Income.  The Company accrues for deficiency payments when the potential for future deficiency payments are both probable and estimable.  There were no amounts of estimated deficiency payments accrued as of June 30, 2014, as the Company concluded that the potential for future deficiency payments did not meet the criteria of both probable and estimable. The Company accrued $100 of estimated deficiency payments as of December 31, 2013.

 

In addition to the recovery of certain general and administrative expenses incurred, the Bradley Agreement provides for an annual management fee payment, which is based on operating profit tiers. The annual management fee is further apportioned 60% to the

 

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Company and 40% to an unaffiliated entity and the annual management fee will be paid to the extent funds are available for the trustee to make a distribution, and are paid after Guaranteed Payments (as defined in the Bradley Agreement) are paid, and after the repayment of all deficiency payments, including interest and premium. Cumulative management fees of approximately $14,233 and $13,733 have not been recognized as of June 30, 2014 and December 31, 2013, respectively, and no management fees were recognized as revenue for the six months ended June 30, 2014 and 2013.

 

9. Borrowing Arrangements

 

Long-term borrowings, in order of preference, consist of:

 

 

 

 

 

Amount Outstanding

 

 

 

Maturity Date

 

June 30,
2014

 

December 31,
2013

 

 

 

 

 

(Unaudited)

 

 

 

Obligations under Senior Credit Facility, net of original discount on borrowings

 

October 2, 2017

 

$

274,986

 

$

286,672

 

Other debt obligations

 

Various

 

2,206

 

1,994

 

Total debt obligations

 

 

 

277,192

 

288,666

 

Less: Current portion under Senior Credit Facility and other debt obligations

 

 

 

28,551

 

24,632

 

Total long-term borrowings

 

 

 

$

248,641

 

$

264,034

 

 

Senior Credit Facility

 

On October 2, 2012, the Company entered into a Credit Agreement with Bank of America, as administrative agent, Wells Fargo Bank, N.A. and JPMorgan Chase Bank, as co-syndication agents, U.S. Bank National Association, First Hawaiian Bank and General Electric Capital Corporation, as co-documentation agents, Merrill Lynch, Pierce, Fenner & Smith Inc., Wells Fargo Securities, LLC and J.P. Morgan Securities LLC, as joint lead arrangers and joint book managers, and the lenders party thereto (the “Lenders”).

 

Pursuant to the terms, and subject to the conditions, of the Credit Agreement, the Lenders have made available to the Company a new secured Senior Credit Facility (the “Senior Credit Facility”) that permits aggregate borrowings of $450,000 consisting of (i) a revolving credit facility of up to $200,000 at any time outstanding, which includes a letter of credit facility that is limited to $100,000 at any time outstanding, and (ii) a term loan facility of $250,000. The Senior Credit Facility matures on October 2, 2017.

 

The Company may be required to make mandatory repayments of principal within 90 days of each fiscal year-end provided that certain excess cash is available, as defined within the Credit Agreement.  In the event the Company is required to make mandatory repayments of principal pursuant to the Credit Agreement, the aggregate borrowings available under the Senior Credit Facility are reduced by the amount of mandatory principal repayments made by the Company.  In March 2014, the Company made a mandatory principal repayment of $7,940, as provided under the Credit Agreement.  There were no mandatory repayments of principal required under the Credit Agreement in 2013.

 

Events of default under the Credit Agreement include failure to pay principal or interest when due, failure to comply with the financial and operational covenants, the occurrence of any cross default event, non-compliance with other loan documents, the occurrence of a change of control event, and bankruptcy and other insolvency events. If an event of default occurs and is continuing, the Lenders holding a majority of the commitments and outstanding term loan under the Credit Agreement have the right, among others, to (i) terminate the commitments under the Credit Agreement, (ii) accelerate and require the Company to repay all the outstanding amounts owed under the Credit Agreement and (iii) require the Company to cash collateralize any outstanding letters of credit.

 

Under the terms of the Credit Agreement, as of June 30, 2014, the Company is required to maintain a maximum consolidated total debt to EBITDA ratio of not greater than 4.0:1.0.  There are certain future step downs as described in the Credit Agreement; decreasing to 3.75:1.0 as of the end of each fiscal-quarter ending after July 1, 2014 through and including the quarter ending June 30, 2015, 3.5:1.0 as of the end of each fiscal quarter ending after July 1, 2015 through and including June 30, 2016 and 3.25:1.0 as of the end of each fiscal quarter ending after July 1, 2016.   In addition, as of June 30, 2014, the Company is required to maintain a minimum consolidated fixed charge coverage ratio of not less than 1.25:1.0 and 1.35:1.0 as of the end of each fiscal quarter ending after July 1, 2014.

 

The Company was in compliance with all covenants as of June 30, 2014.

 

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As of June 30, 2014, the Company had $68,638 of borrowing availability under the Credit Agreement, of which the Company could have borrowed $43,419 on June 30, 2014 and remained in compliance with the above described covenants as of such date.  The additional borrowing availability under the Credit Agreement is limited only as of the Company’s fiscal quarter-end by the covenant restrictions described above.   At June 30, 2014, the Company had $56,212 of letters of credit outstanding under the Senior Credit Facility, with aggregate borrowings against the Senior Credit Facility of $277,835 (excluding debt discount of $2,849).

 

Interest Rate Swap Transactions

 

On October 25, 2012, the Company entered into Interest Rate Swap transactions (collectively, the “Interest Rate Swaps”) with each of JPMorgan Chase Bank, N.A., Bank of America, N.A. and PNC Bank, N.A. in an initial aggregate Notional Amount of $150.0 million (the “Notional Amount”). The Interest Rate Swaps have an effective date of October 31, 2012 and a termination date of September 30, 2017. The Interest Rate Swaps effectively fix the interest rate on an amount of variable interest rate borrowings under the Credit Agreement, originally equal to the Notional Amount at 0.7525% per annum plus the applicable margin rate for LIBOR loans under the Credit Agreement, determined based upon the Company’s consolidated total debt to EBITDA ratio. The Notional Amount is subject to scheduled quarterly amortization that coincides with quarterly prepayments of principal under the Credit Agreement. These Interest Rate Swaps are classified as cash flow hedges, and the Company assesses the effectiveness of the hedge on a monthly basis. The ineffective portion of the cash flow hedge is recognized in earnings as an increase of interest expense. As of June 30, 2014, no ineffectiveness of the hedge has been recognized. See Note 12. Fair Value Measurement for the fair value of the interest rate swap as of June 30, 2014 and December 31, 2013.

 

The Company does not enter into derivative instruments for any purpose other than for cash flow hedging purposes.

 

10. Comprehensive Income

 

Comprehensive income consists of the following components, net of tax (unaudited):

 

 

 

For the three months ended

 

For the six months ended

 

 

 

June 30, 2014

 

June 30, 2013

 

June 30, 2014

 

June 30, 2013

 

Net income

 

$

6,197

 

$

4,224

 

$

10,987

 

$

4,533

 

Effective portion of cash flow hedge

 

(264

)

1,007

 

(276

)

1,161

 

Effect of foreign currency translation

 

55

 

(137

)

83

 

(272

)

Comprehensive income

 

5,988

 

5,094

 

10,794

 

5,422

 

Less: comprehensive income attributable to noncontrolling interest

 

890

 

780

 

1,377

 

1,349

 

Comprehensive income attributable to SP Plus Corporation

 

$

5,098

 

$

4,314

 

$

9,417

 

$

4,073

 

 

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Accumulated other comprehensive income is comprised of unrealized gains (losses) on cash flow hedges and foreign currency translation adjustments. The components of changes in accumulated comprehensive income (loss), net of tax, for the six months ended June 30, 2014 were as follows (unaudited):

 

 

 

Foreign Currency
Translation
Adjustments

 

Effective Portion of
Unrealized Gain (Loss)
on Derivative

 

Total
Accumulated
Other
Comprehensive
Income (Loss)

 

Balance at December 31, 2013

 

$

(368

)

$

486

 

$

118

 

Change in other comprehensive income (loss)

 

83

 

(276

)

(193

)

Balance at June 30, 2014

 

$

(285

)

$

210

 

$

(75

)

 

11. Income Taxes

 

For the three months ended June 30, 2014, the Company recognized income tax expense of $4,254 on pre-tax earnings of $10,451 compared to $2,065 income tax expense on pre-tax earnings of $6,289 for the three months ended June 30, 2013. For the six months ended June 30, 2014, the Company recognized an income tax benefit of $3,184 on pre-tax earnings of $7,803 compared to $1,911 income tax expense on pre-tax earnings of $6,444 for the six months ended June 30, 2013.  The effective tax rate for the six months ended June 30, 2014 was a benefit of 40.7%, primarily as a result of recognizing a $6,359 discrete benefit for the reversal of a valuation allowance for a deferred tax asset established for historical net operating losses attributable to the State of New York. The valuation allowance was reversed in the first quarter of 2014 due to the New York tax law changes effective March 31, 2014, which resulted in the Company determining that the future benefit of net operating loss carryforwards was more likely than not to be realized.

 

As of June 30, 2014, the Company has not identified any uncertain tax positions that would have a material impact on the Company’s financial position. The Company recognizes potential interest and penalties related to uncertain tax positions, if any, in income tax expense.

 

The tax years that remain subject to examination for the Company’s major tax jurisdictions at June 30, 2014 are shown below:

 

2009 — 2013

 

United States — federal income tax

2007 — 2013

 

United States — state and local income tax

2011 — 2013

 

Canada

 

12. Fair Value Measurement

 

Fair value measurements-recurring basis

 

In determining fair value, the Company uses various valuation approaches within the fair value measurement framework. Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability.

 

Applicable accounting literature establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The fair value hierarchy is based on observable or unobservable inputs to valuation techniques that are used to measure fair value.

 

Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources, while unobservable inputs reflect a reporting entity’s pricing based upon its own market assumptions. Applicable accounting literature defines levels within the hierarchy based on the reliability of inputs as follows:

 

· Level 1: Inputs are quoted prices in active markets for identical assets or liabilities.

 

· Level 2: Inputs are quoted prices for similar assets or liabilities in an active market, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable and market-corroborated inputs, which are derived principally from or corroborated by observable market data.

 

· Level 3: Inputs that are derived from valuation techniques in which one or more significant inputs or value drivers are unobservable.

 

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Table of Contents

 

The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis and the basis of measurement at June 30, 2014 and December 31, 2013:

 

 

 

Fair Value Measurement at
June 30, 2014 (unaudited)

 

Fair Value Measurement at
December 31, 2013

 

 

 

Level 1

 

Level 2

 

Level 3

 

Level 1

 

Level 2

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

Prepaid expenses and other

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swap

 

 

$

357

 

 

 

$

824

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Accrued expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent acquisition consideration

 

 

 

$

1,866

 

 

 

$

1,374

 

Other long term liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Contingent acquisition consideration

 

 

 

$

187

 

 

 

$

163

 

 

The Company seeks to minimize risks from interest rate fluctuations through the use of interest rate swap contracts and hedge only exposures in the ordinary course of business. Interest rate swaps are used to manage interest rate risk associated with our floating rate debt. The Company accounts for its derivative instruments at fair value, provided it meets certain documentary and analytical requirements to qualify for hedge accounting treatment. Hedge accounting creates the potential for a Consolidated Statement of Operations match between the changes in fair values of derivatives and the changes in cost of the associated underlying transactions, in this case interest expense. Derivatives held by the Company are designated as hedges of specific exposures at inception, with an expectation that changes in the fair value will essentially offset the change in the underlying exposure. Discontinuance of hedge accounting is required whenever it is subsequently determined that an underlying transaction is not going to occur, with any gains or losses recognized in the Consolidated Statement of Operations at such time, and with any subsequent changes in fair value recognized currently in earnings. Fair values of derivatives are determined based on quoted prices for similar contracts. The effective portion of the change in fair value of the interest rate swap is reported in accumulated other comprehensive income, a component of stockholders’ equity, and is being recognized as an adjustment to interest expense or other (expense) income, respectively, over the same period the related expenses are recognized in earnings. Ineffectiveness would occur when changes in the market value of the hedged transactions are not completely offset by changes in the market value of the derivative and those related gains and losses on derivatives representing hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized currently in earnings when incurred. No ineffectiveness was recognized during the six months ended June 30, 2014 and 2013.

 

The significant inputs used to derive the fair value of the contingent acquisition consideration include financial forecasts of future operating results, the probability of reaching the forecast and the associated discount rate. The weighted average probability of the contingent acquisition consideration ranges from 10% to 50%, with a weighted average discount rate of 12%.

 

The following table provides a reconciliation of the beginning and ending balances for the contingent consideration liability measured at fair value using significant unobservable inputs (Level 3) (unaudited):

 

 

 

Due to Seller

 

Balance at December 31, 2013

 

$

(1,537

)

Payment of contingent consideration

 

141

 

Change in fair value

 

(657

)

 

 

 

 

Balance at June 30, 2014

 

$

(2,053

)

 

Obligations related to contingent consideration for certain acquisitions were finalized in June 2014 in the amount of $1,620, for which we expect pay in the third quarter of 2014.

 

For the three months ended June 30, 2014, the Company recognized an expense of $491 in General and Administrative Expenses within the Consolidated Statement of Income due to the change in fair value measurements using a Level 3 valuation technique. The Company recognized no benefit or expense in the three months ended June 30, 2013. For the six months ended June 30, 2014 and 2013, the Company recognized an expense of $657 and a benefit of $308, respectively, and recognized the related expense and benefit in General and Administrative Expenses within the Consolidated Statement of Income due to the change in fair value measurements using a Level 3 valuation technique. These adjustments were the result of using revised forecasts of operating results, updates to the probability of achieving the revised forecasts and updated fair value measurements that revised the Company’s contingent consideration obligations related to the purchase of these businesses.

 

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Table of Contents

 

Nonrecurring Fair Value Measurements

 

Certain assets are measured at fair value on a nonrecurring basis; that is, the assets are measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances (for example, when there is evidence of impairment). Non-financial assets such as goodwill, intangible assets, and leasehold improvements, equipment land and construction in progress are subsequently measured at fair value when there is an indicator of impairment and recorded at fair value only when an impairment is recognized. The Company assesses the impairment of intangible assets annually or whenever events or changes in circumstances indicate that the carrying amount of an intangible asset may not be recoverable. The fair value of its goodwill and intangible assets is not estimated if there is no change in events or circumstances that indicate the carrying amount of an intangible asset may not be recoverable. There were no impairment charges for the six months ended June 30, 2014 and 2013.

 

Financial instruments not measured at fair value

 

The following table presents the carrying amounts and estimated fair values of financial instruments not measured at fair value in the Consolidated Balance Sheet at June 30, 2014 (unaudited) and December 31, 2013:

 

 

 

June 30, 2014

 

December 31, 2013

 

 

 

Carrying
Amount

 

Fair Value

 

Carrying
Amount

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

23,551

 

$

23,551

 

$

23,158

 

$

23,158

 

Debt obligations—

 

 

 

 

 

 

 

 

 

Senior Credit Facility, net of original discount on borrowings

 

(274,986

)

(274,986

)

(286,672

)

(286,672

)

Other debt obligations

 

$

(2,206

)

$

(2,206

)

$

(1,994

)

$

(1,994

)

 

The carrying value of cash and cash equivalents approximates their fair value due to the short-term nature of these financial instruments and has been classified as a Level 1 measurement. The fair value of the Senior Credit Facility and other obligations was estimated to not be materially different from the carrying amount, as these instruments bear interest at variable market rates and are generally measured using a discounted cash flow analysis based on current market interest rates for similar types of financial instruments and have been classified as a Level 2 measurement.

 

Book overdrafts of $31,328 and $29,310 are included within Accounts Payable in the Consolidated Balance Sheet as of June 30, 2014 and December 31, 2013, respectively.

 

13. 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 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 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.

 

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. All prior periods presented have been restated to reflect the new internal reporting to the CODM.

 

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Table of Contents

 

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 and six months ended June 30, 2014 and 2013 (unaudited):

 

 

 

For the three months ended

 

For the six months ended

 

 

 

June 30,
2014

 

Gross
Margin%

 

June 30,
2013

 

Gross
Margin%

 

June 30,
2014

 

Gross
Margin%

 

June 30,
2013

 

Gross
Margin%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues(a):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Region One

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

$

77,022

 

 

 

$

76,978

 

 

 

$

147,925

 

 

 

$

150,718

 

 

 

Management contracts (b)

 

28,260

 

 

 

27,460

 

 

 

49,686

 

 

 

58,114

 

 

 

Total Region One

 

105,282

 

 

 

104,438

 

 

 

197,611

 

 

 

208,832

 

 

 

Region Two

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

1,100

 

 

 

1,031

 

 

 

2,660

 

 

 

2,358

 

 

 

Management contracts

 

7,436

 

 

 

5,629

 

 

 

20,117

 

 

 

16,346

 

 

 

Total Region Two

 

8,536

 

 

 

6,660

 

 

 

22,777

 

 

 

18,704

 

 

 

Region Three

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

12,041

 

 

 

11,719

 

 

 

23,920

 

 

 

23,138

 

 

 

Management contracts

 

14,773

 

 

 

15,743

 

 

 

28,834

 

 

 

33,463

 

 

 

Total Region Three

 

26,814

 

 

 

27,462

 

 

 

52,754

 

 

 

56,601

 

 

 

Region Four

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

11,233

 

 

 

11,207

 

 

 

22,583

 

 

 

22,473

 

 

 

Management contracts

 

22,129

 

 

 

24,836

 

 

 

52,601

 

 

 

47,966

 

 

 

Total Region Four

 

33,362

 

 

 

36,043

 

 

 

75,184

 

 

 

70,439

 

 

 

Region Five

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

23,639

 

 

 

22,396

 

 

 

44,828

 

 

 

45,823

 

 

 

Management contracts

 

10,328

 

 

 

9,426

 

 

 

19,715

 

 

 

20,400

 

 

 

Total Region Five

 

33,967

 

 

 

31,822

 

 

 

64,543

 

 

 

66,223

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

(77

)

 

 

(99

)

 

 

(323

)

 

 

(193

)

 

 

Management contracts

 

2,005

 

 

 

5,565

 

 

 

3,933

 

 

 

2,465

 

 

 

Total Other

 

1,928

 

 

 

5,466

 

 

 

3,610

 

 

 

2,272

 

 

 

Reimbursed management contract revenue

 

164,539

 

 

 

158,402

 

 

 

333,717

 

 

 

317,879

 

 

 

Total revenues

 

209,889

 

 

 

211,891

 

 

 

416,479

 

 

 

423,071

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Region One

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

6,241

 

8

%

5,487

 

7

%

4,657

 

3

%

8,343

 

6

%

Management contracts

 

11,070

 

39

%

11,504

 

42

%

22,993

 

46

%

26,035

 

45

%

Total Region One

 

17,311

 

 

 

16,991

 

 

 

27,650

 

 

 

34,378

 

 

 

Region Two

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

24

 

2

%

63

 

6

%

324

 

12

%

329

 

14

%

Management contracts

 

2,522

 

34

%

1,881

 

33

%

6,429

 

32

%

4,572

 

28

%

Total Region Two

 

2,546

 

 

 

1,944

 

 

 

6,753

 

 

 

4,901

 

 

 

Region Three

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

1,521

 

13

%

1,218

 

10

%

2,991

 

13

%

1,899

 

8

%

Management contracts

 

5,396

 

37

%

6,481

 

41

%

10,674

 

37

%

13,525

 

40

%

Total Region Three

 

6,917

 

 

 

7,699

 

 

 

13,665

 

 

 

15,424

 

 

 

Region Four

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

959

 

9

%

1,098

 

10

%

1,546

 

7

%

1,790

 

8

%

Management contracts

 

7,616

 

34

%

7,731

 

31

%

13,707

 

26

%

11,675

 

24

%

Total Region Four

 

8,575

 

 

 

8,829

 

 

 

15,253

 

 

 

13,465

 

 

 

Region Five

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

4,817

 

20

%

4,173

 

19

%

8,156

 

18

%

8,663

 

19

%

Management contracts

 

5,091

 

49

%

3,313

 

35

%

9,150

 

46

%

8,672

 

43

%

Total Region Five

 

9,908

 

 

 

7,486

 

 

 

17,306

 

 

 

17,335

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease contracts

 

(583

)

757

%

(821

)

829

%

(144

)

45

%

(839

)

435

%

Management contracts

 

3,220

 

161

%

3,916

 

70

%

2,703

 

69

%

1,705

 

69

%

Total Other

 

2,637

 

 

 

3,095

 

 

 

2,559

 

 

 

866

 

 

 

Total gross profit

 

47,894

 

 

 

46,044

 

 

 

83,186

 

 

 

86,369

 

 

 

General and administrative expenses

 

24,996

 

 

 

26,868

 

 

 

51,062

 

 

 

54,816

 

 

 

General and administrative expense percentage of gross profit

 

52

%

 

 

58

%

 

 

61

%

 

 

63

%

 

 

Depreciation and amortization

 

7,730

 

 

 

8,252

 

 

 

14,893

 

 

 

15,745

 

 

 

 

17



Table of Contents

 

 

 

For the three months ended

 

For the six months ended

 

 

 

June 30,
2014

 

Gross
Margin%

 

June 30,
2013

 

Gross
Margin%

 

June 30,
2014

 

Gross
Margin%

 

June 30,
2013

 

Gross
Margin%

 

Operating income

 

15,168

 

 

 

10,924

 

 

 

17,231

 

 

 

15,808

 

 

 

Other expenses (income):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

4,811

 

 

 

4,763

 

 

 

9,620

 

 

 

9,603

 

 

 

Interest income

 

(94

)

 

 

(128

)

 

 

(192

)

 

 

(239

)

 

 

 

 

4,717

 

 

 

4,635

 

 

 

9,428

 

 

 

9,364

 

 

 

Income before income taxes

 

10,451

 

 

 

6,289

 

 

 

7,803

 

 

 

6,444

 

 

 

Income tax (benefit)

 

4,254

 

 

 

2,065

 

 

 

(3,184

)

 

 

1,911

 

 

 

Net income

 

6,197

 

 

 

4,224

 

 

 

10,987

 

 

 

4,533

 

 

 

Less: Net income attributable to noncontrolling interest

 

890

 

 

 

780

 

 

 

1,377

 

 

 

1,349

 

 

 

Net income attributable to SP Plus Corporation

 

$

5,307

 

 

 

$

3,444

 

 

 

$

9,610

 

 

 

$

3,184

 

 

 

 


(a)                                    Excludes reimbursed management contract revenue.

 

(b)                                   The six months ended June 30, 2013 included a net gain of $2,700 related to the sale of rights associated with a certain contract.

 

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 Canadian Provinces of Manitoba, Ontario, and Quebec.

 

Region Two encompasses event planning and transportation, and the Company’s technology-based parking and traffic management systems.

 

Region Three encompasses operations in Arizona, California, Colorado, Hawaii, Oregon, Utah, Washington and the Canadian Province of Alberta.

 

Region Four encompasses all major airport and transportation operations nationwide.

 

Region Five encompasses Alabama, Florida, Georgia, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, 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.

 

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Table of Contents

 

Item 2.      Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

The following discussion of our results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained in this Quarterly Report on Form 10-Q and the consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2013.

 

Important Information Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q is being filed by SP Plus Corporation (“we”, “SP Plus” or the “Company”) with the Securities and Exchange Commission (“SEC”) and contains forward-looking statements, which are based on our current assumptions and expectations. These statements are typically accompanied by the words “expect,” “estimate,” “expect,” “intend”, ‘will,” “predict,” “project,” “may,” “should,” “could,” “believe,” “would,” “might,” “anticipates,” or words of similar terms and phrases, but such words, terms and phrases are not the exclusive means of identifying such statements.  These expressions are intended to identify forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.  These forward looking statements are made based on management’s expectations, beliefs and projections concerning future events and are subject to uncertainties and factors relating to operations and the business environment, all of which are difficult to predict and many of which are beyond management’s control.  These forward looking statements are not guarantees of future performance and there can be no assurance that our expectations, beliefs and projections will be realized.

 

Although we believe there is a reasonable basis for the forward-looking statements, our actual results could be materially different. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth on our description of risk factors in Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, which should be read in conjunction with the forward-looking statements in this report. Forward-looking statements speak only as of the date they are made, and except as expressly required by the federal securities laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances, future events or for any other reason.

 

Overview

 

Our Business

 

We provide parking management, ground transportation and other ancillary services to commercial, institutional and municipal clients in the United States, Puerto Rico and Canada. Our services include a comprehensive set of on-site parking management and ground transportation services, which consist of training, scheduling and supervising all service personnel as well as providing customer service, marketing, maintenance, security and accounting and revenue control functions necessary to facilitate the operation of clients’ parking facilities. We also provides a range of ancillary services such as airport shuttle operations, valet services, taxi and livery dispatch services and municipal meter revenue collection and enforcement services.

 

We operate our clients’ properties through two types of arrangements: management contracts and leases. Under a management contract, we typically receive a base monthly fee for managing the facility, and we may also receive an incentive fee based on the achievement of facility performance objectives. We also receive fees for ancillary services. Typically, all of the underlying revenue and expenses under a standard management contract flow through to our clients rather than to us. However, some management contracts, which are referred to as “reverse” management contracts, usually provide for larger management fees and require us to pay various costs. Under lease arrangements, we generally pay to the property owner either a fixed annual rent, a percentage of gross customer collections or a combination thereof. We collect all revenue under lease arrangements and we are responsible for most operating expenses, but we are typically not responsible for major maintenance, capital expenditures or real estate taxes. Margins for lease contracts vary significantly, not only due to operating performance, but also due to variability of parking rates in different cities and varying space utilization by parking facility type and location. As of June 30, 2014, we operated approximately 81% of our locations under management contracts and approximately 19% of our locations under leases. For the six months ended June 30, 2014, we derived approximately 79% of our gross profit under management contracts and approximately 21% of our gross profit under lease contracts.

 

In evaluating our financial condition and operating performance, management’s primary focus is gross profit, total general and administrative expenses and general and administrative expenses as a percentage of our gross profit. Although the underlying economics to us of management contracts and leases are similar, the manner in which we are required to account for them differs. Revenue from leases includes all gross customer collections derived from our leased locations (net of local parking taxes), whereas revenue from management contracts only includes our contractually agreed upon management fees and amounts attributable to ancillary services. Gross customer collections at facilities under management contracts, therefore, are not included in our revenue.

 

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Table of Contents

 

Accordingly, while a change in the proportion of our operating agreements that are structured as leases versus management contracts may cause significant fluctuations in reported revenue and expense of parking services that change will not artificially affect our gross profit. For example, as of June 30, 2014, we operated approximately 81% of our locations under management contracts and we derived approximately 79% of our gross profit under management contracts. Only approximately 42% of total revenue (excluding reimbursed management contract revenue), however, was from management contracts because under those contracts the revenue collected from parking customers belongs to our clients. Therefore, gross profit and total general and administrative expenses, rather than revenue, are management’s primary focus.

 

On October 2, 2012, we completed our acquisition (the “Central Merger”) of Central Parking Corporation (“Central”) for 6,161,332 shares of our common stock and the assumption of $217.7 million of Central’s debt, net of cash acquired. Additionally, Central’s former stockholders will be entitled to receive $27.0 million to be paid three years after closing, to the extent the $27.0 million is not used to satisfy seller indemnity obligations pursuant to the Agreement and Plan of Merger dated February 12, 2012. Our consolidated results of operations for the three and six months ended June 30, 2014 and 2013 include Central’s results of operations for the periods presented.

 

General Business Trends

 

We believe that sophisticated commercial real estate developers and property managers and owners recognize the opportunity for parking and related services to be a profit generator rather than a cost center. Often, the parking experience makes both the first and the last impressions on their properties’ tenants and visitors. By outsourcing these services, they are able to capture additional profit by leveraging the unique operational skills and controls that an experienced parking management company can offer. Our ability to consistently deliver a uniformly high level of parking and related services and maximize the profit to our clients improves our ability to win contracts and retain existing locations. Our location retention rate for the twelve-month period ending June 30, 2014 was approximately 89%, compared to approximately 88% for the twelve-month period ended June 30, 2013, excluding Central for the period of time in 2012 it was not under our ownership and dispositions required by the Department of Justice in connection with the Central Merger.

 

Summary of Operating Facilities

 

We focus our operations in core markets where a concentration of locations improves customer service levels and operating margins. The following table reflects our facilities operated at the end of the periods indicated:

 

 

 

June 30, 2014

 

December 31, 2013

 

June 30, 2013

 

Managed facilities

 

3,398

 

3,393

 

3,473

 

Leased facilities

 

812

 

850

 

873

 

Total facilities

 

4,210

 

4,243

 

4,346

 

 

Revenue

 

We recognize parking services revenue from lease and management contracts as the related services are provided. Substantially all of our revenue comes from the following two sources:

 

·              Parking services revenue—lease contracts . Parking services revenue related to lease contracts consist of all revenue received at a leased facility, including parking receipts (net of local parking taxes), consulting and real estate development fees, gains on sales of contracts and payments for exercising termination rights.

 

·              Parking services revenue—management contracts. Management contract revenue consists of management fees, including both fixed and performance-based fees, and amounts attributable to ancillary services such as accounting, equipment leasing, payments received for exercising termination rights, consulting, developmental fees, gains on sales of contracts, as well as insurance and other value-added services with respect to managed locations. We believe we generally purchase required insurance at lower rates than our clients can obtain on their own because we effectively self-insure for all liability and worker’s compensation claims by maintaining a large per-claim deductible. As a result, we have generated operating income on the insurance provided under our management contracts by focusing on our risk management efforts and controlling losses. Management contract revenue does not include gross customer collections at the managed locations as this revenue belongs to the property owner rather than to us. Management contracts generally provide us with a management fee regardless of the operating performance of the underlying facility.

 

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Table of Contents

 

Conversions between types of contracts (lease or management) are typically determined by our client and not us. Although the underlying economics to us of management contracts and leases are similar, the manner in which we account for them differs substantially.

 

Reimbursed Management Contract Revenue

 

Reimbursed management contract revenue consists of the direct reimbursement from the property owner for operating expenses incurred under a management contract, which are reflected in our revenue.

 

Cost of Parking Services

 

Our cost of parking services consists of the following:

 

·              Cost of parking services—lease contracts. The cost of parking services under a lease arrangement consists of contractual rental fees paid to the facility owner and all operating expenses incurred in connection with operating the leased facility. Contractual fees paid to the facility owner are generally based on either a fixed contractual amount or a percentage of gross revenue or a combination thereof. Generally, under a lease arrangement we are not responsible for major capital expenditures or real estate taxes.

 

·              Cost of parking services—management contracts. The cost of parking services under a management contract is generally the responsibility of the facility owner. As a result, these costs are not included in our results of operations. However, our reverse management contracts, which typically provide for larger management fees, do require us to pay for certain costs.

 

Reimbursed Management Contract Expense

 

Reimbursed management contract expense consists of direct reimbursed costs incurred on behalf of property owners under a management contract, which are reflected in our cost of parking services.

 

Gross Profit

 

Gross profit equals our revenue less the cost of generating such revenue. This is the key metric we use to examine our performance because it captures the underlying economic benefit to us of both lease contracts and management contracts.

 

General and Administrative Expenses

 

General and administrative expenses include salaries, wages, payroll taxes, insurance, travel and office related expenses for our headquarters, field offices, supervisory employees, and board of directors.

 

Depreciation and Amortization

 

Depreciation is determined using a straight-line method over the estimated useful lives of the various asset classes, or in the case of leasehold improvements, over the initial term of the operating lease or its useful life, whichever is shorter. Intangible assets determined to have finite lives are amortized over their remaining estimated useful life.

 

Results of Operations

 

Segments

 

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 Chief Operating Decision Maker (“CODM”), in deciding how to allocate resources. Our CODM is our chief executive officer.

 

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. All periods presented have been restated to reflect the new 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 Canadian Provinces of Manitoba, Ontario, and Quebec.

 

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Table of Contents

 

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

 

Region Three encompasses operations in Arizona, California, Colorado, Hawaii, Oregon, Utah, Washington, and the Canadian Province of Alberta.

 

Region Four encompasses all major airport and transportation operations nationwide.

 

Region Five encompasses Alabama, Florida, Georgia, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, 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 business is managed based on regions administered by executive vice presidents. The following is a summary of revenues (excluding reimbursed management contract revenue), cost of parking services and gross profit by regions for the three and six months ended June 30, 2014 and 2013:

 

Three Months ended June 30, 2014 Compared to Three Months ended June 30, 2013

 

Segment revenue information is summarized as follows (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

Region One

 

Region Two

 

Region 
Three

 

Region 
Four

 

Region Five

 

Other

 

Total

 

Variance

 

 

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

Amount

 

%

 

 

 

(In millions)

 

Lease contract revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New location

 

$

2.7

 

$

 

$

 

$

 

$

0.6

 

$

 

$

0.6

 

$

 

$

0.6

 

$

 

$

 

$

 

$

4.5

 

$

 

$

4.5

 

100.0

%

Contract expirations

 

0.2

 

1.8

 

 

 

 

1.0

 

 

1.0

 

 

0.7

 

 

 

0.2

 

4.5

 

(4.3

)

(95.6

)%

Same location

 

74.0

 

74.3

 

1.1

 

1.0

 

11.4

 

10.7

 

10.6

 

10.2

 

23.0

 

21.7

 

(0.1

)

(0.1

)

120.0

 

117.8

 

2.2

 

1.9

%

Conversions

 

0.1

 

0.9

 

 

 

0.1

 

 

 

 

 

 

 

 

0.2

 

0.9

 

(0.7

)

(77.8

)%

Total lease contract revenue

 

$

77.0

 

$

77.0

 

$

1.1

 

$

1.0

 

$

12.1

 

$

11.7

 

$

11.2

 

$

11.2

 

$

23.6

 

$

22.4

 

$

(0.1

)

$

(0.1

)

$

124.9

 

$

123.2

 

$

1.7

 

1.4

%

Management contract revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New location

 

$

2.6

 

$

0.1

 

$

0.3

 

$

 

$

0.9

 

$

 

$

1.3

 

$

 

$

1.3

 

$

0.1

 

$

 

$

 

$

6.4

 

$

0.2