##### 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 March 31, 2007
 Commission file number 001-13950
 CENTRAL PARKING CORPORATION
  Tennessee
    
    62-1052916(State or Other Jurisdiction of
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)2401 21st Avenue South,Suite 200, Nashville, Tennessee
    
    37212(Address of Principal Executive Offices)
    
    (Zip Code)Registrants
Telephone Number, Including Area Code: (615) 297-4255Former name, address
and fiscal year, if changed since last report: Not Applicable
 þ o
  o þ o
 o þ
  Class
    
    Outstanding at April 30, 2007Common Stock, $0.01 par value
    
    32,346,967




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##### 



PAGEPART I FINANCIAL INFORMATIONItem 1 Financial Statements (Unaudited)Consolidated Balance Sheets as of March 31, 2007 and September 30, 2006
    
    
    3Consolidated Statements of Income for the three and six months ended March 31, 2007 and 2006
    
    
    4Consolidated
Statements of Cash Flows for the six months ended March 31, 2007 and 2006
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2 Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 3 Quantitative and Qualitative Disclosure about Market Risk
    
    
    23Item 4 Controls and Procedures
    
    
    25PART II OTHER INFORMATIONItem 1 Legal Proceedings
    
    
    25Item 1A Risk Factors
    
    
    25Item 6 Exhibits
    
    
    29SIGNATURES
    
    
    31Ex-31.1 Section 302 CertificationEx-31.2 Section 302 CertificationEx-32.1 Section 906 CertificationEx-32.2 Section 906 Certification




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##### Table of Contents



CENTRAL PARKING CORPORATION and SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 UNAUDITED
  March 31,
    
    
    September 30,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    47,595
    
    
    $
    44,689Management accounts receivable, net of allowance for doubtful accounts of $1,367 and $1,618
at March 31, 2007 and September 30, 2006, respectively
    
    
    52,125
    
    
    
    47,747Accounts receivable  other, net of allowance for doubtful accounts of $997 and $1,234 at
March 31, 2007 and September 30, 2006, respectively
    
    
    14,452
    
    
    
    13,406Current portion of notes receivable (including amounts due from related parties of $112 at
March 31, 2007 and $165 at September 30, 2006) and net of allowance for doubtful
accounts of $218 and $59 at March 31, 2007 and September 30, 2006, respectively
    
    
    3,484
    
    
    
    3,913Prepaid expenses
    
    
    14,894
    
    
    
    12,306Assets held for sale
    
    
    12,216
    
    
    
    6,682Refundable income taxes
    
    
    6,919
    
    
    
    3,817Deferred income taxes
    
    
    10,924
    
    
    
    10,003Total current assets
    
    
    162,609
    
    
    
    142,563Available for sale securities
    
    
    4,967
    
    
    
    4,909Notes receivable, less current portion
    
    
    8,994
    
    
    
    10,569Property, equipment, and leasehold improvements, net
    
    
    286,255
    
    
    
    295,923Contracts and lease rights, net
    
    
    68,167
    
    
    
    71,995Goodwill, net
    
    
    232,056
    
    
    
    232,056Investment in and advances to partnerships and joint ventures
    
    
    3,834
    
    
    
    3,851Other assets
    
    
    22,611
    
    
    
    26,504Total assets
    
    $
    789,493
    
    
    $
    788,370LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt and capital lease obligations
    
    $
    14,390
    
    
    $
    2,862Accounts payable
    
    
    73,302
    
    
    
    88,672Accrued payroll and related costs
    
    
    13,534
    
    
    
    16,095Accrued expenses
    
    
    33,612
    
    
    
    33,937Management accounts payable
    
    
    34,283
    
    
    
    26,450Total current liabilities
    
    
    169,121
    
    
    
    168,016Long-term debt and capital lease obligations, less current portion
    
    
    76,578
    
    
    
    87,625Subordinated convertible debentures
    
    
    78,085
    
    
    
    78,085Deferred rent
    
    
    20,704
    
    
    
    21,547Deferred income taxes
    
    
    5,925
    
    
    
    6,184Other liabilities
    
    
    19,782
    
    
    
    20,388Total liabilities
    
    
    370,195
    
    
    
    381,845Minority interest
    
    
    510
    
    
    
    297Shareholders equity:Common stock, $0.01 par value; 50,000,000 shares authorized, 32,345,078
and 32,154,128 shares issued and outstanding at March 31, 2007 and
September 30, 2006, respectively
    
    
    323
    
    
    
    322Additional paid-in capital
    
    
    183,444
    
    
    
    180,091Accumulated other comprehensive income, net
    
    
    3,318
    
    
    
    3,398Retained earnings
    
    
    232,408
    
    
    
    223,122Other
    
    
    (705
    )
    
    
    (705
    )Total shareholders equity
    
    
    418,788
    
    
    
    406,228Total liabilities and shareholders equity
    
    $
    789,493
    
    
    $
    788,370
  Page 3 of 32




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CENTRAL PARKING CORPORATION AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 UNAUDITED
  Three months ended March 31,
    
    
    Six months ended March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Parking
    
    $
    129,115
    
    
    $
    128,259
    
    
    $
    260,056
    
    
    $
    259,576Management contracts and other
    
    
    28,956
    
    
    
    28,475
    
    
    
    57,780
    
    
    
    56,084158,071
    
    
    
    156,734
    
    
    
    317,836
    
    
    
    315,660Reimbursement of management contract expenses
    
    
    121,090
    
    
    
    113,386
    
    
    
    241,775
    
    
    
    225,548Total revenues
    
    
    279,161
    
    
    
    270,120
    
    
    
    559,611
    
    
    
    541,208Costs and expenses:Cost of parking
    
    
    115,854
    
    
    
    117,291
    
    
    
    231,419
    
    
    
    236,887Cost of management contracts
    
    
    13,180
    
    
    
    13,141
    
    
    
    24,235
    
    
    
    23,930General and administrative
    
    
    17,996
    
    
    
    21,090
    
    
    
    35,635
    
    
    
    42,012147,030
    
    
    
    151,522
    
    
    
    291,289
    
    
    
    302,829Reimbursed management contract expenses
    
    
    121,090
    
    
    
    113,386
    
    
    
    241,775
    
    
    
    225,548Total costs and expenses
    
    
    268,120
    
    
    
    264,908
    
    
    
    533,064
    
    
    
    528,377Property-related gains (losses), net
    
    
    (562
    )
    
    
    (1,159
    )
    
    
    (146
    )
    
    
    21,722Operating earnings
    
    
    10,479
    
    
    
    4,053
    
    
    
    26,401
    
    
    
    34,553Other income (expense):Interest income
    
    
    326
    
    
    
    285
    
    
    
    458
    
    
    
    587Interest expense
    
    
    (3,113
    )
    
    
    (4,133
    )
    
    
    (5,989
    )
    
    
    (8,077
    )Merger costs
    
    
    (5,137
    )
    
    
    
    
    
    
    (5,137
    )
    
    
    Loss on derivative instruments
    
    
    (619
    )
    
    
    (28
    )
    
    
    (1,197
    )
    
    
    (99
    )Equity in partnership and joint venture earnings
    
    
    368
    
    
    
    43
    
    
    
    733
    
    
    
    463Earnings from continuing operations before minority interest and income taxes
    
    
    2,304
    
    
    
    220
    
    
    
    15,269
    
    
    
    27,427Minority interest
    
    
    (228
    )
    
    
    (195
    )
    
    
    (432
    )
    
    
    (551
    )Earnings from continuing operations before income taxes
    
    
    2,076
    
    
    
    25
    
    
    
    14,837
    
    
    
    26,876Income tax expense
    
    
    (757
    )
    
    
    (10
    )
    
    
    (5,409
    )
    
    
    (10,446
    )Earnings (loss) from continuing operations
    
    
    1,319
    
    
    
    15
    
    
    
    9,428
    
    
    
    16,430Discontinued operations, net of tax
    
    
    (330
    )
    
    
    1,972
    
    
    
    826
    
    
    
    3,513Net earnings
(loss)
    
    $
    989
    
    
    $
    1,987
    
    
    $
    10,254
    
    
    $
    19,943Basic earnings (loss) per share:Earnings (loss) from continuing operations
    
    $
    0.04
    
    
    $
    0.00
    
    
    $
    0.29
    
    
    $
    0.50Earnings (loss) from discontinued operations, net of tax
    
    
    (0.01
    )
    
    
    0.06
    
    
    
    0.03
    
    
    
    0.11Net earnings
    
    $
    0.03
    
    
    $
    0.06
    
    
    $
    0.32
    
    
    $
    0.61Diluted earnings (loss) per share:Earnings (loss) from continuing operations
    
    $
    0.04
    
    
    $
    0.00
    
    
    $
    0.29
    
    
    $
    0.50Earnings (loss) from discontinued operations, net of tax
    
    
    (0.01
    )
    
    
    0.06
    
    
    
    0.02
    
    
    
    0.11Net earnings
    
    $
    0.03
    
    
    $
    0.06
    
    
    $
    0.31
    
    
    $
    0.61Weighted average shares used for basic per share data
    
    
    32,248
    
    
    
    31,962
    
    
    
    32,194
    
    
    
    32,435Effect of dilutive common stock options
    
    
    810
    
    
    
    318
    
    
    
    596
    
    
    
    190Weighted average shares used for dilutive per share data
    
    
    33,058
    
    
    
    32,280
    
    
    
    32,790
    
    
    
    32,625
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CENTRAL
PARKING CORPORATION and SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
  Six months ended March 31,2007
    
    
    2006Net earnings
    
    $
    10,254
    
    
    $
    19,943Earnings from discontinued operations
    
    
    (826
    )
    
    
    (3,513
    )Earnings from continuing operations
    
    
    9,428
    
    
    
    16,430Adjustments to reconcile earnings from continuing operations to net cash provided (used) by
operating activities  continuing
operations:Depreciation and amortization
    
    
    14,553
    
    
    
    15,618Equity in partnership and joint venture earnings
    
    
    (733
    )
    
    
    (463
    )Distributions from partnerships and joint ventures
    
    
    688
    
    
    
    1,346Property-related
(gains) losses, net
    
    
    146
    
    
    
    (21,722
    )Loss on derivative instruments
    
    
    1,197
    
    
    
    99Stock-based compensation
    
    
    356
    
    
    
    (209
    )Excess tax benefit related to stock option exercises
    
    
    (374
    )
    
    
    84Deferred income taxes
    
    
    (1,066
    )
    
    
    (1,635
    )Minority interest
    
    
    432
    
    
    
    551Changes in operating assets and liabilities:Management accounts receivable
    
    
    (3,454
    )
    
    
    5,630Accounts receivable  other
    
    
    (839
    )
    
    
    (782
    )Prepaid expenses
    
    
    (2,463
    )
    
    
    (9,961
    )Other assets
    
    
    (169
    )
    
    
    (514
    )Accounts payable, accrued expenses and other liabilities
    
    
    (19,834
    )
    
    
    990Management accounts payable
    
    
    7,510
    
    
    
    3,824Deferred rent
    
    
    (843
    )
    
    
    (683
    )Refundable income taxes
    
    
    (3,101
    )
    
    
    Income taxes payable
    
    
    55
    
    
    
    (10,989
    )Net cash provided (used) by operating activities  continuing operations
    
    
    1,489
    
    
    
    (2,386
    )Net cash provided (used) by operating activities  discontinued operations
    
    
    121
    
    
    
    (2,216
    )Net cash provided (used) by operating activities
    
    
    1,610
    
    
    
    (4,602
    )Cash flows from investing activities:Proceeds from disposition of property and equipment
    
    
    3,048
    
    
    
    44,933Purchases equipment and leasehold improvements
    
    
    (4,567
    )
    
    
    (8,102
    )Proceeds from collection of notes receivable
    
    
    1,856
    
    
    
    109Other investing activities
    
    
    19
    
    
    
    (228
    )Net cash provided by investing activities  continuing operations
    
    
    356
    
    
    
    36,712Net cash provided by investing activities  discontinued operations
    
    
    1,680
    
    
    
    11,040Net cash provided by investing activities
    
    
    2,036
    
    
    
    47,752Cash flows from financing activities:Dividends paid
    
    
    (968
    )
    
    
    (960
    )Net borrowings under revolving credit agreement
    
    
    
    
    
    
    42,938Proceeds from issuance of notes payable, net of issuance costs
    
    
    347
    
    
    
    70Principal repayments on long-term debt and capital lease obligations
    
    
    (3,277
    )
    
    
    (1,009
    )Payment to minority interest partners
    
    
    (604
    )
    
    
    (352
    )Repurchase of common stock
    
    
    
    
    
    
    (75,325
    )Tax benefit related to stock option exercises
    
    
    374
    
    
    
    84Proceeds from issuance of common stock and exercise of stock options
    
    
    2,998
    
    
    
    2,544Net cash used by financing activities  continuing operations
    
    
    (1,130
    )
    
    
    (32,010
    )Net cash used by financing activities  discontinued operations
    
    
    
    
    
    
    Net cash used by financing activities
    
    
    (1,130
    )
    
    
    (32,010
    )Foreign currency translation
    
    
    390
    
    
    
    (144
    )Net increase in cash and cash equivalents
    
    
    2,906
    
    
    
    10,996Cash and cash equivalents at beginning of period
    
    
    44,689
    
    
    
    26,055Cash and cash equivalents at end of period
    
    $
    47,595
    
    
    $
    37,051Non-cash transactions:Change in unrealized gain on fair value of derivatives and available-for-sale securities, net of tax
    
    $
    58
    
    
    $
    10Purchases of fixed assets from capital leases
    
    $
    2,112
    
    
    $
    Cash payments for:Interest
    
    $
    4,706
    
    
    $
    6,426Income taxes
    
    $
    9,751
    
    
    $
    25,424
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CENTRAL PARKING CORPORATION and SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED
 (1) Basis of Presentation
  (2) Stock Based Compensation
    Stock Plans
    Page 6 of 32




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Restricted Stock
   (3) Earnings Per Share
   (4) Assets
Held For Sale, Property-Related Gains (Losses), Net and Discontinued Operations
 Assets Held For Sale
 Accounting for the Impairment or Disposal of Long-Lived
Assets
 Property-Related Gains (losses), Net
  Three months ended
    
    
    Six months endedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net gains
(losses) on sales of property held for use
    
    $
    (317
    )
    
    $
    (973
    )
    
    $
    291
    
    
    $
    22,613Impairment charges for property, equipment and
leasehold improvements
    
    
    (245
    )
    
    
    (186
    )
    
    
    (247
    )
    
    
    (883
    )Impairment charges for intangible assets
    
    
    
    
    
    
    
    
    
    
    (190
    )
    
    
    (8
    )Property-related gains (losses), net
    
    $
    (562
    )
    
    $
    (1,159
    )
    
    $
    (146
    )
    
    $
    21,722
  Page 7 of 32




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primarily in Segment-One. In assessing impairment, management considered current operating
results, the Companys recent forecast for the next fiscal year and required capital
improvements, management determined that the projected cash flows for these locations would not
be enough to recover the book value of the assets. The Companys property-related loss for the
three months ended March 31, 2006 was $1.2 million. Net property-related losses for the six
months ended March 31, 2007 of $0.1 million was comprised of gains of $0.3 million on sale of
property which was comprised of $0.9 million in Segment-Other and $0.1 million in Segment-Four,
offset by a loss on sale of property of $0.5 million in Segment-Seven, $0.2 million in
Segment-One and $0.1 million in Segment-Two; and $0.4 million of impairments
of leasehold improvements, contract rights and other intangible assets comprised of $0.2
million in Segment-One and $0.2 million in Segment-Other. In assessing impairment, management
considered current operating results, the Companys recent forecast for the next fiscal year and
required capital improvements, management determined that the projected cash flows for these
locations would not be enough to recover the book value of the assets. The Companys
property-related gain for the six months ended March 31, 2006 was $21.7 million.In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, the results of operations (including the gain or loss on sale and any recognized asset
impairment) of long-lived assets which qualify as a component of an entity that either have been
disposed of or are classified as held for sale shall be reported in discontinued operations if
(i) the operations and cash flows of the component have been, or will be, eliminated from
operations of the Company as a result of the disposal transaction and (ii) the Company will not
have any significant continuing involvement in the operations of the component after the
disposal transaction. The net property-related gains noted above have been classified in
continuing operations as the individual disposal transactions did not meet the SFAS No. 144 and
EITF 03-13, applying conditions in Paragraph 42 of FASB Statement No. 144 in Determining Whether
to Report Discontinued Operations,criteria for classification as discontinued operations
primarily due to the expected retention of certain cash flows from assets disposed or the
Companys continuing involvement as arising from contracts to manage the parking properties. If
managements assumptions regarding the timing and amount of such retained cash flows change in
the future, the net property gain (loss) recognized in continuing operations, along with the
results of operations related to such assets, may need to be reclassified to discontinued
operations.(c)
    
    The Company has either disposed of, or designated as held-for-sale, certain locations which
meet the
aforementioned criteria for classification as discontinued operations. The components of
discontinued
operations reflected on the accompanying consolidated statements of income are as follows:
 Three months ended
    
    
    Six months endedMarch 31,
    
    
    March 31,Discontinued Operations:
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Total Revenues
    
    $
    1,207
    
    
    $
    11,157
    
    
    $
    3,428
    
    
    $
    25,704Operating earnings (loss) before property-
related gains, net
    
    
    282
    
    
    
    (178
    )
    
    
    348
    
    
    
    539Property-related gains, net
    
    
    4
    
    
    
    4,044
    
    
    
    689
    
    
    
    5,713Earnings from discontinued operations,
before taxes
    
    
    286
    
    
    
    3,866
    
    
    
    1,037
    
    
    
    6,252Income tax expense
    
    
    (616
    )
    
    
    (1,894
    )
    
    
    (211
    )
    
    
    (2,739
    )Discontinued operations, net of tax
    
    $
    (330
    )
    
    $
    1,972
    
    
    $
    826
    
    
    $
    3,513
  (5) Intangible Assets
  Page 8 of 32




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GrossCarrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    NetContract and lease rights
    
    $
    128,941
    
    
    $
    60,774
    
    
    $
    68,167
  (6) Long-Term Debt
     (7) Derivative Financial Instruments
     Page 9 of 32




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(8) Commitments and Contingencies
 th
  (9) Comprehensive Income
  Three months ended
    
    
    Six months endedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Net earnings
    
    $
    989
    
    
    $
    1,987
    
    
    $
    10,254
    
    
    $
    19,943Change in fair value of investment securities, net of tax
    
    
    34
    
    
    
    (1
    )
    
    
    58
    
    
    
    10Foreign currency cumulative translation adjustment
    
    
    (80
    )
    
    
    (270
    )
    
    
    (138
    )
    
    
    (1,138
    )Comprehensive income
    
    $
    943
    
    
    $
    1,716
    
    
    $
    10,174
    
    
    $
    18,815
 (10) Stock Repurchase
   (11) Business Segments
   Page 10 of 32




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Three months ended
    
    
    Six months endedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues (a):Segment One
    
    $
    24,831
    
    
    $
    26,020
    
    
    $
    50,572
    
    
    $
    52,004Segment Two
    
    
    57,146
    
    
    
    56,337
    
    
    
    117,199
    
    
    
    117,426Segment Three
    
    
    19,407
    
    
    
    16,994
    
    
    
    37,611
    
    
    
    32,683Segment Four
    
    
    16,287
    
    
    
    15,625
    
    
    
    32,922
    
    
    
    30,380Segment Five
    
    
    23,375
    
    
    
    24,071
    
    
    
    46,505
    
    
    
    48,328Segment Six
    
    
    6,713
    
    
    
    4,987
    
    
    
    11,241
    
    
    
    9,036Segment Seven
    
    
    8,750
    
    
    
    10,304
    
    
    
    17,900
    
    
    
    20,930Other
    
    
    1,562
    
    
    
    2,396
    
    
    
    3,886
    
    
    
    4,873Total revenues
    
    $
    158,071
    
    
    $
    156,734
    
    
    $
    317,836
    
    
    $
    315,660
 Three months ended
    
    
    Six months endedMarch 31,
    
    
    March 31,2007
    
    
    2006
    
    
    2007
    
    
    2006Operating earnings (loss):Segment One
    
    $
    1,311
    
    
    $
    2,929
    
    
    $
    6,303
    
    
    $
    6,816Segment Two
    
    
    (2,334
    )
    
    
    1,566
    
    
    
    7,981
    
    
    
    5,034Segment Three
    
    
    1,832
    
    
    
    2,536
    
    
    
    7,385
    
    
    
    4,483Segment Four
    
    
    (221
    )
    
    
    1,225
    
    
    
    2,406
    
    
    
    2,726Segment Five
    
    
    (649
    )
    
    
    1,124
    
    
    
    3,495
    
    
    
    3,523Segment Six
    
    
    1,094
    
    
    
    1,190
    
    
    
    1,447
    
    
    
    2,055Segment Seven
    
    
    (932
    )
    
    
    726
    
    
    
    333
    
    
    
    (2,146
    )Other
    
    
    10,378
    
    
    
    (7,243
    )
    
    
    (2,949
    )
    
    
    12,062Total operating earnings
    
    $
    10,479
    
    
    $
    4,053
    
    
    $
    26,401
    
    
    $
    34,553
 March 31,
    
    
    September 30,2007
    
    
    2006Identifiable assets:Segment One
    
    $
    74,186
    
    
    $
    20,878Segment Two
    
    
    153,242
    
    
    
    42,533Segment Three
    
    
    21,966
    
    
    
    74,218Segment Four
    
    
    197,098
    
    
    
    305,061Segment Five
    
    
    19,885
    
    
    
    27,566Segment Six
    
    
    13,407
    
    
    
    12,221Segment Seven
    
    
    48,833
    
    
    
    43,129Other
    
    
    260,876
    
    
    
    262,764Total assets
    
    $
    789,493
    
    
    $
    788,370
           (12) Proposed Merger Agreement
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th
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Forward-Looking Statements May Prove Inaccurate
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-
    
    the Companys ability to complete the merger as currently proposed and in the time
period currently anticipated;-
    
    the Companys ability to achieve the goals described in this report and other reports
filed with the Securities and Exchange Commission, including but not limited to:
 -
    
    increase cash flow by reducing operating costs, accounts receivable and indebtedness;-
    
    cover the fixed cost of its leased and owned facilities and
maintain adequate liquidity through its cash resources and credit facility;-
    
    integrate future acquisitions, in light of challenges in
retaining key employees, synchronizing business processes and efficiently
integrating facilities, marketing, and operations;-
    
    comply with the terms of its credit facility or obtain waivers of noncompliance;-
    
    reduce operating losses at unprofitable locations;-
    
    form and maintain strategic relationships with certain large real estate owners and
operators; and-
    
    renew existing insurance coverage and obtain performance and surety bonds on favorable
terms;
 -
    
    successful implementation of the Companys strategic plan;-
    
    interest rate fluctuations;-
    
    the loss, or renewal on less favorable terms, of existing management contracts and
leases and the failure to add new locations on favorable terms;-
    
    the timing of property-related gains and losses;-
    
    pre-opening, start-up and break-in costs of parking facilities;-
    
    player strikes or other events affecting major league sports;-
    
    changes in economic and business conditions at the local, regional, national or international levels;-
    
    changes in patterns of air travel or automobile usage, including but not limited to
effects of weather on travel and transportation patterns;-
    
    the impact of litigation and claims;-
    
    higher premium and claims costs relating to medical, liability, workers compensation
and other insurance programs;-
    
    compliance with, or changes in, local, state, national and international laws and
regulations, including, without limitation, local regulations, restrictions and taxation on
real property, parking and automobile usage, security measures, environmental, anti-trust
and consumer protection laws;-
    
    changes in current parking rates and pricing of services to clients;-
    
    extraordinary events affecting parking facilities that the Company manages, including
labor strikes, emergency safety measures, military or terrorist attacks and natural
disasters;-
    
    the loss of key employees; and-
    
    the other factors discussed under Item 1A - Risk Factors and in Item 7 -
Managements Discussion and Analysis of Financial Condition and Results of Operations
included in the Companys Annual Report on Form 10-K for the fiscal year ended September
30, 2006 and herein.
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Overview
      Proposed Merger Agreement
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Critical Accounting Policies
   Impairment of Long-Lived Assets and Goodwill
 Accounting for the Impairment or Disposal of
Long-Lived Assets. Goodwill
and Other Intangible Assets
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Contract and Lease Rights
  Allowance for Doubtful Accounts
  Lease Termination Costs
 ccounting for Costs Associated with Exit or Disposal Activities.
 Self-Insurance Liabilities
 Accounting for Contingencies
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Classification as Continuing or Discontinuing Operations
 .
 Income Taxes
 Accounting for Income Taxes
 Recent Accounting Pronouncements
 Accounting for Uncertainty in Income
Taxes, an interpretation of FASB Statement No. 109 Accounting for Income Taxes.
 How Taxes Collected from
Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement
(That Is, Gross versus Net Presentation)
 Fair
Value Measurements
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Considering the
Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements.
 Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split of
Endorsement Split-Dollar Life Insurance Arrangements,
 Accounting for Purchases of Life Insurance-Determining the Amount That Could Be Realized in Accordance
with FASB Technical Bulletin No. 85-04 ,
 Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment
Split-Dollar Life Insurance Aggangements,
 Accounting for
Planned Major Maintenance Activities,
 Employers Accounting for Defined Benefit Pension and Other Postretirement Plans an amendment of
FASB Statements No. 87, 88, 106, and 132R.
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Employerss Accounting for Pensions, Employers Accounting for
Postretiremnet Benefits Other Than Pension;
 Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB
Statemen No. 115
 Results of Operations
  Three Months Ended March 31, 2007 Compared to Three Months Ended March 31, 2006
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Six Months Ended March 31, 2007 Compared to Six Months Ended March 31, 2006
    Page 20 of 32




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Liquidity and Capital Resources
        Future Cash Commitments
   Payments due by periodLess than
    
    
    1-3
    
    
    3-5
    
    
    After 5Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsLong-term debt and capital lease
obligations
    
    $
    90,968
    
    
    $
    14,390
    
    
    $
    75,631
    
    
    $
    692
    
    
    $
    255Subordinated convertible debentures
    
    
    78,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,085Operating leases
    
    
    971,212
    
    
    
    202,887
    
    
    
    272,953
    
    
    
    164,955
    
    
    
    330,417Total contractual cash obligations
    
    $
    1,140,265
    
    
    $
    217,277
    
    
    $
    348,584
    
    
    $
    165,647
    
    
    $
    408,757
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Amount of commitment expiration per periodLess than
    
    1-3
    
    3-5
    
    After 5Total
    
    1 Year
    
    Years
    
    Years
    
    YearsUnused lines of credit
    
    $
    171,095
    
    
    $
    
    
    
    $
    
    
    
    $
    171,095
    
    
    $
    
   Stock Repurchase
   
 Item 3. Quantitative and Qualitative Disclosure about Market Risk
 Interest Rates
     Foreign Currency Exposure
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ITEM 4. Controls and Procedures
 (a) Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
  (b) Changes in Internal Control Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
 th
  
 Item 1A. Risk Factors
  Failure to complete the proposed Merger could negatively affect us.
  
    
    the current market price of our common stock may reflect a market assumption
that the Merger will occur, and a failure to complete the Merger could result in a decline in the
market price of our
common stock;
    
    certain costs relating to the Merger, such as legal, accounting and financial advisory
fees, are
payable by us whether or not the Merger is completed;
    
    under certain circumstances, if the Merger is not completed, we may be
required to pay the buyer
a termination fee of up to $22.4 million or reimburse the buyer for its out-of-pocket
expenses in
connection with the Merger;
    
    there may be substantial disruption to our business and a distraction of our
management and
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employees from day-to-day operations, because matters related to the Merger may require
substantial commitments of their time and resources;
    
    uncertainty about the effect of the Merger may adversely affect our
relationships with our
employees, suppliers and other persons with whom we have business relationships; and
    
    we are aware of lawsuits that have been filed against us as a result of the
announcement of the
Merger and there may be additional lawsuits filed against us relating to the Merger
 financial performance is sensitive to changes in economic conditions that may impact
employment and consumer spending and commercial office occupancy.
  Our concentration of operations in the Northeastern and Mid-Atlantic regions of the United
States, particularly in New York City, increases the risk of negative financial fluctuations due to
events or factors that affect these areas.
  Compliance with and any failure to comply with current regulatory requirements will result in
additional expenses and may adversely affect us.
  Changes in the insurance marketplace, including significantly higher premiums, higher
deductibles and coverage restrictions and increased claims costs, have negatively impacted our net
income in recent years and could have a material adverse effect on our results of operations and
financial condition in the future.
  Acts of terrorism, such as the September 11, 2001 attacks, can have a significant adverse
affect on our results of operations and financial condition.
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The offer or sale of a substantial amount of our common stock by significant shareholders
could have an adverse impact on the market price of our common stock.
  We are dependent on the continued availability of capital to support our business.
  We are subject to interest rate risk.
  Our large number of leased and owned facilities increases the risk that we may become
unprofitable and that we may not be able to cover the fixed costs of our leased and owned
facilities.
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An increase in government regulation or taxation could have a negative effect on our
profitability.
  The sureties for our performance bond program may increase rates and require additional
collateral to issue or renew performance bonds in support of certain contracts.
   Our net income could be adversely affected if accruals for future insurance losses are not
adequate.
  The operation of our business is dependent on key personnel.
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We have foreign operations that may be adversely affected by foreign currency exchange rate
fluctuations.
  In connection with ownership or operation of parking facilities, we may be liable for
environmental problems.
  If we cannot maintain positive relationships with labor unions representing our employees, a
work stoppage may adversely affect our business.
  
 Item 6. Exhibits
 2.1
    
    Plan of Recapitalization, effective October 9, 1997 (Incorporated by reference to
Exhibit 2 to the Companys Registration Statement No. 33-95640 on Form S-1).2.2
    
    Agreement and Plan of Merger dated September 21, 1998, by and among the Registrant,
Central Merger Sub, Inc., Allright Holdings, Inc., Apollo Real Estate Investment Fund
II, L.P. and AEW Partners, L.P. (Incorporated by reference to Exhibit 2.1 to the
Companys Registration Statement No. 333-66081 on Form S-4 filed on October 21, 1998).2.3
    
    Amendment dated as of January 5, 1999, to the Agreement and Plan of Merger dated
September 21, 1998 by and among the Registrant, Central Merger Sub, Inc., Allright
Holdings, Inc., Apollo Real Estate Investment Fund II, L.P. and AEW Partners, L.P.
(Incorporated by reference to Exhibit 2.1 to the Companys Registration Statement No.
333-66081 on Form S-4 filed on October 21, 1998, as amended).2.4
    
    Acquisition Agreement and Plan of Merger dated as of November 7, 1997, by and between
the Registrant and Kinney System Holding Corp and a subsidiary of the Registrant
(Incorporated by reference to the Companys Current Report on Form 8-K filed on
February 17, 1998).3.1
    (a)
    Amended and Restated Charter of the Registrant (Incorporated by reference to
Exhibit 4.1 to the Companys Registration Statement No. 333-23869 on Form S-3).
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(b)
    Articles of Amendment to the Charter of Central Parking
Corporation increasing the authorized number of shares of common stock,
par value $0.01 per share, to one hundred million (Incorporated by
reference to Exhibit 2 to the Companys 10-Q for the quarter ended
March 31, 1999).3.2
    
    Amended and Restated Bylaws of the Registrant (Incorporated by reference to Exhibit
4.1 to the Companys Registration Statement No. 333-23869 on Form S-3).4.1
    
    Form of Common Stock Certificate (Incorporated by reference to Exhibit 4.1 to the
Companys Registration Statement No. 33-95640 on Form S-1).4.2
    (a)
    Registration Rights Agreement (the Allright Registration Rights Agreement) dated as of September 21, 1998 by and
between the Registrant, Apollo Real Estate Investment Fund II, L.P., AEW Partners, L.P. and Monroe J. Carell, Jr.,
The Monroe Carell Jr. Foundation, Monroe Carell Jr. 1995 Grantor Retained Annuity Trust, Monroe Carell Jr. 1994
Grantor Retained Annuity Trust, The Carell Childrens Trust, The 1996 Carell Grandchildrens Trust, The Carell
Family Grandchildren 1990 Trust, The Kathryn Carell Brown Foundation, The Edith Carell Johnson Foundation, The
Julie Carell Stadler Foundation, 1997 Carell Elizabeth Brown Trust, 1997 Ann Scott Johnson Trust, 1997 Julia
Claire Stadler Trust, 1997 William Carell Johnson Trust, 1997 David Nicholas Brown Trust and 1997 George Monroe
Stadler Trust (Incorporated by reference to Exhibit 4.4 to the Companys Registration Statement No. 333-66081
filed on October 21, 1998).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
    
    Agreement and Plan of Merger dated as of February 20, 2007 by and among KCPC
Holdings, Inc., a Delaware corporation, KCPC Acquisition, Inc., a Tennessee
corporation, and Central Parking Corporation, a Tennessee corporation (Incorporated
by reference to Exhibit 2.1 to the Companys Current Report on Form 8-K filed on
February 21, 2007).
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10.2
    
    Agreement executed as of February 20, 2007 by and between Monroe J. Carell, Jr. and
Central Parking Corporation, a Tennessee corporation(Incorporated by reference to
Exhibit 10.1 to the Companys Current Report on Form 8-K filed on February 21, 2007).10.3
    
    Form of Voting Agreement31.1
    
    Certification of Emanuel Eads pursuant to Rule 13a-14(a).31.2
    
    Certification of Jeff Heavrin pursuant to Rule 13a-14(a).32.1
    
    Certification of Emanuel Eads pursuant to Section 1350.32.2
    
    Certification of Jeff Heavrin pursuant to Section 1350
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CENTRAL PARKING CORPORATIONDate: May 10, 2007
    By:
    /s/  EMANUEL EADSEmanuel EadsChief Executive OfficerCENTRAL PARKING CORPORATIONDate: May 10, 2007
    By:
    /s/  JEFF HEAVRINJeff HeavrinSenior Vice President and Chief Financial Officer Page 32 of 32