SP Plus Corp - Quarter Report: 2011 September (Form 10-Q)

STANDARD PARKING CORPORATION

FORM 10-Q INDEX

Part I. Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of September 30, 2011 (Unaudited) and December 31, 2010			3
Condensed Consolidated Statements of Income (Unaudited) for the three months ended September 30, 2011 and 2010 and the nine months ended September 30, 2011 and 2010			4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2011 and 2010			5
Notes to Condensed Consolidated Interim Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			17
Item 3. Quantitative and Qualitative Disclosures about Market Risk			29
Item 4. Controls and Procedures			30
Part II. Other Information			31
Item 1. Legal Proceedings			31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			31
Item 6. Exhibits			32
Signatures			33
Index to Exhibits			34
Exhibit 10.3
Exhibit 31.1
Exhibit 31.2
Exhibit 31.3
Exhibit 32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT

PART I. FINANCIAL INFORMATION

Item 1.		Financial Statements

STANDARD PARKING CORPORATION

		September 30, 2011				December 31, 2010
		(Unaudited)				(see Note)
ASSETS
Current assets:
Cash and cash equivalents		$	7,619			$	7,305
Notes and accounts receivable, net			54,318				52,167
Prepaid expenses and supplies			2,692				2,312
Deferred taxes			2,314				2,314
Total current assets			66,943				64,098
Leasehold improvements, equipment and construction in progress, net			16,630				16,839
Advances and deposits			5,205				5,172
Long-term receivables, net			13,842				12,789
Intangible and other assets, net			9,080				8,910
Cost of contracts, net			14,332				15,628
Goodwill			131,981				132,196
Total assets		$	258,013			$	255,632
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	41,750			$	43,984
Accrued and other current liabilities			34,426				39,982
Current portion of long-term borrowings			706				673
Total current liabilities			76,882				84,639
Deferred taxes			12,494				9,637
Long-term borrowings, excluding current portion			93,445				97,229
Other long-term liabilities			27,567				27,324
Standard Parking Corporation’s stockholders’ equity:
Preferred stock, par value $.01 per share; 5,000,000 shares authorized and no shares issued			—				—
Common stock, par value $.001 per share; 50,000,000 shares authorized; 15,589,142 and 15,775,645 shares issued and outstanding as of September 30, 2011 and December 31, 2010, respectively			16				16
Treasury stock, at cost, 55,370 shares as of September 30, 2011 and no shares as of December 31, 2010			(866	)			—
Additional paid-in capital			95,141				97,291
Accumulated other comprehensive (loss) income			(362	)			103
Accumulated deficit			(46,234	)			(60,532	)
Total Standard Parking Corporation stockholders’ equity			47,695				36,878
Noncontrolling interest			(70	)			(75	)
Total equity			47,625				36,803
Total liabilities and stockholders’ equity		$	258,013			$	255,632

See Notes to Condensed Consolidated Interim Financial Statements.

STANDARD PARKING CORPORATION

		Three Months Ended								Nine Months Ended
		September 30, 2011				September 30, 2010				September 30, 2011				September 30, 2010
Parking services revenue:
Lease contracts		$	37,501			$	35,713			$	109,899			$	102,991
Management contracts			43,259				43,713				131,556				125,869
			80,760				79,426				241,455				228,860
Reimbursed management contract revenue			106,365				101,500				307,615				308,312
Total revenue			187,125				180,926				549,070				537,172
Cost of parking services:
Lease contracts			34,049				32,714				101,834				95,702
Management contracts			22,489				24,357				73,196				68,899
			56,538				57,071				175,030				164,601
Reimbursed management contract expense			106,365				101,500				307,615				308,312
Total cost of parking services			162,903				158,571				482,645				472,913
Gross profit:
Lease contracts			3,452				2,999				8,065				7,289
Management contracts			20,770				19,356				58,360				56,970
Total gross profit			24,222				22,355				66,425				64,259
General and administrative expenses (1)			11,814				11,549				34,593				35,327
Depreciation and amortization			1,683				1,527				4,893				4,557
Operating income			10,725				9,279				26,939				24,375
Other expenses (income):
Interest expense			1,197				1,286				3,546				4,174
Interest income			(297	)			(56	)			(470	)			(161	)
			900				1,230				3,076				4,013
Income before income taxes			9,825				8,049				23,863				20,362
Income tax expense			3,760				3,124				9,305				7,992
Net income			6,065				4,925				14,558				12,370
Less: Net income attributable to noncontrolling interest			89				89				260				181
Net income attributable to Standard Parking Corporation		$	5,976			$	4,836			$	14,298			$	12,189
Common stock data:
Net income per share:
Basic		$	0.38			$	0.31			$	0.91			$	0.79
Diluted		$	0.37			$	0.30			$	0.89			$	0.77
Weighted average shares outstanding:
Basic			15,704,837				15,651,586				15,776,833				15,526,061
Diluted			16,034,330				15,993,631				16,116,136				15,893,282

See Notes to Condensed Consolidated Interim Financial Statements.

STANDARD PARKING CORPORATION

		Nine Months Ended
		September 30, 2011				September 30, 2010
Operating activities:
Net income		$	14,558			$	12,370
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization			4,935				4,545
(Gain) loss on sale and abandonment of assets			(49	)			50
Amortization of debt issuance costs			478				478
Non-cash stock-based compensation			1,724				1,770
Excess tax benefit related to stock option exercises			(148	)			(1,185	)
Provisions for losses on accounts receivable			33				102
Deferred income taxes			2,857				1,786
Change in operating assets and liabilities			(11,339	)			(4,149	)
Net cash provided by operating activities			13,049				15,767
Investing activities:
Purchase of leasehold improvements and equipment			(2,907	)			(2,168	)
Cost of contracts purchased			(395	)			(522	)
Proceeds from sale of assets			82				3
Capitalized interest			(40	)			(107	)
Contingent purchase payments			(293	)			(104	)
Net cash used in investing activities			(3,553	)			(2,898	)
Financing activities:
Proceeds from exercise of stock options			143				1,450
Repurchase of common stock			(5,031	)			—
Tax benefit related to stock option exercises			148				1,185
Earn-out payment			—				(529	)
Payments on senior credit facility			(3,250	)			(15,200	)
Distribution to noncontrolling interest			(255	)			(179	)
Payments on long-term borrowings			(102	)			(95	)
Payments on debt issuance costs			(30	)			(30	)
Payments on capital leases			(399	)			(404	)
Net cash used in financing activities			(8,776	)			(13,802	)
Effect of exchange rate changes on cash and cash equivalents			(406	)			81
Increase (decrease) in cash and cash equivalents			314				(852	)
Cash and cash equivalents at beginning of period			7,305				8,256
Cash and cash equivalents at end of period		$	7,619			$	7,404
Supplemental disclosures:
Cash paid during the period for:
Interest		$	3,151			$	3,975
Income taxes			4,975				4,925

See Notes to Condensed Consolidated Interim Financial Statements.

STANDARD PARKING CORPORATION

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Standard Parking Corporation have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements.

In the opinion of management, all adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation of the financial position and results of operations have been included. Operating results for the nine month period ended September 30, 2011 are not necessarily indicative of the results that might be expected for any other interim period or the fiscal year ending December 31, 2011. The financial statements presented in this report should be read in conjunction with the consolidated financial statements and footnotes thereto included in our 2010 Annual Report on Form 10-K filed March 11, 2011, as amended on March 22, 2011.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, and variable interest entities in which the Company is the primary beneficiary. Noncontrolling interest recorded in the consolidated statement of income is the interest in consolidated VIEs which are not controlled by the Company. We have interests in twelve joint ventures and one limited liability company. The twelve joint ventures each operate between one and thirty-three parking facilities. The limited liability company was formed to collect and distribute parking facility data for a fee. Of the thirteen variable interest entities, seven are consolidated into our financial statements, and six are single purpose entities where the Company is not the primary beneficiary as power is shared. Investments in variable interest entities where the Company is not the primary beneficiary are accounted for under the equity method. All significant intercompany profits, transactions and balances have been eliminated in consolidation.

Financial Instruments

The carrying values of cash and cash equivalents, notes and accounts receivable and accounts payable are reasonable estimates of their fair value due to the short-term nature of these financial instruments. Long-term debt, including capital lease obligations, has a carrying value that approximates fair value because these instruments bear interest at market rates.

Interest Rate Caps

We do not enter into derivative instruments for any purpose other than cash flow hedging purposes.

On February 22, 2010, we entered into interest rate cap agreements with Wells Fargo Bank N.A. (“Wells Fargo”) and Fifth Third Bank (“Fifth Third”), allowing us to limit our exposure on a portion of our borrowings under our senior credit facility (“Rate Cap Transactions”). Pursuant to two separate letter agreements between the Company and Wells Fargo and Fifth Third, respectively, we will receive payments from Wells Fargo and Fifth Third each quarterly period to the extent that the prevailing three month LIBOR during that period exceeds our cap rate of 3.25%. The Rate Cap Transactions became effective March 31, 2010, and settle each quarter on a date that is intended to coincide with our quarterly interest payment dates under our senior credit facility. The Rate Cap Transactions cap our LIBOR interest rate on a notional amount of $50,000 at 3.25% for a total of 39 months. These Rate Cap Transactions are classified as a cash flow hedge, and we calculate the effectiveness of the hedge on a quarterly basis. The ineffective portion of the cash flow hedge is recognized in current period earnings as an increase of interest expense. The fair value of the interest rate cap at September 30, 2011 is $10 and is included in prepaid expenses.

2. Stock-Based Compensation

We measure share-based compensation expense at the grant date, based on the fair value of the award, and the expense is recognized over the requisite employee service period (the vesting period) for awards expected to vest (considering estimated forfeitures).

The Company has an amended and restated Long-Term Incentive Plan that was adopted in conjunction with our initial public offering. On April 22, 2008, our shareholders approved an amendment to our Long-Term Incentive Plan that increased the maximum number of shares of common stock available for awards under the Long-Term Incentive Plan from 2,000,000 to 2,175,000 and extended the Plan’s termination date. The Plan now terminates twenty years from the date of such approval, or April 22, 2028. Forfeited and expired options under the Plan become generally available for reissuance. At September 30, 2011, 121,493 shares remained available for award under the Plan.

Stock Options and Grants

We use the Black-Scholes option pricing model to estimate the fair value of each option grant as of the date of grant. The volatilities are based on the 90-day historical volatility of our common stock as of the grant date. The risk free interest rate is based on zero-coupon U.S. government issues with a remaining term equal to the expected life of the option. For options granted prior to 2008, the expected life for options was calculated using the simplified method. The simplified method was calculated as the vesting term plus the contractual term divided by two.

There were no options granted during the nine months ended September 30, 2011 and 2010.

The Company recognized no stock-based compensation expense related to stock options for the nine months ended September 30, 2011 and 2010, as all options previously granted were fully vested. As of September 30, 2011, there were no unrecognized compensation costs related to unvested options.

On April 29, 2011, we authorized vested stock grants to certain directors totaling 14,009 shares. The total value of the grant was $245 and is included in general and administrative expenses.

Restricted Stock Units

In March 2008, the Company’s Compensation Committee and the Board of Directors authorized a one-time grant of 750,000 restricted stock units that subsequently were awarded to members of our senior management team on July 1, 2008. In November 2008, an additional 5,000 restricted stock units were awarded. The restricted stock units vest primarily in one-third installments on each of the tenth, eleventh and twelfth year anniversaries of the grant date. The restricted stock unit agreements provide for accelerated vesting upon the recipient reaching their retirement age.

The fair value of restricted stock units is determined using the fair value of our common stock on the date of the grant, and compensation expense is recognized over the vesting period. In accordance with the guidance related to share-based payments, we estimated forfeitures at the time of the grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. We use historical data to estimate pre-vesting forfeitures and record stock-based compensation expense only for those awards that are expected to vest.

During the first nine months of 2011, 68,400 restricted stock units vested and 17,600 restricted stock units were forfeited. The forfeited units were returned to the pool of shares generally available for future use under the Long-Term Incentive Plan as of September 30, 2011.

The Company recognized $411 and $1,479 of stock-based compensation expense related to the restricted stock units for the three and nine months ended September 30, 2011, respectively, which is included in general and administrative expenses. The Company recognized $508 and $1,525 of stock based compensation expense related to the restricted stock units for the three and nine months ended September 30, 2010, respectively, which is included in general and administrative expenses. As of September 30, 2011, there was $6,156 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 6.7 years.

3. Net Income Per Common Share

Companies are required to present basic and diluted earnings per 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 September 30								Nine months Ended September 30
		2011				2010				2011				2010
Weighted average common basic shares outstanding			15,704,837				15,651,586				15,776,883				15,526,061
Effect of dilutive stock options and restricted stock units			329,493				342,045				339,253				367,221
Weighted average common diluted shares outstanding			16,034,330				15,993,631				16,116,136				15,893,282
Net income per share:
Basic		$	0.38			$	0.31			$	0.91			$	0.79
Diluted		$	0.37			$	0.30			$	0.89			$	0.77

There were 9,534 anti-dilutive options excluded in the computation of diluted earnings per share for the three and nine months ended September 30, 2011 and 2010, respectively, because the options’ exercise prices were greater than the average market price of the common stock.

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.

4. Recently Issued Accounting Pronouncements

Accounting Standards Net Yet Adopted

In December 2010, the Financial Accounting Standards Board (“FASB”) issued updated accounting guidance related to the disclosure of supplementary pro forma information for business combinations to specify that if a company presents comparative financial statements, it should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current period, occurred at the beginning of the comparable prior annual reporting period. This guidance is effective prospectively for business combinations for which the acquisition date is, on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The Company does not expect the provisions of this update to have a material effect on its consolidated financial statements.

In May 2011, the FASB issued updated accounting guidance related to amendments to achieve common fair value measurement and disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2011. Early adoption is not permitted. We are currently evaluating how we will adopt this new guidance and the impact, if any, the adoption will have on our future results of operations and financial condition.

In June 2011, the FASB issued updated accounting guidance related to the presentation of comprehensive income, requiring companies to replace the statement of net income with a statement of comprehensive income. This guidance is effective for fiscal years beginning after December 15, 2011. Early adoption is not permitted. The adoption of this update will impact the presentation and disclosure of the Company’s financial statements but will not impact the Company’s results of operations, financial position, or cash flows.

In September 2011, the FASB issued updated accounting guidance related to testing goodwill for impairment. The amendments provide entities with the option of performing a qualitative assessment before performing the first step of the two-step impairment test. If entities determine, on the basis of qualitative factors, it is not more likely than not that the fair value of the reporting unit is less than the carrying amount, then performing the two-step impairment test would be unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. The amendment also provides entities with the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to the first step of the two-step impairment test. This guidance is effective for interim and annual periods beginning after December 15, 2011, but early adoption is permitted. We are currently evaluating how we will adopt this new guidance and the impact, if any, the adoption will have on our future results of operations and financial condition.

In September 2011, the FASB issued updated accounting guidance related to compensation retirement benefits for multiemployer plans. The amendments are intended to provide more information about an employer’s financial obligations to multiemployer pension plans and multiemployer other postretirement benefits plans and, therefore, help financial statement users better understand the financial health of all of the significant plans in which the employer participates. This guidance is effective for annual periods ending after December 15, 2011. The Company will provide increased disclosures related to its participation in multi-employer pension plans upon adoption.

5. Acquisitions

2010 Acquisitions

On December 8, 2010, the Company acquired Expert Parking, Inc. and Expert Parking Management, Inc. in a stock purchase transaction for a purchase price in the amount of $5,977 net of cash acquired, of which $3,597 was paid in cash, and $2,380 of estimated earn-out payments to be paid over five years, which are contingent upon achieving certain financial performance targets. Expert Parking, based in Philadelphia, Pennsylvania, operates and manages garages in Pennsylvania and New Jersey.

The net cash paid at the time of the acquisition of $3,597 consisted of accounts receivable of $569, intangible assets with finite lives of $3,150 and goodwill of $3,489, offset by accounts payable of $580, accrued expenses of $757 and long-term liabilities of $2,274.

The acquisition represents an acquisition of a business and was accounted for using the purchase method of accounting. The purchase price allocation is based on preliminary estimates of goodwill. These estimates are subject to revision after the Company completes its fair value analysis. The Company financed the acquisition through additional term borrowings under the senior credit facility and existing cash. The results of operations of this acquisition are included in the Company’s consolidated statement of income from the date of acquisition.

The Company expensed acquisition related costs of $10 in 2011 and $207 in 2010. These costs are included in general and administrative expenses in the income statement. The amount of goodwill that is expected to be deductible for tax purposes is $1,396.

6. Leasehold Improvements, Equipment and Construction in Progress, Net

A summary of leasehold improvements, equipment, and construction in progress and related accumulated depreciation and amortization is as follows:

		Ranges of Estimated
		useful life		September 30, 2011				December 31, 2010
				(Unaudited)
Equipment		2-10 years		$	36,211			$	30,982
Leasehold improvements		Shorter of lease term or economic life up to 10 years			9,935				9,642
Construction in progress					1,985				6,025
					48,131				46,649
Less accumulated depreciation and amortization					(31,501	)			(29,810	)
Leasehold improvements, equipment and construction in progress, net				$	16,630			$	16,839

Depreciation expense was $1,066 and $3,013 for the three and nine months ended September 30, 2011, respectively, and $932 and $2,797 for the three and nine months ended September 30, 2010, respectively. Depreciation includes gains on sale and abandonment of leasehold improvements and equipment of $13 and $49 for the three and nine months ended September 30, 2011, respectively, and losses on the sale and abandonment of leasehold improvements and equipment of $13 and $50 for the three and nine months ended September 30, 2010, respectively.

7. Cost of Contracts, Net

Cost of contracts represents the contractual rights associated with providing parking services at a managed or leased facility. Cost consists of either capitalized payments made to third parties or the value ascribed to contracts acquired through acquisition. Cost of contracts is amortized over the estimated life of the contracts, including anticipated renewals and terminations.

The balance of cost of contracts is comprised of the following:

		September 30, 2011				December 31, 2010
		(Unaudited)
Cost of contracts		$	23,666			$	23,273
Accumulated amortization			(9,334	)			(7,645	)
Cost of contracts, net		$	14,332			$	15,628

Amortization expense related to cost of contracts was $555 and $1,691 for the three and nine months ended September 30, 2011, respectively, and $546 and $1,349 for the three and nine months ended September 30, 2010 respectively. The weighted average useful life is 9.5 years for 2011 and 2010.

8. Goodwill

Goodwill is assigned to reporting units based upon the specific Region where the assets are acquired and associate goodwill resided.

The following table reflects the changes in the carrying amounts of goodwill by reported segment for the nine months ended September 30, 2011 (unaudited).

		Region				Region				Region				Region
		One				Two				Three				Four				Total
Balance as of January 1, 2011		$	65,664			$	8,714			$	35,241			$	22,577			$	132,196
Contingency payments related to acquisitions			—				—				32				—				32
Foreign currency translation			—				(247	)			—				—				(247	)
Balance as of September 30, 2011		$	65,664			$	8,467			$	35,273			$	22,577			$	131,981

9. Long-Term Receivables, Net

		Amount Outstanding
		September 30, 2011				December 31, 2010
		(Unaudited)
Bradley International Airport
Deficiency payments		$	13,123			$	12,070
Other Bradley related, net			3,203				3,203
Valuation allowance			(2,484	)			(2,484	)
Total long-term receivables, net		$	13,842			$	12,789

Agreement

We entered into a 25-year agreement with the State of Connecticut that expires on April 6, 2025, under which we operate the surface parking and 3,500 garage parking spaces at Bradley International Airport located in the Hartford, Connecticut metropolitan area. The Company manages the facility for which it is expected to receive a management fee.

The parking garage was financed on April 6, 2000 through the issuance of $53,800 of State of Connecticut special facility revenue bonds, representing $47,700 non-taxable Series A bonds and a separate taxable issuance of $6,100 Series B bonds. The Series B bonds were retired on July 1, 2006 according to the terms of the indenture. The Bradley agreement provides that we deposit with a trustee for the bondholders all gross revenues collected from operations of the surface and garage parking, and from these gross revenues, the trustee pays debt service on the special facility revenue bonds outstanding, operating and capital maintenance expenses of the surface and garage parking facilities excluding our management fee discussed below, 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 lease year 2002 to approximately $4,500 in lease year 2025. Annual guaranteed minimum payments to the State will increase from approximately $8,300 in lease year 2002 to approximately $13,200 in lease year 2024. The annual minimum guaranteed payment to the State by the trustee for the nine months ended September 30, 2011 and 2010 was $7,595 and $7,439, respectively.

All of the cash flow from the parking facilities is pledged to the security of the special facility revenue bonds and is 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, we are obligated to deliver the deficiency amount to the trustee. Additionally, the Guaranteed Payments are required to be paid before we are reimbursed for deficiency payments or management fees.

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.

However, to the extent there is a cash surplus in any month during the term of the lease, we have the right to be repaid the principal amount of any and all deficiency payments previously made, together with actual interest expenses and a premium, not to exceed 10% of the initial deficiency payment. We calculate and record interest income and premium income in the period the associated deficiency payment is received from the trustee.

Deficiency Payments

To the extent that monthly gross receipts are not sufficient for the trustee to make the required payments, we are obligated pursuant to our agreement to deliver the deficiency amount to the trustee within three business days of being notified. We are responsible for these deficiency payments regardless of the amount of utilization for the Bradley parking facilities. The deficiency payments represent contingent interest bearing advances to the trustee to cover operating cash flow requirements. To the extent sufficient funds are available in the appropriate fund, the trustee is then directed by the State to reimburse us for deficiency payments up to the amount of the calculated surplus.

In the nine months ended September 30, 2011, we made deficiency payments (net of repayments received) of $1,053. In addition we received $54 in premium income and $256 in interest income on deficiency payments from the trustee. In the nine months ended September 30, 2010, we made deficiency payments of $2,657 and we did not record or receive any interest and premium income related to deficiency repayments from the trustee. The receivable from the trustee for interest and premium income related to deficiency repayments was $0 as of September 30, 2011 and September 30, 2010.

The deficiency payments, if any, are recorded as a receivable by us for which we are reimbursed from time to time as provided in the trust agreement. As of September 30, 2011 and December 31, 2010, we have a receivable of $13,123 and $12,070, respectively, compromised of cumulative deficiency payments to the trustee, net of reimbursements. We believe these advances to be fully recoverable and therefore have not recorded a valuation allowance for them. We do not guarantee the payment of any principal or interest on any debt obligations of the State of Connecticut or the trustee.

The Construction, Financing and Operating Special Facility Lease Agreement, which governs reimbursement of Guarantor Payments, places no time restriction or limits on our right to reimbursement.

The following table reconciles the beginning and ending balance of the receivable for each period presented:

		September 30, 2011				December 31, 2010
		(Unaudited)
Deficiency payments:
Balance at beginning of period		$	12,070			$	9,606
Deficiency payments made			1,432				2,724
Deficiency repayment received			(379	)			(260	)
Balance at end of period			13,123				12,070
Other Bradley related			3,203				3,203
Valuation allowance			(2,484	)			(2,484	)
Total long-term receivables		$	13,842			$	12,789

Compensation

In addition to the recovery of certain general and administrative expenses incurred, our agreement provides for an annual management fee payment that is based on three operating profit tiers calculated for each year during the term of the agreement. The management fee is further apportioned 60% to us and 40% to an un-affiliated entity. To the extent that funds are available for the trustee to make a distribution, the annual management fee is paid when sufficient cash is paid after the Guaranteed Payments (as defined in our agreement), and after the repayment of all deficiency payments, including accrued interest and premium. However, our right to the management fee accrues each year during the term of the agreement and is paid when sufficient cash is available for the trustee to make a distribution.

The annual management fee is paid after the repayment of all deficiency payments, including accrued interest and premium. Therefore, due to the existence and length of time for repayment of the deficiency amounts to the Company, no management fees have been recognized. Management fees will be recognized in accordance with SAB 104 when “collectability is reasonably assured.”

Cumulative management fees of $5,250 have not been recognized as of September 30, 2011 and no management fee income was recognized during the nine months ending September 30, 2011 and 2010.

10. Borrowing Arrangements

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

		Amount Outstanding
		Due Date				September 30, 2011				December 31, 2010
		(Unaudited)
Revolving senior credit facility		June 2013				$	91,950			$	95,200
Capital lease obligations		Various					1,126				1,525
Obligations on seller notes and other		Various					1,075				1,177
							94,151				97,902
Less current portion							706				673
						$	93,445			$	97,229

Senior Credit Facility

On July 15, 2008, we amended and restated our credit facility.

The $210,000 revolving senior credit facility will expire June 29, 2013. In addition, the revolving senior credit facility includes a letter of credit sub-facility with a sublimit of $50,000 and a swing line sub-facility with a sublimit of $10,000. The $50,000 letter of credit sub-facility does not limit the maximum actual borrowings on the revolving senior credit facility.

This revolving senior credit facility bears interest, at our option, at either (1) LIBOR plus an applicable LIBOR margin of between 2.00% and 3.50% depending on the ratio of our total funded indebtedness to our EBITDA from time to time (“Total Debt Ratio”) or (2) the Base Rate (as defined below) plus an applicable Base Rate Margin of between 0.50% and 2.00% depending on our Total Debt Ratio. We may elect interest periods of one, two, three or nine months for LIBOR based borrowings. The Base Rate is the greater of (i) the rate publicly announced from time to time by Bank of America, N.A. as its “prime rate”, or (ii) the overnight federal funds rate plus 0.50%.

Certain financial covenants limit the Company’s capacity to fully draw on its $210,000 revolving credit facility. Our senior credit facility includes a fixed charge ratio covenant, a total debt to EBITDA ratio covenant, a limit on our ability to incur additional indebtedness, issue preferred stock or pay dividends, and certain other restrictions on our activities. We are required to repay borrowings under our senior credit facility out of the proceeds of future issuances of debt or equity securities and asset sales, subject to certain customary exceptions. Our senior credit facility is secured by substantially all of our assets and all assets acquired in the future (including a pledge of 100% of the stock of our existing and future domestic guarantor subsidiaries and 65% of the stock of our existing and future foreign subsidiaries).

We are in compliance with all of our financial covenants as of September 30, 2011.

The weighted average interest rate on our senior credit facility at September 30, 2011 and December 31, 2010 was 2.2% and 2.6%, respectively. The rate includes all outstanding LIBOR contracts, interest rate cap effect and letters of credit. The weighted average interest rate on outstanding borrowings, not including letters of credit, was 2.2% and 2.6% at September 30, 2011 and December 31, 2010, respectively.

At September 30, 2011, we had $16,823 of letters of credit outstanding under the senior credit facility, borrowings against the senior credit facility aggregated $91,950, and we had $55,705 available under the senior credit facility.

11. Business Unit Segment Information

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, in deciding how to allocate resources. Our chief operating decision maker 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 a summary of revenues (excluding reimbursed management contract revenue) and gross profit by regions for the three and nine months ended September 30, 2011 and 2010. Information related to prior periods has been recast to conform to the current region alignment.

The Company has provided this business unit segment information for all comparable prior periods. Segment information is summarized as follows (in thousands):

		For the three months ended																For the nine months ended
		September 30,				Gross				September 30,				Gross				September 30,				Gross				September 30,				Gross
		2011				Margin				2010				Margin				2011				Margin				2010				Margin
Revenues:
Region One
Lease contracts		$	21,118							$	20,255							$	60,709							$	55,598
Management contracts			13,839								12,062								40,702								36,117
Total Region One			34,957								32,317								101,411								91,715
Region Two
Lease contracts			883								508								2,224								1,815
Management contracts			4,084								5,962								16,543								18,723
Total Region Two			4,967								6,470								18,767								20,538
Region Three
Lease contracts			5,885								5,638								17,383								15,764
Management contracts			13,254								13,169								38,482								38,605
Total Region Three			19,139								18,807								55,865								54,369
Region Four
Lease contracts			9,584								9,297								29,547								29,782
Management contracts			11,960								12,497								35,617								32,369
Total Region Four			21,544								21,794								65,164								62,151
Other
Lease contracts			31								15								36								32
Management contracts			122								23								212								55
Total Other			153								38								248								87
Reimbursed revenue			106,365								101,500								307,615								308,312
Total revenues		$	187,125							$	180,926							$	549,070							$	537,172
Gross Profit
Region One
Lease contracts		$	1,898				9	%		$	1,630				8	%		$	4,193				7	%		$	3,390				6	%
Management contracts			7,795				56	%			6,994				58	%			22,214				55	%			20,396				56	%
Total Region One			9,693								8,624								26,407								23,786
Region Two
Lease contracts			53				6	%			33				6	%			205				9	%			167				9	%
Management contracts			1,471				36	%			1,880				32	%			4,229				26	%			5,467				29	%
Total Region Two			1,524								1,913								4,434								5,634
Region Three
Lease contracts			571				10	%			540				10	%			1,730				10	%			1,340				9	%
Management contracts			5,876				44	%			6,027				46	%			18,001				47	%			18,376				48	%
Total Region Three			6,447								6,567								19,731								19,716
Region Four
Lease contracts			707				7	%			762				8	%			1,937				7	%			2,285				8	%
Management contracts			3,986				33	%			4,332				35	%			12,142				34	%			12,214				38	%
Total Region Four			4,693								5,094								14,079								14,499
Other
Lease contracts			223				719	%			34				227	%			—				0	%			107				334	%
Management contracts			1,642				1,346	%			123				535	%			1,774				837	%			517				940	%
Total Other			1,865								157								1,774								624
Total gross profit			24,222								22,355								66,425								64,259
General and administrative expenses			11,814								11,549								34,593								35,327
General and administrative expense percentage of gross profit			49	%							52	%							52	%							55	%
Depreciation and amortization			1,683								1,527								4,893								4,557
Operating income			10,725								9,279								26,939								24,375
Other expenses (income):
Interest expense			1,197								1,286								3,546								4,174
Interest income			(297	)							(56	)							(470	)							(161	)
			900								1,230								3,076								4,013
Income before income taxes			9,825								8,049								23,863								20,362
Income tax expense			3,760								3,124								9,305								7,992
Net income			6,065								4,925								14,558								12,370
Less: Net income attributable to noncontrolling interest			89								89								260								181
Net income attributable to Standard Parking Corporation		$	5,976							$	4,836							$	14,298							$	12,189

Region One encompasses operations in Alabama, Arkansas, Connecticut, Delaware, District of Columbia, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, New Jersey, New York, North Carolina, Nebraska, New Hampshire, North Dakota, Ohio, Ontario, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, Vancouver and Wisconsin.

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

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

Region Four encompasses all major airport and transportation operations nationwide.

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

The CODM does not evaluate segments using discrete asset information.

12. Comprehensive Income

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

		For the three months ended								For the nine months ended
		September 30, 2011				September 30, 2010				September 30, 2011				September 30, 2010
Net income		$	6,065			$	4,925			$	14,558			$	12,370
Revaluation of interest rate cap			9				(71	)			(59	)			(431	)
Effect of foreign currency translation			(452	)			114				(406	)			81
Comprehensive income			5,622				4,968				14,093				12,020
Less: comprehensive income attributable to noncontrolling interest			89				89				260				181
Comprehensive income attributable to Standard Parking Corporation		$	5,533			$	4,879			$	13,833			$	11,839

13. Income Taxes

For the three months ended September 30, 2011, the Company recognized income tax expense of $3,760 on pre-tax earnings of $9,825 compared to $3,124 income tax expense on pre-tax earnings of $8,049 for the three months ended September 30, 2010. For the nine months ended September 30, 2011, the Company recognized income tax expense of $9,305 on pre-tax earnings of $23,863 compared to $7,992 income tax expense on pre-tax earnings of $20,362 for the nine months ended September 30, 2010. Income tax expense is based on a projected effective tax rate of approximately 39.0% for the nine months ended September 30, 2011 compared to approximately 39.2% for the nine months ended September 30, 2010. The Company’s effective tax rate did not change significantly compared to the nine months ended September 30, 2010.

As of September 30, 2011, 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 September 30, 2011 are shown below:

2005 – 2010		United States — federal income tax
2005 – 2010		United States — state and local income tax
2007 – 2010		Canada

14. Legal Proceedings

We are subject to litigation in the normal course of our business. The outcomes of legal proceedings and claims brought against us and other loss contingencies are subject to significant uncertainty. We accrue a charge against income when our management determines that it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. In addition, we accrue for the authoritative judgments or assertions made against us by government agencies at the time of their rendering regardless of our intent to appeal. In determining the appropriate accounting for loss contingencies, we consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss. We regularly evaluate current information available to us to determine whether an accrual should be established or adjusted. Estimating the probability that a loss will occur and estimating the amount of a loss or a range of loss involves significant judgment.

15. Fair Value Measurement

The Company applies the accounting standards for fair value measurements and disclosures for its financial assets and financial liabilities. The guidance requires disclosures about assets and liabilities measured at fair value. The Company’s financial assets relate to the interest rate cap of $10 and the Company’s financial liabilities relate to contingent earn-out payments of $6,478 as of September 30, 2011.

The accounting guidance for fair value measurements and disclosures includes a fair value hierarchy that is intended to increase consistency and comparability in fair value measurements and related disclosures. 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. The fair value hierarchy consists of the following three levels:

•

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.

The significant inputs used to derive the fair value of the amounts due to seller include financial forecasts of future operating results, the probability of reaching the forecast and the associated discount rate. The probability of the contingent consideration ranges from 20% to 95%, with a weighted average discount rate of 13%. 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 September 30, 2011:

		Total Fair Value
		Measurement				Level 1				Level 2				Level 3
Assets:
Interest Rate Cap		$	10			$	—			$	10			$	—
Liabilities:
Due to seller		$	6,478			$	—			$	—			$	6,478

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

		Due to Seller
Balance at December 31, 2010		$	6,807
Contingent earn-out payments-payments made to seller			—
Contingent earn-out payments-change in fair value			(329	)
Balance at September 30, 2011		$	6,478

For the nine months ended September 30, 2011, the Company recorded adjustments to the original contingent consideration obligation recorded upon the acquisition of Gameday Management Group U.S and Expert Parking. The adjustments were the result of using revised forecasts and updated fair value measurements that adjusted the Company’s potential earn-out payments related to the purchase of this business.

For the three and nine months ended September 30, 2011, the Company recognized a benefit of $0 and $329, respectively, which is included in general and administrative expenses in the statement of income due to the change in fair value measurements using level three valuation techniques.

16. Stock Repurchases

2011 Stock Repurchases

In June 2011, our Board of Directors authorized us to repurchase shares of our common stock, on the open market, up to $20,000 in aggregate and cancelled a prior authorization from 2008.

During the second quarter of 2011, we repurchased 27,803 shares from third party shareholders at an average price of $15.52 per share, including average commissions of $0.03 per share, on the open market. The total value of the second quarter transactions was $431. At June 30, 2011, 27,803 shares were held as treasury stock. In July 2011 we returned the shares to authorized and unissued.

During the third quarter of 2011, we repurchased 286,109 shares from third party shareholders at an average price of $16.08 per share, including average commissions of $0.03 per share, on the open market. The total value of the third quarter transactions was $4,600. At September 30, 2011, 55,370 shares were held as treasury stock. In October 2011 we returned the shares to authorized and unissued.

As of September 30, 2011, $14,969 remained available for stock repurchases under the June 2011 authorization by the Board of Directors.

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 our Form 10-K, as amended, for the year ended December 31, 2010.

Overview

Our Business

We manage parking facilities in urban markets and at airports across the United States and in four Canadian provinces. We do not own any facilities, but instead enter into contractual relationships with property owners or managers.

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 September 30, 2011, we operated approximately 90% of our locations under management contracts and approximately 10% of our locations under leases. For the nine months ended September 30, 2011, we derived approximately 88% of our gross profit under management contracts and approximately 12% of our gross profit under leases.

In evaluating our financial condition and operating performance, management’s primary focus is on our 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 parking tax), 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. 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 September 30, 2011, we operated approximately 90% of our locations under management contracts, and for the nine months ended September 30, 2011, we derived approximately 88% of our gross profit under management contracts. Only approximately 54% 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.

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 ended September 30, 2011 was approximately 92%, compared to approximately 87% for the twelve-month period ended September 30, 2010, which also reflects our decision not to renew, or to terminate, unprofitable contracts.

For the nine months ended September 30, 2011 compared to the nine months ended September 30, 2010, average gross profit per location increased by 2.8% from $30.0 thousand to $30.4 thousand due primarily to an increase in same location gross profit.

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:

		September 30, 2011				December 31, 2011				September 30, 2010
Managed facilities			1,970				1,907				1,959
Leased facilities			212				212				211
Total facilities			2,182				2,119				2,170

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 parking tax), 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.

Conversions between type 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 is 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 is 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 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, in deciding how to allocate resources. Our chief operating decision maker is our president and chief executive officer.

Our business is managed based on regions administered by executive vice presidents. The following is a summary of revenues (excluding reimbursed management contract revenue) by region for the three and nine months ended September 30, 2011 and 2010. Information related to prior years has been recast to conform to the new region alignment.

Region One encompasses operations in Alabama, Arkansas, Connecticut, Delaware, District of Columbia, Florida, Georgia, Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, New Jersey, New York, North Carolina, Nebraska, New Hampshire, North Dakota, Ohio, Ontario, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, Virginia, Vancouver and Wisconsin.

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

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

Region Four encompasses all major airport and transportation operations nationwide.

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

The following tables present the material factors that impact our financial statements on an operating segment basis.

Three Months ended September 30, 2011 Compared to Three Months ended September 30, 2010

Segment revenue information is summarized as follows:

		Three Months Ended September 30,
		Region One								Region Two								Region Three								Region Four								Other								Total								Variance
		2011				2010				2011				2010				2011				2010				2011				2010				2011				2010				2011				2010				Amount				%
		(in millions)
Lease contract revenue:
New location		$	1.6			$	—			$	0.3			$	—			$	0.2			$	—			$	—			$	—			$	—			$	—			$	2.1			$	—			$	2.1				100.0
Contract expirations			—				0.8				—				—				—				0.2				—				—				—				—				—				1.0				(1.0	)			(100.0	)
Same location			19.5				19.1				0.6				0.5				5.7				5.5				9.6				9.3				—				—				35.4				34.4				1.0				2.9
Conversions			—				0.3				—				—				—				—				—				—				—				—				—				0.3				(0.3	)			(100.0	)
Total lease contract revenue		$	21.1			$	20.2			$	0.9			$	0.5			$	5.9			$	5.7			$	9.6			$	9.3			$	—			$	—			$	37.5			$	35.7			$	1.8				5.0
Management contract revenue:
New location		$	1.6			$	—			$	0.4			$	0.1			$	1.1			$	—			$	0.2			$	—			$	—			$	—			$	3.3			$	0.1			$	3.2				3200.0
Contract expirations			0.1				1.4				—				2.7				0.1				1.1				—				0.2				—				—				0.2				5.4				(5.2	)			(96.3	)
Same location			12.1				10.6				3.7				3.2				12.2				12.1				11.7				12.3				0.1				—				39.8				38.2				1.6				4.2
Conversions			—				—				—				—				—				—				—				—				—				—				—				—				—				—
Total management contract revenue		$	13.8			$	12.0			$	4.1			$	6.0			$	13.4			$	13.2			$	11.9			$	12.5			$	0.1			$	—			$	43.3			$	43.7			$	(0.4	)			(0.9	)