##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION  FORM 10-K (Mark One)  x
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended September 30, 2004.  o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period from
to Commission file number 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) 297-4255Securities Registered Pursuant to Section 12(b) of the Act:
    
    NoneSecurities Registered Pursuant to Section 12(g) of the Act:
 Title of Each Class
    
    Name of each Exchange on which registeredCommon Stock, $0.01 par Value
    
    New York Stock Exchange
 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 o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. YES x NO o Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES x NO o The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the closing price of the Common Stock on the New York
Stock Exchange on March 31, 2004 (the last business day of the most recently
completed second fiscal quarter) was $299,901,728. For purposes of this
response, the registrant has assumed that its directors, executive officers,
and beneficial owners of 5% or more of its Common Stock are the affiliates of
the registrant. 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 December 6, 2004Common Stock, $0.01 par value
    
    
    36,586,434
 Page 1 of 82




---



##### Table of Contents



DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrants definitive proxy statement for the Annual
Meeting of Shareholders to be held on February 17, 2005 are incorporated by
reference into Part III, items 10, 11, 12, 13 and 14 of this Form 10-K. Page 2 of 82




---



TABLE OF CONTENTS Part IItem 1.
    
    Business
    
    
    6Item 2.
    
    Properties
    
    
    13Item 3.
    
    Legal Proceedings
    
    
    16Item 4.
    
    Submission of Matters to a Vote of Security-Holders
    
    
    17Part IIItem 5.
    

Market for
Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    18Item 6.
    
    Selected Financial Data
    
    
    19Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 7a.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    33Item 8.
    
    Financial Statements and Supplementary Data
    
    
    34Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    66Item 9a.
    
    Controls and Procedures
    
    
    66Item 9b.
    
    Other Information
    
    
    66Part IIIItem 10.
    
    Directors and Executive Officers of the Registrant
    
    
    66Item 11.
    
    Executive Compensation
    
    
    66Item 12.
    
    Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    66Item 13.
    
    Certain Relationships and Related Transactions
    
    
    66Item 14.
    
    Principal Accountant Fees and Services
    
    
    66Part IV.Item 15.
    
    Exhibits, Financial Statement Schedules, and Reports on Form 8-K
    
    
    66Signatures
    
    
    
    
    69EX-10.1.F MONROE CARRELL, JR. COMPENSATION AGREEMENTEX-10.1.G MONROE CARRELL, JR. EMPLOYMENT AGREEMENTEX-21 SUBSIDIARIES OF THE REGISTRANTEX-23 CONSENT OF KPMG LLPEX-31.1 RULE 13a-14(a) CEO CERTIFICATIONEX-31.2 RULE 13a-14(a) CFO CERTIFICATIONEX-32.1 SECTION 1350 CERTIFICATION OF THE CEOEX-32.2 SECTION 1350 CERTIFICATION OF THE CFO
  3




---



##### Table of Contents



IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS Certain information discussed in this Annual Report on Form 10-K,
including but not limited to, information under the captions Business;
Properties; Legal Proceedings; Managements Discussion and Analysis of
Financial Condition and Results of Operations, and Quantitative and
Qualitative Disclosures About Market Risk, and the information incorporated
herein by reference, may constitute forward-looking statements for purposes of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements are
subject to risks and uncertainties, including, without limitation, the factors
set forth under the caption Risk Factors. 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,
results of operations and impact of new accounting pronouncements. Such
statements include, but are not limited to, statements preceded by, followed by
or that otherwise include the words believes, expects, anticipates,
intends, seeks, estimates, projects, objective, strategy,
outlook, assumptions, guidance, forecasts, goal, intends, pursue,
will likely result, will continue 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 in news release and other public statements by the Company and
incorporated by reference in this document:  -
    
    the Companys ability to achieve the goals described in this report
and other reports filed with the Securities and Exchange Commission,
including but not limited to, the Companys ability to  -
    
    increase cash flow by reducing operating costs, accounts receivable
and indebtedness;  -
    
    cover the fixed costs 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 to obtain performance and surety bonds on favorable terms;  -
    
    successful implementation of the Companys operating and growth strategy;  -
    
    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; 4




---



##### Table of Contents



-
    
    the impact of litigation, including but not limited to, the securities class action lawsuit pending against the Company;-
    
    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 the heading Risk Factors included
in the Managements Discussion and Analysis of Financial Condition and
Results of Operations included elsewhere in this Form 10-K. 5




---



##### Table of Contents



PART I 
 Item 1. Business General Central Parking Corporation (Central Parking or the Company) is a
leading provider of parking and related services. As of September 30, 2004,
Central Parking operated 3,433 parking facilities containing 1,529,302 spaces
in 38 states, the District of Columbia, Canada, Puerto Rico, Mexico, Chile,
Colombia, Peru, Venezuela, the United Kingdom, the Republic of Ireland, Spain,
Germany, Poland, Greece and Switzerland. Central Parking operates or manages multi-level parking facilities and
surface lots. It also provides ancillary services, including parking
consulting, shuttle bus, valet, parking meter collection and enforcement, and
billing services. Central Parking operates parking facilities under three
general types of arrangements: management contracts, leases and fee ownership.
As of September 30, 2004, Central Parking operated 1,615 parking facilities
under management contracts and 1,626 parking facilities under leases. In
addition, the Company owned 192 parking facilities either independently or
through joint ventures. Parking Industry The commercial parking services business is very fragmented, consisting of
a few national companies and numerous small, privately held local and regional
operators. Central Parking believes it has certain competitive advantages over
many of these companies, including advantages of scale, financial resources and
technology. During the 1980s, the high level of construction activity in the United
States resulted in a significant increase in the number of parking facilities.
Since that time, construction activity has slowed and the primary growth
opportunity for parking companies has become take-aways or competing with
other parking operators for existing locations. Although some growth in
revenues from existing operations is possible through redesign, increased
operational efficiency, or increased facility use and prices, such growth is
ultimately limited by the size of a facility and market conditions. Management believes that most commercial real estate developers and
property owners view services such as parking as potential profit centers
rather than cost centers. Many of these parties outsource parking operations to
parking management companies in an effort to maximize profits or leverage the
original rental value to a third-party lender. Parking management companies can
increase profits by using managerial skills and experience, operating systems,
and operating controls unique to the parking industry. Management continues to view privatization of certain governmental
operations and facilities as an opportunity for the parking industry. For
example, privatization of on-street parking fee collection and enforcement in
the United Kingdom has provided significant opportunities for private sector
parking companies. In the United States, several cities have awarded on-street
parking fee collection and enforcement and parking meter service contracts to
private sector parking companies such as Central Parking. Growth Strategy Central Parking seeks to increase the number of profitable parking
facilities it operates by focusing its marketing efforts on adding facilities
at the local level, targeting real estate managers and developers with a
national presence, pursuing strategic acquisitions of other parking service
operators on a selective basis, and expanding its international operations. The
key elements of Central Parkings growth strategy are described below. Increase Market Presence Central Parking continually seeks to establish and increase its operations
in new and existing markets through take-aways of competitors contracts,
obtaining new management and lease contracts and entering into joint venture
arrangements. Management believes that Central Parkings relative size,
financial resources and systems give it a competitive advantage in winning new
business and make it an attractive partner for joint venture and other
opportunities. In addition, Central Parking believes that its performance-based
compensation system, which is designed to reward managers for increasing
profitability in their respective areas of responsibility, is an important
element of this strategy. Pursue Strategic Acquisitions A significant portion of the Companys growth over the past six years has
been through targeted acquisitions. Central Parking intends to continue to
pursue acquisition opportunities on a selective basis. Central Parkings
acquisition strategy is to
focus on 6




---



##### Table of Contents



opportunities that enable Central Parking to (i) become a more
efficient provider in selected markets, (ii) generate economies of scale and
cost savings, and (iii) increase cash flow. Pursue Privatization Opportunities and Airports The Company pursues privatization opportunities, including on-street
parking fee collection and enforcement, shuttle services and airport parking
management. The Company currently has contracts for parking meter collection
and enforcement in 29 cities, including; Charlotte, North Carolina; Toledo,
Ohio; Daytona Beach, Florida; and Edinburgh, Scotland. The Company currently
provides airport parking management services to approximately 30 airports,
including airports in Miami, New Orleans, Houston, and Detroit and Washington
Dulles. Expand International Operations Management believes that there are international opportunities for parking
companies, particularly companies that are interested in making significant
investments in equipment and construction, either independently or with foreign
partners. Central Parking typically enters foreign markets either through
consulting projects or by forming joint ventures with established local
entities. Central Parking currently has operations in Canada, Puerto Rico,
Mexico, Chile, Colombia, Peru, Venezuela, the United Kingdom, the Republic of
Ireland, Spain, Germany, Poland, Greece and Switzerland. Approximately 7% of
the Companys total revenues, excluding reimbursed management costs, in fiscal
year 2004 were from international operations. Operating Strategy Central Parking seeks to to increase the revenues and profitability of its
parking facilities through a variety of operating strategies, including the
following: Manage Costs To provide competitively priced services, the Company must contain costs.
Managers analyze staffing and cost control issues, and each is tracked on a
monthly basis to determine whether financial results are within budgeted
ranges. Because of the substantial performance-based components of their
compensation, general (city) managers are motivated to contain the costs of
their operations. Emphasize Sales and Marketing Efforts Central Parkings management is actively involved in developing and
maintaining business relationships and in exploring opportunities for growth.
Central Parkings marketing efforts are designed to expand its operations by
developing lasting relationships with major real estate developers and asset
managers, business and government leaders, and other clients. Central Parking
encourages its managers to pursue new opportunities at the local level while
simultaneously targeting key clients and projects at a national level. Leverage Established Market Presence Central Parking has an established presence in multiple markets,
representing platforms from which it can build. Because of the relatively fixed
nature of certain overhead at the city level and the resources that can be
shared in specific markets, management believes it has the opportunity to
increase the Companys profit margins as it grows its presence in established
markets. Opportunistic
Sales of Properties. Through
the years of operations, the Company has acquired a significant
portfolio of real estate properties. In certain situations, some of
these properties may increase in value significantly such that the
best use for the property is something other than as a parking
facility. In these situations, the Company will consider selling the
property for a different use. During the fiscal year, the Company
sold 14 properties for a total of $50.1 million and anticipates
similar sales during the next fiscal year. Empower Local Managers; Provide
Corporate Support The Companys strategy is to establish a successful balance between
centralized and decentralized management. Because its business is dependent, to
some extent, on relationships with clients, Central Parking provides its
managers with a significant degree of autonomy in order to encourage prompt and
effective responses to local market demands. In conjunction with this local
operational authority, the Company provides, through its corporate office,
services that may not be readily available to independent operators such as
management support, human resources management, marketing and business
expertise, training, and financial and information systems. Services performed
primarily at the corporate level include billing, quality improvement
oversight, financial and accounting functions, human resources, legal services,
policy and procedure development, systems design, and corporate acquisitions
and development. The Companys operations are managed based on segments administered by
senior vice presidents. These segments are generally organized geographically,
with exceptions depending on the needs of specific regions. See Note 17 to the
Consolidated Financial Statements for financial information regarding the
Companys business segments. 7




---



##### Table of Contents



Utilize Performance-Based Compensation Central Parkings performance-based compensation system rewards managers
at the general (city) manager level for the profitability of their respective
areas of responsibility. Maintain Well-Defined Professional Management Organization In order to ensure professionalism and consistency in Central Parkings
operations, provide a career path opportunity for its managers, and achieve a
balance between autonomy and accountability, Central Parking has established a
structured management organization. For its managerial positions, Central Parking seeks to recruit college
graduates or people with previous parking services or hospitality industry
experience, and requires that they undergo a training program. New managers
typically are assigned to a particular facility where they are supervised as
they manage one to five employees. The Companys management trainee program
teaches a wide variety of skills, including organizational skills and basic
management techniques. As managers develop and gain experience, they have the
opportunity to assume expanded responsibility, be promoted to higher management
levels and increase the performance-based component of their compensation. This
well-defined structure provides a career path that is designed to be an
attractive opportunity for prospective new hires. In addition, management
believes the training and advancement program has enabled Central Parking to
instill a high level of professionalism in its employees. Implement Technology Management believes that the Companys application of technology to its
operations represents a competitive advantage over smaller operators with more
limited resources. Central Parking has implemented computerized access card
tracking and accounting systems and automated paystations in certain of its
facilities and is considering the implementation of automated payment and
tracking systems at additional facilities. Strategically Expand Ancillary Service Offerings Central Parking provides services that are complementary to
parking facility management. These services include consulting services
(parking facility design, layout and utilization); on-street parking fee
collection and enforcement services; parking and user fee collection and
enforcement services in parks and recreational areas; shuttle bus and van
services; automated paystations; accounts receivable billing systems and
services; and airport luggage carts. These ancillary services did not
constitute a significant portion of Central Parkings revenues in fiscal year
2004, but management believes that the provision of ancillary services can be
important in obtaining new business and preparing the Company for future
changes in the parking industry. Focus on Retention of Patrons For the Company to succeed, its parking patrons must have a positive
experience at Company facilities. Accordingly, the Company seeks to have well
lit, clean facilities and cordial employees. Each facility manager has primary
responsibility for the environment at the facility, and is evaluated on his or
her ability to retain parking patrons. The Company also monitors customer
satisfaction through customer surveys. Maintain Disciplined Facility Site Selection Analysis In existing markets, the facility site selection process begins with
identification of a possible facility site and the analysis of projected
revenues and costs at the site by general managers and regional managers. The
managers then typically conduct an examination of a locations potential demand
based on traffic patterns and counts, area demographics, and potential
competitors. Pro forma financial statements are then developed and a Company
representative will meet with the property owner to discuss the terms and
structure of the agreement. The Company seeks to distinguish itself from its competitors by combining
a reputation for professionalism and quality management with operating
strategies designed to increase the revenues of parking operations for its
clients. The Companys clients include some of the nations largest owners,
developers and managers of mixed-use projects, office buildings and hotels as
well as municipalities and other governmental agencies and airport authorities.
Parking facilities operated by the Company include, among others, certain
terminals operated by BAA Heathrow International Airport (London), Houston
Airport, Detroit Airport, Strategic Rail Authority Parking (London), the
Prudential Center (Boston), Turner Field (Atlanta), Coors Field (Denver), and
various parking facilities owned by the Hyatt and Westin hotel chains, the
Rouse Company, Faison Associates, May Department Stores, Trizec Office
Properties, Jones Lang LaSalle, Millenium Partners, Shorenstein and Crescent
Real Estate. None of these clients accounted for more than 5% of the Companys
total revenues for fiscal year 2004. 8




---



##### Table of Contents



Acquisitions The Companys acquisition strategy is very selective and focuses primarily
on acquisitions that the Company believes will enable it to become a more
efficient and cost-effective provider in selected markets. The strategy also
focuses on businesses that have the potential to enhance future cash flows and
can be acquired at reasonable valuations. Central Parking believes it has the
opportunity to recognize certain economies of scale by making acquisitions in
markets where the Company already has a presence. Management believes
acquisitions also can be an effective means of entering new markets, thereby
quickly obtaining both operating presence and management personnel. The
Companys acquisitions over the last three years, all of which were accounted
for under the purchase method of accounting, are as follows: USA Parking
Systems, Inc. and Universal Park Holdings in October 2001; a 70% interest in
Lexis Systems, Inc. in October 2001; Park One of Louisiana, LLC in January
2002; and Sterling Parking LTD in May 2003. No acquisitions were made in
2004. See Note 2 to the Consolidated
Financial Statements and Item 7, Managements Discussion and Analysis of
Financial Condition and Results of Operations. Sales and Marketing Central Parkings sales and marketing efforts are designed to expand its
operations by developing and maintaining relationships with major real estate
developers and asset managers, business and government leaders, and other
clients. Central Parking encourages its managers to pursue new opportunities at
the local level while selectively targeting key clients and projects at a
national level. Local At the local level, Central Parkings sales and marketing efforts are
decentralized and directed towards identifying new expansion opportunities
within a particular city or region. Managers are trained to develop the
business contacts necessary to generate new opportunities and monitor their
local markets for take-away and outsourcing opportunities. Central Parking
provides its managers with a significant degree of autonomy in order to
encourage prompt and effective responses to local market demands, which is
complemented by management support and marketing training through Central
Parkings corporate offices. By developing business contacts locally, Central
Parkings managers often get the opportunity to bid on projects when asset
managers and property owners are dissatisfied with other operators and also
learn in advance of possible new projects. National At the national level, Central Parkings marketing efforts are undertaken
primarily by upper-level management, which targets developers, governmental
entities, the hospitality industry, mixed-use projects, and medical facilities.
These efforts are directed at operations that generally have national name
recognition, substantial demand for parking related services, and the potential
for nationwide growth. For example, Central Parkings current clients include,
among other national real estate companies and hotel chains, the Rouse Company,
Millennium Partners, Faison Associates, Shorenstein, May Department Stores,
Crescent Real Estate, Trizec Office Properties, Jones Lang LaSalle, Westin
Hotels, Ritz Carlton Hotels and Hyatt Hotels. Management believes that
providing high-quality, efficient services to such companies can lead to
additional opportunities as those clients expand their operations. Management
believes outsourcing by parking facility owners will continue to be a source
for additional facilities, and management believes the Companys global
presence, experience and reputation with large real estate asset managers give
it a competitive advantage in this area. International Central Parkings international operations began in the early 1990s with
the formation of an international division. The Company typically enters
foreign markets either through consulting projects or by forming joint ventures
with established local entities. Consulting projects allow Central Parking to
establish a presence and evaluate the prospects for growth in a given market
without investing a significant amount of capital. Likewise, forming joint
ventures with local partners allows Central Parking to enter new foreign
markets with reduced operating and investment risks. Operations in London began in 1991 with a single consulting agreement and,
as of September 30, 2004, had grown to 86 locations in the United Kingdom
including four airports, eight rail operating companies and parking meter
enforcement and ticketing services for thirteen local governments that have
privatized these services. Central Parking began expansion into Mexico in July
1994 by forming a joint venture with Gaccion, (formerly Fondo Opcion), an
established Mexican developer, and as of September 30, 2004, operated 105
facilities in Mexico. As of September 30, 2004, Central Parking also operated
142 facilities in Canada, 5 facilities in Spain, 7 in Poland, 25 in Chile, 9 in
Venezuela, 12 in Colombia, 7 in Peru, 1 in Switzerland, and 6 in Greece. The
Company also operates on-street parking services in the United Kingdom, Germany
and the Republic of Ireland. In 1996, Central Parking acquired a 9




---



##### Table of Contents



50% equity
interest in a joint venture, which operated 19 facilities in Germany as of
September 30, 2004. To manage its international expansion efforts, the Company
has allocated responsibilities for international operations to the President of
International Operations. Operating Arrangements Central Parking operates parking facilities under three general types of
arrangements: management contracts, leases, and fee ownership. The following
table sets forth certain information regarding the number of managed, leased,
or owned facilities as of the specified dates: September 30,2004
    
    2003
    
    2002Managed
    
    
    1,615
    
    
    
    1,714
    
    
    
    1,762Leased
    
    
    1,626
    
    
    
    1,798
    
    
    
    1,886Owned
    
    
    192
    
    
    
    205
    
    
    
    214Total
    
    
    3,433
    
    
    
    3,717
    
    
    
    3,862
 See Item 2. Properties for certain information regarding the Companys
managed, leased and owned facilities. The general terms and benefits of these
types of arrangements are discussed below. Financial information regarding
these types of arrangements is set forth in Item 7. Managements Discussion
and Analysis of Financial Condition and Results of Operations. Management Contracts Management contract revenues consist of management fees (both fixed and
performance based) and fees for ancillary services such as insurance,
accounting, benefits administration, equipment leasing, and consulting. The
cost of management contracts includes insurance premiums and claims and other
indirect overhead. The Companys responsibilities under a management contract
as a facility manager generally include hiring, training, and staffing parking
personnel, and providing collections, accounting, record keeping and insurance.
Most management contracts provide that the Company is reimbursed for
out-of-pocket expenses. Central Parking is not responsible under most of 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 typically cancelable by
the property owner on 30 days 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. Leases The Companys leases generally require the payment of a fixed amount of
rent, regardless of the amount of revenues or profitability generated by the
parking facility. In addition, many leases also require the payment of a
percentage of gross revenues above specified threshold levels. In general,
leased facilities require a longer commitment, a larger capital investment for
the Company, and represent a greater risk than managed facilities due to the
relatively fixed nature of expenses. However, leased facilities often provide
a greater opportunity for long-term growth in revenues and profits. The cost
of parking includes rent, payroll and related benefits, depreciation,
maintenance, insurance, and general operating expenses. Under its leases, the
Company is typically responsible for all facets of the parking operations,
including pricing, utilities, and routine maintenance. In short to medium term
leases, the Company is generally not responsible for structural, mechanical or
electrical maintenance or repairs, or property taxes. However, the Company
does often have these responsibilities in longer-term leases. Lease
arrangements are typically for terms of three to twenty years, and generally
provide for increases in base rent that are either pre-determined and
recognized on a straight line basis or based on indices changes, such as the
Consumer Price Index, and recognized when incurred. Fee Ownership 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 and property taxes. 10




---



##### Table of Contents



Joint Ventures The Company often seeks joint venture partners who are established local
or regional real estate developers pursuing financing alternatives for
development projects. Joint ventures typically involve a 50% interest in a
development where the
parking facility is a part of a larger multi-use project, allowing the
Companys joint venture partners to benefit from a capital infusion to the
project. Joint ventures offer the revenue growth potential of ownership with a
partial reduction in capital requirements. The Company has interests in joint
ventures that own or operate parking facilities located in the United States as
well as Mexico, Germany, Poland, Greece, Venezuela, Colombia and Peru. DBE Partnerships Central Parking is a party to a number of disadvantaged business
enterprise partnerships. These are generally partnerships formed by Central
Parking and a disadvantaged business person to manage a facility. Central
Parking generally owns 60% to 75% of the partnership interests in each
partnership and typically receives management fees before partnership
distributions are made to the partners. Competition The parking industry is fragmented and highly competitive with relatively
low barriers to entry. The Company competes with a variety of other companies
to manage, lease and own parking facilities, and faces competition for
customers and employees to operate parking facilities. Although there are
relatively few large, national parking companies that compete with the Company,
numerous companies, including real estate developers, hotel and property
management companies, and national financial services companies either compete
currently or have the potential to compete with parking companies.
Municipalities and other governmental entities also operate parking facilities
that compete with Central Parking. In addition, the Company faces competition
from numerous regional and local parking companies and from owner-operators of
facilities who are potential clients for the Companys management services.
Construction of new parking facilities near the Companys existing facilities
increases the competition for customers and employees and can adversely affect
the Companys business. Management believes that it competes for management clients based on a
variety of factors, including fees charged for services; ability to generate
revenues and control expenses for clients; accurate and timely reporting of
operational results; quality of customer service; and ability to anticipate and
respond to industry changes. Factors that affect the Companys ability to
compete for leased and owned locations include the ability to make capital
investments, pre-paid rent payments and other financial commitments; long-term
financial stability; and the ability to generate revenues and control expenses.
The Company competes for parking customers based primarily on rates charged
for parking; convenience (location) of the facility; and quality of customer
service. Factors affecting the Companys ability to compete for employees
include wages, benefits and working conditions. Seasonality The Companys business is subject to a modest amount of seasonality.
Historically, the Companys results have been strongest during the quarters
that end on December 31 and June 30. The Company attributes the relative
weakness of the quarters that end on March 31 and September 30 to, among other
factors, winter weather and summer vacations. There can be no assurance that
this trend will continue in future years. For further discussion of this issue
see Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operations. Insurance 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 $350,000 that must be met before the insurance companies
are required to reimburse the Company for costs and liabilities relating to
covered claims. The Company purchases a workers compensation policy with a
per claim deductible of $250,000. The Company utilizes a third party
administrator to process and pay filed workers compensation claims. The
Company also provides health insurance for many of its employees and purchases
a stop-loss policy with a deductible of $150,000 per claim. As a result, the
Company is, in effect, self-insured for all claims up to the deductible levels. Because of the size of the operations covered and its claims experience,
the Company purchases liability insurance policies at prices that management
believes represent a discount to the prices that would typically be charged to
parking facility owners on a stand-alone basis. Pursuant to its management
contracts, the Company charges its management clients for insurance at rates it
believes are competitive. In each case, the Companys management clients have
the option of purchasing their own policies, provided the 11




---



##### Table of Contents



Company is named as
an additional insured. A reduction in the number of clients that purchase
insurance through the Company could have a material adverse effect on the
operating earnings of the Company. In addition, a material increase in
insurance costs due to an increase in the number of claims, higher claims costs
or higher premiums paid by the Company could have a material adverse effect on
the operating earnings of the Company. In this regard, the Company has
experienced a substantial increase in the premiums it pays for insurance
in recent years and the Company has experienced a significant increase in
claims costs, including liability, group health, and workers compensation.
These increased costs have adversely affected the Companys profitability. The
Company has been able to recover a portion of these increased costs through
cost sharing programs, however, there can be no assurance the Company will be
able to fully recover or reduce these increased costs. Regulation The Companys business is subject to numerous federal, state and local
laws and regulations, and in some cases, municipal and state authorities
directly regulate parking facilities. The facilities in New York City are, for
example, subject to extensive governmental restrictions concerning numbers of
cars, pricing, structural integrity and certain prohibited practices. Many
cities impose a tax or surcharge on parking services, which generally range
from 10% to 50% of revenues collected. Several state and local laws have been
passed in recent years that encourage car-pooling and the use of mass transit
or impose certain restrictions on automobile usage. These types of laws have
adversely affected the Companys revenues and could continue to do so in the
future. An example was the restrictions imposed by the City of New York in the
wake of the September 11 terrorist attacks, which included street closures,
traffic flow restrictions and a requirement for passenger cars entering certain
bridges and tunnels to have more than one occupant during the morning rush
hour. Although these restrictions have been eased, the City of New York has
considered other actions, including higher tolls, increased taxes and vehicle
occupancy requirements in certain circumstances, which could adversely impact
the Company. The Company is also affected by zoning and use restrictions,
increases in real estate taxes, and other laws and regulations that are common
to any business that owns real estate. The Company is subject to numerous federal, state and local employment and
labor laws and regulations, including Title VII of the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967, the Family Medical Leave Act, wage and hour laws, and
various state and local employment discrimination and human rights laws.
Several cities in which the Company has operations either have adopted or are
considering the adoption of so-called living wage ordinances which could
adversely impact the Companys profitability by requiring companies that
contract with local governmental authorities and other employers to increase
wages to levels substantially above the federal minimum wage. In addition, the
Company is subject to provisions of the Occupational Safety and Health Act of
1970, as amended (OSHA) and related regulations. Various other governmental
regulations affect the Companys operation of parking facilities, both directly
and indirectly, including the Americans with Disabilities Act (ADA). Under
the ADA, public accommodations, including many parking facilities, are required
to meet certain federal requirements related to access and use by disabled
persons. For example, the ADA generally requires garages to include handicapped
spaces, headroom for wheelchair vans, and elevators that are operable by
disabled persons. Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in such property. Such laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of such hazardous or toxic substances. In connection with the
ownership or operation of parking facilities, the Company may be liable for any
such costs. Although Central Parking is currently not aware of any material
environmental claims pending or threatened against it, there can be no
assurance that a material environmental claim will not be asserted against the
Company. The cost of defending against claims of liability, or remediating a
contaminated property, could have a material adverse effect on the Companys
financial condition or results of operations. The Company also is subject to various federal and state antitrust and
consumer laws and regulations including the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the HSR Act), which requires
notification filings and waiting periods in connection with certain mergers and
acquisitions. In connection with the Companys merger with Allright
Corporation (Allright) in March 1999, the Antitrust Division of the United
States Department of Justice filed a complaint in U.S. District Court for the
District of Columbia seeking to enjoin the merger on antitrust grounds. In
addition, the Company received notices from several states, including
Tennessee, Texas, Illinois and Maryland, that the attorneys general of those
states were reviewing the merger from an antitrust perspective. Several of
these states also requested certain information relating to the merger and the
operations of Central Parking and Allright in the form of civil investigative
demands. Central Parking and Allright entered into a settlement agreement with
the Antitrust Division on March 16, 1999, under which the two companies agreed
to divest a total of 74 parking facilities in 18 cities, representing
approximately 18,000 parking spaces. The settlement agreement also prohibited
Central Parking and Allright from, 12




---



##### Table of Contents



among other things, operating any of the
divested properties for a period of two years following the divestiture of each
facility. The two-year prohibition on operating the divested properties has
expired. None of the states that reviewed the transaction from an antitrust
perspective became a party to the settlement
agreement with the Antitrust Division and several of the states continued
their investigation of the merger after the Allright merger was consummated.
The completion of any future mergers or acquisitions by the Company is subject
to the filing requirements described above and possible review by the
Department of Justice or the Federal Trade Commission and various state
attorneys general. Certain of the Companys fee collection activities are
subject to federal and state consumer protection or debt collection laws and
regulations. Employees As of September 30, 2004, the Company employed 22,537 individuals,
including 17,410 full-time and 5,127 part-time employees. Approximately 4,300
U.S. employees are represented by labor unions. Various union locals represent
parking attendants and cashiers at the New York City facilities. Other cities
in which some of the Companys employees are represented by labor unions
include Washington, D.C., Miami, Detroit, Philadelphia, San Francisco, Jersey
City, Newark, Atlantic City, Pittsburgh, Los Angeles, St. Louis, Columbus,
Chicago and San Juan, Puerto Rico. The Company frequently is engaged in
collective bargaining negotiations with various union locals but has not
experienced any significant labor strikes. Management believes that the
Companys employee relations are good. Service Marks and Trademarks The Company has registered the names CPC, Central Parking System and
Central Parking Corporation, and its logo with the United States Patent and
Trademark Office and has the right to use them throughout the United States
except in certain areas, including the Chicago and Atlantic City areas where
two other companies have the exclusive right to use the name Central Parking.
The Company also owns registered trademarks for Square Industries, Kinney
System, Allied Parking and Allright Parking and operates various parking
locations under those names. The Company uses the name Chicago Parking System
in Chicago and CPS Parking in Seattle and Milwaukee. The Company has
registered the name Control Plus and its symbol in London and has registered
that name and symbol in association with its on-street parking activities in
Richmond, Virginia. The Company has registered the name Centra and its symbol
in London in connection with the Companys transportation operations. The
Company has registered, or intends to register, its name and logo in various
international locations where it does business. Foreign and Domestic Operations For information about the Companys foreign and domestic operations refer
to Note 17 to the Consolidated Financial Statements. Available Information The Company files reports with the Securities and Exchange Commission
(SEC), including annual reports on Form 10-K, quarterly reports on Form 10-Q,
and current reports on Form 8-K. Copies of the Companys reports filed with
the SEC may be obtained by the public at the SECs Public Reference Room at 450
Fifth Street, NW, Washington, DC 20549. The public may obtain information
about the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The Company files such reports with the SEC electronically,
and the SEC maintains an Internet site at www.sec.gov that contains the
Companys reports, proxy and information statements, and other information
filed electronically. The Companys website address is www.parking.com. The
Company also makes available, free of charge through the Companys website, its
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and other materials filed with the SEC as soon as reasonably
practicable after such material is electronically filed with or furnished to
the SEC. The information provided on the Companys website is not part of this
report, and is therefore not incorporated by reference unless such information
is otherwise specifically referenced elsewhere in this report. 
 Item 2. Properties The Companys facilities, as of September 30, 2004, are organized into 8
segments which are subdivided into 23 regions as detailed below. Each region is
supervised by a regional manager who reports directly to one of the senior vice
presidents. Regional managers oversee four to six general managers who each
supervise the Companys operations in a particular city. The following table
summarizes certain information regarding the Companys facilities as of
September 30, 2004 13




---



##### Table of Contents



PercentageNumber of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    of TotalSegment
    
    Cities
    
    Locations
    
    Managed
    
    Leased
    
    Owned
    
    Spaces
    
    SpacesSegment 1Los Angeles
    
    Los Angeles, Orange County, San Diego
Burbank Airport, Las Vegas
    
    
    118
    
    
    
    50
    
    
    
    64
    
    
    
    4
    
    
    
    40,639
    
    
    
    2.66
    %San Francisco
    
    San Francisco, Oakland, Sacramento
    
    
    82
    
    
    
    49
    
    
    
    33
    
    
    
    
    
    
    
    16,895
    
    
    
    1.10
    %Seattle
    
    Salt Lake City, Seattle, Vancouver
    
    
    80
    
    
    
    25
    
    
    
    54
    
    
    
    1
    
    
    
    18,282
    
    
    
    1.20
    %Denver
    
    Denver, Phoenix, Albuquerque, El Paso
    
    
    166
    
    
    
    66
    
    
    
    85
    
    
    
    15
    
    
    
    53,819
    
    
    
    3.52
    %Total Segment 1
    
    
    446
    
    
    
    190
    
    
    
    236
    
    
    
    20
    
    
    
    129,635
    
    
    
    8.49
    %Segment 2Boston
    
    Boston, Hartford, Manchester, Providence
    
    
    129
    
    
    
    58
    
    
    
    65
    
    
    
    6
    
    
    
    92,975
    
    
    
    6.07
    %New York
    
    New Jersey, New York City, Poughkeepsie,
Stamford , Atlantic City
    
    
    432
    
    
    
    207
    
    
    
    213
    
    
    
    12
    
    
    
    166,383
    
    
    
    10.87
    %Philadelphia
    
    Philadelphia, Harrisburg Airport
    
    
    85
    
    
    
    38
    
    
    
    42
    
    
    
    5
    
    
    
    65,535
    
    
    
    4.28
    %Total Segment 2
    
    
    646
    
    
    
    303
    
    
    
    320
    
    
    
    23
    
    
    
    324,893
    
    
    
    21.22
    %Segment 3USA Parking
    
    
    
    
    101
    
    
    
    77
    
    
    
    22
    
    
    
    2
    
    
    
    57,683
    
    
    
    3.76
    %Total Segment 3
    
    
    101
    
    
    
    77
    
    
    
    22
    
    
    
    2
    
    
    
    57,683
    
    
    
    3.76
    %Segment 4Mexico
    
    Mexico
    
    
    105
    
    
    
    60
    
    
    
    45
    
    
    
    
    
    
    
    58,344
    
    
    
    3.81
    %South America
    
    Puerto Rico, Chile, Venezuela, Colombia, Peru, San
Juan, Dominican Republic
    
    
    79
    
    
    
    55
    
    
    
    24
    
    
    
    
    
    
    
    35,946
    
    
    
    2.28
    %Europe
    
    London, Ireland, Czech Republic, Spain, Poland,
Greece, Switzerland, Germany
    
    
    128
    
    
    
    96
    
    
    
    31
    
    
    
    1
    
    
    
    112,276
    
    
    
    7.33
    %Total Segment 4
    
    
    312
    
    
    
    211
    
    
    
    100
    
    
    
    1
    
    
    
    206,566
    
    
    
    13.42
    %Segment 5Nashville
    
    Nashville
    
    
    97
    
    
    
    34
    
    
    
    52
    
    
    
    11
    
    
    
    51,317
    
    
    
    3.35
    %Total Segment 5
    
    
    97
    
    
    
    34
    
    
    
    52
    
    
    
    11
    
    
    
    51,317
    
    
    
    3.35
    %Segment 6Cincinnati
    
    Indianapolis, Louisville, Lexington, Boone Co.
Airport,
Cincinnati, Columbus, Cleveland, Columbus Airport
    
    
    164
    
    
    
    56
    
    
    
    91
    
    
    
    17
    
    
    
    61,449
    
    
    
    4.03
    %Canada
    
    Detroit, Detroit Airport, Toledo, Toronto, Ottawa,
Montreal, Calgary, Toronto Pearson Airport
    
    
    135
    
    
    
    96
    
    
    
    37
    
    
    
    2
    
    
    
    116,728
    
    
    
    7.61
    %Chicago
    
    Chicago, Minneapolis, Milwaukee, Gen. Mitchell
Airport
    
    
    144
    
    
    
    49
    
    
    
    82
    
    
    
    13
    
    
    
    61,284
    
    
    
    4.00
    %St. Louis
    
    St. Louis, Kansas City, St. Louis Airport, Omaha,
Memphis, Oklahoma
    
    
    227
    
    
    
    93
    
    
    
    121
    
    
    
    13
    
    
    
    66,730
    
    
    
    4.49
    %Total Segment 6
    
    
    670
    
    
    
    294
    
    
    
    331
    
    
    
    45
    
    
    
    306,191
    
    
    
    20.13
    %Segment 7Washington, DC
    
    Washington, DC, Baltimore, Richmond, Roanoke,
Roanoke Airport, Richmond Airport
    
    
    232
    
    
    
    90
    
    
    
    128
    
    
    
    13
    
    
    
    75,173
    
    
    
    4.91
    %Upper New York
    
    Rochester, Buffalo, Binghamton, Syracuse, Pittsburgh,
Wilkes-Barre, Charleston, WV
    
    
    139
    
    
    
    64
    
    
    
    60
    
    
    
    16
    
    
    
    41,954
    
    
    
    2.76
    %Total Segment 7
    
    
    371
    
    
    
    154
    
    
    
    188
    
    
    
    29
    
    
    
    117,127
    
    
    
    7.65
    %
 14




---



##### Table of Contents



PercentageNumber of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    of TotalSegment
    
    Cities
    
    Locations
    
    Managed
    
    Leased
    
    Owned
    
    Spaces
    
    SpacesSegment 8Florida
    
    Jacksonville, Tampa, Orlando
    
    
    82
    
    
    
    45
    
    
    
    35
    
    
    
    2
    
    
    
    40,151
    
    
    
    2.61
    %Atlanta
    
    Atlanta, Miami
    
    
    110
    
    
    
    62
    
    
    
    39
    
    
    
    9
    
    
    
    65,494
    
    
    
    4.30
    %New Orleans
    
    Mobile, New Orleans, Baton Rouge,
New Orleans Airport, Jackson
    
    
    128
    
    
    
    44
    
    
    
    79
    
    
    
    5
    
    
    
    39,496
    
    
    
    2.58
    %Houston
    
    Houston, Houston Airport, Oklahoma City, Tulsa,
Dallas, Austin, San Antonio, Ft. Worth
    
    
    296
    
    
    
    119
    
    
    
    139
    
    
    
    38
    
    
    
    139,763
    
    
    
    9.13
    %Charlotte
    
    Birmingham, Charlotte, Columbia, Charleston, SC,
Knoxville, Chattanooga
    
    
    174
    
    
    
    82
    
    
    
    85
    
    
    
    7
    
    
    
    50,986
    
    
    
    3.34
    %Total Segment 8
    
    
    790
    
    
    
    352
    
    
    
    377
    
    
    
    60
    
    
    
    335,890
    
    
    
    21.96
    %Total
    
    
    
    
    3,433
    
    
    
    1,615
    
    
    
    1,626
    
    
    
    192
    
    
    
    1,529,302
    
    
    
    100.0
    %
 The Companys facilities include both surface lots and structured parking
facilities (garages). Approximately 17% of the Companys owned parking
properties are in structured parking facilities, with the remainder in surface
lots. Each year the Company expends significant funds to repair and maintain
parking facilities. Management believes the Companys owned facilities
generally are in good condition and are adequate for its present needs. A summary of the facilities operated domestically and internationally by
Central Parking as of September 30, 2004 is as follows: PercentManaged
    
    Leased
    
    Owned
    
    Total
    
    Spaces
    
    of TotalTotal U.S. and Puerto Rico
    
    
    1,360
    
    
    
    1,456
    
    
    
    189
    
    
    
    3,005
    
    
    
    1,271,568
    
    
    
    83.1
    %United Kingdom
    
    
    78
    
    
    
    7
    
    
    
    1
    
    
    
    86
    
    
    
    91,691
    
    
    
    6.0Mexico (1)
    
    
    60
    
    
    
    45
    
    
    
    0
    
    
    
    105
    
    
    
    58,344
    
    
    
    3.8Canada
    
    
    64
    
    
    
    76
    
    
    
    2
    
    
    
    142
    
    
    
    64,135
    
    
    
    4.2Venezuela
    
    
    4
    
    
    
    5
    
    
    
    0
    
    
    
    9
    
    
    
    8,322
    
    
    
    0.5Germany (1)
    
    
    6
    
    
    
    13
    
    
    
    0
    
    
    
    19
    
    
    
    8,300
    
    
    
    0.5Chile
    
    
    17
    
    
    
    8
    
    
    
    0
    
    
    
    25
    
    
    
    8,178
    
    
    
    0.5Greece
    
    
    5
    
    
    
    1
    
    
    
    0
    
    
    
    6
    
    
    
    6,056
    
    
    
    0.4Peru
    
    
    7
    
    
    
    0
    
    
    
    0
    
    
    
    7
    
    
    
    3,638
    
    
    
    0.2Spain
    
    
    1
    
    
    
    4
    
    
    
    0
    
    
    
    5
    
    
    
    1,573
    
    
    
    0.1Poland
    
    
    2
    
    
    
    5
    
    
    
    0
    
    
    
    7
    
    
    
    1,558
    
    
    
    0.1Colombia
    
    
    7
    
    
    
    5
    
    
    
    0
    
    
    
    12
    
    
    
    2,841
    
    
    
    0.2Ireland
    
    
    4
    
    
    
    0
    
    
    
    0
    
    
    
    4
    
    
    
    2,773
    
    
    
    0.2Switzerland
    
    
    0
    
    
    
    1
    
    
    
    0
    
    
    
    1
    
    
    
    325
    
    
    
    0.0Total foreign
    
    
    255
    
    
    
    170
    
    
    
    3
    
    
    
    428
    
    
    
    257,734
    
    
    
    16.9Total facilities
    
    
    1,615
    
    
    
    1,626
    
    
    
    192
    
    
    
    3,433
    
    
    
    1,529,302
    
    
    
    100
    %
  (1)
    
    Operated through unconsolidated 50% owned joint ventures The table below sets forth certain information regarding the Companys managed,
leased and owned facilities in the periods indicated. Year Ended September 30,2004
    
    2003
    
    2002Managed Facilities:Beginning of year
    
    
    1,714
    
    
    
    1,762
    
    
    
    1,869Acquired or merged during year
    
    
    
    
    
    
    9
    
    
    
    71Added during year
    
    
    225
    
    
    
    236
    
    
    
    264Consolidated during year
    
    
    (18
    )
    
    
    (44
    )
    
    
    (193
    )Deleted during year
    
    
    (306
    )
    
    
    (249
    )
    
    
    (249
    )End of year
    
    
    1,615
    
    
    
    1,714
    
    
    
    1,762Renewal Rate (1)
    
    
    84.2
    %
    
    
    87.5
    %
    
    
    88.7
    %
 15




---



##### Table of Contents



Year Ended September 30,2004
    
    2003
    
    2002Leased Facilities:Beginning of year
    
    
    1,798
    
    
    
    1,886
    
    
    
    1,950Acquired or merged during year
    
    
    
    
    
    
    9
    
    
    
    27Added during year
    
    
    108
    
    
    
    164
    
    
    
    207Consolidated during year
    
    
    (59
    )
    
    
    (33
    )
    
    
    (37
    )Deleted during year
    
    
    (221
    )
    
    
    (228
    )
    
    
    (261
    )End of year
    
    
    1,626
    
    
    
    1,798
    
    
    
    1,886Owned Facilities (2):Beginning of year
    
    
    205
    
    
    
    214
    
    
    
    219Purchased during year
    
    
    2
    
    
    
    9
    
    
    
    7Closed or sold during year
    
    
    (15
    )
    
    
    (18
    )
    
    
    (12
    )End of year
    
    
    192
    
    
    
    205
    
    
    
    214Total facilities (end of year)
    
    
    3,433
    
    
    
    3,717
    
    
    
    3,862Net reduction in number of facilities:Managed
    
    
    (5.8
    )%
    
    
    (2.7
    )%
    
    
    (5.7
    %)Leased
    
    
    (9.6
    )%
    
    
    (4.7
    )%
    
    
    (3.2
    %)Owned
    
    
    (6.3
    )%
    
    
    (4.2
    )%
    
    
    (2.3
    %)Total facilities
    
    
    (7.6
    )%
    
    
    (3.8
    )%
    
    
    (4.4
    %)
  (1)
    
    The renewal rate calculation is 100% minus deleted locations divided by
the sum of the beginning of the year, acquired and added during the year
for management locations.  (2)
    
    Includes the Companys corporate headquarters in Nashville, Tennessee. 
 Item 3. Legal Proceedings The ownership of property and provision of services to the public entails
an inherent risk of liability. Although the Company is engaged in routine
litigation incidental to its business, there is no legal proceeding to which
the Company is a party which, in the opinion of management, is likely to have a
material adverse effect upon the Companys financial condition, results of
operations, or liquidity, except as set forth below. The Company carries
liability insurance against certain types of claims such as bodily injury that
management believes meets industry standards; however, there can be no
assurance that any legal proceedings (including any related judgments,
settlements or costs) will not have a material adverse effect on the Companys
financial condition, liquidity or results of operations. In June and July 2003, four stockholders filed separate lawsuits against
the Company, its former CEO, its former CFO and its current CEO in the U. S.
District Court for the Middle District of Tennessee. The plaintiff in each
case sought to represent a plaintiff class of purchasers of Central Parkings
Common Stock. The plaintiff in each case claimed that the defendants made
material misrepresentations and/or omissions in connection with the Companys
financial statements for the quarter and fiscal year ended September 30, 2002
and about the Companys internal controls in violation of the Securities
Exchange Act of 1934, which allegedly caused the plaintiffs to buy Company
stock at inflated prices. The cases have been consolidated by the Court. By
order dated December 10, 2003, the Court has consolidated the cases now
identified as In re: Central Parking Corporation Securities Litigation,civil
action No. 03-CV-0546, appointed two individuals as co-lead plaintiffs and
approved their selection of counsel. The plaintiffs filed an amended complaint
on February 13, 2004, in which plaintiffs added the Companys Independent
Registered Public Accountant as a defendant and in which the plantiffs added a
number of allegations. The amended complaint also seeks to extend the putative
class period during which investors purchased the Companys Common Stock by
approximately nine months (the new class period is February 5, 2002 to February
13, 2003). On April 23, 2004, the defendants filed motions to dismiss the
lawsuit. On August 11, 2004, the court dismissed all claims against the
Companys Independent Registered Public Accountant, but denied the motion to
dismiss with respect to the Company and the individual defendants. The parties
have agreed to participate in non-binding mediation, and trial has been
scheduled for September 6, 2005. The litigation is in its preliminary stages
and the amount of potential loss, if any, cannot reasonably be estimated. In October 2004, two shareholders filed separate derivative complaints
asserting breaches of fiduciary duty by certain present and former officers and
directors of the Company. The Company was named as a nominal defendant in
these cases. No demand to initiate either action was made prior to the filing
of these lawsuits. The complaints allege that the defendants breached their
fiduciary 16




---



##### Table of Contents



duty by failing to insure that the Company maintained adequate
internal controls over its financial reporting regarding accounts payable and
receivables. These cases have been consolidated under the name Earl Porter,
Derivatively on Behalf of Nominal Defendant, Central Parking Corporation v.
James H. Bond, Monroe J. Carell, Jr., Cecil Conlee, Hiram A. Cox, Lewis Katz,
Edward G. Nelson, William C. ONeil, Jr., Julia Carell Stadler, Richard H.
Sinkfield, and William J. Vareschi, Jr.,Docket No. 04-2857-I, Chancery Court
for the State of Tennessee, Davidson County. The individual defendants have
filed a motion for summary judgement or, in the alternative, to dismiss the
case. The parties have tentatively agreed to participate in non-binding
mediation of these claims, but the litigation is in its preliminary stages, and
no prediction can be made regarding the ultimate outcome. The Company arbitrated a rent
dispute relating to a five-year real estate lease extension that began in December 2003.  The extension provided
for a base rent equal to the greater of $4.75 million annually or fair market value, with an annual rent increase of
1.5%.  On December 13, 2004, the arbitrator ruled that the annual base rent would increase
to $7.45 million for the five-year extension period. 
 Item 4. Submission of Matters to a Vote of Security-Holders No matter was submitted to a vote of the Companys security-holders during
the fourth quarter of the fiscal year ended September 30, 2004. 17




---



##### Table of Contents



PART II 
  Item 5.
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities (a) The Registrants common stock is listed on the NYSE under the symbol
CPC. The following table sets forth, for the periods indicated, the high and
low sales prices for the Companys common stock as reported by the NYSE. High
    
    LowFISCAL YEAR 2004First Quarter
    
    $
    15.32
    
    
    $
    11.27Second Quarter
    
    
    21.70
    
    
    
    14.88Third Quarter
    
    
    21.26
    
    
    
    17.18Fourth Quarter
    
    
    19.85
    
    
    
    13.20Twelve months
    
    
    21.70
    
    
    
    11.27FISCAL YEAR 2003First Quarter
    
    $
    24.10
    
    
    $
    18.01Second Quarter
    
    
    19.38
    
    
    
    8.13Third Quarter
    
    
    12.69
    
    
    
    8.15Fourth Quarter
    
    
    15.45
    
    
    
    12.13Twelve months
    
    
    24.10
    
    
    
    8.13
 (b) There were, as of September 30, 2004, approximately 6,862 holders of
the Companys common stock, based on the number of record holders of the
Companys common stock and an estimate of the number of individual participants
represented by security position listings. (c) Since April 1997, Central Parking has distributed a quarterly cash
dividend of $0.015 per share of Central Parking common stock. The Companys
Board currently intends to declare a cash dividend each quarter depending on
Central Parkings profitability and future capital requirements. Central
Parking reserves the right, however, to retain all or a substantial portion of
its earnings to finance the operation and expansion of Central Parkings
business. As a result, the future payment of dividends will depend upon, among
other things, the Companys profitability, capital requirements, financial
condition, growth, business opportunities, and other factors that the Central
Parking Board may deem relevant, including restrictions in any then-existing
credit agreement. The Companys existing credit facility contains certain
covenants including those that require the Company to maintain certain
financial ratios, restrict further indebtedness, and limit the amount of
dividends payable; however, the Company does not believe these restrictions
limit its ability to pay currently anticipated cash dividends. In addition,
Central Parking Finance Trust (the Trust), a Delaware statutory business
trust, of which all of the common securities are owned by the Company, has
issued preferred securities (the Trust Issued Preferred Securities) and has
invested the proceeds thereof in an equivalent amount of 5.25% Convertible
Subordinated Debentures (Convertible Debentures) of the Company. Pursuant to
the Convertible Debentures, the Company is prohibited from paying dividends on
its common stock if the quarterly distributions on the Trust Issued Preferred
Securities are not made. See Note 10 to the Consolidated Financial Statements. (d) The following table is for the presentation of securities authorized for issuance under
equity compensation plans as of September 30, 2004. Number of securities to be
    
    
    
    
    
    Number of securities remaining availableissued upon exercise of
    
    Weighted-average exercise
    
    for future issuance under equityoutstanding options,
    
    price of outstanding
    
    compensation plans (excluding securitieswarrants and rights
    
    options, warrants and rights
    
    reflected in column (a))Plan Category
    
    (a)
    
    (b)
    
    (c)Equity compensation plans
approved by securities holders
    
    
    4,741,596
    
    
    $
    17.70
    
    
    
    2,039,763Equity compensation plans not
approved by securities holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    4,741,596
    
    
    $
    17.70
    
    
    
    2,039,763
 18




---



##### Table of Contents



Item 6. Selected Financial Data Selected financial data of the Company is set forth below for each of the
periods indicated. Certain of the statement of operations, per share, and
balance sheet data were derived from the audited consolidated financial
statements of the Company. All of the information set forth below should be
read in conjunction with Item 8. Companys Financial Statements and
Supplementary Data and with Item 7. Managements Discussion and Analysis of
Financial Condition and Results of Operations. Amounts in thousands, except share and employee data Year Ended September 30,2004 vs. 20032004
    
    2003
    
    2002
    
    2001

    
    2000
    
    Increase (Decrease)STATEMENT OF OPERATIONS DATA:Revenues:Parking
    
    $
    585,798
    
    
    $
    589,383
    
    
    $
    579,390
    
    
    $
    588,481
    
    
    $
    615,990
    
    
    $
    (3,585
    )
    
    
    (0.6
    )%Management contract and other
    
    
    127,052
    
    
    
    119,520
    
    
    
    116,899
    
    
    
    98,701
    
    
    
    99,232
    
    
    
    7,040
    
    
    
    5.9712,850
    
    
    
    708,903
    
    
    
    696,289
    
    
    
    687,182
    
    
    
    715,222
    
    
    
    3,455
    
    
    
    0.5Reimbursement of management contract expenses
    
    
    458,688
    
    
    
    418,058
    
    
    
    390,306
    
    
    
    373,413
    
    
    
    312,709
    
    
    
    40,630
    
    
    
    9.7Total revenues
    
    
    1,171,538
    
    
    
    1,126,961
    
    
    
    1,086,595
    
    
    
    1,060,595
    
    
    
    1,027,931
    
    
    
    44,085
    
    
    
    3.9Expenses:Total before merger costs
    
    
    664,335
    
    
    
    696,151
    
    
    
    628,550
    
    
    
    618,394
    
    
    
    631,739
    
    
    
    (32,916
    )
    
    
    (4.7
    )Merger costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,747
    
    
    
    
    
    
    NMReimbursed management contract expenses
    
    
    458,688
    
    
    
    418,058
    
    
    
    390,306
    
    
    
    373,413
    
    
    
    312,709
    
    
    
    40,630
    
    
    
    8.9Property-related (losses) gains, net
    
    
    7,661
    
    
    
    (7,560
    )
    
    
    (4,986
    )
    
    
    (7,026
    )
    
    
    (1,885
    )
    
    
    15,221
    
    
    
    201.3Operating earnings
    
    
    56,176
    
    
    
    5,192
    
    
    
    62,753
    
    
    
    61,762
    
    
    
    77,851
    
    
    
    51,592
    
    
    
    993.7Percentage of operating earnings to total revenues,
excluding reimbursement of management contract expenses
    
    
    8.0
    %
    
    
    0.7
    %
    
    
    9.0
    %
    
    
    9.0
    %
    
    
    10.9
    %Interest expense, net
    
    
    (15,601
    )
    
    
    (17,304
    )
    
    
    (10,449
    )
    
    
    (17,435
    )
    
    
    (22,672
    )
    
    
    1,703
    
    
    
    13.0Gain on repurchase of subordinated convertible debentures
    
    
    
    
    
    
    
    
    
    
    9,245
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on sale of non-operating assets
    
    
    
    
    
    
    3,279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,279
    )
    
    
    (100.0
    )Equity in partnership and joint venture (losses) earnings
    
    
    (2,984
    )
    
    
    2,212
    
    
    
    2,703
    
    
    
    3,151
    
    
    
    8,162
    
    
    
    (5,196
    )
    
    
    (234.9
    )Earnings (loss) from continuing operations before
income taxes, minority interest and
cumulative effect of accounting changes
    
    
    37,591
    
    
    
    (6,621
    )
    
    
    64,252
    
    
    
    47,478
    
    
    
    63,341
    
    
    
    44,820
    
    
    
    676.9Minority interest
    
    
    (2,999
    )
    
    
    (4,052
    )
    
    
    (4,765
    )
    
    
    (3,502
    )
    
    
    (3,334
    )
    
    
    1,053
    
    
    
    26.0Earnings (loss) from continuing operations before income
taxes and cumulative effect of accounting changes
    
    
    34,592
    
    
    
    (10,673
    )
    
    
    59,487
    
    
    
    43,976
    
    
    
    60,007
    
    
    
    45,873
    
    
    
    429.8Income tax benefit (expense)
    
    
    (14,606
    )
    
    
    4,437
    
    
    
    (19,869
    )
    
    
    (17,063
    )
    
    
    (23,254
    )
    
    
    (19,283
    )
    
    
    (434.6
    )Income tax percentage of earnings (loss) from continuing
operations before income taxes and cumulative effect of
accounting change
    
    
    42.2
    %
    
    
    41.6
    %
    
    
    33.4
    %
    
    
    38.8
    %
    
    
    38.8
    %Cumulative effect of accounting changes, net of tax (1)
    
    
    
    
    
    
    
    
    
    
    (9,341
    )
    
    
    (259
    )
    
    
    
    
    
    
    
    
    
    NMEarnings (loss) from continuing operations
    
    
    19,986
    
    
    
    (6,236
    )
    
    
    30,277
    
    
    
    26,654
    
    
    
    36,753
    
    
    
    26,590
    
    
    
    426.4Discontinued operations, net of tax
    
    
    (2,993
    )
    
    
    1,709
    
    
    
    3,491
    
    
    
    (801
    )
    
    
    (314
    )
    
    
    (4,702
    )
    
    
    (275.1
    )Net earnings (loss)
    
    $
    16,993
    
    
    $
    (4,527
    )
    
    $
    33,768
    
    
    $
    25,853
    
    
    $
    36,439
    
    
    $
    21,888
    
    
    
    483.5
    %Percentage of net earnings (loss) to total revenues,
excluding reimbursement of management contract expenses
    
    
    2.4
    %
    
    
    (0.6
    )%
    
    
    4.8
    %
    
    
    3.8
    %
    
    
    5.1
    %
 Year Ended September 30,2004 vs. 20032004
    
    2003
    
    2002
    
    2001
    
    2000
    
    Increase (Decrease)PER SHARE DATA:Earnings (loss) from continuing operations before
cumulative effect of accounting changes - basic
    
    $
    0.55
    
    
    $
    (0.18
    )
    
    $
    1.10
    
    
    $
    0.75
    
    
    $
    1.01
    
    
    $
    0.74
    
    
    
    414.5
    %Cumulative effect of accounting changes, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.26
    )
    
    
    (0.01
    )
    
    
    
    
    
    
    
    
    
    
    Discontinued operations, net of tax
    
    
    (0.08
    )
    
    
    0.05
    
    
    
    0.10
    
    
    
    (0.02
    )
    
    
    (0.01
    )
    
    
    (0.13
    )
    
    
    (273.6
    )Net earnings (loss) - basic
    
    $
    0.47
    
    
    $
    ( 0.13
    )
    
    $
    0.94
    
    
    $
    0.72
    
    
    $
    1.00
    
    
    $
    0.61
    
    
    
    476.9
    %Earnings (loss) from continuing operations before
cumulative effect of accounting changes - diluted
    
    $
    0.55
    
    
    $
    (0.18
    )
    
    $
    1.09
    
    
    $
    0.75
    
    
    $
    1.00
    
    
    $
    0.74
    
    
    
    415.5
    %Cumulative effect of accounting changes, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.26
    )
    
    
    (0.01
    )
    
    
    Discontinued operations, net of tax
    
    
    (0.08
    )
    
    
    0.05
    
    
    
    0.10
    
    
    
    (0.02
    )
    
    
    (0.01
    )
    
    
    (0.13
    )
    
    
    (273.6
    )Net earnings (loss) -diluted
    
    $
    0.47
    
    
    $
    ( 0.13
    )
    
    $
    0.93
    
    
    $
    0.72
    
    
    $
    0.99
    
    
    $
    0.61
    
    
    
    469.2
    %Basic weighted average common shares outstanding
    
    
    36,346
    
    
    
    36,034
    
    
    
    35,849
    
    
    
    35,803
    
    
    
    36,365
    
    
    
    312
    
    
    
    0.9
    %Diluted weighted average common shares outstanding
    
    
    36,555
    
    
    
    36,034
    
    
    
    36,211
    
    
    
    36,015
    
    
    
    36,735
    
    
    
    521
    
    
    
    1.4
    %Dividends per common share
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    0.06
    
    
    $
    
    
    
    
    
    %Net book value per common share outstanding
at September 30
    
    $
    11.90
    
    
    $
    11.52
    
    
    $
    11.57
    
    
    $
    10.66
    
    
    $
    10.19
    
    
    $
    0.38
    
    
    
    3.3
    %
 19




---



##### Table of Contents



As of September 30,2004 vs 20032004
    
    2003
    
    2002
    
    2001
    
    2000
    
    Increase (Decrease)BALANCE SHEET DATA:Cash and cash equivalents
    
    $
    27,628
    
    
    $
    31,572
    
    
    $
    33,498
    
    
    $
    41,849
    
    
    $
    43,214
    
    
    $
    (3,944
    )
    
    
    (14.4
    )%Working capital
    
    
    (59,123
    )
    
    
    7,656
    
    
    
    (92,805
    )
    
    
    (79,251
    )
    
    
    (89,252
    )
    
    
    (66,779
    )
    
    
    (872.2
    )Goodwill
    
    
    232,562
    
    
    
    230,312
    
    
    
    242,141
    
    
    
    250,630
    
    
    
    264,756
    
    
    
    2,250
    
    
    
    1.0Total assets
    
    
    921,371
    
    
    
    1,001,177
    
    
    
    998,884
    
    
    
    986,881
    
    
    
    1,022,305
    
    
    
    (79,806
    )
    
    
    (8.0
    )Long-term debt and capital lease obligations,
less current portion
    
    
    159,188
    
    
    
    266,961
    
    
    
    207,098
    
    
    
    208,885
    
    
    
    239,285
    
    
    
    (107,773
    )
    
    
    (40.4
    )Subordinated convertible debentures
    
    
    78,085
    
    
    
    78,085
    
    
    
    78,085
    
    
    
    110,000
    
    
    
    110,000
    
    
    
    
    
    
    
    Shareholders equity
    
    
    435,033
    
    
    
    416,526
    
    
    
    415,804
    
    
    
    381,446
    
    
    
    370,257
    
    
    
    18,507
    
    
    
    4.4
 Year Ended September 30,2004 vs 20032004
    
    2003
    
    2002
    
    2001
    
    2000
    
    Increase (Decrease)OTHER DATA:Depreciation and amortization
    
    $
    32,635
    
    
    $
    35,173
    
    
    $
    34,500
    
    
    $
    44,263
    
    
    $
    44,612
    
    
    $
    (2,538
    )
    
    
    7.2
    %Employees (2)
    
    
    22,537
    
    
    
    21,187
    
    
    
    18,100
    
    
    
    18,800
    
    
    
    16,200
    
    
    
    1,350
    
    
    
    6.3Number of shareholders (2)
    
    
    6,862
    
    
    
    8,400
    
    
    
    7,100
    
    
    
    6,500
    
    
    
    7,300
    
    
    
    (1,538
    )
    
    
    18.3Market capitalization (in millions) (3)
    
    $
    484,000
    
    
    $
    443,000
    
    
    $
    724,000
    
    
    $
    501,000
    
    
    $
    720,000
    
    
    $
    41,000
    
    
    
    9.3Return on average equity (4)
    
    
    4.1
    %
    
    
    (1.1
    )%
    
    
    8.5
    %
    
    
    6.9
    %
    
    
    10.2
    %
  (1)
    
    Reflects the Companys adoption in 2002 of Statement of Financial
Accounting Standards (SFAS) No. 142 for the transitional impairment of
goodwill of $9.3 million, net of tax of $28 thousand. Reflects the
Companys adoption in 2001 of Staff Accounting Bulletin (SAB) 101 related
to revenue recognition of $259 thousand, net of tax of $171 thousand.(2)
    
    Reflects information as of September 30 of the respective fiscal year.(3)
    
    Based on number of shares outstanding and closing market price as of
September 30.(4)
    
    Reflects return on equity calculated using fiscal year net earnings
(loss) divided by average shareholders equity for the fiscal year.NM
    
    Not meaningful 20




---



##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations Overview The Company operates parking facilities under three types of arrangements:
leases, fee ownership, and management contracts. Revenues from leased and owned
properties are categorized in the Companys financial statements as parking
revenues. Cost of parking relates to both leased and owned facilities and
includes rent, payroll and related benefits, depreciation, maintenance,
insurance and general operating expenses. The Company experienced a net
decline in the number of leased and owned locations in 2004 of 185 locations
(110 additional leased and owned locations offset by 236 lost or sold locations
and 59 locations that were converted to management agreements or consolidated
with existing locations). Management contract revenues consist of management
fees (both fixed and performance based) and fees for ancillary services such as
insurance, accounting, benefits administration, equipment leasing, and
consulting. The cost of management contracts includes insurance premiums and
claims and other indirect overhead. The Company experienced a net decline in
the number of managed facilities in 2004 of 99 locations (225 additional
managed locations offset by 324 lost locations during the year). 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 U.S. generally accepted accounting
principles. 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
U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reported period. Certain accounting estimates are particularly
sensitive because of their complexity and the possibility that future events
affecting them may differ materially from the Companys current judgments and
estimates. This listing of critical accounting policies is not intended to be a
comprehensive list of all of the Companys accounting policies. In many cases,
the accounting treatment of a particular transaction is specifically dictated
by U. S. generally accepted accounting principles, with no need for
managements judgment regarding accounting policy. The Company believes that of
its significant accounting policies, as discussed in Note 1 to the consolidated
financial statements included herein for the year ended September 30, 2004, the
following involve a higher degree of judgment and complexity: Impairment of Long-Lived Assets and Goodwill As of September 30, 2004, the Companys long-lived assets were comprised
primarily of $380.3 million of property, equipment and leasehold improvements
and $89.0 million of contract and lease rights. In accounting for the
Companys long-lived assets, other than goodwill and other intangible assets,
the Company applies the provisions of SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets.As of September 30, 2004, the
Company had $232.6 million of goodwill. The Company accounts for goodwill and
other intangible assets under the provisions of SFAS No. 142, Goodwill and
Other Intangible Assets. 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. The Company recorded
impairment losses of approximately $5.5 million in property related losses and
an additional $1.3 million in discontinued operations during the year ended
September 30, 2004 as a result of certain locations that were either under
performing, terminated, disposed, or prematurely closed. 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. For the fiscal year
ended September 30, 2003, the Company recorded $7.6 million of impairment
charges related to long-lived assets in continuing operations and $4.4 million
of impairment charges related to long-lived assets in discontinued operations. 21




---



##### Table of Contents



Contract and Lease Rights As of September 30, 2004, the Company had $89.0 million of contract and

lease rights. The Company capitalizes payments made to third parties, which
provide the Company the right to manage or lease facilities. Lease rights and
management contract rights which are purchased individually are amortized on a
straight-line basis over the terms of the related agreements, which range from
5 to 30 years. Management contract rights acquired through acquisition of an
entity are amortized as a group over the estimated term of the contracts,
including anticipated renewals and terminations based on the Companys
historical experience (typically 15 years). If the renewal rate of contracts
within an acquired group is less than initially estimated, accelerated
amortization or impairment may be necessary. Allowance for Doubtful Accounts As of September 30, 2004, the Company had $50.1 million of trade
receivables, including management accounts receivable and accounts receivable -
other. Additionally, the Company had a recorded allowance for doubtful
accounts of $3.2 million. The Company reports management accounts receivable,
net of an allowance for doubtful accounts, to represent its estimate of the
amount that ultimately will be realized in cash. The Company reviews the
adequacy of its allowance for doubtful accounts on an ongoing basis, using
historical collection trends, analyses of 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. As of September 30, 2003, the Company had $49.6 million of
trade receivables, including management accounts receivable and accounts
receivable  other. Lease Termination Costs The Company has recognized lease termination costs related to disposal
activities initiated after December 31, 2002 in accordance with SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities, in its
financial statements. Lease termination costs related to disposal activities
initiated prior to December 31. 2002, were recognized in accordance with
Emerging Issues Task Force 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).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. Insurance 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 $350,000 that must be met before the insurance companies
are required to reimburse the Company for costs incurred relating to covered
claims. In addition, the Companys workers compensation program has a
deductible of $250,000. The Company also provides health insurance for many of
its employees and purchases a stop-loss policy with a deductible of $150,000
per claim. 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 estimable, 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. The
Company engages an actuary to assist in determining the estimated liabilities
for customer injury, employee medical costs and workers compensation claims.
Management utilizes historical experience with similar claims along with input
from legal counsel in determining the likelihood and extent of an unfavorable
outcome for certain general litigation. 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 income tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The Company has certain
net operating loss carry forwards which expire between 2005 and 2018. 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 22




---



##### Table of Contents



considered in the
determination of the Companys deferred tax asset valuation allowance. The
valuation allowance was established for certain net operating loss carry
forwards where their recoverability is deemed to be uncertain. The carrying
value of the Companys net deferred tax assets assumes that the Company
will be able to generate sufficient future taxable income in certain tax
jurisdictions, based on estimates and assumptions. If these estimates and
related assumptions change in the future, the Company will be required to
adjust its deferred tax valuation allowances. During fiscal year 2003, the Company eliminated deferred tax valuation
allowances on acquired operating loss carry forwards totaling $11,949,000,
because management determined that the deferred tax assets from these operating
loss carry forwards would be realized. Since these deferred tax assets were
obtained from previous acquisitions where goodwill was recorded, the Company
reduced such goodwill by the amount of the elimination of the deferred tax
valuation allowance. Results of Operations Year Ended September 30, 2004 Compared to Year Ended September 30, 2003 Parking revenues in fiscal year 2004 decreased to $585.8 million from
$589.4 million in fiscal year 2003, a decrease of $3.6 million, or 0.6%. The
decrease resulted from the conversion of certain contracts from lease
agreements to management agreements which totaled $15.3 million, partially
offset by a net gain of $11.6 million in revenues from new
locations. The Company experienced an increase in same store sales of
$4.0 million for fiscal year 2004 compared to fiscal year 2003
for the Company. Management contract and other revenues (excluding reimbursement of
management contract expenses) increased in fiscal year 2004 to $127.1 million
from $119.5 million in fiscal year 2003, an increase of $7.6 million, or 6.3%.
The majority of the increase is due to the conversion of certain contracts from
lease arrangements to management agreements and $3.8 million of new business
and increased ancillary income. Cost
of parking in fiscal year 2004 decreased to $534.6 million or
91.3%
of parking revenues from $547.2 million or 92.8% of parking revenues in fiscal
year 2003, a decrease of $12.6 million, or 2.3%. The decrease is primarily due
to a decrease in payroll expense of $5.7 million, lower rent
expense of $2.4
million, $2.6 million decrease in depreciation expense, $1.5 million decrease
in supplies, and $0.4 million decrease in snow removal and other expenses. Cost
of management contracts in fiscal year 2004 decreased to $58.2 million from $65.6 million in fiscal year 2003. The cost of management
contracts, as a percentage of management contract and other revenues, excluding
reimbursement of management contract expenses, was 45.8% in fiscal year 2004
compared to 54.9% in fiscal year 2003. The decrease in cost was primarily
caused by a decrease of $3.9 million in bad debt expense, a decrease in
commercial and employment claims of $1.4 million, a decrease of
$1.0 million of
liability insurance expense, and $1.0 million decrease in other miscellaneous
costs. General
and administrative expenses decreased to $71.9 million in 2004
from $83.4 million in 2003, a decrease of $11.5 million, or
13.8%. This
decrease is due to a reduction of $5.3 million in severance
expense, $4.8
million in compensation expense, and $1.4 million in professional fees and
other expenses. General and administrative expenses decreased as a percentage
of total revenue (excluding reimbursement of management contract expenses) to
10.1% in 2004 from 11.8% in 2003. Net property-related gains for fiscal year 2004 were $7.7 million compared
to losses of $7.6 million in fiscal year 2003. The $7.7 million gain was
comprised of a $6.3 million gain on the sale of property in New
York, a $5.8 million gain on the sale of property in Rhode
Island and $2.2 million of gains
on other properties sold, which the Company plans to continue to operate. The
gains on the sale of property were offset by $6.6 million of impairments of
contract rights, deferred expenses and leasehold improvements related to
locations which management plans to continue to operate. The $7.6 million loss
in 2003 was comprised of impairments of $3.6 million of contract rights and
deferred expenses and $4.0 million of leasehold improvements related to
locations which management plans to continue to operate. Impairment charges
recognized in fiscal year 2004 and 2003 were based on estimated fair values
using projected cash flows of the applicable parking facility discounted at the
Companys average cost of funds. Management determined that the projected cash
flows for these locations would not be enough to recover the remaining value of
the assets. The Company adopted the provisions of SFAS No. 144 on October 1, 2002. In
addition to providing enhanced guidance on identifying and measuring
impairments of long-lived assets, SFAS No. 144 requires that the operating
results from certain disposals of a parking facility be reflected as
discontinued operations. SFAS No. 144 also requires that gains, losses and
impairments resulting from the designation of a parking facility as
held-for-sale be reflected as discontinued operations. For fiscal year 2004,
the Company either disposed of or designated as held-for-sale or disposal
certain locations, resulting in loss from cost of parking as a
percent of revenues is anticipated to increase in fiscal year 2005
due to rent escalations and arbitration results. See Item 3 for
additional information. 23




---



##### Table of Contents



discontinued operations of $3.0
million. Included in discontinued operations in 2004 is $1.9 million of losses
from the sale of property and $1.3 million of impairment charges related to
certain properties held for sale, offset by earnings from
discontinued operations of $0.2 million. The Companys 2003 and 2002
results were reclassified to reflect the operations of these locations as
discontinued operations, net of related income taxes. Interest income in fiscal year 2004 increased to $4.9 million from $4.7
million in fiscal year 2003. Interest expense decreased in fiscal year 2004 to
$20.5 million from $22.0 million in fiscal year 2003 due primarily to a
decrease in the average balance outstanding in 2004. The weighted average
balance outstanding for the Companys debt obligations and subordinated
convertible debentures was $306.3 million during the fiscal year ended
September 30, 2004, at a weighted average interest rate of 5.9% compared to a
weighted average balance outstanding of $361.0 million at a weighted average
rate of 5.8% during the fiscal year ended September 30, 2003. Deferred finance
costs were included in the calculation of the weighted average interest rate. On June 28, 2002, the Company repurchased 138,800 shares of the
subordinated convertible debentures for $2.5 million. On March 30, 2002, the
Company repurchased 500,000 shares of the subordinated convertible debentures
for $9.3 million. On December 28, 2001, the Company repurchased 637,795 shares
of the subordinated convertible debentures for $10.0 million. For the year
ended September 30, 2002, these transactions resulted in pre-tax gains of $9.2
million, net of write-downs of a proportionate share of the related deferred
finance costs of $0.9 million. There were no purchases in either fiscal year
2003 or 2004. Equity in partnership and joint venture (losses) earnings was a loss of
$3.0 million in fiscal year 2004 compared to earnings of $2.2 million in fiscal
year 2003. The decrease is primarily related to operating results for the
Companys 50% owned, non-consolidated affiliate in Mexico. During the second
quarter of fiscal 2004, the Companys Mexican affiliate reported to the Company
that the affiliate would be taking certain impairments and losses as part of
the year-end audit performed by independent auditors. As the entity is a 50%
owned, non-consolidated investment, results are recorded on the equity method.
The losses reported to us were mostly non-cash, and totaled $2.6 million. $1.5
million was related to the current quarter and $1.1 million related to prior
periods. The $1.5 million current-quarter impact is the result of non-cash
impairments, primarily related to notes receivable and other assets. The
recent prior-period impact is due to corrections in the recording of equipment
leases, and interest-expense accruals. Due to the immateriality of the effect
on any one prior period, the total adjustment was made to the current quarter. The Companys effective income tax rate after minority interest and before
cumulative effect of accounting change and discontinued operations was 42.2% in
fiscal year 2004 compared to 41.6% in fiscal year 2003. The increase in the
effective tax rate is primarily attributable to a decrease in jobs credit. The
Companys effective tax rate is expected to be approximately 38% before
discontinued operations for fiscal year 2005. See footnote 13. Income taxes
for further discussion. Year Ended September 30, 2003 Compared to Year Ended September 30, 2002 Parking revenues in fiscal year 2003 increased to $589.4 million from
$579.4 million in fiscal year 2002, an increase of $10.0 million, or 1.7%. The
increase resulted from a $6.9 million increase in same-store revenues in the
New York region as locations in that area recovered from the effects of the
September 11, 2001 terrorist attacks. The increase was also the result of $3.1
million of revenues from locations added during fiscal years 2003 and 2002.
Despite the modest increase in fiscal 2003, parking revenues were affected by
continued weakness in the economy, which reduced demand for parking and limited
the Companys ability to increase rates. Management contract and other revenues (excluding reimbursement of
management contract expenses) increased in fiscal year 2003 to $119.5 million
from $116.9 million in fiscal year 2002, an increase of $2.6 million, or 2.2%.
The majority of the increase is due to new business and increased insurance
charges. Cost of parking in fiscal year 2003 increased to $547.2 million or 92.8%
of parking revenues from $509.9 million or 88.0% of parking revenues in fiscal
year 2002, an increase of $37.3 million, or 7.3%. The increase is due to
higher rent expense of $11.5 million primarily due to rents on new locations, a
$5.0 million increase in insurance claims expense primarily due to settlements
in commercial claims and increases in the number of bodily injury and property
damage claims, higher costs per claim, increased premiums and, due to the
higher number of claims and claim cost, an increase in the actuarial valuation,
$3.5 million increase in equipment expense, $3.1 million increase in property
taxes expense and $2.7 million increase in snow removal expense. 24




---



##### Table of Contents



Cost of management contracts in fiscal year 2003 increased to $65.6
million from $48.8 million in fiscal year 2002. The cost of management
contracts, as a percentage of management contract and other revenues, excluding
reimbursement of
management contract expenses, was 54.9% in fiscal year 2003 compared to 41.8%
in fiscal year 2002. The increase in cost was primarily caused by an increase
in insurance related items of $12.0 million, including group insurance and
general liability claims, $3.7 million increase in bad debt expense and $1.1
million increase in other costs. The increase in bad debt expense was
attributed to deterioration in aging of select accounts, and balances whose
resolution is in litigation. The Company has implemented cost sharing programs
for medical, liability and workers compensation insurance and has taken other
steps it believes are likely to reduce insurance claim costs. General and administrative expenses increased to $83.4 million in 2003
from $69.8 million in 2002, an increase of $13.6 million, or 19.5%. This
increase is due to $7.2 million in payroll and severance expense, $1.5 million
in deferred compensation, primarily due the former CEO and other executive
level positions, $4.1 million in professional services and $0.8 million in
other general and administrative expenses. General and administrative expenses
increased as a percentage of total revenue (excluding reimbursement of
management contract expenses) to 11.8% in 2003 from 10.0% in 2002. Net property-related losses for fiscal year 2003 were $7.6 million
compared to $5.0 million in fiscal year 2002. The $7.6 million loss was
comprised of impairments of $3.6 million of contract rights and deferred
expenses and $4.0 million of leasehold improvements related to locations which
management plans to continue to operate. Impairment charges recognized in
fiscal year 2003 were based on estimated fair values using projected cash flows
of the applicable parking facility discounted at the Companys average cost of
funds. Management determined that the projected cash flows for these locations
would not be enough to recover the remaining value of the assets. On January
28, 2002, the Company sold its 50% interest in Civic Parking, LLC (Civic) for
$18.4 million. The transaction resulted in a pre-tax gain of $3.9 million,
which is included as a property-related gain for the year ended September 30,
2002. Additionally, the Company recognized $1.4 million of pre-tax gains on
sales of property during 2002. These gains were offset by impairment charges
of $10.3 million for leasehold improvements, contract rights and prepaid rent
primarily at locations in New York City. The Company adopted the provisions of SFAS No. 144 on October 1, 2002.
For fiscal year 2003, the Company either disposed of or designated as
held-for-sale or disposal certain locations, resulting in income from
discontinued operations of $1.7 million. Included in discontinued operations
in 2003 is $653,000 of impairment charges related to certain properties sold or
held for sale. The Companys 2002 results were reclassified to reflect the
operations of these locations as discontinued operations, net of related income
taxes. Interest income in fiscal year 2003 decreased to $4.7 million from $6.9
million in fiscal year 2002. Interest expense increased in fiscal year 2003 to
$22.0 million from $17.3 million in fiscal year 2002 due primarily to an
increase in the interest rate of the Companys credit facility, which was
refinanced in February of 2003 and amended in August 2003. The Companys
variable rate debt was negatively impacted by the increase in the spread it
pays to its lender group as a result of the refinancing. Deferred finance cost
of $0.8 million and interest rate swap costs of $0.9 million were written off
to interest expense during the second quarter of 2003 as a result of the
refinancing. The Company also incurred waiver related fees of $0.4 million
that were included in interest expense. The weighted average balance outstanding for the Companys debt
obligations and subordinated convertible securities was $361.0 million during
the fiscal year ended September 30, 2003, at a weighted average interest rate
of 5.9% compared to a weighted average balance outstanding of $365.5 million at
a weighted average rate of 4.7% during the fiscal year ended September 30,
2002. Deferred finance costs were included in the calculation of the weighted
average interest rate. Equity in partnership and joint venture earnings decreased to $2.2 million
in fiscal year 2003 from $2.7 million in fiscal year 2002, due to the Company
purchasing some of the underlying properties of the partnerships and including
the earnings from those properties in revenues due to the change in status of
the property. The Companys effective income tax rate after minority interest and before
cumulative effect of accounting change and discontinued operations was 41.6% in
fiscal year 2003 compared to 33.4% in fiscal year 2002. The increase in the
effective tax rate is primarily attributable to an increase in jobs credit
coupled with a decrease in operating earnings. Quarterly Results The Company has and may continue to experience fluctuations in revenues
and related expenses due to a variety of factors, including but not limited to
acquisitions, pre-opening and start-up costs relating to new locations, travel
and transportation patterns 25




---



##### Table of Contents



affected by weather and calendar related events,
and local, regional and national economic conditions. The Companys
concentration of parking facilities in the northeastern and mid-Atlantic part
of the United States continues to
expose the Company to the risk of negative financial fluctuations that may
result from severe winter weather and other local or regional factors,
including acts of terrorism. Additionally, the Company services the parking for
a number of sports stadiums and arenas, and the operating results of such
parking facilities can be impacted by strikes and the relative degree of
success of various sports teams. The following table sets forth certain
quarterly statements of operations data for the eight fiscal year quarters
preceding the end of the fiscal year and the percentage of net revenues
represented by the line items presented (except in the case of per share
amounts). The quarterly statement of operations data set forth below was
derived from unaudited financial statements of the Company and includes all
adjustments which the Company considers necessary for a fair presentation
thereof. Amounts in thousands, except per share data 2004 Fiscal YearDecember 31
    
    March 31
    
    June 30
    
    September 30Total revenues, excluding
reimbursement
of management contract expenses
    
    $
    183,237
    
    
    
    100.0
    %
    
    $
    175,834
    
    
    
    100.0
    %
    
    $
    180,648
    
    
    
    100.0
    %
    
    $
    173,131
    
    
    
    100.0
    %Property related gains, net
    
    
    1,242
    
    
    
    0.7
    
    
    
    52
    
    
    
    
    
    
    
    1,412
    
    
    
    0.8
    
    
    
    1,664
    
    
    
    1.0Operating earnings
    
    
    19,849
    
    
    
    10.8
    
    
    
    13,213
    
    
    
    7.5
    
    
    
    16,870
    
    
    
    9.3
    
    
    
    6,244
    
    
    
    4.0Earnings from continuing operations
    
    
    9,571
    
    
    
    5.2
    
    
    
    3,187
    
    
    
    1.8
    
    
    
    6,866
    
    
    
    3.8
    
    
    
    362
    
    
    
    0.4Discontinued operations, net of tax
    
    
    (1,176
    )
    
    
    (0.6
    )
    
    
    348
    
    
    
    0.2
    
    
    
    (898
    )
    
    
    0.5
    
    
    
    (1,267
    )
    
    
    (0.7
    )Net earnings (loss)
    
    
    8,395
    
    
    
    4.6
    
    
    
    3,535
    
    
    
    2.0
    
    
    
    5,968
    
    
    
    3.3
    
    
    
    (905
    )
    
    
    (0.3
    )Earnings from continuing
operations per share - basic
    
    $
    0.26
    
    
    
    
    
    
    $
    0.09
    
    
    
    
    
    
    $
    0.19
    
    
    
    
    
    
    $
    0.01Discontinued operations, net of tax
    
    
    (0.03
    )
    
    
    
    
    
    
    0.01
    
    
    
    
    
    
    
    (0.03
    )
    
    
    
    
    
    
    (0.03
    )Net earnings (loss) - basic
    
    $
    0.23
    
    
    
    
    
    
    $
    0.10
    
    
    
    
    
    
    $
    0.16
    
    
    
    
    
    
    $
    (0.02
    )Earnings from continuing
operations per share - dilutive
    
    $
    0.26
    
    
    
    
    
    
    $
    0.09
    
    
    
    
    
    
    $
    0.19
    
    
    
    
    
    
    $
    0.01Discontinued operations, net of tax
    
    
    (0.03
    )
    
    
    
    
    
    
    0.01
    
    
    
    
    
    
    
    (0.03
    )
    
    
    
    
    
    
    (0.03
    )Net earnings (loss) - dilutive
    
    $
    0.23
    
    
    
    
    
    
    $
    0.10
    
    
    
    
    
    
    $
    0.16
    
    
    
    
    
    
    $
    (0.02
    )
 2003 Fiscal YearDecember 31
    
    March 31
    
    June 30
    
    September 30Total revenues, excluding
reimbursement
of management contract expenses
    
    $
    178,254
    
    
    
    100.0
    %
    
    $
    172,923
    
    
    
    100.0
    %
    
    $
    180,264
    
    
    
    100.0
    %
    
    $
    177,502
    
    
    
    100.0
    %Property related gains (losses), net
    
    
    123
    
    
    
    0.1
    
    
    
    (3,291
    )
    
    
    (1.9
    )
    
    
    (4,132
    )
    
    
    (2.3
    )
    
    
    (273
    )
    
    
    (0.2
    )Operating earnings (loss)
    
    
    11,504
    
    
    
    6.5
    
    
    
    (6,353
    )
    
    
    (3.7
    )
    
    
    (4,399
    )
    
    
    (2.4
    )
    
    
    4,428
    
    
    
    2.5Earnings (loss) from continuing
operations
    
    
    4,113
    
    
    
    2.3
    
    
    
    (5,041
    )
    
    
    (2.9
    )
    
    
    (4,404
    )
    
    
    (2.4
    )
    
    
    (190
    )
    
    
    (0.1
    )Discontinued operations, net of tax
    
    
    2,754
    
    
    
    1.5
    
    
    
    (4,110
    )
    
    
    (2.4
    )
    
    
    (724
    )
    
    
    (0.0
    )
    
    
    3,075
    
    
    
    1.7Net earnings (loss)
    
    
    6,867
    
    
    
    3.9
    
    
    
    (9,151
    )
    
    
    (5.3
    )
    
    
    (5,128
    )
    
    
    (2.8
    )
    
    
    2,885
    
    
    
    1.6Earnings (loss) from continuing
operations per share - basic
    
    $
    0.11
    
    
    
    
    
    
    $
    (0.14
    )
    
    
    
    
    
    $
    (0.12
    )
    
    
    
    
    
    $
    (0.01
    )Discontinued operations, net of tax
    
    
    0.08
    
    
    
    
    
    
    
    (0.11
    )
    
    
    
    
    
    
    (0.02
    )
    
    
    
    
    
    
    0.08Net earnings (loss) - basic
    
    $
    0.19
    
    
    
    
    
    
    $
    (0.25
    )
    
    
    
    
    
    $
    (0.14
    )
    
    
    
    
    
    $
    0.07Earnings (loss) from continuing
operations per share - dilutive
    
    $
    0.11
    
    
    
    
    
    
    $
    (0.14
    )
    
    
    
    
    
    $
    (0.12
    )
    
    
    
    
    
    $
    (0.01
    )Discontinued operations, net of tax
    
    
    0.08
    
    
    
    
    
    
    
    (0.11
    )
    
    
    
    
    
    
    (0.02
    )
    
    
    
    
    
    
    0.08Net earnings (loss) - dilutive
    
    $
    0.19
    
    
    
    
    
    
    $
    (0.25
    )
    
    
    
    
    
    $
    (0.14
    )
    
    
    
    
    
    $
    0.07
 Fourth quarter 2004 results from continuing operations were lower due to a
decrease in parking revenue due to the general softness of the economy and the
effects on business of the political conventions in New York and Boston. The
hurricanes and the storms in the southern and eastern corridors, where we have
some of our largest markets for parking, also severely restricted our business
as did an increase in general and administrative expenses due to higher
professional fees and a lower discount rate associated with the deferred
compensation plan. Fourth quarter earnings from continuing operations for
2003 were reduced by $1.0 million in severance costs and $1.1 million in
property-related impairment costs. The Company also
increased its workers compensation and general liability reserves by $3.7
million due to higher claims and changes in its actuarial estimates. 26




---



##### Table of Contents



Liquidity and Capital Resources Net cash provided by operating activities for fiscal year 2004 was $41.6
million, an increase of $21.1 million from net cash provided by operating
activities of $20.5 million during fiscal year 2003. The primary factors which
contributed to this change was due to the increase in net earnings in 2004. Net cash provided by investing activities was $52.4 million for fiscal
year 2004 compared to $31.1 million of net cash used by investing activities in
fiscal year 2003. This change was primarily due to a decline in purchases of
contract and lease rights, equipment and leasehold improvements, and an
increase in proceeds from the disposition of property and equipment during
2004. Net cash used by financing activities for fiscal year 2004 was $97.7
million compared to cash provided of $8.1 million in fiscal year 2003. Net
cash used by financing activities in fiscal year 2004 primarily consisted of
debt repayment of $39.1 million and repayments under the revolving credit
agreement of $59.0 million. On February 28, 2003, the Company entered into a credit facility (the
Credit Facility) initially providing for an aggregate availability of up to
$350 million consisting of a five-year $175 million revolving loan, including a
sub-limit of $60 million for standby letters of credit, and a $175 million
seven-year term loan. The facility is secured by the stock of certain
subsidiaries of the Company, certain real estate assets, and domestic personal
property assets of the Company and certain subsidiaries. Proceeds from the
Credit Facility were used to refinance a previous credit facility. The Company
has reduced the maximum loan commitment from $350.0 million to $321.8 million
as of September 30, 2004. This permanent reduction is as a result of $2.6
million of scheduled amortization and $25.6 million of prepayments related to
property dispositions. The Company amended the Credit Facility in June 2004. The amendment
reduced the margin applied to the term loan by 75 basis points, which was
included in the weighted average margin at September 30, 2004, and increased
the standby letters of credit sub-limit by $30.0 million to $90.0 million. The
Company uses its revolving loan to collateralize outstanding letters of credit.
All other terms and conditions remained the same. The Credit Facility bears interest at LIBOR plus a tier-based margin
dependent upon certain financial ratios. There are separate tiers for the
revolving loan and term loan. The weighted average margin as of September 30,
2004 was 250 basis points. The amount outstanding under the Companys Credit
Facility was $157.7 million with a weighted average interest rate of 4.7% as of
September 30, 2004. The term loan is required to be repaid in quarterly
payments of $0.4 million through March 2008 and quarterly payments of $20.8
million from June 2008 through March 2010. The aggregate availability under
the Credit Facility was $117.5 million at September 30, 2004, which is net of
$46.6 million of stand-by letters of credit. The Company had deferred
financing costs related to the Credit Facility of $6.7 million as of September
30, 2004 and $7.8 million as of September 30, 2003. The Company amortizes
these costs over the term of the loan. The Credit Facility contains covenants including those that require the
Company to maintain certain financial ratios, restrict further indebtedness and
certain acquisition activity and limit the amount of dividends paid. The
primary ratios are a leverage ratio, senior leverage ratio and a fixed charge
coverage ratio. Quarterly compliance is calculated using a four quarter rolling
methodology and measured against certain targets. As of March 31, 2003, the
Company was in default due to non-compliance with both the leverage and senior
leverage ratios. A temporary waiver was obtained from the lenders for the
quarter ended March 31, 2003, subject to certain conditions. Pursuant to the
provisions of the Emerging Issues Task Force (EITF) No. 86-30, Classification
of Obligations When a Violation Is Waived by the Creditor, the Company
projected future compliance with the existing covenants and concluded that
non-compliance with the same covenants at the next quarterly measurement date
was probable. As a result, the Credit Facility was classified as a current
liability at March 31, 2003. The temporary waiver required the Company to
complete an amendment to the Credit Facility. The Company completed an amendment of the Credit Facility on August 12,
2003. The Company paid a fee of $1.5 million in connection with obtaining the
amendment. The amendment included changes to the permitted covenant ratios;
limitation of capital expenditures, acquisitions and loans; adjusted pricing
with additional tiers and new provisions for asset dispositions. The amended
facility included a new pricing tier that adds 25 basis points when the
Companys leverage ratio exceeds a certain level. The Company was in compliance
with the amended financial covenants as of September 30, 2004. Accordingly,
the Credit Facility has been classified as a long-term liability as of
September 30, 2004. As of September 30,
2004, the Company is in compliance with all of the Credit Facility
covenants. 27




---



##### Table of Contents



Depending on the timing and magnitude of the Companys future investments
(either in the form of leased or purchased properties, joint ventures, or
acquisitions), the working capital necessary to satisfy current obligations is
anticipated to be generated from operations and the Credit Facility over the
next twelve months. In the ordinary course of business, Central Parking is
required to maintain and, in some cases, make capital improvements to the
parking facilities it operates. If Central Parking identifies investment
opportunities or has needs requiring cash in excess of Central Parkings cash
flows and the existing Credit Facility, Central Parking may seek additional
sources of capital, including seeking to amend the Credit Facility to obtain
additional debt capacity; however, there can be no assurance such additional
capacity or sources of capital could be obtained. The current market value of
Central Parking 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 September 30, 2004, 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 such capital
expenditures for fiscal year 2005 to be approximately $17 to $19 million. Historically, the Company has paid dividends on its common stock and

expects to pay dividends in the future. Common stock dividends of $2.2 million
were paid during fiscal year 2004. The following tables summarize the Companys total contractual obligations
and commercial commitments as of September 30, 2004 (amounts in thousands): Payments due by periodLess than
    
    1-3
    
    3-5
    
    After 5Total
    
    1 Year
    
    Years
    
    Years
    
    YearsLong-term debt
    
    $
    205,932
    
    
    $
    46,774
    
    
    $
    5,404
    
    
    $
    126,174
    
    
    $
    27,580Capital lease obligations
    
    
    123
    
    
    
    93
    
    
    
    29
    
    
    
    1
    
    
    
    Convertible securities
    
    
    78,085
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,085Operating leases
    
    
    1,145,724
    
    
    
    217,463
    
    
    
    292,015
    
    
    
    176,432
    
    
    
    459,814Total contractual cash obligations
    
    $
    1,429,864
    
    
    $
    264,330
    
    
    $
    297,450
    
    
    $
    302,607
    
    
    $
    565,477
 Amount of commitment expiration per periodLess than
    
    1-3
    
    3-5
    
    After 5Total
    
    1 Year
    
    Years
    
    Years
    
    YearsUnused lines of credit
    
    $
    117,500
    
    
    $
    
    
    
    $
    117,500
    
    
    $
    
    
    
    $
    Other commercial commitments
    
    
    2,449
    
    
    
    2,449
    
    
    
    
    
    
    
    
    
    
    
    Total commercial commitments
    
    $
    119,949
    
    
    $
    2,449
    
    
    $
    117,000
    
    
    $
    
    
    
    $
    
 Other commercial commitments
consists of interest expense to be paid to the owner of Edison. Unused
lines of credit as of September 30, 2004 are reduced by
$46.6 million of standby letters of credit. International Foreign Currency Exposure The Company operates wholly-owned subsidiaries in the United Kingdom,
Canada and Spain. Total revenues from wholly-owned foreign operations amounted
to 6.7%, 6.5% and 5.5% of total revenues (excluding reimbursement of management
contract expenses) for the years ended September 30, 2004, 2003 and 2002,
respectively. Additionally, the Company operates through joint ventures in
Mexico, Germany, Poland, Greece, Venezuela, Colombia and Peru. The Company
intends to invest in foreign leased or owned facilities, and may become
increasingly exposed to foreign currency fluctuations. The Company, in
limited circumstances, has denominated contracts in U.S. dollars to limit
currency exposure. Presently, the Company has limited exposure to foreign
currency 28




---



##### Table of Contents



risk and has no hedging programs related to such risk. The Company
anticipates implementing a hedging program if such risk materially increases.
For the year ended September 30, 2004, revenues from operations in the United
Kingdom and Canada represented 47.1% and 31.0%, respectively, of total revenues
generated by foreign operations, excluding reimbursement of management contract
expenses. Impact of Inflation and Changing Prices The primary sources of revenues to the Company are parking revenues from
owned and leased locations and management contract revenue on managed parking
facilities. The Company believes that inflation has had a limited impact on its
overall operations for fiscal years ended September 30, 2004, 2003 and 2002 and
does not expect inflation to have a material effect on its overall operations
in fiscal year 2005. Off Balance Sheet Arrangements The Company has various ownership interests in certain unconsolidated
partnerships and joint ventures, some of which are variable interest entities
under Financial Accounting Standards Board (FASB) Interpretation No. 46R. See
Notes 1 and 8 to the Consolidated Financial Statements for information
regarding the Companys investments in unconsolidated partnerships and joint
ventures. Risk Factors You should carefully consider the following specific risk factors as well
as the other information contained or incorporated by reference in this
financial information, as these are important factors, among others, that could
cause our actual results to differ from our expected or historical results. It
is not possible to predict or identify all such factors. Consequently, you
should not consider any such list to be a complete statement of all of our
potential risks or uncertainties. The failure to successfully integrate future acquisitions could have a
negative impact on Central Parkings business and the market price of its
common stock. Central Parking completed acquisitions of Sterling LTD in fiscal year 2003
and USA Parking Systems, Inc., Universal Park Holdings and Park One of
Louisiana during fiscal year 2002, and plans to seek additional acquisition
opportunities on a selective basis in the future. Central Parking can give no
assurance that any acquired facility or company will be successfully integrated
into its operations. Also, because of the purchase price paid by Central
Parking or because of the performance of acquired operations after such
acquisitions, there can be no assurance that the results of the acquired
operations will not be dilutive to Central Parkings per share earnings. Any
acquisition contemplated or completed by Central Parking may result in adverse
short-term effects on Central Parkings reported operating results, divert
managements attention, introduce difficulties in retaining, hiring and
training key personnel, and introduce risks associated with unanticipated
problems or legal liabilities, some or all of which could have a negative
effect on Central Parkings business and financial results. The Companys financial performance is sensitive to changes in economic
conditions that may impact employment and consumer spending and commercial
office occupancy. The general economic slowdown in the United States has adversely affected
employment levels, consumer spending and commercial office occupancy, which has,
in turn, reduced the demand for parking. The reduced demand for parking has
negatively impacted the Companys revenues and net income. Future economic
conditions affecting disposable consumer income, employment levels, business
conditions, fuel and energy costs, interest rates, and tax rates, are also
likely to adversely affect the Companys business. The Companys 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. The Companys operations in the Northeastern and Mid-Atlantic regions of
the United States, which includes the cities of New York, Newark, Boston,
Philadelphia, Pittsburgh, Baltimore and Washington, D.C. generated
approximately 43.2% of the Companys total revenues (excluding reimbursement of
management contract expenses) in fiscal year 2004. Revenues from the companys
operations in New York City and surrounding areas accounted for approximately
24.8% of the Companys total revenues (excluding reimbursement of management
expenses) in fiscal 2004. The concentration of operations in these areas
increases the risk that local or regional events or factors that affect these
cities or regions such as severe winter weather,
labor strikes, changes in local or 29




---



##### Table of Contents



state laws and regulations, economic
conditions or acts of terrorism, can have a disproportionate impact on the
Companys operating results and financial condition. Changes in the insurance marketplace, including significantly higher
premiums, higher deductibles and coverage restrictions and increased claims
costs, have negatively impacted the Companys net income in recent years and
could have a material adverse effect on the results of operations and financial
condition of the Company in the future. The Company purchases insurance covering certain types of claims that
occur at parking facilities it owns, leases or manages. In addition, the
Company purchases workers compensation, group health, directors and officers
liability and certain other insurance coverages. Due to changes in the
insurance marketplace, including changes related to the September 11, 2001
tragedy, the Company has experienced a substantial increase in the premiums it
pays for most types of insurance coverage and an increase in the deductibles
relating to such coverage. The Company also has experienced an increase in
certain claims costs, including workers compensation, liability and group
health. In addition, coverages of certain types of risk, such as terrorism
coverage, have been significantly restricted or are no longer available. The
changes in the insurance marketplace, including increased premium and claims
costs, higher deductibles and coverage restrictions, negatively impacted the
Companys earnings in recent years and could have a material adverse effect on
the results of operations and financial condition of the Company in the future. Acts of terrorism, such as the September 11, 2001 attacks, can have a
significant adverse affect on the Companys results of operations and financial
condition. The Company estimates that the terrorist attacks on September 11, 2001
reduced the Companys revenues in the fourth quarter of fiscal year 2001 by
approximately $5 million and approximately $10 million in the first half of
fiscal year 2002. Not only did the attack cause physical damage to some of the
parking facilities operated by the Company, but the reduction in the number of
commuters parking in the areas affected, reduction in tourists and local
consumers traveling to the area as well as the broader reduction in airplane
travel and lower attendance at sporting events, concerts and other venues, also
impacted our operations adversely. The closing of streets in the vicinity of
the World Trade Center and other areas of New York City and the imposition of
certain restrictions on traffic and other security measures in New York City
and at the nations airports also had a negative impact on the Companys
operations. The Companys operations are concentrated heavily in the downtown
areas of major U.S. cities and some are located near landmarks or other sites
that have been mentioned as potential targets of terrorists. In addition, the
Company manages the parking operations at approximately 30 airports.
Additional terrorist attacks or the imposition of additional security measures,
particularly in New York, Washington, D.C. or other major cities in which the
Company has a significant presence, or at airports, could have a material
adverse effect on the Companys results of operations and financial condition. The offer or sale of a substantial amount of Central Parking common stock
by significant shareholders of the Company could have an adverse impact on the
market price of Central Parking common stock. In February 2001, the Company filed a registration statement on Form S-3
covering 7,381,618 shares of the Companys common stock held by certain
shareholders of the Company. These shares were registered pursuant to
registration rights previously granted to these shareholders. Although the
Company believes a significant portion of these shares has been sold, these
shareholders may sell any remaining shares that were registered on any stock
exchange, market or trading facility on which the shares are traded, or in
private transactions. Other substantial shareholders of the Company, including
the Chairman and Chief Executive Officer of Central Parking, Monroe Carell,
Jr., the Carell Childrens Trust, and other family members and related entities
(the Carell Family), are permitted to sell significant amounts of the
Companys common stock under Rule 144 and other exemptions from registration
under the federal securities laws. In addition, the Carell Family has certain
rights to register substantially all of the shares held by the family and
related entities. The offer or sale of substantial amounts of Central Parking
common stock by these or other significant shareholders, particularly if such
offers or sales occur simultaneously or relatively close in time, could have a
significant negative impact on the stocks market price. The Company is dependent on the continued availability of capital to
support its business. The Company has significant working capital requirements, including but
not limited to, repair and maintenance obligations for many of its parking
facilities. The Company is dependant on the cash generated from its operations
and its Credit Facility to meet its working capital requirements. The Credit
Facility contains covenants including those that require the Company to
maintain certain financial ratios, restrict further indebtedness and certain
acquisition activity and limit the amount of dividends paid. The primary
ratios are a leverage ratio, senior leverage ratio and a fixed charge coverage
ratio. Quarterly compliance is calculated using a four quarter rolling
methodology and measured against certain targets. The Companys inability to
meet debt covenants and debt service payments under the Credit Facility would
have a material adverse effect on the Company. 30




---



##### Table of Contents



The Company is subject to interest rate risk. The Company is subject to market risk from exposure to changes in interest
rates based upon its financing, investing and cash management activities. The
Credit Facility bears interest at LIBOR plus a tier-based margin dependent upon
certain financial ratios. There are separate tiers for the revolving loan and
term loan. The weighted average margin as of September 30, 2004, was 250 basis
points. The amount outstanding under the Companys Credit Facility was $157.7
million with a weighted average interest rate of 4.7% as of September 30, 2004.
The Company has reduced a portion of its interest rate risk by executing two
interest rate swap transaction whereby the Company has fixed $87.0 million of
floating rate debt. The term loan is required to be repaid in quarterly
payments of $0.4 million through March 2008 and quarterly payments of $20.8
million from June 2008 through March 2010. An increase (decrease) in LIBOR of
1% would result in an increase (decrease) of annual interest expense of $0.7
million based on the Companys outstanding Credit Facility balance of $157.7
million at September 30, 2004. The Company expects to pay both quarterly
principle amortization and monthly interest payments out of operating cash
flow. The Companys large number of leased and owned facilities increases the
risk that the Company may become unprofitable and that it may not be able to
cover the fixed costs of its leased and owned facilities. The Company
leased or owned 1,818 facilities as of September 30, 2004.
Although there is more potential for income from leased and owned facilities
than from management contracts, they also carry more risk if there is a
downturn in the economy, property performance or commercial real estate
occupancy rates because a significant part of the costs to operate such
facilities typically is fixed. For example, in the case of leases, there are
typically minimum lease payments that must be made regardless of the revenues
or profitability of the facility. In particular, it is difficult to
forecast revenues of newly constructed parking facilities because
these facilities do not have an operating history. Start-up costs,
the length of the break-in period during which parking demand is
built and economic conditions at the time the facility is opened, are
very difficult to predict at the time the lease is executed (and the
base rent is agreed upon), which is often two or more years prior to
the opening of the facility. In
the case of owned facilities, there are the normal risks of ownership
and costs of capital. In addition, operating expenses for both leased
and owned facilities are borne by Central Parking and are not passed
through to the owner, as is the case with management contracts. In
the case of owned facilities and generally in the case of longer-term
leased facilities, the Company also is responsible for property taxes
and all maintenance and repair costs, including structural,
mechanical and systems repairs. Performance of Central Parking's
parking facilities depends, in part, on the Company's ability to
negotiate favorable contract terms and control operating expenses,
economic conditions prevailing generally and in areas where parking
facilities are located, the nature and extent of competitive parking
facilities in the area, weather conditions and the real estate market. An increase in government regulation or taxation could have a negative
effect on the Companys profitability. The Companys business is subject to numerous federal, state and local
laws and regulations, and in some cases, municipal and state authorities
directly regulate parking facilities. In addition, many cities impose a
substantial tax or surcharge on parking services, which generally range from
10% to 50%. The Companys business is also affected by increases in property
taxes. Several state and local laws have been passed in recent years which are
designed to encourage car-pooling or the use of mass transit or impose 31




---



##### Table of Contents



certain
restrictions on automobile usage. An example is the restrictions imposed by the
City of New York in the wake of the September 11 terrorist attacks, which
included street closures and a requirement for passenger cars entering certain
bridges and tunnels to have more than one occupant during the morning rush
hour. The Company also is subject to federal, state and local employment and
labor laws and regulations, and several cities in which the Company has
operations either have adopted or are considering the adoption of so-called
living wage ordinances. The adoption of such laws and regulations, the
imposition of additional parking taxes or surcharges and increases in property
and other taxes could adversely impact the Companys profitability. The sureties for our performance bond program may increase rates further
and require additional collateral to issue or renew performance bonds in
support of certain contracts. Under substantially all of our contracts with municipalities and
government entities and airports, we are required to provide a performance bond
to support our obligations under the contract. We are also required to provide
performance bonds under certain leases and other contracts with
non-governmental entities. Due to our financial results in fiscal 2003 and the
financial state of the surety bond industry, the sureties for our performance
bond program have increased and rates have required us to collateralize a
greater percentage of our performance bonds with letters of credit. As a
result, our working capital needs have increased and our borrowing capacity has
decreased since letters of credit used by us to collateralize surety bonds
reduces the availability of funds under our Credit Facility. Although the
Company believes its performance bond program is adequate for its present
needs, if we are unable to provide sufficient collateral in the future, our
sureties may not issue performance bonds to support our obligations under
certain contracts. As is customary in the industry, a surety provider can refuse to provide a
bond principal with new or renewal surety bonds. If any existing or future
surety provider refuses to provide us with surety bonds, there can be no
assurance that we would be able to find alternate providers on acceptable
terms, or at all. Our inability to provide surety bonds could result in the
loss of existing contracts or future business, which could have a material
adverse effect on our business and financial condition. Our
net income could be adversely affected if accruals for future
insurance losses are not adequate. We provide liability, medical and workers compensation insurance
coverage. We are obligated to pay for each loss incurred up to the amount of a
deductible specified in our insurance policies. Our financial statements
reflect our anticipated costs based upon loss experience and guidance and
evaluation we have received from third party insurance professionals, such as
actuaries. There can be no assurance, however, that the ultimate amount of
such costs will not exceed the amount presently accrued, in which case we would
need to increase accruals and pay additional expenses. The operation of our business is dependent on key personnel. Our success is, and will continue to be, substantially dependent upon the
continued services of our management team. The loss of the services of one or
more of the members of our senior management team could have a material adverse
effect on our financial condition and the results of operations. Although we
have entered into employment agreements with, and historically have been
successful in retaining the services of our senior management, there can be no
assurance that we will be able to retain these senior management people in the
future. In addition, our future growth depends on our ability to attract and
retain skilled operating managers and employees. We have foreign operations that may be adversely affected by foreign
currency exchange rate fluctuations. Central Parking operates in the United Kingdom, Germany, Mexico, the
Republic of Ireland, Chile, Poland, Greece, Switzerland, Colombia, Peru,
Venezuela, Canada and Spain, and seeks to expand its business in these and
other international locations. For the year ended September 30, 2004, revenues
from foreign operations represented 6.7% of Central Parkings total revenues,
excluding reimbursement of management contract expenses. The Companys United
Kingdom operations accounted for 47.1% of total revenues from foreign
operations, excluding reimbursement of management contract expense and
excluding earnings from joint ventures. Central Parking receives revenues and
incurs expenses in various foreign currencies in connection with its foreign
operations and, as a result, Central Parking is subject to currency exchange
rate fluctuations. Central Parking intends to continue to invest in foreign
leased or owned parking facilities, either independently or through joint
ventures, where appropriate, and may become increasingly exposed to foreign
currency fluctuations. Central Parking believes it has currently limited
exposure to foreign currency risk and does not have a foreign currency hedging
program. In connection with ownership or operation of parking facilities, we may be
potentially liable for environmental problems. Under various federal, state, and local environmental laws, ordinances,
and regulations, a current or previous owner or operator of real property may
be liable for the cost of removal or remediation of hazardous or toxic
substances on, under, or in such 32




---



##### Table of Contents



property. Such laws typically impose liability
without regard to whether the owner or operator knew of, or was responsible
for, the presence of such hazardous or toxic substances. There can be no
assurance that a material environmental claim will not be asserted against
Central Parking or against its owned or operated parking facilities. The cost
of defending against claims of liability, or of remediating a contaminated
property, could have a negative effect on Central Parkings business and
financial results. If we cannot maintain positive relationships with labor unions
representing our employees, a work stoppage may adversely affect our business. Approximately 4,300 employees of Central Parking are represented by labor
unions. There can be no assurance that Central Parking will be able to renew
existing labor union contracts on acceptable terms. Employees could exercise
their rights under these labor union contracts, which could include a strike or
walk-out. In such cases, there are no assurances that Central Parking would be
able to staff sufficient employees for its short-term needs. Any such labor
strike or the inability of Central Parking to negotiate a satisfactory contract
upon expiration of the current agreements could have a negative effect on
Central Parkings business and financial results. 
 Item 7a. Quantitative and Qualitative Disclosures 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 September 30, 2004, the
Company had $157.7 million of variable rate debt outstanding under the Credit
Facility, priced at LIBOR plus a weighted average 250 basis points. The Company is required under the Credit Facility to enter into and
maintain interest rate protection agreements designed to limit the Companys
exposure to increases in interest rates. On May 30, 2003, the Company entered
into two interest rate swap transactions for a total of $87.5 million. Both
transactions swapped the Companys floating LIBOR interest rates for fixed
interest of 2.45% until June 30, 2007. Both of these derivative instruments
have terms consistent with the terms of the Credit Facility and qualify as cash
flow hedges. The weighted average interest rate on the Companys Credit Facility at
September 30, 2004 was 4.7%. The 4.7% rate includes all outstanding LIBOR
contracts and swap agreements at September 30, 2004. An increase (decrease) in
LIBOR of 1% would result in an increase (decrease) of annual interest expense
of $0.7 million assuming the Companys outstanding Credit Facility balance of
$157.7 million less $87.5 million swapped to a fixed rate at September 30, 2004
remained the same. 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 Exposure The Companys exposure to foreign exchange risk is minimal. As of
September 30, 2004, the Company has approximately GBP 1.0 million (USD $1.9
million) of cash and cash equivalents denominated in British pounds, EUR 2.1
million (USD $2.6 million) denominated in euros, CAD 2.2 million (USD $1.8
million) denominated in Canadian dollars, and USD $0.9 million denominated in
various other foreign currencies. The Company also has EUR 0.8 million (USD
$1.0 million) of notes payable denominated in euros at September 30, 2004.
These notes bear interest at a floating rate of 4.08% as of September 30, 2004,
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 September 30, 2004, management does not believe a near-term
change in currency rates, based on historical currency movements, would
materially affect the Companys financial statements. 33




---



##### Table of Contents



Item 8. Financial Statements and Supplementary Data CENTRAL PARKING CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS PAGEReport of Independent Registered Public Accounting Firm
    
    
    35Consolidated Balance Sheets as of September 30, 2004 and 2003
    
    
    36Consolidated Statements of Operations for the Years Ended September 30,
2004, 2003 and 2002
    
    
    37Consolidated Statements of Shareholders Equity and
Comprehensive Income (Loss) for the Years Ended September 30, 2004, 2003 and 2002
    
    
    38Consolidated Statements of Cash Flows for the Years Ended September 30,
2004, 2003 and 2002
    
    
    39Notes to Consolidated Financial Statements
    
    
    41Schedule II  Valuation and Qualifying Accounts
    
    
    68Schedule IV  Mortgage Loans on Real Estate
    
    
    68
 34




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors
Central Parking Corporation: We have audited the accompanying consolidated balance sheets of Central
Parking Corporation and subsidiaries (the Company) as of September 30, 2004
and 2003, and the related consolidated statements of operations, shareholders
equity and comprehensive income (loss), and cash flows for each of the years in
the three-year period ended September 30, 2004. In connection with our audits
of the consolidated financial statements, we have also audited the financial
statement Schedule II  Valuation and Qualifying Accounts and financial
statement Schedule IV  Mortgage Loans on Real Estate as of September 30, 2004
and for each of the years in the three-year period ended September 30, 2004.
These consolidated financial statements and financial statement schedules are
the responsibility of the Companys management. Our responsibility is to
express an opinion on these consolidated financial statements and financial
statement schedules based on our audits. We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion. In our opinion the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Central
Parking Corporation and subsidiaries as of September 30, 2004 and 2003, and the
results of their operations and their cash flows for each of the years in the
three-year period ended September 30, 2004, in conformity with U.S. generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all material
respects, the information set forth therein. As discussed in Note 5 to the consolidated financial statements, the
Company changed its method of accounting for goodwill in 2002. /s/ KPMG LLP Nashville, Tennessee
December 14, 2004 35




---



##### Table of Contents



CENTRAL PARKING CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS Amounts in thousands, except share and per share data September 30,2004
    
    2003ASSETSCurrent assets:Cash and cash equivalents
    
    $
    27,628
    
    
    $
    31,572Management accounts receivable, net of allowance for doubtful accounts of
$3,206 and $3,720 at September 30, 2004 and 2003, respectively
    
    
    40,779
    
    
    
    34,174Accounts
receivable - other
    
    
    9,334
    
    
    
    15,440Current portion of notes receivable (including amounts due
from related parties of $1,617 in 2004 and $3,370 in 2003)
    
    
    6,010
    
    
    
    8,220Prepaid expenses
    
    
    13,045
    
    
    
    11,424Assets held for sale
    
    
    23,724
    
    
    
    39,417Refundable income taxes
    
    
    1,461
    
    
    
    5,483Deferred
Income Taxes
    
    
    11,177
    
    
    
    11,730Total current assets
    
    
    133,158
    
    
    
    157,460Notes receivable, less current portion
    
    
    41,940
    
    
    
    40,879Property, equipment, and leasehold improvements, net
    
    
    380,256
    
    
    
    414,265Contract and lease rights, net
    
    
    89,015
    
    
    
    102,315Goodwill, net
    
    
    232,562
    
    
    
    230,312Investment in and advances to partnerships and joint ventures
    
    
    7,824
    
    
    
    13,649Other assets
    
    
    36,616
    
    
    
    42,297Total Assets
    
    $
    921,371
    
    
    $
    1,001,177LIABILITIES AND SHAREHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt and capital lease obligations
    
    $
    46,867
    
    
    $
    3,623Accounts payable
    
    
    76,964
    
    
    
    80,128Accrued expenses
    
    
    46,807
    
    
    
    43,661Management accounts payable
    
    
    21,643
    
    
    
    22,392Total current liabilities
    
    
    192,281
    
    
    
    149,804Long-term debt and capital lease obligations, less current portion
    
    
    159,188
    
    
    
    266,961Subordinated convertible debentures
    
    
    78,085
    
    
    
    78,085Deferred rent
    
    
    24,450
    
    
    
    27,569Deferred income taxes
    
    
    17,293
    
    
    
    14,740Other liabilities
    
    
    14,977
    
    
    
    16,303Total liabilities
    
    
    486,274
    
    
    
    553,462Minority interest
    
    
    64
    
    
    
    31,189Shareholders equity:Common stock, $0.01 par value; 50,000,000 shares authorized,
36,582,808 and 36,170,274 shares issued and outstanding at
September 30, 2004 and 2003, respectively
    
    
    366
    
    
    
    362Additional paid-in capital
    
    
    249,452
    
    
    
    246,559Accumulated other comprehensive income, net
    
    
    879
    
    
    
    78Retained earnings
    
    
    185,041
    
    
    
    170,232Other
    
    
    (705
    )
    
    
    (705
    )Total shareholders equity
    
    
    435,033
    
    
    
    416,526Total Liabilities and Shareholders Equity
    
    $
    921,371
    
    
    $
    1,001,177
 See accompanying notes to consolidated financial statements. 36




---



##### Table of Contents



CENTRAL PARKING CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS Amounts in thousands, except per share data Year Ended September 30,2004
    
    2003
    
    2002Revenues:Parking
    
    $
    585,798
    
    
    $
    589,383
    
    
    $
    579,390Management contract and other
    
    
    127,052
    
    
    
    119,520
    
    
    
    116,899712,850
    
    
    
    708,903
    
    
    
    696,289Reimbursement of management contract expenses
    
    
    458,688
    
    
    
    418,058
    
    
    
    390,306Total revenues
    
    
    1,171,538
    
    
    
    1,126,961
    
    
    
    1,086,595Costs and expenses:Cost of parking
    
    
    534,570
    
    
    
    547,173
    
    
    
    509,918Cost of management contracts
    
    
    57,904
    
    
    
    65,569
    
    
    
    48,813General and administrative
    
    
    71,861
    
    
    
    83,409
    
    
    
    69,819664,335
    
    
    
    696,151
    
    
    
    628,550Reimbursed management contract expenses
    
    
    458,688
    
    
    
    418,058
    
    
    
    390,306Total costs and expenses
    
    
    1,123,023
    
    
    
    1,114,209
    
    
    
    1,018,856Property-related gains (losses), net
    
    
    7,661
    
    
    
    (7,560
    )
    
    
    (4,986
    )Operating earnings
    
    
    56,176
    
    
    
    5,192
    
    
    
    62,753Other income (expenses):Interest income
    
    
    4,883
    
    
    
    4,733
    
    
    
    6,870Interest expense
    
    
    (20,484
    )
    
    
    (22,037
    )
    
    
    (17,319
    )Gain on repurchase of subordinated convertible debentures
    
    
    
    
    
    
    
    
    
    
    9,245Gain on sale of non-operating assets
    
    
    
    
    
    
    3,279
    
    
    
    Equity in partnership and joint venture (losses) earnings
    
    
    (2,984
    )
    
    
    2,212
    
    
    
    2,702Earnings (loss) from continuing operations before minority interest,
income taxes, and cumulative effect of accounting change
    
    
    37,591
    
    
    
    (6,621
    )
    
    
    64,251Minority interest
    
    
    (2,999
    )
    
    
    (4,052
    )
    
    
    (4,765
    )Earnings (loss) from continuing operations before income taxes
and cumulative effect of accounting change
    
    
    34,592
    
    
    
    (10,673
    )
    
    
    59,486Income tax (expense) benefit:Current
    
    
    11,499
    
    
    
    (7,032
    )
    
    
    (21,608
    )Deferred
    
    
    (3,107
    )
    
    
    11,469
    
    
    
    1,739Total income tax (expense) benefit
    
    
    (14,606
    )
    
    
    4,437
    
    
    
    (19,869
    )Earnings (loss) from continuing operations before cumulative
effect of accounting change
    
    
    19,986
    
    
    
    (6,236
    )
    
    
    39,617Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    
    
    
    
    (9,341
    )Earnings (loss) from continuing operations
    
    
    19,986
    
    
    
    (6,236
    )
    
    
    30,276Discontinued operations, net of tax
    
    
    (2,993
    )
    
    
    1,709
    
    
    
    3,492Net earnings (loss)
    
    $
    16,993
    
    
    $
    (4,527
    )
    
    $
    33,768Basic earnings (loss) per share:Earnings (loss) from continuing operations before cumulative
effect of accounting change
    
    $
    0.55
    
    
    $
    (0.18
    )
    
    $
    1.10Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.26
    )Discontinued operations, net of tax
    
    
    (0.08
    )
    
    
    0.05
    
    
    
    0.10Net earnings (loss)
    
    $
    0.47
    
    
    $
    (0.13
    )
    
    $
    0.94Diluted earnings (loss) per share:Earnings (loss) from continuing operations before cumulative
effect of accounting change
    
    $
    0.55
    
    
    $
    (0.18
    )
    
    $
    1.09Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    
    
    
    
    (0.26
    )Discontinued operations, net of tax
    
    
    (0.08
    )
    
    
    0.05
    
    
    
    0.10Net earnings (loss)
    
    $
    0.47
    
    
    $
    (0.13
    )
    
    $
    0.93
 See accompanying notes to consolidated financial statements. 37




---



##### Table of Contents



CENTRAL PARKING CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
and COMPREHENSIVE INCOME (LOSS) Amounts in thousands, except per share data AccumulatedAdditional
    
    Other
    
    
    
    
    
    OtherNumber of
    
    Common
    
    Paid-in
    
    Comprehensive
    
    Retained
    
    ShareholdersShares
    
    Stock
    
    Capital
    
    Income (Loss), net
    
    Earnings
    
    Equity
    
    TotalBalance at September 30, 2001
    
    
    35,792
    
    
    $
    358
    
    
    $
    238,464
    
    
    $
    (1,979
    )
    
    $
    145,308
    
    
    $
    (705
    )
    
    $
    381,446Issuance under restricted stock
plan and employment agreements
    
    
    3
    
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63Issuance under Employee Stock
Purchase Plan
    
    
    63
    
    
    
    1
    
    
    
    969
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    970Common stock dividends, $0.06 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,152
    )
    
    
    
    
    
    
    (2,152
    )Exercise of stock options and warrants and
related tax benefits
    
    
    129
    
    
    
    1
    
    
    
    2,339
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,340Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    255
    
    
    
    255Issuance of stock into Rabbi Trust
    
    
    
    
    
    
    
    
    
    
    765
    
    
    
    
    
    
    
    
    
    
    
    (765
    )
    
    
    Repurchase of common stock
    
    
    (35
    )
    
    
    
    
    
    
    (488
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (488
    )Comprehensive income (loss):Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,768
    
    
    
    
    
    
    
    33,768Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (430
    )
    
    
    
    
    
    
    
    
    
    
    (430
    )Unrealized gain on fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    32Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,370Balance at September 30, 2002
    
    
    35,952
    
    
    $
    360
    
    
    $
    242,112
    
    
    $
    (2,377
    )
    
    $
    176,924
    
    
    $
    (1,215
    )
    
    $
    415,804Issuance under restricted stock
plan and employment agreements
    
    
    13
    
    
    
    1
    
    
    
    215
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    216Issuance under Employee Stock
Purchase Plan
    
    
    164
    
    
    
    1
    
    
    
    3,550
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,551Common stock dividends, $0.06 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,165
    )
    
    
    
    
    
    
    (2,165
    )Exercise of stock options and
related tax benefits
    
    
    41
    
    
    
    
    
    
    
    682
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    682Amortization of deferred compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    510
    
    
    
    510Comprehensive income (loss):Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,527
    )
    
    
    
    
    
    
    (4,527
    )Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    629
    
    
    
    
    
    
    
    
    
    
    
    629Unrealized gain on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    
    
    
    
    168Unrealized gain on fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,658
    
    
    
    
    
    
    
    
    
    
    
    1,658Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,072
    )Balance at September 30, 2003
    
    
    36,170
    
    
    $
    362
    
    
    $
    246,559
    
    
    $
    78
    
    
    $
    170,232
    
    
    $
    (705
    )
    
    $
    416,526Issuance under restricted stock
plan and employment agreements
    
    
    16
    
    
    
    
    
    
    
    323
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323Issuance under Employee Stock
Purchase Plan
    
    
    71
    
    
    
    1
    
    
    
    591
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    592Common stock dividends, $0.06 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,184
    )
    
    
    
    
    
    
    (2,184
    )Exercise of stock options and
related tax benefits
    
    
    130
    
    
    
    1
    
    
    
    1,612
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,613Issuance of deferred stock units
    
    
    196
    
    
    
    2
    
    
    
    367
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    369Comprehensive income (loss):Net earnings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,993
    
    
    
    
    
    
    
    16,993Foreign currency translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (276
    )
    
    
    
    
    
    
    
    
    
    
    (276
    )Unrealized loss on available-for-sale
securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )Unrealized gain on fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,082
    
    
    
    
    
    
    
    
    
    
    
    1,082Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,794Balance at September 30, 2004
    
    
    36,583
    
    
    $
    366
    
    
    $
    249,452
    
    
    $
    879
    
    
    $
    185,041
    
    
    $
    (705
    )
    
    $
    435,033
 See accompanying notes to consolidated financial statements. 38




---



##### Table of Contents



CENTRAL PARKING CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS Amounts in thousands Year Ended September 30,2004
    
    2003
    
    2002Cash flows from operating activities:Net earnings (loss)
    
    $
    16,993
    
    
    $
    (4,527
    )
    
    $
    33,768Loss (earnings) from discontinued operations
    
    
    2,993
    
    
    
    (1,709
    )
    
    
    (3,491
    )Earnings (loss) from continuing operations
    
    
    19,986
    
    
    
    (6,236
    )
    
    
    30,277Adjustments to reconcile earnings (loss) from continuing operations to net cash
provided by operating activities - continuing operations:Depreciation and amortization
    
    
    32,635
    
    
    
    35,173
    
    
    
    34,500Equity in partnership and joint venture losses (earnings)
    
    
    2,984
    
    
    
    (2,212
    )
    
    
    (2,702
    )Distributions from partnerships and joint ventures
    
    
    1,412
    
    
    
    1,375
    
    
    
    3,938Gain on sale of non-operating assets
    
    
    
    
    
    
    (3,279
    )
    
    
    Property related (gains) losses, net
    
    
    (7,661
    )
    
    
    7,560
    
    
    
    4,986Gain on repurchase of subordinated convertible debentures
    
    
    
    
    
    
    
    
    
    
    (9,245
    )Loss on derivatives related to refinancing
    
    
    
    
    
    
    918
    
    
    
    Decrease in fair value of derivatives
    
    
    
    
    
    
    12
    
    
    
    Cumulative effect of accounting change, net of tax
    
    
    
    
    
    
    
    
    
    
    9,341Deferred income taxes
    
    
    3,143
    
    
    
    (11,469
    )
    
    
    (1,739
    )Minority interest
    
    
    2,999
    
    
    
    4,052
    
    
    
    4,765Changes in operating assets and liabilities, excluding effects of acquisitions:Management accounts receivable
    
    
    (6,605
    )
    
    
    5,490
    
    
    
    (4,967
    )Accounts receivable - other
    
    
    6,106
    
    
    
    274
    
    
    
    1,001Prepaid expenses
    
    
    (1,621
    )
    
    
    (1,373
    )
    
    
    (2,896
    )Other assets
    
    
    (7,211
    )
    
    
    (3,389
    )
    
    
    (288
    )Accounts payable, accrued expenses and other liabilities
    
    
    (6,096
    )
    
    
    1,186
    
    
    
    (1,583
    )Management accounts payable
    
    
    (749
    )
    
    
    (279
    )
    
    
    1,692Deferred rent
    
    
    (3,119
    )
    
    
    (1,535
    )
    
    
    6,794Refundable income taxes
    
    
    4,022
    
    
    
    (5,483
    )
    
    
    Income taxes payable
    
    
    273
    
    
    
    2,149
    
    
    
    2,691Net cash provided by operating activities - continuing operations
    
    
    40,498
    
    
    
    22,934
    
    
    
    76,565Net cash provided (used) by operating activities - discontinued
operations
    
    
    1,141
    
    
    
    (2,421
    )
    
    
    (1,745
    )Net cash provided by operating activities
    
    
    41,639
    
    
    
    20,513
    
    
    
    74,820Cash flows from investing activities:Proceeds from disposition of property and equipment
    
    
    69,408
    
    
    
    26,147
    
    
    
    16,651Proceeds from sale of investment in partnership
    
    
    
    
    
    
    
    
    
    
    18,399Purchase of equipment and leasehold improvements
    
    
    (13,274
    )
    
    
    (53,924
    )
    
    
    (36,522
    )Purchase of property
    
    
    (1,725
    )
    
    
    
    
    
    
    Purchase of contract and lease rights
    
    
    (4,530
    )
    
    
    (7,186
    )
    
    
    (18,948
    )Acquisitions, net of cash acquired
    
    
    
    
    
    
    (1,997
    )
    
    
    (17,788
    )Incentive payment for USA Parking
    
    
    2,250
    
    
    
    
    
    
    
    Other investing activities
    
    
    227
    
    
    
    5,823
    
    
    
    698Net cash provided (used) by investing activities
    
    
    52,356
    
    
    
    (31,137
    )
    
    
    (37,510
    )Cash flows from financing activities:Dividends paid
    
    
    (2,184
    )
    
    
    (2,165
    )
    
    
    (2,152
    )Net (repayments) borrowings under revolving credit agreement
    
    
    (59,000
    )
    
    
    (87,500
    )
    
    
    33,500Proceeds from issuance of notes payable, net of issuance costs
    
    
    2,933
    
    
    
    176,332
    
    
    
    1,136Principal repayments on long-term debt and capital lease obligations
    
    
    (39,065
    )
    
    
    (78,664
    )
    
    
    (54,214
    )Payment to minority interest partners
    
    
    (3,244
    )
    
    
    (4,116
    )
    
    
    (4,563
    )Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    (488
    )Repurchase of subordinated convertible debentures
    
    
    
    
    
    
    
    
    
    
    (21,823
    )Proceeds from issuance of common stock and exercise of stock options
    
    
    2,897
    
    
    
    4,182
    
    
    
    3,373Net cash (used) provided by financing activities
    
    
    (97,663
    )
    
    
    8,069
    
    
    
    (45,231
    )Foreign currency translation
    
    
    (276
    )
    
    
    629
    
    
    
    (430
    )Net decrease in cash and cash equivalents
    
    
    (3,944
    )
    
    
    (1,926
    )
    
    
    (8,351
    )Cash and cash equivalents at beginning of year
    
    
    31,572
    
    
    
    33,498
    
    
    
    41,849Cash and cash equivalents at end of year
    
    $
    27,628
    
    
    $
    31,572
    
    
    $
    33,498
 39




---



##### Table of Contents



Consolidated Statements of Cash Flows continued: Year Ended September 30,2004
    
    2003
    
    2002Non-cash transactions:Purchase of properties with notes payable
    
    $
    
    
    
    $
    
    
    
    $
    16,500Unrealized (gain) loss on fair value of derivatives and available-
for-sale securities
    
    $
    (1,077
    )
    
    $
    (1,826
    )
    
    $
    (32
    )Cash payments for:Interest
    
    $
    19,160
    
    
    $
    14,020
    
    
    $
    11,652Income taxes
    
    $
    6,725
    
    
    $
    12,256
    
    
    $
    22,770Effects of acquisitions:Estimated fair value of assets acquired
    
    $
    
    
    
    $
    632
    
    
    $
    5,681Purchase price in excess of the net assets acquired (goodwill)
    
    
    
    
    
    
    
    
    
    
    880Purchase price in excess of the net assets acquired (contract rights)
    
    
    
    
    
    
    2,333
    
    
    
    14,339Estimated fair values of liabilities assumed
    
    
    
    
    
    
    (968
    )
    
    
    (2,936
    )Cash paid
    
    
    
    
    
    
    1,997
    
    
    
    17,964Less cash acquired
    
    
    
    
    
    
    
    
    
    
    (176
    )Net cash paid for acquisitions
    
    $
    
    
    
    $
    1,997
    
    
    $
    17,788
 See accompanying notes to consolidated financial statements. 40




---



##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Summary of Significant Accounting Policies A summary of the significant accounting policies applied in the
preparation of the accompanying consolidated financial statements is as
follows: (a) Organization and Basis of Presentation Central Parking Corporation (CPC) is a United States company
incorporated in the State of Tennessee. The consolidated financial statements
include the accounts of Central Parking Corporation and its subsidiaries (the
Company or Central Parking) including Central Parking System, Inc. (CPS)
and its subsidiaries; Kinney System Holdings, Inc. and its subsidiaries
(Kinney); Central Parking System of the United Kingdom, Ltd. and its
subsidiary (CPS-UK); Central Parking System Realty, Inc. and its subsidiaries
(Realty); and Allright Holdings, Inc. and its subsidiaries (Allright),
including through June 30, 2004, Edison Parking Management, L.P. (Edison), a 50% owned partnership
whereby Allright was the general partner and had effective control of the
partnership based on the terms of the partnership agreement. The results of
operations of the remaining 50% of Edison were eliminated as a minority
interest. All significant intercompany transactions have been eliminated in
consolidation. The Company owns, operates and manages parking facilities and provides
parking consulting services throughout the world, primarily in the United
States, Canada, and the United Kingdom. The Company manages and operates owned
or leased parking facilities, manages and operates parking facilities owned or
leased by third parties, and provides financial and other advisory services to
clients. (b) Revenues Parking revenues include the parking revenues from leased and owned
locations. Management contract revenues represent revenues (both fixed and
performance-based fees) from facilities managed for other parties and
miscellaneous fees for accounting, insurance and other ancillary services such
as consulting and transportation management services. Parking revenues from
transient parking are recognized as cash is received. Parking revenues from
monthly parking customers, fixed fee management contract revenues and
miscellaneous management fees are recognized on a monthly basis based on the
terms of the underlying contracts. Management contract revenues related to
performance-based arrangements are accrued when the performance measures have
been met. Management accounts payable reflected on the accompanying consolidated
balance sheets is reflected net of cash. Such cash balances belong to the
owners of the various managed facilities, but they are held by the Company and
are used to pay expenses of the managed facilities and ultimately to settle the
balance due to the owners of the managed facilities. 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 year 2002. This pronouncement required 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 were reclassified to conform to the new presentation.
Adoption of the pronouncement resulted in an increase in total revenues and
total costs and expenses in equal amounts of $390.3 million for the year ended
September 30, 2002. This accounting change had no impact on operating earnings
or net earnings. (c) Cash and Cash Equivalents The Company considers cash and cash equivalents to include cash on hand,
in banks, and short-term, highly liquid investments with original maturities of
three months or less. (d) Management Accounts Receivable Management accounts receivable are recorded at the amount invoiced to
third parties for management contract revenues. The Company reports management
accounts receivable net of an allowance for doubtful accounts to represent its
estimate of the amount that ultimately will be realized in cash. The Company
reviews the adequacy of its allowance for doubtful accounts on an ongoing
basis, using historical collection trends, analyses of 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, 41




---



##### Table of Contents



specifically in the Northeast United States, could have an
impact on the collection of existing receivable balances or future allowance
considerations. (e) Property, Equipment, and Leasehold Improvements Property, equipment and leasehold improvements, including computer
hardware and software, are recorded at cost. Depreciation is provided
principally on a straight-line basis over the estimated useful life of the
asset, which is generally one to fifteen years for furniture, fixtures, and
equipment, three years for computer software, five years for computer hardware,
and thirty to forty years for buildings and garages. Leasehold improvements are
amortized over the remaining lease term or the estimated useful life of the
asset, whichever is shorter. Major additions and improvements to property and
equipment that extend their economic life are capitalized. Repair and
maintenance costs are charged to operating expense as incurred. (f) Investment in and Advances to Partnerships and Joint Ventures The Company has a number of joint ventures to operate and develop parking
garages through either corporate joint ventures, general partnerships, limited
liability companies, or limited partnerships. The financial results of the
Companys joint ventures are generally accounted for under the equity method
and are included in equity in partnership and joint venture earnings in the
accompanying consolidated statements of operations with the exception of the
Companys investment in Edison Parking Management, L.P. (Edison), which was
consolidated, through June 30, 2004, into the Companys financial statements due to the Companys
control of Edison, with the remaining 50% recorded as minority interest.
Effective July 1, 2004, the Companys general partnership interest in Edison
was redeemed by Edison in exchange for cash of $570,251, a note receivable and
certain parking management agreements. As a result of the redemption, the
Company no longer consolidates Edison and reversed minority interest of
$30.6 million. Amounts due from unconsolidated partnerships and joint ventures under
notes receivable are classified in the consolidated balance sheets as
investments in and advances to partnerships and joint ventures until amounts
due become payable in the next twelve months. When these amounts become due
within the next twelve months, such amounts are presented as current portion of
notes receivable from related parties in the consolidated balance sheets. (g) Contract and Lease Rights Contract and lease rights consist of capitalized payments made to third
parties which provide the Company the opportunity to manage or lease
facilities. Contract and lease rights are allocated among respective locations
and are amortized principally on a straight-line basis over the terms of the
related agreements, which range from five to thirty years or an estimated term
considering anticipated terminations and renewals. 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). (h) Goodwill Goodwill, which represents the excess of purchase price over the fair
value of net assets acquired and liabilities assumed in a business combination,
is not amortized, but is tested for impairment at least annually and whenever
events or circumstances occur indicating that goodwill may be impaired. (i) Other Assets Other assets is comprised of a combination of the cash surrender value of
life insurance policies, investment securities, security deposits, key money,
deferred issuance costs on the subordinated convertible debentures, deferred
debt issuance costs and non-compete agreements. Investment securities
primarily consist of debt obligations of states and political subdivisions. As
of September 30, 2004, the balance of the investment securities was $4.4
million. These securities were previously classified as held-to-maturity. Such
securities were stated at amortized cost adjusted for amortization of premiums
and accretion of discounts. As of September 30, 2003, the balance of the
investment was $4.2 million. During fiscal year 2003, the Company sold a
portion of these securities, and accordingly reclassified the remaining
securities as available for sale. Available-for-sale securities are recorded
at fair value. Unrealized holding gains and losses, net of related tax
effects, on these securities are excluded from earnings and are reported as a
separate component of other comprehensive income until realized. Realized
gains and losses from the sale of available-for-sale securities are determined
on a specific-identification basis. Key money represents lease prepayments
tendered to lessors at the inception of long-term lease relationships and is
amortized over the life of the applicable lease. Non-compete agreements are
amortized over the contractual term of the agreement or the economic useful
life, whichever is shorter. Deferred issuance costs are amortized over the
contractual term of the related debt or subordinated convertible debentures. 42




---



##### Table of Contents



(j) Lease Transactions and Related Balances The Company accounts for operating lease obligations and sublease income
on a straight-line basis. Contingent or percentage payments are recognized when
operations indicate such amounts will be paid. Lease obligations paid in
advance are included in prepaid rent. The difference between actual lease
payments and straight-line lease expenses over the lease term is included in
deferred rent. Rent expense for all operating leases and rental income from
subleases are reflected in cost of parking or general and administrative
expenses. In connection with certain acquisitions, the Company revalued certain
leases to estimated fair market value at the time of the respective
acquisition. Favorable operating leases of entities acquired represent the
present value of the excess of the current market rental over the contractual
lease payments. Unfavorable operating leases of entities acquired represent the
present value of the excess of the contractual lease payments over the current
market rental. Such adjustments are amortized on a straight-line basis over the
remaining term of the underlying lease, or 30 years, whichever is shorter.
Favorable and unfavorable lease rights are reflected on the accompanying
consolidated balance sheets in contract and lease rights and other liabilities,
respectively. (k) Property-Related Gains (Losses), Net Net property-related gains and losses on the accompanying consolidated
statements of operations include (i) realized gains and losses on the sale of
operating property and equipment, (ii) impairment of long-lived assets, and
(iii) costs incurred to terminate existing parking facility leases prior to
their contractual termination date. (l) Impairment of Long-Lived Assets In accounting for the Companys long-lived assets, other than goodwill,
the Company applies the provisions of Statement of Financial Accounting
Standards (SFAS) No. 144, Accounting for the Disposal or Impairment of
Long-Lived Assets. Since October 1, 2001, the Company has accounted for
goodwill and other intangible assets under the provisions of SFAS No. 142,
Goodwill and Other Intangible Assets. The determination and measurement of an
impairment loss under these accounting standards require the significant use of
judgment and estimates. Future events may impact these judgments and
estimates. (m) Income Taxes The Company files a consolidated federal income tax return. The Company
uses the asset and liability method to account for income taxes. Under this
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases and operating loss and tax credit carryforwards. 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 effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. The Company does not provide for federal income taxes on the
accumulated earnings considered permanently reinvested in foreign subsidiaries. (n) Pre-opening Expense The direct and incremental costs of hiring and training personnel
associated with the opening of new parking facilities and the associated
internal development costs are expensed as incurred. (o) Per Share Data Basic net earnings (loss) 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 net earnings (loss) 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 resulted in the issuance of common stock that then shared in the earnings of
the Company. (p) Foreign Currency Translation The financial position and results of operations of the Companys foreign
subsidiaries and equity method joint ventures are measured using local currency
as the functional currency. Translation adjustments arising from the
differences in exchange rates from period to period are generally included in
the currency translation adjustment as a component of accumulated other
comprehensive income (loss), net of income taxes in shareholders equity. (q) Fair Value of Financial Instruments The Company discloses the fair values of financial instruments for which
it is practicable to estimate the value. Fair value disclosures exclude certain
financial instruments such as trade receivables and payables when carrying
values approximate the fair 43




---



##### Table of Contents



value. The fair values of the financial instruments
are estimates based upon current market conditions and quoted market prices for
the same or similar instruments as of September 30. At September 30, 2004 and
2003, book value approximates fair value for substantially all of the Companys
assets, liabilities and derivatives that are subject to the fair value
disclosure requirements. (r) Stock Option Plan In December 2002, the Financial Accounting Standards Board (FASB) issued
SFAS No. 148, Accounting for Stock-Based Compensation  Transition and
Disclosure, an amendment of FASB Statement No. 123. SFAS No. 148 amends SFAS
No. 123, Accounting for Stock-Based Compensation,to provide alternative
methods of transition for a voluntary change to the fair value method of
accounting for stock-based employee compensation. In addition, this statement
amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual
and interim financial statements. Certain of the disclosure modifications are
included below. The Company applies the intrinsic-value-based method of accounting
prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for
Stock Issued to Employees,and related interpretations including Financial
Accounting Standards Board (FASB) Interpretation No. 44, Accounting for Certain
Transactions involving Stock Compensation, an interpretation of APB Opinion No.
25,to account for its fixed-plan stock options. Under this method,
compensation expense is recorded on the date of grant only if the current
market price of the underlying stock exceeded the exercise price. SFAS No. 123
established accounting and disclosure requirements using a fair-value-based
method of accounting for stock-based employee compensation plans. As allowed by
SFAS No. 123 and SFAS No. 148, the Company has elected to continue to apply the
intrinsic-value-based method of accounting described above, and has adopted
only the disclosure requirements of these statements. The following table
illustrates the effect on net earnings (loss) if the fair-value-based method
had been applied to record stock-based compensation. Year ended September 30,2004
    
    2003
    
    2002Net earnings (loss), as reported
    
    $
    16,993
    
    
    $
    (4,527
    )
    
    $
    33,768Add stock-based employee compensation expense
included in reported net earnings (loss), net of tax
    
    
    
    
    
    
    
    
    
    
    Deduct total stock-based employee compensation expense
determined under fair-value-based method for all
awards, net of tax
    
    
    (2,765
    )
    
    
    (5,799
    )
    
    
    (4,126
    )Pro forma net earnings (loss)
    
    $
    14,228
    
    
    $
    (10,326
    )
    
    $
    29,642Net earnings (loss) per share:Basic-as reported
    
    $
    0.47
    
    
    $
    (0.13
    )
    
    $
    0.94Basic-pro forma
    
    $
    0.39
    
    
    $
    (0.29
    )
    
    $
    0.83Diluted-as reported
    
    $
    0.47
    
    
    $
    (0.13
    )
    
    $
    0.93Diluted-pro forma
    
    $
    0.39
    
    
    $
    (0.29
    )
    
    $
    0.82
 Deductions for stock-based employee compensation expense in the table
above were calculated using the Black-Scholes option pricing model. The
Company utilizes both the single option and multiple option valuation
approaches. Allocations of compensation expenses were made using historical
option terms for option grants made to the Companys employees and historical
Central Parking Corporation stock price volatility. The Company applies a 38%
tax rate to arrive at the after tax deduction. The estimated weighted average fair value of the options granted was $3.16
for 2004 option grants, $6.60 for 2003 option grants and $11.35 for 2002 option
grants, using the Black-Scholes option pricing model with the following
assumptions: weighted average dividend yield based on historic dividend rates
at the date of grant, weighted average volatility of 42% for fiscal year 2004,
50% for fiscal year 2003 and 41% for fiscal year 2002, weighted average risk
free interest based on the treasury bill rate of 10-year instruments at the
date of grant, and a weighted average expected term of 2.0 years for 2004, 4.9
years for 2003 and 6.2 years for 2002. 44




---



##### Table of Contents



(s) Business Concentrations Approximately 43%, 42% and 42% of the Companys total revenues for fiscal
year 2004, 2003 and 2002, respectively, excluding reimbursement of management
contract expenses, were attributable to parking and management contract
operations geographically located in the northeastern area of the United
States. See also Note 17. As of September 30, 2004, approximately 19.15% of the Companys employees
are subject to various collective bargaining agreements as members of unions. (t) Risk Management The Company utilizes a combination of indemnity and self-insurance
coverages, up to certain maximum losses for liability, health and workers
compensation claims. The accompanying consolidated balance sheets reflect the
estimated losses related to such risks. These policies have deductibles of up
to $350,000 per occurrence, which must be met before the insurance companies
are required to reimburse the Company for costs related 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 estimable, 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. The
Company engages an actuary to assist in determining the estimated liabilities
for customer injury, employee medical costs and workers compensation claims.
Management utilizes historical experience with similar claims along with input
from legal counsel in determining the likelihood and extent of an unfavorable
outcome for certain general litigation. Future events may indicate differences
from these judgments and estimates and result in increased expense recognition
in the future. (u) Use of Estimates The preparation of the consolidated financial statements in conformity
with U.S. generally accepted accounting principles requires management to make
a number of estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the consolidated financial statements and the reported amounts of
revenues and expenses during the reported period. Actual results could differ
from those estimates. (v) 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, the Company enters into various types of
derivative instruments to manage fluctuations in cash flows resulting from
interest rate risk. These instruments include interest rate swaps and caps.
Under the interest rate swaps, the Company 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 interest rate cap
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 derivatives as either assets or liabilities,
measured at fair value, in the consolidated balance sheet. At September 30, 2004, the Companys derivative financial instruments
consisted of three interest rate swaps with a combined notional amount of
$100.3 million. The derivative financial instruments are reported at their
fair values and are included 45




---



##### Table of Contents



as other assets or other liabilities, on the face
of the consolidated balance sheet. The following table lists the fair value of
each type of derivative financial instrument (amounts in thousands): September 30,
    
    September 30,2004
    
    2003Derivative instrument assets:Interest rate swaps
    
    $
    1,268
    
    
    $
    Derivative instrument liabilities:Interest rate swaps
    
    $
    
    
    
    $
    776
 The underlying terms of three of the interest rate swaps, 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 these derivative instruments are included in accumulated
other comprehensive income (loss) on the face of the consolidated balance
sheet. The Company had a $25.0 million swap that matured on October 29, 2003. This
swap hedged a credit facility that was paid in full in February of 2003. Under
the terms of that agreement, the Company continued to pay the fixed interest
through maturity. Because this swap was no longer associated with any existing
debt, it was considered ineffective at September 30, 2003. Therefore any change
in fair value subsequent to February 2003, has been reflected in the
consolidated statement of operations. The Company also had three interest rate
cap agreements, matured on March 19, 2004, which also hedged the 1999 credit
facility. Because the cap agreements were no longer associated with any
existing debt, they were also considered ineffective. Therefore any change in
fair value subsequent to February 2003, has been reflected in the consolidated
statement of operations. (w) Discontinued Operations The Company adopted the provisions of SFAS No. 144 on October 1, 2002. In
addition to providing enhanced guidance on identifying and measuring
impairments of long-lived assets, SFAS No. 144 requires that the operating
results from certain disposals of parking facilities be classified as
discontinued operations. SFAS No. 144 also requires that gains, losses and
impairments resulting from the designation of a parking facility as
held-for-sale be classified as discontinued operations. For the year ended
September 30, 2004, the Company designated as held-for-sale or disposed of
certain locations, resulting in loss from discontinued operations of $3.0
million, including $1.3 million in impairments and $1.9 million in property
related losses. Included in discontinued operations for the year ended
September 30, 2004 is the year-to-date results of operations for all locations
discontinued during the fiscal year of 2004. The Companys 2003 and 2002
results were reclassified to reflect the operations of these locations
discontinued in 2004 as discontinued operations net of related income taxes. (x) Newly Issued Accounting Standards The Company has 19 variable interest entities with which it holds a
significant variable interest, but is not the primary beneficiary: Number ofCommencement
    
    
    
    
    
    
    
    
    
    ParkingEntity
    
    of Operations
    
    Nature of Activities
    
    % Ownership
    
    Location
    
    SpacesCentral Parking
System of Mexico,
SA De CV
    
    Aug-94
    
    Leases and manages
parking lots
    
    
    50.0
    %
    
    Mexico
    
    
    58,344Other investments
in VIEs
    
    Oct 80-July 99
    
    Ownership,
management, and
leases parking lots
    
    3.3%-50.0%
    
    Mexico and Various
states
    
    
    11,652
 ( y) Reclassifications Certain prior year amounts have been reclassified to conform to the
current year presentation. 46




---



##### Table of Contents



(2) Business Combinations USA Parking Systems On October 1, 2001, the Company purchased substantially all of the assets
of USA Parking Systems, Inc. for $11.5 million in cash. The purchase included
61 management and lease contracts located primarily in south Florida and Puerto
Rico. The fair value of the assets acquired as of the acquisition date was as
follows (in thousands): Tangible assets
    
    $
    2,779Noncompete agreement
    
    
    175Trade name
    
    
    100Contract rights
    
    
    8,475Net assets acquired
    
    $
    11,529
 The tangible assets primarily consisted of accounts receivable and parking
equipment. The noncompete agreement is with the seller, who is now employed by
the Company. The duration of the agreement extends five years beyond the
sellers termination of such employment and will begin to be amortized when
such termination occurs. The trade name is included as goodwill and is not
subject to amortization. The contract rights are amortized over 15 years,
which is the average estimated life of the contracts including future renewals.
The purchase agreement also contained an incentive provision whereby the
seller may receive an additional payment of up to $2.3 million based on the earnings
of USA Parking for the twelve months ended March 31, 2004. The incentive
provision was not conditional upon employment. The incentive provision
payment was completed during 2004 and was recorded as additional goodwill. 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 had
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. 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
    
    $
    491Contract rights
    
    
    5,864Liabilities assumed
    
    
    (805
    )Net assets acquired
    
    $
    5,550
 The tangible assets purchased and liabilities assumed consist primarily of
management accounts receivable and management accounts payable, respectively.
The contract rights will be amortized over 15 years, which is the estimated
life of the contracts, including anticipated future renewals. 47




---



##### Table of Contents



Sterling Parking LTD Effective May 1, 2003, the Company purchased 100% of the common stock of
Sterling Parking Limited in Calgary, Alberta for $1,996,567. The purchase
included 18 management and 9 leased locations. The fair value of assets and
liabilities acquired as of the acquisition date was as follows (in thousands): Tangible assets
    
    $
    632Contract rights
    
    
    2,333Liabilities assumed
    
    
    (968
    )Net assets acquired
    
    $
    1,997
 The tangible assets primarily consisted of accounts receivable, equipment
and leasehold improvements, and prepaid lease payments. The purchase price
included $2.0 million paid in cash at closing of which $319,030 went directly
to the seller. The balance of $0.6 is being held in escrow with the closing
attorney pending the disposition of a business tax proceeding in Calgary as
well as an estoppel holdback. Pro forma results for fiscal year 2003 and 2002 are not presented as the
impact of acquisitions to reported results are not significant. 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.In September 2004, the Company repaid the notes with
available balances from the Credit Facility. Lease rights In 1992 the Company entered into an agreement to lease and operate certain
locations in New York City. The 1992 agreement, terminated 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, 2003. The Company was entitled to receive a termination fee, as
defined in the agreement, as the landlord disposes of certain properties or
renegotiates the lease agreements. The termination fee was based on the
earnings of the location over the remaining duration of the agreement. The
termination amounts have been recorded as deferred rent and were fully
amortized through August 2004 to offset the rent payments due under the 1992
agreement. The Company reached an agreement to continue to operate six of the
seven locations when the existing agreement expired in August 2004. These
locations were converted from leased to managed. The seventh location has been
sold and the Company is operating the location for the new owner under a lease. In October 2002, the Company executed an agreement with Connex South
Eastern Limited, a private rail company headquartered in the United Kingdom, to
lease 82 parking facilities throughout the United Kingdom. Connex was
responsible for operating certain rail lines for the Strategic Rail Authority,
a United Kingdom government agency. Under the terms of the lease agreement, the
Company paid an upfront payment of $6.4 million for the right to lease these
facilities and agreed to invest approximately $5 million in property
improvements at these locations. The $6.4 million of upfront payments and $5
million in property improvements were to be amortized over the nine-year term
of the lease. During the third quarter of 2003, the Company was informed that
Connex would be removed as the private operator by the Strategic Rail
Authority. Under the lease agreement Connex was required to reimburse the
Company for the unamortized upfront payments. In November 2003, the Company
entered into a management agreement with the Strategic Rail Authority to
operate the same 82 parking facilities covered by the Connex lease, for a five
year term. In accordance with the management agreement, the Strategic Rail
Authority agreed to acquire the Companys property improvements under the
former Connex agreement. In November 2003, Connex made a settlement payment
to the Company to reimburse the Company for the upfront and property
improvement payments of $11.4 million and for $19.2 million for other capital
expenditures. The Company realized a gain of $0.4 million related to the
settlement of the agreement. (3) Notes Receivable In connection with the acquisition of Kinney in February 1998, the Company
acquired a note receivable from the City of New York (the City) related to
two parking garages which were built on behalf of the City. The Company also
has a long-term 48




---



##### Table of Contents



management agreement to operate the parking garages. Amounts
advanced for the construction of the garages were recorded as a note receivable
and are being repaid by the City in monthly installments of $156 thousand,
including interest at a fixed rate of 8.0%, through December 2007. At
September 30, 2004, the total of the note receivable was $5.1 million. In June 1997, Allright loaned the limited partner of Edison $16.5 million
in connection with Allrights acquisition of its general partnership interest
in Edison. In conjunction with the merger of Allright and Central Parking, the
partnership agreement was restructured and an additional $9.9 million was
advanced to the limited partner. The amended note receivable totals $26.4
million and bears interest at a fixed rate of 10%. The note matures June 1,
2006 and is secured by a pledge of, and security interest in, the limited
partners partnership interest in Edison. In connection with the Allright merger, the Company acquired a mortgage
note of $2.5 million, bearing interest at a fixed rate of 7.7%, from a
partnership which is secured by a parking garage and rental assignments. The
loan is a balloon note which matures in August 2010. In connection with the acquisition of Allied Parking in October 1998, the
Company obtained notes receivable totaling $4.9 million, secured by an
assignment of rents from the properties being leased. The notes are payable
monthly and bear interest at a fixed rate of 7.0%. The remainder of the notes receivable consist of notes ranging from $1
thousand to $2.6 million at the end of fiscal year 2004, and notes ranging from
$1 thousand to $2.1 million at the end of fiscal year 2003. The notes bear
interest at fixed rates ranging from 0% to 12% at the end of fiscal year 2004
and are due between 2005 and 2017. (4) Property, Equipment and Leasehold Improvements A summary of property, equipment and leasehold improvements and related
accumulated depreciation and amortization is as follows (in thousands): September 30,2004
    
    2003Leasehold improvements
    
    $
    46,837
    
    
    $
    45,613Buildings and garages
    
    
    83,643
    
    
    
    85,364Operating equipment
    
    
    73,064
    
    
    
    75,374Furniture and fixtures
    
    
    9,157
    
    
    
    7,674Equipment operated under capital leases
    
    
    3,817
    
    
    
    3,817216,518
    
    
    
    217,842Less accumulated depreciation and amortization
    
    
    99,745
    
    
    
    86,734116,773
    
    
    
    131,108Land
    
    
    263,483
    
    
    
    283,157Property, equipment and leasehold improvements, net
    
    $
    380,256
    
    
    $
    414,265
 Depreciation expense of property, equipment and leasehold improvements was
$20.4 million, $22.5 million and $22.2 million, respectively, for the fiscal
years ended September 30, 2004, 2003 and 2002. Depreciation expense included
in cost of parking was $14.6 million, $16.2 million and $14.7 million,
depreciation expense included in cost of management contracts was $0.5 Million,
$1.1 million and $1.7 million, and depreciation expense included in general and
administrative expenses was $5.3 million, $5.2 million and $5.8 million for the
fiscal years ended September 30, 2004, 2003 and 2002, respectively. 49




---



##### Table of Contents



(5) Goodwill and Amortizable Intangible Assets As of September 30, 2004, the Company had the following amortizable
intangible assets (in thousands): GrossCarrying
    
    AccumulatedAmount
    
    Amortization
    
    NetContract and lease rights
    
    $
    144,744
    
    
    $
    55,729
    
    
    $
    89,015Noncompete agreements
    
    
    2,575
    
    
    
    2,383
    
    
    
    192Total
    
    $
    147,319
    
    
    $
    58,112
    
    
    $
    89,207
 The following table shows the changes in contract and lease rights for
fiscal years 2004 and 2003 (in thousands): As of September 30, 2002
    
    $
    108,406Additions
    
    
    7,186Amortization
    
    
    (9,418
    )Impairments
    
    
    (3,859
    )As of September 30, 2003
    
    $
    102,315Additions
    
    
    1,502Amortization
    
    
    (8,557
    )Deletions
    
    
    (5,747
    )Impairments
    
    
    (498
    )As of September 30, 2004
    
    $
    89,015
 The future amortization of contract and lease rights are as follows (in
thousands): Year EndingSeptember 30,2005
    
    $
    8,8112006
    
    
    9,3492007
    
    
    9,3272008
    
    
    9,1512009
    
    
    8,752Thereafter
    
    
    43,625$
    89,015
 Amortization expense related to the contract and lease rights was $8.5
million, $9.5 million and $10.4 million, respectively, for the years ended
September 30, 2004, 2003 and 2002. Amortization expense related to noncompete
agreements was $33,000, $0.2 million and $0.4 million, respectively, for the
years ended September 30, 2004, 2003 and 2002, respectively. In July 2001, the FASB issued SFAS No. 141, Business Combinations, and
SFAS No. 142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that
the purchase method of accounting be used for all business combinations
initiated after June 30, 2001. SFAS No. 141 also specifies criteria which
intangible assets acquired in a purchase method business combination must meet
to be recognized and reported apart from goodwill. 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. Any
impairment loss would be measured as of the date of adoption and recognized as
the cumulative effect of an accounting change. SFAS No. 142 also requires that
intangible assets with definite useful lives be amortized over their respective
estimated useful lives and reviewed for impairment in accordance with SFAS No.
144, Accounting for the Disposal or Impairment of Long-Lived Assets. The Company adopted the provisions of SFAS No. 141 immediately. For the
Company, SFAS No. 142 had to be adopted by October 1, 2002, but could be
adopted earlier. The Company elected early adoption of SFAS No. 142 as of
October 1, 2001. SFAS No. 142 required that the Company evaluate its existing
intangible assets and goodwill that were acquired in a prior business
combination and to make any necessary reclassifications in order to conform
with the new criteria in SFAS No. 141 for recognition 50




---



##### Table of Contents



apart from goodwill.
With the adoption of SFAS No. 142, the Company reassessed the useful lives and
residual values of all intangible assets acquired in business combinations and
determined that no amortization period adjustments were required. In addition,
the Company did not identify any intangible assets with indefinite useful
lives, other than goodwill. The transitional provisions of SFAS No. 142 required the Company to
perform an assessment of whether there is an indication that goodwill was
impaired as of the date of adoption. To accomplish this, the Company
identified its reporting units and determined the carrying value of each
reporting unit by assigning the assets and liabilities, including the existing
goodwill and intangible assets, to those reporting units as of the date of
adoption. The Company is structured into geographical segments. Each segment
consists of several cities which report to a single senior vice president.
For purposes of allocating and evaluating goodwill and intangible assets, the
Company considers each city to be a separate reporting unit. To the extent a
reporting units carrying amount exceeded its fair value, an indication exists
that the reporting units goodwill may be impaired and the Company performed
the second step of the transitional impairment test. In the second step, the
Company compared the implied fair value of the reporting units goodwill,
determined by allocating the reporting units fair value to all of its assets
(recognized and unrecognized) and liabilities in a manner similar to a purchase
price allocation in accordance with SFAS No. 141, to its carrying amount, both
of which were measured as of the date of adoption. The reporting units fair
value was determined by a third party appraisal. The Company completed the
transition process 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. In accordance with SFAS No. 142, the Company assigned its goodwill to its
various reporting units. The following table reflects this assignment by
reported segment as of October 1, 2001, and the changes in the carrying amounts
for the years ended September 30, 2004, 2003 and 2002 (in thousands): One
    
    Two
    
    Three
    
    Four
    
    Five
    
    Six
    
    Seven
    
    Eight
    
    TotalBalance as of September 30, 2001
    
    $
    5,829
    
    
    $
    194,786
    
    
    $
    
    
    
    $
    214
    
    
    $
    
    
    
    $
    6,913
    
    
    $
    28,695
    
    
    $
    14,193
    
    
    $
    250,630Impaired upon adoption of SFAS 142
as of October 1, 2001
    
    
    
    
    
    
    (6,636
    )
    
    
    
    
    
    
    (214
    )
    
    
    
    
    
    
    (2,519
    )
    
    
    
    
    
    
    
    
    
    
    (9,369
    )Acquired during the period
    
    
    780
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    880Balance as of September 30, 2002
    
    $
    6,609
    
    
    $
    188,150
    
    
    $
    100
    
    
    $
    
    
    
    $
    
    
    
    $
    4,394
    
    
    $
    28,695
    
    
    $
    14,193
    
    
    $
    242,141Writedown due to elimination of
deferred tax valuation allowances
    
    
    (3,207
    )
    
    
    (2,970
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,193
    )
    
    
    
    
    
    
    (4,579
    )
    
    
    (11,949
    )Foreign currency translation
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120Balance as of September 30, 2003
    
    $
    3,522
    
    
    $
    185,180
    
    
    $
    100
    
    
    $
    
    
    
    $
    
    
    
    $
    3,201
    
    
    $
    28,695
    
    
    $
    9,614
    
    
    $
    230,312Acquired during the period
    
    
    
    
    
    
    
    
    
    
    2,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,250Balance as of September 30, 2004
    
    $
    3,522
    
    
    $
    185,180
    
    
    $
    2,350
    
    
    $
    
    
    
    $
    
    
    
    $
    3,201
    
    
    $
    28,695
    
    
    $
    9,614
    
    
    $
    232,562
 During 2004, the Company paid an additional payment to the seller due to
the incentive provision of the USA Parking contract, see note 2. During the 2003 fiscal year, the Company eliminated deferred tax valuation
allowances on acquired operating loss carry forwards totaling $11.9 million,
because Management determined that the deferred tax assets from these operating
loss carry forwards would be realized. Since these deferred tax assets were
obtained from previous acquisitions for which goodwill was recorded, the
Company reduced such goodwill by the amount of the elimination of the deferred
tax valuation allowances. (6) Gain on Sale of Non-Operating Assets During fiscal year 2003, the Company consummated the sale of an airplane
owned by the Company for $3.9 million, resulting in the recognition of a gain
of $3.3 million, net of selling costs. (7) Property-Related Gains (Losses), Net The Company routinely disposes of owned properties due to various factors,
including economic considerations, unsolicited offers from third parties 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. In accordance with SFAS No. 144, gains and losses on the sale or
condemnation of property, equipment, leasehold improvements, contract rights
and lease rights are included as a component of discontinued operations as are
gains and losses on the 51




---



##### Table of Contents



termination, prior to the end of the contractual term,
of lease or management obligations. Impairments associated with parking
facilities that meet the assets held-for-sale criteria as defined in SFAS No.
144 are also included as a component of discontinued operations. Included in property-related gains and losses are the gains or losses from
the disposal of equipment or other assets that are not included in discontinued
operations. Also included are losses due to the impairment of assets at
locations which management plans to continue to operate. All assets disposed of during the years
ended September 30, 2004, 2003 and
2002 were in use at the time of disposal. A summary of property-related
pretax gains and losses for the years ended September 30, 2004, 2003 and 2002
is as follows (in thousands): Years Ended September 30,2004
    
    2003
    
    2002Net gains on sale of property
    
    $
    14,225
    
    
    $
    
    
    
    $
    1,427Impairment charges for property, equipment and leasehold improvements
    
    
    (1,612
    )
    
    
    (3,959
    )
    
    
    (2,962
    )Impairment charges for intangible assets
    
    
    (4,952
    )
    
    
    (3,601
    )
    
    
    (7,304
    )Net gain on sale of partnership interests
    
    
    
    
    
    
    
    
    
    
    3,853Total property related gains (losses), net
    
    $
    7,661
    
    
    $
    (7,560
    )
    
    $
    (4,986
    )
 The $7.7 million gain in 2004 was comprised of a $6.3 million gain on sale
of property in New York, a $5.8 million gain on sale of property in Rhode
Island and $2.2 million of gain on other properties sold, which the Company
plans to continue to operate under management agreements. The gains on the sale
of property were offset by $6.6 million of impairments of contract rights,
deferred expenses and leasehold improvements related to locations which
management plans to continue to operate. The Company recognized $5.0 million
in impairment charges for intangible assets primarily in New York City, Little
Rock, Arkansas and Kansas City. The Company also recognized $1.6 million in
impairment charges for property, equipment and leasehold improvements primarily
in New York City. Based on the current operating results and the Companys
recent forecast for the next fiscal year, management determined that the
projected cash flows for these locations would not be enough to recover the
remaining value of the assets. Impairment charges recognized in fiscal 2004
were based on estimated fair values using projected cash flows of the
applicable parking facility discounted at the Companys average cost of funds. The $7.6 million loss in 2003 was comprised of impairments of contract
rights, deferred expenses and leasehold improvements related to locations which
management plans to continue to operate. The Company recognized $4.0 million
in impairment charges for property, equipment and leasehold improvements
primarily in New York City. Also, the Company recognized $3.6 million in
impairment charges for intangible assets primarily in New York City. Based on
the continued sluggish economy, current operating results, and the Companys
recent forecast for the next fiscal year, management determined that the
projected cash flows for these locations would not be enough to recover the
remaining value of the assets. Impairment charges recognized in fiscal year
2003 were based on estimated fair values using projected cash flows of the
applicable parking facility discounted at the Companys average cost of funds. On January 28, 2002, the Company sold its 50% interest in Civic Parking,
LLC (Civic) for $18.4 million. The transaction resulted in a pre-tax gain of
$3.9 million which is included as a property-related gain for the year ended
September 30, 2002. Additionally, the Company recognized $1.4 million of
pre-tax gains on sales of property during the year, primarily from the
condemnation of a property in Houston. These gains were offset by impairment
charges of $10.3 million, comprised of $3.0 million of leasehold improvements,
$2.3 million of contract and lease rights and $5.0 million of key money.
Impairment charges were the result of condemnations of $1.6 million as well as
impairment charges of $8.7 million for locations, primarily in New York City,
where the discounted projected future cash flows no longer supported the
carrying value of the assets. (8) Investment in and Advances to Partnerships and Joint Ventures The following tables reflect the financial position and results of
operations for the partnerships and joint ventures as of September 30, 2004 and
2003, and for each of the years in the three-year period ended September 30,
2004 (in thousands). Aggregate fair value of investments is not disclosed as
quoted market prices are not available. 52




---



##### Table of Contents



Investment
    
    Advances(Accumulated Losses)
    
    to Partnershipsin Partnerships and
    
    and JointJoint Ventures
    
    Ventures2004
    
    2003
    
    2004
    
    2003Commerce Street Joint Venture
    
    $
    (642
    )
    
    $
    (963
    )
    
    $
    347
    
    
    $
    440Larimer Square Parking Associates
    
    
    1,129
    
    
    
    1,080
    
    
    
    831
    
    
    
    970Lodo Parking Garage, LLC
    
    
    1,079
    
    
    
    1,090
    
    
    
    
    
    
    
    CPS Mexico, Inc.
    
    
    2,761
    
    
    
    6,796
    
    
    
    2.5
    
    
    
    2.8Other
    
    
    1,880
    
    
    
    2,276
    
    
    
    
    
    
    
    935$
    6,207
    
    
    $
    10,279
    
    
    $
    1,617
    
    
    $
    3,370
 Equity in Partnership and
    
    Joint VentureJoint Venture Earnings (Losses)
    
    Debt2004
    
    2003
    
    2002
    
    2004
    
    2003Commerce Street Joint Venture
    
    $
    606
    
    
    $
    484
    
    
    $
    514
    
    
    
    5,350
    
    
    
    5,873Larimer Square Parking Associates
    
    
    312
    
    
    
    287
    
    
    
    295
    
    
    
    1,745
    
    
    
    2,065Lodo Parking Garage, LLC
    
    
    94
    
    
    
    88
    
    
    
    103
    
    
    
    
    
    
    
    CPS Mexico, Inc.
    
    
    (4,036
    )
    
    
    1,424
    
    
    
    1,501
    
    
    
    11,558
    
    
    
    4,730Other
    
    
    40
    
    
    
    (71
    )
    
    
    289
    
    
    
    
    
    
    
    $
    (2,984
    )
    
    $
    2,212
    
    
    $
    2,702
    
    
    $
    18,653
    
    
    $
    12,668
 (a) Commerce Street Joint Venture  The Company has a 50% interest in a joint venture that owns a parking
complex in Nashville, Tennessee. The complex consists of the original
parking garage and retail space (the Original Facility) and an addition
to the parking garage (the Addition) constructed several years after the
completion of the Original Facility. The joint venture financed the Original Facility with industrial
development bonds in the original principal amount of $8.6 million (the
1984 Bonds) issued by The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson County (the Metro IDB
or Issuer) in 1984. The Metro IDB holds title to the Original Facility,
which it leases to the joint venture under a lease expiring in 2014. The
lease of the Original Facility obligates the venture to make lease
payments corresponding to principal and interest payable on Series A Bonds
and provides the venture with an option to purchase the Original Facility
at any time by paying the amount due under the Series A Bonds and making a
nominal purchase payment to the Metro IDB. In 1994, the Issuer, at the
request of the Company, issued additional bonds (the Series 1994 Bonds)
in the amount of $6.7 million and applied the proceeds to refunding of the
1984 Bonds. In June 2002, the Issuer, at the request of the Company issued $4.8
million of Series 2002A variable rate revenue refunding bonds and $0.3
million of Series 2002B Federally-taxable revenue refunding bonds
(collectively the Bonds). The series 2002A Bonds mature on January 1,
2014. The Bonds require monthly interest payments. The proceeds of the
Bonds were used to repay the 1994 Bonds. As of September 30, 2004, the
Series 2002A Bonds had a variable rate of 1.89%. The 2002A Bonds are
subject to a mandatory sinking fund redemption beginning January 1, 2004
and on each January 1 thereafter. The 2002B Bonds were repaid in full in
January 2003. (b) Larimer Square Parking Associates The Company owns a 50% interest in a joint venture that owns a
parking complex in Denver, Colorado. The complex, which was completed in
February 1996, was constructed and financed by the joint venture partners.
The Company invested $991 thousand in the joint venture and loaned the
joint venture $1.1 million in the form of a construction note, bearing
interest at a fixed rate of 9.5%, which was converted to a term note in
August 1996, following completion of the project. An additional $1.1
million was loaned by the Company which will be repaid through sales tax
and property tax revenues by the Denver Urban Renewal Authority at a fixed
interest rate of 10%. The Company manages the parking facility for the
venture. 53




---



##### Table of Contents



(c) Lodo Parking Garage, LLC In March 1995, the Company acquired a 50% interest in a joint venture
which owns a parking complex in Denver, Colorado. The Company invested
$1.4 million in the joint venture and manages the parking facility for the
joint venture. (d) CPS Mexico, Inc. The Company holds a 50% interest in a Mexican joint venture which
manages and leases various parking structures in Mexico. The Company also
has loaned $2.5 million and $2.8 million at September 30, 2004 and 2003,
respectively, to the affiliate. These loans bear interest at fixed rates
ranging from 10% to 12% and are included in current portion of notes
receivable on the Companys consolidated balance sheet at September 30,
2004 and 2003. The Company entered into a partnership agreement effective June 1, 2000,
to operate certain locations in Puerto Rico. The Company was the general
partner. The partners entered into an option agreement on that date whereby
the other partner had the option to sell its partnership interest to the
Company during the period from May 1, 2003 to November 30, 2003. The Company
and the partner mutually agreed to allow the partner to sell its interest to
the Company on March 31, 2003. The purchase was consummated on March 31, 2003,
for approximately $14.3 million, which had previously been recorded as a
liability by the Company. The Company has 19 variable interest entities with which it holds a
significant variable interest, but is not the primary beneficiary: Number ofCommencement
    
    
    
    
    
    
    
    
    
    ParkingEntity
    
    of Operations
    
    Nature of Activities
    
    % Ownership
    
    Location
    
    SpacesCentral Parking
System of Mexico,
SA De CV
    
    Aug-94
    
    Leases and manages
parking lots
    
    
    50.0
    %
    
    Mexico
    
    
    58,344Other investments
in VIEs
    
    Oct 80-July 99
    
    Ownership,
management, and
leases parking lots
    
    3.3%-50.0%
    
    Mexico and Various
states
    
    
    11,652
 (9) Long-Term Debt and Capital Lease Obligations Long-term debt and capital lease obligations consisted of the following
(in thousands): As of September 30,2004
    
    2003Credit FacilityTerm note payable
    
    $
    157,675
    
    
    $
    174,125Revolving credit facility
    
    
    
    
    
    
    59,000Other notes payable
    
    
    47,740
    
    
    
    36,669Capital lease obligations
    
    
    640
    
    
    
    790Total
    
    
    206,055
    
    
    
    270,584Less: current maturities of long-term obligations
    
    
    (46,867
    )
    
    
    (3,623
    )Total long-term obligations
    
    $
    159,188
    
    
    $
    266,961
 On February 28, 2003, the Company entered into a credit facility (the
Credit Facility) initially providing for an aggregate availability of up to
$350 million consisting of a five-year $175 million revolving loan, including a
sub-limit of $60 million for standby letters of credit, and a $175 million
seven-year term loan. The facility is secured by the stock of certain
subsidiaries of the Company, certain real estate assets, and domestic personal
property assets of the Company and certain subsidiaries. Proceeds from the
Credit Facility were used to refinance a previous credit facility. The Company
has reduced the maximum loan commitment from $350.0 million to $321.8 million
as of September 30, 2004. This permanent reduction is as a result of $2.6
million of scheduled amortization and $25.6 million of prepayments related to
property dispositions. The Company amended the Credit Facility in June 2004. The amendment
reduced the margin applied to the term loan by 75 basis points, and increased
the standby letters of credit sub-limit by $30.0 million to $90.0 million. The
Company uses its revolving loan to collateralize outstanding letters of credit.
All other terms and conditions remained the same. The Credit Facility bears interest at LIBOR plus a tier-based margin
dependent upon certain financial ratios. There are separate tiers for the
revolving loan and term loan. The weighted average margin as of September 30,
2004 was 250 basis points. The amount outstanding under the Companys Credit
Facility was $157.7 million with a weighted average interest rate of 4.7% as of
September 30, 2004. The term loan is required to be repaid in quarterly
payments of $0.4 million through March 2008 and quarterly payments of $20.8
million from June 2008 through March 2010. The aggregate availability under
the Credit Facility was $117.5 million at September 30, 2004, which is net of
$46.6 million of stand-by letters of credit. The Company had deferred
financing costs related to the Credit Facility of $6.7 million as of September
30, 2004 and $7.8 million as of September 30, 2003. The Company amortizes
these costs over the term of the loan. 54




---



##### Table of Contents



The Credit Facility contains covenants including those that require the
Company to maintain certain financial ratios, restrict further indebtedness and
certain acquisition activity and limit the amount of dividends paid. The
primary ratios are a leverage ratio, senior leverage ratio and a fixed charge
coverage ratio. Quarterly compliance is calculated using a four quarter rolling
methodology and measured against certain targets.As of March 31, 2003, the
Company was in default due to non-compliance with both the leverage and senior
leverage ratios. A temporary waiver was obtained from the lenders for the
quarter ended March 31, 2003, subject to certain conditions. Pursuant to the
provisions of 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 covenants at
the next quarterly measurement date was probable. As a result, the Credit
Facility was classified as a current liability at March 31, 2003. The
temporary waiver required the Company to complete an amendment to the Credit
Facility. The Company completed an amendment of the Credit Facility on August 12,
2003. The Company paid a fee of $1.5 million in connection with obtaining the
amendment. The amendment included changes to the permitted covenant ratios;
limitation of capital expenditures, acquisitions and loans; adjusted pricing
with additional tiers and new provisions for asset dispositions. The amended
facility included a new pricing tier that adds 25 basis points when the
Companys leverage ratio exceeds a certain level. Pursuant to EITF No. 86-30,
the Company projected future compliance with the amended covenants and believes
that compliance with the amended covenants during the next four quarterly
measurement dates was probable. Accordingly, the Credit Facility was
classified as a long-term liability at September 30, 2003. The Company was in
compliance with the amended covenants at September 30, 2004. 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 required 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. In August of 2003, the Company entered into an amendment to the
transaction. The amendment modified certain agreements, instruments and other
documents, in connection with the April 2002 financing, to align financial
covenants, affirmative covenants and other transaction terms to those found in
the Credit Facility, as amended. The operating properties financed by this
transaction are currently being leased to another parking operator. In
September 2004, the Company repaid the two notes with proceeds from the Credit
Facility. On March 15, 2000, a limited liability company (LLC) of which the
Company is the sole shareholder purchased the Black Angus Garage, a multi-level
structure with 300 parking stalls, located in New York City, for $19.6 million.
$13.3 million of the purchase was financed through a five-year note bearing
interest at one month floating LIBOR plus 162.5 basis points. The note is
collateralized by the parking facility. The $12.8 million remaining principal
balance at September 30, 2004 will be due at the end of the five-year loan
term. The Company plans to repay the loan in 2005 with available balances
under the Credit Facility. To hedge the Companys cash flow exposure to
interest rate fluctuations, the Company entered into a five-year LIBOR swap,
yielding an effective interest cost of 8.91% and an effective monthly principal
and interest payment of approximately $108 thousand for the five-year period.
The note has been classified as current at September 30, 2004. The Company also has several notes payable outstanding totaling $34.9
million at September 30, 2004. These notes are secured by real estate and
equipment and bear interest at fixed rates ranging from 6.5% to 10.0%. Future maturities under long-term debt arrangements, including capital
lease obligations, are as follows (in thousands): Year EndingSeptember 30,2005
    
    $
    46,8672006
    
    
    2,4952007
    
    
    2,9382008
    
    
    42,8082009
    
    
    83,367Thereafter
    
    
    27,580$
    206,055
 In connection with the Kinney acquisition, the Company assumed an
agreement whereby a parking structure and the corresponding land upon which it
sits were leased under a long-term arrangement. The parking structure was
accounted for as a capital lease, and the underlying land was accounted for as
an operating lease. The original agreement called for lease payments 55




---



##### Table of Contents



over a
twenty-year term at a 17.4% interest rate. In connection with purchase
accounting, the carrying value of the related obligation was recorded at fair
value. The lease was paid off during fiscal year 2004. (10) Subordinated Convertible Debentures 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. In December 2003, the FASB issued FASB Interpretation No. 46 (revised
December 2003) (FIN 46R), Consolidation of Variable Interest Entities, which
addresses how a business enterprise should evaluate whether it has a
controlling financial interest in an entity through means other than voting
rights and accordingly should consolidate the entity. FIN 46R replaces FASB
Interpretation No. 46, Consolidation of Variable Interest Entities, which was
issued in January 2003. FIN 46Rs transition guidance required the application of either FIN 46 or
FIN 46R to all Special Purpose Entities (SPEs) in which the Company holds a
variable interest no later than the end of the first reporting period ending
after December 15, 2003. Under the provisions of both FIN 46 and FIN 46R, the
Trust is considered an SPE in which the Company holds a variable interest
because the Trusts activities are generally so restricted and predetermined
that the holders of the Preferred Securities lack the direct or indirect
ability to make decisions about the Trusts activities through voting rights or
similar rights. During the quarter ended December 31, 2003, the Company
adopted the provisions of FIN 46R to account for its variable interest in the
Trust. Since a majority of the Preferred Securities issued by the Trust are owned
by a few investors, the Company is not deemed to be the primary beneficiary
under FIN 46R. Additionally, the Trusts common stock equity held by the
Company would not be considered at risk and therefore, the common stock equity
would not absorb any expected losses of the Trust. Accordingly, under the
provisions of FIN 46R, the Company does not have a significant variable
interest in the Trust. Therefore, the Company deconsolidated the Trust upon
adoption of FIN 46R by removing, on the consolidated balance sheets, the amount
previously recorded as Company-obligated mandatorily redeemable securities of a
subsidiary trust and recorded, as a component of long-term liabilities,
subordinated convertible debentures. Additionally, the amounts previously
reported as dividends on Company-obligated mandatorily redeemable securities
of a subsidiary trust, were included as interest expense on the consolidated
statements of operations. As permitted by FIN 46R, the Company elected to
restate the prior period amounts to conform to the current year presentation. 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 was
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. The other provisions of SFAS No. 145 did not have an effect on the
Companys financial statements. On June 28, 2002, the Company repurchased 138,800 shares of its
subordinated convertible debentures for $2.5 million. On March 30, 2002, the
Company repurchased 500,000 shares of its subordinated convertible debentures
for $9.3 million. On December 28, 2001, the Company repurchased 637,795 shares
of the subordinated convertible debentures 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 56




---



##### Table of Contents



subordinated convertible debentures
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. Gains on the early
extinguishment of debt were previously reported as extraordinary items, net of
tax, in the Companys statement of earnings, but were reclassified as a
separate component of other income as a result of the adoption of SFAS No. 145. (11) Shareholders Equity The following tables set forth the computation of basic and diluted
earnings per share: Year Ended
    
    Year Ended
    
    Year EndedSeptember 30, 2004
    
    September 30, 2003
    
    September 30, 2002Income
    
    Common
    
    Per
    
    Income
    
    Common
    
    Per
    
    Income
    
    Common
    
    PerAvailable
    
    Shares
    
    Share
    
    Available
    
    Shares
    
    Share
    
    Available
    
    Shares
    
    Share($000s)
    
    (000s)
    
    Amount
    
    ($000s)
    
    (000s)
    
    Amount
    
    ($000s)
    
    (000s)
    
    AmountBasic earnings (loss) from continuing
operations per share before
cumulative
effect of accounting changes
    
    $
    19,986
    
    
    
    36,346
    
    
    $
    0.55
    
    
    $
    (6,236
    )
    
    
    36,034
    
    
    $
    (0.18
    )
    
    $
    39,618
    
    
    
    35,849
    
    
    $
    1.10Effects of dilutive stock and options:Stock option plan and warrants
    
    
    
    
    
    
    209
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    362
    
    
    
    Restricted stock plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted earnings (loss) from continuing
operations per share before cumulative
effect of accounting changes
    
    $
    19,986
    
    
    
    36,555
    
    
    $
    0.55
    
    
    $
    (6,236
    )
    
    
    36,034
    
    
    $
    (0.18
    )
    
    $
    39,618
    
    
    
    36,211
    
    
    $
    1.09
 Weighted average common shares used for the computation of basic earnings
(loss) per share excludes certain common shares issued pursuant to the
Companys restricted stock plan and deferred compensation agreement, because
under the related agreements the holders of restricted stock will forfeit such
shares if certain employment or service requirements are not met. The effect of
the conversion of the subordinated convertible debentures has not been included
in the diluted earnings per share calculation since such securities were
anti-dilutive for all periods. At September 30, 2004 and 2003, such securities
were convertible into 1,419,588 shares of common stock. Options to acquire
2,851,723, 4,151,057 and 517,695 shares of common stock were excluded from the
2004, 2003 and 2002 diluted earnings per share calculations because they were
anti-dilutive. (12) Operating Lease Commitments The Company and its subsidiaries conduct a significant portion of their
operations on leased premises under operating leases expiring at various dates
through 2101. Lease agreements provide for minimum payments or contingent
payments based upon a percentage of revenue or, in some cases, a combination of
both types of arrangements. Certain locations additionally require the Company
and its subsidiaries to pay real estate taxes and other occupancy expenses. Future minimum rental commitments under operating leases and subleases are as
follows (in thousands): Year Ending
    
    Fixed
    
    Sub-rental
    
    NetSeptember 30,
    
    Rent
    
    Income
    
    Rent2005
    
    $
    217,463
    
    
    $
    2,797
    
    
    $
    214,6662006
    
    
    165,898
    
    
    
    2,119
    
    
    
    163,7792007
    
    
    126,117
    
    
    
    1,387
    
    
    
    124,7302008
    
    
    95,983
    
    
    

    526
    
    
    
    95,4572009
    
    
    80,449
    
    
    
    496
    
    
    
    79,953Thereafter
    
    
    459,814
    
    
    
    16,155
    
    
    
    443,659Total future operating lease commitments
    
    $
    1,145,724
    
    
    $
    23,480
    
    
    $
    1,122,244
 Rental expense for all operating leases, along with offsetting rental income
from subleases were as follows (in thousands): 57




---



##### Table of Contents



Year Ended September 30,2004
    
    2003
    
    2002Rentals:Minimum
    
    $
    254,378
    
    
    $
    262,189
    
    
    $
    249,290Contingent
    
    
    66,104
    
    
    
    65,085
    
    
    
    64,171Total rent expense
    
    
    320,482
    
    
    
    327,274
    
    
    
    313,461Less sub-lease income
    
    
    (16,570
    )
    
    
    (15,961
    )
    
    
    (15,908
    )Total rent expense, net
    
    $
    303,912
    
    
    $
    311,313
    
    
    $
    297,553
 (13) Income Taxes Income tax expense (benefit) from continuing operations consists of the
following (in thousands): Year Ended September 30,2004
    
    2003
    
    2002Current:Federal
    
    $
    7,395
    
    
    $
    4,771
    
    
    $
    17,157Jobs credit, net of federal tax benefit
    
    
    (305
    )
    
    
    (727
    )
    
    
    (417
    )Net federal current tax expense
    
    
    7,090
    
    
    
    4,044
    
    
    
    16,740State
    
    
    1,681
    
    
    
    1,395
    
    
    
    2,615Non-U.S
    
    
    2,728
    
    
    
    1,593
    
    
    
    2,253Total current tax expense
    
    
    11,499
    
    
    
    7,032
    
    
    
    21,608Deferred:Federal
    
    
    2,718
    
    
    
    (9,412
    )
    
    
    (1,287
    )State
    
    
    389
    
    
    
    (2,057
    )
    
    
    (452
    )Total deferred tax expense (benefit)
    
    
    3,107
    
    
    
    (11,469
    )
    
    
    (1,739
    )Total income tax expense (benefit)
from continuing operations
    
    $
    14,606
    
    
    $
    (4,437
    )
    
    $
    19,869
 Total comprehensive income taxes are allocated as follows (in thousands): Year Ended September 30,2004
    
    2003
    
    2002Income
comprehensive tax expense (benefit) from continuing operations
    
    $
    14,606
    
    
    $
    (4,437
    )
    
    $
    19,869Income tax expense (benefit) from discontinued operations
    
    
    (1,885
    )
    
    
    1,358
    
    
    
    4,294Shareholders equity for unrealized gain on fair value of
derivatives for financial reporting purposes
    
    
    721
    
    
    
    1,106
    
    
    

    21Shareholders equity for compensation expense for tax purposes in
excess of amounts recognized for financial reporting purposes
    
    
    (205
    )
    
    
    105
    
    
    
    (414
    )Cumulative effect of accounting changes
    
    
    
    
    
    
    
    
    
    
    (28
    )Total
comprehensive income tax expense (benefit)
    
    $
    13,237
    
    
    $
    (1,868
    )
    
    $
    23,742
 Provision has not been made for U.S. or additional foreign taxes on
approximately $33.6 million, $27.7 million and $25.5 million at September 30,
2004, 2003 and 2002, respectively, of undistributed earnings of foreign
subsidiaries, as those earnings are intended to be permanently reinvested. The American Jobs Creation Act of 2004, which was enacted on October 22,
2004, provides for a dividend received deduction of 85% of cash dividends
received from controlled foreign corporations and invested in the United
States. This provision would apply to the Companys years ended September 30,
2005 and 2006. The Company is in the early stages of evaluating the effect of
these provisions on its repatriation plans. A reconciliation between actual income taxes and amounts computed by
applying the federal statutory rate to earnings (loss) from continuing
operations before income taxes and cumulative effect of accounting change is
summarized as follows (in thousands): 58




---



##### Table of Contents



Year Ended September 30,2004
    
    2003
    
    2002U.S. Federal statutory rate on (loss) earnings from
continuing operations before income taxes
and cumulative effect of accounting changes
    
    $
    12,107
    
    
    
    35.0
    %
    
    $
    (3,736
    )
    
    
    35.0
    %
    
    $
    20,820
    
    
    
    35.0
    %State and city income taxes, net of federal tax effect
    
    
    1,345
    
    
    
    3.8
    
    
    
    (430
    )
    
    
    4.0
    
    
    
    1,249
    
    
    
    2.1Jobs credits
    
    
    (305
    )
    
    
    (0.9
    )
    
    
    (727
    )
    
    
    6.8
    
    
    
    (417
    )
    
    
    (0.7
    )Foreign versus US rate difference
    
    
    (178
    )
    
    
    (0.5
    )
    
    
    486
    
    
    
    (4.6
    )
    
    
    (70
    )
    
    
    (0.1
    )Equity in unconsolidated subsidiaries
    
    
    1,447
    
    
    
    4.1
    
    
    
    (483
    )
    
    
    4.5
    
    
    
    (553
    )
    
    
    (0.9
    )Other
    
    
    190
    
    
    
    0.6
    
    
    
    453
    
    
    
    (4.1
    )
    
    
    (1,160
    )
    
    
    (1.9
    )Income tax expense (benefit) from continuing operations
    
    $
    14,606
    
    
    
    42.1
    %
    
    $
    (4,437
    )
    
    
    41.6
    %
    
    $
    19,869
    
    
    
    33.5
    %
 Sources of deferred tax assets and deferred tax liabilities are as follows (in thousands): September 30,2004
    
    2003Deferred tax assets:Net operating loss carry forwards
    
    $
    8,253
    
    
    $
    8,061Deferred and capitalized expenses
    
    
    8,321
    
    
    
    8,507Deferred compensation expense
    
    
    5,001
    
    
    
    6,328Impairment of assets
    
    
    8,866
    
    
    
    7,680Accrued expenses and reserves
    
    
    9,309
    
    
    
    8,730Temporary differences related to Edison and its management contracts
    
    
    7,560
    
    
    
    6,860Allowance for doubtful accounts
    
    
    988
    
    
    
    1,108Other
    
    
    2,992
    
    
    
    2,417Total gross deferred tax assets
    
    
    51,290
    
    
    
    49,691Deferred tax liabilities:Property, equipment and leasehold improvements due to differences in
depreciation and purchase business combinations
    
    
    (45,311
    )
    
    
    (42,096
    )Deferred tax gain on sales of properties
    
    
    (7,064
    )
    
    
    (6,879
    )Timing differences in recognition of partnership earnings
    
    
    (409
    )
    
    
    Other
    
    
    (1,386
    )
    
    
    (490
    )Total gross deferred tax liabilities
    
    
    (54,170
    )
    
    
    (49,465
    )Valuation allowance on net operating loss carry forwards
    
    
    (3,236
    )
    
    
    (3,236
    )Net deferred tax liabilities
    
    $
    (6,116
    )
    
    $
    (3,010
    )
 As of September 30, 2004, the Company has federal net operating loss carry
forwards of approximately $6.3 million and state and city net operating loss
carry forwards of approximately $95.7 million which expire between 2005 and
2018. The ability of the Company to fully utilize these net operating losses is
limited due to changes in ownership of the companies which generated these
losses. These limitations have been considered in determining the deferred tax
asset valuation allowance shown above. Based on prior taxable income,
management believes that it is more likely than not that the Company will
generate sufficient taxable income to realize deferred tax assets after giving
consideration to the valuation allowance. The valuation allowance has been
provided for net operating loss carry forwards for which recoverability is
deemed to be uncertain. The valuation allowance decreased approximately $12.0 million in fiscal
2003, of which $11.9 million was credited to goodwill as that amount related to
net operating losses acquired in purchase acquisitions. (14) Employee Benefit Programs (a) Stock Plans In August 1995, the Board of Directors and shareholders approved a stock
plan for key personnel, which included a stock option plan and a restricted
stock plan. Under this plan, incentive stock options, as well as nonqualified
options and other stock-based awards, may be granted to officers, employees and
directors. A total of 7,317,500 common shares have been reserved for issuance
under these two plans combined. Options representing 4,541,157 shares are
outstanding under the stock option plan at September 30, 59




---



##### Table of Contents



2004. Options are
granted with an exercise price equal to the fair market value at the date of
grant, generally vest over a one- to four-year period and generally expire ten
years after the date of grant. At September 30, 2004, 316,463 shares had been issued through the
restricted stock plan. Expense related to vesting of restricted stock is
recognized by the Company over the vesting period. Under the restricted stock
plan, the Company granted 16,000 shares and 12,548 shares with weighted average
fair values on grant date of $20.20 per share and $17.13 per share during
fiscal year 2004 and 2003, respectively. In August 1995, the Board of Directors and shareholders also approved a
stock plan for directors. A total of 475,000 shares have been reserved for
issuance under the plan. Options to purchase 166,750 shares are outstanding
under this plan at September 30, 2004. The following table summarizes the transactions pursuant to the Companys
stock option plans for the last three fiscal years: Number
    
    Weighted Averageof Shares
    
    Exercise PriceOutstanding at September 30, 2001
    
    
    2,300,331
    
    
    $
    21.47Granted
    
    
    2,881,775
    
    
    $
    17.94Exercised
    
    
    (128,745
    )
    
    $
    15.00Canceled
    
    
    (183,177
    )
    
    $
    23.45Outstanding at September 30, 2002
    
    
    4,870,184
    
    
    $
    19.48Granted
    
    
    1,585,500
    
    
    $
    15.25Exercised
    
    
    (41,239
    )
    
    $
    15.29Canceled
    
    
    (1,405,799
    )
    
    $
    18.83Outstanding at September 30, 2003
    
    
    5,008,646
    
    
    $
    18.33Granted
    
    
    654,750
    
    
    $
    14.14Exercised
    
    
    (129,905
    )
    
    $
    14.01Canceled
    
    
    (825,584
    )
    
    $
    19.32Outstanding at September 30, 2004
    
    
    4,707,907
    
    
    $
    17.70
 At September 30, 2004, 2003 and 2002, options to purchase 2,144,778,
1,476,019 and 1,084,814 shares of common stock, respectively, were exercisable
at weighted average exercise prices of $19.68, $21.64 and $22.77, respectively. At September 30, 2004, information for outstanding options and options
currently exercisable is as follows: Option Price Range Per Share$8.00-$12.73
    
    $13.28-$14.81
    
    $16.36-$18.80
    
    $18.99-$20.14
    
    $20.49-$51.06Options outstandingNumber of options
    
    
    1,010,411
    
    
    
    1,067,035
    
    
    
    1,078,176
    
    
    
    1,197,725
    
    
    
    354,560Weighted-average exercise price
    
    $
    12.44
    
    
    $
    14.19
    
    
    $
    18.71
    
    
    $
    19.94
    
    
    $
    32.61Weighted-average contractual lives
    
    8.34 years
    
    8.62 years
    
    7.34 years
    
    6.67 years
    
    
    3.68 yearsOptions exercisableNumber of options
    
    
    403,286
    
    
    
    291,785
    
    
    
    137,672
    
    
    
    959,475
    
    
    
    352,560Weighted-average exercise price
    
    $
    12.00
    
    
    $
    14.44
    
    
    $
    18.50
    
    
    $
    19.91
    
    
    $
    32.66
 At September 30, 2003, information for outstanding options and options
currently exercisable is as follows: Option Price Range Per Share$8.00-$12.33
    
    $12.55-$18.50
    
    $18.80-$27.75
    
    $29.25-$36.75
    
    $45.50-$51.06Options outstandingNumber of options
    
    
    99,125
    
    
    
    1,977,359
    
    
    
    2,635,765
    
    
    
    202,647
    
    
    
    93,750Weighted-average exercise price
    
    $
    8.49
    
    
    $
    14.30
    
    
    $

    19.64
    
    
    $
    31.12
    
    
    $
    49.48Weighted-average contractual lives
    
    
    2.06 years
    
    
    8.90 years
    
    
    7.76 years
    
    
    5.01 years
    
    
    4.95 yearsOptions exercisableNumber of options
    
    
    99,125
    
    
    
    345,988
    
    
    
    757,759
    
    
    
    179,397
    
    
    
    93,750Weighted-average exercise price
    
    $
    8.49
    
    
    $
    15.64
    
    
    $
    20.36
    
    
    $
    31.36
    
    
    $
    49.48
 60




---



##### Table of Contents



The Company also has an Employee Stock Purchase Plan which began on April
1, 1996, under which 850,000 shares of common stock have been reserved for
issuance. The plan allows participants to contribute up to 10% of their normal
pay (as defined in the Plan) to a custodial account for purchase of the
Companys common stock. Participants may enroll or make changes to their
enrollment annually, and they may withdraw from the plan at any time by giving
the Company written notice. Employees purchase
stock annually following the end of the plan year at a price per share equal to
the lesser of 85% of the closing market price of the Companys common stock on
the first or the last trading day of the plan year. At September 30, 2004,
556,019 shares had been purchased under this plan. (b) Profit-Sharing and401(k)Plan The Company has a Profit-Sharing and 401(k) Savings Plan that allows
eligible participants to make pretax contributions, receive Company 401(k)
match contributions and participate in discretionary Company profit-sharing
contributions. Employees 18 years or older may participate in the Plan after
one year of continuous service, if the employee was employed prior to reaching
age 65. Participants contributions, Company 401(k) match contributions and
earnings thereon immediately vest. Company profit-sharing contributions vest
after two years of continuous service at a rate of 20% per year so that
participants are fully vested at the end of seven years. Company expense
associated with this plan was $3.0 million, $2.4 million and $2.6 million in
years 2004, 2003 and 2002, respectively. (c) Incentive Compensation Agreements The Company has incentive compensation agreements with certain key
employees. Participating employees receive an annual bonus based on
profitability of the operations and other factors for which they are
responsible. Incentive compensation expense is accrued during the year based
upon managements estimate of amounts earned under the related agreements.
Incentive compensation under all such agreements was approximately $6.0
million, $4.8 million and $6.3 million in years 2004, 2003 and 2002,
respectively. (d) Deferred Compensation Agreements The Company has an employment agreement with its President of
International Operations in which the officer is entitled to receive upon
retirement 267,750 shares of common stock which were issued in 1995 under the
Companys restricted stock plan. The Company recorded $705 thousand of
deferred compensation expense in its shareholders equity in fiscal year 1995,
which was being amortized ratably over the remaining expected term of the
officers employment. During fiscal year 2001 the agreement was amended to
allow the officer to receive all of the shares if he were to leave the Company
prior to his normal retirement date. Correspondingly, the Company transferred
267,750 shares of restricted common stock into a Rabbi Trust (the Trust)
owned by the Company. The officer has no authority over the administration of
the Trust. Transfer of these shares resulted in an increase in liabilities and
a decrease in equity of $705 thousand. The Company has a deferred compensation agreement that entitles the
Chairman to receive annual payments of $500 thousand for a period of ten years
following his termination, for any reason other than death, in exchange for a
covenant not to compete. Thereafter, the officer is entitled to annual payments
of $300 thousand until his death and, in the event his wife survives him, she
is entitled to annual payments of $300 thousand until her death. The Company
recognizes annual compensation expense pursuant to this agreement equivalent to
the change in the actuarially determined future obligation under the agreement.
Compensation (benefit) expense associated with this agreement was
approximately $199 thousand, ($555) thousand and $(22) thousand in fiscal years
2004, 2003 and 2002, respectively. At September 30, 2004, the Company had
recorded a liability of $3.4 million associated with this plan.
As of December 13, 2004, a new agreement has been entered. See
Note 18, Subsequent Events for additional information. Agreements with certain former key executives of Allright provide for
aggregate annual payments ranging from $20 thousand to $144 thousand per year
for periods ranging from 10 years to life, beginning when the executive retires
or upon death or disability. Under certain conditions, the amount of deferred
benefits can be reduced. Life insurance contracts with a face value of
approximately $9.2 million have been purchased to fund, as necessary, the
benefits under these agreements. The cash surrender value of the life insurance
contracts is approximately $2.0 million and $2.0 million at September 30, 2004
and 2003, respectively, and is included in other non-current assets. The plan
is a nonqualified plan and is not subject to ERISA funding requirements.
Deferred compensation costs for 2004, 2003 and 2002 were $774 thousand, $466
thousand and $296 thousand, respectively. At September 30, 2004, the Company
had recorded a liability of $5.8 million associated with this plan. 61




---



##### Table of Contents



(e) Deferred Unit Plan On December 19, 1996, the Board of Directors approved the adoption of the
Companys Deferred Stock Unit Plan. Under the plan, certain key employees have
the opportunity to defer the receipt of certain portions of their cash
compensation, instead receiving shares of common stock following certain
periods of deferral. The plan is administered by a committee, appointed by the
board of directors of the Company consisting of at least two non-employee
outside directors of the Company. The Company reserved 375,000 shares of
common stock for issuance under the 1996 Deferred Stock Unit Plan. Participants
may defer up to 50% of their salary. As of September 30, 2004, $2.2 million of
compensation remained deferred under this plan. (f) Restricted Stock Units The Company issued $323 thousand, $216 thousand and $63 thousand, during
fiscal year 2004, 2003 and 2002 respectively, related to restricted stock units
granted under individual employment agreements with certain key
executives. These restricted stock are exercisable upon change of
control of the Company. (15) Related Parties The Company leases two properties from an entity 50% owned by Monroe
Carell, Jr., the Companys chairman and Chief Executive Officer, for $290
thousand per year for a 10-year term and pays percentage rent to the entity.
Total rent expense, including percentage rent, was $290 thousand, $290 thousand
and $290 thousand in 2004, 2003 and 2002, respectively. The Company will
receive 25% of the gain in the event of a sale of these properties during the
term of the lease pursuant to the lease agreements. Management believes that
such transactions have been on terms no less favorable to the Company than
those that could have been obtained from unaffiliated persons. A company owned
by Mr. Carell, owns a 50% interest in a limited liability company that owns the
Lodo Garage in Denver, Colorado. The entity owned by Mr. Carell purchased the
interest in the garage from a third party. The Company owns the remaining 50%. In connection with the acquisition of Kinney, the Company entered into a
consulting agreement with Lewis Katz, a director of the Company. The Company
paid $200 thousand to the director pursuant to this agreement during fiscal
year 2002. Additionally, the Company has entered into a limited partnership
agreement with the same director whereby the director has agreed to seek new
business opportunities in the form of leases and management contracts and
renewals of existing leases and contracts as requested by the Company. During
the fiscal years ended September 30, 2004, 2003 and 2002, the Company
recognized expense of $339 thousand, $592 thousand and $221 thousand,
respectively, in connection with this agreement. Lewis Katz, a director of the Company, has an ownership interest in Foley
Parking Affiliate, LLC (Foley Parking). Foley Parking and the Company each
own 50% of a company that leases a parking garage in New York City. The lease
has a term of 20 years and the base rent is $1.3 million per year. This
location incurred losses of approximately $636,000 and $519,500, including
approximately $170,000 and $600,000 of deferred rent expense in fiscal years
2004 and 2003, respectively. (16) Contingencies In June and July 2003, four stockholders filed separate lawsuits against
the Company, its former CEO, its former CFO and its current CEO in the U. S.
District Court for the Middle District of Tennessee. The plaintiff in each
case sought to represent a plaintiff class of purchasers of Central Parkings
Common Stock. The plaintiff in each case claimed that the defendants made
material misrepresentations and/or omissions in connection with the Companys
financial statements for the quarter and fiscal year ended September 30, 2002
and about the Companys internal controls in violation of the Securities
Exchange Act of 1934, which allegedly caused the plaintiffs to buy Company
stock at inflated prices. The cases have been consolidated by the Court. By
order dated December 10, 2003, the Court has consolidated the cases now
identified as In re: Central Parking Corporation Securities Litigation,civil
action No. 03-CV-0546, appointed two individuals as co-lead plaintiffs and
approved their selection of counsel. The plaintiffs filed an amended complaint
on February 13, 2004, in which plaintiffs added the Companys Independent
Registered Public Accountant as a defendant and in which the plantiffs added a
number of allegations. The amended complaint also seeks to extend the putative
class period during which investors purchased the Companys Common Stock by
approximately nine months (the new class period is February 5, 2002 to February
13, 2003). On April 23, 2004, the defendants filed motions to dismiss the
lawsuit. On August 11, 2004, the court dismissed all claims against the
Companys Independent Registered Public Accountant, but denied the motion to
dismiss with respect to the Company and the individual defendants. The parties
have agreed to participate in non-binding mediation, and trial has been
scheduled for September 6, 2005. The litigation is in its preliminary stages
and the amount of potential loss, if any, cannot reasonably be estimated. 62




---



##### Table of Contents



In addition to the matters described above 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 will not have a material adverse effect on the
financial position, operations, or liquidity of the Company. The Company
maintains property casualty 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 property casualty insurance policies
have deductibles of up to $250,000
that must be met before the insurance companies are required to reimburse
the Company for costs and liabilities relating to covered claims. The Company
also provides health insurance for many of its employees and purchases a
stop-loss policy with a deductible of $150,000 per claim. As a result, the
Company is, in effect, self-insured for all of these types of claims up to the
deductible levels. (17) Business Segments The Companys business activities consist of domestic and foreign
operations. Foreign operations are conducted in the United Kingdom, Canada,
Spain, Ireland, Puerto Rico, Chile, Colombia, Peru, Venezuela, Greece, Poland,
and Switzerland. The Company also conducts business through joint ventures in
Mexico and Germany. Revenues attributable to foreign operations were less than
10% of consolidated revenues for each of fiscal years 2004, 2003 and 2002. In
2004, the United Kingdom and Canada account for 47.1% and 31.0% of total
foreign revenues, respectively. A summary of information about the Companys foreign and domestic operations is
as follows (in thousands): Year Ended September 30,2004
    
    2003
    
    2002Total revenues, excluding reimbursement of
management contract expenses:Domestic
    
    $
    664,765
    
    
    $
    663,040
    
    
    $
    657,790Foreign
    
    
    48,085
    
    
    
    45,863
    
    
    
    38,499Consolidated
    
    $
    712,850
    
    
    $
    708,903
    
    
    $
    696,289Operating earnings:Domestic
    
    $
    48,134
    
    
    $
    1,807
    
    
    $
    57,053Foreign
    
    
    8,042
    
    
    
    3,385
    
    
    
    5,700Consolidated
    
    $
    56,176
    
    
    $
    5,192
    
    
    $
    62,753Earnings (loss) from continuing operations before
minority interest, income taxes, and
cumulative effect of accounting changeDomestic
    
    $
    33,341
    
    
    $
    (11,334
    )
    
    $
    56,981Foreign
    
    
    4,250
    
    
    
    4,713
    
    
    
    7,271Consolidated
    
    $
    37,591
    
    
    $
    (6,621
    )
    
    $
    64,252Identifiable assets:Domestic
    
    $
    873,103
    
    
    $
    950,576Foreign
    
    
    48,268
    
    
    
    50,601Consolidated
    
    $
    921,371
    
    
    $
    1,001,177
 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 is a
summary of revenues (excluding reimbursement of management contract expenses)
and operating earnings (loss) by segment for the years ended September 30,
2004, 2003 and 2002 (in thousands) and identifiable assets as of September 30,
2004 and 2003. During fiscal year 2004, the 63




---



##### Table of Contents



Company realigned certain
locations among segments. All prior years segment data has been reclassified
to conform to the new segment alignment. Year Ended September 30,2004
    
    2003
    
    2002Revenues (a):Segment One
    
    $
    75,815
    
    
    $
    73,969
    
    
    $
    75,305Segment Two
    
    
    307,463
    
    
    
    299,631
    
    
    
    292,870Segment Three
    
    
    17,909
    
    
    
    15,262
    
    
    
    12,431Segment Four
    
    
    37,084
    
    
    
    37,217
    
    
    
    32,357Segment Five
    
    
    10,689
    
    
    
    10,101
    
    
    
    10,177Segment Six
    
    
    96,689
    
    
    
    95,462
    
    
    
    91,398Segment Seven
    
    
    66,716
    
    
    
    77,122
    
    
    
    75,600Segment Eight
    
    
    87,966
    
    
    
    91,762
    
    
    
    97,313Other
    
    
    12,519
    
    
    
    8,377
    
    
    
    8,838Total revenues
    
    $
    712,850
    
    
    $
    708,903
    
    
    $
    696,289Operating earnings (loss):Segment One
    
    $
    (4,730
    )
    
    $
    (10,462
    )
    
    $
    (4,232
    )Segment Two
    
    
    (4,629
    )
    
    
    (9,402
    )
    
    
    3,304Segment Three
    
    
    3,446
    
    
    
    448
    
    
    
    980Segment Four
    
    
    6,167
    
    
    
    1,918
    
    
    
    4,651Segment Five
    
    
    948
    
    
    
    286
    
    
    
    358Segment Six
    
    
    980
    
    
    
    142
    
    
    
    1,056Segment Seven
    
    
    (5,452
    )
    
    
    (5,504
    )
    
    
    (150
    )Segment Eight
    
    
    652
    
    
    
    (4,551
    )
    
    
    1,602Other
    
    
    58,794
    
    
    
    32,317
    
    
    
    55,184Total operating earnings
    
    $
    56,176
    
    
    $
    5,192
    
    
    $
    62,753
 September 30,2004
    
    2003Identifiable assets:Segment One
    
    $
    11,545
    
    

    $
    15,295Segment Two
    
    
    327,313
    
    
    
    338,623Segment Three
    
    
    14,414
    
    
    
    12,954Segment Four
    
    
    48,128
    
    
    
    41,666Segment Five
    
    
    1,289
    
    
    
    949Segment Six
    
    
    22,739
    
    
    
    23,123Segment Seven
    
    
    35,441
    
    
    
    36,619Segment Eight
    
    
    32,099
    
    
    
    32,689Other
    
    
    428,403
    
    
    
    499,259Total assets
    
    $
    921,371
    
    
    $
    1,001,177
 (a) Excludes reimbursement of management contract expenses. 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 the USA Parking acquisition. Segment Four encompasses Europe, Puerto Rico, Central and South America. Segment Five encompasses Nashville, TN. 64




---



##### Table of Contents



Segment Six encompasses the Nebraska, Oklahoma, Missouri, and the Midwestern
region of the United States. It also includes Canada, excluding Vancouver. Segment Seven encompasses the mid-Atlantic region of the United States and
includes Washington DC and Baltimore. It also includes Pennsylvania and
Western New York. Segment Eight encompasses Florida, Alabama, parts of Tennessee and portions of
the southeastern region of the United States to include the Gulf Coast region
and Texas. Other encompasses the home office, eliminations, certain owned real estate,
certain partnerships and discontinued operations. (18) Subsequent Event On
December 13, 2004, the Company entered into a new Employment
Agreement and a Revised Deferred Compensation Agreement with Monroe
Carell, the Companys chairman and chief executive officer. The Company arbitrated a rent
dispute relating to a five-year real estate lease extension that began in December 2003.  The extension provided
for a base rent equal to the greater of $4.75 million annually or fair market value, with an annual rent increase of
1.5%.  On December 13, 2004, the arbitrator ruled that the annual base rent would increase
to $7.45 million for the five-year extension period. As a result, the Company recognized
additional net expense of approximately $1.50 million during the fourth quarter of 2004. 65




---



##### Table of Contents



Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure None. 
 Item 9A. Controls and Procedures  (a)
    
    Evaluation of disclosure controls and procedures: Under the supervision
and with participation of the Companys management, including the
Companys Chief Executive Officer and Chief Financial Officer, the Company
conducted an evaluation of its disclosure controls and procedures, as such
term is defined under Rules 13a-15(e) and 15d-15(e) promulgated under the
Securities Exchange Act of 1934, as amended. Based on this evaluation,
the Chief Executive Officer and Chief Financial Officer concluded that the
Companys disclosure controls and procedures as of September 30, 2004 are
effective in timely alerting them to material information required to be
included in the Companys periodic reports and that such information is
(i) accumulated and communicated to the Companys management in a timely
manner, and (ii) recorded, processed, summarized and reported within the
time periods specified in the SECs rules and forms except for the process
of identifying and recording trade accounts payable. With respect to this
issue, the Company has established a process to capture and record vendor
invoices on a more timely basis and to estimate the liabilities for vendor
invoices not yet received. The Company believes that procedures performed
by the Company subsequent to quarter-end provide us with an adequate basis
to conclude the accuracy of this account.  (b)
    
    Changes in internal control over financial reporting: There has been no
change (including corrective actions with regard to significant
deficiencies or material weaknesses) in the Companys internal control
over financial reporting that has occurred during the Companys fiscal
year ended September 30, 2004 that has materially affected, or is
reasonably likely to materially affect the Companys internal control over
financial reporting. 
 Item 9B. Other Information On December 13, 2004, the Company entered into a new Employment Agreement and a Revised
Deferred Compensation Agreement with Monroe Carell, the Companys chairman and chief executive
officer. The Employment Agreement has a term of one year but automatically renews for additional
one-year periods unless notice is provided at least thirty days prior to the end of the term.
The Employment Agreement provides for an initial base salary of $545,000, and annual performance-based bonus payments. The agreement may be terminated by Mr. Carell upon 30 days
written notice or may be terminated by the Company by complying with the severance provisions
provided in the agreement except in the case of a termination for cause, in which case Mr. Carell
is not entitled to severance. The agreement provides that in the event Mr. Carell is terminated
without cause (and such termination does not occur within two years following a change in control)
or he terminates his employment for good reason, Mr. Carell would receive two years of base salary,
bonus and welfare benefits. The Employment Agreement further provides that in the event of a
termination without cause or a constructive discharge within two years following a change in
control, Mr. Carell would receive severance equal to three times base and bonus plus three years of
benefits. The Revised Deferred Compensation Agreement entitles Mr. Carell to annual payments of $500,000
until his death and, in the event his wife survives him, she is entitled to annual payments of
$500,000 until her death. There is an acceleration of the annual retirement payments upon a change
in control. This agreement also provides that Mr. Carell is subject to a non-competition and
non-solicitation covenants during the period payments are made under the agreement and for 12
months following the acceleration of amounts payable to Monroe under this agreement upon a change
in control. In addition, the agreement provides that if Mr. Carell ceases to serve as the chief executive officer, he shall be entitled to annual payments
of $300,000 until the later of (i) the date he ceases to serve as
non-employee chairman of the Companys board of directors or (ii) the date five years following the first payment; provided such payments shall cease if Mr. Carell breaches the non-competition or no-solicitation
provisions. The arrangements also include an excise tax gross-up provision. A change in control is defined to include (i) the consummation of a plan of liquidation with
respect to the Company; (ii) the sale or other divestiture of all or substantially all of the
assets of the Company; (iii) the acquisition of 30% or more of the outstanding stock of the Company
other than through acquisitions of the Company, a subsidiary, or an employee benefit plan of the
Company, or Monroe Carell or family members or related entities; (iv) consummation of a merger,
consolidation, or reorganization, unless following such transaction the shareholders prior to the
transaction continue to own more than 70% of the outstanding shares, Board members prior to the
transaction continue to constitute a majority of the Board and no person or control group owns more
than 30% of the stock (other than Mr. Carell, family members or related entities); or (v) a change
in the majority of the Board. (i) (ii) (iii) or (iv) consummation of the sale of all or
substantially all of the Companys assets or the adoption of a plan of liquidation. 
 PART III 
 Item 10. Directors and Executive Officers of the Registrant Information concerning this Item is incorporated by reference to the
Companys definitive proxy materials for the Companys 2005 Annual Meeting of
Shareholders. 
 Item 11. Executive Compensation Information concerning this Item is incorporated by reference to the
Companys definitive proxy materials for the Companys 2005 Annual Meeting of
Shareholders. 
 Item 12. Security Ownership of Certain Beneficial Owners, Management and
Related Stockholder Matters Information concerning this Item is incorporated by reference to the
Companys definitive proxy materials for the Companys 2005 Annual Meeting of
Shareholders. 
 Item 13. Certain Relationships and Related Transactions Information concerning this Item is incorporated by reference to the
Companys definitive proxy materials for the Companys 2005 Annual Meeting of
Shareholders. 
 Item 14. Principal Accountant Fees and Services Information concerning this Item is incorporated by reference to the
Companys definitive proxy materials for the Companys 2005 Annual Meeting of
Shareholders. 
 Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K  (a)
    
    (1) and (2) Financial Statements and Financial Statement Schedules 66




---



##### Table of Contents



Financial statements and schedules of the Company and its
subsidiaries required to be included in Part II, Item 8, are listed in the
Index to Consolidated Financial Statements.  (b)
    
    (3) Exhibits The exhibits are listed in the Index to Exhibits which appears immediately
following the signature page.  (c)
    
    Reports on Form 8-K On July 29, 2004 the Company filed a current report on Form 8-K
announcing the results of operations for the third quarter ended
June 30, 2004, incorporating the text of the press release dated
July 28, 2004. On September 29, 2004 the Company filed a current report on
Form 8-K announcing a revision to the Companys outlook for fiscal
2004, incorporating the text of the press release dated September
28, 2004. 67




---



##### Table of Contents



CENTRAL PARKING CORPORATION and SUBSIDIARIES
Schedule II  Valuation and Qualifying Accounts Amounts in thousands AdditionsBalance at
    
    Charged to
    
    Charged to
    
    
    
    
    
    Balance atBeginning of
    
    Costs and
    
    Other
    
    (Deductions)
    
    End ofDescription
    
    Period
    
    Expenses
    
    Accounts
    
    Recoveries
    
    PeriodAllowance for Doubtful AccountsYear ended September 30, 2002
    
    $
    474
    
    
    
    (26
    )
    
    
    
    
    
    
    113
    
    
    $
    561Year ended September 30, 2003
    
    
    561
    
    
    
    4,938
    
    
    
    
    
    
    
    (1,779
    )
    
    
    3,720Year ended September 30, 2004
    
    
    3,720
    
    
    
    959
    
    
    
    
    
    
    
    (1,473
    )
    
    
    3,206Deferred Tax Valuation AccountYear ended September 30, 2002
    
    $
    15,279
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    15,279Year ended September 30, 2003
    
    
    15,279
    
    
    
    (94
    )
    
    
    (11,949
    )
    
    
    
    
    
    
    3,236Year ended September 30, 2004
    
    
    3,236
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,236
 See accompanying report of Independent Registered Public Accounting Firm. CENTRAL PARKING CORPORATION and SUBSIDIARIES
Schedule IV  Mortgage Loans on Real Estate Principal AmountFinal
    
    Periodic
    
    
    
    Face
    
    Carrying
    
    of Loans SubjectInterest
    
    Maturity
    
    Payment
    
    Prior
    
    Amount of
    
    Amount of
    
    to DelinquentDescription
    
    Rate
    
    Date
    
    Terms
    
    Liens
    
    Mortgage
    
    Mortgage
    
    Principal or InterestMortgage note
secured by parking
garages
    
    1-month LIBOR +
1.625% with swap to
convert to fixed
rate at 8.91%
    
    3/15/05
    
    $108,250/month
(including swap)
with balance of
$12,691,671 due at
maturity
    
    None
    
    $
    13,300,000
    
    
    $12,766,724 at
September 30, 2004
    
    None
 See accompanying report of Independent Registered Public Accounting Firm. 68




---



##### Table of Contents



Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. CENTRAL PARKING CORPORATIONDate: December 14, 2004
    
    By:
    
    /s/ Mark ShapiroMark ShapiroSenior Vice President and Chief Financial Officer
 Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated. Signature
    
    Title
    
    Date/s/ Monroe J. Carell, Jr.
       Monroe
J. Carell, Jr.
    
    Chairman, Chief Executive Officer
Director
    
    November 23, 2004/s/ Mark Shapiro
       Mark
Shapiro
    
    Senior Vice President and
Chief Financial Officer (Principal Financial Officer)
    
    November 23, 2004/s/ V. Jeffrey Heavrin
       V.
Jeffrey Heavrin
    
    Vice President and Chief
Accounting Officer (Principal Accounting Officer)
    
    November 23, 2004/s/ Cecil Conlee
       Cecil
Conlee
    
    Director
    
    November 23, 2004/s/ Lewis Katz
       Lewis
Katz
    
    Director
    
    November 23, 2004/s/ Edward G. Nelson
       Edward
G. Nelson
    
    Director
    
    November 23, 2004/s/ Ray Baker.
       Ray
Baker
    
    Director
    
    November 23, 2004/s/ Richard H. Sinkfield
       Richard
H. Sinkfield
    
    Director
    
    November 23, 2004/s/ Kathryn Brown
       Kathryn
Brown
    
    Director
    
    November 23, 2004/s/ Owen Shell
       Owen
Shell
    
    Director
    
    November 23, 2004/s/ William Smith
       William
Smith
    
    Director
    
    November 23, 2004
 69




---



##### Table of Contents



Exhibit Index ExhibitNumber
    
    Document2
    
    
    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).2.1
    
    
    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).2.2
    
    
    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).3.1
    
    (a)
    Amended and Restated Charter of the Registrant (Incorporated by
reference to Exhibit 4.1 to the Companys Registration Statement No.
333-23869 on Form S-3).(b)
    Articles of Amendment to the Charter of
Central Parking Corporation increasing the authorized
number of shares of common stock, par value $0.01 per
share, to one hundred million (Incorporated by reference
to Exhibit 2 to the Companys 10-Q for the quarter ended
March 31, 1999).3.2
    
    
    Amended and Restated Bylaws of the Registrant (Incorporated by
reference to Exhibit 4.1 to the Companys Registration Statement No.
333-23869 on Form S-3).4.1
    
    
    Form of Common Stock Certificate (Incorporated by reference to
Exhibit 4.1 to the Companys Registration Statement No. 33-95640 on
Form S-1).4.4
    
    
    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).4.4
    
    
    Amendment dated January 5, 1999 to the 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
 70




---



##### Table of Contents



ExhibitNumber
    
    DocumentCarell Childrens Trust, The 1996 Carell Grand children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 rust and 1997 George Monroe Stadler Trust
(Incorporated by reference to Exhibit 4.4.1 to the
Companys Registration Statement No. 333-66081 filed on
October 21, 1998, as amended).4.5
    
    
    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).4.6
    
    
    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).4.7
    
    
    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).4.8
    
    
    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
    
    
    Executive Compensation Plans and Arrangements(a)
    1995 Incentive and Nonqualified Stock Option
Plan for Key Personnel (Incorporated by reference to
Exhibit 10.1 to the Companys Registration Statement No.
33-95640 on Form S-1).(b)
    Amendment to the 1995 Incentive and
Nonqualified Stock Option Plan for Key Personnel
increasing the number of shares licensed for issuance
under the plan to 3,817,500 (Incorporated by reference to
Exhibit 10.1 (b) of the Companys Annual Report on Form
10-K for the year ended September 30, 2000).(c)
    Form of Option Agreement under Key Personnel
Plan (Incorporated by reference to Exhibit 10.2 to the
Companys Registration Statement No. 33-95640 on Form
S-1).(d)
    1995 Restricted Stock Plan (Incorporated by
reference to Exhibit 10.5.1 to the Companys
Registration Statement No. 33-95640 on Form S-1).(e)
    Form of Restricted Stock Agreement
(Incorporated by reference to Exhibit 10.5.2 to the
Companys Registration Statement No.33-95640 on Form
S-1).(f)
    Monroe J. Carell, Jr. Employment Agreement
(filed herewith).(g)
    Monroe J. Carell, Jr. Revised Deferred
Compensation Agreement, as amended (filed herewith).
 71




---



##### Table of Contents



ExhibitNumber
    
    Document(h)
    Performance Unit Agreement between Central
Parking Corporation and James H. Bond (Incorporated by
reference to Exhibit 10.11.1 to the Companys
Registration Statement No. 33-95640 on Form S-1.)(i)
    Modification of Performance Unit Agreement of
James H. Bond (Incorporated by reference to Exhibit 10.1
(j) to the Companys Annual Report on Form 10-K filed on
December 27, 1997).(j)
    Second modification of Performance Unit
Agreement of James H. Bond (Incorporated by reference to
Exhibit 10.1 (k) to the Companys Report on Form 10-Q for
the period ended March 31, 2001).(k)
    Deferred Stock Unit Plan (Incorporated by
reference to Exhibit 10.1(n) to the Companys Annual
Report on Form 10-K filed on December 21, 2001).(l)
    James H. Bond Employment Agreement dated as
of May 31, 2001 (Incorporated by reference to Exhibit
10.1 (p) to the companys Report on Form 10-Q for the
period ended June 30, 2001).(m)
    Emanuel J. Eads Employment Agreement dated as
of October 1, 2000 (Incorporated by reference to Exhibit
10.1 (q) to the companys Report on Form 10-Q for the
period ended June 30, 2001).(n)
    Gregory A. Susick Employment Agreement dated
as of October 1, 2000 (Incorporated by reference to
Exhibit 10.1 (r) to the companys Report on Form 10-Q for
the period ended June 30, 2001).(o)
    Jeff L. Wolfe Employment Agreement dated as
of October 1, 2000 (Incorporated by reference to Exhibit
10.1 (s) to the companys Report on Form 10-Q for the
period ended June 30, 2001).(p)
    Form of Senior Executive Employment Agreement
(Incorporated by reference to Exhibit 10.1(a) to the
Companys Annual Report on Form 10-K filed on
December 24, 2003.)10.2
    
    (a)
    1995 Nonqualified Stock Option Plan for Directors (Incorporated
by reference to Exhibit 10.3 to the Companys Registration Statement
No. 33-95640 on Form S-1).(b)
    Amendment to the 1995 Nonqualified Stock
Option Plan for Directors increasing the number of shares
reserved for issuance under the plan to 475,000
(Incorporated by reference to Exhibit 10.2 to the
Companys Annual Report on Form 10-K filed on December
21, 2001).10.3
    
    
    Form of Option Agreement under Directors plan (Incorporated by
reference to Exhibit 10.4 to the Companys Registration Statement
No. 33-95640 on Form S-1).10.4
    
    
    Form of Indemnification Agreement for Directors (Incorporated by
reference to Exhibit 10.12 to the Companys Registration Statement
No. 33-95640 on Form S-1).10.5
    
    
    Indemnification Agreement for Monroe J. Carell, Jr. (Incorporated
by reference to Exhibit 10.13 to the Companys Registration
Statement No. 33-95640 on Form S-1).10.6
    
    
    Form of Management Contract (Incorporated by reference to Exhibit
10.6 to the Companys Annual Report on Form 10-K filed on December
21, 2001).10.7
    
    
    Form of Lease (Incorporated by reference to Exhibit 10.7 to the
Companys Annual Report on Form 10-K filed on December 21, 2001).
 72




---



##### Table of Contents



ExhibitNumber
    
    Document10.8
    
    
    1998 Employee Stock Purchase Plan (Incorporated by reference to
Exhibit 10.16 to the Companys Registration Statement No. 33-95640
on Form S-1).10.9
    
    
    Exchange Agreement between the Company and Monroe J. Carell, Jr.
(Incorporated by reference to Exhibit 10.18 to the Companys
Registration Statement No. 33-95640 on Form S-1).10.10
    
    
    Consulting Agreement dated as of February 12, 1998, by and between
Central Parking Corporation and Lewis Katz (Incorporated by
reference to Exhibit 10.20 of the Companys Report on Form 10-K for
the period ended September 30, 1999).10.11
    
    
    Limited Partnership Agreement dated as of August 11, 1999, by and
between CPS of the Northeast, Inc. and Arizin Ventures, L.L.C.
(Incorporated by reference to Exhibit 10.21 of the Companys Report
on Form 10-K for the period ended September 30, 1999).
 73




---



##### Table of Contents



ExhibitNumber
    
    Document10.12
    
    
    Shareholders Agreement and Agreement Not to Compete by and among
Central Parking Corporation, Monroe J. Carell, Jr., Lewis Katz and
Saul Schwartz dated as of February 12, 1998 (Incorporated by
reference to Exhibit 10.23 of the Companys Report on Form 10-K for
the period ended September 30, 1999).10.13
    
    
    Lease Agreement dated as of October 6, 1995, by and between The
Carell Family LLC and Central Parking System of Tennessee, Inc.
(Alloway Parking Lot) (Incorporated by reference to Exhibit 10.24 of
the Companys Report on Form 10-K for the period ended September 30,
1999).10.14
    
    
    First Amendment to Lease Agreement dated as of July 29, 1997, by
and between The Carell Family LLC and Central Parking System of
Tennessee, Inc. (Alloway Parking Lot) (Incorporated by
reference to Exhibit 10.25 of the Companys Report on
Form 10-K for the period ended September 30, 1999).10.15
    
    
    Lease Agreement dated as of October 6, 1995 by and between The
Carell Family LLC and Central Parking System of Tennessee, Inc.
(Second and Church Parking Lot) (Incorporated by reference to
Exhibit 10.26 of the Companys Report on Form 10-K for the period
ended September 30, 1999).10.16
    
    
    First Amendment to Lease Agreement dated as of October 6, 1995, by
and between The Carell Family LLC and Central Parking System of
Tennessee, Inc. (Second and Church Parking Lot) (Incorporated by
reference to Exhibit 10.27 of the Companys Report on Form 10-K for
the period ended September 30, 1999).10.17
    
    
    Revolving Credit Note dated November 1, 2002, by Suntrust Bank and
Central Parking Corporation. (Incorporated by reference to Exhibit
10.1 on Form 10-Q filed on February 18, 2003).10.18
    
    
    Promissory Note dated January 8, 2003 by Bank of America, N.A. and
Central Parking Corporation. (Incorporated by reference to Exhibit
10.2 on Form 10-Q filed on February 18, 2003).10.19
    
    

Credit
Agreement dated February 28, 2003, among Central Parking
Corporation, et. al and Bank of America, N.A., et. al. (Incorporated
by reference to Exhibit 99.2 on Form 8-K filed on
March 4, 2003).10.20
    
    
    Waiver Agreement dated May 14, 2003, by Bank of America, N.A. and
Central Parking Corporation. (Incorporated by reference to Exhibit
10.3 on Form 10-Q filed on May 15, 2003).10.21
    
    
    Employment Agreement dated March 3, 2003, by William J. Vareschi,
Jr. and Central Parking Corporation. (Incorporated by reference to
Exhibit 10.4 on Form 10-Q filed on May 15, 2003).
 74




---



##### Table of Contents



ExhibitNumber
    
    Document10.22
    
    
    First Amendment to Credit Agreement dated August 12, 2003, by Bank
of America, N.A. and Central Parking Corporation. (Incorporated by
reference to Exhibit 10.3 on Form 10-Q filed on August 14, 2003).10.23
    
    

Second
Amendment to the Credit Facility dated June 4, 2004 by Bank of
America, N.A. and Central Parking Corporation (Incorporated by
reference to Exhibit 10.1 on Form 10-Q filed on
August 13, 2004).10.24
    
    
    International Swap Dealers Association, Inc. Master Agreement
dated as of June 9, 2003, by JP Morgan Chase Bank and Central
Parking Corporation. (Incorporated by reference to Exhibit 10.4 on
Form 10-Q filed on August 14, 2003).10.25
    
    
    International Swap Dealers Association, Inc. Master Agreement
dated as of May 23, 2003, by SunTrust Bank and Central Parking
Corporation. (Incorporated by reference to Exhibit 10.5 on Form
10-Q filed on August 14, 2003).21
    
    
    Subsidiaries of the Registrant (filed herewith).23
    
    
    Consent of KPMG LLP (filed herewith).31.1
    
    
    Certification of Monroe J. Carell, Jr. pursuant to Rule 13a-14(a).31.2
    
    
    Certification of Mark Shapiro pursuant to Rule 13a-14(a).32.1
    
    
    Certification of Monroe J. Carell, Jr. pursuant to Section 1350.32.2
    
    
    Certification of Mark Shapiro pursuant to Section 1350.
 75