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

~~FORM 10-Q~~

~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)~~

~~OF THE SECURITIES EXCHANGE ACT OF 1934~~

For the quarterly period ended ~~September~~June 30, ~~2017~~

2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-50796

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, Illinois60601-7702

(Address of Principal Executive Offices, Including Zip Code)

~~(312)~~

(312) 274-2000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	SP	The Nasdaq Stock Market LLC

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~~ ý NO o

Yes☒ No ☐

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ~~YES~~ ý NO o

Yes☒ No ☐

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



Large ~~accelerated filer~~ o Accelerated Filer	☒	Accelerated ~~filer~~ x Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
~~Non-accelerated filer~~ o		~~(Do not check if a smaller reporting company)~~
Emerging Growth Company
~~Smaller reporting company~~ o		~~Emerging growth company~~ o ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

☐

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

AsYes ☐ No ☒

Indicate the number of ~~November 1, 2017, there were 22,520,672~~ shares outstanding of each of the issuer's classes of common stock, as of the ~~registrant outstanding.~~

latest practicable date.


Class	Outstanding at August 2, 2023
Common Stock, $0.001 par value per share	19,649,611	Shares

Table of Contents

SP PLUS CORPORATION

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Condensed Consolidated Balance Sheets ~~as of September 30, 2017 (unaudited) and December 31, 2016~~	2
Condensed Consolidated Statements of Income ~~(unaudited) for the three and nine months ended September 30, 2017 and 2016~~	3
Condensed Consolidated Statements of Comprehensive Income ~~(unaudited) for the three and nine months ended September 30, 2017 and 2016~~	4
Condensed Consolidated Statements of Stockholders' Equity	5
Condensed Consolidated Statements of Cash Flows ~~(unaudited) for the nine months ended September 30, 2017 and 2016~~	5 6
Notes to Condensed Consolidated Financial Statements	6 7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24 21
Item 3. Quantitative and Qualitative Disclosures about Market Risk	39 31
Item 4. Controls and Procedures	39 31

PART II. OTHER INFORMATION	40 33
Item 1. Legal Proceedings	40 33
Item 1A. Risk Factors	40 33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	40 34
Item 3. Defaults Upon Senior Securities	40 34
Item 4. Mine Safety Disclosures	40 34
Item 5. Other Information	40 34
Item 6. Exhibits	41 35

Signatures	42 36

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

SP Plus Corporation

Condensed Consolidated Balance Sheets

(millions, except for share and per share data) September 30, 2017 December 31, 2016
(unaudited)
Assets

Cash and cash equivalents $ 23.4
$ 22.2
Notes and accounts receivable, net 124.9
120.7
Prepaid expenses and other 10.2
13.7
Total current assets 158.5
156.6
Leasehold improvements, equipment and construction in progress, net 26.5
30.9
Other assets

Advances and deposits 4.2
4.3
Other intangible assets, net 55.4
61.3
Favorable acquired lease contracts, net 24.4
30.0
Equity investments in unconsolidated entities 18.7
18.5
Other assets, net 17.7
16.3
Deferred taxes 19.3

17.9
Cost of contracts, net 9.5
11.4
Goodwill 431.7
431.4
Total other assets 580.9
591.1
Total assets $ 765.9
$ 778.6
Liabilities and stockholders’ equity

Accounts payable $ 95.9
$ 109.9
Accrued rent 23.6
21.7
Compensation and payroll withholdings 21.5
25.7
Property, payroll and other taxes 9.1
7.6
Accrued insurance 19.3
18.1
Accrued expenses 20.7
25.5
Current portion of obligations under Restated Credit Facility and other long-term borrowings 20.4
20.4
Total current liabilities 210.5
228.9
Long-term borrowings, excluding current portion

Obligations under Restated Credit Facility 153.0
174.5
Other long-term borrowings —
0.2
153.0
174.7
Unfavorable acquired lease contracts, net 33.5
40.2
Other long-term liabilities 63.4
66.4
Total noncurrent liabilities 249.9
281.3
Stockholders’ equity

Preferred Stock, par value $0.01 per share; 5,000,000 shares authorized as of September 30, 2017 and December 31, 2016; no shares issued —
—
Common stock, par value $0.001 per share; 50,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 22,509,468 and 22,328,578 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively. —
—
Treasury Stock, at cost; 305,183 shares at September 30, 2017 and December 31, 2016 (7.5 )
(7.5 )
Additional paid-in capital 254.7
251.2
Accumulated other comprehensive loss (1.2 ) (1.4 )
Retained earnings 59.1
25.9
Total SP Plus Corporation stockholders’ equity 305.1
268.2
Noncontrolling interest 0.4
0.2
Total stockholders’ equity 305.5
268.4
Total liabilities and stockholders’ equity $ 765.9
$ 778.6


(millions, except for share and per share data)	June 30, 2023			December 31, 2022
	(unaudited)
Assets
Cash and cash equivalents	$	24.6		$	12.4
Accounts receivable, net		179.0			167.7
Prepaid expenses and other current assets		13.2			16.7
Total current assets		216.8			196.8
Property and equipment, net		65.2			60.2
Right-of-use assets		170.7			166.9
Goodwill		543.6			543.2
Other intangible assets, net		63.5			68.9
Deferred taxes		42.9			44.4
Other noncurrent assets		43.6			41.0
Total noncurrent assets		929.5			924.6
Total assets	$	1,146.3		$	1,121.4
Liabilities and stockholders’ equity
Liabilities
Accounts payable	$	136.6		$	133.4
Accrued and other current liabilities		117.7			137.6
Short-term lease liabilities		57.3			60.2
Current portion of long-term borrowings		13.5			12.4
Total current liabilities		325.1			343.6
Long-term borrowings, excluding current portion		352.2			331.8
Long-term lease liabilities		156.3			158.5
Other noncurrent liabilities		71.3			61.8
Total noncurrent liabilities		579.8			552.1
Total liabilities	$	904.9		$	895.7
Stockholders’ equity
Preferred stock, par value $0.01 per share; 5,000,000 shares authorized as of June 30, 2023 and December 31, 2022, respectively; no shares issued or outstanding	$	—		$	—
Common stock, par value $0.001 per share; 50,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 23,444,353 and 19,649,611 shares issued and outstanding as of June 30, 2023, respectively, and 23,276,329 and 19,767,287 shares issued and outstanding as of December 31, 2022, respectively		—			—
Treasury stock, at cost; 3,794,742 and 3,509,042 shares as of June 30, 2023 and December 31, 2022, respectively		(130.5	)		(120.0	)
Additional paid-in capital		278.5			274.2
Accumulated other comprehensive loss		(1.1	)		(1.8	)
Retained earnings		94.3			73.6
Total SP Plus Corporation stockholders’ equity		241.2			226.0
Noncontrolling interests		0.2			(0.3	)
Total stockholders’ equity		241.4			225.7
Total liabilities and stockholders’ equity	$	1,146.3		$	1,121.4

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SP Plus Corporation

Condensed Consolidated Statements of Income

Three Months Ended Nine Months Ended
(millions, except for share and per share data) (unaudited) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Parking services revenue

138.5
Lease contracts $ 140.9
$ 136.1
$ 422.6
$ 410.3
Management contracts 86.7
84.1
262.8
262.0

227.6
220.2
685.4
672.3
Reimbursed management contract revenue 165.1
177.0
512.7
501.8
Total parking services revenue 392.7
397.2
1,198.1
1,174.1
Cost of parking services

Lease contracts 131.0
125.8
387.0
380.4
Management contracts 50.7
50.5
154.5
162.6

181.7
176.3
541.5
543.0
Reimbursed management contract expense 165.1
177.0
512.7
501.8
Total cost of parking services 346.8
353.3
1,054.2
1,044.8
Gross profit

Lease contracts 9.9
10.3
35.6
29.9
Management contracts 36.0
33.6
108.3
99.4
Total gross profit 45.9
43.9
143.9
129.3
General and administrative expenses 19.6
20.3
63.3
67.0
Depreciation and amortization 4.9
7.8
16.3
26.8
Operating income 21.4
15.8
64.3
35.5
Other expenses (income)

Interest expense 2.2
2.7
7.1
8.1
Interest income (0.2 ) (0.1 ) (0.5 ) (0.4 )
Gain on sale of business —
—
(0.1 ) —
Equity in losses from investment in unconsolidated entity 0.1
0.4
0.5
1.2
Total other expenses (income) 2.1
3.0
7.0
8.9
Earnings before income taxes 19.3
12.8
57.3
26.6
Income tax expense 7.3
5.1
21.3
10.9
Net income 12.0
7.7
36.0
15.7
Less: Net income attributable to noncontrolling interest 0.8
0.7
2.6
2.2
Net income attributable to SP Plus Corporation $ 11.2
$ 7.0
$ 33.4
$ 13.5
Common stock data

Net income per common share

Basic $ 0.51
$ 0.31
$ 1.51
$ 0.60
Diluted $ 0.50
$ 0.31
$ 1.48
$ 0.60
Weighted average shares outstanding

Basic 22,203,023
22,208,139
22,186,556
22,293,776
Diluted 22,523,036
22,497,111
22,501,378
22,571,933


	Three Months Ended						Six Months Ended
(millions, except for share and per share data) (unaudited)	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Services revenue
Lease type contracts	$	76.3		$	70.6		$	144.5		$	133.2
Management type contracts		145.0			125.9			293.1			247.7
		221.3			196.5			437.6			380.9
Reimbursed management type contract revenue		220.9			184.5			429.9			349.9
Total services revenue		442.2			381.0			867.5			730.8
Cost of services (exclusive of depreciation and amortization)
Lease type contracts		62.3			55.9			117.5			107.9
Management type contracts		93.1			81.8			195.9			162.8
		155.4			137.7			313.4			270.7
Reimbursed management type contract expense		220.9			184.5			429.9			349.9
Total cost of services (exclusive of depreciation and amortization)		376.3			322.2			743.3			620.6
General and administrative expenses		31.8			26.7			62.4			51.2
Depreciation and amortization		8.8			6.5			17.2			13.3
Operating income		25.3			25.6			44.6			45.7
Other expense (income)
Interest expense		7.3			3.5			14.1			8.3
Interest income		(0.1	)		(0.1	)		(0.2	)		(0.3	)
Total other expenses		7.2			3.4			13.9			8.0
Earnings before income taxes		18.1			22.2			30.7			37.7
Income tax expense		4.8			5.9			8.1			10.1
Net income		13.3			16.3			22.6			27.6
Less: Net income attributable to noncontrolling interests		1.0			0.9			1.9			1.5
Net income attributable to SP Plus Corporation	$	12.3		$	15.4		$	20.7		$	26.1
Common stock data
Net income per common share
Basic	$	0.63		$	0.73		$	1.05		$	1.23
Diluted	$	0.62		$	0.72		$	1.04		$	1.22
Weighted average shares outstanding
Basic		19,631,772			21,195,819			19,666,684			21,211,299
Diluted		19,839,953			21,356,464			19,853,900			21,347,442

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SP Plus Corporation

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended Nine Months Ended
(millions) (unaudited) September 30, 2017
September 30, 2016
September 30, 2017 September 30, 2016
Net income $ 12.0

$ 7.7

$ 36.0
$ 15.7
Other comprehensive income (expense) 0.1

0.1

0.2
(0.2 )
Comprehensive income 12.1

7.8

36.2
15.5
Less: Comprehensive income attributable to noncontrolling interest 0.8

0.7

2.6
2.2
Comprehensive income attributable to SP Plus Corporation $ 11.3

$ 7.1

$ 33.6
$ 13.3


	Three Months Ended					Six Months Ended
(millions) (unaudited)	June 30, 2023		June 30, 2022			June 30, 2023		June 30, 2022
Net income	$	13.3	$	16.3		$	22.6	$	27.6
Reclassification of de-designated interest rate collars		—		0.1			—		0.5
Foreign currency translation gain (loss)		0.5		(0.2	)		0.7		(0.1	)
Comprehensive income		13.8		16.2			23.3		28.0
Less: Comprehensive income attributable to noncontrolling interests		1.0		0.9			1.9		1.5
Comprehensive income attributable to SP Plus Corporation	$	12.8	$	15.3		$	21.4	$	26.5

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SP Plus Corporation

Condensed Consolidated Statements of ~~Cash Flows~~

Nine Months Ended
(millions) (unaudited) September 30, 2017 September 30, 2016
Operating activities

Net income $ 36.0
$ 15.7
Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization 16.9
27.0
Net accretion of acquired lease contracts (1.2 ) (1.4 )
Loss (gain) on sale of equipment 0.1
(0.2 )
Net equity in (earnings) losses of unconsolidated entities (net of distributions) (8.6 )
0.6
Gain on sale of business (0.1 )
—
Amortization of debt issuance costs 0.6
0.6
Amortization of original discount on borrowings 0.4
0.4
Non-cash stock-based compensation 3.2
2.8
Provisions for losses on accounts receivable 0.2
0.1
Deferred income taxes (1.5 ) 2.3
Changes in operating assets and liabilities

Notes and accounts receivable (4.6 ) (15.6 )
Prepaid assets 3.5
1.5
Other assets (1.9 ) (5.6 )
Accounts payable (14.1 ) 2.0
Accrued liabilities (7.5 ) 0.4
Net cash provided by operating activities 21.4
30.6
Investing activities

Purchase of leasehold improvements and equipment (4.9 ) (10.8 )
Proceeds from sale of equipment and contract terminations 0.9
2.9
Proceeds from equity method investee's sale of assets 8.4

—
Proceeds from sale of business 0.6

—
Cost of contracts purchased (0.6 ) (2.0 )
Net cash provided by (used in) investing activities 4.4
(9.9 )
Financing activities

Payments on senior credit facility revolver (Restated Credit Facility) (308.7 ) (302.2 )
Proceeds from senior credit facility revolver (Restated Credit Facility) 301.5
301.7
Payments on term loan (Restated Credit Facility) (15.0 ) (11.2 )
Payments on other long-term borrowings (0.2 ) (0.2 )
Distribution to noncontrolling interest (2.4 ) (2.6 )
Payments of debt issuance costs and original discount on borrowings (0.1 ) (0.1 )
Repurchase of common stock —

(5.4 )
Net cash used in financing activities (24.9 ) (20.0 )
Effect of exchange rate changes on cash and cash equivalents 0.3
(0.1 )
Increase in cash and cash equivalents 1.2
0.6
Cash and cash equivalents at beginning of period 22.2
18.7
Cash and cash equivalents at end of period $ 23.4
$ 19.3
Supplemental disclosures

Cash paid during the period for

Interest $ 6.2
$ 6.9
Income taxes, net $ 21.4
$ 11.8

Stockholders' Equity


	Common Stock
(millions, except share data) (unaudited)	Number of Shares Issued		Par Value		Additional Paid-In Capital			Accumulated Other Comprehensive Loss			Retained Earnings			Treasury Stock			Noncontrolling Interests			Total
Balance at January 1, 2023		23,276,329	$	—	$	274.2		$	(1.8	)	$	73.6		$	(120.0	)	$	(0.3	)	$	225.7
Net income		—		—		—			—			8.4			—			0.9			9.3
Foreign currency translation		—		—		—			0.2			—			—			—			0.2
Issuance of restricted stock units		148,806		—		(0.4	)		—			—			—			—			(0.4	)
Non-cash stock-based compensation		—		—		2.2			—			—			—			—			2.2
Noncontrolling interests buyout		—		—		(0.7	)		—				—		—			—			(0.7	)
Repurchases of common stock		—		—		—			—			—			(10.5	)		—			(10.5	)
Distributions to noncontrolling interests		—		—		—			—			—			—			(0.5	)		(0.5	)
Balance at March 31, 2023		23,425,135	$	—	$	275.3		$	(1.6	)	$	82.0		$	(130.5	)	$	0.1		$	225.3
Net income		—		—		—			—			12.3			—			1.0			13.3
Foreign currency translation		—		—		—			0.5			—			—			—			0.5
Issuance of restricted stock units		558		—		—			—			—			—			—			—
Issuance of stock grants		18,660		—		0.6			—			—			—			—			0.6
Non-cash stock-based compensation		—		—		2.6			—			—			—			—			2.6
Distributions to noncontrolling interests		—		—		—			—			—			—			(0.9	)		(0.9	)
Balance at June 30, 2023		23,444,353	$	—	$	278.5		$	(1.1	)	$	94.3		$	(130.5	)	$	0.2		$	241.4


	Common Stock
(millions, except share data) (unaudited)	Number of Shares Issued		Par Value		Additional Paid-In Capital		Accumulated Other Comprehensive Loss			Retained Earnings		Treasury Stock			Noncontrolling Interests			Total
Balance at January 1, 2022		23,224,459	$	—	$	267.5	$	(2.8	)	$	28.4	$	(70.6	)	$	(0.4	)	$	222.1
Net income		—		—		—		—			10.7		—			0.6			11.3
Foreign currency translation		—		—		—		0.1			—		—			—			0.1
Reclassification of de-designated interest rate collars		—		—		—		0.4			—		—			—			0.4
Issuance of restricted stock units		37,235		—		—		—			—		—			—			—
Non-cash stock-based compensation		—		—		1.8		—			—		—			—			1.8
Distributions to noncontrolling interests		—		—		—		—			—		—			(0.5	)		(0.5	)
Balance at March 31, 2022		23,261,694	$	—	$	269.3	$	(2.3	)	$	39.1	$	(70.6	)	$	(0.3	)	$	235.2
Net income		—		—		—		—			15.4		—			0.9			16.3
Foreign currency translation		—		—		—		(0.2	)		—		—			—			(0.2	)
Reclassification of de-designated interest rate collars		—		—		—		0.1			—		—			—			0.1
Issuance of stock grants		14,635		—		0.4		—			—		—			—			0.4
Non-cash stock-based compensation		—		—		2.2		—			—		—			—			2.2
Repurchases of common stock		—		—		—		—			—		(5.6	)		—			(5.6	)
Distributions to noncontrolling interests		—		—		—		—			—		—			(0.7	)		(0.7	)
Balance at June 30, 2022		23,276,329	$	—	$	271.9	$	(2.4	)	$	54.5	$	(76.2	)	$	(0.1	)	$	247.7

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

SP Plus Corporation

Condensed Consolidated Statements of Cash Flows


	Six Months Ended
(millions) (unaudited)	June 30, 2023			June 30, 2022
Operating activities
Net income	$	22.6		$	27.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		17.2			13.3
Non-cash stock-based compensation		5.4			4.4
Provisions (reversals) for credit losses on accounts receivable		0.7			(0.1	)
Deferred income taxes		1.8			2.8
Other		(1.7	)		1.3
Changes in operating assets and liabilities
Accounts receivable		(11.9	)		(13.4	)
Prepaid expenses and other current assets		3.5			10.3
Accounts payable		3.1			9.7
Accrued liabilities and other		(19.7	)		(20.2	)
Net cash provided by operating activities		21.0			35.7
Investing activities
Purchases of property and equipment		(11.3	)		(9.1	)
Acquisition of other intangible assets		—			(1.8	)
Proceeds from sale of equipment		—			0.2
Noncontrolling interest buyout		(2.2	)		—
Net cash used in investing activities		(13.5	)		(10.7	)
Financing activities
Proceeds from credit facility revolver		256.8			173.2
Payments on credit facility revolver		(232.9	)		(198.2	)
Proceeds from credit facility term loan		—			17.2
Payments on credit facility term loan		(2.5	)		(4.2	)
Payments of debt issuance costs		—			(2.5	)
Payments on other long-term borrowings		(3.8	)		(5.4	)
Payments of withholding taxes on share-based compensation		(0.4	)		—
Distributions to noncontrolling interests		(1.4	)		(1.2	)
Repurchases of common stock		(11.1	)		(4.9	)
Net cash provided by (used in) financing activities		4.7			(26.0	)
Effect of exchange rate changes on cash and cash equivalents		—			(0.1	)
Increase (decrease) in cash and cash equivalents		12.2			(1.1	)
Cash and cash equivalents at beginning of year		12.4			15.7
Cash and cash equivalents at end of period	$	24.6		$	14.6
Supplemental disclosures
Cash paid (received) during the period for
Interest	$	13.6		$	7.8
Income taxes, net	$	4.0		$	(12.7	)

See Notes to Condensed Consolidated Financial Statements.

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SP Plus Corporation

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~(millions, except for share and per share data) (unaudited)~~

1. Significant Accounting Policies and Practices

The Company

SP Plus Corporation (the ~~“Company”~~"Company") ~~provides parking management, ground transportation~~develops and other ancillary services to commercial, institutional and municipal clients in urban markets and airports across the United States, Puerto Rico and Canada. These services include a comprehensive set of on-site parkingintegrates technology with operations management and ~~ground transportation services, which include facility maintenance, training, scheduling~~support to deliver mobility solutions that enable the efficient and ~~supervising all service personnel as well as providing customer service, marketing,~~time-sensitive movement of people, vehicles and ~~accounting and revenue control functions necessary to facilitate the operation of clients’ facilities.~~personal travel belongings. The Company ~~also provides~~is committed to providing solutions that make every moment matter for a ~~range~~world on the go while meeting the objectives of ~~ancillary services such~~the Company's diverse client base in North America and Europe, which includes aviation, commercial, hospitality and institutional clients. The Company typically enters into contractual agreements with property owners or managers as ~~airport shuttle operations, valet services, taxi and livery dispatch services, security services and municipal meter revenue collection and enforcement services.~~

opposed to owning facilities.

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"~~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 ~~Condensed Consolidated Balance Sheets, Statements of Income, Comprehensive Income and Cash Flows prepared in conformity with U.S. GAAP~~financial statements have been condensed or omitted as permitted by such rules and regulations.

During the third quarter 2017, the Company corrected reimbursed management contract revenue and reimbursed management contract expense for the previous periods presented, whereby, the Company had been overstating reimbursed management contract revenue and reimbursed management contract expense included within the Condensed Consolidated Statements of Income in equal and off-setting amounts. This correction resulted in the following: (i) a reduction of reimbursed management contract revenue of $11.9 million and $35.2 million and a reduction of reimbursed management contract expense by $11.9 million and $35.2 million for the three and nine months ended September 30, 2016, respectively, and (ii) a reduction of reimbursed management contract revenue of $24.4 million and a reduction reimbursed management contract expense of $24.4 million for the nine months ended September 30, 2017, which represents the correction of the over statement previously reported for t~~he six-month period ended June 30, 2017.~~ The correction had no impact to the Condensed Consolidated Balance Sheets, Statements of Income, Comprehensive Income or Cash Flows, except as described above and as it relates to reimbursed management contract revenue and reimbursed management contract expense. Management has evaluated the effects of the previous misstatements, both qualitatively and quantitatively, and concluded that these corrections were immaterial to any current or prior interim or annual periods that were affected.

~~In the opinion of management, all~~

All adjustments (consisting only of adjustments of a normal and recurring nature) considered necessary for a fair presentation have been included. Operating results ~~for~~during the three and ~~nine month periods~~six months ended ~~September~~June 30, ~~2017~~2023 are not necessarily indicative of the results ~~that might~~to be expected for any other interim period or the fiscal year ~~ended~~ending December 31, ~~2017.~~2023. The financial statements presented in this report should be read in conjunction with the Company’s annual ~~consolidated financial statements~~Consolidated Financial Statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed on February 24, ~~2017.~~2023 with the Securities and Exchange Commission.

~~Reclassifications~~

~~Certain reclassifications having no effect on the Condensed Consolidated Balance Sheets, Statements~~

Principles of Income, Comprehensive Income, earnings per share, total assets, or total liabilities have been made to the previously issued Condensed Consolidated Statements of Cash Flows to conform to the current periods presentation of the Company'sConsolidation

The unaudited Condensed Consolidated Financial ~~Statements. Specifically,~~Statements include the accounts of the Company, ~~reclassified~~ its wholly owned subsidiaries, and Variable Interest Entities ("VIEs") in which the Company is the primary beneficiary. The Company is the primary beneficiary of a VIE when the Company has the power to direct activities that most significantly affect the economic performance of the VIE. If the Company is not the primary beneficiary in a VIE and has significant influence, the Company accounts for the investment in the VIE as an equity ~~in earnings (losses)~~method investment. As of ~~unconsolidated entities from Other~~June 30, 2023 and December 31, 2022, assets ~~within the changes in operating~~related to consolidated VIEs were $58.6 million and $57.1 million, respectively, which were primarily related to right-of-use (“ROU”) assets and property and equipment, net. As of June 30, 2023 and December 31, 2022, liabilities ~~of the~~related to consolidated VIEs were $46.6 million and $50.9 million, respectively, which were primarily related to operating ~~activities section of the Condensed Consolidated Statements of Cash Flows to Net equity~~and finance lease liabilities. All intercompany profits, transactions and balances have been eliminated in ~~(earnings) losses of unconsolidated entities (net of distributions), which is a separate line within the operating activities section of the Condensed Consolidated Statements of Cash Flows.~~consolidation.

Cash and ~~cash equivalents~~

Cash Equivalents

Cash equivalents represent funds temporarily invested in money market instruments with maturities of three months or less. Cash equivalents are stated at cost, which approximates fair value. Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements were ~~$0.4 million and $0.3~~$0.6 million as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016, respectively,~~2022, and ~~are~~were included ~~within~~in Cash and cash equivalents within the Condensed Consolidated Balance Sheets.

~~Financial Instruments~~

Allowance for Doubtful Accounts

Accounts receivable, net of the allowance for doubtful accounts, represents the Company’s estimate of the amount that ultimately will be realized in cash. The ~~carrying values~~Company reviews the adequacy of ~~cash,~~its allowance for doubtful accounts ~~receivable~~on an ongoing basis, primarily using a review of specific accounts, as well as historical collection trends and ~~accounts payable approximate their fair value due~~aging of receivables, and records adjustments to the ~~short-term nature of these financial instruments. Book overdrafts of $26.5 million and $36.5 million are~~allowance as necessary. The Company’s allowance for doubtful accounts, which was included ~~within~~in Accounts ~~payable~~receivable, net, within the Condensed Consolidated Balance Sheets, was $4.1 million and $4.0 million as of ~~September~~June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. ~~Long-term debt has~~

Property and Equipment, Net

Property and equipment includes the Company's equipment, internal-use software, vehicles, leasehold improvements and construction/development in process. Property and equipment are stated at cost, less accumulated depreciation and amortization, whenever applicable.

Certain costs incurred in the planning and evaluation stage of internal-use software projects are recorded to expense as incurred. Costs associated with directly obtaining, developing or upgrading internal-use software are capitalized and included as Software in Property and equipment, net, within the Condensed Consolidated Balance Sheets. When the internal-use software is ready for

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its intended use, it is amortized on a ~~carrying value~~straight-line basis over the estimated useful life of the internal-use software, which is typically 3 years.

Equipment and vehicles are depreciated on a straight-line basis over estimated useful lives ranging from 1 to 10 years. Expenditures for major renewals and improvements that ~~approximates fair value because these instruments bear interest at variable market rates.~~extend the useful life of property and equipment, other than internal-use software, are capitalized. Leasehold improvements are amortized on a straight-line basis over the terms of the respective leases or the useful lives of the improvements, whichever is shorter.

Equity Investments in Unconsolidated Entities

The Company has ownership interests in 3225 active partnerships, joint ventures or similar arrangements that operate parking facilities, of which 2419 are consolidated under the VIE or voting interest models and 86 are unconsolidated where the Company’s ownership interests range from ~~30-50~~30-50 percent and for which there are no indicators of control. The Company accounts for such investments under the equity method of accounting, and ~~its~~the Company’s underlying share of each investee’s equity isof $12.2 million and $11.9 million as of June 30, 2023 and December 31, 2022, respectively, was included in ~~Equity investments in unconsolidated entities~~Other noncurrent assets within the Condensed Consolidated Balance Sheets. As the operations of these entities are consistent with the Company’s underlying core business operations, the equity in earnings of these investments ~~are~~were included in ~~Parking services revenue—Lease~~Services revenue - lease type contracts within the Condensed Consolidated Statements of Income. The equity in earnings in these related investments ~~which includes earnings of $8.5 million from for our proportionate share of the net gain of an equity method investees' sale of assets for the nine months September 30, 2017, was $0.6 million and $0.7~~were $0.6 million for the three months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, respectively~~2022, and ~~$10.6~~$1.3 million and ~~$1.8~~$1.5 million ~~for~~during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016,~~2022, respectively.

~~In October 2014, the Company entered into an agreement to establish a joint venture with Parkmobile USA, Inc. (“Parkmobile USA”) and contributed all of the~~

Other Noncurrent Assets

Other noncurrent assets and liabilities of its proprietary Click and Park parking prepayment business in exchange for a 30 percent interest in the newly formed legal entity called Parkmobile, LLC (“Parkmobile”). The joint venture of Parkmobile provides on-demand and prepaid transaction processing for on- and off-street parking and transportation services. The contribution of the Click and Park business in the joint venture resulted in a loss of control of the business, and therefore it was deconsolidated from the Company’s financial statements. The Company accounts for its investment in the joint venture with Parkmobile using the equity method of accounting, and its underlying shareconsisted of equity ~~in Parkmobile is included in Equity~~ investments inof unconsolidated entities, within the Condensed Consolidated Balance Sheets. The equity in losses in the Parkmobile joint venture is included in Equity in losses from investment in unconsolidated entity within the Condensed Consolidated Statementsadvances, deposits and cost of ~~Income.~~contracts, net, as of June 30, 2023 and December 31, 2022.

Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of insurance, accrued rent, compensation, contingent consideration, payroll withholdings, property, payroll and other taxes and other accrued expenses as of June 30, 2023 and December 31, 2022.

~~Non-Controlling~~

Noncontrolling Interests

Noncontrolling interests represent the noncontrolling holders’ percentage share of income ~~or losses~~(losses) from the subsidiaries in which the Company holds a ~~majority,~~controlling interest, but less than 100 percent, ownership ~~interest and the~~interest. The results of ~~which~~these subsidiaries are consolidated and included within the Condensed Consolidated Financial Statements.

~~Sale of Business~~

During the ~~third quarter 2015,~~six months ended June 30, 2023, the Company ~~signed an agreement~~recorded a $1.0 million liability related to ~~sell and subsequently sold portions~~its estimate of additional consideration (“contingent consideration") due to a former minority partner that formerly held a noncontrolling interest in a joint venture with the ~~Company’s security business primarily operating~~Company. The Company purchased the minority partner’s interest in the ~~Southern California market to a third-party for a gross sales price of $1.8 million, which resulted~~joint venture in ~~a gain on sale of business of $0.5 million, net of legal and other expenses.~~2020. The assets under the sale agreement met the definition of a business as defined by ASC 805-10-55-4. Cash consideration received during the third quarter 2015, net of legal and other expenses, was $1.0 million, with the remaining consideration for the sale of the business being classified as contingent consideration. Per the sales agreement, the contingent consideration ~~was based~~is contingent on the performance of the ~~business and retention~~operations of ~~current customers over an eighteen-month period ending on February 2017.~~the Bradley International Airport. The contingent consideration is not capped and, if any amount is due, would be payable to the former minority partner in April 2025. The $1.0 million was ~~valued at fair value as~~determined based on a probability weighting of potential payouts and recorded in Additional paid-in capital within the ~~date of sale of the business and resulted in~~Condensed Consolidated Balance Sheets. In addition, the Company ~~recognizing~~recorded a ~~contingent consideration receivable from the buyer in the amount~~deferred tax asset of ~~$0.5 million. The buyer had sixty days from February 2017 to calculate and remit the remaining consideration. The Company received $0.6~~$0.3 million for the final earn out consideration from the buyer during the second quarter of 2017, which resulted in the Company recognizing an additional gain on sale of business of $0.1 million for the nine months ended September 30, 2017. See Note 6. ~~Fair Value Measurement~~ ~~for the fair value of the contingent receivable as of December 31, 2016.~~

~~Interest Rate Swap Transactions~~

In October 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 effectively fixed the interest rate on an amount of variable interest rate borrowings under the Company's credit agreements, originally equal to the Notional Amount at 0.7525% per annum plus the applicable margin rate for LIBOR loans under the Company's credit agreements, determined based upon the Company’s consolidated total debt to EBITDA ratio. The Notional Amount was subject to scheduled quarterly amortization that coincides with quarterly prepayments of principal under the Company's credit agreements. 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 was recognized in earnings as an increase of interest expense. As of September 30, 2017, no ineffectiveness of the hedge has been recognized in interest expense. The Interest Rate Swaps expired on September 30, 2017. See Note 6. ~~Fair Value Measurement~~ ~~for the fair value of the interest rate swap as of December 31, 2016.~~

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

~~Recently Issued Accounting Pronouncements~~

~~Recently Adopted Accounting Pronouncements~~

~~In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09,~~ ~~Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.~~ ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions and their presentation in the financial statements. The new guidance requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled, eliminating additional paid in capital ("APIC") pools. The guidance will also require companies to elect whether to account for forfeitures of share-based payments by (1) recognizing forfeitures of awards as they occur (e.g., when an award does not vest because the employee leaves the company) or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change, as is currently required. These and other requirements of ASU 2016-09 were effective for interim and annual reporting periods beginning after December 15, 2016.

The Company adopted the provisions of ASU 2016-09 in the first quarter of 2017. The impact to the Company's financial position, results of operations, cash flow and financial statement disclosures are as follows:

On a modified retrospective basis, as allowed by ASU 2016-09, the Company elected to account for forfeitures of share-based awards as they occur. As a result, beginning retained earnings includes a $0.3 million adjustment related to the ~~recognition~~contingent consideration during the six months ended June 30, 2023, which was recorded in Additional paid-in capital within the Condensed Consolidated Balance Sheets. The Company will continue to evaluate the criteria for making these payments in the future and adjust the liability when deemed necessary.

Additionally, during the six months ended June 30, 2023, the Company paid a former minority partner $2.2 million per the terms of ~~estimated forfeitures previously not recognized as expense by~~an agreement between the Company and the former minority partner. The Company purchased the former minority partner’s entire noncontrolling interest in a joint venture with the Company as of December 31, ~~2016.~~

~~The Company recognized excess tax benefits of $0.1 million and $0.7 million for~~2022. Per the ~~three and nine months ended September 30, 2017, respectively, related to shares issued and settled with employees during the respective periods.~~

ASU 2016-09 also requires the presentation of excess tax benefits on the statement of cash flows as an operating activity on either a prospective or retrospective basis. The Company elected to apply this guidance on a prospective basis. Prior periods have not been adjusted to reflect this adoption.

There was no significant impact to diluted weighted average shares outstanding for purposes of calculating net income per common share-diluted for the three and nine months ended September 30, 2017, as a resultterms of the ~~adoption.~~

~~In March 2016,~~agreement, the ~~FASB issued ASU No. 2016-07,~~ ~~Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to Equity Method of Accounting~~, which eliminates the requirements to apply the equity method of accounting retrospectively when a reporting entity obtains significant influence over a previously held investment. Under ASU 2016-08, the equity method of accounting should be applied prospectively from the date significant influence is obtained. The new standard also provides specific guidance for available-for-sale securities that become eligible for the equity method of accounting. In those cases, any unrealized gain or loss recorded within accumulated other comprehensive income should be recognized in earnings at the date the investment initially qualifies for the use of the equity method. The new standard is effective for interim and annual periods beginning after December 15, 2016. The Company ~~adopted this standard as of January 1, 2017. The standard did not have an impact on the Company's financial position, results of operation, cash flows and financial statement disclosures.~~

~~In March 2016, the FASB issued ASU No. 2016-05,~~ ~~Derivatives and Hedging (Topic 815)~~: ~~Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships~~. The new guidance clarifies that a change in the counterparty to a derivative contract, in and of itself, does not require the dedesignation of a hedging relationship. An entity will, however, still need to evaluate whether it is probable that the counterparty will perform under contract as part of its ongoing effectiveness assessment for hedge accounting. Therefore, a novation of a derivative to a counterparty with a sufficiently high credit risk could still result in the dedesignation of the hedging relationship. ASU 2016-05 is effective in fiscal years beginning after December 15, 2016, including interim periods within those years. The Company adopted this standard as of January 1, 2017. The standard did not have an impact on the Company's financial position, results of operation, cash flows and financial statement disclosures.

~~Accounting Pronouncements to be Adopted~~

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~. The ASU provides new guidance about income statement classification and eliminates the requirement to separately measure and report hedge ineffectiveness. The entire change in fair value for qualifying hedge instruments included in the effectiveness will be recorded in other comprehensive income (OCI) and amounts deferred in OCI will be reclassified to earnings in the same income statement line item in which the earnings effect of the hedged item is reported. The new guidance also amends the presentation and disclosure requirements. The intention is to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting and increase transparency as to the scope and results of hedging programs. ASU 2017-12 is effective in fiscal years beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. The Company is currently assessing the impact of adopting this standard on the Company's financial position, results of operations, cash flows and financial statement disclosures.

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~. ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 under current goodwill impairment test rules) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (i.e., measure the charge based on the Step 1 analysis under current guidance). The standard will be applied prospectively and is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019 for public business entities ("PBEs") that meet the definition of a Securities and Exchange Commission ("SEC") filer (i.e., for any impairment test performed by calendar-year entities in 2020). Early adoption is permitted for annual and interim goodwill impairment testing dates after January 1, 2017. The Company is currently assessing the impact of adopting this standard on the Company’s financial position, results of operations, cash flows and financial statement disclosures.

~~In January 2017, the FASB issued ASU No. 2017-01,~~ ~~Business Combinations (Topic 805) - Clarifying the Definition of a Business~~. Under ASU 2017-01, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set is not a business. If it’s not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Under current guidance, a business consists of (1) inputs, (2) processes applied to those inputs and (3) the ability to create outputs. ASU 2017-01 is effective for PBE's for fiscal years beginning after December 15, 2017, and interim periods within those years. The ASU will be applied prospectively to any transactions occurring within the period of adoption. The Company does not expect the adoption of this ASU to have a material impact on its financial position, results of operations, cash flows and financial statement disclosures.

~~In November 2016, the FASB issued ASU No. 2016-18,~~ ~~Statement of Cash Flows (Topic 230): Restricted Cash~~. ASU 2016-18 clarifies how entities should present restricted cash and restricted cash equivalents in the statement of cash flows. The guidance requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. The guidance, which is based on a consensus of the Emerging Issues Task Force (EITF), is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted. The Company does not expect the adoption of this ASU to have a material impact on its financial position, results of operations, cash flows and financial statement disclosures.

~~In August 2016, the FASB issued ASU No. 2016-15,~~ ~~Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~. ASU 2016-15 amends the guidance in ASC 230 related to the classification of certain cash receipts and payments in the statement of cash flows. The primary purpose of the ASU is to reduce the diversity in practice that has resulted from the lack of consistent principles on this topic. The amendment adds or clarifies several statement of cash flow classification issues including: (i) debt prepayment or debt extinguishment costs, (ii) settlement of certain zero-coupon debt instruments, (iii) contingent consideration payments, (iv) proceeds from the settlement of insurance claims, (v) proceeds from the settlement of corporate-owned life insurance policies, (vi) distributions received from equity method investments, (vii) beneficial interest in securitization transactions, and (viii) separately identifiable cash flows and application of the predominance principle. The standard is effective for interim and annual reporting periods beginning after December 15, 2017. The Company does not expect the adoption of this ASU to have a material impact on its financial position, results of operations, cash flows and financial statement disclosures.

~~In June 2016, the FASB issued ASU No. 2016-13,~~ ~~Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~. The standard significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today’s “incurred loss” approach with an “expected loss” model for instruments measured at amortized cost. For available-for-sale debt securities, entities will be required to record allowances rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently assessing the impact of adopting this standard on the Company’s financial position, results of operations, cash flows and financial statement disclosures.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842). ASU 2016-2 requires lessees to move most leases~~make additional payments to the ~~balance sheet and recognize expense, similar~~former minority partner over a ten-year period, amounting to ~~current accounting guidance, on~~a total of $4.5 million. The $2.2 million that was paid during the income statement. Additionally, the classification criteria and the accounting for sales-type and direct financing leases is modified for lessors. Under ASU 2016-2, all entities will classify leases to determine: (i) lease-related revenue and expense and (ii) for lessors, amount recorded on the balance sheet. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative periodsix months ended June 30, 2023 was included in ~~the financial statements, with full retrospective application being prohibited. ASU 2016-2 is effective for interim and annual reporting periods beginning after December 15, 2018. These~~Accrued and other changes to accounting for leases under ASU 2016-02 are currently being evaluated by the Company for impacts to the Company's financial position, results of operations, cash flows and financial statement disclosures.

~~In January 2016, the FASB issued ASU No. 2016-01,~~ ~~Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~. ASU 2016-1 amends various areas of the accounting for financial instruments. Key provisions of the amendment currently being evaluated by the Company require (i) equity investments to be measured at fair value (except those accounted for under the equity method), (ii) the simplification of equity investment impairment

determination, (iii) certain changes to the fair value measurement of financial instruments measured at amortized cost, (iv) the separate presentation, in other comprehensive income, of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (given certain conditions), and (v) the evaluation for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the Company's other deferred tax assets. ASU 2016-01 is effective for interim and annual reporting periods beginning after December 15, 2017. The Company does not expect the adoption of this ASU to have a material impact on its financial position, results of operations, cash flows and financial statement disclosures.

~~In May 2017, the FASB issued ASU No. 2017-10,~~ ~~Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services.~~ ASU 2017-10 clarifies how operating entities should determine the customer of operation services for transactions within the scope of this guidance. US GAAP does not currently address how an operating entity should determine the customer of the operation services for transactions within the scope of Topic 853. The amendment eliminates diversity in practice by clarifying that the grantor is the customer of the operation services in all cases for those arrangements. The amendments in this update should be adopted at the same time as adoption of Topic 606, as defined further below. Early adoption is permitted. The Company is currently assessing the impact of adopting this standard on the Company's financial position, results of operations, cash flows and financial statement disclosures, in conjunction with the adoption of ASU No. 2014-09, ~~Revenue from Contracts with Customers (Topic 606)~~.

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606). Since the release of ASU 2014-09, the FASB has issued the following additional ASUs updating the topic:~~

~~In December 2016, the FASB issued ASU No. 2016-20,~~ ~~Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers~~

~~In May 2016, the FASB issued ASU No. 2016-12,~~ ~~Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients~~

~~In April 2016, the FASB issued ASU No. 2016-10,~~ ~~Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing~~

~~In March 2016, the FASB issued ASU No. 2016-08,~~ ~~Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net).~~

~~In August 2015, the FASB issued ASU No. 2015-14,~~ ~~Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date~~

Collectively these standards create new accounting guidance for revenue recognition that supersedes most existing revenue recognition rules, including most industry specific revenue recognition guidance. 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. Topic 606 also provides new guidance on the recognition of certain costs related to customer contracts, and changes the FASB guidance for revenue-related issues, such as how an entity is required to consider whether revenue should be reported gross or net basis. The amendments are effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2017.

The Company's process for implementing Topic 606 includes, but is not limited to, identifying contracts within the scope of the standard, identifying distinct performance obligations within each contract, and applying the new guidance for measuring and recognizing revenue, to each performance obligation. The Company is also evaluating new disclosure requirements and identifying appropriate changes to business processes and controls to support recognition and disclosure under the new guidance. ASU No. 2017-10, Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services issued in May 2017, clarified how operating entities should determine the customer of operation services for transactions within the scope of this guidance. The Company has determined that revenue generated from service concession arrangements, which are currently accounted for as leasing type of arrangements, will be accounted for under the guidance of Topic 606 upon adoption of Topic 853 and will be adopted concurrently with Topic 606. The Company expects that certain expenses related to these arrangements, primarily recorded within Cost of parking services, will be presented as a reduction of revenue upon adoption of Topic 853. The Company is currently evaluating the impact of this change to the Company's financial position, results of operations, cash flows and financial statement disclosures. The Company expects to complete the implementation assessment of Topic 606 and Topic 853 in the fourth quarter of 2017 and will adopt Topic 606 using the modified retrospective method.

~~2. Legal and Other Commitments and Contingencies~~

The Company is subject to claims and litigation 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 potential liabilities 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.

~~Contracts Acquired in the Central Merger~~

Certain lease contracts acquired in the Central Merger (as defined below) include provisions allocating to the Company responsibility for the cost of certain structural and other repairs required to be made to the leased property, including improvement and repair

costs arising as a result of ordinary wear and tear. The Company recorded nil and $0.1 million of costs for the three months ended September 30, 2017 and 2016, respectively, and $0.1 million and $0.4 million for the nine months ended September 30, 2017 and 2016, respectively, (net of expected recoveries of the total cost recognized by the Company through the applicable indemnity discussed further below and in Note 3. ~~Central Merger and Restructuring, Merger and Integration Costs~~) in Cost of parking services—Lease contracts within the Condensed Consolidated Statements of Income for structural and other repair costs related to certain lease contracts acquired in the Central Merger, whereby the Company has expensed repair costs for certain leases and engaged third-party general contractors to complete certain structural and other repair projects, and other indemnity related costs. Based on information available at this time, the Company believes that it has completed and incurred all additional costs for certain structural and other repair costs for certain lease contracts acquired in the Central Merger ("Structural and Repair Costs"). Additionally and as further described in Note 3. ~~Central Merger and Restructuring, Merger and Integration Costs,~~ ~~the Company settled all outstanding matters between the former Central stockholders and the Company.~~

~~Holten Settlement~~

In March 2010, John V. Holten, a former indirect controlling shareholder of the Company, filed a lawsuit against the Company in the United States District Court, District of Connecticut. Mr. Holten was terminated as the Company's chairman in October 2009. The lawsuit alleged breach of his employment agreement and claimed that the agreement entitled Mr. Holten to payments worth more than $3.8 million. The Company filed an answer and counterclaim to Mr. Holten's lawsuit in 2010.

In March 2016, the Company and Mr. Holten settled all claims in connection with the original lawsuits ("Holten Settlement"). Per the settlement, the Company paid Mr. Holten $3.4 million, of which $1.9 million was recovered by the Company through the Company's directors and officer's liability insurance policies. The Company recognized an expense, net of insurance recoveries, related to the Holten Settlement of $1.5 million for the nine months ended September 30, 2016.

~~3. Central Merger and Restructuring, Merger and Integration Costs~~

On October 2, 2012 ("Closing Date"), the Company completed the 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 $217.7 million of Central's debt, net of cash acquired. Additionally, the Agreement and Plan of Merger dated February 28, 2012 with respect to the Central Merger ("Merger Agreement") provided that Central's former stockholders were entitled to receive cash consideration (the "Cash Consideration") in the amount equal to $27.0 million plus, if and to the extent the Net Debt Working Capital (as defined below) was less than $275.0 million (the "Lower Threshold") as of September 30, 2012, the amount by which the Net Debt Working Capital was below such amount (such sum, the "Cash Consideration Amount") to be paid three years after closing, to the extent the $27.0 million was not used to satisfy indemnity obligations pursuant to the Merger Agreement.

Pursuant to the Merger Agreement, the Company was 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 working capital (as determined in accordance with the Merger Agreement) (the "Net Debt Working Capital") exceeded $285.0 million (the "Upper Threshold") as of September 30, 2012 and (ii) for certain defined adverse consequences as set forth in the Merger Agreement (including with respect to Structural and Repair Costs). Pursuant to the Merger Agreement, Central's former stockholders were required to satisfy certain indemnity obligations, which were capped at the Cash Consideration Amount (the "Capped Items") only through a reduction of the Cash Consideration. For certain other indemnity obligations set forth in the Merger Agreement, which were not capped at the Cash Consideration Amount (the "Uncapped Items"), including the Net Debt Working Capital indemnity obligations described above, Central's former stockholders had the ability to satisfy any amount payable pursuant to such indemnity obligations as follows (provided that the Company reserves the right to reject the cash and stock alternatives available to the Company and choose to reduce the Cash Consideration):

~~Central's former stockholders could elect to pay such amount with cash;~~

~~Central's former stockholders could elect to pay such 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 could elect to reduce the $27.0 million cash consideration by such amount, subject to the condition that the cash consideration remains at least $17.0 million to cover Capped Items.

Following the Closing Date, the Company and Central's former stockholders exchanged notices regarding indemnification matters, including with respect to the calculation of Net Debt Working Capital, and the Company made adjustments for known matters as they arose, although Central’s former stockholders may not have agreed to the aggregate of such adjustments made by the Company. During such time, Central’s former stockholders continually requested additional documentation supporting the Company’s indemnification claims, including with respect to the Company’s calculation of Net Debt Working Capital. Furthermore, following the Company's notices of indemnification matters, the representative of Central's former stockholders indicated that they might make additional inquiries and raise issues with respect to the Company's indemnification claims (including, specifically, as to Structural and Repair Costs) and that they might assert various claims of their own relating to the Merger Agreement.

In early 2015, the Company and Central’s former stockholders engaged an independent public accounting firm for ultimate resolution, through binding arbitration, regarding their dispute as to the Company’s calculation of Net Debt Working Capital.

On February 19, 2016, the Company and Central’s former stockholders received a non-appealable and binding decision from the independent public accounting firm indicating that Net Debt Working Capital as of September 30, 2012 was $291.6 million, or $6.6 million above the Upper Threshold. Furthermore, as part of the independent public accounting firm’s decision over the calculation of Net Debt Working Capital as of September 30, 2012, it was determined by the independent public accounting firm and the Company that $1.5 million of Net Debt Working Capital claims were more appropriately claimable as an adverse consequence indemnification claim, as defined in the Merger Agreement. As such and in conjunction with the independent public accounting firm’s decision on Net Debt Working Capital, the Company (i) reclassified $1.5 million of indemnification claims from the Net Debt Working Capital calculation to indemnification claims for certain adverse consequences; and (ii) recognized an expense of $1.6 million ($0.9 million, net of tax) in General and administrative expenses for certain of the other amounts disallowed under the Net Debt Working Capital calculation as of and for the year ended December 31, 2015 respectively. The independent public accounting firm also determined that an additional $1.6 million of Net Debt Working Capital claims were disallowed; however, these Net Debt Working Capital amounts claimed by the Company were not previously recognized by the Company as a cost recovery given their contingent nature and since these claims were not previously recognized as an expense by the Company, and therefore the independent public accounting firm’s decision to disallow these claims had no impact to the Company's consolidated financial statements as of and for the year ended December 31, 2015.

On March 11, 2016, the Company provided notification to Central's former stockholders of an additional indemnity claim for $1.6 million and further provided notification that its indemnity claims for certain defined adverse consequences aggregated to $26.5 million. The additional $1.6 million of indemnity claim made by the Company in the March 11, 2016 letter was not recognized as a cost recovery given the contingent nature and since this claim was not previously recognized by the Company as an expense.

~~As previously discussed in Note 2.~~ ~~Legal and Other Commitments and Contingencies~~, certain lease contracts acquired in the Central Merger include provisions allocating to the Company responsibility for all or a defined portion of the costs of certain structural and other repair costs required on the property, including improvement and repair costs arising as a result of ordinary wear and tear. The Company reduced the Cash Consideration Amount by $6.6 million, representing the amount Net Debt Working Capital exceeded the Upper Threshold, and $18.8 million, representing the amount of indemnified claims for certain adverse consequences (including but not limited to Structural and Repair Costs) recognized by the Company as of September 30, 2016. Additionally, the Company submitted $7.7 million of additional indemnity claims for certain adverse consequences (including but not limited to Structural and Repair Costs) to Central's former stockholders, including claims as set for in the March 11, 2016 letter, but did not recognize these indemnity claims as a receivable or offset to the Cash Contingent Amount with a corresponding gain or reduction of costs incurred by the Company, as these claims were contingent in nature or represented costs which the Company had not yet incurred but which met the requirements of the indemnification provisions established in the Merger Agreement.

On September 27, 2016, the Company and Central's former stockholders agreed-upon non-binding terms to settle all outstanding matters between the parties relating to the Central Merger ("Settlement Terms") and on December 15, 2016 the Company and Central's former stockholders executed a settlement agreement ("Settlement Agreement") to settle all outstanding matters between the parties relating to the Central Merger (including the Company's claims as described above). Pursuant to the Settlement Agreement, the Company paid Central's former stockholders $2.5 million in aggregate, which effectively reduced the $27.0 million of Cash Consideration that would have been payable by the Company to Central's former stockholders under the Merger Agreement by $24.5 million. As a result of the Settlement Terms, the Company recorded $0.8 million ($0.5 million, net of tax) in General and administrative expense within the Condensed Consolidated Statements of Income in the third quarter 2016. Additionally and pursuant to the Settlement Agreement, the parties fully released one another from claims relating to the Central Merger, and therefore the Company has no further obligation to pay any additional Cash Consideration Amount to Central's former stockholders.

~~Restructuring, Merger and Integration Costs~~

~~Since the Central Merger, the Company has incurred certain restructuring, acquisition and integration costs associated with the transaction that were expensed as incurred, which include:~~

costs (primarily severance and relocation costs) related to a series of Company initiated workforce reductions to increase organizational effectiveness and provide cost savings that can be reinvested in the Company's growth initiatives during 2016 and second quarter 2017 (included within General and administrative expenses within the Condensed Consolidated Statements of Income);

costs related to the Selling Stockholders' underwritten public offerings of common stock of the Company incurred during the second quarter of 2017 (included within General and administrative expenses within the Condensed Consolidated Statements of Income); and

costs related to the write-off of certain fixed assets and the acceleration of certain software assets directly as a result of the Central Merger (included within Depreciation and amortization within the Condensed Consolidated Statements of Income).

An accrual for restructuring, merger and integration costs of $3.0 million (of which $2.2 million is included in Compensation and payroll withholdings, $0.1 million in Accrued expenses and $0.7 million in Other long-termcurrent liabilities within the Condensed Consolidated Balance Sheets) and $5.4 million (of which $3.6 million is included in Compensation and payroll withholdings, $0.3 million in Accrued expenses and $1.5 million in Other long-term liabilities within the Condensed Consolidated Balance Sheets)Sheets as of ~~September 30, 2017 and~~ December 31, ~~2016, respectively.~~2022.

~~The aggregate costs associated~~

Goodwill

Goodwill represents the excess of the purchase price paid over the fair value of net assets acquired. In accordance with the ~~restructuring, merger and integration costs are summarized in~~Financial Accounting Standards Board's ("FASB") authoritative accounting guidance on goodwill, the ~~following table:~~

Three Months Ended Nine Months Ended
(millions) (unaudited) September 30, 2017
September 30, 2016 September 30, 2017
September 30, 2016
General and administrative expenses $ —

$ 0.2
$ 1.1

$ 1.1
Depreciation and amortization —

—
—

2.4
Total $ —

$ 0.2
$ 1.1

$ 3.5

~~4. Other Intangible Assets, net~~

~~The following presents a summary of other intangible assets, net:~~

September 30, 2017 (unaudited) December 31, 2016
(millions) Weighted
Average
Life (Years) Acquired
Intangible
Assets,
Gross (1) Accumulated
Amortization Acquired
Intangible
Assets,
Net Acquired
Intangible
Assets,
Gross (1) Accumulated
Amortization Acquired
Intangible
Assets,
Net
Covenant not to compete 1.8 $ 0.9
$ (0.9 ) $ —
$ 0.9
$ (0.9 ) $ —
Trade names and trademarks 2.3 9.8
(9.7 ) 0.1
9.8
(9.6 ) 0.2
Proprietary know how 2.3 34.7
(34.6 ) 0.1
34.7
(32.6 ) 2.1
Management contract rights 11.7 81.0
(25.8 ) 55.2
81.0
(22.0 ) 59.0
Acquired intangible assets, net (2) 11.6 $ 126.4
$ (71.0 ) $ 55.4
$ 126.4
$ (65.1 ) $ 61.3

~~(1) Excludes the original cost and accumulated amortization of fully amortized intangible assets.~~

~~(2) Intangible assets have estimated useful lives between one and nineteen years.~~

Three Months Ended
Nine Months Ended
(millions) (unaudited) September 30, 2017
September 30, 2016
September 30, 2017
September 30, 2016
Amortization expense related to other intangible assets included in depreciation and amortization $ 1.4

$ 3.8

$ 5.9

$ 11.4

~~5. Goodwill~~

~~The amounts for~~Company evaluates goodwill ~~and changes to carrying value by operating segment are as follows:~~

(millions) (unaudited) Region
One Region
Two Total
Balance as of December 31, 2016 (1) $ 368.7
$ 62.7
$ 431.4
Foreign currency translation 0.3
—
0.3
Balance as of September 30, 2017 $ 369.0
$ 62.7
$ 431.7

(1) Due to the new segment reporting effective in the first quarter of 2017, goodwill allocated to previous reporting units of Region One and Region Three have been aggregated into a single operating segment, Region One. See also Note 14. ~~Business Unit Segment Information~~ ~~for further discussion on certain organizational and executive leadership changes.~~

~~The Company tests goodwill at least annually~~ for impairment ~~(the~~on an annual basis, or more often if events or circumstances change that could cause goodwill to become impaired. The Company has elected to ~~annually test for potential~~assess the impairment of goodwill annually on ~~the first day of the fourth quarter) and tests more frequently~~October 1 or at an interim date if ~~indicators are present~~there is an event or ~~changes~~change in circumstances ~~suggest that~~indicating the carrying value may not be recoverable. The goodwill impairment may exist. The indicators include, among others, declines in sales, earnings or cash flows or the development of a material adverse change in business climate. The Company assesses goodwill for impairmenttest is performed at the reporting unit ~~level, which is defined as an operating segment or one level below an operating segment, referred to as a component.~~

Due to a change in the Company’s segment reporting effective in the first quarter of 2017, the goodwill allocated to certain previous reporting units have been aggregated into a single operating segment. See also Note 14. ~~Business Unit Segment Information~~ ~~for further disclosure on the Company’s change in reporting segments effective in the first quarter of 2017.~~

As a result of the change in internal reporting segment information, the Company completed an interim quantitative impairment analysis (Step One) for goodwill as of January 1, 2017 and concluded that the estimated fair values of each oflevel; the Company's reporting units ~~exceeded~~represent its operating segments, consisting of Commercial and Aviation. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the use of acquired assets or the Company’s business strategy, and significant negative industry or economic trends.

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The Company may perform a qualitative, rather than quantitative, assessment to determine whether it is more likely than not the fair value of a reporting unit is less than its carrying ~~amount~~amount. If the Company determines impairment is present, the Company would need to perform a quantitative assessment. The determination of ~~net assets assigned to the respective~~fair value of a reporting unit asutilizes cash flow projections that assume certain future revenue and cost levels, comparable marketplace data, comparable company market valuations, assumed discount rates based upon current market conditions and other valuation factors, all of ~~January 1, 2017~~which involve the use of significant judgment and immediately prior to the reorganization and therefore no further testing was required (Step Two). In conducting the January 1, 2017 goodwill Step One analysis, the Company analyzed actual and projected growth trends of the reporting units, gross margin, operating expenses and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") (which also includes forecasted five-year income statement and working capital projection, a market-based weighted average cost of capital and terminal values after five years).estimates. The Company also assesses critical areas that may impact its business, including economic conditions, market related exposures, competition, changes in service offerings and changes in key personnel. ~~As part~~

Other Intangible Assets, net

Other intangible assets represent assets with finite lives that are amortized on a straight-line basis over their estimated useful lives. The Company evaluates other intangible assets on a periodic basis to determine whether events or circumstances warrant a revision to their remaining useful lives. In addition, other intangible assets are reviewed for impairment when circumstances change that would indicate the carrying value may not be recoverable. Assumptions and estimates about future values and remaining useful lives of intangible assets are complex and subjective, and can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors, such as changes in the Company's business strategy and forecasts. Although the Company believes the historical assumptions and estimates are reasonable and appropriate, different assumptions and estimates could materially impact reported financial results.

Long-Lived Assets

The Company evaluates long-lived assets, including ROU assets, leasehold improvements, equipment and construction/development in progress, for impairment whenever events or circumstances indicate that the carrying value of an asset or asset group may not be recoverable. The Company groups assets at the lowest level for which cash flows are separately identified in order to measure an impairment. Events or circumstances that would result in an impairment review include a significant change in the use of an asset, the planned sale or disposal of an asset, or a projection that demonstrates continuing losses associated with the use of a long-lived asset or asset group. Recoverability of assets to be held and used is measured by a comparison of the ~~January 1, 2017 goodwill assessment,~~carrying amount of the asset or asset group to future undiscounted cash flows expected to be generated by the asset or asset group. If the asset or asset group is determined to be impaired, the impairment recognized is measured by the amount by which the carrying value of the asset or asset group exceeds its fair value.

Assumptions and estimates used to determine cash flows in the evaluation of impairment and the fair values used to determine the impairment are subject to a degree of judgment and complexity. Any future changes to the assumptions and estimates resulting from changes in actual results or market conditions from those anticipated may affect the carrying value of long-lived assets or asset groups and could result in impairment charges. Future events that may result in impairment charges include economic volatility or other factors that could decrease revenues and profitability of existing locations and changes in the cost structure of existing facilities, such as increasing labor and benefit costs.

Foreign Operations

The Company ~~engaged a third-party to evaluate its reporting units' fair values. No impairment was~~has foreign operations in Canada, Puerto Rico, the United Kingdom and India. Assets and liabilities of the Company’s foreign operations are translated into U.S. dollars at the rate in effect on the respective balance sheet date, while income and expenses are translated at the average rates during the respective periods. Translation adjustments resulting from the fluctuations in exchange rates are recorded as a ~~result~~separate component of accumulated other comprehensive loss in stockholders’ equity within the Condensed Consolidated Balance Sheets, while transaction gains and losses are recorded within the Condensed Consolidated Statements of Income. Deferred taxes are not recorded on cumulative foreign currency translation adjustments when the Company expects the foreign earnings to be permanently reinvested.

2. Acquisitions

On October 11, 2022, the Company acquired K M P Associates Limited ("KMP"), a United Kingdom based software and technology provider serving aviation and commercial parking clients, primarily through its Aeroparker technology, throughout the United States and Europe, for approximately $13.8 million, less cash acquired of $0.9 million, and assumed KMP's debt of $0.3 million. Immediately following the acquisition, the Company repaid all of the ~~interim goodwill impairment test performed.~~

~~6. Fair Value Measurement~~

~~Fair Value Measurements-Recurring Basis~~

~~In determining fair value,~~debt assumed. KMP's operations are included in the Aviation segment.

On November 10, 2022, the Company ~~uses various valuation approaches within~~acquired certain assets of DIVRT, Inc. ("DIVRT"), a developer of innovative software and technology solutions that enables frictionless parking capabilities, for approximately $17.6 million. In addition, the Company may be required to pay the former owner of DIVRT a maximum amount of $7.0 million in contingent consideration if certain targets related to the number of the Company's locations using the DIVRT technology are met by October 31, 2025. Based on a probability weighting of potential payouts, the Company accrued $4.0 million in projected contingent consideration as of the acquisition date, which was determined to be Level 3 under the fair value ~~measurement framework. Fair~~hierarchy. The Company's estimate of the potential payout increased to $4.3 million from $4.1 million as of June 30, 2023 and December 31, 2022, respectively. The increases were due to the changes in the present value ~~measurements~~of the estimated payout. The Company recorded $0.1 million and $0.2 million of operating expense within the Condensed Consolidated Statements of Income during the three and six months ended June 30, 2023, respectively, related to the change in the present value of the contingent consideration. The Company will continue to evaluate the potential payouts in the

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future and adjust the contingent consideration for any changes in the estimated fair value each reporting period. DIVRT's operations are ~~determined~~included in the Commercial segment.

Both acquisitions enhance the Company's position as a global provider of frictionless technology solutions that are independent of the Company's legacy parking management and transportation related operations. The acquisitions of KMP and DIVRT have been accounted for as business combinations, and the assets acquired and liabilities assumed were recorded at their estimated fair values as of the acquisition dates. Goodwill was measured as the excess of the consideration over the assets acquired, including other intangible assets, less liabilities assumed, based on their estimated fair values at the acquisition dates. Tax deductible goodwill related to the acquisitions was $10.1 million. The results of each acquisition's operations are reflected in the Condensed Consolidated Financial Statements from the date of acquisition.

During the three and six months ended June 30, 2023, the acquisitions contributed $1.6 million and $3.2 million, respectively, of services revenue and losses before income taxes of $0.8 million and $1.7 million, respectively, primarily due to the amortization related to the acquired other intangible assets.

The Company believes the information gathered to date provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, however, the provisional measurements of fair value for the other intangible assets and goodwill of KMP and DIVRT are subject to change. As a result, during the measurement period, which may be up to one year from the acquisition dates, adjustments to assets and liabilities assumed will be recorded with corresponding adjustments to goodwill. The Company expects to complete the purchase price allocations for the KMP and DIVRT acquisitions as soon as practicable but no later than one year from the acquisition dates.

The estimated fair values of the assets acquired and liabilities assumed based on the information that was available as of the acquisition dates were as follows:


(millions)
Cash and cash equivalents	$	0.9
Accounts receivable		0.7
Prepaid expenses and other current assets		0.1
Other intangible assets		21.7
Goodwill		16.3
ROU asset		0.1
Accounts payable		(0.1	)
Accrued and other current liabilities		(1.5	)
Deferred tax liability		(2.5	)
Other long-term borrowings		(0.3	)
Net assets acquired and liabilities assumed		35.4
Less: cash and cash equivalents acquired		0.9
Less: contingent consideration payable		4.0
Net cash paid	$	30.5

In addition to the acquisitions discussed above, on April 18, 2022, the Company acquired certain other intangible assets for a purchase price of $1.8 million.

As discussed above, during the year ended December 31, 2022, the Company recorded additions to other intangible assets of $23.5 million. The other intangible assets acquired were recorded at their estimated fair value on the acquisition dates as follows:


(millions)	Estimated Life	Estimated Fair Value
Proprietary know how	7.4 Years	$	17.3
Customer relationships	5.8 Years		3.2
Trade names	13.2 Years		1.8
Covenant not to compete	4.2 Years	1.2
Estimated fair value of identified intangible assets		$	23.5

The fair values of other intangible assets acquired were determined to be Level 3 under the fair value hierarchy. The fair value estimate for all identifiable intangible assets is based on 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~~most advantageous market 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 asset.

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, 2017 and December 31, 2016:~~

Fair Value Measurement
September 30, 2017 (unaudited) December 31, 2016
(millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
Assets

Prepaid expenses and other

Contingent consideration receivable $ —
$ —
$ —
$ —
$ —
$ 0.5
Interest rate swap —
—
—
—
0.1
—
Total $ —
$ —
$ —
$ —
$ 0.1
$ 0.5

~~Interest Rate Swaps~~

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 they meet certain documentary and analytical requirements to qualify for hedge accounting treatment. Hedge accounting creates the potential for an income statement match between the changes inestimated fair values of ~~derivatives and~~Proprietary know how were determined using the ~~changes in cost of~~multi-period excess earnings method under 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~~income approach utilizing projected financial information for each technology 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 Statements of Income at such time, with any subsequent changes in fair value recognized currently in earnings. Fair values of derivatives are determined based on quoted prices for similar contracts.was acquired. The ~~effective portion of the change in~~estimated fair value of the ~~interest rate swap is reported in Accumulated other comprehensive~~customer relationships was determined using the distributor method and excess earnings method under the income ~~a component of Stockholders' equity, and 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~~approach. The estimated fair values of the ~~hedged transactions are not completely offset by changes~~trade names were determined using the relief from royalty savings method under the income approach. The Company considered the return on assets and market comparable methods when estimating an appropriate royalty rate for the trade names.

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3. Leases

The Company leases parking facilities, office space, warehouses, vehicles and equipment and determines if an arrangement is a lease at inception. The Company subleases certain real estate to third parties. The Company's sublease portfolio consists of operating leases for space within leased parking facilities.

As discussed 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 in earnings when incurred. No ineffectiveness was recognized during the nine months ended September 30, 2017 and 2016. The Interest Rate Swaps expired on September 30, 2017.

~~Contingent Consideration Receivable~~

~~During the third quarter 2015, certain assets, which met the definition of a business, were sold to a third-party in an arms-length transaction (see also~~ Note 1. Significant Accounting Policies and Practices ~~for further detail on the sale of the business). Under the sales agreement, 40% of the sale proceeds from the buyer was contingent in nature and scheduled to be received by~~, the Company ~~within sixty days~~tests ROU assets when impairment indicators are present.

The components of February 2017 or eighteen months from the date of the transaction; however, the buyer had sixty days from February 2017 to calculate and remit the remaining consideration, with the contingent consideration being based on financial and operational performance of the business sold. During the second quarter 2017, the Company received $0.6 million from the buyer for the final earn out consideration, which resulted in the Company recognizing an additional gain on sale of business of $0.1 million. The significant inputs historically used to derive the Level 3 fair value contingent consideration receivable was the probability of reaching certain revenue growth of the business sold and retention of current customers over an eighteen month period. The fair value of the contingent receivable was $0.5 million as of December 31, 2016. There was no fair value of the contingent consideration receivable as of September 30, 2017.

~~Nonrecurring Fair Value Measurements~~

Certain assets are measured at fair value on a nonrecurring basis; that is, the assets are not 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, intangibleROU assets and ~~leasehold improvements, equipment~~lease liabilities and ~~construction in progress are subsequently measured at fair value when there is an indicator of impairment and recorded at fair value only when 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 nine months ended September 30, 2017 and 2016.

~~Financial Instruments Not Measured at Fair Value~~

~~The following presents the carrying amounts and estimated fair values of financial instruments not measured at fair value in~~classification within the Condensed Consolidated Balance Sheets ~~at September~~as of June 30, ~~2017~~2023 (unaudited) and December 31, ~~2016:~~ 2022 were as follows:


(millions)	Classification	June 30, 2023		December 31, 2022
Assets
Operating	Right-of-use assets	$	170.7	$	166.9
Finance	Property and equipment, net		23.7		24.4
Total leased assets		$	194.4	$	191.3
Liabilities
Current
Operating	Short-term lease liabilities	$	57.3	$	60.2
Finance	Current portion of long-term borrowings		7.1		7.2
Noncurrent
Operating	Long-term lease liabilities		156.3		158.5
Finance	Long-term borrowings, excluding current portion		15.7		16.0
Total lease liabilities		$	236.4	$	241.9

The components of lease cost and classification within the Condensed Consolidated Statements of Income during the three and six months ended June 30, 2023 and 2022 (unaudited) were as follows:


		Three Months Ended				Six Months Ended
(millions)	Classification	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Operating lease cost (a)(b)	Cost of services - lease type contracts	$	15.2	$	14.6	$	29.0	$	29.7
Short-term lease (a)	Cost of services - lease type contracts		5.3		5.3		10.2		10.4
Variable lease	Cost of services - lease type contracts		22.8		18.8		41.0		33.3
Operating lease cost			43.3		38.7		80.2		73.4
Finance lease cost
Amortization of leased assets	Depreciation and amortization		1.7		1.4		3.3		2.7
Interest on lease liabilities	Interest expense		0.3		0.3		0.6		0.5
Net lease cost		$	45.3	$	40.4	$	84.1	$	76.6

(a)

Included expense related to leases for office space recorded in General and administrative expenses within the Condensed Consolidated Statements of Income of $0.9 million and $1.9 million during the three and six months ended June 30, 2023 and 2022, respectively.

September 30, 2017 (unaudited) December 31, 2016
(millions) Carrying
Amount Fair Value Carrying
Amount Fair Value
Cash and cash equivalents $ 23.4
$ 23.4
$ 22.2
$ 22.2
Long-term borrowings

Restated Credit Facility, net of original discount on borrowings and deferred financing costs $ 172.0
$ 172.0
$ 193.4
$ 193.4
Other obligations 1.4
1.4
1.7
1.7
(b)

Included rent concessions amounting to $1.2 million and $2.5 million during the three and six months ended June 30, 2023, respectively, and $1.5 million and $3.7 million during the three and six months ended June 30, 2022, respectively.

Sublease income was $0.5 million and $0.3 million during the three months ended June 30, 2023 and 2022, respectively, and $1.0 million and $0.6 million during the six months ended June 30, 2023 and 2022, respectively.

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Maturities, lease term and discount rate information of lease liabilities as of June 30, 2023 (unaudited) were as follows:


(millions)	Operating Leases Liabilities			Finance Leases Liabilities			Total
2023	$	35.8		$	4.4		$	40.2
2024		59.1			7.0			66.1
2025		46.5			5.1			51.6
2026		35.6			3.8			39.4
2027		22.8			2.1			24.9
After 2027		48.7			3.1			51.8
Total lease payments		248.5			25.5			274.0
Less: Imputed interest		34.9			2.7			37.6
Present value of lease liabilities	$	213.6		$	22.8		$	236.4
Weighted-average remaining lease term (years)		5.2			4.2
Weighted-average discount rate		5.4	%		5.1	%

Future sublease income for the above periods shown was excluded, as the amounts are not material.

Supplemental cash flow information related to leases during the six months ended June 30, 2023 and 2022 (unaudited) was as follows:


	Six Months Ended
(millions)	June 30, 2023		June 30, 2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows related to operating leases	$	44.2	$	46.7
Operating cash outflows related to interest on finance leases		0.5		0.5
Financing cash outflows related to finance leases		3.8		5.4
Leased assets obtained in exchange for new operating liabilities		31.2		5.8
Leased assets obtained in exchange for new finance lease liabilities		3.5		4.9

4. Revenue

The ~~carrying value~~Company recognizes revenue when control of ~~cash~~the promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services.

Contracts with customers and clients

The Company accounts for a contract when it has the approval and commitment from both parties, the rights of the parties are identified, the payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Once a contract is identified, the Company evaluates whether the contract should be accounted for as more than one performance obligation. Substantially all of the Company’s revenues come from the following two types of arrangements: Lease type and Management type contracts.

Lease type contracts

Lease type contract revenue includes gross receipts (net of local taxes), consulting fees, e-commerce technology fees, customer convenience fees, gains on sales of contracts and payments for exercising termination rights. Performance obligations related to lease type contracts include parking for transient and monthly parkers. Revenue is recognized over time as the Company provides services. Under lease type arrangements, the Company pays the property owner a fixed base rent, percentage rent that is tied to the facility’s financial performance, or a combination of both. The Company operates the parking facility and is responsible for most operating expenses, but typically is not responsible for major maintenance, capital expenditures or real estate taxes. Certain expenses, primarily rental expense for the contractual arrangements that meet the definition of service concession arrangements, are recorded as a reduction of Service revenue – lease type contracts.

Management type contracts

Management type contract revenue consists of management fees, including both fixed and performance-based fees, and in some cases e-commerce technology fees, customer convenience fees and monthly subscription fees related to the use of the Company's technology solutions. In exchange for this consideration, the Company may have a bundle of integrated services that comprise one performance obligation and include services such as managing the facility, as well as ancillary services such as accounting, equipment leasing, consulting, insurance and other value-added services. Management type contract revenues do not include gross customer collections at the managed facilities as these revenues belong to the property owners rather than the Company. Management type contracts generally provide the Company with management fees regardless of the operating performance of the underlying facilities. Revenue is recognized over time as the Company provides services.

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Service concession arrangements

Certain expenses (primarily rental expense), as well as depreciation and amortization, related to service concessions arrangements for lease type contracts, are recorded as a reduction of Service revenue – lease type contracts.

The Company recorded cost concessions related to service concession arrangements (recognized as an increase to revenue) of $2.7 million and $5.6 million during the three and six months ended June 30, 2023, respectively, and $2.9 million and $6.1 million during the three and six months ended June 30, 2022, respectively.

Disaggregation of revenue

The Company disaggregates its revenue from contracts with customers by type of arrangement for each of the reportable segments. The Company has concluded that such disaggregation of revenue best depicts the overall economic nature, timing and uncertainty of the Company's revenue and cash ~~equivalents approximates their fair value~~flows affected by the economic factors of the respective contractual arrangement. See Note 13. Segment Information for further information on disaggregation of the Company's revenue by segment.

Performance obligations

As of June 30, 2023, the Company had $199.2 million related to performance obligations that were unsatisfied or partially unsatisfied for which the Company expects to recognize revenue. This amount excludes variable consideration primarily related to contracts where the Company and customer share the gross revenues or operating profit for the location and contracts where transaction prices include performance incentives that are constrained at contract inception. These performance incentives are based on measures that are ascertained exclusively by future performance and therefore cannot be estimated at contract inception by the Company. The Company applies the practical expedient that permits exclusion of information about the remaining performance obligations that have original expected durations of one year or less.

The Company expects to recognize the remaining performance obligations as revenue in future periods as follows:


(millions) (unaudited)	Remaining Performance Obligations
2023	$	40.5
2024		58.8
2025		37.2
2026		28.6
2027		17.1
2028 and thereafter		17.0
Total	$	199.2

Contract balances

Contract assets and liabilities are reported on a contract-by-contract basis and are included in Accounts receivable, net, and Accrued and other current liabilities, respectively, within the Condensed Consolidated Balance Sheets.

The following table provides information about accounts receivable, contract assets and contract liabilities with customers and clients as of June 30, 2023 (unaudited) and December 31, 2022:


(millions)	June 30, 2023			December 31, 2022
Accounts receivable	$	180.6		$	169.9
Contract asset		2.5			1.8
Contract liabilities		(12.3	)		(17.4	)

Changes in contract assets, which include the recognition of additional consideration due from the client, are offset by reclassifications of contract asset balances to accounts receivable when the ~~short-term nature~~Company obtains an unconditional right to consideration, thereby establishing an accounts receivable. The following table provides information about changes to contract assets during the six months ended June 30, 2023 and 2022 (unaudited):


	Six Months Ended
(millions)	June 30, 2023			June 30, 2022
Balance, beginning of period	$	1.8		$	2.3
Additional contract assets		2.5			—
Reclassification to accounts receivable		(1.8	)		(2.3	)
Balance, end of period	$	2.5		$	—

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Changes in contract liabilities primarily include additional contract liabilities and reductions of contract liabilities when revenue is recognized. The following table provides information about changes to contract liabilities during the six months ended June 30, 2023 and 2022 (unaudited):


	Six Months Ended
(millions)	June 30, 2023			June 30, 2022
Balance, beginning of period	$	(17.4	)	$	(15.7	)
Additional contract liabilities		(12.3	)		(8.3	)
Recognition of revenue from contract liabilities		17.4			15.7
Balance, end of period	$	(12.3	)	$	(8.3	)

Cost of contracts, net

Cost of contracts expense related to service concession arrangements and certain management type contracts are recorded as a reduction of revenue. Cost of contracts expense during the three and six months ended June 30, 2023 and 2022 (unaudited), which was included as a reduction to Services revenue – management type contracts within the Condensed Consolidated Statements of Income, was as follows:


	Three Months Ended				Six Months Ended
(millions)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Cost of contracts expense	$	0.3	$	0.3	$	0.5	$	0.5

As of June 30, 2023 (unaudited) and December 31, 2022, cost of contracts, net of accumulated amortization, included in Other noncurrent assets within the Condensed Consolidated Balance Sheets was $2.7 million and $2.9 million, respectively.

5. Legal and Other Commitments and Contingencies

The Company is subject to claims and litigation in the normal course of its business, including those related to labor and employment, contracts, personal injury and other related matters, some of which allege substantial monetary damages and claims. Some of these actions may be brought as class actions on behalf of a class or purported class of employees. While the outcomes of claims and legal proceedings brought against the Company are subject to uncertainty, the Company believes the final outcome will not have a material adverse effect on its financial ~~instruments~~position, results of operations or cash flows.

6. Other Intangible Assets, net

The components of other intangible assets, net, as of June 30, 2023 (unaudited) and ~~has been classified~~December 31, 2022, were as ~~a Level 1.~~ follows:


			June 30, 2023							December 31, 2022
(millions)	Weighted Average Life (Years)		Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net		Intangible Assets, Gross		Accumulated Amortization			Intangible Assets, Net
Covenant not to compete		3.4	$	2.9	$	(1.8	)	$	1.1	$	2.9	$	(1.4	)	$	1.5
Trade names and trademarks		12.0		3.0		(0.9	)		2.1		2.8		(0.7	)		2.1
Proprietary know how		6.4		22.0		(4.4	)		17.6		21.7		(2.7	)		19.0
Management contract rights		6.0		81.0		(55.4	)		25.6		81.0		(52.9	)		28.1
Customer relationships		8.1		24.9		(7.8	)		17.1		24.8		(6.6	)		18.2
Other intangible assets, net		6.8	$	133.8	$	(70.3	)	$	63.5	$	133.2	$	(64.3	)	$	68.9

Amortization expense related to other intangible assets during the three and six months ended June 30, 2023 and 2022, (unaudited), respectively, which was included in Depreciation and amortization within the Condensed Consolidated Statements of Income, was as follows:


	Three Months Ended				Six Months Ended
(millions)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Amortization expense	$	3.0	$	2.1	$	6.0	$	4.9

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7. Goodwill

The ~~fair value of the Restated Credit Facility and Other obligations were estimated to not be materially different from~~changes in the carrying amount ~~and are generally measured using a discounted cash flow analysis based on current market interest rates for similar types~~ of ~~financial instruments and would be classified~~goodwill during the six months ended June 30, 2023 (unaudited) were as ~~a Level 2.~~follows:


(millions)	Commercial		Aviation			Total
Net book value as of December 31, 2022
Goodwill	$	387.0	$	215.7		$	602.7
Accumulated impairment losses		—		(59.5	)		(59.5	)
Total	$	387.0	$	156.2		$	543.2
Foreign currency translation		0.1		0.3			0.4
Net book value as of June 30, 2023
Goodwill	$	387.1	$	216.0		$	603.1
Accumulated impairment losses		—		(59.5	)		(59.5	)
Total	$	387.1	$	156.5		$	543.6

8. Borrowing Arrangements

Long-term borrowings, as of June 30, 2023 (unaudited) and December 31, 2022, in order of preference, ~~consist of:~~

were as follows:


	Amount Outstanding
(millions)	June 30, 2023			December 31, 2022
Senior Credit Facility, net of original discount on borrowings(1)	$	343.9		$	322.3
Other borrowings(2)		23.9			24.3
Deferred financing costs		(2.1	)		(2.4	)
Total obligations		365.7			344.2
Less: Current portion of long-term borrowings		13.5			12.4
Total long-term borrowings, excluding current portion	$	352.2		$	331.8

(1)

Included discount on borrowings of $1.1 million and $1.3 million as of June 30, 2023 and December 31, 2022, respectively.

Amount Outstanding
(millions) Maturity Date September 30, 2017 December 31, 2016

(unaudited)

Restated Credit Facility, net of original discount on borrowings and deferred financing costs February 20, 2020 $ 172.0
$ 193.4
Other borrowings Various 1.4
1.7
Total obligations under Restated Credit Facility and other borrowings 173.4
195.1
Less: Current portion of obligations under Restated Credit Facility and other borrowings 20.4
20.4
Total long-term obligations under Restated Credit Facility and other borrowings $ 153.0
$ 174.7
(2)

Included finance lease liabilities of $22.8 million and $23.2 million as of June 30, 2023 and December 31, 2022, respectively. See Note 3. Leases for further discussion.

Senior Credit Facility

On ~~October 2, 2012,~~April 21, 2022 (the “Fifth Amendment Effective Date”), the Company entered into a fifth amendment (the “Fifth Amendment”) to the Company’s credit agreement (“(as amended prior to the Fifth Amendment Effective Date, the “Credit Agreement”; the Credit Agreement, as amended by the Fifth Amendment, the “Amended Credit Agreement”) with Bank of America, N.A. ("(“Bank of ~~America"~~America”), as ~~administrative agent, Wells Fargo Bank, N.A. ("Wells Fargo Bank")~~Administrative Agent, swing-line lender 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.

Pursuant to the terms, and subject to the conditions, of the Credit Agreement, the Lenders made available to the Company a secured senior credit facility (the “Senior Credit Facility”) that permitted aggregate borrowings of $450.0 million consisting of (i) a revolving credit facility of up to $200.0 million at any time outstanding, which included a letter of credit ~~facility that was limited to $100.0 million at any time outstanding, and (ii) a term loan facility~~issuer; certain subsidiaries of ~~$250.0 million. The Senior Credit Facility was originally due to mature on October 2, 2017.~~

~~Amended and Restated Credit Facility~~

~~On February 20, 2015 (“Restatement Date”),~~ the Company, ~~entered into an Amended and Restated Credit Agreement (the “Restated Credit Agreement”) with Bank of America,~~ as administrative agent, an issuing lender and swing-line lender; Wells Fargo Bank, N.A., as an issuing lender and syndication agent; U.S. Bank National Association, First Hawaiian Bank and BMO Harris Bank N.A., as co-documentation agents; Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as joint lead arrangers and joint book managers;guarantors; and the lenders party thereto (the “Lenders”)~~. The Restated Credit Agreement reflects modifications~~, pursuant to ~~and an extension of, the Senior Credit Facility.~~

~~Pursuant to the terms, and subject to the conditions, of the Restated Credit Agreement,~~which the Lenders have made available to the Company a senior secured credit facility (the ~~“Restated~~“Senior Credit Facility”) ~~that~~. The Senior Credit Facility permits aggregate borrowings of ~~$400.0~~$600.0 million consisting of (i) a revolving credit facility of up to ~~$200.0~~$400.0 million at any time outstanding, which includes a ~~$100.0 million sublimit for letters~~letter of credit ~~and a $20.0~~facility that is limited to $100.0 million ~~sublimit for swing-line loans,~~at any time outstanding, and (ii) a term loan facility of ~~$200.0 million (reduced from $250.0 million under~~$200.0 million. The maturity date of the Senior Credit ~~Facility)~~Facility is April 21, 2027. ~~The Company may request increases~~

As of ~~the revolving credit facility in an aggregate additional principal amount of $100.0 million. The Restated Credit Facility matures on February 20, 2020.~~

The entire amount of the term loan portion of the Restated Credit Facility had been drawn by the Company as of the Restatement Date (including approximately $10.4 million drawn on such date) and is subject to scheduled quarterly amortization of principal as follows: (i) $15.0 million in the first year, (ii) $15.0 million in the second year, (iii) $20.0 million in the third year, (iv) $20.0 million in the fourth year, (v) $20.0 million in the fifth year and (vi) $110.0 million in the sixth year. The Company also had outstanding borrowings of $147.3 million (including $53.4 million in letters of credit) under the revolving credit facility as of the Restatement Date.

Borrowings under the Restated Credit Facility bear interest, at the Company’s option, (i) at a rate per annum based on the Company’s consolidated total debt to EBITDA ratio for the 12-month period ending as of the last day of the immediately preceding fiscal quarter, determined in accordance with the pricing levels set forth in the Restated Credit Agreement (the “Applicable Margin”), plus LIBOR or (ii) the Applicable Margin plus the highest of (x) the federal funds rate plus 0.5%, (y) the Bank of America prime rate and (z) a daily rate equal to LIBOR plus 1.0% (the highest of (x), (y) and (z), the “Base Rate”), except that all swing-line loans will bear interest at the Base Rate plus the Applicable Margin.

Under the terms of the Restated Credit Agreement, the Company is required to maintain a maximum consolidated total debt to EBITDA ratio of not greater than 4.0 to 1.0 as of the end of any fiscal quarter ending during the period from the Amended and Restatement Date through SeptemberJune 30, ~~2015, (ii) 3.75 to 1.0 as of~~2023, the ~~end of any fiscal quarter ending during the period from~~

October 1, 2015 through September 30, 2016, and (iii) 3.5 to 1.0 as of the end of any fiscal quarter ending thereafter. In addition, the Company is required to maintain a minimum consolidated fixed charge coverage ratio of not less than 1.25:1.0.

Events of default under the Restated 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 the 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 Restated Credit Agreement have the right, among others, to (i) terminate the commitments under the Restated Credit Agreement, (ii) accelerate and require the Company to repay all the outstanding amounts owed under the Restated Credit Agreement and (iii) require the Company to cash collateralize any outstanding letters of credit.

Each wholly owned domestic subsidiary of the Company (subject to certain exceptions set forth in the Restated Credit Agreement) has guaranteed all existing and future indebtedness and liabilities of the other guarantors and the Company arising under the Restated Credit Agreement. The Company’s obligations under the Restated Credit Agreement and such domestic subsidiaries’ guaranty obligations are secured by substantially all of their respective assets.

~~The~~ Company was in compliance with ~~all~~its debt covenants ~~as of September 30, 2017.~~

under the Amended Credit Agreement.

As of ~~September~~June 30, ~~2017,~~2023, the Company had $129.4 million of borrowing availability under the Restated Credit Agreement, of which the Company could have borrowed $129.4 million on September 30, 2017 and remained in compliance with the above described covenants as of such date. The additional borrowing availability under the Restated Credit Agreement is limited only as of the Company’s fiscal quarter-end by the covenant restrictions described above. At September 30, 2017, the Company had $51.6$39.1 million of letters of credit outstanding under the ~~Restated~~ Senior Credit Facility ~~with aggregate~~and borrowings against the ~~Restated~~ Senior Credit Facility aggregated to $345.0 million.

The weighted average interest rate on the Senior Credit Facility was 6.5% and 3.3% during the six months ended June 30, 2023 and 2022, respectively. That rate included the letters of ~~$174.1 million (excluding debt discount~~credit for both years and interest rate collars during the three months ended June 30, 2022. The weighted average interest rate on all outstanding borrowings, not including letters of ~~$0.9 million~~credit, was 7.0% and ~~deferred financing cost~~3.4% during the six months ended June 30, 2023 and 2022, respectively.

Table of ~~$1.2 million).~~Contents

Subordinated Convertible Debentures

The Company acquired Subordinated Convertible Debentures ("Convertible Debentures") as a result of the October 2, 2012 acquisition of Central Parking Corporation. As of October 2, 2012, the Convertible Debentures were no longer redeemable for shares. The Convertible Debentures mature April 1, 2028 at $25 per share. The Convertible Debenture holders have the right to redeem the Convertible Debentures for $19.18 per share upon acceleration or earlier repayment of the Convertible Debentures. There have been no redemptions of the Convertible Debentures during the periods ended June 30, 2023 and December 31, 2022. The approximate redemption value of the Convertible Debentures outstanding as of June 30, 2023 and December 31, 2022 was $1.1 million.

~~8. Share~~

9. Stock Repurchase ~~Plan~~

~~In May 2016,~~Program

On February 14, 2023, the Company's Board of Directors (the "Board") authorized the Company to repurchase, on the open market, shares of ~~its~~the Company's outstanding common stock in an amount not to exceed ~~$30.0 million in aggregate. Purchases of~~$60.0 million. No shares have been repurchased under this program.

In May 2022, the Company's common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with Rule 10b-18 and 10b5-1 under the Securities Exchange Act of 1934 ("Exchange Act"). The share repurchase program does not obligateBoard authorized the Company to repurchase, ~~any particular amount~~on the open market, shares of the Company’s outstanding common stock ~~and has no fixed termination date.~~

~~Under this program,~~in an amount not to exceed $60.0 million in aggregate. During the ~~Company has~~six months ended June 30, 2023, 285,700 shares were repurchased ~~305,183 shares of common stock through September 30, 2017~~ at an average price of ~~$24.43~~$36.53 per share ~~resulting in $7.5~~under this program. As of June 30, 2023, $0.2 million remained available for repurchase under this program.

Stock repurchase activity under the May 2022 stock repurchase program during the six months ended June 30, 2023 and 2022 (unaudited) was as follows:


(millions, except for share and per share data)	June 30, 2023		June 30, 2022
Total number of shares repurchased		285,700		176,500
Average price paid per share	$	36.53	$	31.51
Total value of common stock repurchased	$	10.4	$	5.6

No stock repurchases were made during the three months ended June 30, 2023 or the three months ended March 31, 2022.

The Company recorded $0.1 million in ~~program-to-date purchases. No shares were repurchased~~additional paid-in capital within the Condensed Consolidated Balance Sheets during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2023, related to the excise tax on net repurchases of common stock that was a provision of the Inflation Reduction Act of 2022.

The remaining authorized repurchase amount under the May 2022 and February 2023 stock repurchase programs as of June 30, 2023 (unaudited), was as follows:


(millions)	June 30, 2023
Total authorized repurchase amount	$	120.0
Total value of shares repurchased		59.8
Total remaining authorized repurchase amount	$	60.2

~~9. Bradley Agreement~~

10. Stock-Based Compensation

Stock Grants

The Company ~~entered into a 25-year agreement with~~granted 18,660 and 14,635 shares of common stock to the ~~State~~Board during the six months ended June 30, 2023 and 2022, respectively. The Company recognized $0.6 million and $0.4 million of ~~Connecticut (“State”) that expires on April 6, 2025, under which it operates~~stock-based compensation expense related to stock grants during the ~~surface parking~~three and ~~3,500 garage parking spaces at Bradley International Airport (“Bradley”) located in~~six months ended June 30, 2023 and 2022, respectively.

Restricted Stock Units

During the ~~Hartford, Connecticut metropolitan area.~~

~~The parking garage was financed through the issuance of State of Connecticut special facility revenue bonds and provides that~~six months ended June 30, 2023, the Company ~~deposits, with~~granted 126,931 restricted stock units to certain executives that vest over three years. During 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 $3.6 million in contract year 2002 to approximately $4.5 million in contract year 2025. Annual guaranteed minimum payments to the State increase from approximately $8.3 million in contract year 2002 to approximately $13.2 million in contract year 2024. The annual minimum guaranteed payment to the State by the trustee for the twelvesix months ended December 31, 2017 and 2016 is $11.5 million and was $11.3 million, 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,June 30, 2022, the Company ~~is obligated~~granted 1,057 and 135,054 restricted stock units 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~~certain executives and ~~surface operating expenses,~~

~~Principal~~employees that vest over one and ~~interest on the special facility revenue bonds,~~

three years, respectively.

~~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 repayments (net of payments made) to the State~~

Nonvested restricted stock units as of ~~September~~June 30, ~~2017~~2023, and changes during the six months ended June 30, 2023 (unaudited) were as follows:

(millions) 2017
Balance at December 31, 2016 $ 9.9
Deficiency payments made 0.2
Deficiency repayment received (1.9 )
Balance at September 30, 2017 $ 8.2

~~The total deficiency repayments (net~~


	Shares			Weighted Average Grant-Date Fair Value
Nonvested as of December 31, 2022		338,448		$	33.28
Granted		126,931			34.57
Vested		(8,426	)		35.95
Nonvested as of June 30, 2023		456,953		$	33.62

Table of ~~payments made), interest and premium received and recorded for the three and nine months ended September 30, 2017 and 2016 were as follows:~~Contents

Three Months Ended Nine Months Ended
(millions) (unaudited) September 30, 2017
September 30, 2016 September 30, 2017
September 30, 2016
Deficiency repayments $ 0.5

$ —
$ 1.7

$ 1.2
Interest $ —

$ 0.2
$ 0.2

$ 0.3
Premium $ —

$ —
$ 0.2

$ 0.2

~~Deficiency payments made are recorded as an increase in Cost of parking services~~—~~management and deficiency repayments, interest and premium received are recorded as reductions to Cost of parking services~~—~~management.~~

The reimbursement of principal, interest and premium are recognized when received. There were no amounts of estimated deficiency payments accrued as of September 30, 2017 and December 31, 2016, as the Company concluded that the potential for future deficiency payments did not meet the criteria of both probable and estimable.

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 Company and 40% to an un-affiliated 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), and after the repayment of all deficiency payments, including interest and premium. Cumulative management fees of approximately $17.5 million and $16.7 million have not been recognized as of September 30, 2017 and December 31, 2016, respectively, and no management fees were recognized as revenue for the nine months ended September 30, 2017 and 2016.

~~10. Stock-Based Compensation~~

~~Stock Grants~~

~~There were 16,428 and 32,180 authorized vested stock grants to certain directors for the nine months ended September 30, 2017 and 2016, respectively.~~

~~The table below shows the~~ Company's stock-based compensation expense related to the ~~vested~~restricted stock ~~grants for~~units during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, respectively and is~~2022 (unaudited), which was included in General and administrative expenses within the Condensed Consolidated Statements of ~~Income.~~Income, was as follows:


	Three Months Ended				Six Months Ended
(millions)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Stock-based compensation expense	$	1.4	$	1.5	$	2.5	$	2.8

Three Months Ended Nine Months Ended
(millions) (unaudited) September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016
Stock-based compensation expense $ —
$ —
$ 0.5
$ 0.7

~~Restricted Stock Units~~

~~During the nine months ended September~~

As of June 30, 2017, no restricted stock units were authorized by the Company. During the nine months ended September 30, 2017 and 2016, 4,399, and 1,415 restricted stock units vested, respectively. During the nine months ended September 30, 2017 and 2016, 4,537 and 4,124 restricted stock units, respectively, were forfeited under the Company's Amended and Restated Long-Term Incentive Plan and became available for reissuance.

~~The table below shows the Company's~~2023, there was $8.2 million of unrecognized stock-based compensation expense related to the restricted stock units for the three and nine months ended September 30, 2017 and 2016, respectively, which is included in General and administrative expenses within the Condensed Consolidated Statements of Income.

Three Months Ended Nine Months Ended
(millions) (unaudited) September 30, 2017
September 30, 2016 September 30, 2017 September 30, 2016
Stock-based compensation expense $ 0.2

$ 0.2
$ 0.6
$ 0.6

~~As of September 30, 2017, there was $1.1 million of unrecognized stock-based compensation costs related to the~~ restricted stock units that are expected to be recognized over a weighted average remaining period of approximately ~~2.3~~2.0 years.

Performance Share Units

~~In September 2014,~~ (“PSUs”)

During the ~~Board of Directors authorized a performance-based incentive program under the Company’s Amended~~six months ended June 30, 2023 and ~~Restated Long-Term Incentive Plan (“Performance-Based Incentive Program”), whereby~~2022, the Company ~~will issue performance share units~~granted 126,921 and 132,304 PSUs, respectively, to certain ~~executive management individuals that represent shares potentially issuable in the future.~~executives. The ~~objective of the Performance-Based Incentive Program~~performance target is to link compensation to business performance, encourage ownership of Company stock, retain executive talent, and reward executive performance. The Performance-Based Incentive Program provides participating executive management individuals with the opportunity to earn vested common stock if certain performance targets for pre-tax free cash flow are achieved over a three year performance period and recipients satisfy service-based vesting requirements. The stock-based compensation expense associated with unvested performance share units are recognized on a straight-line basis over the shorter of the vesting period or minimum service period and dependent upon the probable outcome of the number of shares that will ultimately be issued based on the achievement of ~~pre-tax free cash flow~~a certain level of operating income, excluding depreciation and amortization, as well as certain other discretionary adjustments by the Board, over a three-year performance period. The ultimate number of shares issued could change depending on the Company’s results over the ~~cumulative three year~~performance period. ~~During~~The maximum amount of shares that could be issued for the ~~nine~~PSU's granted in 2023 ("2023 PSUs"), the PSU's granted in 2022 ("2022 PSUs") and the PSU's granted in 2021 ("2021 PSUs") are 253,842, 258,114 and 97,096, respectively. The Company is currently recognizing expense for the 2023 PSUs based on a payout of 130,729 shares, the 2022 PSUs based on a payout of 197,457 shares, and the maximum payout of 97,096 shares for the 2021 PSUs.

Nonvested PSUs as of June 30, 2023, and changes during the six months ended ~~September~~June 30, 2017 and 2016, the Company granted 76,120 and 98,078 performance share units, respectively, to certain individuals within executive management. During the nine months ended September 30, 2017 and 2016, 11,770 and 4,493, performance share units, respectively,2023 (unaudited), were forfeited under the Amended and Restated Long-Term Incentive Plan and became available for reissuance. As of September 30, 2017, 14,195 shares were vested related to certain participating executives being eligible for retirement.as follows:


	Shares		Weighted Average Grant-Date Fair Value
Nonvested as of December 31, 2022		177,605	$	31.94
Granted		126,921		34.57
Nonvested as of June 30, 2023		304,526	$	33.04

The ~~table below shows the~~ Company's stock-based compensation expense related to ~~the Performance-Based Incentive Program for~~PSUs during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, respectively, and is~~2022 (unaudited), which was included in General and administrative expenses within the Condensed Consolidated Statements of ~~Income.~~Income, was as follows:


	Three Months Ended				Six Months Ended
(millions)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Stock-based compensation expense	$	1.2	$	0.7	$	2.3	$	1.2

Three Months Ended Nine Months Ended
(millions) (unaudited) September 30, 2017
September 30, 2016 September 30, 2017
September 30, 2016
Stock-based compensation expense $ 0.6

$ 0.5
$ 1.8

$ 1.5

~~Future~~

As of June 30, 2023, there was $7.8 million of unrecognized stock-based compensation ~~expense for currently outstanding awards under the Performance-Based Incentive Program could reach a maximum of $9.0 million. Stock-based compensation for the Performance-Based Incentive Program is~~expenses related to PSUs that are expected to be recognized over a weighted average remaining period of ~~1.8~~approximately 1.9 years.

~~Adoption~~ In addition, the Company could recognize additional future stock-based compensation expense of ~~ASU 2016-09~~

~~Refer to Note 1.~~ ~~Significant Accounting Policies~~$4.3 million and ~~Practices~~$1.9 million for the ~~impact of adopting ASU 2016-09 on~~2023 PSUs and the ~~Company's stock-based compensation, income taxes, and net income per common share.~~2022 PSUs, respectively, if the maximum performance target is achieved for each award.

11. Net Income per Common Share

Basic net income per common 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 common share is based upon the weighted daily average number of shares of common stock outstanding ~~for~~during the period plus all potentially dilutive ~~potential common shares,~~stock-based awards, including ~~stock options and~~ restricted stock and performance share units, using the treasury-stock method.

Unvested performance share units are excluded from the computation of weighted average diluted common shares outstanding if the performance targets upon which the issuance of the shares is contingent have not been achieved and the respective performance period has not been completed as of the end of the period.

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Basic and diluted net income per common share and a reconciliation of the weighted average basic common shares outstanding to the weighted average diluted common shares outstanding ~~is as follows:~~

Three Months Ended
Nine Months Ended
(millions, except share and per share data) (unaudited) September 30, 2017
September 30, 2016 September 30, 2017
September 30, 2016
Net income attributable to SP Plus Corporation $ 11.2

$ 7.0
$ 33.4

$ 13.5
Basic weighted average common shares outstanding 22,203,023

22,208,139
22,186,556

22,293,776
Dilutive impact of share-based awards 320,013

288,972
314,822

278,157
Diluted weighted average common shares outstanding 22,523,036

22,497,111
22,501,378

22,571,933
Net income per common share

Basic $ 0.51

$ 0.31
$ 1.51

$ 0.60
Diluted $ 0.50

$ 0.31
$ 1.48

$ 0.60

~~For~~during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016, performance share units~~2022 (unaudited) was as follows:


	Three Months Ended				Six Months Ended
(millions, except share and per share data)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Net income attributable to SP Plus Corporation	$	12.3	$	15.4	$	20.7	$	26.1
Basic weighted average common shares outstanding		19,631,772		21,195,819		19,666,684		21,211,299
Dilutive impact of share-based awards		208,181		160,645		187,216		136,143
Diluted weighted average common shares outstanding		19,839,953		21,356,464		19,853,900		21,347,442
Net income per common share
Basic	$	0.63	$	0.73	$	1.05	$	1.23
Diluted	$	0.62	$	0.72	$	1.04	$	1.22

There were excluded from the computation of weighted average diluted common share outstanding because the number of shares ultimately issuable is contingent on the Company's performance goals, which were not achieved as of the reporting dates.

~~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 common share, other than those disclosed.

~~Adoption of ASU 2016-09~~

~~There was no significant impact to diluted weighted average shares outstanding for purposes of calculating net income per common share-diluted as a result of adopting ASU 2016-09. Refer to Note 1.~~ ~~Significant Accounting Policies and Practices~~ ~~for additional information on the impact of adopting ASU 2016-09 to the Company.~~

12. Comprehensive Income

(Loss)

~~Comprehensive~~

The components of other comprehensive income ~~consists of~~(loss) and the ~~following components, net of tax:~~income tax benefit allocated to each component during the three and six months ended June 30, 2023 and 2022 (unaudited) were as follows:


	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
(millions)	Before Tax Amount		Income Tax		Net of Tax Amount		Before Tax Amount		Income Tax		Net of Tax Amount
Translation adjustments	$	0.5	$	—	$	0.5	$	0.7	$	—	$	0.7
Other comprehensive income	$	0.5	$	—	$	0.5	$	0.7	$	—	$	0.7


	Three Months Ended June 30, 2022								Six Months Ended June 30, 2022
(millions)	Before Tax Amount			Income Tax		Net of Tax Amount			Before Tax Amount			Income Tax		Net of Tax Amount
Translation adjustments	$	(0.2	)	$	—	$	(0.2	)	$	(0.1	)	$	—	$	(0.1	)
De-designation of interest rate collars		0.1			—		0.1			0.7			0.2		0.5
Other comprehensive income (loss)	$	(0.1	)	$	—	$	(0.1	)	$	0.6		$	0.2	$	0.4

Three Months Ended Nine Months Ended
(millions) (unaudited) September 30, 2017
September 30, 2016 September 30, 2017
September 30, 2016
Net income $ 12.0

$ 7.7
$ 36.0

$ 15.7
Effective portion of unrealized loss on cash flow hedge (0.1 )
0.2
—

(0.1 )
Foreign currency translation gain (loss) 0.2

(0.1 ) 0.2

(0.1 )
Comprehensive income 12.1

7.8
36.2

15.5
Less: Comprehensive income attributable to noncontrolling interest 0.8

0.7
2.6

2.2
Comprehensive income attributable to SP Plus Corporation $ 11.3

$ 7.1
$ 33.6

$ 13.3

~~Accumulated~~

The changes to accumulated other comprehensive loss ~~is comprised of unrealized gains (losses) on cash flow hedges and foreign currency translation adjustments.~~ by component during the six months ended June 30, 2023 (unaudited) were as follows:


(millions)	Foreign Currency Translation Adjustments			Total Accumulated Other Comprehensive Loss
Balance as of December 31, 2022	$	(1.8	)	$	(1.8	)
Other comprehensive income before reclassification		0.7			0.7
Balance as of June 30, 2023	$	(1.1	)	$	(1.1	)

The ~~components of~~ changes into accumulated other comprehensive loss ~~net of tax, for~~by component during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2022 (unaudited) were as follows:


(millions)	Foreign Currency Translation Adjustments			Interest Rate Collars			Total Accumulated Other Comprehensive Loss
Balance as of December 31, 2021	$	(2.3	)	$	(0.5	)	$	(2.8	)
Other comprehensive loss before reclassification		(0.1	)		—			(0.1	)
Amounts reclassified from accumulated other comprehensive loss		—			0.5			0.5
Balance as of June 30, 2022	$	(2.4	)	$	—		$	(2.4	)

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(millions) (unaudited) Foreign Currency
Translation
Adjustments Effective Portion of
Unrealized Gain (Loss)
on Cash Flow Hedge Total Accumulated
Other
Comprehensive
Loss
Balance at December 31, 2016 $ (1.4 ) $ —
$ (1.4 )
Change in other comprehensive income 0.2
—
0.2
Balance at September 30, 2017 $ (1.2 ) $ —
$ (1.2 )

~~13. Income Taxes~~

~~For~~

Reclassifications from accumulated other comprehensive loss during the three and six months ended ~~September~~June 30, 2017, the Company recognized an income tax expense of $7.3 million on pre-tax earnings of $19.3 million compared to $5.1 million income tax expense on pre-tax earnings of $12.8 million for the three months ended September 30, 2016. For the nine months ended September 30, 2017, the Company recognized income tax expense of $21.3 million on pre-tax earnings of $57.3 million compared to income tax expense of $10.9 million on pre-tax earnings of $26.6 million for the nine months ended September 30, 2016. The effective tax rate was approximately was 37.2% for the nine months ended September 30, 2017 compared to approximately 41.0% for the nine months ended September 30, 2016. The effective tax rate for the nine months ended September 30, 2017 was lower than the nine months ended September 30, 2016 primarily due to additional 2017 year-to-date federal employer income tax credits recognized ($0.5 million)2023 and ~~the adoption of ASU 2016-09 and the related excess tax benefits now recognized~~2022 (unaudited) were as ~~a reduction of income tax expense ($0.7 million).~~follows:


(millions)	Three Months Ended June 30				Six Months Ended June 30				Classification in the Condensed Consolidated Statements of Income
Interest Rate Collars:	2023		2022		2023		2022
Net realized loss	$	—	$	0.1	$	—	$	0.7	Other expenses
Reclassifications before tax		—		0.1		—		0.7
Income tax benefit		—		—		—		0.2
Reclassifications, net of tax	$	—	$	0.1	$	—	$	0.5

As of September 30, 2017, 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, 2017 are shown below:~~

~~2014 – 2016 United States — federal income tax~~

~~2007 – 2016 United States — state and local income tax~~

~~2013 – 2016 Canada and Puerto Rico~~

~~Adoption of ASU 2016-09~~

~~Refer to Note 1.~~ ~~Significant Accounting Policies and Practices~~ ~~for the impact of adopting ASU 2016-09 on the Company's stock-based compensation, income taxes, and net income per common share.~~

~~14. Business Unit~~

13. Segment Information

Segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the Company's 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 discrete financial information is available and evaluated regularly by the ~~Company’s~~ CODM in deciding how to allocate resources and ~~in assessing~~assess 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 isare directly responsible for revenue and expenses related to their operations, including direct ~~regional~~segment general and administrative ~~costs. Finance, information technology, human resources, and legal are shared functions that are not allocated back to the two operating segments.~~expenses. The CODM assesses the performance of each operating segment using information about ~~its revenue and gross profit~~operating income (loss) as its primary measure of performance, but does not evaluate segments using discrete asset information. Therefore, assets are not presented at the segment level. There ~~are~~were no inter-segment transactions during the three and six months ended June 30, 2023, and the Company does not allocate ~~interest and~~ other ~~income,~~expense (income), interest expense ~~depreciation and amortization~~(income) or ~~taxes~~income tax expense (benefit) to the operating segments. The accounting policies for segment reporting are the same as for the Company as a whole.

~~In the first quarter of 2017, the Company changed its internal reporting segment information reported to its CODM.~~

The Company’s operating segments are ~~internally reported as Region One (Commercial)~~Commercial and ~~Region Two (Airports). All prior periods presented have been restated to reflect~~Aviation:

•

Commercial encompasses the ~~new internal reporting to the CODM.~~

~~Region One (Commercial) encompasses our~~Company's services in healthcare facilities, municipalities, including meter revenue collection and enforcement services, government facilities, hotels, commercial real estate, residential communities, retail, colleges and universities, as well as ancillary services such as providing technology-based mobility solutions, shuttle and ground transportation services, valet services, taxi and livery dispatch services and event planning, including shuttle and transportation services.

~~Region Two (Airports)~~•

Aviation encompasses ~~our~~the Company's services ~~at all major~~in aviation (i.e., airports, airline and certain hospitality clients with baggage and parking services) as well as ancillary services, which ~~includes~~include shuttle and ground transportation services, valet services, baggage handling, baggage repair and ~~valet services.~~

~~"Other" consists of ancillary revenue that is not specifically identifiable to a region and certain unallocated items, such as and including prior year insurance reserve adjustments~~replacement, remote air check-in services, wheelchair assist services and other services, as well as providing technology-based mobility solutions.

The Other segment includes costs related to the Company’s operational support teams and costs related to common and shared infrastructure, including finance, accounting, information technology, human resources, procurement, legal and corporate ~~items.~~

development.

Table of Contents

~~The business is managed based on regions administered~~

Revenue, operating income (loss), general and administrative expenses and depreciation and amortization by ~~executive vice presidents. The following is a summary of revenues (excluding reimbursed management contract revenue) and gross profit by regions for~~operating segment during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2023 and ~~2016:~~

2022 (unaudited) were as follows:


	Three Months Ended						Six Months Ended
(millions)	June 30, 2023			June 30, 2022			June 30, 2023			June 30, 2022
Services revenue
Commercial
Lease type contracts	$	72.4		$	67.1		$	137.0		$	126.3
Management type contracts		75.2			65.8			155.0			137.8
Total Commercial		147.6			132.9			292.0			264.1
Aviation
Lease type contracts		3.9			3.5			7.5			6.9
Management type contracts		69.8			60.1			138.1			109.9
Total Aviation		73.7			63.6			145.6			116.8
Reimbursed management type contract revenue		220.9			184.5			429.9			349.9
Total services revenue	$	442.2		$	381.0		$	867.5		$	730.8
Operating income (loss)
Commercial	$	36.1		$	34.7		$	67.3		$	63.3
Aviation		9.6			8.5			18.2			16.6
Other		(20.4	)		(17.6	)		(40.9	)		(34.2	)
Total operating income	$	25.3		$	25.6		$	44.6		$	45.7
General and administrative expenses
Commercial	$	9.3		$	7.8		$	17.5		$	13.9
Aviation		4.0			2.9			7.9			5.6
Other		18.5			16.0			37.0			31.7
Total general and administrative expenses	$	31.8		$	26.7		$	62.4		$	51.2
Depreciation and amortization
Commercial(1)	$	3.8		$	2.8		$	7.4		$	5.8
Aviation(2)		3.1			2.1			5.9			5.0
Other		1.9			1.6			3.9			2.5
Total depreciation and amortization	$	8.8		$	6.5		$	17.2		$	13.3

(1)

Included depreciation and amortization expenses related to cost of services activities of $2.2 million and $1.6 million during the three months ended June 30, 2023 and 2022, respectively, and $4.1 million and $3.4 million during the six months ended June 30, 2023 and 2022, respectively.

Three Months Ended September 30, Nine Months Ended September 30,
(millions) (unaudited) 2017 Gross
Margin
% 2016 Gross
Margin
% 2017 Gross
Margin
% 2016 Gross
Margin
%
Parking Services Revenue

Region One

Lease contracts $ 108.9

$ 104.9

$ 326.0

$ 316.6

Management contracts 62.5

61.1

190.1

185.5

Total Region One 171.4

166.0

516.1

502.1

Region Two

Lease contracts 32.0

31.2

96.6

93.7

Management contracts 22.2

20.6

66.4

69.1

Total Region Two 54.2

51.8

163.0

162.8

Other

Lease contracts —

—

—

—

Management contracts 2.0

2.4

6.3

7.4

Total Other 2.0

2.4

6.3

7.4

Reimbursed management contract revenue 165.1

177.0

512.7

501.8

Total Parking Services Revenue $ 392.7

$ 397.2

$ 1,198.1

$ 1,174.1

Gross Profit

Region One

Lease contracts $ 7.8
7 % $ 8.8
8 % $ 28.9
9 % $ 25.3
8 %
Management contracts 25.3
40 % 24.4
40 % 74.7
39 % 70.7
38 %
Total Region One 33.1

33.2

103.6

96.0

Region Two

Lease contracts 1.6
5 % 1.5
5 % 4.9
5 % 4.0
4 %
Management contracts 6.2
28 % 6.2
30 % 19.5
29 % 18.0
26 %
Total Region Two 7.8

7.7

24.4

22.0

Other

Lease contracts 0.5
— % —
— % 1.8
— % 0.6
— %
Management contracts 4.5
225 % 3.0
125 % 14.1
224 % 10.7
145 %
Total Other 5.0

3.0

15.9

11.3

Total gross profit $ 45.9

$ 43.9

$ 143.9

$ 129.3

General and administrative expenses 19.6

20.3

63.3

67.0

General and administrative expense percentage of gross profit 43 %
46 %
44 %
52 %
Depreciation and amortization 4.9

7.8

16.3

26.8

Operating income 21.4

15.8

64.3

35.5

Other expenses (income)

Interest expense 2.2

2.7

7.1

8.1

Interest income (0.2 )
(0.1 )
(0.5 )
(0.4 )
Gain on sale of business —
—
(0.1 ) —

Equity in losses from investment in unconsolidated entity 0.1

0.4

0.5

1.2

Total other expenses (income) 2.1

3.0

7.0

8.9

Earnings before income taxes 19.3

12.8

57.3

26.6

Income tax expense 7.3

5.1

21.3

10.9

Net income 12.0

7.7

36.0

15.7

Less: Net income attributable to noncontrolling interest 0.8

0.7

2.6

2.2

Net income attributable to SP Plus Corporation $ 11.2

$ 7.0

$ 33.4

$ 13.5

(2)

Included depreciation and amortization expenses related to cost of service activities of $1.5 million and $1.1 million during the three months ended June 30, 2023 and 2022, respectively, and $2.8 million and $2.2 million during the six months ended June 30, 2023 and 2022, respectively.

14. Subsequent Event

On July 25, 2023, the Company acquired certain assets of Roker Inc., a United States based provider of fully-integrated parking solutions that simplify permit, violation and enforcement management for organizations and municipalities, for approximately $3.1 million. The Company utilized borrowings under its Senior Credit Facility and cash on hand to fund the acquisition.

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

The following discussion of ~~our~~SP Plus Corporation’s (“we”, “us” or “our”) results of operations should be read in conjunction with the condensed 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 fiscal year ended December 31, ~~2016.~~

During the third quarter 2017, we corrected reimbursed management contract revenue and reimbursed management contract expense for the previous periods presented, whereby, the Company had been overstating reimbursed management contract revenue and reimbursed management contract expense included within the Condensed Consolidated Statements of Income in equal and off-setting amounts. This correction resulted in the following: (i) a reduction of reimbursed management contract revenue of $11.9 million and $35.2 million and a reduction of reimbursed management contract expense by $11.9 million and $35.2 million for the three and nine months ended September 30, 2016, respectively, and (ii) a reduction of reimbursed management contract revenue of $24.4 million and a reduction reimbursed management contract expense of $24.4 million for the nine months ended September 30, 2017, which represents the correction of the over statement previously reported for t~~he six-month period ended June 30, 2017.~~ The correction had no impact to the Condensed Consolidated Balance Sheets, Statements of Income, Comprehensive Income or Cash Flows, except as described above and as it relates to reimbursed management contract revenue and reimbursed management contract expense.

2022.

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”)~~us with the Securities and Exchange Commission (“SEC”) and contains forward-looking statements, which are based on our current assumptions and expectations, 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").statements. These statements are typically accompanied by the words “expect,” “estimate,” “intend”, “will,” “predict,” “project,” “may,” “should,” “could,” “believe,” “would,” “might,” “anticipate,” 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”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as enacted under the Private Securities Litigation Reform Act of 1995. These forward looking statements are made based on ~~management's~~our 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~~our control. These ~~forward looking~~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~~ Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking ~~statements, our~~statements.

Our actual results, performance and achievements could be materially ~~different. The most important~~different from those expressed in, or implied by, our forward-looking statements. Important factors which could cause or contribute to our actual results, ~~to differ~~performance or achievements being different from those expressed in, or implied by, our forward-looking statements include, but are ~~set forth on our description of risk factors~~not limited to, those discussed in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016,~~2022 and other documents we file with the SEC, 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~~changes in circumstances, future events or for any other reason.

Overview

~~Our Business~~

~~We provide~~

Acquisitions

On October 11, 2022, we acquired K M P Associates Limited ("KMP"), a United Kingdom based software and technology provider serving aviation and commercial parking ~~management, ground transportation and other ancillary services to commercial, institutional and municipal~~ clients, ~~in urban markets and airports across~~primarily through its AeroParkertechnology, throughout the United States ~~Puerto Rico~~ and ~~Canada.~~Europe, for approximately $13.8 million, less cash acquired of $0.9 million, and assumed KMP’s debt of $0.3 million. Immediately following the acquisition, we repaid all of the debt assumed. KMP’s operations are included in the Aviation segment.

On November 10, 2022, we acquired certain assets of DIVRT, Inc. ("DIVRT"), a developer of innovative software and technology solutions that enables frictionless parking capabilities, for approximately $17.6 million. In addition, we may be required to pay the former owner of DIVRT a maximum amount of $7.0 million in contingent consideration if certain targets related to the number of our locations using the DIVRT technology are met by October 31, 2025. Based on a probability weighting of potential payouts, we accrued $4.0 million in projected contingent consideration as of the acquisition date. Our ~~services include~~estimate of the potential payout increased to $4.3 million as of June 30, 2023, due to the changes in the present value of the estimated payout. We will continue to evaluate the potential payouts in the future and adjust the contingent consideration for any changes in the estimated fair value each reporting period. DIVRT’s operations are included in the Commercial segment.

As discussed in Note 14. Subsequent Events within the notes to the Condensed Consolidated Financial Statements, we recently acquired Roker Inc.

The acquisitions noted above enhance our position as a ~~comprehensive set~~global provider of ~~on-site~~frictionless technology solutions that are independent of our legacy parking management and ~~ground~~ transportation ~~services, which include facility maintenance, security services, training, scheduling~~related operations.

Our Business

We develop and ~~supervising all service personnel, as well as~~integrate technology with operations management and support to deliver mobility solutions that enable the efficient and time-sensitive movement of people, vehicles and personal travel belongings. We are committed to providing ~~customer service, marketing, and accounting and revenue control functions necessary to facilitate~~solutions that make every moment matter for a world on the ~~operation~~go while meeting the objectives of our ~~clients' facilities or events. We also provide a range of ancillary services such as airport shuttle operations, valet services, taxi~~diverse client base in North America and ~~livery dispatch services, security services~~Europe, which includes aviation, commercial, hospitality and ~~municipal meter revenue collection and enforcement services.~~ institutional clients.

We typically enter into contractual relationships with property owners or managers as opposed to owning facilities.

We primarily operate ~~our clients’ properties through~~under two types of arrangements: management type contracts and ~~leases.~~ lease type contracts.

•

Under a management type contract, we typically receive a ~~base~~fixed and/or variable monthly fee for ~~managing the facility,~~providing our services, and we may ~~also~~ receive an incentive fee based on the achievement of ~~facility~~certain performance objectives. We also receive fees for ancillary ~~services.~~services such as accounting support services, equipment leasing and consulting. Typically, all of the underlying ~~revenues~~revenue and expenses under a standard management type contract flow through to our ~~clients~~client rather than to us. However,

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some management type contracts, which are referred to as “reverse” management type contracts, usually provide for larger management fees and require us to pay various costs.

•

Under a lease ~~arrangements,~~type contract, we generally pay our clients either a fixed base rent or fee, percentage of rent that is tied to the ~~property owner a fixed annual rent, a percentage~~financial performance of ~~gross customer collections~~the operation, or a combination ~~thereof.~~of both. We collect all ~~revenues under lease arrangements~~revenue and we are responsible for most operating expenses, but wetypically are ~~typically~~ not responsible for major maintenance, capital expenditures or real estate taxes. Margins for lease type 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~~June 30, ~~2017,~~2023, in our Commercial segment, we operated ~~81%~~approximately 87% of our locations under management type contracts and ~~19%~~13% under ~~leases.~~

lease type contracts, while in our Aviation segment, we served 160 airports across North America and Europe.

In evaluating our financial condition and operating performance, ~~management’s~~our primary area of focus is on our gross profit and total general and administrative expense. 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.operating income. Revenue from ~~leases~~lease type contracts includes all gross customer collections derived from our leased locations (net of local ~~parking~~ taxes), whereas revenue from management type contracts only includes our contractually agreed upon management fees and amounts attributable to ancillary services. Gross customer collections at facilities under management type 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~~lease type contracts may cause significant fluctuations in reported revenue and ~~expense~~cost of ~~parking~~ services, ~~that change~~our operating income under lease type contracts will ~~not artificially affect our gross profit. For example, as of September 30, 2017, 81% of our locations were operated~~be comparable to the operating income under management ~~contracts and 75% of our gross profit for the nine months ended September 30, 2017 was derived from management~~type contracts. Only 38% 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 expense, rather than revenue, are management’s primary focus.

General Business Trends

We believe that sophisticated ~~commercial real estate developers and property managers and owners~~clients recognize the potential for technology-driven mobility solutions, parking services, parking management, ground transportation services, baggage handling services and ~~related~~other ancillary services to be a profit generator ~~rather than~~and/or a ~~cost center. Often, the parking experience makes both the first and the last impressions on~~service differentiator to their ~~properties' tenants and visitors.~~customers. By outsourcing these services, ~~they~~our clients are able to capture additional profit and improve customer experiences by leveraging the unique technology, operational skills and controls that an experienced ~~parking management company~~services and technology solutions provider can offer. Our ability to consistently deliver a uniformly high level of ~~parking and related~~ services to our clients, including the use of various ~~technological~~technology solutions and enhancements, allows us to maximize the profit toand/or customer experience for our clients and improves our ability to win contracts and retain existing ~~locations.~~clients. Our focus on customer service and satisfaction is a key driver of our high ~~location~~ retention rate, which was approximately ~~92%~~94% and ~~87%~~91% for the ~~twelve month~~twelve-month periods ended ~~September~~June 30, ~~2017~~2023 and ~~2016, respectively.~~

~~Summary of Operating~~2022, respectively, for our Commercial segment facilities.

Commercial Segment 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 Commercial facilities (by contractual type) operated on the dates indicated:


	June 30, 2023		December 31, 2022		June 30, 2022
Leased facilities		414		421		428
Managed facilities		2,842		2,709		2,660
Total Commercial segment facilities		3,256		3,130		3,088

Aviation Segment - Airports Served

The following table reflects the number of airports where at ~~the end~~least one of our services was provided as of dates indicated:


	June 30, 2023		December 31, 2022		June 30, 2022
North America		102		100		90
Europe		58		58		—
Total Airports		160		158		90

The increase as of December 31, 2022 included 65 unique airports added as a result of the ~~periods indicated:~~

September 30, 2017
December 31, 2016
September 30, 2016
Leased facilities 683
688
696
Managed facilities 2,964
2,966
2,993
Total facilities (1) (2) 3,647
3,654
3,689

~~(1) Includes partial ownership in two managed facilities acquired in the Central Merger.~~

~~(2) December 31, 2016 and September 30, 2016 facilities are adjusted for Click and Park locations due to the termination~~acquisition of ~~the transition services agreement.~~

KMP.

Revenue

We recognize ~~parking~~ services revenue from ~~lease~~our contracts and ~~management contracts~~certain fees for using our technology-driven mobility solutions as the related services are provided. Substantially all of our revenue comes from the following ~~two~~ sources:

~~Parking services revenue—lease~~

Lease type contracts. ~~Parking services revenue related to lease contracts consist~~Consists of all revenue received at ~~a leased facility,~~lease type locations, including ~~parking~~gross receipts (net of local ~~parking tax)~~taxes), consulting and real estate development fees, e-commerce technology fees, customer convenience fees, gains on sales of contracts and payments for exercising termination rights.

~~Parking services revenue—management~~ As discussed in Note 4. Revenue in the notes to the Condensed Consolidated Financial Statements, revenue from lease type contracts includes a reduction for certain expenses (primarily rent expense) related to service concession arrangements.

Management type contracts. ~~Management contract revenue consists~~ Consists of management fees, including ~~both~~ fixed, ~~and~~variable and/or performance-based fees, and in some cases e-commerce technology fees, customer convenience fees and monthly subscription fees related to the use of the

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Company’s technology solutions and amounts attributable to ancillary services such as accounting, equipment leasing, baggage services, payments received for exercising termination rights, consulting, developmental fees, gains on sales of contracts, insurance and other value-added ~~services with respect to managed locations.~~services. We believe we generally can 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 and health care claims by maintaining a large per-claim deductible. As a result, we ~~have generated~~generate operating income on the insurance provided under our management type contracts by focusing on our risk management efforts and controlling losses. Management type contract revenues do not include gross customer collections, ~~at the managed locations,~~ as ~~these~~those revenues belong to the ~~property owner~~client rather than to us. Management type contracts generally provide us with a management fee regardless of the operating performance of the underlying ~~facilities.~~

~~Conversions between types of contracts, lease or~~facility. In addition, management ~~are typically determined by~~type contract revenue includes revenue related to our ~~client~~other aviation services. Other aviation services include our baggage delivery services, curbside concierge services, remote airline check-in services and ~~not us. Although the underlying economics~~other miscellaneous services provided to ~~us of management contracts~~our airport and ~~leases are similar, the manner in which we account for them differs substantially.~~

airline clients.

Reimbursed Management Type Contract ~~Revenue~~

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

type contract.

Cost of ~~Parking~~ Services

(Exclusive of Depreciation and Amortization)

Our cost of ~~parking~~ services consists of the following:

~~Cost of parking services—lease~~

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

~~Cost of parking services—management~~

Management type contracts. ~~The cost of parking services~~ Expenses under a management type contract isare generally the responsibility of the ~~facility owner.~~client. As a result, these costs are not included in ~~our results~~cost of ~~operations.~~services. However, ~~our reverse~~“reverse” management type contracts, which typically provide for larger management fees, do require us to pay for certain ~~costs.~~

costs, which are included in cost of services. In addition, certain costs related to providing our other aviation and ancillary services are included in cost of services.

Reimbursed Management Type Contract ~~Expense~~

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

type contract.

Gross Profit

Gross profit equals our revenue less the cost of generating such ~~revenue. This is the key metric we use~~revenue (“cost of services”) and depreciation and amortization expenses related to ~~examine our performance because it captures the underlying economic benefit to us~~cost of ~~both lease contracts and management contracts.~~

services activities.

General and Administrative Expenses

General and administrative expenses include salaries, wages, incentive compensation, stock-based compensation, payroll taxes, insurance, travel and office related expenses for our headquarters, field offices and supervisory ~~employees,~~employees. Additionally, acquisition-related expenses are included in general and ~~board of directors.~~

administrative expenses.

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, usually acquired through the acquisition of businesses, are amortized over their remaining estimated useful life.

~~Results~~

Operating Income

Operating income represents revenue less cost of ~~Operations~~

~~Impacts of Recent Hurricanes~~

~~Although we have significant operations in~~services, general and administrative expenses and depreciation and amortization. This is the ~~areas impacted by Hurricanes Harvey, Irma~~key metric our Chief Operating Decision Maker (“CODM”) uses for making decisions, assessing performance and ~~Maria,~~allocating resources to our ~~business~~Operating Segments, Commercial and financial results were not significantly impacted. The estimated impact to the Company's results was a $0.7 million reduction in gross profit for the periods ended September 30, 2017. We continue to assess the impact of the damage caused by the hurricanes on our operations and insured property and currently do not expect the impacts of the named hurricanes to be significant. We currently believe that we will be entitled to recover the total amount of insured losses sustained as a result of the named hurricanes, less related deductibles, if any. As of September 30, 2017, no amounts have been recorded related to the deductible portion of our insurance programs that we expect to incur in connection with any hurricane-related insurance claim we may file.

Aviation.

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.~~the CODM. Our CODM is our chief executive officer.

~~In the first quarter of 2017, we changed the internal reporting~~ The CODM uses this separate discrete financial information by segment ~~information reported~~ to ~~our CODM. The~~allocate resources and assess performance, primarily based on operating income.

Our operating segments are ~~internally reported as region one (Commercial)~~Commercial and ~~region two (Airports). All prior periods presented have been restated to reflect the new internal reporting to the CODM.~~

Aviation, which are described below.

~~Region one (Commercial)~~•

Commercial encompasses our services in healthcare facilities, municipalities, including meter revenue collection and enforcement services, government facilities, hotels, commercial real estate, residential communities, retail, colleges and

universities, as well as ancillary services such as providing technology-driven mobility solutions, shuttle and ground

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transportation services, valet services, taxi and livery dispatch services and event planning, including shuttle and transportation services.

~~Region two (Airports)~~•

Aviation encompasses our services ~~at all major~~in aviation (e.g., airports, airline and certain hospitality clients with baggage and parking services), as well as ancillary services, which includes shuttle and ground transportation services, valet services, baggage handling, baggage repair and ~~valet services.~~

The Other segment includes costs related to our operational support teams and costs related to common and shared infrastructure, including finance, accounting, information technology, human resources, procurement, legal and corporate ~~items.~~

~~The following is a summary~~development.

Analysis of ~~revenues (excluding reimbursed management contract revenue), cost~~Results of ~~parking services (excluding reimbursed management contract expense) and gross profit by regions for~~Operations

New business relates to contracts that started during the ~~three and nine months ended September 30, 2017 and 2016:~~

~~Three Months Ended September 30, 2017 Compared to Three Months September 30, 2016~~

~~Segment revenue information is summarized as follows:~~

Three Months Ended September 30,
Region One Region Two Other Total Variance
(millions) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Amount %
Lease contract revenue:

New locations $ 12.1
$ 2.5
$ 0.7
$ 0.2
$ —
$ —
$ 12.8
$ 2.7
$ 10.1
374.1 %
Contract expirations 7.1
13.0
—
1.2
—
—
7.1
14.2
(7.1 ) (50.0 )%
Same locations 87.0
87.4
31.3
29.8
—
—
118.3
117.2
1.1
0.9 %
Conversions 2.7
2.0
—
—
—
—
2.7
2.0
0.7
35.0 %
Total lease contract revenue $ 108.9
$ 104.9
$ 32.0
$ 31.2
$ —
$ —
$ 140.9
$ 136.1
$ 4.8
3.5 %
Management contract revenue:

New locations $ 8.6
$ 5.5
$ 4.3
$ 2.0
$ —
$ —
$ 12.9
$ 7.5
$ 5.4
72.0 %
Contract expirations 3.9
6.2
1.0
4.5
—
—
4.9
10.7
(5.8 ) (54.2 )%
Same locations 49.8
49.3
16.9
14.1
2.0
2.4
68.7
65.8
2.9
4.4 %
Conversions 0.2
0.1
—
—
—
—
0.2
0.1
0.1
100.0 %
Total management contract revenue $ 62.5
$ 61.1
$ 22.2
$ 20.6
$ 2.0
$ 2.4
$ 86.7
$ 84.1
$ 2.6
3.1 %

Revenue associated with same locations represents locations that have been operating for at least one year and operating for the entire period in the comparative period being presented. Revenue associated with contract expirations relatescurrent period. Contract terminations relate to contracts that have expired ~~however,~~or terminated early during the current period but where we were operating the ~~facility~~business in the comparative period presented.

~~Parking services revenue—~~ Conversions relate to contracts that were converted from lease ~~contracts.~~ ~~Lease contract revenue increased $4.8 million, or 3.5%,~~type contracts to ~~$140.9 million for~~management type contracts after the prior year period.

Restructuring, integration and other costs include compensation expenses related to organizational changes within our Company, integration expenses related to our recent acquisitions, and severance and other costs primarily related to workforce reductions.

Three Months Ended June 30, 2023 Compared to Three Months Ended June 30, 2022

Consolidated results during the three months ended ~~September~~June 30, ~~2017, compared to $136.1 million for~~2023 and 2022, respectively, included the three months ended September 30, 2016. The increase in lease contract revenue resulted primarily from increases of $10.1 million from new locations, $1.1 million from same locations and $0.7 million from locations that converted from management contracts during the periods presented, partially offset by a $7.1 million decrease in revenue from contract expirations. Same locationfollowing notable items:


	Three Months Ended				Variance
(millions) (unaudited)	June 30, 2023		June 30, 2022		Amount			%
Services revenue	$	442.2	$	381.0	$	61.2			16.1	%
Cost of services (exclusive of depreciation and amortization)		376.3		322.2		54.1			16.8	%
General and administrative expenses		31.8		26.7		5.1			19.1	%
Depreciation and amortization		8.8		6.5		2.3			35.4	%
Operating income		25.3		25.6		(0.3	)		(1.2	)%
Interest expense		7.3		3.5		3.8			108.6	%
Income tax expense		4.8		5.9		(1.1	)		(18.6	)%
Net income		13.3		16.3		(3.0	)		(18.4	)%

Services revenue increased ~~$1.1~~by $61.2 million, or ~~0.9%~~16.1%, ~~primarily due~~attributable to ~~net increases in short term parking~~the following:

•

Services revenue ~~rental revenue and monthly parking revenue.~~

~~From a reporting segment perspective,~~for lease ~~contract revenue~~type contracts increased primarily due to new locations in regions one and two, same locations in region two and conversions in region one, partially offset by decreases in contract expirations in regions one and two and same locations in region one. The other region amounts in same location represent revenue not specifically identifiable to a region.

~~Parking services revenue—management contracts.~~ ~~Management contract revenue increased $2.6~~$5.7 million, or 3.1%, to $86.7 million for the three months ended September 30, 2017, compared to $84.1 million for the three months ended September 30, 2016. The increase in management contract revenue resulted primarily from increases of $5.4 million from new locations, $2.9 million from same locations and $0.1 million from locations that converted from lease contracts during the periods presented, partially offset by a $5.8 million decrease in revenue from contract expirations. Same location revenue increased $2.9 million, or 4.4%, primarily due to change in contract terms for certain management contracts, whereby the contract terms converted from a management contract to a "reverse" management contract, which typically has higher management fees from the facility owner but requires us to pay certain operating costs associated with the facilities operation.

From a reporting segment perspective, management contract revenue increased primarily due to new locations in regions one and two, same locations in regions one and two and conversions in region one, partially offset by decreases in contract terminations in regions one and two and same locations in other. The other region amounts in same location represent revenue not specifically identifiable to a region.

~~Reimbursed management contract revenue.~~ Reimbursed management contract revenue decreased $11.9 million, or 6.7%, to $165.1 million for the three months ended September 30, 2017, compared to $177.0 million for the three months ended September 30, 2016.

~~Segment cost of parking services information is summarized as follows:~~

Three Months Ended September 30,
Region One Region Two Other Total Variance
(millions) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Amount %
Cost of parking services lease contracts:

New locations $ 11.6
$ 2.4
$ 0.6
$ 0.2
$ —
$ —
$ 12.2
$ 2.6
$ 9.6
369.2 %
Contract expirations 6.0
11.7
—
1.1
—
—
6.0
12.8
(6.8 ) (53.1 )%
Same locations 80.8
80.1
29.8
28.4
(0.5 ) —
110.1
108.5
1.6
1.5 %
Conversions 2.7
1.9
—
—
—
—
2.7
1.9
0.8
42.1 %
Total cost of parking services lease contracts $ 101.1
$ 96.1
$ 30.4
$ 29.7
$ (0.5 ) $ —
$ 131.0
$ 125.8
$ 5.2
4.1 %
Cost of parking services management contracts:

New locations $ 4.3
$ 3.3
$ 4.3
$ 2.0
$ —
$ —
$ 8.6
$ 5.3
$ 3.3
62.3 %
Contract expirations 2.8
3.7
0.9
3.6
—
—
3.7
7.3
(3.6 ) (49.3 )%
Same locations 30.1
29.7
10.8
8.8
(2.5 ) (0.6 ) 38.4
37.9
0.5
1.3 %
Conversions —
—
—
—
—
—
—
—
—
— %
Total cost of parking services management contracts $ 37.2
$ 36.7
$ 16.0
$ 14.4
$ (2.5 ) $ (0.6 ) $ 50.7
$ 50.5
$ 0.2
0.4 %

Cost of parking services associated with same locations represents locations that have been operating for at least one year and operating for the entire period in the comparative period being present. Cost of parking services associated with contract expirations relates to contacts that have expired, however, we were operating the facility in the comparative period presented.

~~Cost of parking services—lease contracts.~~ Cost of parking services for lease contracts increased $5.2 million, or 4.1%, to $131.0 million for the three months ended September 30, 2017, compared to $125.8 million for the three months ended September 30, 2016. The increase in cost of parking services for lease contracts resulted primarily from increases of $9.6 million from new locations, $1.6 million from same locations and $0.8 million from locations that converted from management contracts during the periods presented, partially offset by a decrease of $6.8 million from contract expirations. Same location costs increased $1.6 million, or 1.5%8.1%, primarily due to an increase in ~~rent expense~~transient and monthly parking revenue as a result of ~~higher revenues for same locations~~the continued recovery in travel and ~~overall net operating costs,~~fewer restrictions on mobility, as well as new business, partially offset by ~~unallocated insurance reserve adjustments/costs~~terminations and ~~other unallocated corporate items.~~

~~From a reporting segment perspective,~~lower cost concessions related to service concession arrangements of parking services for lease contracts increased primarily from new locations in regions one and two, same locations in regions one and two and conversions in region one, partially offset by decreases in contract expirations in regions one and two and same locations in other. The other region amounts in same location represent costs not specifically identifiable to a region.

~~Cost of parking services—management contracts.~~ ~~Cost of parking services for management contracts increased $0.2~~$2.7 million ~~or 0.4%, to $50.7 million for~~during the three months ended ~~September~~June 30, ~~2017,~~2023 as compared to ~~$50.5~~$2.9 million ~~for~~during the three months ended ~~September~~June 30, ~~2016. The increase in cost of parking services~~2022.

•

Services revenue for management type contracts ~~resulted primarily from increases of $3.3 million from new locations and $0.5 million from same locations, partially offset by a decrease of $3.6 million from contract expirations. Same location costs~~ increased ~~$0.5~~$19.1 million, or ~~1.3%~~15.2%, primarily due to an increase in ~~costs due~~volume related to ~~change~~our baggage delivery businesses and volume-based management type contracts as a result of the continued recovery in ~~contract terms for certain management contracts, whereby the contract terms converted~~travel and fewer restrictions on mobility, as well as increased volume related to other aviation services, new business and revenue from a management contract to a "reverse" management contract, which typically have higher operating costs associated with the facilities operation but allow us to have a higher management fee from the facility owner and overall net operating costs,acquisitions of $1.1 million, partially offset by ~~unallocated insurance reserve adjustments/costs and other unallocated corporate items.~~terminations.

•

From a reporting segment perspective, cost of parking services for management contracts increased primarily from increases in new locations in regions one and two and same locations in regions one and two, partially offset by decreases in contract expirations in regions one and two and same locations in other. The other region amounts in same location represent costs not specifically identifiable to a region.

Reimbursed management type contract ~~expense.~~ ~~Reimbursed management contract expense decreased $11.9~~revenue was $220.9 million ~~or 6.7%, to $165.1~~and $184.5 million ~~for~~during the three months ended ~~September~~June 30, ~~2017, compared~~2023 and 2022, respectively. The increase in reimbursed management type contract revenue was primarily due to ~~$177.0~~the continued recovery in travel and fewer restrictions on mobility, new business and revenue from acquisitions of $0.5 million, partially offset by terminations.

Cost of services (exclusive of depreciation and amortization) increased by $54.1 million, or 16.8%, attributable to the following:

•

Cost of services (exclusive of depreciation and amortization) for lease type contracts increased $6.4 million, or 11.4%, primarily due to higher operating costs as a result of the continued recovery in travel and fewer restrictions on mobility, new business and lower cost concessions related to rent concessions of $1.2 million during the three months ended ~~September~~June 30, ~~2016.~~

~~Segment gross profit/gross profit percentage information is summarized~~2023 as ~~follows:~~

Three Months Ended September 30,
Region One Region Two Other Total Variance
(millions) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Amount %
Gross profit lease contracts:

New locations $ 0.5
$ 0.1
$ 0.1
$ —
$ —
$ —
$ 0.6
$ 0.1
$ 0.5
500.0 %
Contract expirations 1.1
1.3
—
0.1
—
—
1.1
1.4
(0.3 ) (21.4 )%
Same locations 6.2
7.3
1.5
1.4
0.5
—
8.2
8.7
(0.5 ) (5.7 )%
Conversions —
0.1
—
—
—
—
—
0.1
(0.1 ) — %
Total gross profit lease contracts $ 7.8
$ 8.8
$ 1.6
$ 1.5
$ 0.5
$ —
$ 9.9
$ 10.3
$ (0.4 ) (3.9 )%
(Percentages)
Gross profit percentage lease contracts:

New locations 4.1 % 4.0 % 14.3 % — % — % — % 4.7 % 3.7 %
Contract expirations 15.5 % 10.0 % — % 8.3 % — % — % 15.5 % 9.9 %
Same locations 7.1 % 8.4 % 4.8 % 4.7 % — % — % 6.9 % 7.4 %
Conversions — % 5.0 % — % — % — % — % — % 5.0 %
Total gross profit percentage 7.2 % 8.4 % 5.0 % 4.8 % — % — % 7.0 % 7.6 %
Gross profit management contracts:

New locations $ 4.3
$ 2.2
$ —
$ —
$ —
$ —
$ 4.3
$ 2.2
$ 2.1
95.5 %
Contract expirations 1.1
2.5
0.1
0.9
—
—
1.2
3.4
(2.2 ) — %
Same locations 19.7
19.6
6.1
5.3
4.5
3.0
30.3
27.9
2.4
8.6 %
Conversions 0.2
0.1
—
—
—
—
0.2
0.1
0.1
100.0 %
Total gross profit management contracts $ 25.3
$ 24.4
$ 6.2
$ 6.2
$ 4.5
$ 3.0
$ 36.0
$ 33.6
$ 2.4
7.1 %
(Percentages)
Gross profit percentage management contracts:

New locations 50.0 % 40.0 % — % — % — % — % 33.3 % 29.3 %
Contract expirations 28.2 % 40.3 % 10.0 % 20.0 % — % — % 24.5 % 31.8 %
Same locations 39.6 % 39.8 % 36.1 % 37.6 % 225.0 % 125.0 % 44.1 % 42.4 %
Conversions 100.0 % 100.0 % — % — % — % — % 100.0 % 100.0 %
Total gross profit percentage 40.5 % 39.9 % 27.9 % 30.1 % 225.0 % 125.0 % 41.5 % 40.0 %

Gross profit associated with same locations represents locations that have been operating for at least one year and operating for the entire period in the comparative period being present. Gross profit associated with contract expirations relatescompared to ~~contracts that have expired, however, we were operating the facility in the comparative period presented.~~

~~Gross profit—lease contracts.~~ ~~Gross profit for lease contracts decreased $0.4~~$1.5 million ~~or 3.9%, to $9.9 million for~~during the three months ended ~~September~~June 30, ~~2017, compared~~2022, partially offset by terminations.

•

Cost of services (exclusive of depreciation and amortization) for management type contracts increased $11.3 million, or 13.8%, primarily due to ~~$10.3~~higher operating costs as a result of the continued recovery in travel and fewer restrictions on

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mobility related to our baggage delivery businesses, reverse management contracts and other aviation services, as well as new business and acquisitions, partially offset by terminations.

•

Reimbursed management type contract expense was $220.9 million ~~for three months ended September 30, 2016. Gross profit percentage for lease contracts decreased to 7.0% for~~and $184.5 million during the three months ended ~~September~~June 30, ~~2017, compared~~2023 and 2022, respectively. The increase in reimbursed management type contract cost of services was primarily due to ~~7.6% for~~the continued recovery in travel and fewer restrictions on mobility, new business and acquisitions of $0.5 million, partially offset by terminations.

General and administrative expenses increased $5.1 million, or 19.1%, primarily due to higher compensation and non-cash stock-based compensation expenses and our continued investments in business development, technology deployment and other growth initiatives, as well as higher restructuring, integration, acquisition and other costs of $1.3 million during the three months ended ~~September~~June 30, ~~2016. Gross profit for lease contracts decreased~~2023 as ~~a result of decreases in gross profit for same locations, contract expirations, and locations that converted from management contracts~~compared to $0.3 million during the ~~periods presented, partially offset by increase in gross profit for new locations. Gross profit for same locations decreased~~three months ended June 30, 2022.

Depreciation and amortization expenses increased $2.3 million, or 35.4%, primarily due to ~~net decreases~~the amortization of other intangible assets related to the recent acquisitions and our continued investment in ~~rent~~technology and growth initiatives.

Our effective tax rate was 26.5% and 26.6% during the three months ended June 30, 2023 and 2022, respectively.

Net income decreased $3.0 million, or 18.4%, primarily due to higher interest expense as a result of higher variable interest rates and the factors noted above, partially offset by lower income taxes.

The following tables summarize our revenues ~~for same locations~~(excluding reimbursed management type contract revenue), gross profit, general and ~~overall net~~administrative expenses, depreciation and amortization, and operating ~~costs,~~income (expense) by segment during the three months ended June 30, 2023 and 2022.

Commercial


	Three Months Ended							Variance
(millions) (unaudited)		June 30, 2023			June 30, 2022			Amount			%
Services revenue
Lease type contracts		$	72.4		$	67.1		$	5.3			7.9	%
Management type contracts			75.2			65.8			9.4			14.3	%
Total services revenue			147.6			132.9			14.7			11.1	%
Gross profit
Lease type contracts			13.0			13.6			(0.6	)		(4.4	)%
Management type contracts			36.2			31.7			4.5			14.2	%
Depreciation and amortization			(2.2	)		(1.6	)		(0.6	)		(37.5	)%
Total gross profit			47.0			43.7			3.3			7.6	%
General and administrative expenses			9.3			7.8			1.5			19.2	%
Depreciation and amortization(1)			1.6			1.2			0.4			33.3	%
Operating income		$	36.1		$	34.7		$	1.4			4.0	%

(1)

Primarily related to amortization of other intangible assets and general and administrative depreciation and amortization.

Gross Profit

•

Lease type contracts. Gross profit decreased $0.6 million, or 4.4%, to $13.0 million during the three months ended June 30, 2023, compared to $13.6 million during the three months ended June 30, 2022. Gross profit decreased primarily due to the accrual of a reserve related to a sublease, as well as lower cost concessions related to rent concessions of $1.2 million during the three months ended June 30, 2023 compared to $1.5 million during the three months ended June 30, 2022, partially offset by increases in ~~short term parking revenue, rental revenue,~~transient and monthly parking revenue ~~and unallocated insurance reserve adjustments/costs and other unallocated corporate items.~~

From a reporting segment perspective, gross profit for lease contracts decreased primarily due to decreases in contract expirations in regions one and two, same locations in region one and conversions in region one, partially offset by increases in new locations in regions one and two and same locations in region two and other.

~~Gross profit—management contracts.~~ Gross profit for management contracts increased $2.4 million, or 7.1%, to $36.0 million for the three months ended September 30, 2017, compared to $33.6 million for the three months ended September 30, 2016. Gross profit percentage for management contracts increased to 41.5% for three months ended September 30, 2017, compared to 40.0% for three months ended September 30, 2016. Gross profit for management contracts increased as a result of ~~an increase~~the continued recovery in ~~gross profit for~~travel and fewer restrictions on mobility and new ~~locations, same locations and locations that converted from lease contracts during the periods presented, partially~~business.

•

~~offset by a decrease in gross profit for contract expirations.~~Management type contracts. Gross profit ~~for same locations~~ increased ~~primarily due to higher operating profits and unallocated insurance reserve adjustments/costs and other unallocated corporate items.~~

From a reporting segment perspective, gross profit for management contracts increased primarily from new locations in region one, same locations in regions one and two and other and conversions in region one, partially offset by decreases from contract expirations in regions one and two.

Although we have significant operations in the areas impacted by Hurricanes Harvey, Irma and Maria, our business and financial results were not significantly impacted. Our results were impacted by an estimated $0.7 million reduction in gross profit, primarily related to lease contracts, for the three months ended September 30, 2017.

~~General and administrative expenses.~~ ~~General and administrative expenses decreased $0.7~~$4.5 million, or ~~3.4%~~14.2%, to ~~$19.6~~$36.2 million for the three months ended September 30, 2017, compared to $20.3 million for the three months ended September 30, 2016. The decrease in general and administrative expenses was primarily due to a decrease in performance-based compensation costs, a decrease in compensation and benefit costs related to prior year cost reduction initiatives, merger and integration costs (primarily related to severance and relocation costs in the prior year comparable period) and overall better expense control, partially offset by investments related to supporting our various initiatives, which include implementing a vertical market strategy and re-aligning the organization.

~~Depreciation and amortization~~. Depreciation and amortization decreased $2.9 million, or 37.2%, to $4.9 million for the three months ended September 30, 2017, compared to $7.8 million for the three months ended September 30, 2016. This decrease was primarily a result of accelerated depreciation of software during the three months ended ~~September~~June 30, ~~2016 and~~2023, compared to $31.7 million during the three months ended ~~September~~June 30, ~~2017 did not include~~2022. Gross profit increased primarily due to an increase in volume-based management type contracts as a result of the continued recovery in travel and fewer restrictions on mobility and new business, partially offset by terminations.

•

Depreciation and amortization.Depreciation and amortization ~~of certain intangible assets as they were fully amortized during the fourth quarter of 2016.~~

~~Interest expense.~~ ~~Interest expense decreased $0.5 million,~~expenses increased by $0.6, or ~~18.5%~~37.5%, to $2.2 million ~~for~~during the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$2.7~~$1.6 million ~~for~~during the three months ended ~~September~~June 30, ~~2016.~~2022.

General and administrative expenses increased $1.5 million, or 19.2%, to $9.3 million during the three months ended June 30, 2023, compared to $7.8 million during the three months ended June 30, 2022. The ~~decrease in interest expense~~increase was primarily related to ~~reductions~~higher compensation and non-cash stock-based compensation expenses, as well as our continued investments in ~~amounts outstanding under our Restated Credit Facility,~~growth initiatives and higher restructuring, integration and other costs of $0.8 million during the three months ended June 30, 2023 as compared to $0.6 million during the three months ended June 30, 2022.

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Operating income increased $1.4 million, or 4.0%, to $36.1 million during the three months ended June 30, 2023, compared to $34.7 million during the three months ended June 30, 2022, primarily due to the factors noted above, partially offset by $0.4 million of amortization expenses during the three months ended June 30, 2023 related to other intangible assets acquired as a result of the acquisition of DIVRT.

Aviation


	Three Months Ended							Variance
(millions) (unaudited)		June 30, 2023			June 30, 2022			Amount			%
Services revenue
Lease type contracts		$	3.9		$	3.5		$	0.4			11.4	%
Management type contracts			69.8			60.1			9.7			16.1	%
Total services revenue			73.7			63.6			10.1			15.9	%
Gross profit
Lease type contracts			1.0			1.1			(0.1	)		(9.1	)%
Management type contracts			15.7			12.4			3.3			26.6	%
Depreciation and amortization			(1.5	)		(1.1	)		(0.4	)		(36.4	)%
Total gross profit			15.2			12.4			2.8			22.6	%
General and administrative expenses			4.0			2.9			1.1			37.9	%
Depreciation and amortization(1)			1.6			1.0			0.6			60.0	%
Operating income		$	9.6		$	8.5		$	1.1			12.9	%

(1)

Primarily related to amortization of intangible assets and general and administrative depreciation and amortization.

Gross Profit

•

Lease type contracts. Gross profit decreased $0.1 million, or 9.1%, to $1.0 million during the three months ended June 30, 2023 compared to $1.1 million during the three months ended June 30, 2022. Gross profit decreased primarily due to lower cost concessions related to service concession arrangements of $0.9 million during the three months ended June 30, 2023 as compared to $1.1 million during the three months ended June 30, 2022 and terminations, partially offset by an increase in ~~average borrowing rates.~~transient revenue as a result of the continued recovery in travel and fewer restrictions on mobility.

•

~~Interest income.~~ ~~Interest income was $0.2~~Management type contracts. Gross profit increased $3.3 million, ~~and $0.1~~or 26.6%, to $15.7 million ~~for~~during the three months ended ~~September~~June 30, ~~2017 and 2016, respectively.~~

~~Equity in losses from investment in unconsolidated entity.~~ ~~Equity in losses from investment in unconsolidated entity was $0.1~~2023, compared to $12.4 million ~~and $0.4 million for~~during the three months ended ~~September~~June 30, ~~2017~~2022. Gross profit increased primarily due to an increase in volume-based management type contracts as a result of the continued recovery in travel and ~~2016, respectively.~~

~~Income tax expense.~~ ~~Income tax expense~~fewer restrictions on mobility, increased ~~$2.2~~activity related to other aviation services, acquisitions and new business.

•

Depreciation and amortization. Depreciation and amortization expenses increased by $0.4, or 36.4% to $1.5 million ~~or 43.1%, to $7.3 million for~~during the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~$5.1~~$1.1 million ~~for~~during the three months ended ~~September~~June 30, ~~2016. Our effective tax rate was 37.7% for~~2022.

General and administrative expenses increased $1.1 million, or 37.9%, to $4.0 million during the three months ended ~~September~~June 30, ~~2017,~~2023, compared to ~~39.8% for~~$2.9 million during the three months ended ~~September~~June 30, ~~2016. The effective tax rate for~~2022 primarily due to higher restructuring, integration and other costs of $0.4 million during the three months ended ~~September~~June 30, ~~2017 was lower~~2023 as compared to a benefit of $0.5 million during the three months ended June 30, 2022, and our continued investments in growth initiatives.

Operating income increased $1.1 million, or 12.9%, to $9.6 million during the three months ended June 30, 2023, compared to $8.5 million during the three months ended June 30, 2022, primarily due to ~~additional federal employer income tax credits recognized ($0.3 million) and~~ the ~~adoption of ASU 2016-09 and the related excess tax benefits now recognized as a reduction of income tax expense ($0.1 million). See Note 1.~~ ~~Significant Accounting Policies and Practices~~ ~~of the Condensed Consolidated Financial Statements for further discussion of the impact of ASU 2016-09.~~

~~Nine Months Ended September 30, 2017 Compared to Nine Months September 30, 2016~~

~~Segment revenue information is summarized as follows:~~

Nine Months Ended September 30,
Region One Region Two Other Total Variance
(millions) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Amount %
Lease contract revenue:

New locations $ 27.4

$ 3.8

$ 2.2

$ 0.2

$ —

$ —

$ 29.6

$ 4.0

$ 25.6

640.0 %
Contract expirations 10.2

33.6

—

3.7

—

—

10.2

37.3

(27.1 )
(72.7 )%
Same locations 281.2

272.8

94.4

89.8

—

—

375.6

362.6

13.0

3.6 %
Conversions 7.2

6.4

—

—

—

—

7.2

6.4

0.8

12.5 %
Total lease contract revenue $ 326.0

$ 316.6

$ 96.6

$ 93.7

$ —

$ —

$ 422.6

$ 410.3

$ 12.3

3.0 %
Management contract revenue:

New locations $ 28.3

$ 9.8

$ 10.9

$ 4.6

$ —

$ —

$ 39.2

$ 14.4

$ 24.8

172.2 %
Contract expirations 6.3

20.1

2.4

20.4

—

—

8.7

40.5

(31.8 )
(78.5 )%
Same locations 155.1

155.3

53.1

44.1

6.3

7.4

214.5

206.8

7.7

3.7 %
Conversions 0.4

0.3

—

—

—

—

0.4

0.3

0.1

33.3 %
Total management contract revenue $ 190.1

$ 185.5

$ 66.4

$ 69.1

$ 6.3

$ 7.4

$ 262.8

$ 262.0

$ 0.8

0.3 %

Revenue associated with same locations represents locations that have been operating for at least one year and operating for the entire period in the comparative period being presented. Revenue associated with contract expirations relates to contracts that have expired, however, we were operating the facility in the comparative period presented.

~~Parking services revenue—lease contracts.~~ Lease contract revenue increased $12.3 million, or 3.0%, to $422.6 million for the nine months ended September 30, 2017, compared to $410.3 million for the nine months ended September 30, 2016. The increase in lease contract revenue resulted primarily from increases of $25.6 million from new locations, $13.0 million from same locations and $0.8 million from locations that converted from management contracts during the periods presented,factors noted above, partially offset by $0.5 million of amortization expenses during the three months ended June 30, 2023 related to other intangibles assets acquired as a ~~decrease~~result of ~~$27.1 million from contract expirations. Same location revenue~~the acquisition of KMP.

Other

Operating expenses within the Other segment increased ~~$13.0~~$2.8 million, or ~~3.6%~~15.9%, to $20.4 million during the three months ended June 30, 2023, compared to $17.6 million during the three months ended June 30, 2022, primarily due to ~~earnings~~higher compensation and non-cash stock-based compensation expenses and our continued investments in business development and technology deployment and other growth initiatives, as well as higher integration, acquisition, restructuring and other costs of ~~$8.5~~$0.5 million ~~for our proportionate share~~during the three months ended June 30, 2023 as compared to $0.2 million during the three months ended June 30, 2022.

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Six Months Ended June 30, 2023 Compared to Six Months Ended June 30, 2022

Consolidated results during the ~~net gain of an equity method investees' sale of assets~~six months ended June 30, 2023 and ~~net increases in monthly parking revenue, rental revenue and short term revenue.~~

~~From a reporting segment perspective, lease contract~~2022 included the following notable items:


	Six Months Ended				Variance
(millions) (unaudited)	June 30, 2023		June 30, 2022		Amount			%
Services revenue	$	867.5	$	730.8	$	136.7			18.7	%
Cost of services (exclusive of depreciation and amortization)		743.3		620.6		122.7			19.8	%
General and administrative expenses		62.4		51.2		11.2			21.9	%
Depreciation and amortization		17.2		13.3		3.9			29.3	%
Operating income		44.6		45.7		(1.1	)		(2.4	)%
Interest expense		14.1		8.3		5.8			69.9	%
Income tax expense		8.1		10.1		(2.0	)		(19.8	)%
Net income		22.6		27.6		(5.0	)		(18.1	)%

Services revenue increased ~~primarily due to new locations in regions one and two, same locations in regions one and two and conversions in region one, partially offset~~ by ~~decreases from contract expirations in regions one and two. The other region amounts in same location represent revenue not specifically identifiable to a region.~~

~~Parking services revenue—management contracts.~~ ~~Management contract revenue increased $0.8~~$136.7 million, or ~~$0.3%~~18.7%, attributable to ~~$262.8 million~~the following:

•

Services revenue for the nine months ended September 30, 2017, compared to $262.0 million for the nine months ended September 30, 2016. The increase in management contract revenue resulted primarily from increases of $24.8 from new locations, $7.7 million from same locations and $0.1 million from locations that converted from lease type contracts ~~during the periods presented, partially offset by a decrease of $31.8 from contract expirations. Same location revenue~~ increased ~~$7.7~~$11.3 million, or 3.7%, primarily due to change in contract terms for certain management contracts, whereby the contract terms converted from a management contract to a "reverse" management contract, which typically has higher management fees from the facility owner but require us to pay certain operating costs associated with the facilities operation.

From a reporting segment perspective, management contract revenue increased primarily due to new locations in regions one and two, same locations in region two and conversions in region one, partially offset by decreases in contract expirations in regions one and two and same locations in region one and other. The other region amounts in same location represent revenues not specifically identifiable to a region.

~~Reimbursed management contract revenue.~~ Reimbursed management contract revenue increased $10.9 million, or 2.2%, to $512.7 million for the nine months ended September 30, 2017, compared to $501.8 million for the nine months ended September 30, 2016.

~~Segment cost of parking services information is summarized as follows:~~

Nine Months Ended September 30,
Region One Region Two Other Total Variance
(millions) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Amount %
Cost of parking services lease contracts:

New locations $ 25.8

$ 3.6

$ 1.9

$ 0.2

$ —

$ —

$ 27.7

$ 3.8

$ 23.9

628.9 %
Contract expirations 9.2

31.8

—

3.5

—

—

9.2

35.3

(26.1 )
(73.9 )%
Same locations 255.0

249.9

89.8

86.0

(1.8 )
(0.6 )
343.0

335.3

7.7

2.3 %
Conversions 7.1

6.0

—

—

—

—

7.1

6.0

1.1

18.3 %
Total cost of parking services lease contracts $ 297.1

$ 291.3

$ 91.7

$ 89.7

$ (1.8 )
$ (0.6 )
$ 387.0

$ 380.4

$ 6.6

1.7 %
Cost of parking services management contracts:

New locations $ 15.9

$ 5.9

$ 10.6

$ 4.5

$ —

$ —

$ 26.5

$ 10.4

$ 16.1

154.8 %
Contract expirations 4.6

13.0

2.0

19.2

—

—

6.6

32.2

(25.6 )
(79.5 )%
Same locations 94.8

95.8

34.3

27.4

(7.8 )
(3.3 )
121.3

119.9

1.4

1.2 %
Conversions 0.1

0.1

—

—

—

—

0.1

0.1

—

— %
Total cost of parking services management contracts $ 115.4

$ 114.8

$ 46.9

$ 51.1

$ (7.8 )
$ (3.3 )
$ 154.5

$ 162.6

$ (8.1 )
(5.0 )%

~~Cost of parking services—lease contracts.~~ Cost of parking services for lease contracts increased $6.6 million, or 1.7%, to $387.0 million for the nine months ended September 30, 2017, compared to $380.4 million for the nine months ended September 30, 2016. The increase in cost of parking services for lease contracts resulted primarily from increases of $23.9 million from new locations, $7.7 million from same locations and $1.1 million from locations that converted from management contracts during the periods presented, partially offset by a decrease of $26.1 million from contract expirations. Same location costs increased $7.7 million, or 2.3%8.5%, primarily due to an increase in ~~rent expense~~transient and monthly parking revenue as a result of ~~higher revenues for same locations~~the continued recovery in travel and ~~overall net operating costs,~~fewer restrictions on mobility and new business, partially offset by ~~unallocated insurance reserve adjustments/costs~~terminations and ~~other unallocated corporate items.~~lower cost concessions related to service concession arrangements of $5.6 million during the six months ended June 30, 2023 as compared to $6.1 million during the six months ended June 30, 2022.

•

~~From a reporting segment perspective, cost of parking services~~Services revenue for ~~lease~~management type contracts increased primarily due to increases from new locations in regions one and two, same locations in regions one and two, and conversions in region one, offset by decreases in contract expirations in regions one and two and same locations in other. The other region amounts in same location represent costs not specifically identifiable to a region.

~~Cost of parking services—management contracts.~~ ~~Cost of parking services for management contracts decreased $8.1~~$45.4 million, or 5.0%, to $154.5 million for the nine months ended September 30, 2017, compared to $162.6 million for the nine months ended September 30, 2016. The decrease in cost of parking services for management contracts resulted primarily from decreases of $25.6 million from contract expirations, partially offset by increases of $16.1 million from new locations and $1.4 million from same locations. Same location costs increased $1.4 million, or 1.2%18.3%, primarily due to an increase in ~~costs due~~volume related to ~~change in contract terms for certain~~our baggage delivery businesses and volume-based management type contracts whereby the contract terms converted from a management contract to a "reverse" management contract, which typically have higher operating costs associated with the facilities operation but allow us to have a higher management fee from the facility owner and overall net operating costs, partially offset by unallocated insurance reserve adjustments/costs and other unallocated corporate items.

From a reporting segment perspective, cost of parking services for management contracts decreased primarily from contract expirations in regions one and two, same locations in region one and other, partially offset by increases from new locations in regions one and two and same locations in region two. The other region amounts in same location represent costs not specifically identifiable to a region.

~~Reimbursed management contract expense.~~ Reimbursed management contract expense increased $10.9 million, or 2.2%, to $512.7 million for the nine months ended September 30, 2017, compared to $501.8 million for the nine months ended September 30, 2016.

~~Segment gross profit/gross profit percentage information is summarized as follows:~~

Nine Months Ended September 30,
Region One Region Two Other Total Variance
(millions) (unaudited) 2017 2016 2017 2016 2017 2016 2017 2016 Amount %
Gross profit lease contracts:

New locations $ 1.6
$ 0.2
$ 0.3
$ —
$ —
$ —
$ 1.9
$ 0.2
$ 1.7
850.0 %
Contract expirations 1.0
1.8
—
0.2
—
—
1.0
2.0
(1.0 ) (50.0 )%
Same locations 26.2
22.9
4.6
3.8
1.8
0.6
32.6
27.3
5.3
19.4 %
Conversions 0.1
0.4
—
—
—
—
0.1
0.4
(0.3 ) (75.0 )%
Total gross profit lease contracts $ 28.9
$ 25.3
$ 4.9
$ 4.0
$ 1.8
$ 0.6
$ 35.6
$ 29.9
$ 5.7
19.1 %
(Percentages)
Gross profit percentage lease contracts:

New locations 5.8 % 5.3 % 13.6 % — % — % — % 6.4 % 5.0 %
Contract expirations 9.8 % 5.4 % — % 5.4 % — % — % 9.8 % 5.4 %
Same locations 9.3 % 8.4 % 4.9 % 4.2 % — % — % 8.7 % 7.5 %
Conversions 1.4 % 6.3 % — % — % — % — % 1.4 % 6.3 %
Total gross profit percentage 8.9 % 8.0 % 5.1 % 4.3 % — % — % 8.4 % 7.3 %
Gross profit management contracts:

New locations $ 12.4
$ 3.9
$ 0.3
$ 0.1
$ —
$ —
$ 12.7
$ 4.0
$ 8.7
217.5 %
Contract expirations 1.7
7.1
0.4
1.2
—
—
2.1
8.3
(6.2 ) (74.7 )%
Same locations 60.3
59.5
18.8
16.7
14.1
10.7
93.2
86.9
6.3
7.2 %
Conversions 0.3
0.2
—
—
—
—
0.3
0.2
0.1
50.0 %
Total gross profit management contracts $ 74.7
$ 70.7
$ 19.5
$ 18.0
$ 14.1
$ 10.7
$ 108.3
$ 99.4
$ 8.9
9.0 %
(Percentages)
Gross profit percentage management contracts:

New locations 43.8 % 39.8 % 2.8 % 2.2 % — % — % 32.4 % 27.8 %
Contract expirations 27.0 % 35.3 % 16.7 % 5.9 % — % — % 24.1 % 20.5 %
Same locations 38.9 % 38.3 % 35.4 % 37.9 % 223.8 % 144.6 % 43.4 % 42.0 %
Conversions 75.0 % 66.7 % — % — % — % — % 75.0 % 66.7 %
Total gross profit percentage 39.3 % 38.1 % 29.4 % 26.0 % 223.8 % 144.6 % 41.2 % 37.9 %

Gross profit associated with same locations represents locations that have been operating for at least one year and operating for the entire period in the comparative period being presented. Gross profit associated with contract expirations relates to contracts that have expired, however, we were operating the facility in the comparative period presented.

~~Gross profit—lease contracts.~~ Gross profit for lease contracts increased $5.7 million, or 19.1%, to $35.6 million for the nine months ended September 30, 2017, compared to $29.9 million for nine months ended September 30, 2016. Gross profit percentage for lease contracts increased to 8.4% for the nine months ended September 30, 2017, compared to 7.3% for the nine months ended September 30, 2016. Gross profit for lease contracts increased as a result of ~~increases~~the continued recovery in ~~gross profit for~~travel and fewer restrictions on mobility, as well as increased volume related to other aviation services, new ~~locations~~business and ~~same locations,~~revenue from acquisitions of $2.1 million, partially offset by terminations.

•

Reimbursed management type contract ~~expirations~~revenue was $429.9 million and ~~locations that converted~~$349.9 million during the six months ended June 30, 2023 and 2022, respectively. The increase in reimbursed management type contract revenue was primarily due to the continued recovery in travel and fewer restrictions on mobility, new business and revenue from acquisitions of $1.1 million, partially offset by terminations.

Cost of services (exclusive of depreciation and amortization) increased by $122.7 million, or 19.8%, attributable to the following:

•

Cost of services (exclusive of depreciation and amortization) for lease type contracts increased $9.6 million, or 8.9%, primarily due to higher operating costs as a result of the continued recovery in travel and fewer restrictions on mobility, new business and lower cost concessions related to rent concessions of $2.5 million during the six months ended June 30, 2023 as compared to $3.7 million during the six months ended June 30, 2022, partially offset by terminations.

•

Cost of services (exclusive of depreciation and amortization) for management type contracts increased $33.1 million, or 20.3%, primarily due to higher operating costs as a result of the continued recovery in travel and fewer restrictions on mobility related to our baggage delivery businesses, reverse management contracts and other aviation related services, as well as new business and acquisitions, partially offset by terminations.

•

Reimbursed management type contract expense was $429.9 million and $349.9 million during the ~~periods presented.~~six months ended June 30, 2023 and 2022, respectively. The increase in reimbursed management type contract cost of services was primarily due to the continued recovery in travel and fewer restrictions on mobility, new business and acquisitions of $1.1 million, partially offset by terminations.

General and administrative expenses increased $11.2 million, or 21.9%, primarily due to higher compensation and non-cash stock-based compensation expenses and our continued investments in business development, technology deployment and growth initiatives, as well as higher restructuring, integration, acquisition and other costs of $2.6 million during the six months ended June 30, 2023 as compared to $0.5 million during the six months ended June 30, 2022.

Depreciation and amortization expenses increased $3.9 million, or 29.3%, primarily due to the amortization of other intangible assets related to the recent acquisitions and our continued investment in technology and growth initiatives.

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Our effective tax rate was 26.4% and 26.8% during the six months ended June 30, 2023 and 2022, respectively.

Net income decreased $5.0 million, or 18.1%, primarily due to higher interest expense as a result of the increase in variable interest rates and the factors noted above, partially offset by lower income taxes.

The following tables summarize our revenues (excluding reimbursed management type contract revenue), gross profit, general and administrative expenses, depreciation and amortization, and operating income (expense) by segment during the six months ended June 30, 2023 and 2022.

Commercial


	Six months ended							Variance
(millions) (unaudited)		June 30, 2023			June 30, 2022			Amount			%
Services revenue
Lease type contracts		$	137.0		$	126.3		$	10.7			8.5	%
Management type contracts			155.0			137.8			17.2			12.5	%
Total services revenue			292.0			264.1			27.9			10.6	%
Gross profit
Lease type contracts			24.7			22.8			1.9			8.3	%
Management type contracts			67.5			60.2			7.3			12.1	%
Depreciation and amortization			(4.1	)		(3.4	)		(0.7	)		(20.6	)%
Total gross profit			88.1			79.6			8.5			10.7	%
General and administrative expenses			17.5			13.9			3.6			25.9	%
Depreciation and amortization(1)			3.3			2.4			0.9			37.5	%
Operating income		$	67.3		$	63.3		$	4.0			6.3	%

(1)

Primarily related to amortization of other intangible assets and general and administrative depreciation and amortization.

Gross Profit

•

Lease type contracts. Gross profit ~~for same locations~~increased $1.9 million, or 8.3%, to $24.7 million during the six months ended June 30, 2023, compared to $22.8 million during the six months ended June 30, 2022. Gross profit increased primarily due to ~~earnings of $8.5 million for our proportionate share of the net gain of an equity method investees' sale of assets and a net~~ increases in transient and monthly parking revenue ~~rental revenue~~as a result of the continued recovery in travel and ~~short term parking revenue~~fewer restrictions on mobility and ~~decreased costs relating~~new business, partially offset by lower cost concessions related to ~~certain unallocated insurance reserve adjustments/costs~~service concession arrangements and rent concessions of $3.7 million and $2.5 million, respectively, during the six months ended June 30, 2023 compared to $3.8 million and $3.7 million, respectively, during the six months ended June 30, 2022, as well as terminations.

•

Management type contracts. Gross profit increased $7.3 million, or 12.1%, to $67.5 million during the six months ended June 30, 2023, compared to $60.2 million during the six months ended June 30, 2022. Gross profit increased primarily due to an increase in volume-based management type contracts as a result of the continued recovery in travel and fewer restrictions on mobility and new business, partially offset by terminations.

•

Depreciation and amortization.Depreciation and amortization expenses increased $0.7 million, or 20.6%, to $4.1 million during the six months ended June 30, 2023, compared to $3.4 million during the six months ended June 30, 2022,

General and administrative expenses increased $3.6 million, or 25.9%, to $17.5 million during the six months ended June 30, 2023, compared to $13.9 million during the six months ended June 30, 2022. The increase was primarily related to higher compensation and non-cash stock-based compensation expenses, as well as our continued investments in growth initiatives and higher restructuring, integration and other ~~unallocated corporate items,~~costs of $0.8 million during the six months ended June 30, 2023 as compared to $0.7 million during the six months ended June 30, 2022.

Operating income increased $4.0 million, or 6.3%, to $67.3 million during the six months ended June 30, 2023, compared to $63.3 million during the six months ended June 30, 2022, primarily due to the factors noted above, partially offset by $0.8 million of amortization expenses during the six months ended June 30, 2023 related to the other intangible assets acquired as a result of the acquisition of DIVRT.

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Aviation


	Six months ended							Variance
(millions) (unaudited)		June 30, 2023			June 30, 2022			Amount			%
Services revenue
Lease type contracts		$	7.5		$	6.9		$	0.6			8.7	%
Management type contracts			138.1			109.9			28.2			25.7	%
Total services revenue			145.6			116.8			28.8			24.7	%
Gross profit
Lease type contracts			2.3			2.5			(0.2	)		(8.0	)%
Management type contracts			29.7			24.7			5.0			20.2	%
Depreciation and amortization			(2.8	)		(2.2	)		(0.6	)		(27.3	)%
Total gross profit			29.2			25.0			4.2			16.8	%
General and administrative expenses			7.9			5.6			2.3			41.1	%
Depreciation and amortization(1)			3.1			2.8			0.3			10.7	%
Operating income		$	18.2		$	16.6		$	1.6			9.6	%

(1)

Primarily related to amortization of intangible assets and general and administrative depreciation and amortization.

Gross Profit

•

Lease type contracts. Gross profit decreased $0.2 million, or 8.0%, to $2.3 million during the six months ended June 30, 2023 compared to $2.5 million during the six months ended June 30, 2022. Gross profit decreased primarily due to lower cost concessions related to service concession arrangements of $1.9 million during the six months ended June 30, 2023 as compared to $2.3 million during the six months ended June 30, 2022 and terminations, partially offset by an increase in ~~rent expense~~transient revenue as a result of ~~higher revenues for same locations~~the continued recovery in travel and ~~overall net operating costs.~~fewer restrictions on mobility.

•

~~From a reporting segment perspective, gross~~Management type contracts. Gross profit ~~for lease contracts~~increased $5.0 million, or 20.2%, to $29.7 million during the six months ended June 30, 2023, compared to $24.7 million during the six months ended June 30, 2022. Gross profit increased primarily due to ~~increases~~new business, as well as an increase in ~~new locations in regions one and two, same locations in regions one and two and other, partially offset by decreases in contract expirations in regions one and two and conversions in region one.~~

~~Gross profit—~~volume-based management ~~contracts.~~ ~~Gross profit for management~~type contracts ~~increased $8.9 million, or 9.0%, to $108.3 million for the nine months ended September 30, 2017, compared to $99.4 million for the nine months ended September 30, 2016. Gross~~

profit percentage for management contracts increased to 41.2% for nine months ended September 30, 2017, compared to 37.9% for the nine months ended September 30, 2016. Gross profit for management contracts increased as a result of ~~increases~~the continued recovery in ~~gross profit for new locations, same locations~~travel and ~~locations that converted from lease contracts during the periods presented,~~fewer restrictions on mobility, increased activity related to other aviation services and acquisitions, partially offset by ~~decreases~~terminations.

•

Depreciation and amortization. Depreciation and amortization expenses increased $0.6 million, or 27.3%, to $2.8 million during the six months ended June 30, 2023, compared to $2.2 million during the six months ended June 30, 2022.

General and administrative expenses increased $2.3 million, or 41.1%, to $7.9 million during the six months ended June 30, 2023, compared to $5.6 million during the six months ended June 30, 2022 primarily due to our continued investments in ~~contract expirations. Gross profit for same locations~~growth initiatives, as well as higher restructuring, integration and other costs of $0.6 million during the six months ended June 30, 2023 as compared to a benefit of $0.4 million during the six months ended June 30, 2022.

Operating income increased $1.6 million, or 9.6%, to $18.2 million during the six months ended June 30, 2023, compared to $16.6 million during the six months ended June 30, 2022, primarily due to the factors noted above, partially offset by $0.9 million of amortization expenses during the six months ended June 30, 2023 related to other intangibles assets acquired as a result of the acquisition of KMP.

Other

Operating expenses within the Other segment increased $6.7 million, or 19.6%, to $40.9 million during the six months ended June 30, 2023, compared to $34.2 million during the six months ended June 30, 2022, primarily due to higher ~~operating profits~~compensation and ~~unallocated insurance reserve adjustments/costs~~non-cash stock-based compensation expenses and our continued investments in business development, technology deployment and growth initiatives, as well as higher integration, acquisition, restructuring and other ~~unallocated corporate items.~~

From a reporting segment perspective, gross profit for management contracts increased primarily from new locations in region one and two, same locations in regions one and two and other and conversions in region one, partially offset by decreases in contract expirations in regions one and two.

~~Although we have significant operations in~~costs of $1.2 million during the areas impacted by Hurricanes Harvey, Irma and Maria, our business and financial results were not significantly impacted. Our results were impacted by an estimated $0.7 million reduction in gross profit, primarily related to lease contracts, for the ninesix months ended ~~September~~June 30, ~~2017.~~

~~General and administrative expenses.~~ ~~General and administrative expenses decreased $3.7~~2023 as compared to $0.2 million ~~or 5.5%, to $63.3 million for the nine~~during six months ended ~~September~~June 30, ~~2017, compared~~2022.

Analysis of Financial Condition

Liquidity and Capital Resources

General

We continually project anticipated cash requirements for our operating, investing and financing needs, as well as cash flows generated from operating activities available to ~~$67.0~~meet those needs. Our operating needs can include, among other items, commitments for cost of services, operating leases, payroll, insurance claims, interest and legal settlements. Our investing and financing spending can include payments for acquired businesses or assets, joint ventures, capital expenditures, distributions to noncontrolling interests, stock repurchases and payments on our outstanding indebtedness.

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As of June 30, 2023, we had $24.6 million ~~for the nine months ended September 30, 2016. The decrease in general~~of cash and ~~administrative expenses was due primarily to a decrease in compensation~~cash equivalents and ~~benefit costs related to cost reduction initiatives, merger and integration costs (net~~$215.9 million of compensation and benefit costs for restructuring, merger and integration initiatives, primarily related to severance and relocation costs) and overall better expense control, partially offset by an increase in costs associated with an underwritten public offering of common stock by selling stockholders, which was a required expense of the Company pursuant to the Central Merger documentation, investments related to supporting our various initiatives, which include implementing a vertical market strategy and re-aligning the organization and an increase in performance-based compensation costs. Additionally, the nine months ended September 30, 2016 included costs related to the settlement of litigation with a former indirect controlling shareholder of the Company for $1.5 million, net of insurance recoveries.

~~Depreciation and amortization~~. Depreciation and amortization decreased $10.5 million, or 39.2%, to $16.3 million for the nine months ended September 30, 2017, compared to $26.8 million for the nine months ended September 30, 2016. This decrease was primarily a result of accelerated depreciation of software during the nine months ended September 30, 2016, and the nine months ended September 30, 2017 did not include amortization of certain intangible assets as they were fully amortized during the fourth quarter of 2016.

~~Interest expense.~~ Interest expense decreased $1.0 million, or 12.3%, to $7.1 million for the nine months ended September 30, 2017, compared to $8.1 million for the nine months ended September 30, 2016. The decrease in interest expense was primarily related to reductions in amounts outstandingborrowing availability under our ~~Restated~~Senior Credit Facility ~~partially offset by an increase~~(as defined in ~~average borrowing rates.~~

~~Interest income.~~ ~~Interest income was $0.5 million and $0.4 million for~~Note 8. Borrowing Arrangements within the ~~nine months ended September 30, 2017 and 2016, respectively.~~

~~Gain on sale of business.~~ During the nine months ended September 30, 2017, we recognized $0.1 million of gain on sale of a portion of our security business primarily operating in the Southern California market. The Company received $0.6 million for the final earn out consideration from the buyer during the second quarter of 2017, which resulted in the Company recognizing an additional gain on sale of business of $0.1 million, as the Company's historical estimate for the fair value of earn-out consideration receivable was $0.5 million.

~~Equity in losses from investment in unconsolidated entity.~~ ~~Equity in losses from investment in unconsolidated entity was $0.5 million and $1.2 million for the nine months ended September 30, 2017 and 2016, respectively.~~

~~Income tax expense.~~ ~~Income tax expense increased $10.4 million, or 95.4%,~~notes to $21.3 million for the nine months ended September 30, 2017, compared to $10.9 million for the nine months ended September 30, 2016. Our effective tax rate was 37.2% for the nine months ended September 30, 2017, compared to 41.0% for the nine months ended September 30, 2016. The effective tax rate for the nine months ended September 30, 2017 was lower than the nine months ended September 30, 2016 primarily due to additional 2017 year-to-date federal employer income tax credits recognized ($0.5 million) and the adoption of ASU 2016-09 and the related excess tax benefits now recognized as a reduction of income tax expense ($0.7 million). See Note 1. ~~Significant Accounting Policies and Practices~~ of the Condensed Consolidated Financial ~~Statements~~Statements). The full impact of macroeconomic conditions, including higher inflation and rising interest rates, on our business and the businesses of our customers and clients is unknown. We believe we will be able to generate sufficient liquidity to satisfy our obligations and remain in compliance with our existing debt covenants for ~~further discussion of~~the next twelve months.

We continue to monitor the impact of ~~ASU 2016-09.~~

~~Liquidity~~the recent regional bank failures. Currently, we do not believe that our banking partners are exposed to any significant credit risk, and ~~Capital Resources~~

continue to believe that we have sufficient assets and liquidity to adequately cover future obligations as they come due.

Outstanding Indebtedness

On ~~September~~June 30, ~~2017,~~2023, we had total indebtedness of approximately ~~$173.4~~$365.7 million, ~~a decrease~~an increase of ~~$21.7~~$21.5 million from December 31, ~~2016.~~2022. The ~~$173.4~~$365.7 million in total indebtedness as of ~~September~~June 30, ~~2017 includes:~~

2023 included:


▪	~~$172.0~~• $341.8 million under our ~~Restated Credit Facility, net of original discount on borrowings of $0.9 million and deferred financing costs of $1.2 million; and~~


▪	~~$1.4 million of other debt obligations, which includes capital lease obligations, obligations on seller notes and other indebtedness.~~

Senior Credit ~~Facility~~Facility; and

•

~~On October 2, 2012, we entered into a credit agreement (“Credit Agreement”) with Bank~~$23.9 million of ~~America, N.A. ("Bank~~other debt including finance lease obligations.

As of America"), as administrative agent, Wells Fargo Bank, N.A. ("Wells Fargo Bank") and JPMorgan Chase Bank, N.A., 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.

Pursuant to the terms, and subject to the conditions, of the Credit Agreement, the lenders made available to the Company a secured Senior Credit Facility (the “Senior Credit Facility”) that permitted aggregate borrowings of $450.0 million consisting of (i) a revolving credit facility of up to $200.0 million at any time outstanding, which included a letter of credit facility that was limited to $100.0 million at any time outstanding, and (ii) a term loan facility of $250.0 million. The Senior Credit Facility was due to originally mature on October 2, 2017.

~~Amended and Restated Credit Facility~~

~~On February 20, 2015 (“Restatement Date”),~~June 30, 2023, we entered into an Amended and Restated Credit Agreement (the "Restated Credit Agreement") with Bank of America, N.A. (“Bank of America”), as administrative agent, an issuing lender and swing-line lender; Wells Fargo Bank, N.A., as an issuing lender and syndication agent; U.S. Bank National Association, First Hawaiian Bank and BMO Harris Bank N.A., as co-documentation agents; Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC, as joint lead arrangers and joint book managers; and the lenders party thereto (the “Lenders”). The Restated Credit Agreement reflects modifications to, and an extension of, the Senior Credit Facility.

Pursuant to the terms, and subject to the conditions of the Restated Credit Agreement, the Lenders have made available to the Company a senior secured credit facility (the “Restated Credit Facility”) that permits aggregate borrowings of $400.0 million consisting of (i) a revolving credit facility of up to $200.0 million at any time outstanding, which includes a $100.0 million sublimit for letters of credit and a $20.0 million sublimit for swing-line loans, and (ii) a term loan facility of $200.0 million (reduced from $250.0 million under the Senior Credit Facility). The Company may request increases of the revolving credit facility in an aggregate additional principal amount of $100.0 million. The Restated Credit Facility matures on February 20, 2020.

Under the terms of the Restated Credit Agreement, we are required to maintain a maximum consolidated total debt to EBITDA ratio of not greater than 4.0 to 1.0 as of the end of any fiscal quarter ending during the period from the Restatement Date through September 30, 2015, (ii) 3.75 to 1.0 as of the end of any fiscal quarter ending during the period from October 1, 2015 through September 30, 2016, and (iii) 3.5 to 1.0 as of the end of any fiscal quarter ending thereafter. In addition, the Company is required to maintain a minimum consolidated fixed charge coverage ratio of not less than 1:25:1.0.

~~the Company to repay all the outstanding amounts owed under the Restated Credit Agreement and (iii) require the Company to cash collateralize any outstanding letters of credit.~~

Each wholly owned domestic subsidiary of the Company (subject to certain exceptions set forth in the Restated Credit Agreement) has guaranteed all existing and future indebtedness and liabilities of the other guarantors and the Company arising under the Restated Credit Agreement. The Company's obligations under the Restated Credit Agreement and such domestic subsidiaries’ guaranty obligations are secured by substantially all of their respective assets.

We were in compliance with ~~all~~our debt covenants ~~as of September 30, 2017.~~

under the Amended Credit Agreement (as defined in Note 8. Borrowing Arrangements within the Notes to the Condensed Consolidated Financial Statements).

As of ~~September~~June 30, ~~2017,~~2023, we had $129.4 million of borrowing availability under the Restated Credit Agreement, of which we could have borrowed $129.4 million on September 30, 2017 and remained in compliance with the above described covenants as of such date. The additional borrowing availability under the Restated Credit Agreement is limited only as of the Company’s fiscal quarter-end by the covenant restrictions described above. As of September 30, 2017, we had $51.6$39.1 million of letters of credit outstanding under the ~~Restated~~Senior Credit Facility ~~with aggregate~~and borrowings against the ~~Restated~~Senior Credit Facility aggregated to $345.0 million.

The weighted average interest rate on our Senior Credit Facility was 6.5% and 3.3% during the six months ended June 30, 2023 and 2022, respectively. That rate included the letters of ~~$174.1 million (excluding original discount~~credit for both years and interest rate collars during the six months ended June 30, 2023 and 2022. The weighted average interest rate on all outstanding borrowings, not including letters of ~~$0.9 million~~credit, was 7.0% and ~~deferred financing costs of $1.2 million).~~

~~Share~~3.4% during the six months ended June 30, 2023 and 2022, respectively.

Stock Repurchases

~~In May 2016,~~

On February 14, 2023, our Board of Directors (our "Board") authorized us to repurchase, on the open market, shares of our outstanding common stock in an amount not to exceed $60.0 million.

In May 2022, our Board authorized us to repurchase, on the open market, shares of upour outstanding common stock in an amount not to ~~$30.0~~exceed $60.0 million in aggregate. ~~Purchases of our common stock may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with Rules 10b-18~~During the three and 10b5-1 under the Securities Exchange Act of 1934 ("Exchange Act"). The share repurchase program does not obligate us to repurchase any particular amount of common stock, and has no fixed termination date.

~~Under this program, we~~six months ended June 30, 2023, 285,700 shares were repurchased ~~305,183 shares of common stock through September 30, 2017~~ at an average price of ~~$24.43~~$36.53 per share ~~resulting in $7.5~~under this program. As of June 30, 2023, $0.2 million ~~in program-to-date repurchases. No shares were repurchased~~remained available for repurchase under this program.

Stock repurchase activity under the May 2022 stock repurchase program during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~

~~Commitments~~2023 and ~~Contingencies~~

~~Central Merger~~

~~We have contractual provisions under certain lease contracts to complete structural or other improvements to leased properties and incur repair costs, including improvements and repairs arising~~2022 was as a result of ordinary wear and tear, and evaluate 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—Lease contracts within the Condensed Consolidated Statements of Income.

~~Certain lease contracts acquired in the Central Merger include provisions allocating to us responsibility for the cost of certain structural and other repairs required to be~~follows:


(millions, except for share and per share data)	June 30, 2023		June 30, 2022
Total number of shares repurchased		285,700		176,500
Average price paid per share	$	36.53	$	31.51
Total value of common stock repurchased	$	10.4	$	5.6

No stock repurchases were made ~~to the leased property, including improvement and repair costs arising as a result of ordinary wear and tear. We recorded nil and $0.1 million in costs~~ during the three months ended ~~September~~June 30, ~~2017 and 2016, respectively, and $0.1 million and $0.4 million during~~2023 or the ~~nine~~three months ended ~~September~~March 31, 2022.

The remaining authorized repurchase amounts under the May 2022 and February 2023 stock repurchase programs as of June 30, ~~2017 and 2016, respectively, (net of expected recoveries of the total cost recognized by the Company through the applicable indemnity discussed further in Note 3.~~ ~~Central Merger and Restructuring, Merger and IntegrationCosts~~ of our Condensed Consolidated Financial Statements) in Cost of parking services—Lease contracts within the Condensed Consolidated Statements of Income for structural and other repair costs related to certain lease contracts acquired in the Central Merger, whereby we have expensed repair costs for certain leases and engaged third-party general contractors to complete certain structural and other repair projects, and other indemnity related costs. Based on information available at this time, the Company believes that it has completed and incurred all additional costs for certain structural and other repair costs for certain lease contracts acquired in the Central Merger ("Structural and Repair Costs"). Additionally and as further described in Note 3. ~~Central Merger and Restructuring, Merger and Integration Costs,~~ ~~the Company settled all outstanding matters between the former Central stockholders and the Company.~~

~~Holten Settlement~~

In March 2010, John V. Holten, a former indirect controlling shareholder of the Company, filed a lawsuit against us in the United States District Court, District of Connecticut. Mr. Holten was terminated as the chairman in October 2009. The lawsuit alleged breach of his employment agreement and claimed that the agreement entitled Holten to payments worth more than $3.8 million. We filed an answer and counterclaim to Mr. Holten's lawsuit in 2010.

In March 2016, we settled all claims in connections with the original lawsuits ("Holten Settlement"). Per the settlement, we paid Mr. Holten $3.4 million of which $1.9 million was recovered by us through our directors and officers liability insurance policies. We recognized an expense, net of insurance recoveries, related to the Holten settlement of $1.5 million for the nine months ended September 30, 2016.

~~Interest Rate Swaps~~

On October 25, 2012, we 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 had a termination date of September 30, 2017. The Interest Rate Swaps effectively fixed the interest rate on an amount of variable interest rate borrowings under our credit agreements, originally equal to the Notional Amount at 0.7525% per annum plus the applicable margin rate for LIBOR loans under our credit agreements determined based upon our consolidated total debt to EBITDA ratio. The Notional Amount was subject to scheduled quarterly amortization that coincides with quarterly prepayments of principal under our credit agreements. These Interest Rate Swaps are classified as cash flow hedges, and we calculated the effectiveness of the hedge on a monthly basis. The ineffective portion of the cash flow hedge was recognized in earnings as an increase of interest expense. As of September 30, 2017, no ineffectiveness of the hedge has been recognized in interest expense. The Interest Rate Swaps expired on September 30, 2017. The fair value of the Interest Rate Swaps at December 31, 2016 was an asset of $0.1 million, and is included in the line item "Other assets, net" within the Condensed Consolidated Balance Sheets.

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

~~Deficiency Payments~~

Pursuant to our obligations with respect to the parking garage operations at Bradley International Airport, we are required to make certain deficiency payments for the benefit of the State of Connecticut and for holders of special facility revenue bonds. The deficiency payments represent contingent interest bearing advances to the trustee to cover operating cash flow requirements. As of September 30, 2017, we had made $8.2 million of cumulative deficiency repayments from the trustee, net of payments. Deficiency payments made are recorded as increases to cost parking services and the reimbursements are recorded as reductions to cost of parking services. We believe these advances to be fully recoverable and will recognize the principal, interest and premium payments related to these deficiency payments when they are received. We do not directly guarantee the payment of any principal or interest on any debt obligations of the State of Connecticut or the trustee.

~~The total deficiency repayments (net of payments made), interest and premium received and recorded for the three and nine months ended September 30, 2017 and 2016~~2023 were as follows:


(millions)	June 30, 2023
Total authorized repurchase amount	$	120.0
Total value of shares repurchased		59.8
Total remaining authorized repurchase amount	$	60.2

Daily Cash Collections

As a result of day-to-day activity at our parking locations, we collect significant amounts of cash. Lease type contract revenue is generally deposited into our local bank accounts, with a portion remitted to our clients in the form of rental payments ~~according to~~based on the terms of the leases. Under management type contracts, clients may require us to deposit the daily receipts into one of our local bank accounts, with the cash in excess of our operating expenses and management fees remitted to the clients at negotiated intervals. Other clients may require us to deposit the daily receipts into client designated bank accounts and the clients then reimburse us for operating expenses and pay our management fee subsequent to ~~month-end or~~month-end. In addition, our clients may require

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segregated bank accounts for ~~the~~ receipts and ~~disbursements at locations.~~disbursements. Our working capital and liquidity may be adversely affected if a significant number of our clients require us to deposit all parking revenues into their respective accounts.

Our liquidity also fluctuates on an intra-month and intra-year basis depending on the contract mix and timing of significant cash payments. Additionally, our ability to utilize cash deposited into our local accounts is dependent upon the availability and movement of that cash into our corporate ~~account.~~accounts. For all these reasons, from time to time, we carry a significant cash balance, while also utilizing our ~~Restated~~Senior Credit Facility.

Summary of Cash Flows

Nine Months Ended
(millions) (unaudited) September 30, 2017 September 30, 2016
Net cash provided by operating activities $ 21.4
$ 30.6
Net cash provided by (used in) investing activities $ 4.4
$ (9.9 )
Net cash used in financing activities $ (24.9 ) $ (20.0 )

~~Operating Activities~~

Our primary sources of ~~funds~~liquidity are cash flows from operating activities and ~~changes in operating assets~~availability under our Senior Credit Facility. Our cash flows during the six months ended June 30, 2023 and ~~liabilities.~~

2022 were as follows:


	Six Months Ended
(millions)	June 30, 2023			June 30, 2022
Net cash provided by operating activities	$	21.0		$	35.7
Net cash used in investing activities		(13.5	)		(10.7	)
Net cash provided by (used in) financing activities		4.7			(26.0	)
Effect of exchange rate changes on cash and cash equivalents		—			(0.1	)
Net increase (decrease) in cash and cash equivalents	$	12.2		$	(1.1	)

Operating Activities

Net cash provided by operating activities ~~totaled $21.4~~was $21.0 million ~~for~~during the ~~nine~~six months ended ~~September~~June 30, ~~2017. Cash provided by operating activities for~~2023 as compared to $35.7 million during the ~~first nine~~six months ~~of 2017 included $46.0 million from operations; partially offset by changes in operating assets and liabilities that resulted in a use of $24.6 million.~~ended June 30, 2022. The ~~net increase in operating assets and liabilities was a result of (i) an increase in notes and accounts receivable of $4.6 million due to timing of collections; (ii) a net~~ decrease in prepaid and other assets of $1.6 million mainly due to prepaid payroll and annual software maintenance; (iii) a $14.1 million decrease in accounts payable due to timing of payments to our clients as described under "Daily Cash Collections"; and (iv) a $7.5 million net decrease in accrued liabilities primarily related to timing of payments including payment of our 2016 performance-based compensation accrual as well as a reduction in customer deposits and the reduction of insurance reserves.

~~Net~~ cash provided by operating activities ~~totaled $30.6~~primarily resulted from the receipt of the $20.5 million ~~for nine~~U.S. Federal income tax refund during the six months ended ~~September~~June 30, ~~2016. Cash provided by operating activities for~~2022 and higher interest payments during the ~~first nine~~six months ended June 30, 2023 of ~~2016 included $47.9~~$13.6 million ~~from operations;~~as compared to $7.8 million during the six months ended June 30, 2022, partially offset by changes in operating assets and liabilities that resulted in a use of $17.3 million. The net increase in operating assets and liabilities resulted primarily from (i) an increase in notes and accounts receivable of $15.6 million due to timing of collections; (ii) a net increase in prepaid and other assets of $4.1 million due to prepaid operating expenses and an increase in our deferred tax asset; (iii) a $0.4 million net increase in accrued liabilities primarily related to timing of payments; and (iv) a $2.0 million increase in accounts payable due to timing of payments to our clients as described under "Daily Cash Collections".

improved working capital.

Investing Activities

Net cash provided by investing activities totaled $4.4 million for the nine months ended September 30, 2017. Cash provided by investing activities for the nine months ended September 30, 2017 included (i) $8.4 million in proceeds received from the sale of an equity method investee's sale of assets; (ii) $0.9 million of proceeds from the sale of assets and contract terminations; and (iii) $0.6 million of proceeds received and relating to the final earn-out payment from buyer for the security business sold in 2015; offset by (iv) $4.9 million for capital investments needed to secure and/or extend lease facilities and investments in information system enhancements and infrastructure and (v) $0.6 million for cost of contract purchases.

Net cash used in investing activities ~~totaled $9.9~~was $13.5 million induring the ~~nine~~six months ended ~~September~~June 30, ~~2016. Cash~~2023, an increase of $2.8 million from $10.7 million during the six months ended June 30, 2022. The increase in net cash used in investing activities ~~for~~primarily resulted from the ~~nine~~increase in purchases of property and equipment, primarily related to our investments in internal-use software, of $11.3 million during the six months ended ~~September~~June 30, ~~2016 included (i) $10.8~~2023 as compared to $9.1 million ~~for capital investments needed to secure and/or extend lease facilities and investments in information system enhancements and infrastructure; and (ii) $2.0~~during the six months ended June 30, 2022, as well as the noncontrolling interest buyout of $2.2 million ~~for cost~~during the six months ended June 30, 2023.

Financing Activities

Net cash provided by financing activities was $4.7 million during the six months ended June 30, 2023, an increase of ~~contract purchases; offset by (iii) $2.9~~$30.7 million ~~of proceeds~~ from ~~the sale of assets and contract terminations.~~

~~Financing Activities~~

~~Net~~net cash used in financing activities ~~totaled $24.9~~of $26.0 million induring the ~~nine~~six months ended ~~September~~June 30, ~~2017. Cash used in financing activities for~~2022. During the ~~nine~~six months ended ~~September~~June 30, ~~2017 included (i) $15.0 million for payments~~2023, we had increased borrowings on the ~~Restated~~Senior Credit Facility ~~term loan; (ii) net payments of $7.2 million on~~as compared to the Restated Credit Facility revolver; (iii) $2.4 million of distributions to noncontrolling interest; (iv) $0.2 million for payments on other long-term debt obligations; and (v) $0.1 million on payments for debt issuance costs.

~~Net cash used in financing activities totaled $20.0 million in the nine~~six months ended ~~September~~June 30, ~~2016. Cash used in financing~~2022 due to lower net cash provided by operating activities, ~~for~~partially offset by higher common stock repurchases of $11.1 million under our May 2022 stock repurchase program during the ~~nine~~six months ended ~~September~~June 30, ~~2016 included (i) net payments on~~2023 as compared to $4.9 million during the Restated Credit Facility revolver of $0.5 million; (ii) $2.6 million of distributions to noncontrolling interest; (iii) $11.2 million for payments on the Restated Credit Facility term loan; (iv) $0.2 million for payments on other long-term borrowings; (v) $0.1 million on payments for debt issuance costs; and (vi) $5.4 million on the repurchase of common stock.

six months ended June 30, 2022.

Cash and Cash Equivalents

We had ~~cash~~Cash and cash equivalents of ~~$23.4~~$24.6 million and ~~$22.2~~$12.4 million ~~at September~~as of June 30, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. ~~Cash and~~The cash ~~equivalents that are restricted as~~balances reflect our ability to withdrawal or use under the terms of certain contractual agreements were $0.4 million and $0.3 million as of September 30, 2017 and December 31, 2016, respectively, and are included within Cash and cash equivalents within the Condensed Consolidated Balance Sheets.

utilize funds deposited into our bank accounts.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our primary risk exposures or management of market risks from those disclosed in our Annual Report on Form 10-K for the ~~year-ended~~fiscal year ended December 31, ~~2016.~~

2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this quarterly report, we ~~conducted~~carried out an evaluation, under the supervision and with the participation of our management, including ~~the chief executive officer, chief financial officer~~our Chief Executive Officer, Chief Financial Officer and ~~corporate controller,~~Corporate Controller, of the effectiveness of the design and operation of our disclosure controls and procedures ~~pursuant to Rules 13a-15 and 15d-15~~(the "Evaluation") at a reasonable assurance level as of the ~~Securities Exchange Act~~last day of 1934, as amended ("Exchange Act"). Based upon that evaluation, our chief executive officer, chief financial officer and corporate controller concluded that our disclosure controls and procedures were effective as of September 30, 2017. the period covered by this Form 10-Q.

Disclosure controls and procedures are defined by Rules 13a-15(e) and 15d-15(e) of the Exchange Act as controls and other procedures that are designed to ensure that information required to be disclosed by us in reports filed with the SEC under the

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Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed under the Exchange Act is accumulated and communicated to our management, including our ~~principal executive officer, principal financial officer~~Chief Executive Officer, Chief Financial Officer and ~~principal accounting officer,~~Corporate Controller, or persons performing similar functions, as appropriate, to allow timely decisions regarding required ~~disclosure.~~

disclosures.

Based on the Evaluation, our Chief Executive Officer, Chief Financial Officer and Corporate Controller concluded that our disclosure controls and procedures were effective as of June 30, 2023.

Changes in Internal ~~Controls~~Control Over Financial Reporting

There have been no significant changes in our internal control over financial reporting that occurred during the ~~last fiscal~~ quarter ended June 30, 2023, which were identified in connection with management’s evaluation required by paragraph (d) of Rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

~~Limitations~~

Inherent limitations of the Effectiveness of Internal Control

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the internal control system are met. Because of the inherent limitations of any internal control system, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to claims and litigation in the normal course of our ~~business. The~~business, including those related to labor and employment, contracts, personal injury and other related matters, some of which allege substantial monetary damages and claims. Some of these actions may be brought as class actions on behalf of a class or purported class of employees. While the outcomes of current claims and legal proceedings ~~and claims~~ brought against us ~~and other loss contingencies~~ are subject to ~~significant uncertainty.~~ uncertainty, we believe the final outcome will not have a material adverse effect on our financial position, results of operations or cash flows.

We accrue a charge ~~against income~~ when ~~our management determines~~we determine 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,~~When a loss is probable, we ~~accrue~~record an accrual based on the reasonably estimable loss or range of loss. When no point of loss is more likely than another, we record the lowest amount in the estimated range of loss and, if material, disclose the estimated range. We do not record liabilities for ~~the authoritative judgments or assertions made against us by government agencies at the time~~reasonably possible loss contingencies, but do disclose a range of ~~their rendering regardless of our intent to appeal. In addition,~~reasonably possible losses if they are material and we are able to estimate such a range. If we cannot provide a range of reasonably possible losses, we explain the factors that prevent us from time-to-time party to litigation, administrative proceedings and union grievances that arise in the normal course of business, and occasionally pay non-material amounts to resolve claims or alleged violations of regulatory requirements. There are no "normal course" matters that separately or in the aggregate, would, in the opinion of management, havedetermining such a ~~material adverse effect on our operations, financial condition or cash flow.~~

In determining the appropriate 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 potential loss.range. 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 ~~potential~~ loss or a range of ~~potential~~ loss involves significant estimation and judgment.

~~See Note 2.~~ ~~Legal and Other Commitments and Contingencies~~ ~~to the Condensed Consolidated Financial Statements included in Item 1. "Financial Statements" for disclosures related to the Holten Settlement reached in March 2016.~~

~~See Note 3.~~ ~~Central Merger and Restructuring, Merger and Integration Costs~~ ~~to the Condensed Consolidated Financial Statements included in Item 1. "Financial Statements" for disclosures related to the Settlement Agreement with former Central Stockholders in December 2016.~~

Item 1A. Risk Factors

~~There have been no material changes to~~

Investors should carefully consider the discussion of risk factors and the other information described in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2016.~~

2022 and in subsequent filings by us with the SEC. New risks could emerge at any time and we cannot predict such risks or estimate the extent to which they may affect our financial performance. There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

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Item 2. Unregistered Sales of Equity and Use of Proceeds

~~There were no sales or repurchases of stock in the three months ended September 30, 2017.~~

Not applicable.

Item 3. Defaults ~~Upon~~upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

Index to Exhibits



~~Exhibit~~ ~~Number~~		~~Description~~

31.1*		~~Section 302 Certification dated November 2, 2017 for G Marc Baumann, Director, President and Chief Executive Officer (Principal Executive Officer).~~

31.2*		~~Section 302 Certification dated November 2, 2017 for Vance C. Johnston, Chief Financial Officer and Treasurer (Principal Financial Officer).~~

31.3*		~~Section 302 Certification dated November 2, 2017 for Kristopher H. Roy, Senior Vice President, Corporate Controller and Assistant Treasurer (Principal Accounting Officer).~~

32**		~~Certification pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated November 2, 2017.~~

101.INS*		~~XBRL Instance Document~~
101.SCH*		~~XBRL Taxonomy Extension Schema~~
101.CAL*		~~XBRL Taxonomy Extension Calculation Linkbase~~
101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase~~
101.LAB*		~~XBRL Taxonomy Extension Label Linkbase~~
101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase~~


			Incorporated by Reference
Exhibit Number	Description	Form	Exhibit	Filing Date/Period End Date


3.1	Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation of SP Plus Corporation dated May 11, 2023	8-K	3.1	May 16, 2023

3.2	Amendment to Fourth Amended and Restated Bylaws of the Company dated May 11, 2023	8-K	3.2	May 16, 2023

31.1*	Section 302 Certification dated August 3, 2023 for G Marc Baumann, Chairman and Chief Executive Officer (Principal Executive Officer).

31.2*	Section 302 Certification dated August 3, 2023 for Kristopher H. Roy, Chief Financial Officer (Principal Financial Officer).

31.3*	Section 302 Certification dated August 3, 2023 for Gary T. Roberts, Senior Vice President, Corporate Controller and Assistant Treasurer (Principal Accounting Officer and Duly Authorized Officer).

32**	Certification pursuant to 18 USC Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated August 4, 2023.

101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH*	Inline XBRL Taxonomy Extension Schema

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase

101.PRE* 104**	Inline XBRL Taxonomy Extension Presentation Linkbase Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101

*Filed herewith

**Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	SP PLUS CORPORATION

~~Dated: November 2, 2017~~ Date: August 3, 2023	By:	/s/ G MARC BAUMANN
		G Marc Baumann
		~~Director, President~~ Chairman and Chief Executive Officer
		(Principal Executive Officer)

~~Dated: November 2, 2017~~ Date: August 3, 2023	By:	~~/s/ VANCE C. JOHNSTON~~
		~~Vance C. Johnston~~
		~~Executive Vice President, Chief Financial Officer and Treasurer~~
		~~(Principal Financial Officer)~~

~~Dated: November 2, 2017~~	~~By:~~	/s/ KRISTOPHER H. ROY
		Kristopher H. Roy
		Chief Financial Officer
		(Principal Financial Officer)

Date: August 3, 2023	By:	/s/ GARY T. ROBERTS
		Gary T. Roberts
		Senior Vice President, Corporate Controller
		and Assistant Treasurer
		(Principal Accounting Officer and Duly Authorized Officer)



(millions, except for share and per share data)	September 30, 2017			December 31, 2016
	(unaudited)
Assets
Cash and cash equivalents	$	23.4		$	22.2
Notes and accounts receivable, net	124.9			120.7
Prepaid expenses and other	10.2			13.7
Total current assets	158.5			156.6
Leasehold improvements, equipment and construction in progress, net	26.5			30.9
Other assets
Advances and deposits	4.2			4.3
Other intangible assets, net	55.4			61.3
Favorable acquired lease contracts, net	24.4			30.0
Equity investments in unconsolidated entities	18.7			18.5
Other assets, net	17.7			16.3
Deferred taxes	19.3			17.9
Cost of contracts, net	9.5			11.4
Goodwill	431.7			431.4
Total other assets	580.9			591.1
Total assets	$	765.9		$	778.6
Liabilities and stockholders’ equity
Accounts payable	$	95.9		$	109.9
Accrued rent	23.6			21.7
Compensation and payroll withholdings	21.5			25.7
Property, payroll and other taxes	9.1			7.6
Accrued insurance	19.3			18.1
Accrued expenses	20.7			25.5
Current portion of obligations under Restated Credit Facility and other long-term borrowings	20.4			20.4
Total current liabilities	210.5			228.9
Long-term borrowings, excluding current portion
Obligations under Restated Credit Facility	153.0			174.5
Other long-term borrowings	—			0.2
	153.0			174.7
Unfavorable acquired lease contracts, net	33.5			40.2
Other long-term liabilities	63.4			66.4
Total noncurrent liabilities	249.9			281.3
Stockholders’ equity
Preferred Stock, par value $0.01 per share; 5,000,000 shares authorized as of September 30, 2017 and December 31, 2016; no shares issued	—			—
Common stock, par value $0.001 per share; 50,000,000 shares authorized as of September 30, 2017 and December 31, 2016; 22,509,468 and 22,328,578 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively.	—			—
Treasury Stock, at cost; 305,183 shares at September 30, 2017 and December 31, 2016	(7.5		)	(7.5		)
Additional paid-in capital	254.7			251.2
Accumulated other comprehensive loss	(1.2		)	(1.4		)
Retained earnings	59.1			25.9
Total SP Plus Corporation stockholders’ equity	305.1			268.2
Noncontrolling interest	0.4			0.2
Total stockholders’ equity	305.5			268.4
Total liabilities and stockholders’ equity	$	765.9		$	778.6



	Three Months Ended						Nine Months Ended
(millions, except for share and per share data) (unaudited)	September 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Parking services revenue										138.5
Lease contracts	$	140.9		$	136.1		$	422.6		$	410.3
Management contracts	86.7			84.1			262.8			262.0
	227.6			220.2			685.4			672.3
Reimbursed management contract revenue	165.1			177.0			512.7			501.8
Total parking services revenue	392.7			397.2			1,198.1			1,174.1
Cost of parking services
Lease contracts	131.0			125.8			387.0			380.4
Management contracts	50.7			50.5			154.5			162.6
	181.7			176.3			541.5			543.0
Reimbursed management contract expense	165.1			177.0			512.7			501.8
Total cost of parking services	346.8			353.3			1,054.2			1,044.8
Gross profit
Lease contracts	9.9			10.3			35.6			29.9
Management contracts	36.0			33.6			108.3			99.4
Total gross profit	45.9			43.9			143.9			129.3
General and administrative expenses	19.6			20.3			63.3			67.0
Depreciation and amortization	4.9			7.8			16.3			26.8
Operating income	21.4			15.8			64.3			35.5
Other expenses (income)
Interest expense	2.2			2.7			7.1			8.1
Interest income	(0.2		)	(0.1		)	(0.5		)	(0.4		)
Gain on sale of business	—			—			(0.1		)	—
Equity in losses from investment in unconsolidated entity	0.1			0.4			0.5			1.2
Total other expenses (income)	2.1			3.0			7.0			8.9
Earnings before income taxes	19.3			12.8			57.3			26.6
Income tax expense	7.3			5.1			21.3			10.9
Net income	12.0			7.7			36.0			15.7
Less: Net income attributable to noncontrolling interest	0.8			0.7			2.6			2.2
Net income attributable to SP Plus Corporation	$	11.2		$	7.0		$	33.4		$	13.5
Common stock data
Net income per common share
Basic	$	0.51		$	0.31		$	1.51		$	0.60
Diluted	$	0.50		$	0.31		$	1.48		$	0.60
Weighted average shares outstanding
Basic	22,203,023			22,208,139			22,186,556			22,293,776
Diluted	22,523,036			22,497,111			22,501,378			22,571,933



		September 30, 2017 (unaudited)							December 31, 2016
(millions)	Weighted Average Life (Years)	Acquired Intangible Assets, Gross (1)		Accumulated Amortization			Acquired Intangible Assets, Net		Acquired Intangible Assets, Gross (1)		Accumulated Amortization			Acquired Intangible Assets, Net
Covenant not to compete	1.8	$	0.9	$	(0.9	)	$	—	$	0.9	$	(0.9	)	$	—
Trade names and trademarks	2.3	9.8		(9.7		)	0.1		9.8		(9.6		)	0.2
Proprietary know how	2.3	34.7		(34.6		)	0.1		34.7		(32.6		)	2.1
Management contract rights	11.7	81.0		(25.8		)	55.2		81.0		(22.0		)	59.0
Acquired intangible assets, net (2)	11.6	$	126.4	$	(71.0	)	$	55.4	$	126.4	$	(65.1	)	$	61.3



(millions) (unaudited)	Region One		Region Two		Total
Balance as of December 31, 2016 (1)	$	368.7	$	62.7	$	431.4
Foreign currency translation	0.3		—		0.3
Balance as of September 30, 2017	$	369.0	$	62.7	$	431.7



	Fair Value Measurement
	September 30, 2017 (unaudited)						December 31, 2016
(millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Prepaid expenses and other
Contingent consideration receivable	$	—	$	—	$	—	$	—	$	—	$	0.5
Interest rate swap	—		—		—		—		0.1		—
Total	$	—	$	—	$	—	$	—	$	0.1	$	0.5



		Amount Outstanding
(millions)	Maturity Date	September 30, 2017		December 31, 2016
		(unaudited)
Restated Credit Facility, net of original discount on borrowings and deferred financing costs	February 20, 2020	$	172.0	$	193.4
Other borrowings	Various	1.4		1.7
Total obligations under Restated Credit Facility and other borrowings		173.4		195.1
Less: Current portion of obligations under Restated Credit Facility and other borrowings		20.4		20.4
Total long-term obligations under Restated Credit Facility and other borrowings		$	153.0	$	174.7



(millions)	2017
Balance at December 31, 2016	$	9.9
Deficiency payments made	0.2
Deficiency repayment received	(1.9		)
Balance at September 30, 2017	$	8.2



(millions) (unaudited)	Foreign Currency Translation Adjustments			Effective Portion of Unrealized Gain (Loss) on Cash Flow Hedge		Total Accumulated Other Comprehensive Loss
Balance at December 31, 2016	$	(1.4	)	$	—	$	(1.4	)
Change in other comprehensive income	0.2			—		0.2
Balance at September 30, 2017	$	(1.2	)	$	—	$	(1.2	)



	Three Months Ended September 30,										Nine Months Ended September 30,
(millions) (unaudited)	2017			Gross Margin %		2016			Gross Margin %		2017			Gross Margin %		2016			Gross Margin %
Parking Services Revenue
Region One
Lease contracts	$	108.9				$	104.9				$	326.0				$	316.6
Management contracts	62.5					61.1					190.1					185.5
Total Region One	171.4					166.0					516.1					502.1
Region Two
Lease contracts	32.0					31.2					96.6					93.7
Management contracts	22.2					20.6					66.4					69.1
Total Region Two	54.2					51.8					163.0					162.8
Other
Lease contracts	—					—					—					—
Management contracts	2.0					2.4					6.3					7.4
Total Other	2.0					2.4					6.3					7.4
Reimbursed management contract revenue	165.1					177.0					512.7					501.8
Total Parking Services Revenue	$	392.7				$	397.2				$	1,198.1				$	1,174.1
Gross Profit
Region One
Lease contracts	$	7.8		7	%	$	8.8		8	%	$	28.9		9	%	$	25.3		8	%
Management contracts	25.3			40	%	24.4			40	%	74.7			39	%	70.7			38	%
Total Region One	33.1					33.2					103.6					96.0
Region Two
Lease contracts	1.6			5	%	1.5			5	%	4.9			5	%	4.0			4	%
Management contracts	6.2			28	%	6.2			30	%	19.5			29	%	18.0			26	%
Total Region Two	7.8					7.7					24.4					22.0
Other
Lease contracts	0.5			—	%	—			—	%	1.8			—	%	0.6			—	%
Management contracts	4.5			225	%	3.0			125	%	14.1			224	%	10.7			145	%
Total Other	5.0					3.0					15.9					11.3
Total gross profit	$	45.9				$	43.9				$	143.9				$	129.3
General and administrative expenses	19.6					20.3					63.3					67.0
General and administrative expense percentage of gross profit	43		%			46		%			44		%			52		%
Depreciation and amortization	4.9					7.8					16.3					26.8
Operating income	21.4					15.8					64.3					35.5
Other expenses (income)
Interest expense	2.2					2.7					7.1					8.1
Interest income	(0.2		)			(0.1		)			(0.5		)			(0.4		)
Gain on sale of business	—					—					(0.1		)			—
Equity in losses from investment in unconsolidated entity	0.1					0.4					0.5					1.2
Total other expenses (income)	2.1					3.0					7.0					8.9
Earnings before income taxes	19.3					12.8					57.3					26.6
Income tax expense	7.3					5.1					21.3					10.9
Net income	12.0					7.7					36.0					15.7
Less: Net income attributable to noncontrolling interest	0.8					0.7					2.6					2.2
Net income attributable to SP Plus Corporation	$	11.2				$	7.0				$	33.4				$	13.5