##### 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, 2006
 Commission file number 001-13950
 CENTRAL PARKING CORPORATION
  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
 þ o
  o þ o
 Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Act). YES o NO þ
  Class
    
    Outstanding at August 7, 2006Common Stock, $0.01 par value
    
    32,112,628




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##### 



PAGEPART I FINANCIAL INFORMATIONItem 1 Financial Statements (Unaudited)Consolidated Balance Sheets as of June 30, 2006 and September 30, 2005
    
    
    3Consolidated Statements of Income for the three and nine months ended June 30, 2006 and 2005
    
    
    4Consolidated Statements of Cash Flows for the nine months ended June 30, 2006 and 2005
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2 Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    14Item 3 Quantitative and Qualitative Disclosure about Market Risk
    
    
    22Item 4 Controls and Procedures
    
    
    23PART II OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    25Item 6 Exhibits
    
    
    26SIGNATURES
    
    
    28EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32.1 SECTION 906 CERTIFICATION OF THE CEOEX-32.2 SECTION 906 CERTIFICATION OF THE CFO




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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
UNAUDITED
  June 30,
    
    
    September 30,2006
    
    
    2005ASSETSCurrent assets:Cash and cash equivalents
    
    $
    28,622
    
    
    $
    26,055Management accounts receivable, net of allowance for doubtful accounts of $3,015 and $7,091
at
June 30, 2006 and September 30, 2005, respectively
    
    
    49,823
    
    
    
    51,931Accounts receivable  other, net of allowance for doubtful accounts of $2,217 and $2,685 at
June 30, 2006 and
September 30, 2005
    
    
    16,262
    
    
    
    15,537Current portion of notes receivable (including amounts due from related parties of
$937 at June 30, 2006 and $937 at September 30, 2005) and net of allowance for doubtful
accounts of $182 and
$493 at June 30, 2006 and September 30, 2005
    
    
    4,806
    
    
    
    5,818Prepaid expenses
    
    
    14,394
    
    
    
    8,630Assets held for sale
    
    
    31,558
    
    
    
    49,048Available for sale securities
    
    
    4,824
    
    
    
    4,606Refundable income taxes
    
    
    4,931
    
    
    
    Deferred income taxes
    
    
    23,256
    
    
    
    19,949Total current assets
    
    
    178,476
    
    
    
    181,574Notes receivable, less current portion
    
    
    10,365
    
    
    
    10,480Property, equipment, and leasehold improvements, net
    
    
    309,066
    
    
    
    327,391Contracts and lease rights, net
    
    
    73,966
    
    
    
    80,064Goodwill, net
    
    
    232,443
    
    
    
    232,443Investment in and advances to partnerships and joint ventures
    
    
    3,779
    
    
    
    4,443Other assets
    
    
    28,833
    
    
    
    31,419Total assets
    
    $
    836,928
    
    
    $
    867,814LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt and capital lease obligations
    
    $
    2,648
    
    
    $
    1,764Trade accounts payable
    
    
    90,924
    
    
    
    83,604Accrued expenses
    
    
    50,990
    
    
    
    52,809Management accounts payable
    
    
    26,810
    
    
    
    25,532Income taxes payable
    
    
    
    
    
    
    12,389Total current liabilities
    
    
    171,372
    
    
    
    176,098Long-term debt and capital lease obligations, less current portion
    
    
    128,627
    
    
    
    98,212Subordinated convertible debentures
    
    
    78,085
    
    
    
    78,085Deferred rent
    
    
    20,834
    
    
    
    22,113Deferred income taxes
    
    
    20,453
    
    
    
    19,565Other liabilities
    
    
    20,087
    
    
    
    21,152Total liabilities
    
    
    439,458
    
    
    
    415,225Minority interest
    
    
    421
    
    
    
    528Shareholders equity:Common stock, $0.01 par value; 50,000,000 shares authorized, 32,100,503
and 36,680,694 shares issued and outstanding at June 30, 2006 and
September 30, 2005, respectively
    
    
    321
    
    
    
    368Additional paid-in capital
    
    
    179,657
    
    
    
    251,784Accumulated other comprehensive income, net
    
    
    3,199
    
    
    
    3,432Retained earnings
    
    
    214,577
    
    
    
    197,182Other
    
    
    (705
    )
    
    
    (705
    )Total shareholders equity
    
    
    397,049
    
    
    
    452,061Total liabilities and shareholders equity
    
    $
    836,928
    
    
    $
    867,814
  3




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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
  Three months ended June 30,
    
    
    Nine months ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues:Parking
    
    $
    132,961
    
    
    $
    136,103
    
    
    $
    395,428
    
    
    $
    406,998Management contracts
    
    
    30,382
    
    
    
    27,248
    
    
    
    86,980
    
    
    
    85,678163,343
    
    
    
    163,351
    
    
    
    482,408
    
    
    
    492,676Reimbursement of management contract expenses
    
    
    117,419
    
    
    
    113,759
    
    
    
    344,550
    
    
    
    330,885Total revenues
    
    
    280,762
    
    
    
    277,110
    
    
    
    826,958
    
    
    
    823,561Costs and expenses:Cost of parking
    
    
    120,215
    
    
    
    121,907
    
    
    
    360,404
    
    
    
    369,244Cost of management contracts
    
    
    12,546
    
    
    
    14,254
    
    
    
    36,554
    
    
    
    44,683General and administrative
    
    
    18,837
    
    
    
    21,572
    
    
    
    60,848
    
    
    
    61,829151,598
    
    
    
    157,733
    
    
    
    457,806
    
    
    
    475,756Reimbursed management contract expenses
    
    
    117,419
    
    
    
    113,759
    
    
    
    344,550
    
    
    
    330,885Total costs and expenses
    
    
    269,017
    
    
    
    271,492
    
    
    
    802,356
    
    
    
    806,641Property-related gains (losses), net
    
    
    4,542
    
    
    
    (1,149
    )
    
    
    26,297
    
    
    
    15,487Operating earnings
    
    
    16,287
    
    
    
    4,469
    
    
    
    50,899
    
    
    
    32,407Other income (expense):Interest income
    
    
    417
    
    
    
    1,177
    
    
    
    1,004
    
    
    
    3,359Interest expense
    
    
    (4,065
    )
    
    
    (4,030
    )
    
    
    (12,143
    )
    
    
    (13,917
    )(Loss) gain on derivative instruments
    
    
    (249
    )
    
    
    (773
    )
    
    
    (349
    )
    
    
    872Equity in partnership and joint venture income (loss)
    
    
    336
    
    
    
    (21
    )
    
    
    800
    
    
    
    (371
    )Earnings from continuing operations before minority interest and income taxes
    
    
    12,726
    
    
    
    822
    
    
    
    40,211
    
    
    
    22,350Minority interest, net of tax
    
    
    (251
    )
    
    
    (470
    )
    
    
    (802
    )
    
    
    (1,189
    )Earnings from continuing operations before income taxes
    
    
    12,475
    
    
    
    352
    
    
    
    39,409
    
    
    
    21,161Income tax expense
    
    
    (3,868
    )
    
    
    (160
    )
    
    
    (14,297
    )
    
    
    (9,586
    )Earnings from continuing operations
    
    
    8,607
    
    
    
    192
    
    
    
    25,112
    
    
    
    11,575Discontinued operations, net of tax
    
    
    (9,711
    )
    
    
    (5,528
    )
    
    
    (6,276
    )
    
    
    (6,490
    )Net earnings (loss)
    
    $
    (1,104
    )
    
    $
    (5,336
    )
    
    $
    18,836
    
    
    $
    5,085Basic earnings (loss) per share:Earnings from continuing operations
    
    $
    0.27
    
    
    $
    0.01
    
    
    $
    0.78
    
    
    $
    0.32(Loss) from discontinued operations, net of tax
    
    
    (0.30
    )
    
    
    (0.15
    )
    
    
    (0.19
    )
    
    
    (0.18
    )Net earnings (loss)
    
    $
    (0.03
    )
    
    $
    (0.15
    )
    
    $
    0.58
    
    
    $
    0.14Diluted earnings (loss) per share:Earnings from continuing operations
    
    $
    0.27
    
    
    $
    0.01
    
    
    $
    0.77
    
    
    $
    0.32(Loss) from discontinued operations, net of tax
    
    
    (0.30
    )
    
    
    (0.15
    )
    
    
    (0.19
    )
    
    
    (0.18
    )Net earnings (loss)
    
    $
    (0.03
    )
    
    $
    (0.14
    )
    
    $
    0.58
    
    
    $
    0.14Weighted average shares used for basic per share data
    
    
    32,060
    
    
    
    36,663
    
    
    
    32,310
    
    
    
    36,603Effect of dilutive common stock options
    
    
    252
    
    
    
    220
    
    
    
    211
    
    
    
    139Weighted average shares used for dilutive per share data
    
    
    32,312
    
    
    
    36,883
    
    
    
    32,521
    
    
    
    36,742
  4




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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
  Nine months ended June 30,2006
    
    
    2005(Revised SeeNote 3)Cash flows from operating activities:Net earnings
    
    $
    18,836
    
    
    $
    5,085Loss from discontinued operations
    
    
    6,276
    
    
    
    6,490Earnings from continuing operations
    
    
    25,112
    
    
    
    11,575Adjustments to reconcile earnings from continuing operations to net cash (used) provided by operating activities:Depreciation and amortization
    
    
    22,968
    
    
    
    21,504Equity in partnership and joint venture (earnings) losses
    
    
    (800
    )
    
    
    371Distributions from partnerships and joint ventures
    
    
    1,895
    
    
    
    1,393Property-related gains, net
    
    
    (26,297
    )
    
    
    (15,487
    )Loss (gain) on derivative instruments
    
    
    349
    
    
    
    (872
    )Stock-based compensation
    
    
    337
    
    
    
    Tax benefit
related to stock option exercises
    
    
    (197
    )
    
    
    Deferred
income tax benefit
    
    
    (2,368
    )
    
    
    (3,555
    )Minority interest, net of tax
    
    
    802
    
    
    
    1,189Changes in operating assets and liabilities:Management accounts receivable
    
    
    2,718
    
    
    
    (5,037
    )Accounts receivable  other
    
    
    (596
    )
    
    
    (110
    )Prepaid expenses
    
    
    (5,605
    )
    
    
    87Other assets
    
    
    3,102
    
    
    
    (4,852
    )Trade accounts payable, accrued expenses and other liabilities
    
    
    2,968
    
    
    
    5,571Management accounts payable
    
    
    1,018
    
    
    
    8,599Deferred rent
    
    
    (1,279
    )
    
    
    (1,960
    )Refundable income taxes
    
    
    (4,929
    )
    
    
    (5,971
    )Income taxes payable
    
    
    (12,323
    )
    
    
    51Net cash provided by operating activities  continuing operations
    
    
    6,875
    
    
    
    12,496Net cash used by operating activities  discontinued operations
    
    
    (14,393
    )
    
    
    (5,096
    )Net cash (used) provided by operating activities
    
    
    (7,518
    )
    
    
    7,400Cash flows from investing activities:Proceeds from disposition of property and equipment
    
    
    42,785
    
    
    
    35,209Purchases of property, equipment and leasehold improvements
    
    
    (12,189
    )
    
    
    (8,198
    )Other investing activities
    
    
    723
    
    
    
    3,920Net cash provided by investing activities  continuing operations
    
    
    31,319
    
    
    
    30,931Net cash provided by investing activities  discontinued operations
    
    
    22,489
    
    
    
    742Net cash provided by investing activities
    
    
    53,808
    
    
    
    31,673Cash flows from financing activities:Dividends paid
    
    
    (1,441
    )
    
    
    (1,651
    )Net borrowings under revolving credit agreement
    
    
    32,938
    
    
    
    71,126Proceeds from issuance of notes payable, net of issuance costs
    
    
    539
    
    
    
    9,728Principal repayments on long-term debt and capital lease obligations
    
    
    (3,350
    )
    
    
    (120,195
    )Payment to minority interest partners
    
    
    (531
    )
    
    
    (392
    )Repurchase of common stock
    
    
    (75,325
    )
    
    
    Tax benefit
related to stock option exercises
    
    
    197
    
    
    
    Proceeds from issuance of common stock and exercise of stock options
    
    
    2,814
    
    
    
    1,733Net cash used by financing activities  continuing operations
    
    
    (44,159
    )
    
    
    (39,651
    )Net cash used by financing activities  discontinued operations
    
    
    
    
    
    
    Net cash used by financing activities
    
    
    (44,159
    )
    
    
    (39,651
    )Foreign currency translation
    
    
    436
    
    
    
    (258
    )Net increase in cash and cash equivalents
    
    
    2,567
    
    
    
    (836
    )Cash and cash equivalents at beginning of period
    
    
    26,055
    
    
    
    27,628Cash and cash equivalents at end of period
    
    $
    28,622
    
    
    $
    26,792Non-cash transactions:Unrealized gain on fair value of investment securities, net of tax
    
    $
    21
    
    
    $
    64Cash payments for:Interest
    
    $
    8,632
    
    
    $
    13,291Income taxes
    
    $
    37,503
    
    
    $
    13,417
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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
 (1) Basis of Presentation
  (2) Stock Based Compensation
 Accounting for Stock Issued to
Employees, Accounting for Certain Transactions involving Stock Compensation, an
interpretation of APB Opinion No. 25, Accounting for Stock Based Compensation Accounting
for Stock-Based Compensation-Transition and Disclosure, and amendment of FASB Statement No. 123
 Three Months
    
    
    Nine Monthsended June 30,
    
    
    ended June 30,2005
    
    
    2005Net earnings (loss), as reported
    
    $
    (5,336
    )
    
    $
    5,085Add stock-based employee
compensation expense included in
reported net income, net of tax
    
    
    
    
    
    
    Deduct total stock-based employee
compensation expense determined under
fair-value-based method for all awards,
net of tax
    
    
    (976
    )
    
    
    (2,939
    )Pro forma net earnings (loss)
    
    $
    (6,312
    )
    
    $
    2,146Earnings (loss) per share:Basic-as reported
    
    $
    (0.15
    )
    
    $
    0.14Basic-pro forma
    
    $
    (0.17
    )
    
    $
    0.06Diluted-as reported
    
    $
    (0.14
    )
    
    $
    0.14Diluted-pro forma
    
    $
    (0.17
    )
    
    $
    0.06
   6




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##### Table of Contents



Stock Plans
     7




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##### Table of Contents



Weighted
    
    AggregateNumber
    
    Weighted Average
    
    Average Remaining
    
    Intrinsic Valueof Shares
    
    Exercise Price
    
    Contractual Term
    
    as of 6/30/06Outstanding at September 30, 2005
    
    
    4,153,206
    
    
    $
    17.98Granted
    
    
    
    
    
    
    n/aExercised
    
    
    (40,675
    )
    
    $
    11.56Forfeited
    
    
    (3,000
    )
    
    $
    12.73Expired
    
    
    (36,926
    )
    
    $
    16.30Outstanding at December 31, 2005
    
    
    4,072,605
    
    
    $
    18.06Granted
    
    
    
    
    
    
    n/aExercised
    
    
    (124,919
    )
    
    $
    13.23Forfeited
    
    
    (3,000
    )
    
    $
    12.73Expired
    
    
    (22,500
    )
    
    $
    16.34Outstanding at March 31, 2006
    
    
    3,922,186
    
    
    $
    18.22Granted
    
    
    300,000
    
    
    $
    14.41Exercised
    
    
    (15,250
    )
    
    $
    13.14Forfeited
    
    
    (2,250
    )
    
    $
    12.73Expired
    
    
    (417,041
    )
    
    $
    19.77Outstanding at June 30, 2006
    
    
    3,787,645
    
    
    $
    17.78
    
    
    
    5.83
    
    
    $
    4,190,468Vested or expected to vest at June 30, 2006
    
    
    3,722,603
    
    
    $
    17.84
    
    
    
    0.20
    
    
    $
    4,063,688Exercisable at June 30, 2006
    
    
    3,239,895
    
    
    $
    18.47
    
    
    
    5.62
    
    
    $
    2,904,576
  Restricted Stock
    Number
    
    Weighted Averageof Shares
    
    Grant Date Fair ValueOutstanding at September 30, 2005
    
    
    28,660
    
    
    $
    16.76Granted
    
    
    
    
    
    
    n/aVested
    
    
    
    
    
    
    n/aForfeited
    
    
    
    
    
    
    n/aOutstanding at December 31, 2005
    
    
    28,660
    
    
    $
    16.76Granted
    
    
    14,000
    
    
    $
    15.56Vested
    
    
    (14,001
    )
    
    $
    17.24Forfeited
    
    
    
    
    
    
    n/aOutstanding at March 31, 2006
    
    
    28,659
    
    
    $
    15.94Granted
    
    
    
    
    
    
    n/aVested
    
    
    
    
    
    
    n/aForfeited
    
    
    
    
    
    
    n/aOutstanding at June 30, 2006
    
    
    28,659
    
    
    $
    15.94
 (3) Cash Flow Statement Revisions
  8




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##### Table of Contents



2005
    
    
    2004
    
    
    2003Net cash provided by operating activities-continuing operations
    
    $
    16,527
    
    
    $
    35,567
    
    
    $
    19,018Net cash (used) provided by operating activities-discontinued
operations
    
    
    (13,293
    )
    
    
    6,072
    
    
    
    1,495Net cash provided by operating activities
    
    
    3,234
    
    
    
    41,639
    
    
    
    20,513Net cash provided (used) by investing activities-continuing operations
    
    $
    101,004
    
    
    $
    45,338
    
    
    $
    (46,804
    )Net cash provided by investing activities-discontinued operations
    
    
    742
    
    
    
    7,018
    
    
    
    15,667Net cash provided (used) by investing activities
    
    
    101,746
    
    
    
    52,356
    
    
    
    (31,137
    )Net cash (used) provided by financing activities-continuing operations
    
    $
    (106,620
    )
    
    $
    (97,663
    )
    
    $
    8,069Net cash provided (used) by financing activities-discontinued
operations
    
    
    
    
    
    
    
    
    
    
    Net cash (used) provided by financing activities
    
    
    (106,620
    )
    
    
    (97,663
    )
    
    
    8,069Foreign currency translation
    
    $
    67
    
    
    $
    (276
    )
    
    $
    629Cash and cash equivalents-beginning of the year
    
    $
    27,628
    
    
    $
    31,572
    
    
    $
    33,498Cash and cash equivalents-end of the year
    
    $
    26,055
    
    
    $
    27,628
    
    
    $
    31,572
 (4) Earnings Per Share
   (5) Assets Held For Sale, Property-Related Gains, Net and Discontinued Operations
 (a)
    
    Assets Held For SaleIn accordance with SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
long-lived assets are classified as held for sale are presented separately in the asset section
of the balance sheet. Assets classified as held for sale are comprised almost exclusively of
real property and are included in the Segment-Other in the identifiable asset segment table
included in note 11.(b)
    
    Property-Related Gains (losses), NetThe Company routinely disposes of or recognizes impairment related to 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. A summary of property-related gains and losses for the three
and nine months ended June 30, 2006 and June 30, 2005 is as follows (in thousands):
 9




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##### Table of Contents



Three months ended
    
    
    Nine months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net gains on sales of property
    
    $
    4,858
    
    
    $
    2,112
    
    
    $
    27,504
    
    
    $
    19,601Impairment charges for property, equipment and
leasehold improvements
    
    
    1
    
    
    
    (406
    )
    
    
    (883
    )
    
    
    (1,167
    )Impairment charges for contract rights, lease
rights and other intangible assets
    
    
    (317
    )
    
    
    (2,855
    )
    
    
    (324
    )
    
    
    (2,947
    )Property-related gains (losses), net
    
    $
    4,542
    
    
    $
    (1,149
    )
    
    $
    26,297
    
    
    $
    15,487
 Net property-related gains for the three months ended June 30, 2006 of $4.5 million was
comprised of gains on sale of property of $4.8 million ($2.4 million from the sale of our
equity-method investment in our Germany subsidiary, $1.3 million
in Knoxville, $0.8 million in
Baltimore, $0.1 million in Chicago and $0.2 million in miscellaneous property sales); partially
offset by $0.3 million of impairments of leasehold improvements, contract rights and other
intangible assets primarily in Segment-Other. Net property-related gains for the nine months
ended June 30, 2006 of $26.3 million was comprised of gains on sale of property of $27.5 million
($12.0 million in Houston, $6.0 million in Chicago, $2.4 million from the sale of our
equity-method investment in our Germany subsidiary, $1.8 million in Atlanta, $1.4 million in
Denver, $1.4 million in West Palm Beach, $0.8 million in Baltimore, $0.5 million in Dallas, $0.3
million in Montreal and $0.9 million in miscellaneous properties sales); partially offset by
$1.2 million of impairments of leasehold improvements, contract rights and other intangible
assets primarily in Segment-Four and Segment-Other. In assessing impairment, management
considered current operating results, the Companys recent forecast for the next fiscal year and
required capital improvements, management determined that the projected cash flows for these
locations would not be enough to recover the book value of the assets. The Companys
property-related loss for the three months ended June 30, 2005 was $1.1 million. The Companys
property related gains for the nine months ended June 30, 2005 was $15.5 million.In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
the results of operations (including the gain or loss on sale and any recognized asset
impairment) of long-lived assets which qualify as a component of an entity that either have been
disposed of or are classified as held for sale shall be reported in discontinued operations if
(i) the operations and cash flows of the component have been, or will be, eliminated from
operations of the Company as a result of the disposal transaction and (ii) the entity will not
have any significant continuing involvement in the operations of the component after the
disposal transaction. The net property-related gains noted above have been classified in
continuing operations as the individual disposal transactions did not meet the SFAS No. 144 and
EITF 03-13 criteria for classification as discontinued operations primarily due to the expected
retention of certain cash flows from assets disposed. If managements assumptions regarding the
timing and amount of such retained cash flows change in the future, the net property gain (loss)
recognized in continuing operations, along with the results of operations related to such
assets, may need to be reclassified to discontinued operations.(c)
    
    Discontinued OperationsThe Company has either disposed of, or designated as held-for-sale, certain locations which meet
the aforementioned criteria for classification as discontinued
operations. The components of discontinued operations reflected on
the accompanying consolidated statements of income are as follows:
 10




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##### Table of Contents



Three months ended
    
    
    Nine months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Discontinued Operations:Total Revenues
    
    $
    15,418
    
    
    $
    11,592
    
    
    $
    36,133
    
    
    $
    50,597Operating
earnings (loss) before property-related gains (losses), net
    
    
    1,259
    
    
    
    (5,667
    )
    
    
    1,773
    
    
    
    (5,109
    )Property-related gains (losses), net
    
    
    (9,868
    )
    
    
    (214
    )
    
    
    (4,188
    )
    
    
    (5,018
    )Loss from
discontinued operations, before taxes
    
    
    (8,609
    )
    
    
    (5,881
    )
    
    
    (2,415
    )
    
    
    (10,127
    )Income tax benefit (expense)
    
    
    (1,102
    )
    
    
    353
    
    
    
    (3,861
    )
    
    
    3,637Discontinued operations, net of tax
    
    $
    (9,711
    )
    
    $
    (5,528
    )
    
    $
    (6,276
    )
    
    $
    (6,490
    )
  (6) Intangible Assets
  GrossCarrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    NetContract and lease rights
    
    $
    129,201
    
    
    $
    55,235
    
    
    $
    73,966
  (7) Long-Term Debt
     (8) Derivative Financial Instruments
  11




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##### Table of Contents



June 30,
    
    
    September 30,2006
    
    
    2005Derivative instrument assets:Interest rate swaps
    
    $
    2,657
    
    
    $
    3,006
   (9) Stock Repurchase
   (10) Comprehensive Income
  Three months ended
    
    
    Nine months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net earnings (loss)
    
    $
    (1,104
    )
    
    $
    (5,336
    )
    
    $
    18,836
    
    
    $
    5,085Change in fair value of investment securities, net of tax
    
    
    11
    
    
    
    73
    
    
    
    21
    
    
    
    64Foreign currency cumulative translation adjustment
    
    
    885
    
    
    
    (835
    )
    
    
    (253
    )
    
    
    2,272Comprehensive income (loss)
    
    $
    (208
    )
    
    $
    (6,098
    )
    
    $
    18,604
    
    
    $
    7,421
 (11) Business Segments
  12




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##### Table of Contents



Three months ended
    
    
    Nine months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues:(1)Segment One
    
    $
    15,716
    
    
    $
    16,453
    
    
    $
    46,980
    
    
    $
    49,774Segment Two
    
    
    24,550
    
    
    
    25,166
    
    
    
    73,392
    
    
    
    74,453Segment Three
    
    
    28,344
    
    
    
    26,898
    
    
    
    80,278
    
    
    
    79,836Segment Four
    
    
    60,413
    
    
    
    62,095
    
    
    
    177,954
    
    
    
    181,452Segment Five
    
    
    18,098
    
    
    
    19,159
    
    
    
    52,827
    
    
    
    56,852Segment Six
    
    
    4,541
    
    
    
    4,828
    
    
    
    13,844
    
    
    
    14,428Segment Seven
    
    
    9,030
    
    
    
    6,144
    
    
    
    29,999
    
    
    
    28,699Other
    
    
    2,651
    
    
    
    2,608
    
    
    
    7,134
    
    
    
    7,182Total revenues
    
    $
    163,343
    
    
    $
    163,351
    
    
    $
    482,408
    
    
    $
    492,676
 (1)
    
    Revenues exclude reimbursement of management contract expenses. Such amounts were
$117.4 million and $113.8 million for the three months ended June 30, 2006 and 2005,
respectively, and $344.6 million and $330.9 million for the nine months ended June 30, 2006
and 2005, respectively.
 Three months ended
    
    
    Nine months endedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Operating earnings (loss):Segment One
    
    $
    1,468
    
    
    $
    (555
    )
    
    $
    3,850
    
    
    $
    1,263Segment Two
    
    
    2,217
    
    
    
    1,113
    
    
    
    5,360
    
    
    
    3,018Segment Three
    
    
    4,507
    
    
    
    144
    
    
    
    10,745
    
    
    
    2,692Segment Four
    
    
    5,891
    
    
    
    5,489
    
    
    
    10,999
    
    
    
    9,885Segment Five
    
    
    2,914
    
    
    
    3,431
    
    
    
    7,746
    
    
    
    8,710Segment Six
    
    
    865
    
    
    
    1,448
    
    
    
    2,991
    
    
    
    3,129Segment Seven
    
    
    1,814
    
    
    
    (4,577
    )
    
    
    (302
    )
    
    
    (2,721
    )Other (including net
realized gain (loss) on the
sale of real estate)
    
    
    (3,389
    )
    
    
    (2,024
    )
    
    
    9,510
    
    
    
    6,431Total operating earnings
    
    $
    16,287
    
    
    $
    4,469
    
    
    $
    50,899
    
    
    $
    32,407
 June 30,
    
    
    September 30,2006
    
    
    2005Identifiable assets:Segment One
    
    $
    18,030
    
    
    $
    18,666Segment Two
    
    
    44,633
    
    
    
    45,626Segment Three
    
    
    17,083
    
    
    
    16,366Segment Four
    
    
    310,389
    
    
    
    312,329Segment Five
    
    
    27,883
    
    
    
    29,961Segment Six
    
    
    14,016
    
    
    
    11,457Segment Seven
    
    
    48,112
    
    
    
    49,267Other
    
    
    356,782
    
    
    
    384,142Total assets
    
    $
    836,928
    
    
    $
    867,814
         (12) Commitments and Contingencies
  13




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements May Prove Inaccurate
   -
    
    the Companys ability to achieve the goals described in this report and other reports
filed with the Securities and Exchange Commission, including but not limited to, the
Companys ability to:
 -
    
    increase cash flow by reducing operating costs, accounts receivable and indebtedness;-
    
    cover the fixed cost of its leased and owned facilities and
maintain adequate liquidity through its cash resources and credit facility;-
    
    integrate future acquisitions, in light of challenges in
retaining key employees, synchronizing business processes and efficiently
integrating facilities, marketing, and operations;-
    
    comply with the terms of its credit facility or obtain waivers of noncompliance;-
    
    reduce operating losses at unprofitable locations;-
    
    form and maintain strategic relationships with certain large real estate owners and
operators; and-
    
    renew existing insurance coverage and obtain performance and surety bonds on favorable
terms.
 14




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##### Table of Contents



-
    
    successful implementation of the Companys strategic plan;-
    
    interest rate fluctuations;-
    
    the loss, or renewal on less favorable terms, of existing management contracts and
leases and the failure to add new locations on favorable terms;-
    
    the timing of property-related gains and losses;-
    
    pre-opening, start-up and break-in costs of parking facilities;-
    
    player strikes or other events affecting major league sports;-
    
    changes in economic and business conditions at the local, regional, national or international levels;-
    
    changes in patterns of air travel or automobile usage, including but not limited to
effects of weather on travel and transportation patterns;-
    
    the impact of litigation and claims;-
    
    higher premium and claims costs relating to medical, liability, workers compensation
and other insurance programs;-
    
    compliance with, or changes in, local, state, national and international laws and
regulations, including, without limitation, local regulations, restrictions and taxation on
real property, parking and automobile usage, security measures, environmental, anti-trust
and consumer protection laws;-
    
    changes in current parking rates and pricing of services to clients;-
    
    extraordinary events affecting parking facilities that the Company manages, including
labor strikes, emergency safety measures, military or terrorist attacks and natural
disasters;-
    
    the loss of key employees; and-
    
    the other factors discussed under Item 1A  Risk Factors and in Item 7 
Managements Discussion and Analysis of Financial Condition and Results of Operations
included in the Companys Annual Report on Form 10-K for the fiscal year ended September
30, 2005.
 Overview
     15




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##### Table of Contents



Critical Accounting Policies
   Impairment of Long-Lived Assets and Goodwill
 Accounting for the Impairment or Disposal of Long-Lived Assets Goodwill and Other Intangible Assets
  Contract and Lease Rights
  16




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Allowance for Doubtful Accounts
  Insurance
  Income Taxes
  Recent Accounting Pronouncements
 Share-Based Payment.
 Accounting for Conditional Asset
Retirement Obligations, an interpretation of FASB Statement No. 143 Accounting for Asset Retirement Obligations
 17




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##### Table of Contents



Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109 Accounting for Income Taxes.
 Determining Whether a General Partner,
or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the
Limited Partners Have Certain Rights
 Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or
Acquired in a Business Combination
 How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in
the Income Statement (That Is, Gross versus Net Presentation)
 Results of Operations
 Three Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005
   18




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##### Table of Contents



Nine Months Ended June 30, 2006 Compared to Nine Months Ended June 30, 2005
  19




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20




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Liquidity and Capital Resources
           21




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Future Cash Commitments
   Payments due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    After 5Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsLong-term debt and capital lease
obligations
    
    $
    131,275
    
    
    $
    2,648
    
    
    
    100,966
    
    
    $
    27,534
    
    
    $
    127Subordinated convertible debentures
    
    
    78,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,085Operating leases
    
    
    967,571
    
    
    
    197,290
    
    
    
    274,320
    
    
    
    167,318
    
    
    
    328,643Total contractual cash obligations
    
    $
    1,176,931
    
    
    $
    199,938
    
    
    $
    375,286
    
    
    $
    194,852
    
    
    $
    406,855
 Amount of commitment expiration per periodLess than
    
    1-3
    
    3-5
    
    After 5Total
    
    1 Year
    
    Years
    
    Years
    
    YearsUnused lines of credit
    
    $
    132,858
    
    
    $
    
    
    
    $
    132,858
    
    
    $
    
    
    
    $
    
  
 Item 3. Quantitative and Qualitative Disclosure about Market Risk
 Interest Rate
     22




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##### Table of Contents



Foreign Currency Risk
  
 ITEM 4. Controls and Procedures
 (a) Evaluation of Disclosure Controls and Procedures
    (b) Managements Report on Internal Control Over Financial Reporting
 Internal ControlIntegrated Framework
  Inadequate company-level controls. Internal ControlIntegrated Framework
 
    
    Our control environment did not sufficiently promote integrity and
ethical values over financial reporting throughout our management
structure, and this material weakness was a contributing factor in
the development of other material weaknesses described below;
    
    We had inadequate monitoring controls, including inadequate staffing
and procedures to ensure periodic evaluations of internal controls to
ensure that appropriate personnel regularly obtain evidence that
controls are functioning effectively and that identified control
deficiencies are remediated timely; and
    
    There was inadequate communication from management to employees
regarding the importance of controls and employees duties and control
responsibilities.
 23




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##### Table of Contents



Inadequate Expertise in U.S. Generally Accepted Accounting Principles.
 Inadequate segregation of duties.
 Inadequate financial statement preparation and review procedures.
 Inadequate reviews of account reconciliations, analyses and journal entries.
 Inadequate controls over authorization of purchase and disbursement transactions.
 
    
    Inadequate and ineffective policies over the authorization of purchases;
    
    Ineffective invoice approval policies;
    
    Ineffective supervisory oversight and/or review of the addition or removal of management contracts; and
    
    Inadequate period-end cut-off procedures in the procurement cycle.
  Inadequate controls over revenue recognition.
 24




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##### Table of Contents



(c) Changes in Internal Control Over Financial Reporting
    
    
    Hired senior management including financial reporting personnel.
    
    Changed the lines of reporting so that the accounting, internal audit, information
technology and human resources functions in the United Kingdom subsidiary report directly
to the corresponding department heads in the United States.
    
    Established new approval authorization control limits.
    
    Established new reconciliation procedures.
    
    Replaced accounting software used in the United Kingdom subsidiary with programs used in
the United States and U.S. management employees have direct access to this system.
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  25




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##### Table of Contents



Item 6. 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).
 26




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##### Table of Contents



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
    
    
    
    Fifth Amendment to Credit Agreement dated April 7, 2006 by and among Central Parking
Corporation et al and Bank of America, N. A. et al (Incorporated by reference to
Exhibit 10.1 on Form 10-Q filed on May 10, 2006).31.1
    
    
    
    Certification of Emanuel Eads pursuant to Rule 13a-14(a).31.2
    
    
    
    Certification of Jeff Heavrin pursuant to Rule 13a-14(a).32.1
    
    
    
    Certification of Emanuel Eads pursuant to Section 1350.32.2
    
    
    
    Certification of Jeff Heavrin pursuant to Section 1350
 27




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##### Table of Contents



CENTRAL PARKING CORPORATIONDate: August 9, 2006
    By:
    /s/  EMANUEL EADSEmanuel EadsChief Executive Officer CENTRAL PARKING CORPORATIONDate: August 9, 2006
    By:
    /s/  JEFF HEAVRINJeff HeavrinSenior Vice President and Chief
Financial Officer 28