##### 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 December 31, 2002

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) 297-4255                      
|                                                                    |  |                                     
|                                                                    |  |                                     
|Former 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[  ]

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 February 13, 2003
|                              |  |                                 
|Common Stock, $0.01 par value |  | 35,997,954                      





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TABLE OF CONTENTS



|                                             |                                                                                               |                                            |  |  |  |  |  | 
|-------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------ |  |  |  |  |  | 
|                                             | Part 1.                                                                                      
|                                             | Item 1. Financial Statements                                                                 
|                                             |                                                                                               | CONSOLIDATED BALANCE SHEETS               
|                                             |                                                                                               | CONSOLIDATED STATEMENTS OF EARNINGS       
|                                             |                                                                                               | 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 5. Other Information                                                                    
|                                             | Item 6. Exhibits and Reports on Form 8-K                                                     
|SIGNATURES                                  
|CERTIFICATION                               
|Revolving Credit Note dated November 1, 2002
|Promissory Note dated January 8, 2003       
|Section 906 Certification of the CEO and CFO
|Press Release dated February 14, 2003       



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##### Table of Contents



INDEX

CENTRAL PARKING CORPORATION AND SUBSIDIARIES

|                              |                                                                                               |                                                                                             |    |      |   | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | -- | ---- | - | 
|                              |                                                                                               |                                                                                             |    | PAGE
|PART I. FINANCIAL INFORMATION |                                                                                               |                                                                                             |    |     
|                              | Item 1. Financial Statements (Unaudited)                                                      |                                                                                             |    |      |  
|                              |                                                                                               | Consolidated Balance Sheets as of December 31, 2002 and September 30, 2002                  |    |      | 3 | 
|                              |                                                                                               | Consolidated Statements of Earnings for the three months ended December 31, 2002 and 2001   |    |      | 4 | 
|                              |                                                                                               | Consolidated Statements of Cash Flows for the three months ended December 31, 2002 and 2001 |    |      | 5 | 
|                              |                                                                                               | Notes to Consolidated Financial Statements                                                  |    |      | 7 | 
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |                                                                                             |    | 16   |  
|                              | Item 3. Quantitative and Qualitative Disclosure about Market Risk                             |                                                                                             |    | 22   |  
|                              | Item 4. Controls and Procedures                                                               |                                                                                             |    | 23   |  
|PART II. OTHER INFORMATION    |                                                                                               |                                                                                             |    |     
|                              | Item 1. Legal Proceedings                                                                     |                                                                                             |    | 23   |  
|                              | Item 5.
Other Information                                                                     |                                                                                             |    | 24   |  
|                              | Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                             |    | 24   |  
|SIGNATURES                    |                                                                                               |                                                                                             | 26 |     
|CERTIFICATION                 |                                                                                               |                                                                                             | 27 |     





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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

|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |         |         | 
|-------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | --------- | ------------ | --------- | ------------- | ------- | ------- | ------- | 
|                                                                                                                     |                                                                                                                                                                           |                            |           | December 31, |           | September 30,
|                                                                                                                     |                                                                                                                                                                           |                            |           | 2002         |           | 2002         
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |              
|ASSETS                                                                                                               |                                                                                                                                                                           |                            |           |              |           |               |         |        
|Current assets:                                                                                                      |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     | Cash and cash equivalents                                                                                                                                                 |                            | $         | 24,965       |           |               | $       | 33,498  |        
|                                                                                                                     | Management
accounts receivable, net                                                                                                                                       |                            |           | 45,653       |           |               |         | 39,664  |        
|                                                                                                                     | Accounts receivable  other                                                                                                                                               |                            |           | 13,495       |           |               |         | 15,714  |        
|                                                                                                                     | Current portion of notes receivable (including amounts due from related parties of
$4,102 at December 31, 2002 and $8,972 at September 30, 2002)                          |                            |           | 5,075        |           |               |         | 11,549  |        
|                                                                                                                     | Prepaid expenses                                                                                                                                                          |                            |           | 15,755       |           |               |         | 9,835   |        
|                                                                                                                     | Deferred income taxes                                                                                                                                                     |                            |           | 72           |           |               |         | 72      |        
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     |                                                                                                                                                                           | Total current assets       |           |              | 105,015   |               |         |         | 110,332 | 
|Notes receivable, less current portion                                                                               |                                                                                                                                                                           |                            | 41,257    |              |           |               | 41,210  |        
|Property, equipment, and leasehold improvements, net                                                                 |                                                                                                                                                                           |                            | 445,729   |              |           |               | 434,733 |        
|Contracts and lease rights, net                                                                                      |                                                                                                                                                                           |                            | 112,218   |              |           |               | 108,406 |        
|Goodwill, net                                                                                                        |                                                                                                                                                                           |                            | 242,141   |              |           |               | 242,141 |        
|Investment in and advances to partnerships, joint ventures                                                           |                                                                                                                                                                           |                            | 13,120    |              |           |               | 12,836  |        
|Other assets                                                                                                         |                                                                                                                                                                           |                            | 45,248    |              |           |               | 49,226  |        
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     |                                                                                                                                                                           | Total assets               |           | $            | 1,004,728 |               |         | $       | 998,884 | 
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                 |                                                                                                                                                                           |                            |           |              |           |               |         |        
|Current liabilities:                                                                                                 |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     | Current portion of long-term debt and capital lease obligations                                                                                                           |                            | $         | 229,374      |           |               | $       | 53,318  |        
|                                                                                                                     | Accounts payable                                                                                                                                                          |                            |           | 75,824       |           |               |         | 73,638  |        
|                                                                                                                     | Accrued expenses                                                                                                                                                          |                            |           | 39,969       |           |               |         | 43,659  |        
|                                                                                                                     | Management accounts payable                                                                                                                                               |                            |           | 21,243       |           |               |         | 22,671  |        
|                                                                                                                     | Income taxes payable                                                                                                                                                      |                            |           | 11,761       |           |               |         | 9,851   |        
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     |                                                                                                                                                                           | Total current liabilities  |           |              | 378,171   |               |         |         | 203,137 | 
|Long-term debt and capital lease obligations, less current portion                                                   |                                                                                                                                                                           |                            | 34,798    |              |           |               | 207,098 |        
|Deferred rent                                                                                                        |                                                                                                                                                                           |                            | 29,281    |              |           |               | 29,104  |        
|Deferred income taxes                                                                                                |                                                                                                                                                                           |                            | 12,483    |              |           |               | 13,825  |        
|Other liabilities                                                                                                    |                                                                                                                                                                           |                            | 19,563    |              |           |               | 20,259  |        
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     |                                                                                                                                                                           | Total liabilities          |           |              | 474,296   |               |         |         | 473,423 | 
|Company-obligated mandatorily redeemable convertible securities of
subsidiary trust holding solely parent debentures |                                                                                                                                                                           |                            | 78,085    |              |           |               | 78,085  |        
|Minority interest                                                                                                    |                                                                                                                                                                           |                            | 29,817    |              |           |               | 31,572  |        
|Shareholders equity:                                                                                                |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     | Common stock, $0.01 par value; 50,000,000 shares authorized, 35,967,709
and 35,951,626 shares issued and outstanding at December 31, and
September 30, 2002, respectively |                            |           | 360          |           |               |         | 360     |        
|                                                                                                                     | Additional paid-in capital                                                                                                                                                |                            |           | 242,366      |           |               |         | 242,112 |        
|                                                                                                                     | Accumulated other comprehensive loss, net                                                                                                                                 |                            |           | (2,389       | )         |               |         | (2,377  | )      
|                                                                                                                     | Retained earnings                                                                                                                                                         |                            |           | 183,252      |           |               |         | 176,924 |        
|                                                                                                                     | Other                                                                                                                                                                     |                            |           | (1,059       | )         |               |         | (1,215  | )      
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        
|                                                                                                                     |                                                                                                                                                                           | Total shareholders equity |           |              | 422,530   |               |         |         | 415,804 | 
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        
|Total liabilities and shareholders equity                                                                           |                                                                                                                                                                           | $                          | 1,004,728 |              |           | $             | 998,884 |        
|                                                                                                                     |                                                                                                                                                                           |                            |           |              |           |               |         |        

See accompanying notes to consolidated financial statements.

Page 3 of 27



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##### Table of Contents






CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS

UNAUDITED

Amounts in thousands, except per share data

|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |         |         | 
|----------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------- | ------------------------------- | ------- | ---- | ------- | ------- | ------- | 
|                                                                                                                        |                                                                                                             |                                     |         | Three months ended December 31,
|                                                                                                                        |                                                                                                             |                                     |         |                                
|                                                                                                                        |                                                                                                             |                                     |         | 2002                            |         | 2001
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |     
|Revenues:                                                                                                               |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Parking                                                                                                     |                                     | $       | 152,432                         |         |      | $       | 147,372 |        
|                                                                                                                        | Management contracts                                                                                        |                                     |         | 30,564                          |         |      |         | 29,579  |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             |                                     | 182,996 |                                 |         |      | 176,951 |        
|                                                                                                                        | Reimbursement of management contract expenses                                                               |                                     |         | 101,981                         |         |      |         | 97,704  |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             | Total revenues                      |         |                                 | 284,977 |      |         |         | 274,655 | 
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|Costs and expenses:                                                                                                     |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Cost of parking                                                                                             |                                     |         | 136,835                         |         |      |         | 127,970 |        
|                                                                                                                        | Cost of management contracts                                                                                |                                     |         | 13,475                          |         |      |         | 12,009  |        
|                                                                                                                        | General and administrative                                                                                  |                                     |         | 20,591                          |         |      |         | 18,109  |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             |                                     | 170,901 |                                 |         |      | 158,088 |        
|                                                                                                                        | Reimbursed management contract expenses                                                                     |                                     |         | 101,981                         |         |      |         | 97,704  |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             | Total costs and expenses            |         |                                 | 272,882 |      |         |         | 255,792 | 
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Property-related
gains, net                                                                                 |                                     |         |                                |         |      |         | 4,008   |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Operating earnings                                                                                          |                                     |         | 12,095                          |         |      |         | 22,871  |        
|Other income (expenses):                                                                                                |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Interest income                                                                                             |                                     |         | 1,144                           |         |      |         | 1,352   |        
|                                                                                                                        | Interest expense                                                                                            |                                     |         | (2,953                          | )       |      |         | (3,258  | )      
|                                                                                                                        | Dividends on Company-obligated mandatorily redeemable convertible securities of a subsidiary trust          |                                     |         | (1,045                          | )       |      |         | (1,471  | )      
|                                                                                                                        | Gain on repurchase of company-obligated mandatorily redeemable convertible securities of a subsidiary trust |                                     |         |                                |         |      |         | 5,520   |        
|                                                                                                                        | Equity in partnership and joint venture earnings                                                            |                                     |         | 675                             |         |      |         | 1,388   |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|Earnings from continuing operations before income taxes, minority interest, and cumulative effect of accounting
changes |                                                                                                             |                                     | 9,916   |                                 |         |      | 26,402  |        
|Income tax expense                                                                                                      |                                                                                                             |                                     | 3,127   |                                 |         |      | 9,446   |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|Earnings from continuing operations before minority interest, and cumulative effect of accounting change                |                                                                                                             |                                     | 6,789   |                                 |         |      | 16,956  |        
|Minority interest, net of tax                                                                                           |                                                                                                             |                                     | (1,286  | )                               |         |      | (1,271  | )      
|Cumulative effect of accounting change, net of tax                                                                      |                                                                                                             |                                     |        |                                 |         |      | (9,341  | )      
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             | Earnings from continuing operations |         |                                 | 5,503   |      |         |         | 6,344   | 
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|Discontinued
operations, net of tax                                                                                     |                                                                                                             |                                     | 1,363   |                                 |         |      |        |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             | Net earnings                        |         | $                               | 6,866   |      |         | $       | 6,344   | 
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|Basic earnings per share:                                                                                               |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Earnings from continuing operations before cumulative effect of accounting change                           |                                     | $       | 0.15                            |         |      | $       | 0.44    |        
|                                                                                                                        | Cumulative effect of accounting change, net of tax                                                          |                                     |         |                                |         |      |         | (0.26   | )      
|                                                                                                                        | Discontinued operations, net of tax                                                                         |                                     |         | 0.04                            |         |      |         |        |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             | Net earnings                        |         | $                               | 0.19    |      |         | $       | 0.18    | 
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|Diluted earnings per share:                                                                                             |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Earnings
from continuing operations before cumulative effect of accounting change                           |                                     | $       | 0.15                            |         |      | $       | 0.44    |        
|                                                                                                                        | Cumulative effect of accounting change, net of tax                                                          |                                     |         |                                |         |      |         | (0.26   | )      
|                                                                                                                        | Discontinued operations, net of tax                                                                         |                                     |         | 0.04                            |         |      |         |        |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        |                                                                                                             | Net earnings                        |         | $                               | 0.19    |      |         | $       | 0.18    | 
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Weighted average shares used for basic per share data                                                       |                                     |         | 35,969                          |         |      |         | 35,754  |        
|                                                                                                                        | Effect of dilutive common stock options                                                                     |                                     |         | 314                             |         |      |         | 251     |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        
|                                                                                                                        | Weighted average share used for dilutive per share data                                                     |                                     |         | 36,283                          |         |      |         | 36,005  |        
|                                                                                                                        |                                                                                                             |                                     |         |                                 |         |      |         |        

See accompanying notes to consolidated financial statements.

Page 4 of 27



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##### Table of Contents






CENTRAL PARKING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED

Amounts in thousands

|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |      |         |        |         |  
|------------------------------------------------ | -------------------------------------------- | ----------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------- | ------- | ------------------------------- | ------- | ---- | ------- | ------ | ------- | -
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         | Three months ended December 31,
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         | 2002                            |         | 2001
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|Cash flows from operating activities:            |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              | Net
earnings                                                                        |                                                                                                                                        | $                                                    | 6,866   |                                 |         | $    | 6,344   |       
|                                                 |                                              |                                                                                     | Income
from discontinued operations                                                                                                    |                                                      |         | (1,363                          | )       |      |         |       |        
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              | Earnings from continuing operations                                                 |                                                                                                                                        |                                                      | 5,503   |                                 |         |      | 6,344   |       
|                                                 |                                              | Adjustments to reconcile net earnings to net cash provided by operating activities: |                                                                                                                                        |                                                      |         |                                 |         |      |         |       
|                                                 |                                              |                                                                                     | Depreciation and amortization of property                                                                                              |                                                      |         | 8,123                           |         |      |         | 8,734  |        
|                                                 |                                              |                                                                                     | Equity in partnership and joint venture earnings                                                                                       |                                                      |         | (675                            | )       |      |         | (1,388 | )      
|                                                 |                                              |                                                                                     | Distributions from partnerships and joint ventures                                                                                     |                                                      |         | 274                             |         |      |         | 2,019  |        
|                                                 |                                              |                                                                                     | Property-related gains, net                                                                                                            |                                                      |         |                                |         |      |         | (4,008 | )      
|                                                 |                                              |                                                                                     | Gain on repurchase of company-obligated mandatorily redeemable convertible securities of a subsidiary
securities of a subsidiary trust |                                                      |         |                                |         |      |         | (5,520 | )      
|                                                 |                                              |                                                                                     | Cumulative effect of accounting change, net of tax                                                                                     |                                                      |         |                                |         |      |         | 9,341  |        
|                                                 |                                              |                                                                                     | Deferred income tax                                                                                                                    |                                                      |         | (1,476                          | )       |      |         | 888    |        
|                                                 |                                              |                                                                                     | Minority interest, net of tax                                                                                                          |                                                      |         | 1,286                           |         |      |         | 1,271  |        
|                                                 |                                              | Changes in operating assets and liabilities, excluding effects of acquisitions:     |                                                                                                                                        |                                                      |         |                                 |         |      |         |       
|                                                 |                                              |                                                                                     | Management accounts receivable                                                                                                         |                                                      |         | (5,989                          | )       |      |         | (3,978 | )      
|                                                 |                                              |                                                                                     | Accounts receivable  other                                                                                                            |                                                      |         | 2,219                           |         |      |         | 1,337  |        
|                                                 |                                              |                                                                                     | Prepaid expenses                                                                                                                       |                                                      |         | (5,920                          | )       |      |         | (4,949 | )      
|                                                 |                                              |                                                                                     | Other assets                                                                                                                           |                                                      |         | 2,531                           |         |      |         | 1,411  |        
|                                                 |                                              |                                                                                     | Accounts payable, accrued expenses and other liabilities                                                                               |                                                      |         | (1,892                          | )       |      |         | 11,343 |        
|                                                 |                                              |                                                                                     | Management accounts payable                                                                                                            |                                                      |         | (1,428                          | )       |      |         | 260    |        
|                                                 |                                              |                                                                                     | Deferred Rent                                                                                                                          |                                                      |         | 177                             |         |      |         | 163    |        
|                                                 |                                              |                                                                                     | Income taxes payable                                                                                                                   |                                                      |         | 949                             |         |      |         | 5,027  |        
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              |                                                                                     |                                                                                                                                        | Net cash provided by continuing operations           |         |                                 | 3,682   |      |         |        | 28,295  |  
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|Cash flows from investing activities:            |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              | Proceeds from disposition of property and equipment                                 |                                                                                                                                        |                                                      | 9,217   |                                 |         |      | 15,009  |       
|                                                 |                                              | Purchases of property, equipment and leasehold improvements                         |                                                                                                                                        |                                                      | (23,118 | )                               |         |      | (6,082  | )     
|                                                 |                                              | Purchases of contract and lease rights                                              |                                                                                                                                        |                                                      | (7,414  | )                               |         |      | (4,040  | )     
|                                                 |                                              | Acquisitions, net of cash acquired                                                  |                                                                                                                                        |                                                      |        |                                 |         |      | (12,264 | )     
|                                                 |                                              | Other investing activities                                                          |                                                                                                                                        |                                                      | 8,922   |                                 |         |      | (3,125  | )     
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              |                                                                                     |                                                                                                                                        | Net cash used by investing activities                |         |                                 | (12,393 | )    |         |        | (10,502 | )
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|Cash flows from financing activities:            |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              | Dividends paid                                                                      |                                                                                                                                        |                                                      | (538    | )                               |         |      | (539    | )     
|                                                 |                                              | Net borrowings under revolving credit agreement                                     |                                                                                                                                        |                                                      | 7,000   |                                 |         |      | 12,500  |       
|                                                 |                                              | Proceeds from issuance of notes payable, net of issuance costs                      |                                                                                                                                        |                                                      | 9,970   |                                 |         |      |        |       
|                                                 |                                              | Principal repayments on long-term debt and capital lease obligations                |                                                                                                                                        |                                                      | (13,214 | )                               |         |      | (14,245 | )     
|                                                 |                                              | Payment to minority interest partners                                               |                                                                                                                                        |                                                      | (3,080  | )                               |         |      | (3,107  | )     
|                                                 |                                              | Repurchase of common stock                                                          |                                                                                                                                        |                                                      |        |                                 |         |      | (488    | )     
|                                                 |                                              | Repurchase of mandatorily redeemable securities                                     |                                                                                                                                        |                                                      |        |                                 |         |      | (10,000 | )     
|                                                 |                                              | Proceeds from issuance of common stock and exercise of stock options                |                                                                                                                                        |                                                      | 254     |                                 |         |      | 7       |       
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              |                                                                                     |                                                                                                                                        | Net
cash provided (used) by financing activities     |         |                                 | 392     |      |         |        | (15,872 | )
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|Foreign currency translation                     |                                              |                                                                                     | (214                                                                                                                                   | )                                                    |         |                                 |        |     
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              |                                                                                     |                                                                                                                                        | Net (decrease) increase in cash and cash equivalents |         |                                 | (8,533  | )    |         |        | 1,921   |  
|Cash and cash equivalents at beginning of period |                                              |                                                                                     | 33,498                                                                                                                                 |                                                      |         |                                 | 41,849  |     
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|Cash and cash equivalents at end of period       |                                              | $                                                                                   | 24,965                                                                                                                                 |                                                      |         | $                               | 43,770  |     
|                                                 |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|Non-cash transactions:                           |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 | Issuance of restricted stock                 |                                                                                     | $                                                                                                                                      |                                                     |         |                                 | $       | 25   |        
|                                                 | Purchase of equipment with capital lease     |                                                                                     | $                                                                                                                                      |                                                     |         |                                 | $       | 396  |        
|                                                 | Unrealized gain on fair value of derivatives |                                                                                     | $                                                                                                                                      | 201                                                  |         |                                 | $       | 228  |        
|Cash payments for:                               |                                              |                                                                                     |                                                                                                                                        |                                                      |         |                                 |         |     
|                                                 |                                              |                                                                                     | Interest                                                                                                                               |                                                      | $       | 2,651                           |         |      | $       | 3,011  |        
|                                                 |                                              |                                                                                     | Income taxes                                                                                                                           |                                                      | $       | 3,654                           |         |      | $       | 1,300  |        

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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)

|                         |                                                            |  |                                 |   |      |  |   |        |  
|------------------------ | ---------------------------------------------------------- |  | ------------------------------- | - | ---- |  | - | ------ | -
|                         |                                                            |  | Three months ended December 31,
|                         |                                                            |  |                                
|                         |                                                            |  | 2002                            |   | 2001
|Effects of acquisitions: |                                                            |  |                                 |   |      |  |   |       
|                         | Estimated fair value of assets acquired                    |  | $                               |  |      |  | $ | 13,601 |  
|                         | Purchase price in excess of net assets acquired (goodwill) |  |                                 |  |      |  |   | 780    |  
|                         | Estimated fair value of liabilities assumed                |  |                                 |  |      |  |   | (2,117 | )
|                         |                                                            |  |                                 |   |      |  |   |       
|                         | Cash paid                                                  |  |                                 |  |      |  |   | 12,264 |  
|                         | Less cash acquired                                         |  |                                 |  |      |  |   |       |  
|                         |                                                            |  |                                 |   |      |  |   |       
|                         | Net cash paid for acquisitions                             |  | $                               |  |      |  | $ | 12,264 |  
|                         |                                                            |  |                                 |   |      |  |   |       

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 months ended December 31,
2002 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 year 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 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 required for
fiscal years ending after December 15, 2002 and 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, 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 SFAS No. 123. The
following table illustrates the effect on net income if the fair-value-based
method had been applied to all outstanding and unvested awards in each period.

|                                                                                                            |  |                                 |        |      |  |   |        |  
|----------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------ | ---- |  | - | ------ | -
|                                                                                                            |  | Three Months
Ended December 31,
|                                                                                                            |  | 2002                            |        | 2001
|                                                                                                            |  |                                 |        |     
|Net
earnings, as reported                                                                                   |  | $                               | 6,866  |      |  | $ | 6,344  |  
|Add 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, net of tax |  |                                 | (1,501 | )    |  |   | (1,150 | )
|                                                                                                            |  |                                 |        |      |  |   |        |  
|Pro
forma net earnings                                                                                      |  | $                               | 5,365  |      |  | $ | 5,194  |  
|                                                                                                            |  |                                 |        |      |  |   |        |  
|Earnings
per share:                                                                                         |  |                                 |        |      |  |   |        |  
|Basic-as
reported                                                                                           |  | $                               | 0.19   |      |  | $ | 0.18   |  
|                                                                                                            |  |                                 |        |      |  |   |        |  
|Basic-pro
forma                                                                                             |  | $                               | 0.15   |      |  | $ | 0.15   |  
|                                                                                                            |  |                                 |        |      |  |   |        |  
|Diluted-as
reported                                                                                         |  | $                               | 0.19   |      |  | $ | 0.18   |  
|                                                                                                            |  |                                 |        |      |  |   |        |  
|Diluted-pro
forma                                                                                           |  | $                               | 0.15   |      |  | $ | 0.14   |  
|                                                                                                            |  |                                 |        |      |  |   |        |  

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(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      |                     | $ | 2,779 |       
|Noncompete agreement |                     |   | 175   |       
|Trade name           |                     |   | 100   |       
|Contract rights      |                     |   | 8,475 |       
|                     |                     |   |       |       
|                     | Net 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 acquired as of the acquisition date was as follows (in
thousands):

|                    |                     |   |       |       | 
|------------------- | ------------------- | - | ----- | ----- | 
|Tangible assets     |                     | $ | 491   |      
|Contract rights     |                     |   | 5,864 |      
|Liabilities 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.

Property acquisitions

In 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.

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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 rights

In 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 rail company headquartered in the United Kingdom, to lease 82
parking facilities throughout the United Kingdom. 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 term of the lease
which is 9 years. Yearly base lease payments under the lease range from $7.1 million in year
one to $7.4 in years two through nine. 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.

(3) Earnings Per Share

Basic 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 the subsidiary
trust have not been included in the diluted earnings per share calculation
since such securities are anti-dilutive. At December 31, 2002 and 2001, such
securities were convertible into 1,419,588 and 1,710,093 shares of common
stock, respectively. For the three months ended December 31, 2002 and 2001,
options to purchase 519,647 and 1,811,765 shares, respectively, are excluded
from the calculation of diluted common shares since they are anti-dilutive.

(4) Property-Related Gains (Losses), Net

The Company routinely disposes of or impairs owned properties and
leasehold improvements due to various factors, including economic
considerations, unsolicited offers from third parties, loss of contracts and
condemnation proceedings initiated by local government authorities. Leased
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. A summary of property-related gains and
losses for the three months ended December 31, 2001 is as follows:

|                                                                                 |  |   |       |  
|-------------------------------------------------------------------------------- |  | - | ----- | -
|Net gains on sale of property                                                    |  | $ | 4,960 |  
|Impairment charges for property, equipment and leasehold improvements            |  |   | (56   | )
|Impairment charges for contract rights, lease rights and other intangible assets |  |   | (896  | )
|                                                                                 |  |   |       |  
|Total property-related gains, net                                                |  | $ | 4,008 |  
|                                                                                 |  |   |       |  

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(5) Goodwill and Intangible Assets

As of December 31, 2002, the Company had the following amortizable
intangible assets (in thousands):

|                          |                       |       |         |          |         |              |        |       |        |   |         |     |         | 
|------------------------- | --------------------- | ----- | ------- | -------- | ------- | ------------ | ------ | ----- | ------ | - | ------- | --- | ------- | 
|                          |                       |       |         | Gross    |         |              |        |       |        |   |         |    
|                          |                       |       |         | Carrying |         | Accumulated  |        |       |        |  
|                          |                       |       |         | Amount   |         | Amortization |        | Net  
|                          |                       |       |         |          |         |              |        |      
|Contract
and lease rights |                       | $     | 154,299 |          |         | $            | 42,379 |       |        | $ | 111,920 |    
|                          | Noncompete agreements |       |         | 2,575    |         |              |        | 2,277 |        |   |         | 298 |        
|                          |                       |       |         |          |         |              |        |       |        |   |         |    
|                          |                       | Total |         | $        | 156,874 |              |        | $     | 44,656 |   |         | $   | 112,218 | 
|                          |                       |       |         |          |         |              |        |       |        |   |         |    

Amortization expense related to the contract and lease rights was $2.4 million, respectively, for the three months ended December 31,
2002 and 2001. Amortization expense related to noncompete agreements was $0.1 million, respectively, for the three months ended December 31,
2002 and 2001, 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.

(6) Long-Term Debt

The Company has a credit facility (the Credit
Facility) providing for an aggregate availability of up to $400
million consisting of a five-year $200 million revolving credit facility
including a sub-limit of $40 million for standby letters of credit, and a $200
million five-year term loan. The Credit Facility bears interest at LIBOR plus
a grid-based margin dependent upon the Company achieving certain financial
ratios. The amount outstanding under the Companys Credit Facility was $ 226
million with a weighted average interest rate of 2.8% as of December 31, 2002,
including the principal amount of the term loan of $62.5 million. The term
loan is required to be repaid in quarterly payments of $12.5 million through
March 2004 and the outstanding balance of the revolving line of credit is due
in full March 2004. The aggregate availability under the Credit Facility was
$30.6 million at December 31, 2002, which is net of $29.3 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
limit the amount of dividends paid. The two primary ratios are a 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 December 31, 2002, the Company was in non-compliance with certain of its
financial covenants. A waiver was obtained from the lenders for the quarter
ended December 31, 2002 and as a result, non-compliance with
this covenant is not considered an event of default. Pursuant to the provisions of Emerging
Issues Task Force (EITF) 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 covenant at the next quarterly measurement date was probable.
Accordingly, the outstanding balance of the Credit Facility of $163.5 million was
classified as a current liability at December 31, 2002.

Modification of the existing covenants was not pursued due to the fact
that the Company has received a letter of intent for a replacement
credit facility
that it anticipates will be completed prior to February 28,
2003. The letter of intent for the new
facility provides for $350 million and consists of a $200 million revolver
and a $150 million seven year term loan. The letter of intent
provides for interest calculated at LIBOR plus a grid-based margin
between 1.75% and 3.25%, depending on the consolidated leverage ratio.
Amortization of the term loan is expected to be payable quarterly at a rate of 1% for the
first 5 years with the remainder due in years 6 and 7. The letter of
intent provides that the Company will be required to maintain
financial covenants under the replacement facility measured at
the end of each fiscal quarter. Ratio targets are
expected to be at rates higher than the current facility and step down over time. There
can be no assurance that the replacement facility will close or that the terms
of the replacement facility will be on similar terms as those described in the letter of intent.

The failure of the
Company to secure refinancing of the Credit Facility would force the
Company to secure other forms of financing as current operating cash
flows would not be sufficient to cover the contractually required
debt service requirements. The Companys inability to secure
other financing to refinance the Credit Facility would have a
material adverse impact on the Company. Additionally, refinancing the
Credit Facility with other financing at higher interest rates could
negatively impact the Companys financial performance.

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On
November 1, 2002, the Company entered into a $10 million revolving credit note. The revolving credit note is due February 28, 2003 and carries an
interest rate of LIBOR plus 87.5 basis points. Proceeds of the note were used
to provide additional working capital and for general corporate purposes.

(7) Convertible Trust Issued Preferred Securities

On 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 upon the 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 subsidiary trust holding solely parent debentures.

In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
Corrections. Among other provisions, this statement rescinds SFAS No. 4,
Reporting Gains and Losses from Extinguishment of Debt,which required that all
gains and losses on extinguishment of debt be classified as an extraordinary
item, net of tax, on the face of the income statement.The statement is
effective for all fiscal years beginning after May 15, 2002, but may be adopted
earlier. The Company adopted this statement in the third quarter of fiscal
year 2002, retroactive to October 1, 2001. Prior periods have been
reclassified to conform to the new presentation.

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 writedowns of a
proportionate share of the related deferred finance costs of $0.9 million.

(8) Derivative Financial Instruments

The 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

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interest rate swaps, the Company receives variable interest rate payments
and makes fixed interest rate payments, thereby creating fixed-rate debt. 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 does not enter into derivative instruments for any purpose
other than cash flow hedging purposes. That is, the Company does not speculate
using derivative instruments. The Company assesses interest rate cash flow
risk by continually identifying and monitoring changes in interest rate
exposures that may adversely impact expected future cash flows and by
evaluating hedging opportunities. The Company maintains risk management
control systems to monitor interest rate cash flow risk attributable to both
the Companys outstanding or forecasted debt obligations as well as the
Companys offsetting hedge positions. The risk management control systems
involve the use of analytical techniques, including cash flow sensitivity
analysis, to estimate the expected impact of changes in interest rates on the
Companys future cash flows.

The
Company recognizes all derivative instruments as either assets or liabilities, measured at
fair value, in the consolidated balance sheets.

At December 31, 2002, the Companys derivative financial instruments
consist of three interest rate cap agreements with a combined notional amount
of $75 million and two interest rate swaps with a combined notional amount of
$38 million that effectively convert an equal portion of its debt from a
variable rate to a fixed rate. The derivative financial instruments are
reported at their fair values, and are included as other assets and other
liabilities, respectively, on the face of the balance sheet. The following
table lists the amortized cost and carrying value (fair value) of each type of
derivative financial instrument (amounts in thousands):

|                                   |                     |  |                   |       |                    |  |   |       | 
|---------------------------------- | ------------------- |  | ----------------- | ----- | ------------------ |  | - | ----- | 
|                                   |                     |  | December 31, 2002 |       | September 30, 2002
|                                   |                     |  |                   |       |                   
|Derivative instrument assets:      |                     |  |                   |       |                    |  |   |      
|                                   | Interest rate caps  |  | $                 | 1     |                    |  | $ | 5     | 
|                                   |                     |  |                   |       |                    |  |   |      
|Derivative instrument liabilities: |                     |  |                   |       |                    |  |   |      
|                                   | Interest rate swaps |  | $                 | 2,748 |                    |  | $ | 3,043 | 
|                                   |                     |  |                   |       |                    |  |   |      

The underlying terms of the interest rate swaps and caps, including the
notional amount, interest rate index, duration, and reset dates, are identical
to those of the associated debt instruments and therefore the hedging
relationship results in no ineffectiveness. Accordingly, such derivative
instruments are classified as cash flow hedges. As such, any changes in the
fair market value of the derivative instruments are included in accumulated
other comprehensive loss on the face of the balance sheet. The portion of this
accumulated loss that relates to the actual amount paid for the interest rate
caps is amortized to earnings as interest expense on a straight-line basis over
the life of the caps.

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(9) Revenue Recognition

In January 2002, the EITF released Issue
No. 01-14, Income Statement Characterization of Reimbursements Received for
Out-of-Pocket Expenses Incurred,which the Company adopted in the third
quarter of fiscal 2002. This pronouncement requires the Company to recognize
as both revenues and expenses, in equal amounts, costs directly reimbursed from
its management clients. Previously, expenses directly reimbursed under
management agreements were netted against the reimbursement received. Prior
periods have been reclassified to conform to the presentation of these
reimbursed expenses in 2002. Adoption of the pronouncement resulted in an
increase in total revenues and total costs and expenses in equal amounts of
$102 million and $98 million for the three months ended December 31, 2002 and
2001, respectively.

(10) Discontinued Operations

During the quarter ended December 31, 2002, the operations of 6 locations
were discontinued due to the sale or condemnation of certain properties. In
relation to these properties, the Company recorded a gain on the sale of assets
of $2.3 million, net of tax $961 thousand, and reflected such
net gains as
discontinued operations consistent with the provisions SFAS No. 144, Accounting
for the Impairment or Disposal of Long-Lived Assets. The results of operations
for these locations for both the current year and comparative prior periods
have not been reclassified to discontinued operations due to the
insignificance of their results to the consolidated financial
statements of the Company.

(11) 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 initial recognition and measurement provisions of
the Interpretation are applicable to guarantees issued or modified after
December 31, 2002 and are not expected to have a material effect on the
Companys financial statements. The disclosure requirements are effective for
financial statements of interim and annual periods ending after December 31,
2002.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51.This
Interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interests in variable interest entities created after
January 31, 2003, and to variable interests in variable interest entities
obtained after January 31, 2003. The
Interpretation requires certain disclosures in financial statements issued
after January 31, 2003 if it is reasonably possible that the Company will
consolidate or disclose information about variable interest entities when the
Interpretation becomes effective. The Company does not have
variable interests in variable interest entities. Accordingly, the application of this Interpretation is not
expected to have a material effect on the Companys financial statements.

(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 has the option to sell its partnership interest to the
Company during the period from May 1, 2003 to November 30, 2003. If the other
partner does not exercise its option, then the Company has an option to
purchase the other partners interest during the period from May 1, 2004 to
October 31, 2004. The agreed upon purchase price under both of these options
is approximately $14.3 million. The Company
believes that it is probable that one of these options will be exercised during
fiscal year 2003 and, accordingly, has included this commitment on its balance
sheet in accrued expenses as of September 30, 2002. The purchase price is
backed by a letter of credit provided by the
Companys Chairman. The Chairman can require the letter of credit
to be replaced by the Company if
the Companys stock price
falls below $14.50 per share on the New York Stock Exchange.

The Company is a defendant in a lawsuit brought by Texas Gulf Bank and
other trustees and individuals on behalf of the owners of an undivided interest
in a undeveloped city block in downtown Houston that was leased to a subsidiary
of Allright. Allright leased the block as a parking lot under a series of
leases from 1985 to 2000 under which Allright was obligated to pay base rent
plus a percentage of revenues above a specified threshold level. Plaintiffs
have alleged substantial underpayment of percentage rent under the lease as a
result of theft and fraud.

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Plaintiffs have asserted causes of action for breach of contract, conversion,
common law fraud, fraud in the inducement and fraudulent concealment. Based on
the most recent court filings, the plaintiffs are seeking compensatory damages
of approximately $12 million plus approximately $4 million in attorneys fees.
In addition, plaintiffs are seeking punitive damages in an unspecified amount.
The compensatory damages being sought by the plaintiffs include approximately
$650 thousand in underpaid revenues and $1.2 million in interest, fees and expenses
for the 1996 to 2000 lease period; and approximately $1.5 million in underpaid
revenues and $8.4 million in interest, fees and expenses for the 1985 to 1996
lease period. The owner of approximately 15% of the lot settled her interest
in the lawsuit earlier this year. However, efforts to settle with the owners
of the remaining 85% have been unsuccessful to date, and there can be no
assurance the Company will be able to settle with the remaining owners on terms
favorable to the Company. The suit, which was filed in June 2001, is pending
in the 270th Judicial District Court in Harris County, Texas. Plaintiffs have
requested a jury trial. The trial began on February 4, 2003 and is
still in progress.

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 thousand 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 Income

Comprehensive income for the three months ended December 31, 2002 and
2001, was as follows (in thousands):

|                                                         |  |                    |       |      |  |   |       | 
|-------------------------------------------------------- |  | ------------------ | ----- | ---- |  | - | ----- | 
|                                                         |  | Three months ended
|                                                         |  | December 31,      
|                                                         |  |                   
|                                                         |  | 2002               |       | 2001
|                                                         |  |                    |       |     
|Net earnings                                             |  | $                  | 6,866 |      |  | $ | 6,344 | 
|Unrealized
gain on fair value of derivatives, net of tax |  |                    | 201   |      |  |   | 228   | 
|Foreign currency cumulative translation adjustment       |  |                    | (214  | )    |  |   |      | 
|                                                         |  |                    |       |      |  |   |       | 
|Comprehensive income                                     |  | $                  | 6,853 |      |  | $ | 6,572 | 
|                                                         |  |                    |       |      |  |   |       | 

(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 earnings of each segment for the three
months ended December 31, 2002 and 2001, as well as identifiable assets for
each segment as of December 31, 2002 and 2001. 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
|             |               |                |   | December 31,      
|             |               |                |   |                   
|             |               |                |   | 2002               |         | 2001
|             |               |                |   |                    |         |     
|Revenues:(1) |               |                |   |                    |         |      |   |       
|             | Segment One   |                | $ | 19,295             |         |      | $ | 18,749 |        
|             | Segment Two   |                |   | 76,099             |         |      |   | 73,977 |        
|             | Segment Three |                |   | 9,122              |         |      |   | 8,525  |        
|             | Segment Four  |                |   | 18,595             |         |      |   | 18,332 |        
|             | Segment Five  |                |   | 9,828              |         |      |   | 7,905  |        
|             | Segment Six   |                |   | 3,524              |         |      |   | 3,358  |        
|             | Segment Seven |                |   | 25,786             |         |      |   | 25,933 |        
|             | Segment Eight |                |   | 18,753             |         |      |   | 18,106 |        
|             | Other         |                |   | 1,994              |         |      |   | 2,066  |        
|             |               |                |   |                    |         |      |   |       
|             |               | Total revenues |   | $                  | 182,996 |      |   | $      | 176,951 | 
|             |               |                |   |                    |         |      |   |       

(1) Revenues exclude reimbursement of management
contract expenses. Such amounts were $102.0 million and $99.7 million
for the three months ended December 31, 2002 and 2001,
respectively.

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|                    |               |                          |   |       |        |  |   |       |        | 
|------------------- | ------------- | ------------------------ | - | ----- | ------ |  | - | ----- | ------ | 
|Operating earnings: |               |                          |   |       |        |  |   |      
|                    | Segment One   |                          | $ | 299   |        |  | $ | 734   |       
|                    | Segment Two   |                          |   | 5,729 |        |  |   | 7,433 |       
|                    | Segment Three |                          |   | 485   |        |  |   | 304   |       
|                    | Segment Four  |                          |   | 1,883 |        |  |   | 2,940 |       
|                    | Segment Five  |                          |   | 875   |        |  |   | 1,511 |       
|                    | Segment Six   |                          |   | 546   |        |  |   | 396   |       
|                    | Segment Seven |                          |   | 1,819 |        |  |   | 3,046 |       
|                    | Segment Eight |                          |   | 891   |        |  |   | 2,140 |       
|                    | Other         |                          |   | (432  | )      |  |   | 4,367 |       
|                    |               |                          |   |       |        |  |   |      
|                    |               | Total operating earnings |   | $     | 12,095 |  |   | $     | 22,871 | 
|                    |               |                          |   |       |        |  |   |      

|                     |               |              |   |              |           |               |   |         |         | 
|-------------------- | ------------- | ------------ | - | ------------ | --------- | ------------- | - | ------- | ------- | 
|                     |               |              |   | December
31, |           | September
30,
|                     |               |              |   |             
|                     |               |              |   | 2002         |           | 2001         
|                     |               |              |   |              |           |              
|Identifiable assets: |               |              |   |              |           |               |   |        
|                     | Segment One   |              | $ | 18,806       |           |               | $ | 20,660  |        
|                     | Segment Two   |              |   | 297,284      |           |               |   | 309,260 |        
|                     | Segment Three |              |   | 19,840       |           |               |   | 19,582  |        
|                     | Segment Four  |              |   | 30,298       |           |               |   | 24,542  |        
|                     | Segment Five  |              |   | 37,267       |           |               |   | 25,322  |        
|                     | Segment Six   |              |   | 3,984        |           |               |   | 3,108   |        
|                     | Segment Seven |              |   | 30,993       |           |               |   | 28,412  |        
|                     | Segment Eight |              |   | 39,889       |           |               |   | 41,197  |        
|                     | Other         |              |   | 526,367      |           |               |   | 526,801 |        
|                     |               |              |   |              |           |               |   |        
|                     |               | Total assets |   | $            | 1,004,728 |               |   | $       | 998,884 | 
|                     |               |              |   |              |           |               |   |        

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.

(15) Subsequent Events

On January 8,
2003, the Company entered into a $10 million revolving credit note. The revolving credit note is due March 31, 2003 and carries an
interest rate of LIBOR plus 87.5 basis points. Proceeds of the note were used
to provide additional working capital and for general corporate purposes.

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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;                                                                                                                                                                                                                                            
|
| |  |  | 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; and      
|
| |  |  | the inability to successfully
refinance the
Companys credit facility.                                                                                                                                                                                                

Overview

The Company operates parking facilities under three types of arrangements:
leases, fee ownership, and management contracts. As of December 31, 2002,
Central Parking operated 1,756 parking facilities through management contracts,
leased 1,890 parking facilities, and owned 211 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 $16.0 million and $16.8
million for the three months ended

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December 31, 2002 and 2001, respectively, representing 10.5% and 11.4% 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 $136.4 million and
$130.6 million for the three months ended December 31, 2002 and 2001,
respectively, which accounted for 89.5% and 88.6% of total parking revenues in
the respective periods. 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 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 $29.6 million
for the three months ended December 31, 2002 and 2001, 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.

In January 2002, the
Emerging Issues Task Force (EITF) released Issue No. 01-14,
Income Statement Characterization of Reimbursements Received for
Out-of-Pocket Expenses Incurred,which the Company adopted in the third
quarter of fiscal 2002. This pronouncement requires the Company to recognize
as both revenues and expenses, in equal amounts, costs directly reimbursed from
its management clients. Previously, expenses directly reimbursed under
management agreements were netted against the reimbursement received. Prior
periods have been reclassified to conform to the presentation of these
reimbursed expenses in 2002. Adoption of EITF 01-14 resulted in an increase in
total revenues and total costs and expenses in equal amounts of $102.0 million
and $97.7 million for the three months ended December 31, 2002 and 2001,
respectively.

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 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.

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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 December 31,
2002, the Companys long-lived assets were comprised primarily
of $445.7 million of property, equipment and leasehold improvements,
$112.2 million of contract rights and $25.7 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 December 31, 2002, the Company had
$242.1 million of goodwill.

The determination and
measurement of an impairment loss under these
accounting standards require the significant use of judgment and estimates. The
determination of fair value of these assets utilizes 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. For the three
months ended December 31, 2001, the Company recorded $1 million of
impairment charges related to
long-lived assets and a $9.3 million impairment charge related to
goodwill. The $9.3 million goodwill impairment charge was the result
of the Companys initial adoption of SFAS No. 142 and is
reflected as a cumulative effect of an accounting change. The Company
did not record any impairment charges during the three-months ended
December 31, 2002. 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 December 31,
2002, the Company had $112.2 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.

Lease Termination Costs

The Company has recognized lease termination costs in accordance with
EITF Issue No. 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring), in its financial statements. Lease
termination costs are based upon certain estimates of liabilities related to
costs to exit an activity. Liability estimates may change as a result of
future events, such as the settlement of a lease termination for an amount less
than the amount contractually required.

Allowance for
Doubtful Accounts

As of December 31,
2002, the Company had $59.1 million of trade receivables, including
management accounts receivable and accounts receivable - other.
Additionally, the Company had a recorded allowance for doubtful
accounts of $1.6 million. The Company reports 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
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

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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.

Recent Accounting Pronouncements

In November 2002, the
Financial Accounting Standards Board (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 initial recognition and measurement provisions of
the Interpretation are applicable to guarantees issued or modified after
December 31, 2002 and are not expected to have a material effect on the
Companys financial statements. The disclosure requirements are effective for
financial statements of interim and annual periods ending after December 31,
2002.

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 Statement 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
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements. Certain of the disclosure modifications are required for
interim periods ending after December 15, 2002 and are included in the notes to
these consolidated financial statements.

In January 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an interpretation of ARB No. 51.This
Interpretation addresses the consolidation by business enterprises of variable
interest entities as defined in the Interpretation. The Interpretation applies
immediately to variable interests in variable interest entities created after
January 31, 2003, and to variable interests in variable interest entities
obtained after January 31, 2003. The Interpretation requires
certain disclosures in financial statements issued after January 31, 2003, if
it is reasonably possible that the Company will consolidate or disclose
information about variable interest entities when the Interpretation becomes
effective. The Company does not have
variable interests in variable interest entities. Accordingly, the application of this Interpretation is not expected to have a material
effect on the Companys financial statements.

Results of Operations

Three Months Ended December 31, 2002 Compared to Three Months Ended December
31, 2001

Parking revenues in the first quarter of fiscal year 2003
increased to $152.4 million from $147.4 million in the first quarter of fiscal
year 2002, an increase of $5.0 million, or 3.4%. The increase primarily
resulted from a $3.3 million increase in same-store revenues, which includes a
$4.4 million increase in New York region same-store revenues caused mainly by
the effects of the September 11, 2001 terrorist attacks on FY 2002 revenues and
a $1.1 million decrease in same-store revenues from all other locations
reflecting primarily decreases in monthly parking activity due to the effects
of the general economic slowdown and the related increase in unemployment
rates. This decrease was partially offset by $0.5 million of new parking
revenues from the Park One acquisition.

Management contract revenues for the first quarter of fiscal 2003
increased to $30.6 million from $29.6 million in the same period of fiscal
2002, an increase of $1.0 million or 3.3%. The increase is
primarily due to an increase in insurance charges.

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Cost of parking in the first quarter
of 2003 increased to $136.8 million from
$128.0 million in the first quarter of 2002, an increase of $8.8 million or
6.9%. This increase included a $1.5 million increase in accounts payable to
correct an error in the process for recording vendor invoices. This error was
in a large part attributed to the Companys decentralized payables process. In
addition, a $1.1 million increase in bad debt expense, was
recorded in the first quarter of 2003. This increase in the bad debt expense
was attributed to the Company aggressively pursuing collections, identifying
deterioration in aging accounts, customers who have filed for bankruptcy and
balances being disputed by customers whose resolution is in
litigation. During the quarter
the Company identified specific technical problems resulting in exposures
related to credit card transactions for which a reserve of $ 0.5 million was
established. The Company does not believe that these levels of bad debt expense
will be experienced in the future. Other items causing this increase
were an increased rent expense of $0.5 million, cost inflation driven by higher
property taxes and payroll and payroll related costs, start up costs related to
new business brought on since last year, a $0.4 million write-down of an
employee medical stop loss receivable, which was partially written
down during the year ended September 30, 2002, and increased snow removal costs
totaling $0.8 million. Rent expense as a percentage of parking revenues
decreased to 48.7% during the quarter ended December 31, 2002, from 50.2% in
the quarter ended December 31, 2001. Payroll and benefit expenses were 19.3%
of parking revenues during the first 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 89.8% in the first quarter of fiscal 2003 from
86.8% in the first quarter of fiscal 2002.

Cost of management contracts in the first quarter of fiscal 2003 increased
to $13.5 million from $12.0 million in the comparable period in 2002, an
increase of $1.5 million or 12.2%. The increase in cost was primarily caused
by the settlement of two employee litigation claims and an increase of
$1.0 million in employee health care costs. Cost of management contracts as a percentage of management
contract revenue increased to 44.1% for the first fiscal quarter of 2002 from
40.6% for the same period in 2001, due to the increase in the aforementioned
items.

General and
administrative expenses increased to $20.6 million for the
first quarter of fiscal 2003 from $18.1 million in the first quarter of fiscal
2002, an increase of $2.5 million or 13.7%. This increase is due to an increase
in payroll and bonus expense of $0.6 million, an increase of $0.7 million in
overhead, an increase of $0.4 million in auto expense, an increase of $0.3
million in travel and entertainment and an increase of $1.0 in other
miscellaneous expenses, offset by a decrease of $0.7 million in depreciation
and amortization of contract and lease rights expense for the first quarter of
fiscal 2003. In addition, the Companys general and
administrative costs were higher than the prior
year primarily due to consulting costs related to tax
initiatives and our program to centralize sourcing, along with
program costs related to technology and quality assurance.
General and administrative expenses as a percentage of total
revenues increased to 7.2% for the first quarter of fiscal 2003 compared to
6.6% for the first quarter of fiscal 2002.

Net property-related
gains for the three months ended December 31, 2001
was $4.0 million. The $4.0 million gain was comprised of $5.0 million in gains on sales of property during the
three months ended December 31, 2001, primarily from the condemnation of a
property in Houston, Texas. The gains on the sale of property was
offset with a write-off of $1.0
million for locations in Houston and Fort Worth, Texas, and San Diego,
California that are no longer operated by the Company.

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 cash
flows from a disposal of a parking facility be reflected as
discontinued operations. SFAS No. 144 also requires that cash flows
resulting from the disposal of the facility be reflected as
discontinued operations. For the three months ended December 31,
2002, the Company disposed of six locations, resulting in gains of
$2.3 million. These gains, net of related income taxes, are reflected
as discontinued operations. The results of operations of these
locations for both the current year and comparative prior periods
have not been reclassified to discontinued operations due to the
insignificance of their results to the
consolidated financial statements of the Company.

Interest income decreased to $1.1 million for the first quarter of fiscal
2003 from $1.4 million in the first quarter of fiscal 2002, a
decrease of $0.2
million, or 15.4%. The decrease in interest income was the result of lower
market interest rates.

Interest expense and dividends on Company-obligated mandatorily redeemable
convertible securities decreased to $4.0 million for the
first quarter of fiscal 2003 from $4.7 million in the first quarter of fiscal
2002, a decrease of $0.7 million or 15.7%. This decrease in interest expense
was primarily attributable to the lower amount of overall debt outstanding
 resulting from the scheduled repayments on the Credit Facility and
the repurchase of $16 million of the Company-obligated mandatorily
redeemable convertible securities coupled with lower interest rates. The weighted
average balance outstanding for the Companys debt obligations and convertible
securities was $238 million during the quarter ended December 31, 2002, at a
weighted average interest rate of 3.1% compared to $390.0 million during the
quarter ended December 31, 2001 at an average interest rate of 4.8%.

Income taxes from continuing operations
decreased to $3.1 million for the first quarter of fiscal
2003 from $9.4 million in the first quarter of fiscal 2002, a
decrease of $6.4 million. The effective tax rate on earnings from continuing operations
for the first quarter of fiscal 2003
was 31.5% compared to 35.8% for the first quarter of fiscal 2002.

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Liquidity and Capital Resources

Operating activities for the three months ended December 31, 2002 provided
net cash of $3.7 million, compared to $28.3 million of cash provided by operating activities for the three
months ended December 31, 2001. Net earnings from continuing
operations of $5.5 million and depreciation
and amortization of $8.1 million, along with net increases in operating assets
and net decreases in operating liabilities totaling $9.4 million account for
the majority of the cash provided by operating activities during the first three
months of fiscal 2003.

Investing activities for the three months ended December 31, 2002 used net
cash of $12.4 million, compared to $10.5 million of net cash used by investing
activities for the same period in the prior year. Purchases of property,
equipment and leasehold improvements of $23.1 million and
purchases of contract
and lease rights of $7.4 million, offset by proceeds from disposition of
property and equipment of $9.2 million and other investing activities of $8.9
million, accounted for the majority of the cash used by investing activities in
the first three months of fiscal 2003. Acquisitions of $12.3 million,
purchases of property, equipment, leasehold improvements of $6.1
million and contract and lease rights of $4.0 million, and
other investing activities of $3.1 million, offset by proceeds of $15.0 million
from the disposition of property and equipment, accounted for the majority of
cash used by investing activities during the first three months of fiscal 2002.

Financing activities for the three months ended December 31, 2002 provided
net cash of $0.4 million, compared to $15.9 million used in the same period in
the prior year. Principal repayments on notes payable of $13.2 million and
payment to minority interest partners of $3.1, offset by net borrowings under
the revolving credit agreement of $7.0 million and proceeds from issuance of
notes payable of $10.0 million comprised a majority of the cash provided by
finance activities for the three months ended December 31, 2002. Principal
repayments on notes payable of $14.2 million and the repurchase of mandatorily
redeemable preferred securities of $10.0 million, offset by net borrowings
under the revolving credit agreement of $12.5 million, and payment to minority
interest partners of $3.1 million comprised a majority of the cash used by
finance activities during the three months ended December 31, 2001.

The Company has a credit facility (the Credit
Facility) providing for an aggregate availability of up to $400
million consisting of a five-year $200 million revolving credit facility
including a sub-limit of $40 million for standby letters of credit, and a $200
million five-year term loan. The Credit Facility bears interest at LIBOR plus
a grid-based margin dependent upon the Company achieving certain financial
ratios. The amount outstanding under the Companys Credit
Facility was $226
million with a weighted average interest rate of 2.8% as of December 31, 2002,
including the principal amount of the term loan of $62.5 million. The term
loan is required to be repaid in quarterly payments of $12.5 million through
March 2004. The aggregate availability under the Credit Facility was $30.6
million at December 31, 2002, which is net of $29.3 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
limit the amount of dividends paid. The two primary ratios are a 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 December 31, 2002, the Company was in compliance with each of its
financial covenants except the leverage ratio. A waiver was obtained from the
lenders for the quarter ended December 31, 2002, and as a result, noncompliance with this
covenant is not considered an event of default. Pursuant to EITF No.
86-30, Classification of Obligations When a Violation is Waived by
the Creditor, the Company is
required to project future compliance with the existing covenants and
has concluded that non-compliance with the same covenant at the next
measurement day is probable. Accordingly, the outstanding balance of
the Credit Facility of $163.5 million was classified as a current
liability at December 31, 2002.

Additionally, the
Company has received a letter of intent for a replacement facility that it
anticipates will be completed prior to February 28, 2003. The
new facility is expected to be for $350 million and consist of a $200 million revolver and a $150
million term loan due in seven years. The letter of intent provides
for interest calculated as LIBOR plus a grid-based margin between 1.75% and
3.25%, depending on the consolidated leverage ratio. It is
anticipated that amortization of the term
loan will be payable quarterly at a rate of 1% for the first
5 years with the remainder due in years 6 and 7. There can be no assurance that
the replacement facility that is actually entered into will be on the
terms of the letter of intent or that the replacement facility will
close.

The Company will be required to maintain financial
covenants under the replacement facility as of the end of each fiscal quarter.
Proposed ratio targets have been reset higher than the current
facility and are expected to step
down over time. The Company would have been in compliance with the proposed financial covenants
negotiated under the new facility as of December 31, 2002; however, there can be no assurance that the
Company will be in compliance with one or more of these covenants in future
quarters.

The failure of the
Company to secure refinancing of the Credit Facility would force the
Company to secure other forms of financing as current operating cash
flows would not be sufficient to cover the contractually required
debt service requirements. The Companys inability to secure
other financing to refinance the Credit Facility would have a
material adverse impact on the Company. Additionally, refinancing the
Credit Facility with other financing at higher interest rates could
impact the Companys financial performance.

On November 1, 2002, the Company entered into a revolving credit note of
$10 million. The revolving credit note is due February 28, 2003 and carries an
interest rate of LIBOR plus 87.5 basis points. Proceeds of the note were used
to provide additional working capital and for general corporate purposes.

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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

On January 18, 2000, the Companys board of directors authorized the
repurchase of up to $50 million in outstanding shares of the Companys capital
stock. The Companys bank lenders subsequently approved the repurchase program
on February 14, 2000. As of December 31, 2002, the Company had repurchased
$49.8 million of common and preferred securities under this authorization.

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 $5.5 million during the first three months of fiscal 2003.

The following tables
summarize the Companys total contracted obligations and
commercial commitments as of December 31, 2002 (amounts in
thousands)



|                                   |  |                        |           |        |  |           |         |       |  |         |         |       |  |  |         |  |  |  |         | 
|---------------------------------- |  | ---------------------- | --------- | ------ |  | --------- | ------- | ----- |  | ------- | ------- | ----- |  |  | ------- |  |  |  | ------- | 
|                                   |  | Payments due by period
|                                   |  |                       
|                                   |  |                        |           |        |  | Less than |         | 1-3   |  | 4-5     |         | After
|                                   |  | Total                  |           | 1 Year |  | Years     |         | Years |  | 5 Years
|                                   |  |                        |           |        |  |           |         |       |  |        
|Long-Term
Debt(1)                  |  | $                      | 261,065   |        |  |           | 61,972  |       |  |         | 181,349 |       |  |  | 17,047  |  |  |  | 697     | 
|Capital lease obligations          |  |                        | 3,107     |        |  |           | 2,585   |       |  |         | 210     |       |  |  | 161     |  |  |  | 151     | 
|Convertible securities             |  |                        | 78,085    |        |  |           |        |       |  |         |        |       |  |  |        |  |  |  | 78,085  | 
|Operating leases                   |  |                        | 1,302,640 |        |  |           | 223,401 |       |  |         | 341,384 |       |  |  | 247,262 |  |  |  | 490,593 | 
|Other long-term obligations        |  |                        | 14,250    |        |  |           | 14,250  |       |  |         |        |       |  |  |        |  |  |  |        | 
|                                   |  |                        |           |        |  |           |         |       |  |         |         |       |  |  |         |  |  |  |         | 
|Total contractual cash obligations |  | $                      | 1,659,147 |        |  |           | 302,208 |       |  |         | 522,943 |       |  |  | 264,470 |  |  |  | 569,526 | 
|                                   |  |                        |           |        |  |           |         |       |  |         |         |       |  |  |         |  |  |  |         | 

|                             |  |                                            |        |        |  |           |        |       |  |         |        |       |  |  |   |  |  |  |   | 
|---------------------------- |  | ------------------------------------------ | ------ | ------ |  | --------- | ------ | ----- |  | ------- | ------ | ----- |  |  | - |  |  |  | - | 
|                             |  | Amount of commitment expiration per period
|                             |  |                                           
|                             |  |                                            |        |        |  | Less than |        | 1-3   |  | 4-5     |        | After
|                             |  | Total                                      |        | 1 Year |  | Years     |        | Years |  | 5 Years
|                             |  |                                            |        |        |  |           |        |       |  |        
|Unused lines of credit       |  |                                            | 17,166 |        |  |           |       |       |  |         | 17,166 |       |  |  |  |  |  |  |  | 
|Stand-by letters of credit   |  |                                            | 37,579 |        |  |           | 36,033 |       |  |         | 1,546  |       |  |  |  |  |  |  |  | 
|Guarantees                   |  |                                            |       |        |  |           |       |       |  |         |       |       |  |  |  |  |  |  |  | 
|Other commercial commitments |  |                                            | 2,888  |        |  |           | 248    |       |  |         | 2,640  |       |  |  |  |  |  |  |  | 
|                             |  |                                            |        |        |  |           |        |       |  |        
|Total commercial commitments |  |                                            | 57,633 |        |  |           | 36,281 |       |  |         | 21,352 |       |  |  |  |  |  |  |  | 
|                             |  |                                            |        |        |  |           |        |       |  |         |        |       |  |  |   |  |  |  |   | 

(1) These amounts reflect the contractual
maturities of the Companys long-term debt as of
December 31, 2002. The December 31, 2002 balance sheet
reflects the Companys Credit Facility as current due to a
covenant violation as of that date and the application of EITF No.
86-30. See footnote 6 to the consolidated financial statements
for additional information.

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

Subsequent Events

On February 14, 2003,
the Company announced that Hiram A. Cox, senior vice president and
Chief Financial Officer, resigned from his position with the Company.
The Companys Board of Directors named William J. Vareschi, Jr.,
as Acting Chief Financial Officer in the interim. The Company is
aggressively seeking to hire a replacement.

On January 8, 2003,
the Company entered in a $10 million revolving credit note. The
revolving credit note is due March 31, 2003 and carries an interest
rate of LIBOR plus 87.5 basis points. Proceeds of the note were used
to provide additional working capital and for general corporate
purposes.




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 December 31, 2002, the
Company had $216.0 million of variable rate debt outstanding under the Credit
Facility priced at LIBOR plus 87.5 basis points. Of this amount, $62.5 million
of the Credit Facility is payable in quarterly installments of $12.5 million
and $153.5 million in revolving credit loans are due in March
2004. As described previously, the Company anticipates refinancing the Credit Facility prior to February 28, 2003.

The Company
anticipates that the terms and conditions of the refinanced facility
will bear interest
calculated as LIBOR plus a grid-based margin between 1.75% and 3.25%, depending
on the consolidated leverage ratio. Amortization of the term loan is
expected to be
payable quarterly at a rate of 1% for the first 5 years with the
remaining balance being repaid in years 6 and 7.

The Company is required under the Credit Facility to enter into interest
rate protection agreements designed to limit the Companys exposure to
increases in interest rates. As of December 31, 2002, interest rate protection
agreements had been purchased to hedge $100 million of the Companys variable
rate debt under the Credit Facility. These instruments were comprised of a $25 million
interest rate swap agreement under which the Company pays to the counterparty a
fixed rate of 6.16% and receives a variable rate equal to LIBOR, and three
separate $25 million interest rate cap agreements with rates of 8.0%, 8.0%, and
8.5%. These derivative instruments have terms consistent with the terms
of the variable rate debt and are accounted for as cash flow hedges.

The weighted average interest rate on the Companys Credit Facility at
December 31, 2002 was 2.84%. An increase (decrease) in LIBOR of 1% would
result in an increase (decrease) of annual interest expense of $2.2 million
based on the Companys outstanding Credit Facility balance of $245.3 million at
December 31, 2002, less $25.0 million which is effectively fixed by the
interest rate swap agreement. Additional increases (decreases) in LIBOR would
result in proportionate increases (decreases) in interest expense until LIBOR
exceeded 8.0% and 8.5%, at which point an additional $50.0 million and $25.0
million of the balance, respectively, would be fixed by the interest rate cap
agreements.

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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 with a five-year note bearing interest at one-month floating
LIBOR plus 162.5 basis points. To fix the interest rate, the Company entered
into a five-year LIBOR swap, yielding an effective interest cost of 8.91% for
the five-year period. The notional amount of the swap is reduced in
conjunction with the principal payments on the related variable rate debt.

Foreign Currency Risk

The Companys exposure to
foreign exchange risk is minimal. As of
December 31, 2002, the Company has approximately GBP (1.1) million (USD (1.8)
million) of cash and cash equivalents denominated in British pounds, EUR 1.5
million (USD 1.6 million) denominated in euros, CAD 0.5 million (USD 0.3
million) denominated in Canadian dollars, and USD 0.8 million denominated in
various other foreign currencies. The Company also has EUR 1.1 million (USD
1.8 million) of notes payable denominated in euros at December 31, 2002. These
notes bear interest at a floating rate of 5.34% as of December 31, 2002, 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 December 31, 2002, management does not believe a near-term change in
currency rates, based on historical currency movements, would materially affect
the Companys financial statements.




Item 4. Controls and Procedures

The Companys
Chief Executive Officer and Acting Chief Financial Officer,
evaluated the effectiveness of the Companys disclosure controls and
procedures, as defined in Exchange Act Rules 13a-14(c) and 15d-14(c), as of a
date within 90 days of the filing date of this Form 10-Q.
Based on this evaluation, he has concluded that
those disclosure controls and procedures were adequate, 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 provides us with an adequate basis to
conclude the accuracy of this account.

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

The Company is a defendant in a lawsuit brought by Texas Gulf Bank and
other trustees and individuals on behalf of the owners of an undivided interest
in a undeveloped city block in downtown Houston that was leased to a subsidiary
of Allright. Allright leased the block as a parking lot under a series of
leases from 1985 to 2000 under which Allright was obligated to pay base rent
plus a percentage of revenues above a specified threshold level. Plaintiffs
have alleged substantial underpayment of percentage rent under the lease as a
result of theft and fraud. Plaintiffs have asserted causes of action for
breach of contract, conversion, common law fraud, fraud in the inducement and
fraudulent concealment. Based on the most recent court filings, the plaintiffs
are seeking compensatory damages of approximately $12 million plus
approximately $4 million in attorneys fees. In addition, plaintiffs are
seeking punitive damages in an unspecified amount. The compensatory damages
being sought by the plaintiffs include approximately $650 thousand in underpaid
revenues and $1.2 million in interest, fees and expenses for the 1996 to 2000
lease period; and approximately $1.5 million in underpaid revenues and $8.4
million in interest, fees and expenses for the 1985 to 1996 lease period. The
owner of approximately 15% of the lot settled her interest in the lawsuit
earlier this year. However, efforts to settle with the owners of the remaining
85% have been unsuccessful to date, and there can be no assurance the Company
will be able to settle with the remaining owners on terms favorable to the
Company. The suit, which was filed in June 2001, is pending in the 270th
Judicial District Court in Harris County, Texas. Plaintiffs have requested a
jury trial. The trial began on February 4, 2003 and is still in
process.

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Item 5. Other Information

On February 14, 2003,
the Company issued a press release announcing earnings for the
quarter ended December 31, 2002 (a copy of which is filed herewith as
Exhibit 99.2).




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).                                                                                                                                                                                                                                                                                                               
|              |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3.1(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

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|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  | 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).
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|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 (filed herewith).                                                                                                                                                                                                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.2   |  | Promissory Note dated January 8, 2003 by Bank of America, N.A. and
Central Parking Corporation (filed herewith).                                                                                                                                                                                                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|99.1   |  | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002  Chief Executive
Officer and Acting Chief Financial Officer (filed herewith).                                                                                                                                                                                                                                                                          
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|99.2   |  | Press Release dated February 14, 2003 (filed herewith).                                                                                                                                                                                                                                                                                                                                                                                                                       

(b) Reports on Form 8-K

On November 6, 2002 the Company filed a current report on form 8-K
announcing its results for the quarter and year ended September 30, 2002,
incorporating the text of a press release on that date.

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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 CORPORATION                                                                                                         
|     
|Date: |  | February 17, 2003 |  | By:  /s/  WILLIAM J.
VARESCHI, JR.William J. Vareschi, Jr.
Vice Chairman, Chief Executive Officer
and Acting Chief Financial Officer

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CERTIFICATION

I, William J. Vareschi, Jr., certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Central Parking
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     I am responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to me by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and

c) presented in this quarterly report my conclusions about the effectiveness
of the disclosure controls and procedures based on my evaluation as of the
Evaluation Date;

5.     I have disclosed, based on
my most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrants ability to record, process,
summarize and report financial data and have identified for the registrants
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     I have indicated in this
quarterly report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent
to the date of my most recent evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.

|                        |  |                                                                                                                                   
|----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------
|Date: February 17, 2003 |  | By: /s/ WILLIAM J. VARESCHI, JR.William J. Vareschi, Jr.
Vice Chairman, Chief Executive Officer
and Acting Chief Financial Officer

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