##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended June 30, 2003

Commission file number 001-13950

CENTRAL PARKING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)


Tennessee
    
    62-1052916(State or Other Jurisdiction of Incorporation
or Organization)
    
    (I.R.S. Employer Identification No.)2401 21st Avenue South,
Suite 200, Nashville, Tennessee
    
    37212(Address of Principal Executive Offices)
    
    (Zip Code)Registrants Telephone Number, Including Area Code:
    
    (615) 297-4255Former name, address and fiscal year, if changed since last report:
    
    Not Applicable


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

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

Indicate the number of shares outstanding of each of the registrants classes
of common stock as of the latest practicable date.

Class
    
    Outstanding at August 11, 2003Common Stock, $0.01 par value
    
    36,099,500






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TABLE OF CONTENTS



|                                               |                                                                                               |                                            |  |  |  |  |  | 
|---------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|                                               | Part 1.                                                                                      
|                                               | Item 1. Financial Statements                                                                 
|                                               |                                                                                               | Consolidated Balance Sheets               
|                                               |                                                                                               | Consolidated Statements of Operations     
|                                               |                                                                                               | Consolidated Statements of Cash Flows     
|                                               |                                                                                               | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                               | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                                               | Item 3. Quantitative and Qualitative Disclosure about Market Risk                            
|                                               | ITEM 4. Controls and Procedures                                                              
|                                               | PART II  OTHER INFORMATION                                                                  
|                                               | Item 1. Legal Proceedings                                                                    
|                                               | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                    
|Ex-10.3 First Amendment to Credit Agreement   
|Ex-10.4 Master Agreement                      
|Ex-10.5 Master Agreement                      
|Ex-31.1 Certification of Monroe J. Carell, Jr.
|Ex-31.2 Certification of V. Jeffrey Heavrin   
|Ex-32.1 Certification of Monroe J. Carell, Jr.
|Ex-32.2 Certification of V. Jeffrey Heavrin   



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##### Table of Contents



INDEX

CENTRAL PARKING CORPORATION AND SUBSIDIARIES

PAGEPART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Consolidated Balance Sheets as of June 30, 2003 and September 30, 2002
    
    
    3Consolidated Statements of Operations for the three and nine months ended
June 30, 2003 and 2002
    
    
    4Consolidated Statements of Cash Flows for the nine months ended June 30,
2003 and 2002
    
    
    5Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosure about Market Risk
    
    
    25Item 4.
    
    Controls and Procedures
    
    
    26PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    26Item 6.
    
    Exhibits and Reports on Form 8-K
    
    
    27SIGNATURES
    
    
    29






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##### Table of Contents






Part 1.




Item 1. Financial Statements




CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETSUNAUDITED

Amounts in thousands, except share data

June 30,
    
    September 30,2003
    
    2002ASSETSCurrent assets:Cash and cash equivalents
    
    $
    33,510
    
    
    $
    33,498Management
accounts receivable, net of allowance for doubtful accounts of $2,900
and $561
at
June 30, 2003 and September 30, 2002, respectively
    
    
    36,052
    
    
    
    39,664Accounts receivable  other
    
    
    13,397
    
    
    
    15,714Current portion of notes receivable (including amounts due from related parties of
$4,363 at June 30, 2003 and $8,972 at September 30, 2002)
    
    
    8,634
    
    
    
    11,549Prepaid expenses
    
    
    11,448
    
    
    
    9,835Refundable income taxes
    
    
    10,904
    
    
    
    Deferred income taxes
    
    
    
    
    
    
    72Total current assets
    
    
    113,945
    
    
    
    110,332Notes receivable, less current portion
    
    
    40,635
    
    
    
    41,210Property, equipment, and leasehold improvements, net
    
    
    454,470
    
    
    
    434,733Contracts and lease rights, net
    
    
    107,488
    
    
    
    108,406Goodwill, net
    
    
    230,309
    
    
    
    242,141Investment in and advances to partnerships and joint ventures
    
    
    13,724
    
    
    
    12,836Other assets
    
    
    43,800
    
    
    
    49,226Total assets
    
    $
    1,004,371
    
    
    $
    998,884LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt and capital lease obligations
    
    $
    4,441
    
    
    $
    53,318Accounts payable
    
    
    88,017
    
    
    
    73,638Accrued expenses
    
    
    35,951
    
    
    
    43,659Management accounts payable
    
    
    24,182
    
    
    
    22,671Income taxes payable
    
    
    
    
    
    
    9,851Total current liabilities
    
    
    152,591
    
    
    
    203,137Long-term debt and capital lease obligations, less current portion
    
    
    279,508
    
    
    
    207,098Deferred rent
    
    
    27,974
    
    
    
    29,104Deferred income taxes
    
    
    4,635
    
    
    
    13,825Other liabilities
    
    
    18,982
    
    
    
    20,259Total liabilities
    
    
    483,690
    
    
    
    473,423Company-obligated mandatorily redeemable convertible securities of a
subsidiary trust holding solely parent debentures
    
    
    78,085
    
    
    
    78,085Minority interest
    
    
    30,644
    
    
    
    31,572Shareholders equity:Common stock, $0.01 par value; 50,000,000 shares authorized, 36,099,500
and 35,951,626 shares issued and outstanding at June 30, 2003 and
September 30, 2002, respectively
    
    
    361
    
    
    
    360Additional paid-in capital
    
    
    245,107
    
    
    
    242,112Accumulated other comprehensive loss, net
    
    
    (699
    )
    
    
    (2,377
    )Retained earnings
    
    
    167,888
    
    
    
    176,924Other
    
    
    (705
    )
    
    
    (1,215
    )Total shareholders equity
    
    
    411,952
    
    
    
    415,804Total liabilities and shareholders equity
    
    $
    1,004,371
    
    
    $
    998,884


See accompanying notes to consolidated financial statements.

Page 3 of 29



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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED

Amounts in thousands, except per share data

Three months ended June 30,
    
    Nine months ended June 30,2003
    
    2002
    
    2003
    
    2002Revenues:Parking
    
    $
    152,150
    
    
    $
    149,696
    
    
    $
    448,690
    
    
    $
    442,008Management contracts
    
    
    30,622
    
    
    
    31,256
    
    
    
    90,801
    
    
    
    90,113182,772
    
    
    
    180,952
    
    
    
    539,491
    
    
    
    532,121Reimbursement of management contract expenses
    
    
    104,636
    
    
    
    97,370
    
    
    
    309,338
    
    
    
    289,705Total revenues
    
    
    287,408
    
    
    
    278,322
    
    
    
    848,829
    
    
    
    821,826Costs and expenses:Cost of parking
    
    
    141,832
    
    
    
    131,542
    
    
    
    416,211
    
    
    
    385,794Cost of management contracts
    
    
    16,568
    
    
    
    12,394
    
    
    
    48,663
    
    
    
    37,738General and administrative
    
    
    24,987
    
    
    
    17,224
    
    
    
    66,797
    
    
    
    52,571Non-compete amortization
    
    
    13
    
    
    
    94
    
    
    
    157
    
    
    
    310183,400
    
    
    
    161,254
    
    
    
    531,828
    
    
    
    476,413Reimbursed management contract expenses
    
    
    104,636
    
    
    
    97,370
    
    
    
    309,338
    
    
    
    289,705Total costs and expenses
    
    
    288,036
    
    
    
    258,624
    
    
    
    841,166
    
    
    
    766,118Property-related (losses) gains, net
    
    
    (4,435
    )
    
    
    (2,298
    )
    
    
    (6,963
    )
    
    
    4,735Operating (loss) earnings
    
    
    (5,063
    )
    
    
    17,400
    
    
    
    700
    
    
    
    60,443Other income (expenses):Interest income
    
    
    1,137
    
    
    
    1,221
    
    
    
    3,503
    
    
    
    4,260Interest expense
    
    
    (4,887
    )
    
    
    (3,142
    )
    
    
    (13,434
    )
    
    
    (9,461
    )Dividends on Company-obligated mandatorily redeemable convertible securities
of a subsidiary trust
    
    
    (1,045
    )
    
    
    (1,093
    )
    
    
    (3,134
    )
    
    
    (3,823
    )Gain on repurchase of company-obligated mandatorily redeemable convertible
securities of a subsidiary trust
    
    
    
    
    
    
    881
    
    
    
    
    
    
    
    9,245Gain on sale of non-operating assets
    
    
    38
    
    
    
    
    
    
    
    3,279
    
    
    
    Equity in partnership and joint venture earnings
    
    
    177
    
    
    
    1,265
    
    
    
    1,437
    
    
    
    3,233(Loss) earnings from continuing operations before minority interest, income taxes and
cumulative effect of accounting changes
    
    
    (9,643
    )
    
    
    16,532
    
    
    
    (7,649
    )
    
    
    63,897Minority interest, net of tax
    
    
    (884
    )
    
    
    (1,374
    )
    
    
    (3,244
    )
    
    
    (3,652
    )(Loss) earnings from continuing operations before income taxes and cumulative
effect of accounting changes
    
    
    (10,527
    )
    
    
    15,158
    
    
    
    (10,893
    )
    
    
    60,245Income tax benefit (expense)
    
    
    5,349
    
    
    
    (5,215
    )
    
    
    4,738
    
    
    
    (22,381
    )(Loss) earnings from continuing operations before cumulative effect of accounting changes
    
    
    (5,178
    )
    
    
    9,943
    
    
    
    (6,155
    )
    
    
    37,864Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,341
    )(Loss) earnings from continuing operations
    
    
    (5,178
    )
    
    
    9,943
    
    
    
    (6,155
    )
    
    
    28,523Discontinued operations, net of tax
    
    
    50
    
    
    
    50
    
    
    
    (1,258
    )
    
    
    814Net (loss) earnings
    
    $
    (5,128
    )
    
    $
    9,993
    
    
    $
    (7,413
    )
    
    $
    29,337Basic (loss) earnings per share:(Loss) earnings from continuing operations before cumulative effect of accounting
change
    
    $
    (0.14
    )
    
    $
    0.28
    
    
    $
    (0.17
    )
    
    $
    1.06Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.26
    )Discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.04
    )
    
    
    0.02Net (loss) earnings
    
    $
    (0.14
    )
    
    $
    0.28
    
    
    $
    (0.21
    )
    
    $
    0.82Diluted (loss) earnings per share:(Loss) earnings from continuing operations before cumulative effect of accounting
change
    
    $
    (0.14
    )
    
    $
    0.27
    
    
    $
    (0.17
    )
    
    $
    1.05Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.26
    )Discontinued operations, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.04
    )
    
    
    0.02Net (loss) earnings
    
    $
    (0.14
    )
    
    $
    0.27
    
    
    $
    (0.21
    )
    
    $
    0.81Weighted average shares used for basic per share data
    
    
    36,078
    
    
    
    35,923
    
    
    
    36,008
    
    
    
    35,817Effect of dilutive common stock options
    
    
    
    
    
    
    664
    
    
    
    
    
    
    
    373Weighted average share used for dilutive per share data
    
    
    36,078
    
    
    
    36,587
    
    
    
    36,008
    
    
    
    36,190


See accompanying notes to consolidated financial statements.

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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED

Amounts in thousands

Nine months ended June 30,2003
    
    2002Cash flows from operating activities:Net (loss) earnings
    
    $
    (7,413
    )
    
    $
    29,337Loss (earnings) from discontinued operations
    
    
    1,258
    
    
    
    (814
    )(Loss) earnings from continuing operations
    
    
    (6,155
    )
    
    
    28,523Adjustments to reconcile net (loss) earnings from continuing operations to net cash provided by operating activities:Depreciation and amortization of property
    
    
    24,754
    
    
    
    25,759Equity in partnership and joint venture earnings
    
    
    (1,437
    )
    
    
    (3,233
    )Distributions from partnerships and joint ventures
    
    
    1,375
    
    
    
    3,353Gain on sale of non operating assets
    
    
    (3,279
    )
    
    
    Property-related losses (gains), net
    
    
    6,963
    
    
    
    (4,735
    )Gain on repurchase of company-obligated mandatorily redeemable convertible securities of a subsidiary trust
    
    
    
    
    
    
    (9,245
    )Decrease in fair value of derivatives
    
    
    630
    
    
    
    Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    9,341Deferred income tax benefit
    
    
    (9,866
    )
    
    
    (963
    )Minority interest, net of tax
    
    
    3,244
    
    
    
    3,652Changes in operating assets and liabilities, excluding effects of acquisitions:Management accounts receivable
    
    
    3,612
    
    
    
    (3,799
    )Accounts receivable  other
    
    
    2,317
    
    
    
    2,616Prepaid expenses
    
    
    (1,613
    )
    
    
    (4,275
    )Other assets
    
    
    12,600
    
    
    
    1,614Accounts payable, accrued expenses and other liabilities
    
    
    4,940
    
    
    
    5,346Management accounts payable
    
    
    1,511
    
    
    
    2,340Deferred rent
    
    
    (1,130
    )
    
    
    8,075Refundable income taxes
    
    
    (10,904
    )
    
    
    Income taxes payable
    
    
    (9,851
    )
    
    
    7,236Net cash provided by operating activities  continuing operations
    
    
    17,711
    
    
    
    71,605Net cash (used) provided by operating activities  discontinued operations
    
    
    (1,258
    )
    
    
    814Net cash provided by operating activities
    
    
    16,453
    
    
    
    72,419Cash flows from investing activities:Proceeds from disposition of property and equipment
    
    
    17,918
    
    
    
    15,716Proceeds from sale of partnership interests
    
    
    
    
    
    
    18,399Purchases of property, equipment and leasehold improvements
    
    
    (51,952
    )
    
    
    (19,777
    )Purchases of contract and lease rights
    
    
    (7,186
    )
    
    
    (18,801
    )Acquisitions, net of cash acquired
    
    
    (1,997
    )
    
    
    (17,788
    )Other investing activities
    
    
    4,963
    
    
    
    (483
    )Net cash used by investing activities
    
    
    (38,254
    )
    
    
    (22,734
    )Cash flows from financing activities:Dividends paid
    
    
    (1,623
    )
    
    
    (1,613
    )Net (repayments) borrowings under revolving credit agreement
    
    
    (74,500
    )
    
    
    9,500Proceeds from issuance of notes payable, net of issuance costs
    
    
    176,332
    
    
    
    Principal repayments on long-term debt and capital lease obligations
    
    
    (78,299
    )
    
    
    (41,512
    )Payment to minority interest partners
    
    
    (3,914
    )
    
    
    (3,972
    )Repurchase of common stock
    
    
    
    
    
    
    (488
    )Repurchase of mandatorily redeemable securities
    
    
    
    
    
    
    (21,823
    )Proceeds from issuance of common stock and exercise of stock options
    
    
    2,995
    
    
    
    3,261Net cash provided (used) by financing activities
    
    
    20,991
    
    
    
    (56,647
    )Foreign currency translation
    
    
    822
    
    
    
    (316
    )Net increase (decrease) in cash and cash equivalents
    
    
    12
    
    
    
    (7,278
    )Cash and cash equivalents at beginning of period
    
    
    33,498
    
    
    
    41,849Cash and cash equivalents at end of period
    
    $
    33,510
    
    
    $
    34,571


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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)

Nine months ended June 30,2003
    
    2002Non-cash transactions:Purchase of properties with notes payable
    
    $
    
    
    
    $
    16,500Unrealized gain (loss) on fair value of derivatives
    
    $
    164
    
    
    $
    302Cash payments for:Interest
    
    $
    13,263
    
    
    $
    9,698Income taxes
    
    $
    13,453
    
    
    $
    15,492Effects of acquisitions:Estimated fair value of assets acquired
    
    $
    632
    
    
    $
    20,020Purchase price in excess of net assets acquired (goodwill)
    
    
    
    
    
    
    880Purchase price in excess of net assets acquired (contract rights)
    
    
    2,333
    
    
    
    Estimated fair value of liabilities assumed
    
    
    (968
    )
    
    
    (2,936
    )Cash paid
    
    
    1,997
    
    
    
    17,964Less cash acquired
    
    
    
    
    
    
    (176
    )Net cash paid for acquisitions
    
    $
    1,997
    
    
    $
    17,788


See accompanying notes to consolidated financial statements.

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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED

(1) Basis of Presentation

a.The accompanying unaudited consolidated
financial statements of Central Parking Corporation (Central Parking or the
Company) have been prepared in accordance with accounting principles
generally accepted in the United States of America and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by accounting principles
generally accepted in the United States of America for complete financial
statements. In the opinion of management, the unaudited consolidated financial
statements reflect all adjustments considered necessary for a fair
presentation, consisting only of normal and recurring adjustments. All
significant inter-company transactions have been eliminated in consolidation.
Operating results for the three and nine months ended June 30, 2003 are not
necessarily indicative of the results that may be expected for the fiscal year
ending September 30, 2003. For further information, refer to the consolidated
financial statements and footnotes thereto for the year ended September 30,
2002 (included in the Companys Annual Report on Form 10-K). Certain prior
period amounts have been reclassified to conform to the current year
presentation.

b.In December 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure, an amendment of FASB
Statement No. 123. SFAS No. 148 amends SFAS No. 123, Accounting for Stock-Based
Compensation,to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements. Certain of the disclosure modifications are included
below.

The Company applies the intrinsic-value-based method of accounting
prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees,and related interpretations including FASB
Interpretation No. 44, Accounting for Certain Transactions involving Stock
Compensation, an interpretation of APB Opinion No. 25,to account for its
fixed-plan stock options. Under this method, compensation expense is recorded
on the date of grant only if the current market price of the underlying stock
exceeded the exercise price. SFAS No. 123, established accounting and
disclosure requirements using a fair-value-based method of accounting for
stock-based employee compensation plans. As allowed by SFAS No. 123 and SFAS
No. 148, the Company has elected to continue to apply the intrinsic-value-based
method of accounting described above, and has adopted only the disclosure
requirements of these statements. The following table illustrates the effect on
net (loss) income if the fair-value-based method had been applied to all
outstanding and unvested awards in each period.

Three Months ended June 30,
    
    Nine Months ended June 30,2003
    
    2002
    
    2003
    
    2002Net (loss) earnings, as reported
    
    $
    (5,128
    )
    
    $
    9,993
    
    
    $
    (7,413
    )
    
    $
    29,337Add stock-based employee
compensation expense included
in reported net (loss) income,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Deduct total stock-based
employee compensation expense
determined under
fair-value-based method for all
rewards, net of tax
    
    
    (1,213
    )
    
    
    (1,531
    )
    
    
    (3,816
    )
    
    
    (4,126
    )Pro forma net (loss) earnings
    
    $
    (6,341
    )
    
    $
    8,462
    
    
    $
    (11,229
    )
    
    $
    25,211(Loss) earnings per share:Basic-as reported
    
    $
    (0.14
    )
    
    $
    0.28
    
    
    $
    (0.21
    )
    
    $
    0.82Basic-pro forma
    
    $
    (0.18
    )
    
    $
    0.24
    
    
    $
    (0.31
    )
    
    $
    0.70Diluted-as reported
    
    $
    (0.14
    )
    
    $
    0.27
    
    
    $
    (0.21
    )
    
    $
    0.81Diluted-pro forma
    
    $
    (0.18
    )
    
    $
    0.23
    
    
    $
    (0.31
    )
    
    $
    0.70


Deductions
for stock-based employee compensation expense in the table above were
calculated using the Black-Scholes option pricing model. The Company
utilizes both the single option and multiple option valuation
approaches. Allocations of compensation expenses were made using
historical option terms for option grants made to the Companys
employees and historical Central Parking Corporation stock price
volatility. The Company applies a 40% tax rate to arrive at the after
tax deduction.

Page 7 of 29



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##### Table of Contents



(2) Acquisitions

USA Parking Systems

On October 1, 2001, the Company purchased substantially all of the assets
of USA Parking Systems, Inc. for $11.5 million in cash. The purchase included
61 management and lease contracts located primarily in south Florida and Puerto
Rico. The fair value of the assets acquired as of the acquisition date was as
follows (in thousands):

Tangible assets
    
    $
    2,779Noncompete agreement
    
    
    175Trade name
    
    
    100Contract rights
    
    
    8,475Net assets acquired
    
    $
    11,529


The tangible assets primarily consisted of accounts receivable and parking
equipment. The noncompete agreement is with the seller, who is now employed by
the Company. The duration of the agreement extends five years beyond the
sellers termination of such employment and will begin to be amortized when
such termination occurs. The trade name is included as goodwill and is not
subject to amortization. The contract rights are amortized over 15 years,
which is the average estimated life of the contracts including future renewals.
The purchase agreement also contained an incentive provision whereby the
seller may receive an additional payment of up to $2.3 million based on the
earnings of USA Parking for the twelve months ended March 31, 2004. The
incentive provision is not conditional upon employment. Any amounts owed
under this incentive provision will be recorded as goodwill in the period
payment is made.

Universal Park Holdings

On October 1, 2001, the Company purchased 100% of the common stock of
Universal Park Holdings (Universal) for $535 thousand. Universal provides
fee collection and related services for state, local and national parks and has
contracts to provide these services to six parks in the western United States
as of the acquisition date. The purchase price included $385 thousand paid in
cash at closing and a $150 thousand commitment to be paid after one year,
contingent upon retention of acquired contracts. Any amounts owed under this
contingent provision will be recorded as goodwill in the period payment is
made. The purchase resulted in goodwill of $646 thousand, which is not
deductible for tax purposes. This acquisition expanded the Companys presence
in the municipal, state and national parks market.

Lexis Systems, Inc.

On October 1, 2001, the Company purchased a 70% interest in Lexis Systems,
Inc. (Lexis) for $350 thousand in cash. Lexis manufactures and sells
automated pay stations used primarily for parking facilities. The purchase
resulted in goodwill of $134 thousand, which is not deductible for tax
purposes. The Company intends to use the automated pay stations in its
existing parking operations as well as for sale to other parking operators.

Park One of Louisiana, LLC

On January 1, 2002, the Company purchased certain assets and liabilities
of Park One of Louisiana, LLC, for $5.6 million in cash. The purchase included
24 management and 17 lease contracts located in New Orleans, Louisiana. The
fair value of the assets and liabilities acquired as of the acquisition date
was as follows (in thousands):

Tangible assets
    
    $
    491Contract rights
    
    
    5,864Liabilities assumed
    
    
    (805
    )Net assets acquired
    
    $
    5,550


The tangible assets purchased and liabilities assumed consist primarily of
management accounts receivable and management accounts payable, respectively.
The contract rights will be amortized over 15 years, which is the estimated
life of the contracts, including anticipated future renewals.

Sterling Parking LTD

Effective May 1, 2003, the Company purchased 100% of the common stock of Sterling
Parking Limited in Calgary, Alberta for $1,996,567. The purchase
included 18 management and 9 leased locations. The fair value of assets and
liabilities acquired as of the acquisition date was as follows (in thousands):

Page 8 of 29Table of ContentsTangible assets
    
    $
    632Contract rights
    
    
    2,333Liabilities assumed
    
    
    (968
    )Net assets acquired
    
    $
    1,997

The tangible assets primarily consisted of accounts receivable, equipment
and leasehold improvements, and prepaid lease payments. The purchase price
included $1,996,567 paid in cash at closing of which $319,030 went directly to
the seller. The balance of $1,677,537 is being held in escrow with the closing
attorney pending the disposition of a business tax proceeding in Calgary as
well as an estoppel holdback.Property acquisitionsIn April 2002, the Company acquired four properties in Atlanta for $16.5
million, including acquisition costs. The purchase was funded through two
notes payable secured by the acquired properties. The notes require the
Company to make monthly interest payments at a weighted average rate of
one-month LIBOR plus 157.5 basis points, with the principal balance due in
April 2007. The properties are currently being leased to another parking
operator.On October 7, 2002, the Company purchased a parking location in Baltimore,
Maryland for approximately $16 million in cash. Previously, the company had
operated the location under a lease agreement.Lease rightsIn January 2002, the Company purchased the lease rights for three
locations in New York City for $16.4 million in cash. The lease rights are
being amortized over the remaining terms of the individual lease agreements,
which range from 10 to 30 years. Previously, the Company had operated each of
these locations under an agreement entered into in September 1992. The 1992
agreement, which terminates in August 2004, initially covered approximately 80
locations; however, all but seven of these locations had been renegotiated with
extended terms or terminated as of September 30, 2002. The Company intends to
enter into negotiations to extend the terms of these remaining locations prior
to the termination of the existing agreement. There can be no assurance that
these locations will be renewed or, if renewed, that the new agreements will
not have substantially different terms.The Company is entitled to receive a termination fee, as defined in the
agreement, as the third party disposes of certain properties or renegotiates
the lease agreements. The termination fee is based on the earnings of the
location and the remaining duration of the agreement. The amount has been
recorded as deferred rent and will be amortized through August 2004 to offset
the guaranteed rent payments due under the original agreement.In October 2002, the Company executed
an agreement with Connex South
Eastern Limited, a private rail company headquartered in the United Kingdom, to
lease 82 parking facilities throughout the United Kingdom. Connex is
responsible for operating certain rail lines for the Strategic Rail
Authority, a
United Kingdom government agency. Under the terms of the lease agreement, the
Company paid an upfront payment of $6.4 million for the right to lease these
facilities and agreed to invest approximately $5 million in property
improvements at these locations. The $6.4 million of upfront payments and $5
million in property improvements will be amortized over the nine-year term of the
lease. Yearly base lease payments under the lease range from $7.1
million in year one to $7.4 million in years two through nine, which are being
recognized by the Company on a straight-line method during the term of the
lease. Additionally, lease payments may increase during the final six years of
the lease based upon increases in the aggregate pricing charged to customers at
these locations. During the third quarter of 2003, the Company was informed
that Connex will be removed as the private operator by the Strategic Rail
Authority effective December 31, 2003. The Strategic Rail authority is in the
process of identifying a new private operator to assume Connexs
responsibilities. The Company anticipates that its contract with Connex will
be assumed by the new operator. However, there can be no assurance that this
will happen.(3) Earnings Per ShareBasic earnings per share excludes dilution and is computed by dividing
income available to common shareholders by the weighted-average number of
common shares outstanding for the period. Diluted earnings per share reflects
the potential dilution that could occur if securities or other contracts to
issue common stock were exercised or converted into common stock, or if
restricted shares of common stock were to become fully vested.The company-obligated mandatorily redeemable securities of a subsidiary
trust have not been included in thePage 9 of 29Table of Contentsdiluted earnings per share calculation since such securities are
anti-dilutive. Such securities were convertible into 1,419,588 shares of common
stock on both June 30, 2003 and 2002. For the three and nine months ended June
30, 2003, options to purchase 5,288,704 shares and 4,495,983 shares are
excluded from the calculation of diluted common shares since they are
anti-dilutive due to the reported net losses.(4) Property-Related Gains (Losses), NetThe Company routinely disposes of or impairs owned properties, leasehold
improvements, contract rights, lease rights and other long term deferred
expenses due to various factors, including economic considerations, unsolicited
offers from third parties, loss of contracts and condemnation proceedings
initiated by local government authorities. Leased and managed properties are
also periodically evaluated and determinations may be made to sell or exit a
lease obligation. The Company adopted SFAS No. 144, Accounting for the
Impairment or Disposal of Long Lived Assets, effective October 1, 2002. In
accordance with SFAS No. 144, gains and losses on the sale or condemnation of
property, equipment, leasehold improvements, contract rights and lease rights
are included as a component of discontinued operations as are gains and losses
on the termination, prior to the end of the contractual term, of lease or
management obligations. Impairments associated with parking facilities that
meet the assets held-for-sale criteria as defined in SFAS No. 144 are also
included as a component of discontinued operations. A summary of
property-related gains and losses for the three and nine months ended June 30,
2003 and June 30, 2002 is as follows (in thousands):Three months ended
    
    Nine months endedJune
    30,
    June 30,2003
    
    2002
    
    2003
    
    2002Net gains on sale of property
    
    $
    
    
    
    $
    313
    
    
    $
    
    
    
    $
    5,173Impairment charges for property,
equipment and leasehold improvements
    
    
    (3,436
    )
    
    
    (420
    )
    
    
    (3,436
    )
    
    
    (481
    )Impairment charges for contract rights,
lease rights and other intangible assets
    
    
    (999
    )
    
    
    (2,191
    )
    
    
    (3,527
    )
    
    
    (3,810
    )Net gains on sale of partnership interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,853Property-related (losses) gains, net
    
    $
    (4,435
    )
    
    $
    (2,298
    )
    
    $
    (6,963
    )
    
    $
    4,735

(5) Goodwill and Intangible AssetsAs of June 30, 2003, the Company had the following amortizable intangible
assets (in thousands):GrossCarrying
    
    AccumulatedAmount
    
    Amortization
    
    NetContract and lease rights
    
    $
    151,274
    
    
    $
    43,786
    
    
    $
    107,488Noncompete agreements
    
    
    2,575
    
    
    
    2,341
    
    
    
    234Total
    
    $
    153,849
    
    
    $
    46,127
    
    
    $
    107,722

Amortization expense related to the contract and lease rights was $2.8
million and $7.7 million, respectively, for the three and nine months ended
June 30, 2003, and $2.7 million and $7.7 million for the three and nine months
ended June 30, 2002. Amortization expense related to noncompete agreements was
$54,000 and $0.2 million, respectively, for the three and nine months ended
June 30, 2003, and $94,000 and $0.3 million for the three and nine months ended
June 30, 2002, respectively.In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 142 requires that goodwill and intangible assets with
indefinite useful lives no longer be amortized, but instead be tested for
impairment at least annually. The transition provisions of SFAS No. 142
required that the Company assess goodwill for impairment as of the date of
adoption and recognize identified impairments as a cumulative effect of an
accounting change in the accounting period in which the standard was adopted.
The Company adopted SFAS No. 142 as of October 1, 2001. The Company completed
the transition process as required under the provisions of SFAS No. 142 and
recorded as a cumulative effect of an accounting change a charge of $9.3
million (net of an income tax benefit of $28 thousand) related to business
units in Chicago and New Jersey as of October 1, 2001.During the three months ended June 30, 2003, the Company eliminated
deferred tax valuation allowances onPage 10 of 29Table of Contentsacquired operating loss carryforwards totaling $11,949,000, because
Management determined that the deferred tax assets from these operating loss
carryforwards would be realized. Since these deferred tax assets were obtained
from previous acquisitions for which goodwill was recorded, the Company reduced
such goodwill by the amount of the
elimination of the deferred tax valuation allowances.(6) Gain on Sale of Non-Operating AssetsDuring the three months ended March 31, 2003, the Company consummated the
sale of an airplane owned by the Company for $3.9 million. At the time of the
consummation of the sale, the airplane had a net book value of $0.1 million,
resulting in the recognition of a gain of $3.3 million, net of selling costs.(7) Long-Term DebtOn February 28, 2003, the Company entered into a credit facility (the
Credit Facility) initially providing for an aggregate availability of up to
$350 million consisting of a five-year $175 million revolving credit facility
including a sub-limit of $60 million for standby letters of credit, and a $175
million seven-year term loan. Proceeds from the credit facility were
used to refinance the 1999 credit facility. The facility is secured by the stock of
certain subsidiaries of the Company, 106 real estate assets, and
domestic personal property assets of the Company and certain
subsidiaries.The Credit
Facility bears interest at LIBOR plus a tier-based margin
dependent upon certain financial ratios. There are separate tiers for the
revolving credit facility and term loan. The weighted average margin as of June
30, 2003 was 3.35%. The amount outstanding under the Companys Credit Facility
was $246.6 million with a weighted average interest rate of 4.99% as of June
30, 2003. The term loan is required to be repaid in quarterly payments of $0.44
million through March 2008 and quarterly payments of $20.8 million from June
2008 through March 2010. The aggregate availability under the Credit Facility
was $32.3 million at June 30, 2003, which is net of $35.7 million of stand-by
letters of credit.The Credit Facility contains covenants including those that require the
Company to maintain certain financial ratios, restrict further indebtedness and
certain acquisition activity and limit the amount of dividends paid. The
primary ratios are a leverage ratio, senior leverage ratio and a fixed charge
coverage ratio. Quarterly compliance is calculated using a four quarter rolling
methodology and measured against certain targets. As of March 31, 2003, the
Company was in default due to non-compliance with both the leverage and senior
leverage ratios. A temporary waiver was obtained from the lenders for the
quarter ended March 31, 2003, subject to certain conditions. Pursuant to the
provisions of the Emerging Issues Task Force (EITF) Issue No. 86-30,
Classification of Obligations When a Violation Is Waived by the Creditor, the
Company projected future compliance with the existing covenants and concluded
that non-compliance with the same covenants at the next quarterly measurement
date was probable. As a result, the Credit Facility was classified as a
current liability at March 31, 2003. The temporary waiver required the Company
to complete an amendment to the Credit Facility.The Company completed an amendment of the Credit Facility on August 12,
2003. The Company paid a fee of $1.5 million in connection with obtaining the
amendment. The amendment included changes to the permitted covenant ratios;
limitation of capital expenditures, acquisitions and loans; adjusted pricing
with additional tiers; and new provisions for asset dispositions. The
amended facility includes a new pricing tier that adds 25 basis
points when the Companys leverage ratio exceeds certain levels. Pursuant to
EITF Issue No. 86-30, the Company projected future compliance with the amended
covenants and believes that compliance with the amended covenants during the
next four quarterly measurement dates was probable. Accordingly, the Credit
Facility has been classified as a long-term liability at June 30, 2003.(8) Convertible Trust Issued Preferred SecuritiesOn March 18, 1998, the Company created Central Parking Finance Trust
(Trust) which completed a private placement of 4,400,000 shares at $25.00 per
share of 5.25% convertible trust issued preferred securities (Preferred
Securities) pursuant to an exemption from registration under the Securities
Act of 1933, as amended. The Preferred Securities represent preferred undivided
beneficial interests in the assets of Central Parking Finance Trust, a
statutory business trust formed under the laws of the State of Delaware. The
Company owns all of the common securities of the Trust. The Trust exists for
the sole purpose of issuing the Preferred Securities and investing the proceeds
thereof in an equivalent amount of 5.25% Convertible Subordinated Debentures
(Convertible Debentures) of the Company due 2028. The net proceeds to the
Company from the Preferred Securities private placement were $106.5 million.
Each Preferred Security is entitled to receive cumulative cash distributions at
an annual rate of 5.25% (or $1.312 per share) and will be convertible at the
option of the holder thereof into shares of Company common stock at a
conversion rate of 0.4545 shares of Company common stock for each Preferred
Security (equivalent to $55.00 per share of Company common stock), subject to
adjustment in certain circumstances. The Preferred Securities prohibit the
payment of dividends on Central Parking common stock if the quarterly
distributions on the Preferred Securities are not made for any reason. The
Preferred Securities do not have a stated maturity date but are subject to
mandatory redemption uponPage 11 of 29Table of Contentsthe repayment of the Convertible Debentures at their stated maturity (April 1,
2028) or upon acceleration or earlier repayment of the Convertible Debentures.The Companys consolidated balance sheets reflect the Preferred Securities
of the Trust as company-obligated mandatorily redeemable convertible securities
of a subsidiary trust holding solely parent debentures.On June 28, 2002, the Company repurchased 138,800 shares of its Preferred
Securities for $2.5 million. On March 30, 2002, the Company repurchased
500,000 shares of its Preferred Securities for $9.3 million. On December 28,
2001, the Company repurchased 637,795 shares of the Preferred Securities for
$10.0 million. For the year ended September 30, 2002, these transactions
resulted in a reduction of $31.9 million of the outstanding balance of the
Preferred Securities and pre-tax gains of $9.2 million, net of write downs of a
proportionate share of the related deferred finance costs of $0.9 million.(9) Derivative Financial InstrumentsThe Company uses variable rate debt to finance its operations. These debt
obligations expose the Company to variability in interest payments due to
changes in interest rates. If interest rates increase, interest expense
increases. Conversely, if interest rates decrease, interest expense also
decreases. Management believes it is prudent to limit the variability of its
interest payments.To meet this objective, management enters into various types of derivative
instruments to manage fluctuations in cash flows resulting from interest rate
risk. These instruments include interest rate swaps and caps. Under the
interest rate swaps, the Company swaps variable interest rate
payments for fixed-rate payments. The purchased interest rate cap agreements
also protect the Company from increases in interest rates that would result in
increased cash interest payments made under its Credit Facility. Under the
agreements, the Company has the right to receive cash if interest rates
increase above a specified level.The Company recognizes all derivative instruments as either assets or
liabilities, measured at fair value, in the consolidated balance sheets.At June 30, 2003, the Companys derivative financial instruments consist
of three interest rate cap agreements with a combined notional amount of $75.0
million and four interest rate swaps with a combined notional amount of $125.8
million. The interest rate caps and an interest rate swap with a notional
amount of $25.0 million were obtained to manage fluctuations in cash flows
associated with the Companys 1999 Credit Facility. The refinancing of the
credit facility during the second quarter of 2003 resulted in these derivatives
being deemed to be ineffective based on the guidance provided in SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activitiesand related
interpretations. Accordingly, the Company recorded an increase to interest
expense of approximately $0.9 million during the quarter ended March 31, 2003,
which represented the balance recorded in accumulated other comprehensive
income associated with these derivative financial instruments.As of June 30, 2003, the Company has not redesignated these derivative
financial instruments. As a result, the three interest rate caps and the
interest rate swap are being accounted for as speculative derivative financial
instruments with changes in fair values being reflected as a component of
interest expense. For the three months ended June 30, 2003,
approximately $301,000 was recorded as decrease within other income
(expense) to reflect the increase in fair value of these
derivatives from the date of the refinancing to June 30, 2003.The following table lists the fair value of each type of derivative
financial instrument (amounts in thousands):June 30, 2003
    
    September 30, 2002Derivative instrument assets:Interest rate caps
    
    $
    
    
    
    $
    5Derivative instrument liabilities:Interest rate swaps
    
    $
    2,373
    
    
    $
    3,043

(10) Discontinued OperationsThe Company adopted the provisions of SFAS No. 144 on October 1, 2002. In
addition to providing enhanced guidance on identifying and measuring
impairments of long-lived assets, SFAS No. 144 requires that the operatingPage 12 of 29Table of Contentsresults from certain disposals of a parking facility be reflected as
discontinued operations. SFAS No. 144 also requires that gains, losses and
impairments resulting from the designation of a parking facility
disposed of or held-for-sale as discontinued operations. For the
nine months ended June 30, 2003, the Company designated as held-for-sale or
disposed of 26 locations, resulting in a loss from discontinued operations of $1.3
million, including $2.9 million in impairments and $2.9 million in property
related gains. Included in the nine months ended June 30, 2003 is the
year-to-date results of operations for all locations discontinued during the
first quarter as well as the locations disposed of during the second and third
fiscal quarters of 2003. The Companys 2002 results were reclassified to
reflect the operations of these locations discontinued in 2003 as discontinued
operations net of related income taxes.(11) Recent Accounting PronouncementsIn November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34. This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The disclosure requirements are effective for financial
statements of interim and annual periods ending after December 15, 2002, and
have been included in the notes to the consolidated financial statements
included herein. The impact on the Companys financial statements from the
application of the recognition and measurement provisions of the Interpretation
is dependent on the level of guarantees issued or modified in 2003. No
guaranties were issued or modified during the nine months ended June 30, 2003 which
were impacted by the provisions of FASB Interpretation No. 45.In
January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities, an interpretation of ARB No. 51.The primary objectives of
Interpretation No. 46 are to provide guidance on the identification of entities for which
control is achieved through means other than through voting rights (variable
interest entities or VIEs) and how to determine when and which business
enterprise should consolidate the VIE (the primary beneficiary). This new
model for consolidation applies to an entity in which either (1) the equity
investors (if any) do not have a controlling financial interest or (2) the
equity investment at risk is insufficient to finance that entitys activities
without receiving additional subordinated financial support from other parties.
In addition, Interpretation No. 46 requires that both the primary beneficiary and all
other enterprises with a significant variable interest in a VIE make additional
disclosures. The Company has 19 variable interest entities with which it
holds a significant variable interest, but is not the primary beneficiary:

|                                           |  |                  |  |                                                |  |           |            |          |  |                           |  |  |        |           |  |  |  |  |  | 
|------------------------------------------ |  | ---------------- |  | ---------------------------------------------- |  | --------- | ---------- | -------- |  | ------------------------- |  |  | ------ | --------- |  |  |  |  |  | 
|                                           |  | Commencement     |  |                                                |  |           |            | %        |  |                           |  |  |        | Number of
|Entity                                     |  | of Operations    |  | Nature of Activities                           |  | Ownership |            | Location |  | Parking Spaces           
|                                           |  |                  |  |                                                |  |           |            |          |  |                          
|Central Parking System of Mexico, SA De CV |  | Aug-94           |  | Leases and manages parking lots                |  |           | 50.00      | %        |  | Mexico                    |  |  | 64,062 |          
|Larimer Square Parking Associates          |  | Jan-95           |  | Owns parking lot                               |  |           | 50.00      | %        |  | Denver, Colorado          |  |  | 307    |          
|LODO Parking Garage, LLC                   |  | Feb-95           |  | Owns parking lot                               |  |           | 50.00      | %        |  | Denver, Colorado          |  |  | 314    |          
|157166 Canada, Inc.                        |  | Sep-87           |  | Owns parking lots                              |  |           | 50.00      | %        |  | Canada                    |  |  | 179    |          
|Other investments in VIEs                  |  | Oct 80 - July 99 |  | Ownership, management, and leases parking lots |  |           | 3.32% - 50 | %        |  | Mexico and Various states |  |  | 11,031 |          

The
Company will adopt the provisions of Interpretation No. 46 beginning July 1,
2003. The initial adoption of Interpretation No. 46 will not have any effect on the
Companys financial statements.

In May 2003, the FASB issued Statement No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity.
FASB SFAS No. 150 requires issuers to classify as liabilities (or assets
in some circumstance) three classes of freestanding financial instruments that
embody obligations for the issuer. Generally, FASB SFAS No. 150 is
effective for financial instruments entered into or modified after May 31,
2003 and is otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The Company adopted the provisions of FASB
SFAS No. 150 on July 1, 2003. The Company did not enter into any
financial instruments within the scope of FASB SFAS No. 150
after May 31, 2003. On July 1,
2003, the $78,085,000 Company-obligated mandatorily redeemable convertible
securities of a subsidiary trust holding solely parent debentures, were
classified as liabilities. There was no cumulative effect of the change in
accounting principle as a result of adopting FASB SFAS No. 150.

(12) Commitments and Contingencies

The Company entered into a partnership agreement effective June 1, 2000,
to operate certain locations in Puerto Rico. The Company is the general
partner. The partners entered into an option agreement on that date whereby
the other partner had the option to sell its partnership interest to the
Company during the period from May 1, 2003 to November 30, 2003. The Company
and the partner mutually agreed to allow the partner to sell its interest to
the

Page 13 of 29



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##### Table of Contents



Company on March 31, 2003. The purchase was consummated on March 31, 2003, for
approximately $14.3 million, which had previously been recorded as a liability
by the Company.

In June and July 2003, four stockholders filed separate lawsuits against
the Company, its former CEO, its former CFO and its current CEO in the U. S.
District Court for the Middle District of Tennessee (Case Nos. 3CV546, 3CV585,
3CV645 and 3CV661). The plaintiff in each case seeks to represent a plaintiff
class that includes those, except for Company insiders and immediate families,
who purchased the Companys common stock from November 4, 2002 through February
13, 2003. The plaintiff in each case claims that the defendants, between
November 4, 2002 and February 13, 2003, made material misrepresentations and/or
omissions in connection with the Companys financial statements for the quarter
and the fiscal year ended September 30, 2002 and about the Companys internal
controls in violation of the Securities Exchange Act of 1934, allegedly caused the plaintiffs to buy Company
stock at inflated prices. The Company has not yet formally responded to these
complaints, but intends to vigorously defend the claims and allegations
asserted in each of these cases.

The
Company, Pepsi Cola Company (Pepsi) and several related Pepsi companies and
individuals are
co-defendants in a lawsuit filed in the 270th Judicial District Court in Harris
County, Texas, by an individual, David Loftus, and three companies
affiliated with Mr.
Loftus known as PepsiPark USA, Inc. The plaintiffs in the suit allege, among
other things, that the Company and Pepsi conspired to misappropriate a concept
developed by the plaintiffs for selling Pepsi products and other vending
machine products to parking lot customers.
Plaintiffs allege several causes of action, including breach of contract,
misrepresentation, breach of fiduciary duties, fraud, conversion and unfair
competition. The suit, which was initially filed on June 24, 2002, was amended
on April 24, 2003, to add allegations against the Company for
underpayment of percentage rent with respect to three parking lots leased to
the Company by Mr. Loftus and related companies. The plaintiffs allege, among
other things, breach of contract and fraud with respect to these parking
lots, and are currently seeking damages for allegedly unpaid percentage rent of $1.3
million plus interest and attorneys fees and expenses. The plaintiffs also
are seeking unspecified exemplary damages. On May 9, 2003, the suit was again
amended to add an allegation that the Company refused to implement the
plaintiffs concept for selling vending machine products to parking lot
customers to avoid liability for past underreporting of revenues. The Company
is vigorously defending the case.

The
Company has settled a lawsuit brought by
Texas Gulf Bank and other trustees and individuals on behalf of the owners of
an individual interest in an undeveloped city block in downtown Houston that
was leased by a subsidiary of Allright (which is a subsidiary of the Company).
The suit was filed in June 2001, in the 270th Judicial District Court in Harris
County, Texas. The plaintiffs in the suit alleged underpayment of
percentage rent as a result of theft and fraud. Management has
established an accrual for the entire amount of the proposed
settlement.

The Company is subject to various legal proceedings and claims, which
arise in the ordinary course of its business. In the opinion of management, the
ultimate liability with respect to those proceedings and claims, except as
discussed above, will not have a material adverse effect on the financial
position, operations, or liquidity of the Company. The Company maintains
liability insurance coverage for individual claims in excess of various dollar
amounts, subject to annual aggregate limits. The primary amount of such
coverage is $1 million per occurrence and $2 million in the aggregate per
facility. In addition, the Company purchases umbrella/excess liability
coverage. The Companys various liability insurance policies have deductibles
of up to $250,000 that must be met before the insurance companies are required
to reimburse the Company for costs and liabilities relating to covered claims.
As a result, the Company is, in effect, self-insured for all claims up to the
deductible levels.

(13) Comprehensive (Loss) Income

Comprehensive (loss) income for the three and nine months ended June 30,
2003 and 2002, was as follows (in thousands):

Three months ended
    
    Nine months endedJune 30,
    
    June 30,2003
    
    2002
    
    2003
    
    2002Net (loss) earnings
    
    $
    (5,128
    )
    
    $
    9,993
    
    
    $
    (7,413
    )
    
    $
    29,337Change in fair value of derivatives, net of tax
    
    
    856
    
    
    
    (275
    )
    
    
    (138
    )
    
    
    225Foreign currency cumulative translation adjustment
    
    
    822
    
    
    
    (170
    )
    
    
    822
    
    
    
    (316
    )Comprehensive (loss) income
    
    $
    (3,450
    )
    
    $
    9,548
    
    
    $
    (6,729
    )
    
    $
    29,246


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(14) Business Segments

The Company is managed based on segments administered by senior vice
presidents. These segments are generally organized geographically, with
exceptions depending on the needs of specific regions. The following are
summaries of revenues and operating (loss) earnings of each segment for the
three and nine months ended June 30, 2003 and 2002, as well as identifiable
assets for each segment as of June 30, 2003 and 2002. During fiscal year 2002,
the Company realigned certain locations among segments. All prior year segment
data has been reclassified to conform to the new segment alignment.

Three months ended
    
    Nine months endedJune 30,
    
    June 30,2003
    
    2002
    
    2003
    
    2002Revenues:(1)Segment One
    
    $
    18,750
    
    
    $
    19,708
    
    
    $
    55,776
    
    
    $
    56,630Segment Two
    
    
    78,368
    
    
    
    75,368
    
    
    
    226,836
    
    
    
    224,011Segment Three
    
    
    3,535
    
    
    
    3,663
    
    
    
    11,434
    
    
    
    9,898Segment Four
    
    
    18,504
    
    
    
    19,208
    
    
    
    55,388
    
    
    
    56,395Segment Five
    
    
    9,368
    
    
    
    8,073
    
    
    
    28,746
    
    
    
    23,928Segment Six
    
    
    3,284
    
    
    
    3,447
    
    
    
    10,425
    
    
    
    9,697Segment Seven
    
    
    26,180
    
    
    
    26,382
    
    
    
    77,854
    
    
    
    78,537Segment Eight
    
    
    14,889
    
    
    
    13,759
    
    
    
    42,564
    
    
    
    39,766Segment Nine
    
    
    9,764
    
    
    
    10,764
    
    
    
    30,291
    
    
    
    33,197Other
    
    
    130
    
    
    
    580
    
    
    
    177
    
    
    
    62Total revenues
    
    $
    182,772
    
    
    $
    180,952
    
    
    $
    539,491
    
    
    $
    532,121


(1) Revenues exclude reimbursement of management contract expenses. Such
amounts were $104.6 million and $97.4 million for the three months ended June
30, 2003 and 2002, respectively, and $309.3 million and $289.7 million for the
nine months ended June 30,2003 and 2002, respectively.

Operating (loss) earnings:Segment One
    
    $
    (301
    )
    
    $
    1,106
    
    
    $
    (2,883
    )
    
    $
    2,445Segment Two
    
    
    2,109
    
    
    
    4,903
    
    
    
    7,584
    
    
    
    18,172Segment Three
    
    
    (1,416
    )
    
    
    156
    
    
    
    (972
    )
    
    
    320Segment Four
    
    
    1,652
    
    
    
    3,141
    
    
    
    5,871
    
    
    
    8,486Segment Five
    
    
    773
    
    
    
    1,115
    
    
    
    2,455
    
    
    
    3,742Segment Six
    
    
    165
    
    
    
    488
    
    
    
    1,214
    
    
    
    1,016Segment Seven
    
    
    2,240
    
    
    
    3,444
    
    
    
    5,032
    
    
    
    9,468Segment Eight
    
    
    (1,340
    )
    
    
    1,251
    
    
    
    (538
    )
    
    
    3,380Segment Nine
    
    
    1,019
    
    
    
    1,258
    
    
    
    1,353
    
    
    
    4,288Other
    
    
    (9,964
    )
    
    
    538
    
    
    
    (18,416
    )
    
    
    9,126Total operating (loss) earnings
    
    $
    (5,063
    )
    
    $
    17,400
    
    
    $
    700
    
    
    $
    60,443


June 30,
    
    September 30,2003
    
    2002Identifiable assets:Segment One
    
    $
    16,583
    
    
    $
    18,620Segment Two
    
    
    348,689
    
    
    
    381,758Segment Three
    
    
    12,943
    
    
    
    12,863Segment Four
    
    
    26,742
    
    
    
    31,179Segment Five
    
    
    40,181
    
    
    
    39,961Segment Six
    
    
    3,376
    
    
    
    3,516Segment Seven
    
    
    30,681
    
    
    
    31,193Segment Eight
    
    
    31,107
    
    
    
    33,225Segment Nine
    
    
    13,697
    
    
    
    13,622Other
    
    
    480,372
    
    
    
    432,947Total assets
    
    $
    1,004,371
    
    
    $
    998,884


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Segment One encompasses the western region of the United States and Vancouver,
BC.

Segment Two encompasses the northeastern United States, including New York
City, New Jersey, Boston and Philadelphia.

Segment Three encompasses Florida and the USA Parking acquisition.

Segment Four encompasses Louisiana, Ohio, and parts of Texas and Alabama.

Segment Five encompasses Europe, Puerto Rico, Central and South America.

Segment Six encompasses Nashville, TN and the Lexis acquisition.

Segment Seven encompasses the Midwestern region of the United States as well as
western Pennsylvania and western New York. It also includes Canada, excluding
Vancouver.

Segment Eight encompasses the southeastern region of the United States to
include Washington D.C. and Baltimore.

Other encompasses the home office, eliminations, certain owned real estate, and
certain partnerships.




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

Forward-Looking Statements May Prove Inaccurate

This report includes various forward-looking statements regarding the
Company that are subject to risks and uncertainties, including, without
limitation, the factors set forth below and under the caption Risk Factors in
the Managements Discussion and Analysis of Financial Condition and Results of
Operations section of the Companys annual report on Form 10-K for the year
ended September 30, 2002. Forward-looking statements include, but are not
limited to, discussions regarding the Companys operating strategy, growth
strategy, acquisition strategy, cost savings initiatives, industry, economic
conditions, financial condition, liquidity and capital resources and results of
operations. Such statements include, but are not limited to, statements
preceded by, followed by or that otherwise include the words believes,
expects, anticipates, intends, estimates or similar expressions. For
those statements, the Company claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995.

The following important factors, in addition to those discussed elsewhere
in this document, and the documents which are incorporated herein by reference,
could affect the future financial results of the Company and could cause actual
results to differ materially from those expressed in forward-looking statements
contained or incorporated by reference in this document:



| |  | ongoing integration of past and future acquisitions, in light of challenges in retaining key employees, synchronizing business
processes and efficiently integrating facilities, marketing, and operations;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | successful implementation of the Companys operating and growth strategy, including possible strategic acquisitions;
|- |  | --------------------------------------------------------------------------------------------------------------------



| |  | the loss, or renewal on less favorable terms, of management contracts and leases;
|- |  | ---------------------------------------------------------------------------------



| |  | fluctuations in quarterly operating results caused by a variety of factors including the timing of pre-opening costs of parking
facilities, the effect of weather on travel and transportation patterns, player strikes or other events affecting major league
sports;
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | the ability of the Company to form and maintain its strategic
relationships with certain large real estate owners and operators;
|- |  | --------------------------------------------------------------------------------------------------------------------------------



| |  | additional acts of terrorism or war;
|- |  | ------------------------------------



| |  | global and/or regional economic factors;
|- |  | ----------------------------------------



| |  | the outcome of litigation;
|- |  | --------------------------

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| |  | compliance with local, state, national and international laws and
regulations, including, without limitation, local regulations and
restrictions on parking and automobile usage, security measures,
environmental, anti-trust and consumer protection laws.
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Overview

The Company operates parking facilities under three types of arrangements:
leases, fee ownership, and management contracts. As of June 30, 2003, Central
Parking operated 1,753 parking facilities through management contracts, leased
1,838 parking facilities, and owned 213 parking facilities, either
independently or in joint ventures with third parties. Parking revenues
consist of revenues from leased and owned facilities. Cost of parking relates
to both leased and owned facilities and includes rent, payroll and related
benefits, depreciation (if applicable), maintenance, insurance, and general
operating expenses. Management contract revenues consist of management fees
(both fixed and performance based) and fees for ancillary services such as
insurance, accounting, equipment leasing, and consulting. The cost of
management contracts includes insurance premiums, claims and other indirect
overhead.

Parking revenues from owned properties amounted to $16.6 million and $17.6
million for the three months ended June 30, 2003 and 2002, respectively,
representing 10.9% and 11.7% of total parking revenues for the respective
periods. For the nine months ended June 30, 2003 and 2002, parking revenues
from owned properties were $49.5 million and $52.4 million, respectively,
representing 11.0% and 11.8% of total parking revenues for the respective
periods. Ownership of parking facilities, either independently or through joint
ventures, typically requires a larger capital investment and greater risk than
managed or leased facilities, but provides maximum control over the operation
of the parking facility and the greatest profit potential of the three types of
operating arrangements. All owned facility revenues flow directly to the
Company, and the Company has the potential to realize benefits of appreciation
in the value of the underlying real estate if the property is sold. The
ownership of a parking facility brings the Company complete responsibility for
all aspects of the property, including all structural, mechanical or electrical
maintenance or repairs.

Parking revenues from leased facilities amounted to $136.0 million and
$132.2 million for the three months ended June 30, 2003 and 2002, respectively,
and $399.6 million and $389.9 million for the nine months ended June 30, 2003
and 2002, respectively. Parking revenues from leased facilities accounted for
89.1% and 88.3% of total parking revenues for the three months ended June 30,
2003 and 2002, respectively, and 89.0% and 88.2% of total parking revenues for
the nine months ended June 30, 2003 and 2002, respectively. The Companys
leases generally require the payment of a fixed amount of rent, regardless of
the profitability of the parking facility. In addition, many leases also
require the payment of a percentage of gross revenues above specified threshold
levels. Generally speaking, leased facilities require a longer commitment and
a larger capital investment for the Company and represent a greater risk than
managed facilities but provide a greater opportunity for long-term growth in
revenues and profits. Under its leases, the Company is typically responsible
for all facets of the parking operations, including pricing, utilities, and
ordinary and routine maintenance, but is generally not responsible for
structural, mechanical or electrical maintenance or repairs. Lease arrangements
are typically for terms of three to ten years, with a renewal term, and
generally provide for increases in base rent based on indices, such as the
Consumer Price Index, or on pre-determined amounts.

Management contract revenues amounted to $30.6 million and $31.3 million
for the three months ended June 30, 2003 and 2002, respectively, and $90.9
million and $90.2 million for the nine months ended June 30, 2003 and 2002,
respectively. The Companys responsibilities under a management contract as a
facility manager include hiring, training, and staffing parking personnel, and
providing collections, accounting, record keeping, insurance, and facility
marketing services. In general, Central Parking is not responsible under its
management contracts for structural, mechanical, or electrical maintenance or
repairs, or for providing security or guard services or for paying property
taxes. In general, management contracts are for terms of one to three years and
are renewable for successive one-year terms, but are cancelable by the property
owner on short notice. With respect to insurance, the Companys clients have
the option of obtaining liability insurance on their own or having Central
Parking provide insurance as part of the services provided under the management
contract. Because of the Companys size and claims experience, management
believes it can purchase such insurance at lower rates than the Companys
clients can generally obtain on their own. Accordingly, Central Parking
historically has generated profits on the insurance provided under its
management contracts.

Critical Accounting Policies

Managements Discussion and Analysis of Financial Condition and Results of
Operations discusses the Companys consolidated financial statements, which
have been prepared in accordance with accounting principles

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generally accepted in the United States of America. Accounting estimates
are an integral part of the preparation of the financial statements and the
financial reporting process and are based upon current judgments. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reported period. Certain accounting estimates are particularly sensitive
because of their complexity and the possibility that future events affecting
them may differ materially from the Companys current judgments and estimates.

This listing of critical accounting policies is not intended to be a
comprehensive list of all of the Companys accounting policies. In many cases,
the accounting treatment of a particular transaction is specifically dictated
by accounting principles generally accepted in the United States of America,
with no need for managements judgment regarding accounting policy. The Company
believes that of its significant accounting policies, as discussed in Note 1 of
the consolidated financial statements included in the Companys Annual Report
on Form 10-K for the year ended September 30, 2002, the following involve a
higher degree of judgment and complexity:

Impairment of Long-Lived Assets and Goodwill

As of June 30, 2003, the Companys long-lived assets were comprised
primarily of $454.5 million of property, equipment and leasehold improvements,
$107.5 million of contract rights and $19.8 million of deferred expenses. In
accounting for the Companys long-lived assets, other than goodwill and other
intangible assets, the Company applies the provisions of Statement of Financial
Accounting Standards (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. The Company accounts for goodwill and other
intangible assets under the provisions of SFAS No. 142, Goodwill and Other
Intangible Assets. As of June 30, 2003, the Company had $230.3 million of
goodwill.

The determination and measurement of an impairment loss under these
accounting standards require the continuous use of significant judgment and
estimates. The determination of fair value of these assets includes cash flow
projections that assume certain future revenue and cost levels, assumed
discount rates based upon current market conditions and other valuation
factors, all of which involve the use of significant judgment and estimation.
A $9.3 million goodwill impairment charge reflected in the statement of
operations for the nine-months ended June 30, 2002 resulted from the Companys
initial adoption of SFAS No. 142 and is reflected as a cumulative effect of an
accounting change as of October 1, 2001. The Company recorded impairment
losses of approximately $4.3 million in property related losses during the
three months ended June 30, 2003 as a result of underperforming locations,
upon termination or disposal and premature closures. The Company recorded
impairment losses of approximately $9.7 million in property related losses and
an additional $2.4 million in discontinued operations during the nine months
ended June 30, 2003 as a result of underperforming locations, upon termination or disposal and premature closures. Future events may indicate differences
from managements judgments and estimates, which could, in turn, result in
increased impairment charges in the future. Future events that may result in
increased impairment charges include increases in interest rates, which would
impact discount rates, unfavorable economic conditions or other factors, which
could decrease revenues and profitability of existing locations, and changes in
the cost structure of existing facilities.

Contract and Lease Rights

As of June 30, 2003, the Company had $107.5 million of contract and lease
rights. The Company capitalizes payments made to third parties, which provide
the Company the right to manage or lease facilities. Lease rights and
management contract rights, which are purchased individually, are amortized on
a straight-line basis over the terms of the related agreements, which range
from 5 to 30 years. Management contract rights acquired through acquisition of
an entity are amortized as a group over the estimated term of the contracts,
including anticipated renewals and terminations based on the Companys
historical experience (typically 15 years). If the renewal rate of contracts
within an acquired group is less than initially estimated, accelerated
amortization or impairment may be necessary.

Allowance for Doubtful Accounts

As of June 30, 2003, the Company had $49.4 million of trade receivables,
including management accounts receivable and accounts receivable  other.
Additionally, the Company had a recorded allowance for doubtful accounts of
$2.9 million. The Company reports management accounts receivable, net of an
allowance for doubtful accounts, to represent its estimate of the amount that
ultimately will be realized in cash. The Company reviews the adequacy of its
allowance for doubtful accounts on an ongoing basis, using historical
collection trends, analyses of

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receivable portfolios by region and by source, aging of receivables, as
well as review of specific accounts, and makes adjustments in the allowance as
necessary. Changes in economic conditions, specifically in the Northeast
United States, could have an impact on the collection of existing receivable
balances or future allowance considerations.

Litigation

The Company purchases comprehensive liability insurance covering certain
claims that occur at parking facilities it owns, leases or manages. The primary
amount of such coverage is $1 million per occurrence and $2 million in the
aggregate per facility. In addition, the Company purchases umbrella/excess
liability coverage. The Companys various liability insurance policies have
deductibles of up to $250,000 that must be met before the insurance companies
are required to reimburse the Company for costs incurred relating to covered
claims. As a result, the Company is, in effect, self-insured for all claims up
to the deductible levels. The Company applies the provisions of SFAS No. 5,
Accounting for Contingencies, in determining the timing and amount of expense
recognition associated with claims against the Company. The expense
recognition is based upon managements determination of an unfavorable outcome
of a claim being deemed as probable and reasonably estimated, as defined in
SFAS No. 5. This determination requires the use of judgment in both the
estimation of probability and the amount to be recognized as an expense.
Management utilizes historical experience with similar claims along with input
from legal counsel in determining the likelihood and extent of an unfavorable
outcome. Future events may indicate differences from these judgments and
estimates and result in increased expense recognition in the future.

Income Taxes

The Company uses the asset and liability method of SFAS No. 109,
Accounting for Income Taxes, to account for income taxes. Under this method,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The Company has certain
net operating loss carry forwards which expire between 2003 and 2017. The
ability of the Company to fully utilize these net operating losses to offset
taxable income is limited due to changes in ownership of the companies which
generated these losses. These limitations have been considered in the
determination of the Companys deferred tax asset valuation allowance. The
valuation allowance provides for net operating loss carry forwards for which
recoverability is deemed to be uncertain. The carrying value of the Companys
net deferred tax assets assumes that the Company will be able to generate
sufficient future taxable income in certain tax jurisdictions, based on
estimates and assumptions. If these estimates and related assumptions change in
the future, the Company will be required to adjust its deferred tax valuation
allowances.

During the three months ended June 30, 2003, the Company eliminated
deferred tax valuation allowances on acquired operating loss carryforwards
totaling $11,949,000, because management determined that the deferred tax
assets from these operating loss carryforwards would be realized. Since these
deferred tax assets were obtained from previous acquisitions for
which goodwill was recorded, the Company reduced goodwill
by the amount of the elimination of the deferred tax valuation allowance.

Recent Accounting Pronouncements

In November 2002, the FASB issued Interpretation No. 45, Guarantors
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others, an interpretation of FASB Statements No.
5, 57 and 107 and a rescission of FASB Interpretation No. 34. This
Interpretation elaborates on the disclosures to be made by a guarantor in its
interim and annual financial statements about its obligations under guarantees
issued. The Interpretation also clarifies that a guarantor is required to
recognize, at inception of a guarantee, a liability for the fair value of the
obligation undertaken. The disclosure requirements are effective for financial
statements of interim and annual periods ending after December 15, 2002, and
have been included in the notes to the consolidated financial statements
included herein. The impact on the Companys financial statements from the
application of the recognition and measurement provisions of the Interpretation
is dependent on the level of guarantees issued or modified in 2003. No
guaranties were issued or modified during the quarter ended June 30, 2003,
which were impacted by the provisions of FASB Interpretation No. 45.

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation  Transition and Disclosure, an amendment of FASB Statement No.
123. This Statement amends FASB SFAS No. 123, Accounting for Stock-Based
Compensation,to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
SFAS No. 123 to require prominent disclosures in both annual and interim
financial

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statements. The Company adopted the disclosure provisions of SFAS No. 148
during the three months ended December 31, 2002.

In
January 2003, the FASB issued Interpretation No. 46, Consolidation of Variable
Interest Entities, an interpretation of ARB No. 51.The primary objectives of
Interpretation No. 46 are to provide guidance on the identification of entities for which
control is achieved through means other than through voting rights (variable
interest entities or VIEs) and how to determine when and which business
enterprise should consolidate the VIE (the primary beneficiary). This new
model for consolidation applies to an entity in which either (1) the equity
investors (if any) do not have a controlling financial interest or (2) the
equity investment at risk is insufficient to finance that entitys activities
without receiving additional subordinated financial support from other parties.
In addition, Interpretation No. 46 requires that both the primary beneficiary and all
other enterprises with a significant variable interest in a VIE make additional
disclosures. The Company has 19 variable interest entities with which it
holds a significant variable interest, but is not the primary beneficiary:

|                                           |  |                  |  |                                                |  |           |            |          |  |                           |  |  |        |           |  |  |  |  |  | 
|------------------------------------------ |  | ---------------- |  | ---------------------------------------------- |  | --------- | ---------- | -------- |  | ------------------------- |  |  | ------ | --------- |  |  |  |  |  | 
|                                           |  | Commencement     |  |                                                |  |           |            | %        |  |                           |  |  |        | Number of
|Entity                                     |  | of Operations    |  | Nature of Activities                           |  | Ownership |            | Location |  | Parking Spaces           
|                                           |  |                  |  |                                                |  |           |            |          |  |                          
|Central Parking System of Mexico, SA De CV |  | Aug-94           |  | Leases and manages parking lots                |  |           | 50.00      | %        |  | Mexico                    |  |  | 64,062 |          
|Larimer Square Parking Associates          |  | Jan-95           |  | Owns parking lot                               |  |           | 50.00      | %        |  | Denver, Colorado          |  |  | 307    |          
|LODO Parking Garage, LLC                   |  | Feb-95           |  | Owns parking lot                               |  |           | 50.00      | %        |  | Denver, Colorado          |  |  | 314    |          
|157166
Canada, Inc.                        |  | Sep-87           |  | Owns parking lots                              |  |           | 50.00      | %        |  | Canada                    |  |  | 179    |          
|Other investments in VIEs                  |  | Oct 80 - July 99 |  | Ownership, management, and leases parking lots |  |           | 3.32% - 50 | %        |  | Mexico and Various states |  |  | 11,031 |          

The Company will adopt the provisions of Interpretation  No. 46 beginning July 1,
2003. The initial adoption of Interpretation No. 46 will not have any effect on the
Companys financial statements.

In
May 2003, the FASB issued SFAS No. 150, Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity.
FASB SFAS No. 150 requires issuers to classify as liabilities (or assets
in some circumstance) three classes of freestanding financial instruments that
embody obligations for the issuer. Generally, FASB SFAS No. 150 is
effective for financial instruments entered into or modified after May 31,
2003 and is otherwise effective at the beginning of the first interim period
beginning after June 15, 2003. The Company adopted the provisions of FASB
SFAS No. 150 on July 1, 2003. The Company did not enter into any
financial instruments within the scope of FASB Statement No. 150 after May 31, 2003. On July 1,
2003, the $78,085,000 Company-obligated mandatorily redeemable convertible
securities of a subsidiary trust holding solely parent debentures, were
classified as liabilities. There was no cumulative effect of the change in
accounting principle as a result of adopting FASB SFAS No. 150.

Results of Operations

Three Months Ended June 30, 2003 Compared to Three Months Ended June 30, 2002

Parking revenues in the third quarter of fiscal year 2003 increased to
$152.6 million from $149.8 million in the third quarter of fiscal year 2002, an
increase of $2.8 million, or 1.9%. The increase primarily resulted from a $2.8
million increase in same-store revenues.

Management contract revenues for the third quarter of fiscal 2003
decreased to $30.6 million from $31.3 million in the third quarter of fiscal
year 2002.

Cost of parking in the third quarter of 2003 increased to $142.1 million
from $131.6 million in the third quarter of 2002, an increase of $10.5 million
or 8.0%. This increase included a $3.7 million increase in rent expense due to
new locations and new lease agreements, and $1.2 million due to
increased property taxes. Other items causing this increase were cost inflation driven by
higher insurance costs and start up costs related to new business brought on
since last year. Rent expense as a percentage of parking revenues increased to
52.1% during the quarter ended June 30, 2003, from 50.7% in the quarter ended
June 30, 2002. Payroll and benefit expenses were 19.1% of parking revenues
during the third quarter of fiscal 2003 as compared to 19.5% in the comparable
prior year period. Cost of parking as a percentage of parking revenues
increased to 93.1% in the third quarter of fiscal 2003 from 87.9% in the third
quarter of fiscal 2002.

Cost of management contracts in the third quarter of fiscal 2003 increased
to $16.6 million from $12.4 million in the comparable period in 2002, an
increase of $4.2 million or 33.9%. The increase was primarily caused by an
increase of $1.2 million in bad debt expense, an increase of $1.1 million in
employee health care costs, an increase of $0.4 million in commercial and
unemployment claims, an increase of $0.8 million in bodily
injury claims
and

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an increase of $0.3 million in property damage insurance. The increase in
the bad debt expense was attributed to reserve increases as a result of
deterioration in aging of select accounts, and balances whose resolution is in
litigation. Cost of management contracts as a percentage of management
contract revenue increased to 54.1% for the third fiscal quarter of 2003 from
39.6% for the same period in 2002.

General and administrative expenses increased to $25.0 million for the
third quarter of fiscal 2003 from $17.2 million in the third quarter of fiscal
2002, an increase of $7.8 million or 45.3%. This increase is due to an increase
in legal and professional expenses of $0.5 million and an increase of $5.7
million in payroll, primarily related to severance costs. Miscellaneous other
expenses of $1.6 million comprise the remainder of the increase for the third
quarter of fiscal 2003. General and administrative expenses as a percentage of
total revenues (excluding reimbursement of management contract expenses)
increased to 13.6% for the third quarter of fiscal 2003 compared to 9.5% for
the third quarter of fiscal 2002.

Net property-related losses for the three months ended June 30, 2003 was
$4.4 million. The $4.4 million loss was comprised of impairments of contract
rights, leasehold improvements and deferred expenses related to locations which management plans to continue to operate. Based on the
continued sluggish economy, current operating results, and the Companys recent
forecast for the next fiscal year, management determined that the projected
cash flows for these locations would not be enough to recover the remaining
value of the assets. The Companys property-related losses for the three
months ended June 30, 2002, were primarily comprised of impairment of contract
rights and leasehold improvements related to a location in New York
City due to changes in traffic flow patterns resulting in a reduction
of revenues at that site.

The Company adopted the provisions of SFAS No. 144 on October 1, 2002. In
addition to providing enhanced guidance on identifying and measuring
impairments of long-lived assets, SFAS No. 144 requires that the operating
results from certain disposals of a parking facility be reflected as
discontinued operations. SFAS No. 144 also requires that gains, losses and
impairments resulting from the designation of a parking facility as
held-for-sale be reflected as discontinued operations. For the
three months ended June 30, 2003, the Company either disposed of or designated as held-for-sale or
disposal 7 locations, resulting in income from discontinued
operations of $50,000. The Companys 2002 results were reclassified to reflect the
operations of these locations discontinued in 2003 as discontinued operations
net of related income taxes.

Interest income decreased to $1.1 million for the third quarter of fiscal
2003 from $1.2 million in the third quarter of fiscal 2002, a decrease of $0.1
million, or 8.3%. The decrease in interest income was the result of lower
market interest rates.

Interest expense and dividends on Company-obligated mandatory redeemable
convertible securities increased to $5.9 million for the third quarter of
fiscal 2003 from $4.2 million in the third quarter of fiscal 2002, an increase
of $1.7 million or 40.5%. The increase was attributed to an increase in
interest rates on the Companys Credit Facility ($1.4 million), an increase in
letter of credit costs ($0.2 million), and an increase in other
costs ($0.1
million).

The weighted average balance outstanding for the Companys debt
obligations and convertible securities was $367.3 million during the quarter
ended June 30, 2003, at a weighted average interest rate of 6.0% compared to a
weighted average balance outstanding of $355.2 million at a weighted average
rate of 4.7% during the quarter ended June 30, 2002. Deferred finance costs
were included in the calculation of the weighted average interest rate.

The
Company recorded an income tax benefit of $5.3 million for the third
quarter of fiscal 2003 as compared to income tax expense of $5.2 million in the
third quarter of fiscal 2002, a change of $10.5 million. The effective tax rate
on (loss) earnings from continuing operations before income taxes and
cumulative effect of accounting change for the third quarter of fiscal 2003 was
51.2% compared to 34.3% for the third quarter of fiscal 2002. The change in
the effective tax rate is due to the change in relationship of the amount of certain non
deductible items to the pretax loss in 2003.

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Nine Months Ended June 30, 2003 Compared to Nine Months Ended June 30, 2002

Parking revenues in the first nine months of fiscal year 2003 increased to
$448.7 million from $442.3 million in the first nine months of fiscal year
2002, an increase of $6.4 million, or 1.4%. The increase primarily resulted
from a $6.4 million increase in same-store revenues.

Management contract revenues for the first nine months of fiscal 2003
increased to $90.8 million from $90.2 million in the same period of fiscal
2002, an increase of $0.6 million or 0.7%. The increase is primarily due to an
increase in insurance charges.

Cost of parking in the first nine months of 2003 increased to $416.2
million from $386.0 million in the first nine months of 2002, an increase of
$30.2 million or 7.8%. This increase was attributable to an increase in rent
and property expense of $10.3 million, payroll and payroll related costs
increase of $3.0 million, snow removal costs of $2.7 million, insurance cost
increases of $3.1 million, increase in equipment expenses of $1.5 million,
increase in supplies expense of $0.9 million, increase in utilities of $0.7
million, and other miscellaneous costs of parking of $8.0 million. Rent
expense as a percentage of parking revenues increased to 51.2% during the first
nine months ended June 30, 2003, from 49.9% during the same period of 2002.
Payroll and benefit expenses were 19.4% of parking revenues during the third
quarter of fiscal 2003 as compared to 18.9% in the comparable prior year
period. Cost of parking as a percentage of parking revenues increased to 92.8%
in the first nine months of fiscal 2003 from 87.3% in the first nine months of
fiscal 2002.

Cost of management contracts in fiscal first nine months 2003 increased to
$48.7 million from $37.7 million in the comparable period in 2002, an increase
of $11.0 million or 29.2%. The increase in cost was primarily caused by an
increase in insurance related items of $7.5 million including group insurance
and general liability claims, an increase of $2.8 million in bad debt
expense, and an increase in other costs of $0.7 million. The increase in the
bad debt expense was attributed to reserve increases as a result of
deterioration in aging of select accounts, and balances whose resolution is in
litigation. Cost of management contracts as a percentage of management
contract revenue increased to 53.6% for the first nine months of fiscal 2003
from 41.8% for the same period in fiscal 2002, due to the increase in the
aforementioned items.

General and administrative expenses increased to $66.8 million for the
first nine months of fiscal 2003 from $52.6 million in the first nine months of
fiscal 2002, an increase of $14.2 million or 27.0%. This increase is due to an
increase in payroll and bonus expense of $7.1 million, an increase of $3.9
million in professional services, an increase of $0.6 million in rent expense,
an increase of $1.7 million in deferred compensation, and an increase of $0.9
million in miscellaneous general and administrative for the first nine months
of fiscal 2003. The increase in payroll expense is due primarily to severance
charges. General and administrative expenses as a percentage of total revenues
(excluding reimbursement of management contract expenses) increased to 12.4%
for the first nine months of fiscal 2003 compared to 9.9% for the first nine
months of fiscal 2002.

Net property-related losses for the nine
months ended June 30, 2003 was
$7.0 million. The $7.0 million loss was comprised of $7.0 million of
impairments of contract rights, deferred expenses and leasehold
improvements related to locations
which management plans to continue to operate. Based on the continued
sluggish economy, current operating results, and the Companys
recent forecast for the next fiscal year, management determined that
the projected cash flows for these locations would not be enough to
recover the remaining value of assets. The Companys property-related
gains for the nine months ended June 30, 2002, were primarily comprised of a
$4.6 million gain on the sale of property in Houston and the
$3.9 million gain on the sale of the
Companys Civic partnership interest, offset by $1.2 million of impairment
charges for condemned locations and impairment of $2.6 million of leasehold
improvements and prepaid rent at a New York City location.

The Company adopted the provisions of SFAS No. 144 on October 1, 2002. In
addition to providing enhanced guidance on identifying and measuring
impairments of long-lived assets, SFAS No. 144 requires that the operating
results from certain disposals of a parking facility be reflected as
discontinued operations. SFAS No. 144 also requires that gains, losses and
impairments resulting from the designation of a parking facility as
held-for-sale be reflected as discontinued operations. For the
nine months ended June 30, 2003, the Company either disposed of
or designated as held-for-sale 26 locations, resulting in a loss from discontinued operations of $1.3
million, including $2.9 million in impairments and $2.9 million in property
related gains. Included in the nine months ended June 30, 2003 is the
year-to-date results of operations all locations discontinued during the first
quarter as well as the locations

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disposed of during the second and third fiscal quarters of 2003. The Companys
2002 results were reclassified to reflect the operations of these locations
discontinued in 2003 as discontinued operations net of related income taxes.

Interest income decreased to $3.5 million for the first nine months of
fiscal 2003 from $4.3 million in the first nine months of fiscal 2002, a
decrease of $0.8 million, or 18.6%. The decrease in interest income was the
result of lower market interest rates.

Interest expense and dividends on Company-obligated mandatory redeemable
convertible securities increased to $16.6 million for the first nine months of
fiscal 2003 from $13.3 million in the first nine months of fiscal 2002, an
increase of $3.3 million or 24.8%. The increase was due primarily to costs
associated with the refinancing of the 1999 Credit Facility and an increase in
interest rates from the new Credit Facility. Deferred finance cost of $0.8
million and interest rate swap costs of $0.9 million were written off to
interest expense during the second quarter of 2003 as a result of the
refinancing. The Company also incurred waiver related fees of $0.4 million that
were included in interest expense.

The weighted average balance outstanding for the Companies debt
obligations and convertible securities was $356.5 million during the first nine
months of 2003, at a weighted average interest rate of 5.7% compared to a
weighted average balance outstanding of $381.2 million and a weighted average
rate of 4.5% during the same period of 2002. Deferred finance costs were
included in the calculation of the weighted average interest rate.

Gain on sale of non-operating assets was $3.3 million for the nine months
ended June 30, 2003. The gain is attributable to the sale of the corporate
airplane during the second quarter.

Income taxes decreased to a $4.7 million benefit for the first nine months
of fiscal 2003 from a $22.4 million expense in the first nine months of fiscal
2002, a decrease of $27.1 million. The effective tax rate on
(loss) earnings from
continuing operations before income taxes and cumulative effect of accounting
change for the first nine months of fiscal 2003 was 43.5% compared to 37.0% for
the first nine months of fiscal 2002. The change in the effective tax rate is
due to the change in relationship of the amount of certain non-deductible items to the
pretax loss in 2003.

Liquidity and Capital Resources

Operating activities for the nine months ended June 30, 2003 provided net
cash of $16.5 million, compared to $72.4 million of cash provided by operating
activities for the nine months ended June 30, 2002. Net loss from continuing
operations of $6.2 million, depreciation and amortization of $24.8 million,
deferred taxes of $9.9 million, property related losses of $7.0 million and
gain on sale of non operating assets of $3.3 million, along with net increases
in operating assets and net decreases in operating liabilities totaling $4.1
million, account for the majority of the cash provided by operating activities
during the first nine months of fiscal 2003.

Investing activities for the nine months ended June 30, 2003 used net cash
of $38.3 million, compared to $22.7 million of net cash used in investing
activities for the same period in the prior year. Purchases of property,
equipment and leasehold improvements of $52.0 million and purchases of contract
and lease rights of $7.2 million, offset by proceeds from disposition of
property and equipment of $17.9 million and other investing activities of $3.0
million, accounted for the majority of the cash used by investing activities in
the first nine months of fiscal 2003. Acquisitions of $17.8 million, purchases
of property, equipment, and leasehold improvements of $19.8 million and contract
rights and lease rights of $18.8 million, offset by proceeds of $34.1 million
from the disposition of property and equipment, and proceeds from sale of
investment in partnership accounted for the majority of cash
used by investing activities during the first nine months of fiscal 2002.

Financing activities for the nine months ended June 30, 2003 provided net
cash of $21.0 million, compared to $56.6 million used in the same period in the
prior year. Principal repayments on revolving credit of $74.5 million,
principal repayments on notes payable and capital leases of $78.3 million,
payment to minority interest partners of $3.9 and dividends paid of $1.6
million, offset by proceeds from issuance of notes payable of $176.3 million
comprised a majority of the cash provided by financing activities for the nine
months ended June 30, 2003. Principal repayments on long-term debt of $41.5
million and the repurchase of mandatorily redeemable preferred securities of
$21.8 million, offset by net borrowings under the revolving credit agreement of
$9.5 million, comprised a majority of the cash used by financing activities
during the nine months ended June 30, 2002.

On February 28, 2003, the Company entered into a credit facility (the
Credit Facility) initially providing for an

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aggregate availability of up to $350 million consisting of a five-year
$175 million revolving credit facility including a sub-limit of $60 million for
standby letters of credit, and a $175 million seven-year term
loan. The facility is secured by the stock of certain subsidiaries of
the Company, 106 real estate assets, and domestic personal property
assets of the Company and certain subsidiaries. Proceeds
from the Credit Facility were used to refinance the 1999 Credit Facility.

The Credit Facility bears interest at LIBOR plus a tier-based margin
dependent upon certain financial ratios. There are separate tiers for the
revolving credit facility and term loan. The weighted average margin as of June
30, 2003 was 3.35%. The amount outstanding under the Companys Credit Facility
was $246.6 million with a weighted average interest rate of 4.99% as of June
30, 2003. The term loan is required to be repaid in quarterly payments of $0.44
million through March 2008 and quarterly payments of $20.8 million from June
2008 through March 2010. The aggregate availability under the Credit Facility
was $32.3 million at June 30, 2003, which is net of $35.7 million of stand-by
letters of credit.

The Credit Facility contains covenants including those that require the
Company to maintain certain financial ratios, restrict further indebtedness and
certain acquisition activity and limit the amount of dividends paid. The
primary ratios are a leverage ratio, senior leverage ratio and a fixed charge
coverage ratio. Quarterly compliance is calculated using a four quarter rolling
methodology and measured against certain targets.As of March 31, 2003, the
Company was in default due to non-compliance with both the leverage and senior
leverage ratios. A temporary waiver was obtained from the lenders for the
quarter ended March 31, 2003, subject to certain conditions. Pursuant to the
provisions of the Emerging Issues Task Force (EITF) Issue No. 86-30, Classification
of Obligations When a Violation Is Waived by the Creditor, the Company
projected future compliance with the existing covenants and concluded that
non-compliance with the same covenants at the next quarterly measurement date
was probable. As a result, the Credit Facility was classified as a current
liability at March 31, 2003. The temporary waiver required the Company to
complete an amendment to the Credit Facility.

The Company completed an amendment of the Credit Facility on August 12,
2003. The Company paid a fee of $1.5 million in connection with obtaining the
amendment. The amendment included changes to the permitted covenant ratios;
limitation of capital expenditures, acquisitions and loans; adjusted pricing
with an additional tier and new provisions for asset dispositions. The
amended facility includes a new pricing tier that adds 25 basis
points when the Companys leverage ratio exceeds certain
levels. Pursuant to
EITF Issue No. 86-30, the Company projected future compliance with the amended
covenants and believes that compliance with the amended covenants during the
next four quarterly measurement dates was probable. Accordingly, the Credit
Facility has been classified as a long-term liability at June 30, 2003.

If Central Parking identifies investment opportunities requiring cash in
excess of Central Parkings cash flows and the Credit Facility, Central Parking
may seek additional sources of capital, including seeking to further amend the
existing credit facility to obtain additional indebtedness. The decreased
market value of Central Parkings common stock also could have an impact on
Central Parkings ability to complete significant acquisitions or raise
additional capital.

Future Cash Commitments

The Company routinely makes capital expenditures to maintain or enhance
parking facilities under its control. The Company expects capital expenditures
for fiscal 2003 to be approximately $24 to $28 million, of which the Company
has spent $26.8 million during the first nine months of fiscal 2003.

The following tables summarize the Companys total contracted obligations
and commercial commitments as of June 30, 2003 (amounts in thousands)

Payments due by periodLess than
    
    1-3
    
    4-5
    
    After 5Total
    
    1 Year
    
    Years
    
    Years
    
    YearsLong-term
debt(1)
    
    $
    282,504
    
    
    $
    3,084
    
    
    $
    18,132
    
    
    $
    105,344
    
    
    $
    146,555Capital lease obligations
    
    
    1,455
    
    
    
    1,357
    
    
    
    96
    
    
    
    2
    
    
    
    Convertible securities
    
    
    78,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,085Operating leases
    
    
    1,302,640
    
    
    
    139,055
    
    
    
    375,487
    
    
    
    297,505
    
    
    
    490,593Other long-term obligations
    
    
    14,250
    
    
    
    14,250
    
    
    
    
    
    
    
    
    
    
    
    Total contractual cash obligations
    
    $
    1,678,934
    
    
    $
    157,746
    
    
    $
    393,715
    
    
    $
    402,851
    
    
    $
    715,233


(1) The amounts reflect the
contractual maturities of the Companys long-term debt as of
June 30, 2003.

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Amount of commitment expiration per periodLess than
    
    1-3
    
    4-5
    
    After 5Total
    
    1 Year
    
    Years
    
    Years
    
    YearsUnused lines of credit
    
    $
    71,610
    
    
    $
    1,750
    
    
    $
    3,500
    
    
    $
    3,500
    
    
    $
    62,860Stand-by letters of credit
    
    
    37,579
    
    
    
    36,033
    
    
    
    1,546
    
    
    
    
    
    
    
    Guarantees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other commercial commitments
    
    
    2,702
    
    
    
    2,702
    
    
    
    
    
    
    
    
    
    
    
    Total commercial commitments
    
    $
    111,891
    
    
    $
    40,485
    
    
    $
    5,046
    
    
    $
    3,500
    
    
    $
    62,860


Other commercial commitments include guaranteed minimum payments to
minority partners of certain partnerships.




Item 3. Quantitative and Qualitative Disclosure about Market Risk

Interest Rates

The Companys primary exposure to market risk consists of changes in
interest rates on variable rate borrowings. As of June 30, 2003, the Company
had $246.6 million of variable rate debt outstanding under the Credit Facility
priced at LIBOR plus a weighted average margin of 3.35%. Of this amount,
$174.6 million of the Credit Facility is payable in quarterly installments of
$0.44 million through March 2008 and quarterly payments of $20.8 million from
June 2008 through March 2010 and $72.0 million in revolving credit loans are
due in February 2008. The Company anticipates paying the scheduled quarterly
payments from operating cash flows.

The Company is required under the Credit Facility to enter into and
maintain interest rate protection agreements designed to limit the Companys
exposure to increases in interest rates. On May 30, 2003, the Company entered
into two interest rate swap transactions for a total of $87.5 million. Both
transactions swapped the Companys floating LIBOR interest rates for fixed
interest of 2.45% until June 30, 2007. Both of these derivative instruments
have terms consistent with the terms of the Credit Facility and qualify as cash
flow hedges.

The weighted average interest rate on the Companys Credit Facility at
June 30, 2003 was 4.99%. An increase (decrease) in LIBOR of 1% would result in
an increase (decrease) of annual interest expense of $2.47 million based on the
Companys outstanding Credit Facility balance of $246.6 million at June 30,
2003.

In March 2000, a limited liability company, of which the Company is the
sole shareholder, purchased a parking structure for $19.6 million and financed
$13.3 million of the purchase price with a five-year note bearing interest at
one-month floating LIBOR plus 162.5 basis points. The Company entered into a
five-year LIBOR swap for this interest rate, yielding an effective interest
cost of 8.91% for the five-year period. The notional amount of the swap
amortizes with the payments on the related variable rate debt. The terms of
this derivative instrument are consistent with the terms of the note
and this derivative instrument qualifies as a cash flow hedge.

Market
Risk

At
June 30, 2003 the Companys three interest rate
cap agreements with a combined notional amount of $75.0 million
and one interest rate swap with a notional value of 25.0 million
are being accounted for as speculative derivative financial
instruments with changes in fair values being reflected as a
component of other income (expense). Subsequent changes in the fair
value of the speculative derivative financial instruments will continue
to impact the Companys financial statements for the duration of
the agreements. The interest rate cap agreements and swap agreement
terminate March 19, 2004 and October 29, 2003 respectively.

Foreign Currency Risk

The Companys exposure to foreign exchange risk is minimal. As of June
30, 2003, the Company has approximately GBP 0.6 million (USD $1.0 million)
of cash and cash equivalents denominated in British pounds, EUR 1.5 million
(USD $1.7 million) denominated in euros, CAD 2.0 million
(USD $1.5 million)
denominated in Canadian dollars, and USD $1.3 million denominated in various
other foreign currencies. The Company also has EUR 1.0 million
(USD $1.1
million) of notes payable denominated in euros at June 30, 2003. These notes
bear interest at a floating rate of 5.34% as of June 30, 2003, and require
monthly principal and interest payments through 2012. The Company does not
hold any hedging instruments related to foreign currency transactions. The
Company monitors foreign currency positions and may enter into certain hedging
instruments in the future should it determine that exposure to foreign exchange
risk has increased. Based on the Companys overall currency rate exposure as
of June 30, 2003, management does not believe a near-term change in currency
rates, based on historical currency movements, would materially affect the
Companys financial statements.

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ITEM 4. Controls and Procedures



|(a) |  | Evaluation of disclosure controls and procedures: Under the supervision
and with participation of the Companys management, including the
Companys Chief Executive Officer and Chief Accounting
Officer, the Company conducted an evaluation of its disclosure
controls and procedures, as such term is defined under
Rules 13a-15(e) and
15d-15(e) promulgated under the Securities Exchange Act of 1934, as
amended. Based on this evaluation, the Chief
Executive Officer and Chief Accounting Officer concluded that the
Companys disclosure controls and procedures as of June 30,
2003, are effective in timely
alerting them to material information required to be included in the
Companys periodic reports and is (i) accumulated and communicated to the
Companys management in a timely manner, and (ii) recorded, processed,
summarized and reported within the time periods specified in the SECs
rules and forms, except for the process of identifying and recording trade
accounts payable. With respect to this issue, the Company has established
a process to capture and record vendor invoices on a more timely basis and
to estimate the liabilities for vendor invoices not yet received. The
Company believes that procedures performed by the Company subsequent to
quarter-end provide us with an adequate basis to conclude the accuracy of
this account.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | Changes in internal control over financial reporting: There have been no
significant changes (including corrective actions with regard to
significant deficiencies or material weaknesses) in the Companys internal
control over financial reporting or in other factors that could
significantly affect this control subsequent to the date of the most
recent evaluation of the Companys internal control over financial
reporting. Except as disclosed above there have been no significant
changes in the Companys internal controls or in other factors that
could significantly affect these controls subsequent to the date of
this evaluation.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




PART II  OTHER INFORMATION




Item 1. Legal Proceedings

In June and July 2003, four stockholders filed separate lawsuits against
the Company, its former CEO, its former CFO and its current CEO in the U. S.
District Court for the Middle District of Tennessee (Case Nos. 3CV546, 3CV585,
3CV645 and 3CV661). The plaintiff in each case seeks to represent a plaintiff
class that includes those, except for Company insiders and immediate families,
who purchased the Companys common stock from November 4, 2002 through February
13, 2003. The plaintiff in each case claims that the defendants, between
November 4, 2002 and February 13, 2003, made material misrepresentations and/or
omissions in connection with the Companys financial statements for the quarter
and the fiscal year ended September 30, 2002 and about the Companys internal
controls in violation of the Securities Exchange Act of 1934, allegedly caused the plaintiffs to buy Company
stock at inflated prices. The Company has not yet formally responded to these
complaints, but intends to vigorously defend the claims and allegations
asserted in each of these cases.

The
Company, Pepsi Cola Company (Pepsi) and several related Pepsi companies and
individuals are
co-defendants in a lawsuit filed in the 270th Judicial District Court in Harris
County, Texas, by an individual, David Loftus, and three companies
affiliated with Mr.
Loftus known as PepsiPark USA, Inc. The plaintiffs in the suit allege, among
other things, that the Company and Pepsi conspired to misappropriate a concept
developed by the plaintiffs for selling Pepsi products and other vending
machine products to parking lot customers.
Plaintiffs allege several causes of action, including breach of contract,
misrepresentation, breach of fiduciary duties, fraud, conversion and unfair
competition. The suit, which was initially filed on June 24, 2002, was amended
on April 24, 2003, to add allegations against the Company for
underpayment of percentage rent with respect to three parking lots leased to
the Company by Mr. Loftus and related companies. The plaintiffs allege, among
other things, breach of contract and fraud with respect to these parking
lots, and are currently seeking damages for allegedly unpaid percentage rent of $1.3
million plus interest and attorneys fees and expenses. The plaintiffs also
are seeking unspecified exemplary damages. On May 9, 2003, the suit was again
amended to add an allegation that the Company refused to implement the
plaintiffs concept for selling vending machine products to parking lot
customers to avoid liability for past underreporting of revenues. The Company
is vigorously defending the case.

The
Company has settled a lawsuit brought by
Texas Gulf Bank and other trustees and individuals on behalf of the owners of
an individual interest in an undeveloped city block in downtown Houston that
was leased by a subsidiary of Allright (which is a subsidiary of the Company).
The suit was filed in June 2001, in the 270th Judicial
District Court in Harris County, Texas. The plaintiffs in the suit alleged
underpayment of percentage rent as a result of theft and fraud.
Management has established an accrual for the entire amount of the
proposed settlement.

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Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits

2.1
    
    
    
    Plan of Recapitalization, effective October 9, 1997 (Incorporated
by reference to Exhibit 2 to the Companys Registration Statement
No. 33-95640 on Form S-1).2.2
    
    
    
    Agreement and Plan of Merger dated September 21, 1998, by and
among the Registrant, Central Merger Sub, Inc., Allright
Holdings, Inc., Apollo Real Estate Investment Fund II, L.P. and
AEW Partners, L.P. (Incorporated by reference to Exhibit 2.1 to
the Companys Registration Statement No. 333-66081 on Form S-4
filed on October 21, 1998).2.3
    
    
    
    Amendment dated as of January 5, 1999, to the Agreement and Plan
of Merger dated September 21, 1998 by and among the Registrant,
Central Merger Sub, Inc., Allright Holdings, Inc., Apollo Real
Estate Investment Fund II, L.P. and AEW Partners, L.P.
(Incorporated by reference to Exhibit 2.1 to the Companys
Registration Statement No. 333-66081 on Form S-4 filed on October
21, 1998, as amended).2.4
    
    
    
    Acquisition Agreement and Plan of Merger dated as of November 7,
1997, by and between the Registrant and Kinney System Holding
Corp and a subsidiary of the Registrant (Incorporated by
reference to the Companys Current Report on Form 8-K filed on
February 17, 1998).3.1
    
    (a)
    
    Amended and Restated Charter of the Registrant (Incorporated
by reference to Exhibit 4.1 to the Companys Registration
Statement No. 333-23869 on Form S-3).(b)
    
    Articles of Amendment to the Charter of Central Parking
Corporation increasing the authorized number of shares of common
stock, par value $0.01 per share, to one hundred million
(Incorporated by reference to Exhibit 2 to the Companys 10-Q for
the quarter ended March 31, 1999).3.2
    
    
    
    Amended and Restated Bylaws of the Registrant (Incorporated by
reference to Exhibit 4.1 to the Companys Registration Statement
No. 333-23869 on Form S-3).4.1
    
    
    
    Form of Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 to the Companys Registration Statement No. 33-95640
on Form S-1).4.2
    
    (a)
    
    Registration Rights Agreement (the Allright Registration
Rights
Agreement) dated as of September 21, 1998 by and between the
Registrant, Apollo Real Estate Investment Fund II, L.P., AEW
Partners, L.P. and Monroe J. Carell, Jr., The Monroe Carell Jr.
Foundation, Monroe Carell Jr. 1995 Grantor Retained Annuity Trust,
Monroe Carell Jr. 1994 Grantor Retained Annuity Trust, The Carell
Childrens Trust, The 1996 Carell Grandchildrens Trust, The Carell
Family Grandchildren 1990 Trust, The Kathryn Carell Brown Foundation,
The Edith Carell Johnson Foundation, The Julie Carell Stadler
Foundation, 1997 Carell Elizabeth Brown Trust, 1997 Ann Scott Johnson
Trust, 1997 Julia Claire Stadler Trust, 1997 William Carell Johnson
Trust, 1997 David Nicholas Brown Trust and 1997 George Monroe Stadler
Trust (Incorporated by reference to Exhibit 4.4 to the Companys
Registration Statement No. 333-66081 filed on October 21,
1998).


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4.2
    
    (b)
    
    Amendment dated January 5, 1999 to the Allright Registration Rights
Agreement (Incorporated by reference to Exhibit 4.4.1 to the
Companys Registration Statement No. 333-66081 filed on October 21,
1998, as amended).4.2
    
    (c)
    
    Second Amendment dated February 1, 2001 to the Allright Registration
Rights Agreement. (Incorporated by reference to Exhibit 4.6 to the
Companys Registration Statement No. 333-54914 on Form S-3 filed on
February 2, 2001).4.3
    
    
    
    Indenture dated March 18, 1998 between the registrant and Chase
Bank of Texas, National Association, as Trustee regarding up to
$113,402,050 of 5-1/4 % Convertible Subordinated Debentures due
2028. (Incorporated by reference to Exhibit 4.5 to the
Registrants Registration Statement No. 333-52497 on
Form S-3).4.4
    
    
    
    Amended and Restated Declaration of Trust of Central Parking
Finance Trust dated as of March 18, 1998. (Incorporated by
reference to Exhibit 4.5 to the Registrants Registration
Statement No. 333-52497 on Form S-3).4.5
    
    
    
    Preferred Securities Guarantee Agreement dated as of March 18,
1998 by and between the Registrant and Chase Bank of Texas,
national Association as Trustee (Incorporated by reference to
Exhibit 4.7 to the Registrants Registration Statement No.
333-52497 on Form S-3).4.6
    
    
    
    Common Securities Guarantee Agreement dated March 18, 1998 by the
Registrant. (Incorporated by reference to Exhibit 4.9 to
333-52497 on Form S-3).10.1
    
    
    
    Revolving Credit
Note dated November 1, 2002, by SunTrust Bank
and Central Parking Corporation. (Incorporated by reference to
Exhibit 10.1 to the Registrants Form 10-Q for the quarter ended
March 31, 2003)10.2
    
    
    
    Promissory Note dated January 8, 2003 by Bank of America, N.A.
and Central Parking Corporation.  (Incorporated by reference to
Exhibit 10.2 to the Registrants Form 10-Q for the quarter ended
March 31, 2003)10.3
    
    
    
    First Amendment to
Credit Agreement dated August 12, 2003, by Bank of America, N.A.
and Central Parking Corporation.10.4
    
    
    
    International Swap
Dealers Association, Inc. Master Agreement dated as of June 9,
2003, by JPMorgan Chase Bank and Central Parking Corporation.10.5
    
    
    
    International Swap
Dealers Association, Inc. Master Agreement dated as of May 28,
2003, by SunTrust Bank and Central Parking Corporation.31.1
    
    
    
    Certification of Monroe J. Carell, Jr. pursuant to
Rule 13a-14(a).31.2
    
    
    
    Certification of V. Jeffrey Heavrin pursuant to Rule
13a-14(a).32.1
    
    
    
    Certification of
Monroe J. Carell, Jr. pursuant to Rule 13a-14(b).32.2
    
    
    
    Certification of
V. Jeffrey Heavrin pursuant to Rule 130-14(b).


(b) Reports on Form 8-K

On April 4, 2003, the Company filed a current report on form 8-K
announcing that the Company expects to report net loss for the second fiscal
quarter.

On May 7, 2003, the Company filed a current report on form 8-K announcing
that the Company is reporting a net loss of $9.2 million for the quarter ended
March 31, 2003.

On June 19, 2003, the Company filed a current report on form 8-K
announcing that the Company plans vigorous defense against a shareholder
complaint.

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SIGNATURES

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

CENTRAL PARKING CORPORATIONDate: August 14, 2003
    
    By:
    
    /s/ MONROE J. CARELL, JR.Monroe J. Carell, Jr.
Chairman and Chief Executive OfficerCENTRAL PARKING CORPORATIONDate: August 14, 2003
    
    By:
    
    /s/ V. JEFFREY HEAVRINV. Jeffrey Heavrin
Chief Accounting Officer


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