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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

|           |            |                                                                                                                               
|---------- | ---------- | ------------------------------------------------------------------------------------------------------------------------------
|(Mark one)
|           | X IN A BOX | ANNUAL REPORT PURSUANT TO SECTION
13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2001

or

|    |  |                                                                                                                                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------
|BOX |  | 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 1-15629

IMPERIAL PARKING CORPORATION

(Exact name of registrant as specified in its charter)

|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 91-2161409                          
|                                                               |  |                                     
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                              
|601 West Cordova Street, Suite 300
Vancouver, BC Canada        |  | V6B 1G1                             
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          
|                                                              
|Registrants telephone number, including area code:            |  | (604) 681-7311                      
|                                                               |  |                                     

Securities Registered Pursuant to Section 12(b) of the Act:

|                              |  |                                          
|----------------------------- |  | -----------------------------------------
|Title of Each Class           |  | Name of Each Exchange
On Which Registered
|                              |  |                                          
|Common Stock, $0.01 Par Value |  | American Stock Exchange                  

Securities Registered Pursuant to Section 12(g) of the Act:
None

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 in a box     Nobox

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K 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.box

The aggregate market value of the Registrants Common Stock held by
non-affiliates of the Registrant on March 8, 2002 (based on the closing price
of the Registrants Common Stock on the American Stock Exchange on such date)
was approximately $19,645,000. Shares of the Registrants common stock held by
each executive officer and director and by each entity that owns 5% or more of
the Registrants outstanding common stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.

The number of shares outstanding of the Registrants Common Stock at March 8,
2002 was 1,819,328.

Portions of the Registrants definitive Proxy Statement to be filed for its
2002 Annual Meeting of Stockholders are incorporated by reference into Part III
of this Report.

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TABLE OF CONTENTS
IMPERIAL PARKING CORPORATION

|     |            |         |                                                                                       |  |  |  |  |  |  |  |    |  |   
|---- | ---------- | ------- | ------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | -- |  | --
|Item |            | PART I  |                                                                                       |  |  |  |  |  |  | 
|     | 1          |         | Business                                                                              |  |  |  |  |  |  |  | 4 
|     | 2          |         | Properties                                                                            |  |  |  |  |  |  |  | 10
|     | 3          |         | Legal Proceedings                                                                     |  |  |  |  |  |  |  | 11
|     | 4          |         | Submission of Matters to a Vote of Security Holders                                   |  |  |  |  |  |  |  | 12
|     |            | PART II |                                                                                       |  |  |  |  |  |  | 
|     | 5          |         | Market for Registrant's Common Equity and Related Stockholder Matters                 |  |  |  |  |  |  |  | 13
|     | 6          |         | Selected Financial Data                                                               |  |  |  |  |  |  |  | 13
|     | 7          |         | Management's Discussion and Analysis of Financial Condition and Results of Operations |  |  |  |  |  |  |  | 16
|     | 8          |         | Financial Statements and Supplementary Data                                           |  |  |  |  |  |  |  | 27
|     | 9          |         | Changes in the Disagreements with Accountants on Accounting and Financial Disclosure  |  |  |  |  |  |  |  | 27
|     |            |         | PART III                                                                              |  |  |  |  |  |  |  |   
|     | 10         |         | Directors and Executive Officers of the Registrant                                    |  |  |  |  |  |  |  | 28
|     | 11         |         | Executive Compensation                                                                |  |  |  |  |  |  |  | 28
|     | 12         |         | Security Ownership of Certain Beneficial Owners and Management                        |  |  |  |  |  |  |  | 28
|     | 13         |         | Certain Relationships and Related Transactions                                        |  |  |  |  |  |  |  | 28
|     |            |         | PART IV                                                                               |  |  |  |  |  |  |  |   
|     | 14         |         | Exhibits, Financial Statements Schedules, and Reports on Form 8-K                     |  |  |  |  |  |  |  | 29
|     | Signatures |         |                                                                                       |  |  |  |  |  |  |  |    |  | 31

FINANCIAL STATEMENT SCHEDULES

| |  |  |                                                            |  |  |  |  |  |  |     |  |  | 
| |  |  | ---------------------------------------------------------- |  |  |  |  |  |  | --- |  |  | 
| |  |  | Imperial Parking Corporation Financial Statement Schedules |  |  |  |  |  |  | F-1

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Important Information Regarding Forward-Looking Statements

Certain matters discussed under the captions Business, Managements
Discussion and Analysis of Financial Condition and Results of Operations,
Quantitative and Qualitative Disclosures About Market Risk and elsewhere in
this Annual Report on Form 10-K and the information incorporated by reference
in this report 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 include
statements related to our operating strategy, growth strategy, cost savings
initiatives, industry and economic conditions and future financial performance
and other matters related to the future, and sometimes are preceded by,
followed by or otherwise include the words believes, expects,
anticipates, intends, estimates or similar expressions in these
discussions. Our actual future performance, achievements and may differ
materially from those expressed or implied by these forward-looking statements
as a result of such known and unknown risks, uncertainties, assumptions and
other factors. Representative examples of these factors include, without
limitation:



|- |  | successfully integrating past and future acquisitions in light of
challenges in retaining key employees, synchronizing business
processes and efficiently integrating facilities, marketing, and
operations;                                                                                                                                                                
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|- |  | successful implementation of our operating and growth strategy,
including possible strategic acquisitions;                                                                                                                                                                                                                                                                  
| 
|- |  | fluctuations in quarterly operating results caused by a variety of
factors including the timing of gains on sales of owned facilities,
pre-opening costs, changes in our cost of borrowing, effect of weather
on travel and transportation patterns, player strikes or other events
affecting major league sports and local, national and international
economic conditions;
| 
|- |  | our ability to form and maintain our strategic relationships with
certain large real estate owners and operators;                                                                                                                                                                                                                                                           
| 
|- |  | global and regional economic factors; and                                                                                                                                                                                                                                                                                                                                   
| 
|- |  | compliance with laws and regulations, including, without limitation,
environmental, antitrust and consumer protection laws and regulations
at the federal, state, provincial, local and international levels.                                                                                                                                                               

Readers are cautioned that the Companys actual results could differ materially
from those set forth in such forward- looking statements.

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PART I

Item 1.     Business

General

Imperial Parking Corporation (as used in this report, the terms Impark,
we, us or the Company mean Imperial Parking Corporation, including its
consolidated subsidiaries) is a leading provider of parking services in North
America. As of December 31, 2001, we managed, leased or owned 1,338 parking
lots in Canada and 261 parking lots in the United States, containing more than
300,000 parking spaces in aggregate, making us the leading parking provider in
Canada and one of the four largest in North America. We also provide parking
lot patrolling, ticketing and collection services for our own lots and for
those operated by other parties.

The Company resulted from the combination on March 27, 2000 of the
Canadian parking assets and operations of First Union Real Estate Equity and
Mortgage Investments (First Union) and the parking related business of First
Union Management, Inc. (FUMI). The businesses combined into Impark are
referred to in this report for periods prior to the combination as follows:



| |                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FUR Parking Business. The FUR Parking Business, constituting the parking
assets and operations of First Union, consisted primarily of 15 owned
parking properties in Canada. Between April 1997 and March 2000,
subsidiaries of First Union operated this business, including leasing the
properties to FUMI for operations and management.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FUMI Parking Business. The FUMI Parking Business consisted of the parking
services and related ancillary activities that have been continued into
the Company. Between April 1997 and March 2000, subsidiaries of FUMI
carried on these activities. The operations of FUMIs indirect
subsidiaries, Imperial Parking Limited and Impark Services Ltd., consisted
of operating and managing parking facilities in Canada and the United
States and carrying on other parking related activities.

The combination resulting in our formation was completed on March 27, 2000
following a series of transactions pursuant to a detailed plan of organization.
The final step of the series of transactions was the distribution by First
Union of substantially all of the outstanding shares of our common stock to the
shareholders of First Union.

Industry

The parking industry is highly fragmented and competitive. Industry
participants, the vast majority of which are privately held companies, consist
of a relatively few national companies and a large number of small regional or
local operators, including a substantial number of companies providing parking
as an ancillary service in connection with property management or ownership.
The parking industry has experienced consolidation as smaller operators have
found that they lack the capital, economies of scale and sophisticated
management techniques required to compete with larger providers. We expect
this trend to continue and to provide significant opportunities for us to
acquire smaller existing providers.

We expect a number of other trends in the commercial property management
business to continue to provide opportunities for large, specialized providers
of high-quality parking services. We believe that:



| |  | The trend toward consolidation of property management companies
favors larger, nationwide parking providers, as increasingly
centralized property management companies and property owners seek to
minimize the number of separate parking providers they deal with;
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| |  | As the property management industry becomes increasingly
sophisticated and professional, property management companies and
property owners will likely seek to work with specialized,
professional parking service providers;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | Parking is increasingly seen by building owners as a profit
center, and owners are seeking parking providers who can help them to
maximize profitability, increase efficiency and reduce financial
unpredictability; and
|- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The owners of premier properties, as they recognize that the
parking experience often provides both the first and last impression
of their properties to tenants and users, are seeking to offer the
highest possible level of quality in their parking services as a means
of distinguishing their properties from those of competitors.
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We believe that the industry trends toward outsourcing by private-sector
owners and privatization by government entities provide additional growth
opportunities for parking facility operators. Private-sector parking owners
have begun to move from owner-operator of their parking facilities to
outsourcing the management of operations to specialized operators. This allows
them to focus on their core competencies while increasing overall returns on
parking assets. In addition, governments and government agencies, particularly
cities and municipal authorities, sometimes retain private firms to operate
facilities and parking-related services in an effort to reduce operating
budgets and increase efficiency.

Operating Arrangements

We operate parking facilities under three general types of arrangements:
leases, management contracts, and fee ownership. As of December 31, 2001, we
leased 559 parking facilities, operated 1,025 parking facilities through
management contracts and owned 15 parking facilities.

The general terms and benefits of these types of arrangements are
described below:

Leases.Under a lease arrangement, we generally pay either a fixed annual
rent, a percentage of gross customer collections, or a combination thereof to
the property owner. We collect all revenues and are responsible for most
operating expenses, but are typically not responsible for major maintenance.
In contrast to management contracts, lease arrangements are typically for terms
of three to ten years and often have a renewal term, and provide for a fixed
payment to the facility owner regardless of the operating earnings of the
parking facility. As a result, leased facilities generally require a longer
commitment and a larger capital investment by us than do managed facilities,
but generally provide a greater opportunity for long-term revenue growth and
profitability.

Management Contracts.Under a management contract, we generally receive a
base monthly fee for managing the facilities and often receive an incentive fee
based on the achievement of facility revenues above a base amount. We
generally charge fees for various ancillary services such as accounting,
equipment leasing and consulting. Responsibilities under a management contract
include hiring, training and staffing parking personnel, and providing
collections, accounting, record-keeping, insurance and facility marketing
services. In general, the facility owner is responsible for operating expenses
such as taxes, license and permit fees, insurance premiums, payroll, as well
as, non-routine maintenance, repair costs and capital improvements. The
typical management contract is for a term of one to three years (often the
owner reserves the right to terminate, without cause, on 30 days notice) and
may contain a renewal clause.

Fee ownership.Under fee ownership arrangements, we own the property and
fixtures. Ownership of parking facilities typically requires a larger capital
investment than managed or leased facilities but provides maximum control over
the operation of the parking facility, and all increases in revenue flow
directly to us.

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Ownership provides the potential for realizing capital gains from the
appreciation in the value of the underlying real estate, but it also subjects
us to risks including reduction in value of the property and additional
potential liabilities, as well as additional costs such as real estate taxes
and structural, mechanical or electrical maintenance or repairs.

Enforcement and Collections

Approximately 50% of our parking lots are operated with parking meters and
without parking lot attendants. We enforce user payment at these lots by
having patrollers circulate regularly through lots to identify delinquent
parkers and issue violation notices. We use technology which enables our
patrollers to monitor and identify first-time and repeat offenders using
hand-held computers. The hand-held computers are uploaded daily to mainframe
computers that track violation history. This hand-held equipment generates
violation notices for offenders. Payments on account of these violation
notices are handled by our collections operation and are included in our
revenues.

Growth Strategy

Our strategy is to strengthen our position as the leading parking provider
in Canada while significantly expanding our presence into selected markets in
the United States. Key elements of this growth strategy include:

Increase penetration of existing core markets.We will seek to leverage
our long-standing relationships with real estate owners in cities where we
currently have significant operations. Our reputation for premium service, our
local market knowledge and our management infrastructure, allows us to compete
aggressively for new business in these core cities. Because existing parking
operations are sufficient to cover the costs of local and regional personnel,
we expect that additional parking operations in these markets will provide a
greater contribution to our profits than the operations in new markets. As we
compete for new business, we will also strive to retain and improve the
profitability of existing contracts.

Pursue aggressive growth in other urban markets.We have targeted major
cities in the United States where we currently have little or no presence for
aggressive expansion. In the past three years, we have added New York, San
Francisco, Chicago, Philadelphia, Cincinnati, Cleveland, Seattle and Atlanta to
our U.S. portfolio. We believe that continued expansion in the United States
is a key component to enhancing our overall profitability. The United States
is the largest parking market in the world, and members of our management have
significant experience in the United States. Also, there are greater
opportunities to bid for contracts in the United States than in Canada where we
are already a leader in our industry. Additionally, parking rates and average
profits per facility tend to be higher in the United States than in Canada.
Our strategy is to enter a new market only if we believe we can quickly gain a
significant position in the markets, with sufficient critical mass to compete
effectively and realize economies of scale. Certain markets are dominated by
national parking companies that have established strong relationships through
more advanced parking techniques. However, where a market is fragmented by a
number of smaller less sophisticated parking operators we believe there is an
opportunity to gain market share by providing superior systems and controls to
prospective customers. We expect to pursue opportunities in these markets
either through acquisition or by establishing our own operations there. We
believe that there are several markets in the United States in which we
anticipate gaining market share over the next three to four years.

Pursue acquisition opportunities.We believe there are opportunities to
expand our business through the acquisition of smaller operators, both in
existing core markets and in other targeted cities where we believe we can
attain market share. The parking industry is highly fragmented and we believe
that many of our smaller competitors have limited access to capital or do not
have the systems or the scale to compete effectively. We have completed seven
acquisitions in the last seven years, adding approximately 375 facilities.
Typically, we seek to acquire small to medium-sized local operators with
several years of experience in their market. We believe this allows for the
immediate understanding of the market and provides a platform for increased
penetration in the same city.

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Operating Strategy

We seek to increase the revenues and profitability of our parking
facilities through a variety of operating strategies, including the following:

Focus on larger urban markets.We intend to focus on larger urban markets.
We believe that (i) urban markets are more resistant to economic downturns,
(ii) property owners and real estate asset managers in these markets typically
have a presence in other cities, which provides opportunities to leverage these
relationships to expand to new locations, (iii) the typically higher prices
charged in these markets can support our premium service levels, and (iv) our
senior management has significant expertise in these markets. Together,
Charles Huntzinger and Bryan Wallner have 35 years of parking experience in
urban markets including New York, Philadelphia, Baltimore, Washington, Boston,
Richmond, Jacksonville, Pittsburgh, Cleveland, Columbus, Cincinnati, Milwaukee,
Denver, San Francisco, Los Angeles, Seattle, St. Louis, and Indianapolis, as
well as Toronto and Ottawa in Canada.

Increase proportion of leased facilities.We intend over time to increase
the number of facilities we operate under lease relative to the number we
operate under management contracts. Historically, our net profits have been
higher on leased facilities than on managed facilities. Although our net
profits have been higher from leased facilities, typically these profits
increase year over year over the term of the leases. Therefore, we experience
lower profits and sometimes losses during the first one or two years of a lease
term. This is illustrated by the table below which groups our leased locations
that were active at December 31, 2001 by the year that we opened the location.

|            |  |               |     |                              |  |                      |        |              |  |   |       |  |  |  |      | 
|----------- |  | ------------- | --- | ---------------------------- |  | -------------------- | ------ | ------------ |  | - | ----- |  |  |  | ---- | 
|            |  |               |     | Year ended December 31, 2001
|            |  | Number of     |     |                             
|Year opened |  | Locations (1) |     | Revenue ($'000)              |  | Gross margin ($'000) |        | Coverage (2)
|            |  |               |     |                              |  |                      |        |             
|Before 1997 |  |               | 296 |                              |  | $                    | 26,521 |              |  | $ | 5,133 |  |  |  | 1.24 | 
|1997        |  |               | 28  |                              |  |                      | 2,579  |              |  |   | 522   |  |  |  | 1.25 | 
|1998        |  |               | 55  |                              |  |                      | 8,279  |              |  |   | 777   |  |  |  | 1.10 | 
|1999        |  |               | 28  |                              |  |                      | 3,151  |              |  |   | 578   |  |  |  | 1.22 | 
|2000        |  |               | 53  |                              |  |                      | 13,300 |              |  |   | 1,255 |  |  |  | 1.10 | 
|2001        |  |               | 99  |                              |  |                      | 13,156 |              |  |   | 145   |  |  |  | 1.01 | 
|            |  |               |     |                              |  |                      |        |              |  |   |       |  |  |  |     
|Total       |  |               | 559 |                              |  | $                    | 66,986 |              |  | $ | 8,410 |  |  |  | 1.14 | 
|            |  |               |     |                              |  |                      |        |              |  |   |       |  |  |  |     



|(1) |  | Includes only those leased locations open as at December 31, 2001 and does
not include leased locations operated during the year, but closed by year-end.                                                                                                                                                                                                                                                                                     
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Coverage is calculated by dividing Revenue by the amount that Revenue
exceeds Gross margin. Coverage should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with generally
accepted accounting principles. Coverage is not an accepted measure under
generally accepted accounting principles and other companies will use different
measures or different calculations of profitability.

Included in the 559 locations above were 83 locations which incurred a loss for
2001 totaling $1.1 million. Of these 83 locations incurring a loss, 49 were
opened in 2001 and incurred a total loss of $0.7 million.

Our goal is to increase the proportion of leased facilities to managed
facilities. We believe a more balanced mix of leased and managed parking
facilities will diversify our operations, providing us with a balance of lower
risk and lower profit managed operations, and higher risk and higher profit
leased and owned operations.

Provide consistently high level of service.Our goal is to provide a
uniformly high level of quality and service across all of the facilities we
manage, characterized by clean, well-lit, secure and pleasant surroundings,
attractive graphics and signage, and professional, courteous and well dressed
staff. We offer a wide range of optional premium services, including valet
parking, concierge services, car washing, dry cleaning drop off and pick up and
vehicle repair. These premium services are typically offered to owners of
first-class properties who seek to

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provide their tenants with the highest possible level of service to help
differentiate their property from competing properties.

Continue to implement standardized systems and controls.As a result of
our experience in the parking management business, we have developed
sophisticated and comprehensive management systems and controls, which we seek
to implement uniformly at the facilities we manage. These systems include
accounting and financial management and reporting practices, general operating
procedures, training, employment policies, cash controls, marketing procedures
and visual image. We believe that our standardized systems and controls
enhance our ability to successfully expand our operations into new markets.

Aggressively implement technology and automation.We believe that
automation and technology can enhance customer convenience, lower labor costs,
improve cash management and increase our overall profitability. We have been a
leader in the field of introducing automation and technology to the parking
business and we were among the first to widely adopt innovations such as the
use of credit card payment systems, hand held computers to track violators and
issue citations, bar-code scanners to ensure monthly parkers are using the
correct lot and are up-to-date in payment and entry and exit gates
incorporating sensing equipment that can automatically recognize and admit
authorized vehicles. We believe that our higher proportion of unmanned
facilities gives us a cost advantage as we compete for business. We have also
developed a sophisticated management information system that enables us to
track revenue and manage cash on a daily basis and generate a wide variety of
internal reports, as well as customized reports requested by our clients.

Implement incentive compensation program.We have adopted a
performance-based compensation system for city managers, vice presidents and
others based on the profitability of each individuals area of responsibility.
We believe this program will enhance the entrepreneurship of our management
employees by tying their compensation directly to improvements in the
profitability of the operations they manage and we believe these incentives
will encourage them to improve operations and control costs.

Provide profitable patrol, enforcement and ticketing service.We seek to
increase the profitability of our overall operations by providing parking lot
patrol, enforcement and ticketing services, both at our own facilities and at
facilities operated by others. We believe there are opportunities to market
these services to facilities we do not operate, especially those owned by
municipalities or by suburban retail centers, who wish to discourage all-day
parkers by enforcing parking regulations which favor short-term parkers.

Maintain strict cash control.Strict cash control is critical to our
success and that of our clients. Our cash control procedures are based on an
auditing system supervised by professional managers and auditors, and include
on-site spot checks, multiple daily cash deposits, reconciliation of tickets
and gate counts to cash collected, local audit functions, managerial
supervision and review, and internal audit procedures. We believe our cash
control procedures are effective in minimizing loss of revenues at parking
facilities.

Acquisitions

Following the strategy of acquiring medium-sized or smaller operators in
targeted cities, on July 1, 2001 we acquired all of the issued and outstanding
shares of DLC Management Group, Inc. (DLC) for approximately $9.0 million.
We paid approximately $4.6 million in cash, including expenses, to acquire DLC.
In addition, the former shareholders of DLC are entitled to additional cash
consideration over a period of five years based on a proportion of the actual
operating results of the acquired business, calculated in accordance with
generally accepted accounting principles, for the twelve month periods ending
June 30, 2002 through 2006. If current operating results of the acquired
business were achieved during each of the periods through June 30, 2006, we
would be required to make additional payments to the former shareholders of DLC
of approximately $1.0 million per annum. The actual amount to be paid for any
given year will depend on the actual operating performance of DLC and is not
subject to

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any limit. DLC operates 71 locations in and around Philadelphia, Pennsylvania.
We have accounted for the acquisition of DLC as a purchase under generally
accepted accounting principles.

Seasonality

We may experience fluctuations in our income from quarter to quarter
caused by fluctuations in revenues and related expenses due to the impact of
weather and calendar related events on travel and transportation patterns.
Additionally, we manage the parking for a number of sports stadiums and arenas
and our income from such facilities can be affected by the seasonality of
revenue and by the relative degree of success of various sports teams.
Historically, our results have been strongest during the quarters that end on
June 30 and September 30.

Competition

The parking industry is fragmented and highly competitive, with relatively
few barriers to entry. We compete regularly with a wide variety of parking
services providers to retain our existing operations and to expand our
operations in existing and new markets. We compete for clients based on the
pricing of our services and our ability to increase revenues and control
expenses for each of our clients parking facilities.

Our largest competitors in North America are Central Parking Corporation,
APCOA/Standard Parking, Inc. and Ampco System Parking. We are substantially
smaller in number of locations and revenue than Central Parking, but we have
approximately the same number of locations as APCOA/Standard and Ampco System.
We have lower revenues than APCOA/Standard because APCOA/Standard are
principally located in the United States where gross revenues generated from a
location are typically higher than in Canada. However, being principally in
Canada gives us a solid Canadian base as Canadian corporations typically prefer
to do business with an established Canadian parking company. Additionally,
since profit per location is generally lower in Canada, most U.S. competitors
have historically focused their efforts in the U.S. marketplace where there is
higher potential profit.

We also compete with many regional or local parking service providers, as
well as municipalities and other governmental entities, property owners and
others.

Regulation

Our business is not substantially affected by direct governmental
regulation, however, a number of state, provincial and local laws have been
passed in recent years that encourage car pooling and the use of mass transit,
including, for example, laws prohibiting employers from reimbursing employees
parking expenses. Laws and regulations that reduce the number of cars and
vehicles could negatively affect our business. We are also affected by laws
and regulations (such as zoning ordinances and business taxes) that are common
to any business that owns or leases real estate and by regulations (such as
labor and tax laws) that affect companies with a large number of employees.

Under various federal, state, provincial 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 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 ownership or operation of parking facilities, we may be
potentially liable for such costs. Although we are not currently aware of any
material environmental claims pending or threatened against us or any of our
owned or operated parking facilities, there can be no assurance that a material
environmental claim will not be asserted against us or against any of our owned
or operated parking facilities. The cost of defending against claims of
liability, or of remediating a contaminated property, could have a material
adverse effect on our financial condition or results of operations.

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Various other governmental regulations affect our operations of parking
facilities, both directly and indirectly. In the United States, these include
the Americans with Disabilities Act, or the ADA. Under the ADA, all public
accommodations in the United States, including parking facilities, are required
to meet certain federal requirements related to access and use by disabled
persons. For example, the ADA requires parking facilities to include
handicapped spaces, headroom for wheelchair vans, attendants booths that
accommodate wheelchairs, and elevators that are operable by disabled persons.
We believe that the parking facilities we own and operate are in substantial
compliance with these requirements.

Employees

As of December 31, 2001, we employed approximately 3,300 individuals. We
believe that our employee relations are good. Approximately 33% of our
employees (some 1,074 employees) are represented by unions, including the
Construction and Specialized Workers Union Local 1611 (British Columbia),
Christian Labour Association of Canada Local 501 (British Columbia), Service
Employees International Union (Regina), Saskatchewan Joint Board, Retail,
Wholesale & Department Store Union Local 558 (Saskatoon), Canada Labour
Congress (Winnipeg), Teamsters (Ottawa, San Francisco, New York City and
Chicago), SEIU, UFCW (Toronto), SEIU (London), Le Syndicat des employés and
Union des employés de service (Montréal) and Garage Employees (New York).

Segmented Information

Information about our foreign and domestic operations appears in Note 13
to our 2001 Consolidated Financial Statements that are included in response to
Item 8 and are listed in Item 14 to this Annual Report on Form 10-K.

Item 2.     Properties

The following table summarizes certain information regarding our parking
facilities and surface lots as of December 31, 2001. We believe that our owned
facilities generally are in good condition and adequate for our present needs.

|         |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |         | 
|-------- | -------- | ---- | ------ | ------ | ------- | ---- | ------ | ------ | ----- | ---- | ----- | ------ |  | ---- | ------- | ------- |  |  | -- | -- |  |  | ----- | ----- |  |  | ----- | ----- |  |  | ------- | ------- | 
|         |          |      | Leased |        | Managed |      | Owned  |        | Total
|         |          |      |        |        |         |      |        |        |      
|Location |          | Lots |        | Spaces |         | Lots |        | Spaces |       | Lots |       | Spaces |  | Lots |         | Spaces 
|         |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |        
|CANADA   |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |        
|         | Western  |      |        | 229    |         |      |        | 22,777 |       |      |       | 649    |  |      |         | 128,669 |  |  |    | 5  |  |  |       | 968   |  |  |       | 883   |  |  |         | 152,414 | 
|         | Prairies |      |        | 148    |         |      |        | 9,323  |       |      |       | 108    |  |      |         | 19,546  |  |  |    | 9  |  |  |       | 687   |  |  |       | 265   |  |  |         | 29,556  | 
|         | Eastern  |      |        | 53     |         |      |        | 5,240  |       |      |       | 136    |  |      |         | 54,083  |  |  |    | 1  |  |  |       | 50    |  |  |       | 190   |  |  |         | 59,373  | 
|         |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |        
|         | Total    |      |        | 430    |         |      |        | 37,340 |       |      |       | 893    |  |      |         | 202,298 |  |  |    | 15 |  |  |       | 1,705 |  |  |       | 1,338 |  |  |         | 241,343 | 
|         |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |        
|USA      |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |        
|         | Western  |      |        | 27     |         |      |        | 6,541  |       |      |       | 16     |  |      |         | 5,939   |  |  |    |   |  |  |       |      |  |  |       | 43    |  |  |         | 12,480  | 
|         | Mid-west |      |        | 64     |         |      |        | 12,016 |       |      |       | 49     |  |      |         | 13,101  |  |  |    |   |  |  |       |      |  |  |       | 113   |  |  |         | 25,117  | 
|         | Eastern  |      |        | 38     |         |      |        | 8,611  |       |      |       | 67     |  |      |         | 14,314  |  |  |    |   |  |  |       |      |  |  |       | 105   |  |  |         | 22,925  | 
|         |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |        
|         | Total    |      |        | 129    |         |      |        | 27,168 |       |      |       | 132    |  |      |         | 33,354  |  |  |    |   |  |  |       |      |  |  |       | 261   |  |  |         | 60,522  | 
|         |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |        
|TOTAL    |          |      | 559    |        |         |      | 64,508 |        |       |      | 1,025 |        |  |      | 235,652 |         |  |  | 15 |    |  |  | 1,705 |       |  |  | 1,599 |       |  |  | 301,865 |        
|         |          |      |        |        |         |      |        |        |       |      |       |        |  |      |         |         |  |  |    |    |  |  |       |       |  |  |       |       |  |  |         |        

The cities included in the regions listed above are as follows:



| |  |  | Western Canada  Vancouver, Kamloops, Kelowna, Edmonton, Calgary and Banff                  
| |  | - | --------------------------------------------------------------------------------------------
|
| |  |  | Prairies (Canada)  Regina, Saskatoon and Winnipeg                                          
|
| |  |  | Eastern Canada  Toronto, Hamilton, London, Ottawa, Windsor, Montreal, Halifax and St.Johns

10



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| |  |  | Western USA  Seattle and San Francisco                                    
| |  | - | ---------------------------------------------------------------------------
|
| |  |  | Mid-western USA  Minneapolis, Milwaukee, Chicago, Cleveland and Cincinnati



| |  |  | Eastern USA  New York City, Buffalo, Philadelphia, Atlanta,
Washington DC, Wilmington and Atlantic City
| |  | - | --------------------------------------------------------------------------------------------------------

Item 3.     Legal Proceedings

The provision of services to the public entails an inherent risk of
liability. We are engaged from time to time in routine litigation incidental to
our business. Other than cases involving Eau Claire Market, Sterling Parking
Ltd. and the City of Calgary in Calgary, Alberta, and The Weitz Company and
Weitz Golf Construction, Inc. in San Francisco, California described below,
there is no legal proceeding to which we are a party which, if decided
adversely could materially harm our financial condition. We attempt to disclaim
liability for personal injury in facilities we operate. We also carry liability
insurance that we believe meets or exceeds industry standards as determined by
our landlords. We can provide no assurances, however, that any future legal
proceedings (including any related judgements, settlements or costs) will not
have a material adverse effect on our financial condition, liquidity or results
of operations.

The Eau Claire Market litigation was filed in the Queens Bench of Alberta
on August 20, 1998. It involves a claim against a property in which Imperial
Parking Canada Corporation (Impark Canada), a subsidiary of the Company and
successor to Imperial Parking Limited by amalgamation, is the lessee. The
plaintiff MP Acquisitions Ltd. purchased the property and asserts that it did
not receive full disclosure of the terms of the Impark Canada lease. The
plaintiff claims that, as a result, it is entitled to priority over Impark
Canadas lease and to possession of the property. We believe that this claim is
without merit. If, however, we do not prevail in the litigation, we may be
forced to renegotiate the lease with the landlord, in which case the rent could
be substantially increased and may materially impact our results.

Impark Canada is a defendant in a lawsuit brought by Newcourt Financial
Ltd. (Newcourt) as the assignee of Oracle Corporation Canada Inc. (Oracle).
The suit was filed in Ontario Superior Court on June 11, 1999. It alleges that
Impark Canada and FUMI owe approximately $825,000 under a software licence and
services agreement, plus interest and legal costs. We believe the claim is
largely without merit. In response to the claim, Impark Canada and FUMI have
commenced their own action in British Columbia, seeking a declaration that no
amounts are owing to either Newcourt or Oracle under the license and services
agreement. The Ontario lawsuit has been stayed pending the resolution of the
B.C. action. First Union has agreed in writing to indemnify Impark Canada with
respect to all liabilities and damages that may be incurred by Impark with
respect to this claim.

Impark Canada is a defendant in a lawsuit brought by Sterling Parking
Ltd., which was filed April 3, 2001 in the Queens Bench of Alberta. The suit
involves an alleged breach by Impark Canada of a confidentiality agreement
entered into with Sterling in October 2000 relating to the potential management
by Impark Canada of certain Sterling lots in Calgary. The agreement prohibited
Impark Canada from bidding on any Sterling lots while negotiations of such
transaction were underway. During negotiations, Impark Canada successfully bid
on two Sterling lots. The proposed transaction with Sterling was not completed.
Sterling claims in the lawsuit that Impark Canada wrongfully bid on the two
lots and an additional three lots, as well as improperly used Sterling
confidential information, all in breach of the confidentiality agreement. The
total damages claimed by Sterling are approximately $7.3 million (C$11.6
million). We believe that Sterlings allegations are largely without merit and
that the amount of damages claimed is far in excess of the actual damages
suffered by Sterling, if any. We have accrued at December 31, 2001 our best
estimate of costs related to this action and believe that any damages awarded
against Impark Canada will not have a material effect on our results.

Impark Canada commenced a lawsuit against the City of Calgary in Alberta,
Canada in the Queens Bench of Alberta on April 12, 2001. The City of Calgary
had earlier passed a business tax bylaw in 2001 imposing a

11



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##### 



revised method for
calculating the business tax payable by commercial parking lot operators in
that city. The new
bylaw imposes a business tax on the basis of the square footage of the
premises leased or operated, as opposed to the historical method of assessing
business taxes on the basis of rent paid by the lessee. Impark Canada is
applying for a court ruling that the 2001 bylaw is void for vagueness or that
it is invalid because of its discriminatory effect. Impark Canada is also
appealing the increased business taxes through the government assessment review
process. We were unsuccessful in our first stage of appeal at the Calgary City
Assessment Review Board, and are presently appealing this decision at the
Alberta Municipal Government Board. In February 2002, the City of Calgary
passed a 2002 Business Tax Bylaw, which approximately tripled the business tax
for Impark operations in Calgary for the 2002 calendar year to approximately
$0.9 million (C$1.5 million). We intend to appeal the 2002 assessment through
the assessment review process, and also to amend our lawsuit against the City
of Calgary to include the 2002 assessment. We believe that both the Citys
2001 and 2002 business tax bylaws are void and invalid. If we are unsuccessful
in appealing the tax assessments, and if we are unsuccessful in our lawsuit
against the City of Calgary, we will be required to pay the full amount of the
2001 business tax assessment for which we have accrued such amount at December
31, 2001, and also the full amount of the 2002 business tax assessment which
payment would materially impact our results.

On September 26, 2000, a lawsuit was filed by Ghilotti Brothers
Construction Inc. (Ghilotti) in the Superior Court of California against
Imperial Parking (U.S.), Inc. (a subsidiary of the Company and herein Impark
U.S.), Weitz Golf Construction Inc. and the surety (the Ghilotti Lawsuit).
The lawsuit alleges that Ghilotti incurred cost overruns of approximately
$610,000 relating to the construction of the Pacific Bell Park parking lots in
San Francisco in the winter and spring of 2000. On August 2, 2001, a separate
and related lawsuit was filed in the Superior Court of California by Weitz Golf
Construction, Inc. and The Weitz Company (collectively Weitz) against Impark
U.S. and the surety (the Weitz Lawsuit). Weitz and Impark U.S. had entered
into contracts in November 1998 relating to the demolition and construction of
the Pacific Bell Park parking lots. Weitz was the general contractor and
Ghilotti was a subcontractor. Weitz alleges that it incurred cost overruns
related to both the demolition and construction, and that it also suffered
damages from the release of certain mechanics liens that it had filed against
the parking lots. Weitz claims damages in the aggregate of $3.2 million, which
amount includes the amounts claimed by Ghilotti against Weitz and Impark U.S.
in the Ghilotti Lawsuit. Both the Weitz Lawsuit and the Ghilotti Lawsuit have
been stayed, pending final and binding arbitration involving all parties. We
are negotiating a settlement with all parties and believe that our potential
liability is significantly less than alleged by Weitz or Ghilotti. Further, we
sublease the parking lots from the China Basin Ballpark Company LLC (CBBC),
pursuant to which CBBC is required to share in any cost overruns. We anticipate
that a substantial amount of any actual cost overruns for which we are liable
will be reimbursed to Impark U.S. by CBBC.

Item 4.     Submission of Matters To a Vote of Security Holders.

No matter was submitted to a vote of the Companys stockholders during the
fourth quarter of fiscal 2001.

12



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##### 



PART II.

Item 5.     Market for Registrants Common Equity and Related Stockholder Matters

The Companys common stock is listed on the American Stock Exchange
(AMEX). The following table sets forth for the periods indicated the high
and low sales prices for our common stock as reported by AMEX.

|               |  |      |       |     |  |  |       | 
|-------------- |  | ---- | ----- | --- |  |  | ----- | 
|Fiscal 2000    |  | High |       | Low
|               |  |      |       |    
|First quarter  |  |      | 17.75 |     |  |  | 13.06 | 
|Second quarter |  |      | 17.44 |     |  |  | 11.62 | 
|Third quarter  |  |      | 17.25 |     |  |  | 16.12 | 
|Fourth quarter |  |      | 18.00 |     |  |  | 16.19 | 

|               |  |      |       |     |  |  |       | 
|-------------- |  | ---- | ----- | --- |  |  | ----- | 
|Fiscal 2001    |  | High |       | Low
|               |  |      |       |    
|First quarter  |  |      | 23.10 |     |  |  | 17.75 | 
|Second quarter |  |      | 23.60 |     |  |  | 21.25 | 
|Third quarter  |  |      | 26.70 |     |  |  | 21.85 | 
|Fourth quarter |  |      | 26.00 |     |  |  | 22.00 | 

The number of holders of record of our common stock as of March 8, 2002, was
approximately 1,274.

No dividends have been declared on our common stock since their distribution in
March 2000. Our policy is to reinvest earnings to fund future growth.
Accordingly, we do not anticipate declaring dividends on our common stock in
the foreseeable future.

Item 6.     Selected Financial Data

The selected financial data presented below as at and for periods
commencing prior to January 1, 2000 has been calculated by combining
information in the combined financial statements of the FUR Parking Business
and the FUMI Parking Business and from the consolidated financial statements of
Impark Holdings Inc. The selected financial data for these periods has been
extracted from audited financial statements. For further information on these
financial statements, refer to our Information Statement on Form 10 dated March
27, 2000 that was filed with the Securities and Exchange Commission.

The selected financial data presented below for the year ended December
31, 2000 has been calculated by combining information in our audited
consolidated financial statements for fiscal 2000 with the unaudited combined
financial statements of the FUMI Parking Business for the three months ended
March 31, 2000. The selected balance sheet data as at December 31, 2000 has
been extracted from our audited consolidated financial statements at that date.

The selected financial data for all periods prior to 2001 is presented on
a pro forma basis after giving effect to the following pro forma transactions:



| | (i) |  | the elimination of inter-entity lease fees and interest costs;
| | --- |  | --------------------------------------------------------------

13



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##### 





| | (ii)  |  | the elimination of the asset management fee earned during the
period January 1, 1999 to March 27, 2000 for managing the United
States parking properties of First Union. The fee agreement was
cancelled on March 27, 2000; and
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (iii) |  | the elimination of interest expense on long-term debt repaid and
the note payable capitalized on the combination on March 27, 2000.                                                                                            

For purposes of presenting selected financial data, an adjustment has not
been made for interest income on additional cash balances contributed on the
combination on March 27, 2000.

This financial data should be read in conjunction with the Consolidated
Financial Statements and Managements Discussion and Analysis of Financial
Condition and Results of Operations.

|                                                       |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|------------------------------------------------------ |  | -------- | ------ | -------- |  | ---------------------------------------------------- | ------- | -------- |  | ---- | ------- | - |  | - | ------ |  |  | - | ------ | -
|                                                       |  |          |        |          |  | Year ended December 31,                              |         |          |  |     
|                                                       |  |          |        |          |  |                                                      |         |          |  |     
|                                                       |  | 1997 (1) |        | 1998 (1) |  | 1999 (1)                                             |         | 2000 (1) |  | 2001
|                                                       |  |          |        |          |  |                                                      |         |          |  |     
|                                                       |  |          |        |          |  | (thousands of dollars, except per share information) |         |          |  |     
|Statement of Operations Data                           |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|Revenues                                               |  | $        | 50,775 |          |  | $                                                    | 54,087  |          |  | $    | 59,065  |   |  | $ | 67,809 |  |  | $ | 87,824 |  
|                                                       |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|Gross margin                                           |  |          | 13,699 |          |  |                                                      | 14,891  |          |  |      | 14,706  |   |  |   | 17,121 |  |  |   | 20,521 |  
|                                                       |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|Operating income (loss) (2)                            |  |          | (2,325 | )        |  |                                                      | (5,524  | )        |  |      | (557    | ) |  |   | 935    |  |  |   | 1,262  |  
|Interest expense                                       |  |          | (680   | )        |  |                                                      | (784    | )        |  |      |        |   |  |   |       |  |  |   | (298   | )
|Other income (expense) (3)                             |  |          | (976   | )        |  |                                                      | (15,884 | )        |  |      | (279    | ) |  |   | 411    |  |  |   | (245   | )
|                                                       |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|Income (loss) from continuing operations               |  | $        | (3,981 | )        |  | $                                                    | (22,192 | )        |  | $    | (836    | ) |  | $ | 1,346  |  |  | $ | 719    |  
|                                                       |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|Per
share dataIncome (loss) from continuing operations |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|- Basic                                                |  | $        | (1.87  | )        |  | $                                                    | (10.43  | )        |  | $    | (0.39   | ) |  | $ | 0.64   |  |  | $ | 0.40   |  
|- Diluted                                              |  |          | (1.87  | )        |  |                                                      | (10.43  | )        |  |      | (0.39   | ) |  |   | 0.64   |  |  |   | 0.39   |  
|Balance Sheet Data (end of period)                     |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|Cash and cash equivalents                              |  | $        | 882    |          |  | $                                                    | 1,128   |          |  | $    | 3,378   |   |  | $ | 5,615  |  |  | $ | 10,991 |  
|Working capital                                        |  |          | (7,023 | )        |  |                                                      | (8,181  | )        |  |      | (30,144 | ) |  |   | 96     |  |  |   | 291    |  
|Goodwill                                               |  |          | 66,560 |          |  |                                                      | 45,379  |          |  |      | 43,344  |   |  |   | 41,131 |  |  |   | 44,259 |  
|Total assets                                           |  |          | 99,423 |          |  |                                                      | 74,923  |          |  |      | 76,176  |   |  |   | 79,391 |  |  |   | 89,245 |  
|Long-term liabilities                                  |  |          | 52,365 |          |  |                                                      | 55,219  |          |  |      | 40,024  |   |  |   | 1,656  |  |  |   | 8,201  |  
|Total owners equity (deficiency)                      |  |          | 14,767 |          |  |                                                      | (2,797  | )        |  |      | (8,230  | ) |  |   | 60,029 |  |  |   | 58,261 |  
|Other information                                      |  |          |        |          |  |                                                      |         |          |  |      |         |   |  |   |        |  |  |   |        |  
|Stock-based compensation expense (4)                   |  |          |       |          |  |                                                      |        |          |  |      |        |   |  |   | 114    |  |  |   | 780    |  
|Goodwill amortization (4)                              |  |          | 1,440  |          |  |                                                      | 1,691   |          |  |      | 2,284   |   |  |   | 2,194  |  |  |   | 2,206  |  
|Write-down of goodwill (4)                             |  |          |       |          |  |                                                      | 14,976  |          |  |      |        |   |  |   |       |  |  |   |       |  
|Deferred income tax expense(recovery) (4)              |  |          | (353   | )        |  |                                                      | 12      |          |  |      | 11      |   |  |   |       |  |  |   | 649    |  
|Cash net income (4)                                    |  |          | (2,894 | )        |  |                                                      | (5,513  | )        |  |      | 1,459   |   |  |   | 3,654  |  |  |   | 4,354  |  

14



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---

|(1) |  | The amounts presented for these captions have been accumulated as follows:
|--- |  | --------------------------------------------------------------------------

|                                         |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|---------------------------------------- |  | ---------------------- | ------ | ----------------- |  | --- | ------ | ----------- |  | ----- | ------ | ---- |  | --- | ------- | ----------- |  | ----- | ------ | - |  |  | ------- | - |  |  | ------ | - |  |  | ------- | - |  |  | ------- | -
|                                         |  | Year ended             |        | Year ended       
|                                         |  |                        |        |                  
|                                         |  | December 31, 1997      |        | December 31, 1998
|                                         |  |                        |        |                  
|                                         |  | Impark                 |        | FUMI              |  | FUR |        | Elimination |  | Total |        | FUMI |  | FUR |         | Elimination |  | Total
|                                         |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |      
|                                         |  | (thousands of dollars)
|Statement of Operations Data             |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|Revenues                                 |  |                        | 14,065 |                   |  |     | 36,710 |             |  |       | 302    |      |  |     | (302    | )           |  |       | 50,775 |   |  |  | 54,087  |   |  |  | 454    |   |  |  | (454    | ) |  |  | 54,087  |  
|                                         |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|Gross margin                             |  |                        | 2,341  |                   |  |     | 11,056 |             |  |       | 302    |      |  |     |        |             |  |       | 13,699 |   |  |  | 14,449  |   |  |  | 442    |   |  |  |        |   |  |  | 14,891  |  
|                                         |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|Operating income (loss)                  |  |                        | (2,272 | )                 |  |     | (324   | )           |  |       | 271    |      |  |     |        |             |  |       | (2,325 | ) |  |  | (5,921  | ) |  |  | 397    |   |  |  |        |   |  |  | (5,524  | )
|Interest expense                         |  |                        | (453   | )                 |  |     | (4,650 | )           |  |       | (904   | )    |  |     | 5,327   |             |  |       | (680   | ) |  |  | (6,542  | ) |  |  | (2,757 | ) |  |  | 8,515   |   |  |  | (784    | )
|Other income (expense)                   |  |                        | 67     |                   |  |     | (370   | )           |  |       | 1,999  |      |  |     | (2,672  | )           |  |       | (976   | ) |  |  | (15,492 | ) |  |  | 3,333  |   |  |  | (3,725  | ) |  |  | (15,884 | )
|                                         |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|Income (loss) from continuing
operations |  |                        | (2,658 | )                 |  |     | (5,344 | )           |  |       | 1,366  |      |  |     | 2,655   |             |  |       | (3,981 | ) |  |  | (27,955 | ) |  |  | 973    |   |  |  | 4,790   |   |  |  | (22,192 | )
|                                         |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|Balance Sheet Data (end of year)         |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|Cash and cash equivalents                |  |                        |       |                   |  |     |       |             |  |       | 882    |      |  |     |        |             |  |       | 882    |   |  |  |        |   |  |  | 1,128  |   |  |  |        |   |  |  | 1,128   |  
|Working capital                          |  |                        |       |                   |  |     | (7,375 | )           |  |       | 352    |      |  |     |        |             |  |       | (7,023 | ) |  |  | (9,353  | ) |  |  | 1,172  |   |  |  |        |   |  |  | (8,181  | )
|Goodwill                                 |  |                        |       |                   |  |     | 66,560 |             |  |       |       |      |  |     |        |             |  |       | 66,560 |   |  |  | 45,379  |   |  |  |       |   |  |  |        |   |  |  | 45,379  |  
|Total assets                             |  |                        |       |                   |  |     | 89,440 |             |  |       | 41,660 |      |  |     | (31,677 | )           |  |       | 99,423 |   |  |  | 65,229  |   |  |  | 42,002 |   |  |  | (32,308 | ) |  |  | 74,923  |  
|Long-term liabilities                    |  |                        |       |                   |  |     | 60,768 |             |  |       | 22,977 |      |  |     | (31,380 | )           |  |       | 52,365 |   |  |  | 63,052  |   |  |  | 23,759 |   |  |  | (31,592 | ) |  |  | 55,219  |  
|Total owners equity (deficiency)        |  |                        |       |                   |  |     | (3,089 | )           |  |       | 17,856 |      |  |     |        |             |  |       | 14,767 |   |  |  | (20,348 | ) |  |  | 17,551 |   |  |  |        |   |  |  | (2,797  | )
|Other                                    |  |                        |        |                   |  |     |        |             |  |       |        |      |  |     |         |             |  |       |        |   |  |  |         |   |  |  |        |   |  |  |         |   |  |  |         |  
|Stock-based compensation                 |  |                        |       |                   |  |     |       |             |  |       |       |      |  |     |        |             |  |       |       |   |  |  |        |   |  |  |       |   |  |  |        |   |  |  |        |  
|Goodwill amortization                    |  |                        | 277    |                   |  |     | 1,163  |             |  |       |       |      |  |     |        |             |  |       | 1,440  |   |  |  | 1,691   |   |  |  |       |   |  |  |        |   |  |  | 1,691   |  
|Write-down of goodwill                   |  |                        |       |                   |  |     |       |             |  |       |       |      |  |     |        |             |  |       |       |   |  |  | 14,976  |   |  |  |       |   |  |  |        |   |  |  | 14,976  |  
|Deferred income tax expense(recovery)    |  |                        | (353   | )                 |  |     |       |             |  |       |       |      |  |     |        |             |  |       | (353   | ) |  |  |        |   |  |  | 12     |   |  |  |        |   |  |  | 12      |  
|Cash net income                          |  |                        | (2,734 | )                 |  |     | (4,181 | )           |  |       | 1,366  |      |  |     | 2,655   |             |  |       | (2,894 | ) |  |  | (11,288 | ) |  |  | 985    |   |  |  | 4,790   |   |  |  | (5,513  | )

|                                         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|---------------------------------------- |  | ---------------------- | ------- | ----------------- |  | ----------- | ------- | ----- |  | -------- | ------- | ------- |  | ----------- | ------- | ----- |  |  | ------ | - |  | --- | ------ | - |  |  | ------ | - |  |  | ------ | 
|                                         |  | Year ended             |         | Year ended       
|                                         |  |                        |         |                  
|                                         |  | December 31, 1999      |         | December 31, 2000
|                                         |  |                        |         |                  
|                                         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  | The |        |   |  |  |        |   |  | 
|                                         |  | FUMI                   |         | FUR               |  | Elimination |         | Total |  | FUMI (6) |         | Company |  | Elimination |         | Total
|                                         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |      
|                                         |  | (thousands of dollars)
|Statement of Operations Data             |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|Revenues                                 |  |                        | 60,145  |                   |  |             | 582     |       |  |          | (1,662  | )       |  |             | 59,065  |       |  |  | 14,901 |   |  |     | 53,305 |   |  |  | (397   | ) |  |  | 67,809 | 
|                                         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|Gross margin                             |  |                        | 15,206  |                   |  |             | 580     |       |  |          | (1,080  | )       |  |             | 14,706  |       |  |  | 3,904  |   |  |     | 13,487 |   |  |  | (270   | ) |  |  | 17,121 | 
|                                         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|Operating income (loss)                  |  |                        | (14     | )                 |  |             | 537     |       |  |          | (1,080  | )       |  |             | (557    | )     |  |  | 186    |   |  |     | 1,019  |   |  |  | (270   | ) |  |  | 935    | 
|Interest expense                         |  |                        | (5,872  | )                 |  |             | (3,044  | )     |  |          | 8,916   |         |  |             |        |       |  |  | (1,446 | ) |  |     | (786   | ) |  |  | 2,232  |   |  |  |       | 
|Other income (expense)                   |  |                        | (431    | )                 |  |             | (14,816 | )     |  |          | 14,968  |         |  |             | (279    | )     |  |  | (61    | ) |  |     | 1,507  |   |  |  | (1,035 | ) |  |  | 411    | 
|                                         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|Income (loss) from continuing
operations |  |                        | (6,317  | )                 |  |             | (17,323 | )     |  |          | 22,804  |         |  |             | (836    | )     |  |  | (1,321 | ) |  |     | 1,740  |   |  |  | 927    |   |  |  | 1,346  | 
|                                         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|Balance Sheet Data (end of year)         |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|Cash and cash equivalents                |  |                        | 1,394   |                   |  |             | 1,984   |       |  |          |        |         |  |             | 3,378   |       |  |  |       |   |  |     | 5,615  |   |  |  |       |   |  |  | 5,615  | 
|Working capital                          |  |                        | (33,218 | )                 |  |             | 3,074   |       |  |          |        |         |  |             | (30,144 | )     |  |  |       |   |  |     | 96     |   |  |  |       |   |  |  | 96     | 
|Goodwill                                 |  |                        | 43,344  |                   |  |             |        |       |  |          |        |         |  |             | 43,344  |       |  |  |       |   |  |     | 41,131 |   |  |  |       |   |  |  | 41,131 | 
|Total assets                             |  |                        | 65,109  |                   |  |             | 30,113  |       |  |          | (19,046 | )       |  |             | 76,176  |       |  |  |       |   |  |     | 79,391 |   |  |  |       |   |  |  | 79,391 | 
|Long-term liabilities                    |  |                        | 48,292  |                   |  |             | 28,061  |       |  |          | (36,329 | )       |  |             | 40,024  |       |  |  |       |   |  |     | 1,656  |   |  |  |       |   |  |  | 1,656  | 
|Total owners equity (deficiency)        |  |                        | (28,601 | )                 |  |             | 1,371   |       |  |          | 19,000  |         |  |             | (8,230  | )     |  |  |       |   |  |     | 60,029 |   |  |  |       |   |  |  | 60,029 | 
|Other                                    |  |                        |         |                   |  |             |         |       |  |          |         |         |  |             |         |       |  |  |        |   |  |     |        |   |  |  |        |   |  |  |        | 
|Stock-based compensation                 |  |                        |        |                   |  |             |        |       |  |          |        |         |  |             |        |       |  |  |       |   |  |     | 114    |   |  |  |       |   |  |  | 114    | 
|Goodwill amortization                    |  |                        | 2,284   |                   |  |             |        |       |  |          |        |         |  |             | 2,284   |       |  |  | 493    |   |  |     | 1,701  |   |  |  |       |   |  |  | 2,194  | 
|Write-down of goodwill                   |  |                        |        |                   |  |             |        |       |  |          |        |         |  |             |        |       |  |  |       |   |  |     |       |   |  |  |       |   |  |  |       | 
|Deferred income tax expense(recovery)    |  |                        |        |                   |  |             | 11      |       |  |          |        |         |  |             | 11      |       |  |  |       |   |  |     |       |   |  |  |       |   |  |  |       | 
|Cash net income                          |  |                        | (4,033  | )                 |  |             | (17,312 | )     |  |          | 22,804  |         |  |             | 1,459   |       |  |  | (828   | ) |  |     | 3,555  |   |  |  | 927    |   |  |  | 3,654  | 

15



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|(2) |  | The operating loss for 1998 includes a severance provision of $2.4
million and for 1999 includes a recovery of previously overprovided
amounts of $1.8 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | Other income (expense) principally includes gains or losses on the sale
or write-down of assets, other interest expense and income taxes. In the
year ended December 31, 1998, other income (expense) includes a write-down
of goodwill of $15.0 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(4) |  | We believe cash net income should be considered in conjunction with net
income and cash flows when evaluating our operating results because
management believes cash net income is a useful tool to measure our
ability to generate cash flow from operations. Cash net income is not a
measure under generally accepted accounting principles and should not be
considered as an alternative to net income, as a measure of our financial
performance or as an alternative to cash flows from operating activities
as a measure of liquidity. Cash net income equals equals income (loss)
from continuing operations as shown in the table above, plus stock-based
compensation, goodwill amortization expense, write-down of goodwill and
deferred income tax expense(recovery). Cash net income measures as
presented may not be comparable to similarly titled measures of other
entities.
|   
|(5) |  | There were no cash dividends declared on common shares during any of the
periods disclosed in the Selected Financial Data table above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(6) |  | Results of the FUMI Parking Business for 2000 are for the three months
ended March 31, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

Item 7.     Managements Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our historical results of operations and
financial condition should be read in conjunction with the Consolidated
Financial Statements and the Selected Financial Data, which are included in
this document.

Description of Financial Information

Impark resulted from the combination on March 27, 2000 of the parking
related businesses of FUMI and the Canadian parking facilities of First Union.
A brief description of the operations of each business combined is as follows:

FUMI Parking Business.The FUMI Parking Business consisted of the parking
services and related ancillary activities that we acquired on March 27, 2000.
From April 1997 to March 2000, subsidiaries of FUMI carried on these
activities. The operations of FUMIs indirect subsidiaries, Imperial Parking
Limited and Impark Services Ltd., consisted of operating and managing parking
facilities in Canada and the United States and carrying on other parking
related activities.

FUR Parking Business.The FUR Parking Business consisted primarily of
owning 15 parking properties in Canada. From April 1997 to March 2000,
subsidiaries of First Union operated this business, including leasing the
properties to FUMI for operation and management.

Periods Presented.The results of operations for the years ended December
31, 1999 and 2000 combine the results of the FUMI Parking Business and the FUR
Parking Business on a pro forma basis as if the March 27, 2000 transactions had
been completed at the commencement of the earliest of the periods presented.
We have presented the information in this manner to assist the reader, as we
believe it is the most meaningful way to consider and evaluate the Company in
its current form. In doing this we are not indicating what the results of
operations would actually have been if the businesses had been combined on
those dates.

Overview

We operate parking facilities under leases, management contracts, and fee
ownership. These three types of arrangements are discussed further in this
report under Item 1. Business.

16



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Revenues consist of parking revenues from leased and owned facilities, and
revenues earned in accordance with the terms of management contracts. The
following table sets out the pro forma revenues earned from each of the three
operating arrangements for each of the three years ended December 31, 2001:

|                   |  |                         |        |      |  |      |  |  |  |  |      |   |  |                        |        |  |  |  |      |   |  |   |        |  |  |  |  |  |  |  |      |  
|------------------ |  | ----------------------- | ------ | ---- |  | ---- |  |  |  |  | ---- | - |  | ---------------------- | ------ |  |  |  | ---- | - |  | - | ------ |  |  |  |  |  |  |  | ---- | -
|                   |  | Year ended December 31,
|                   |  | 1999                    |        | 2000 |  | 2001
|                   |  |                         |        |      |  |     
|                   |  |                         |        |      |  |      |  |  |  |  |      |   |  | (dollars in thousands) |        |  |  |  |      |   |  |   |        |  |  | 
|Leased Facilities  |  | $                       | 50,196 |      |  |      |  |  |  |  | 85.0 | % |  | $                      | 57,586 |  |  |  | 84.9 | % |  | $ | 74,095 |  |  |  |  |  |  |  | 84.4 | %
|Managed Facilities |  |                         | 7,193  |      |  |      |  |  |  |  | 12.2 | % |  |                        | 8,615  |  |  |  | 12.7 | % |  |   | 12,061 |  |  |  |  |  |  |  | 13.7 | %
|Owned Facilities   |  |                         | 1,676  |      |  |      |  |  |  |  | 2.8  | % |  |                        | 1,608  |  |  |  | 2.4  | % |  |   | 1,668  |  |  |  |  |  |  |  | 1.9  | %
|                   |  |                         |        |      |  |      |  |  |  |  |      |   |  |                        |        |  |  |  |      |   |  |   |        |  |  |  |  |  |  |  |      |  
|Total              |  | $                       | 59,065 |      |  |      |  |  |  |  | 100  | % |  | $                      | 67,809 |  |  |  | 100  | % |  | $ | 87,824 |  |  |  |  |  |  |  | 100  | %
|                   |  |                         |        |      |  |      |  |  |  |  |      |   |  |                        |        |  |  |  |      |   |  |   |        |  |  |  |  |  |  |  |      |  

The number of facilities operated as at each fiscal year end under each of
these arrangements is as follows:

|                   |  |                    |       |      |  |      |       |  |  |  |       | 
|------------------ |  | ------------------ | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                   |  | As at December 31,
|                   |  |                   
|                   |  | 1999               |       | 2000 |  | 2001
|                   |  |                    |       |      |  |     
|Leased Facilities  |  |                    | 490   |      |  |      | 502   |  |  |  | 559   | 
|Managed Facilities |  |                    | 915   |      |  |      | 948   |  |  |  | 1,025 | 
|Owned Facilities   |  |                    | 15    |      |  |      | 15    |  |  |  | 15    | 
|                   |  |                    |       |      |  |      |       |  |  |  |       | 
|                   |  |                    | 1,420 |      |  |      | 1,465 |  |  |  | 1,599 | 
|                   |  |                    |       |      |  |      |       |  |  |  |       | 

Results of Operations

Year Ended December 31, 2001
Compared to Year Ended December 31, 2000

Total revenues for fiscal 2001 increased $20.0 million, or 29.5%, to $87.8
million from $67.8 million for fiscal 2000. The increase was due largely to an
increase in revenue on leased facilities, and from including the results for
DLC which was acquired effective July 1, 2001.

Revenues from leased facilities for fiscal 2001 increased to $74.1 million
from $57.6 million in fiscal 2000, an increase of $16.5 million or 28.7%.
$13.3 million of this increase was in the United States and resulted from
starting operations in San Francisco (April 2000), Cleveland (September 2000)
and Atlanta (August 2001) and the acquisition of both E-Z Park in Cincinnati
(April 2000) and DLC in Philadelphia (July 2001). The increase of $3.2 million
in leased revenue in Canada included a recovery of $0.5 million related to our
settlement of a dispute over direct taxes on parking violation revenue. Fiscal
2000 included a reduction of revenue of $0.3 million based on estimates of our
tax liability at the time. During fiscal 2001, we were successful in
recovering $0.2 million during fiscal 2001 of the amount previously provided.
We do not expect any further benefits in the future from settling this tax
liability. The remainder of the increase in Canada of $2.7 million was due in
part, to parking rate increases and a public transit strike in Calgary, Alberta
and Vancouver, B.C.

Management contract revenues for fiscal 2001 increased to $12.1 million
from $8.6 million for fiscal 2000 an increase of $3.5 million, or 40.0%. The
increase was solely attributable to the acquired DLC contracts.

Direct costs in fiscal 2001 increased to $67.3 million from $50.7 million
in fiscal 2000, an increase of $16.6 million or 32.8%. Of this increase, $3.4
million was from DLCs operations; $10.5 million was attributable to higher
rent expense; and $2.7 million to other directs costs. Rent expense increased
$10.5 million, or 29.7% from

17



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$35.4 million for fiscal 2000 to $45.9 million for fiscal 2001. Rent as a
percentage of revenues, increased to 53.4% in fiscal 2001 from 52.2% in fiscal
2000. This increase is principally due to the leases in our new U.S.
operations being in the early phase of their terms. As we continue to operate
these new leased facilities, we would expect revenue growth to exceed any
growth in rent and, therefore, rent as a percentage of revenue would decline.
The increase in other direct costs of $2.7 million, or 17.6%, from $15.3
million to $18.0 million, is due to the general increase in revenues. Direct
costs as a percentage of revenues increased to 76.6% in fiscal 2001 from 74.8%
in fiscal 2000.

General and administrative expenses increased $3.0 million, or 25.7%, from
$11.4 million for fiscal 2000 to $14.4 million for fiscal 2001. The increase
in general and administrative expenses is due, in part, to the acquisition of
DLC, which added $1.2 million of general and administrative expenses, and
expansion since last year in the United States, including $0.4 million for
operations in San Francisco, Cincinnati, Cleveland, and Atlanta and $0.4
million to establish a regional management infrastructure in the United States.
We also incurred $0.3 million of additional expense related to being a public
company and $0.7 million of increased stock compensation expense, as discussed
below. General and administrative expenses, as a percentage of total revenues
decreased to 16.4 % for fiscal 2001 compared to 16.8 % for fiscal 2000.

Included in general and administrative expense is stock-based compensation
expense for fiscal 2001 of $0.8 million which includes an allocation of both
senior managements compensation related to our stock performance and
directors annual stock entitlement for services rendered. In fiscal 2000
there was $0.1 million of stock-based compensation for stock awarded to
directors, but no stock compensation expense for senior management. The
allocation for senior managements compensation is based on the 2000 Stock
Incentive Plan which was approved by the stockholders at our 2001 Annual
General Meeting. The plan includes variable stock options whereby the exercise
price of the options increases during the term of the options. Accordingly,
any change in the intrinsic value of the options is reflected as a compensation
expense on a quarterly basis.

Depreciation and amortization decreased $0.1 million, or 0.7%, from $4.8
million in fiscal 2000 to $4.7 million in fiscal 2001. Included in these
amounts is goodwill amortization of $2.2 million for fiscal 2001 and $2.3
million for fiscal 2000. With the adoption of the Financial Accounting
Statement No. 142, goodwill will no longer be amortized effective fiscal 2002
onwards. However, the carrying value of goodwill will be subject to a regular
impairment test.

The equity share in the limited liability company (LLC) losses
represents our 50% share in nine LLCs which each operate a parking facility in
New York, New York. The LLCs started operating these facilities in fiscal
2001.

Interest income of $0.6 million was earned in fiscal 2001 compared to $0.7
million in fiscal 2000. Although the interest income in 2000 was earned during
only a period of nine months from the combination in March 2000, interest rates
in 2000 were higher by approximately 1.5%.

Interest expense of $0.3 million for fiscal 2001 represents interest on
the bank loan to finance the acquisition of DLC and imputed interest on the
portion of the purchase price that is deferred.

Income tax expense for fiscal 2001 includes our current tax liability for
capital and state taxes, and a deferred tax expense as we utilize our net
operating losses for tax purposes in Canada. The deferred tax expense has been
reduced by a deferred tax recovery for operating losses in the U.S. for fiscal
2001. The effect of offsetting losses in the U.S. at lower tax rates against
profits in Canada at higher tax rates is to increase the effective tax rate for
accounting purposes to 53% on a consolidated basis for fiscal 2001. There was
no corresponding deferred tax expense in fiscal 2000, as we had not then
recognized the Canadian tax losses for accounting purposes.

Net earnings for fiscal 2001 were $0.7 million  a decrease of $0.6
million from the fiscal 2000 pro forma earnings of $1.3 million. This
decrease is primarily due to a $3.0 million increase in general and
administrative

18



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##### 



expenses; equity losses of $0.2 million in the LLCs; lower net interest
income of $0.4 million; and higher income tax expense of $0.5 million; offset
by a higher gross margin of $3.4 million and lower depreciation and
amortization expense of $0.1 million.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

Total revenues, on a pro forma basis, increased $8.7 million, or 14.7%, to
$67.8 million for fiscal 2000 compared to $59.1 million for fiscal 1999. This
increase was principally attributable to greater revenues from leased
facilities as detailed below.

Pro forma revenues from leased facilities for fiscal 2000 increased to
$57.6 million from $50.2 million in fiscal 1999, an increase of $7.4 million,
or 14.7%. The increase is primarily a result of commencing operations in San
Francisco in February 2000, and specifically the opening of the Pacific Bell
baseball stadium in April 2000, which contributed $5.7 million in lease
revenue. The acquisition in April 2000 of ten leased facilities upon the
purchase of E-Z Park and subsequent organic growth in Cincinnati, also
generated $1.7 million of additional lease revenue in fiscal 2000. A further
$1.6 million of additional lease revenue was generated in fiscal 2000 from
converting a significant urban mid-west U.S. parkade in December 1999 from a
management contract to a lease. These increases were offset by the sales in
1999 of the Robbins Parking and Asian divisions which had generated $2.0
million of lease revenue in 1999.

Pro forma revenues from management contracts for fiscal 2000 increased to
$8.6 million from $7.2 million in fiscal 1999, an increase of $1.4 million or
19.4%. The increase is attributed to organic growth and increased management
fees on existing locations of $1.7 million offset by the sales in 1999 of the
Robbins Parking and Asian operations which had generated $0.3 million of
management contract revenue in 1999.

Pro forma direct costs in fiscal 2000 increased to $50.7 million from
$44.4 million in fiscal 1999, an increase of $6.3 million or 14.2%. This
increase was attributable to higher rent expense from the start of operations
in San Francisco, the acquisition of E-Z Park and the conversion of the urban
mid-west U.S. parkade to a lease arrangement. Rent expense increased from
$29.0 million for fiscal 1999 to $35.4 million for fiscal 2000, an increase of
$6.4 million or 22.1%. Rent as a percentage of revenues, excluding Robbins and
Asia, increased from 51.6% to 52.2% for fiscal 1999 and 2000, respectively.
Offsetting this increase in direct costs was the effect of the sales in 1999 of
the Robbins and Asian operations which incurred $2.1 million of direct costs in
fiscal 1999. An increase of $2.0 million in other operating expenses related
to the increase in lease revenue accounted for the remaining change in direct
costs for fiscal 2000 over fiscal 1999. Direct costs as a percentage of
revenues decreased to 74.8% in fiscal 2000 from 75.1% in fiscal 1999.

Pro forma general and administrative expenses increased $1.2 million to
$11.4 million for fiscal 2000 from $10.2 million for fiscal 1999. Expenses in
1999 included an adjustment for an employee severance provision accrued in
1998, but which was determined to be over-accrued by $1.8 million and reversed
in 1999. 1999 also included additional severance of $0.9 million and $0.4
million related to the Robbins and Asian operations sold in 1999. Excluding
these three items, general and administrative expenses for 1999 were $10.7
million. The increase in 2000 over 1999 includes $0.4 million related to
growth in new cities (Cincinnati, San Francisco, Cleveland and New York) and
$0.2 million of compensation expense for shares and options issued to directors
and management in 2000. General and administrative expenses, excluding
severance, as a percentage of pro forma total revenues decreased to 16.8 % for
the fiscal 2000 compared to 18.8 % for fiscal 1999.

Depreciation and amortization for fiscal 2000 decreased to $4.8 million
from $5.0 million in fiscal 1999, a decrease of $0.2 million or 4.0%, as a
result of the full amortization of certain management and lease agreements
which are amortized over the term of the agreements.

In fiscal 2000, other income of $0.4 million reflects interest earned on
cash balances and other investments of $0.7 million partially offset by
corporate tax expense of $0.3 million. No interest income was recorded in the
1999 pro forma results.

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The provision for deferred income taxes, including $0.8 million for
non-deductible goodwill amortization, would have been $1.7 million higher for
fiscal 2000, except for credit of $1.7 million for the change in the valuation
allowance against the deferred tax asset representing loss carry forwards in
Canada. The valuation allowance at December 31, 2000 is $0.9 million and
largely represents the expectation that the losses will be utilized at rates
lower than currently in effect.

Pro forma net earnings for fiscal 2000 were $1.3 million  an increase of
$2.1 million from the $0.8 million loss for fiscal 1999. This increase is
primarily due to increased gross margin of $2.4 million, lower other operating
expenses of $0.8 million, and higher other income of $0.7 million offset by the
reversal in 1999 of over-accrued severance of $1.8 million.

Liquidity and Capital Resources

As at December 31, 2001, we had cash and cash equivalents of $11.0
million. This represents an increase of $5.4 million during fiscal 2001. The
increase resulted from $10.7 million of cash generated from operations and $3.9
million of funds drawn under our Credit Facility to finance the acquisition of
DLC. These cash inflows were offset by $4.7 million used to purchase all of
the issued and outstanding shares of DLC, $3.5 million used in other investing
activities, $0.5 million used to repurchase our stock and $0.5 million of
changes in exchange rates on cash balances. $2.7 million of the cash from
operations was generated by using a letter of credit to replace and release the
restricted cash previously on short-term deposit to support a lien bond issued
in conjunction with negotiating final costs of the San Francisco Giants parking
development.

We are negotiating final costs with the contractor of the San Francisco
Giants parking development. The contractor is claiming costs and damages of
$3.2 million. We believe that our potential liability is significantly less
than the amount claimed. Also, we sublease the related parking lots from the
China Basin Ballpark Company LLC (CBBC) and CBBC is required to share in any
cost overruns. An accrual has been recorded at December 31, 2001 for the
estimated settlement costs.

At December 31, 2001 we had $3.9 million of bank debt outstanding. After
borrowing these funds and using $2.8 million for outstanding letters of credit,
we have $13.3 million remaining of a $20.0 million credit facility with HSBC
Bank Canada to fund working capital requirements, acquisitions and other
capital investment opportunities.

In the next 12 months, we anticipate the working capital necessary to
satisfy current obligations will be generated from operations, available cash,
and our bank facility.

In the future, if we identify investment opportunities requiring cash in
excess of operating cash flows and credit facilities, we may seek additional
sources of capital, including the sale or issuance of our common stock or a
rights offering, or amending our credit facility to obtain additional
indebtedness. No assurances can be given that such increases would be
available at the time needed to complete any such transaction.

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Future cash commitments

The following tables summarize our total contractual obligations and
commercial commitments as of December 31, 2001:

Payments due by period
(amounts in thousands)

|                                |  |       |         |                  |  |           |        |           |  |               |        |  |  |   |        |  |  |   |        | 
|------------------------------- |  | ----- | ------- | ---------------- |  | --------- | ------ | --------- |  | ------------- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                                |  | Total |         | Less than 1 year |  | 1-3 years |        | 4-5 years |  | After 5 years
|                                |  |       |         |                  |  |           |        |           |  |              
|Bank indebtedness               |  | $     | 3,900   |                  |  | $         | 3,900  |           |  |               |       |  |  |   |       |  |  |   |       | 
|Operating leases                |  |       | 151,140 |                  |  |           | 38,064 |           |  |               | 44,391 |  |  |   | 24,942 |  |  |   | 43,743 | 
|Other long-term
obligations     |  |       | 5,795   |                  |  |           | 1,307  |           |  |               | 2,566  |  |  |   | 1,549  |  |  |   | 373    | 
|                               
|Total contractual
cash payments |  | $     | 160,835 |                  |  | $         | 43,271 |           |  | $             | 46,957 |  |  | $ | 26,491 |  |  | $ | 44,116 | 
|                               

The bank indebtedness has been reflected as payable within one year as it
is repayable on demand. However, it is currently being repaid in blended
monthly instalments of principal and interest of $60,074 through December
2007.



Amount of commitment expiration per
period
(amounts in thousands)

|                             |  |       |       |                  |  |           |       |           |  |               |   |  |  |  |   |  |  |  |   | 
|---------------------------- |  | ----- | ----- | ---------------- |  | --------- | ----- | --------- |  | ------------- | - |  |  |  | - |  |  |  | - | 
|                             |  | Total |       | Less than 1 year |  | 1-3 years |       | 4-5 years |  | After 5 years
|                             |  |       |       |                  |  |           |       |           |  |              
|Standby letters of
credit    |  | $     | 2,833 |                  |  |           | 2,833 |           |  |               |  |  |  |  |  |  |  |  |  | 
|                            
|Total commercial
commitments |  | $     | 2,833 |                  |  |           | 2,833 |           |  |               |  |  |  |  |  |  |  |  |  | 
|                            

Critical accounting policies

Impark is involved in the ownership, management and operation of parking
facilities in the United States and Canada. In preparing the consolidated
financial statements, estimates and judgments are applied that affect the
reported amounts of assets, liabilities, revenues and expenses and the
disclosure of contingent assets and liabilities for the reporting periods. We
base our estimates on historical experience and on various other assumptions
that are believed to be reasonable in the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily available from other sources. On an on-going
basis, we evaluate areas of estimate or judgment to ensure they reflect
currently available assessments and knowledge. Actual results may differ from
these estimates under different assumptions and conditions.

We believe that the following critical accounting policies affect our more
significant judgments and estimates.

The consolidated financial statements reflect goodwill, management
agreements and fixed assets arising from historical transactions. In assessing
the underlying value of these assets, we consider estimates of future cash
flows to be generated from the assets over their estimated useful life.
Various factors, including customer demand, weather, transit use and government
policies, could change thereby impacting these estimates, possibly materially.
These factors are substantially outside of our control.

The consolidated financial statements reflect deferred income tax assets
based on our assessment that we are more likely than not to be able to utilize
certain deductions in the future, primarily loss carry-forwards. Our
assessment is based on a judgment of taxable income before such deductions in
2003. Changes in the timing of the recognition and amount of revenues and
expenses in the future may impact our ability to utilize these deductions.

Under the terms of the agreement to acquire DLC, we are required to make
annual payments to the former shareholders of DLC for each of the twelve month
periods ending June 30, 2002 through 2006. The payments are calculated relative
to the actual operating results of the acquired business in accordance with
generally accepted accounting principles. Each twelve month period calculation
is independent and separable from each other twelve month period calculation.
In making this calculation, a multiple of 6.5 is applied to each future twelve
month periods EBITDA less depreciation of any new capital expenditure on the
acquired parking facilities, and one-tenth of that amount is payable in cash at
that time. At December 31, 2001 we estimated this liability, based on operating
results of the acquired business for 2001, to be approximately $1.0 million per
annum for each of the periods through June 30, 2006. We have accrued for this
amount in our Consolidated Financial Statements as at December 31, 2001. The

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actual amount to be paid for any given year may differ significantly from
our estimate as it depends on the actual operating performance of DLC and is
not subject to any limit. However, the former shareholders of DLC are required
to make up any shortfall, up to $300,000, in the EBITDA of the acquired
business below $1.3 million for any of the twelve month periods through June
30, 2006.

As discussed in further detail in Item 3. Legal Proceedings, we are
negotiating final costs with the contractor of the San Francisco Giants parking
development. The contractor is claiming costs and damages of $3.2 million. We
believe that our potential liability is significantly less than the amount
claimed. Also, we sublease the related parking lots from the China Basin
Ballpark Company LLC (CBBC) and CBBC is required to share in any cost
overruns. We have recorded an accrual at December 31, 2001 for our estimate of
the settlement costs. If the final settlement exceeds the amount accrued,
depreciation of our share of the development costs would increase. We recorded
$0.4 million in 2001 related to depreciation of our share of development costs.

New Accounting Pronouncements

During 2001, the Financial Accounting Standards Board announced new rules
related to the accounting for goodwill. Financial Accounting Statement No.
141, Business Combinations (SFAS 141) eliminates the pooling method of
accounting for business combinations and is effective for all transactions
initiated after June 30, 2001. The acquisition described in Note 3 to the
Consolidated Financial Statements in Item 14(a)1 of this report has been
accounted for using the purchase method in accordance with SFAS 141.

Financial Accounting Statement No. 142, Goodwill and Other Intangible
Assets (SFAS 142) requires that goodwill no longer be amortized, but the
carrying value of goodwill will be subject to a regular impairment test. SFAS
142 is effective for the first fiscal quarter beginning after December 15, 2001
except to the extent that it relates to acquisitions after June 30, 2001. The
effect on the financial statements of the Company is that amortization of
existing goodwill will cease as of December 31, 2001. Goodwill resulting from
the acquisition described in Note 3 to the Consolidated Financial Statements in
this report is not amortized, but is subject to an annual impairment test. The
Companys goodwill amounts at December 31, 2001 for acquisitions that occurred
prior to July 1, 2001 will be subject to the annual impairment test on an
ongoing basis commencing with adoption on January 1, 2002. Due to the extensive
effort required to comply with adopting SFAS 142, it is not practicable to
reasonably estimate the impact of adopting this statement on the Companys
financial statements at the date of this report, including whether any
transitional impairment losses will be required to be recognized as the
cumulative effect of a change in accounting principle in 2002. We anticipate
completing our preliminary assessment of the potential impact of adopting SFAS
142, if any, by June 30, 2002.

In October 2001, the Board issued Financial Accounting Statement No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144)
which addresses financial accounting and reporting for the impairment or
disposal of long-lived assets. While SFAS 144 supersedes SFAS 121, the
fundamental recognition and measurement principles of SFAS 121 for assets to be
held and used, and the fundamental measurement principles for assets to be held
for sale, are retained. Under SFAS 144, an asset to be sold would be classified
as held for sale in the period when the criteria for a qualifying plan of sale
are met, and depreciation would cease at that time. The statement also
addresses assets that will be disposed of other than by sale (e.g.,
abandonment), and will require that they be classified as held and used until
the entity disposes of the asset (or ceases to use it in the case of
abandonment). The Statement extends the reporting of discontinued operations
to all components of an entity and requires that results of operations of a
component of an entity that has been disposed of, or is classified as held for
sale, be reported in discontinued operations if its activities, operations and
assets will be eliminated in the disposal transaction. There is no material
effect of SFAS 144 on the consolidated financial statements as the Company is
not presently contemplating any disposal of long-lived assets.

Effective January 1, 2001, the Company adopted the recommendations
outlined in Financial Accounting Standards Board Statement No. 133, Accounting
for Derivative Instruments and Hedging Activities (SFAS

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133). The Company does not currently have any derivative instruments and
does not engage in hedging activities and accordingly there is no impact on the
consolidated financial statements of adopting this new standard.

Foreign Currency Exposure

We operate wholly-owned subsidiaries in Canada. Total historical revenues
from Canadian operations amounted to $38.3 million and $53.5 million for fiscal
years 2000 and 2001, respectively. We intend to continue to invest in Canadian
facilities, and may identify expansion opportunities in other foreign
countries. Our exposure to foreign currency fluctuations is limited as the
Canadian dollar revenues have to date been significantly offset by Canadian
dollar operating costs. Our net earnings in Canada for 2001 were approximately
$1.9 million, or approximately C$2.9 million translated at the average exchange
rate for 2001 of US$1 = C$1.55. If the exchange rate used in 2001 had been
C$1.63 instead of C$1.55, the effect would be to reduce our net earnings by
approximately $0.1 million. Presently, we have no formal hedging programs. We
would consider implementing a hedging program if such risk materially
increases.

Impact of Inflation and Changing Prices

Our primary sources of revenues are parking revenues from owned and leased
locations and management contract revenue (net of expense reimbursements). In
the years ended December 31, 2000 and 2001 inflation had a limited impact on
our operations.

Quarterly Results

We may experience fluctuations in our income from quarter to quarter due
to fluctuations in revenues and related expenses due to acquisitions,
pre-opening costs, travel and transportation patterns affected by weather and
calendar related events, and local and national economic conditions.
Additionally, we manage the parking for a number of sports stadiums and arenas
and our income can be affected by the relative degree of success of various
sports teams. Information on our quarterly reported revenues, net
income (loss)
and earnings(loss) per share is disclosed in Note 14 to the Consolidated
Financial Statements in this report.

CERTAIN FACTORS AFFECTING FUTURE OPERATING RESULTS

This Annual Report, including the information incorporated herein by reference
contain certain statements that may be considered forward-looking statements
under the Private Securities Litigation Reform Act of 1995. You can identify
forward-looking statements by the use of the words believe, expect,
anticipate, intend, estimate, assume, will, should, and other
expressions which predict or indicate future events or trends and which do not
relate to historical matters. The Companys actual results could differ
materially from those projected in the forward-looking statements as a result
of, among other factors, the factors discussed below, our ability to
successfully integrate past and future acquisitions, our ability to form and
maintain strategic relationships with certain large real estate owners, and
changes in assumptions used in making such forward-looking statements. Readers
should carefully review the factors described on below and should not place
undue reliance on our forward looking statements. The Company assumes no
obligations to update any forward-looking statements.

Our growth strategy may not succeed

As part of our business strategy, we intend to pursue acquisitions of
other parking operators. In executing our acquisition strategy, we may be
unable to identify suitable acquisition candidates. In addition, we expect to
face competition from other parking providers for acquisition candidates,
making it more difficult to acquire suitable companies on favorable terms. If
we pursue any acquisition, our management could spend a significant

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amount of time and effort in identifying and completing the acquisition. If we
complete an acquisition, we may have to devote a significant amount of
management resources to integrating the acquired business with our existing
business. An acquisition might not produce the revenue or earnings that we
anticipated, and an acquired operation may not perform as expected.
Accordingly, our acquisition efforts may not succeed. In addition, from an
accounting perspective, an acquisition may result in non-recurring charges or
involve significant write-offs of goodwill that could adversely affect our
operating results.

To pay for an acquisition, we might use capital stock or cash.
Alternatively, we might borrow money from a bank or other lender. If we use
capital stock, our stockholders may experience dilution. If we use cash or
debt financing, our financial liquidity would be reduced. We cannot be certain
that we will have sufficient access to capital to permit us to implement our
acquisition strategies.

We also intend to pursue aggressive growth in targeted major cities in the
United States. However, we may not be able to sign up parking contracts in
these cities due to competition from existing operators or reluctance from
landlords to enter into agreements with an operator who is new in the local
market. Furthermore, if we are able to add new facilities, we may incur losses
on these new locations during the first or second year of operations as we
attempt to achieve projected revenue targets by optimizing parking rates and
marketing the facility.

Severe winter weather may adversely affect our business

The parking business depends on the free flow of vehicular traffic.
Severe winter weather conditions in Canada and the northern United States could
close or significantly slow roadways. This, in turn, may harm our business and
adversely affect our cash flow by reducing the demand for parking and
increasing our snow removal costs.

Changes in privacy legislation
could harm our business by making collections more difficult and costly

City Collections, an Impark subsidiary, identifies vehicle owners in
Canada through searches based on license plate numbers. The license plate data
are maintained by each province in Canada. Although most provinces have
enacted privacy legislation regulating access to such data, City Collections
has entered into access agreements with several provinces. Should more
restrictive privacy legislation be enacted it could adversely affect City
Collections business. In addition, fees charged for searches of motor vehicle
registration are also set by provincial governments and any increase in these
fees will have an adverse effect on City Collections business.

An increase in the cost of insurance claims could increase our costs

We typically have a large number of small property or personal injury
claims. We have insurance to cover the cost of these claims, to the extent
such costs exceed a deductible amount. However, a major increase in the number
and cost of claims to the insurance company could significantly increase the
amount that we pay to insure against these claims.

Currency fluctuations could adversely affect our financial results

While our consolidated financial statements are prepared in United States
dollars, many of our operations are conducted in Canadian dollars.
Fluctuations in exchange rates may have a material adverse effect on our
financial results, particularly our operating margins, and could also result in
exchange losses. To date we have not sought to hedge these risks, but may
undertake hedging transactions in the future. We cannot be certain, however,
that any hedging techniques would be successful in preventing or limiting the
adverse financial effects of exchange rate fluctuations.

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We face risks associated with environmental regulations

Various federal, state, provincial and local environmental laws and
regulations impose liabilities on a current or previous owner or operator of
real property for the cost of removal or remediation of hazardous or toxic
substances on the property. These laws typically impose liability without
regard to whether the owner or operator knew of, or was responsible for, the
presence of the hazardous or toxic substances. In connection with our
ownership, operation or acquisition of parking facilities, we may be
potentially liable for such costs. Although we are currently not aware of any
material environmental claims pending or threatened against us or any of our
owned or operated parking facilities, we cannot give any assurance that a
material environmental claim will not be asserted against us or against our
owned or operated parking facilities. We could face significant costs in
defending against claims of liability or in remediating a contaminated
property.

An increase in government regulation or taxation could harm our business

The parking business is subject to a significant degree of government
regulation. The regulations include potentially costly matters such as
requiring improvements to meet civic by-laws, workers compensation regulations
and labor standards, as well as, environmental and other potentially costly
legislation. Any new or increased levels of regulation could adversely impact
our business.

The parking industry is also subject to increased taxation from the
various levels of government. Historically, it has been considered as an
environmentally unfriendly industry due to its primary purpose, which is to
park automobiles driven into downtown business districts. Consequently the
parking industry has been the subject of significant taxation including
federal, state and provincial sales taxes, property taxes, business taxes and
federal and provincial/state income taxes. Our business will be adversely
affected by any significant new tax legislation or increased levels of
taxation, any of which could be retroactive.

Various other governmental regulations affect our operation of parking
facilities, both directly and indirectly, including air quality laws, licensing
laws and the Americans with Disabilities Act of 1990. Under the ADA, all
public accommodations, including parking facilities, are required to meet
certain federal requirements related to access and use by disabled persons.
Although we believe that the parking facilities we own and operate are in
substantial compliance with these requirements, a determination that we or the
facility owner is not in compliance with the ADA could result in the imposition
of fines or damage awards against us.

In addition, several state, provincial and local laws have been passed in
recent years that encourage car pooling and the use of mass transit, including,
for example, laws prohibiting employers from reimbursing employee parking
expenses. Laws and regulations that reduce the number of cars and vehicles
being driven could hurt our business.

We have significant competition from a variety of sources

The parking industry is highly competitive. Our competitors range from
small single-lot operators to large regional and national multi-facility
operators, and include municipal and other governmental entities. Some of our
present and potential competitors have or may obtain greater financial and
marketing resources than we have. Furthermore, we compete for qualified
management personnel with other parking facility operators, with property
management companies and with property owners. We may encounter increased
competition in the future. Among other things, increased construction of
parking facilities could limit our ability to attract customers, expand our
business or maintain profitable pricing levels and could decrease our market
share. We compete for acquisitions with other parking facility operators, real
estate developers and real estate investment trusts. We may encounter
increased competition for acquisitions in the future, and this competition
could hurt our ability to complete acquisitions or have the effect of
increasing the prices we must pay for acquisitions.

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We believe that there will be rapid business consolidation in the parking
services industry. If this occurs and we are unable to participate
successfully in the business consolidation, our business and financial results
could be harmed.

A labor strike could hurt our competitiveness

A significant number of our employees are members of labor unions. As a
result there is more risk of work stoppages due to strikes which could
potentially be costly to us because increased labor costs could adversely
affect our ability to retain management contracts and to remain competitive in
the marketplace.

The large number of leased facilities increases the risk that we may not be
able to cover the fixed costs of our leased facilities

We leased 559 and owned 15 facilities as of December 31, 2001. 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
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,
and in the case of owned facilities, there are the normal risks of ownership
and costs of capital. In addition, maintenance and operating expenses for both
leased and owned facilities are borne by us and are not passed through to the
owner, as is the case with management contracts. Generally, performance of our
parking facilities depend, in part, on our ability to negotiate favorable
contract terms, our ability to control operating expenses, financial 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 generally. The relative significance of
our leases can be viewed in relation to the term remaining on currently active
leases and the extent to which the direct costs of operating those leased
facilities historically have been covered by revenue generated by the
facilities, as follows:

|                    |  |                                  |        |              |  |  |      | 
|------------------- |  | -------------------------------- | ------ | ------------ |  |  | ---- | 
|                    |  | Year ended December 31, 2001 (1)
|                    |  |                                 
|Term expires        |  | Direct costs (2)                 |        | Coverage (3)
|                    |  |                                  |        |             
|2002                |  | $                                | 22,672 |              |  |  | 1.17 | 
|2003                |  |                                  | 9,251  |              |  |  | 1.12 | 
|2004                |  |                                  | 5,070  |              |  |  | 1.17 | 
|2005                |  |                                  | 5,259  |              |  |  | 1.07 | 
|2006 and thereafter |  |                                  | 16,324 |              |  |  | 1.13 | 
|                    |  |                                  |        |              |  |  |      | 
|Total               |  | $                                | 58,576 |              |  |  | 1.14 | 
|                    |  |                                  |        |              |  |  |      | 



---

|(1) |  | For leased locations that were open as at December 31, 2001.                                                                                                                                                                                                                                                                                                                                                 
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Direct costs included minimum rental payments, contingent payments
based upon a percentage of revenues, property taxes and other operating
expenses.                                                                                                                                                                                                                                                         
|   
|(3) |  | Coverage is calculated by dividing Revenue by Direct costs. Coverage
should not be considered in isolation or as a substitute of measures of
performance prepared in accordance with generally accepted accounting
principles. Coverage is not an accepted measure under generally accepted
accounting principles and other companies will use different measures or
different calculations of profitability.

Several of our locations are dependent on sports-related traffic

Several of our leased facilities are located beside or in the vicinity of
major sporting arenas. A significant proportion of the revenue earned at these
locations occurs during regular and post-season games. In 2001, approximately
6% of our revenue was earned from customers attending baseball games. A player
strike or other work stoppage leading to the cancellation of games, or a
reduction in attendance at games, would substantially

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reduce the revenue earned at these locations. However, our fixed rent
commitments on these locations would be unchanged. As a result, the profit we
earn from these facilities would decrease significantly.

Item 7a. Quantitative and Qualitative Disclosure about Market Risk

To December 31, 2001, we have not entered into significant derivative
instruments either for hedging or speculative purposes. As of December 31,
2001, we had no such instruments outstanding. We will periodically hold excess
available cash in cash equivalents which are short-term deposits at major
financial institutions with terms to maturity at the date of acquisition of
three months or less.

Interest Rates

Our primary exposure to market risk consists of changes in interest rates
on cash invested in short-term deposits which are all included in cash
equivalents on our consolidated balance sheet. Changes in interest rates could
impact our anticipated real rate of return. However, due to the short-term
nature of such investments, the risk of loss to market is not significant.

Our bank indebtedness of $3.9 million at December 31, 2001 bears interest
at rates which vary with changes in the London Interbank Offered Rate
(LIBOR).

Foreign Currency Exposure

We operate wholly-owned subsidiaries in Canada. Total revenues from
Canadian operations amounted to $38.3 million for the year ended December 31,
2001 as detailed in Note 14 to the Financial Statements. We intend to continue
to invest in Canadian facilities, and may identify expansion opportunities in
other foreign countries. We believe that our exposure to foreign currency
fluctuations is limited because our Canadian dollar revenues have to date been
significantly offset by Canadian dollar operating costs. Our net earnings in
Canada for 2001 were approximately $1.9 million, or approximately C$2.9 million
translated at the average exchange rate for 2001 of US$1 = C$1.55. If the
exchange rate used in 2001 had been C$1.63 instead of C$1.55, the effect would
be to reduce our net earnings by approximately $0.1 million. Presently, we have
no formal hedging programs, other than investing any excess Canadian cash in
U.S. Treasury bills. We would consider implementing a hedging program if such
risk materially increases.

Item 8. Financial Statements and Supplementary Data

The consolidated financial statements listed in Item 14(a)1 and 14(a)2 are
included in this report on pages F-1 through F-6.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None

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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 2002 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 2002 Annual Meeting of
Shareholders.

Item 12.     Security Ownership of Certain Beneficial Owners and Management

Information concerning this Item is incorporated by reference to the
Companys definitive proxy materials for the Companys 2002 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 2002 Annual Meeting of
Shareholders.

28



---



##### 



Part IV

Item 14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)  1. Financial Statements

The following financial statements are filed as part of this report:

|                                   |                                                                                         |  |      |     | 
|---------------------------------- | --------------------------------------------------------------------------------------- |  | ---- | --- | 
|                                   |                                                                                         |  | Page
|                                   |                                                                                         |  |     
|Independent Auditors Report       |                                                                                         |  | F-1  |    
|Consolidated Financial Statements: |                                                                                         |  |      |    
|                                   | Balance Sheets as of December 31, 2001 and 2000                                         |  |      | F-2 | 
|                                   | Statements of Operations for the years ended December 31, 2001, 2000 and 1999           |  |      | F-3 | 
|                                   | Statements of Stockholders Equity for the years ended December 31, 2001, 2000 and 1999 |  |      | F-4 | 
|                                   | Statement of Cash Flows for the years ended December 31, 2001, 2000 and 1999            |  |      | F-5 | 
|                                   | Notes to Consolidated Financial Statements                                              |  |      | F-7 | 

2.Financial Statements Schedules

None

Financial statement schedules have been omitted because they are not
applicable.

3.Exhibits

Each exhibit listed below in the Index to Exhibits is filed as a part of
this report. Exhibits not incorporated by reference to a prior filing are
designated by an asterisk (*); all exhibits not so designated are
incorporated herein by reference to a prior filing as indicated.

Index to Exhibits

|            |  |                                                                                                                                                                                                                                                                                                   
|----------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                       
|2.1         |  | Memorandum of Understanding regarding the Distribution between
First Union Real Estate Equity and Mortgage Investments (First
Union) and the Registrant (Incorporated by reference to Exhibit 2.1
to the Companys Registration Statement No. 001-15629 on Form 10/A as
filed on March 2, 2000).
|            |  |                                                                                                                                                                                                                                                                                                   
|3.1         |  | Amended and Restated Certificate of Incorporation of the
Registrant (Incorporated by reference to Exhibit 3.1 to the Companys
Registration Statement No. 001-15629 on Form 10/A as filed on March
2, 2000).                                                                                      
|            |  |                                                                                                                                                                                                                                                                                                   
|3.2         |  | Amended and Restated By-Laws of the Registrant (Incorporated by
reference to Exhibit 3.2 to the Companys Registration Statement No.
001-15629 on Form 10/A as filed on March 2, 2000).                                                                                                           
|            |  |                                                                                                                                                                                                                                                                                                   
|4.1         |  | Specimen certificate for shares of common stock of the
Registrant (Incorporated by reference to Exhibit 4.1 to the Companys
Registration Statement No. 001-15629 on Form 10/A as filed on March
2, 2000).                                                                                        

29



---



##### 



|            |  |                                                                                                                                                                                                                                         
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                             
|10.1        |  | 2000 Stock Incentive Plan of the Registrant (Incorporated by
reference to Exhibit 10.1 to the Companys Registration Statement No.
001-15629 on Form 10/A as filed on March 2, 2000).                                                   
|            |  |                                                                                                                                                                                                                                         
|10.2*       |  | Indemnification Agreement (Incorporated by reference to
Exhibit 10.4 to the Companys Registration Statement No. 001-15629 on
Form 10/A as filed on March 2, 2000) and First Amendment to
Indemnification Agreement (attached herewith).
|            |  |                                                                                                                                                                                                                                         
|10.3        |  | Huntzinger Employment Agreement (Incorporated by reference to
Exhibit 10.6 to the Companys Registration Statement No. 001-15629 on
Form 10/A as filed on March 21, 2000).                                                              
|            |  |                                                                                                                                                                                                                                         
|10.4        |  | Wallner Employment Agreement (Incorporated by reference to
Exhibit 10.7 to the Companys Registration Statement No. 001-15629 on
Form 10/A as filed on March 21, 2000).                                                                 
|            |  |                                                                                                                                                                                                                                         
|10.5        |  | Newsome Employment Agreement (Incorporated by reference to
Exhibit 10.8 to the Companys Registration Statement No. 001-15629 on
Form 10/A as filed on March 2, 2000).                                                                  
|            |  |                                                                                                                                                                                                                                         
|10.6        |  | $20.0 million Credit Facility (Incorporated by reference to
Exhibit 10.10 to the Companys Annual Report on Form 10-K as filed on
March 28, 2001).                                                                                      
|            |  |                                                                                                                                                                                                                                         
|10.7        |  | Restricted Stock Agreement for Annual Stock Grant to Directors
(Incorporated by reference to Exhibit 10.11 to the Companys
Quarterly Report on Form 10-Q as filed on November 13,
2001).                                               
|            |  |                                                                                                                                                                                                                                         
|10.8        |  | Amended and Restated Share Purchase Agreement between Imperial
Parking (U.S.), Inc. and the shareholders of DLC (Incorporated by
reference to Exhibit 2.1 to the Companys Current Report on Form 8-K
as filed on July 12, 2001).       
|            |  |                                                                                                                                                                                                                                         
|21.1        |  | Subsidiaries of the Registrant (Incorporated by reference to
Exhibit 21.1 to the Companys Quarterly Report on Form 10-Q as filed
on November 13, 2001).                                                                                

(b)Report on Form 8-K

We did not file any reports on Form 8-K during the last quarter of fiscal
year ended December 31, 2001.

30



---



##### 



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.

|                     |  |                                                                   
|-------------------- |  | ------------------------------------------------------------------
|                     |  | IMPERIAL PARKING CORPORATION                                      
|                    
|Date: March 20, 2002 |  | By:  /s/  J. BRUCE NEWSOMEJ. Bruce Newsome
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

|                           |  |                                                                               |      |               
|-------------------------- |  | ----------------------------------------------------------------------------- | ---- | --------------
|Name                       |  | Title                                                                         | Date
|                           |  |                                                                               |     
|                           |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/  CHARLES E. HUNTZINGER |  | President, Chief Executive Officer
and Director
(Principal Executive Officer) |      | March 20, 2002
|                           |  |                                                                               |      |               
|Charles E. Huntzinger      |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/  J. BRUCE NEWSOME      |  | Senior Vice President, Finance
and Chief Financial Officer                    |      | March 20, 2002
|                           |  | (Principal Financial and Accounting Officer)                                  |      |               
|J. Bruce Newsome           |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/  WILLIAM A. ACKMAN     |  | Chairman of the Board of Directors                                            |      | March 20, 2002
|                           |  |                                                                               |      |               
|William A. Ackman          |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/  DANIEL P. FRIEDMAN    |  | Vice-Chairman of the Board of Directors                                       |      | March 20, 2002
|                           |  |                                                                               |      |               
|Daniel P. Friedman         |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/  TALTON R. EMBRY       |  | Director                                                                      |      | March 20, 2002
|                           |  |                                                                               |      |               
|Talton R. Embry            |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/  ARMAND E. LASKY       |  | Director                                                                      |      | March 20, 2002
|                           |  |                                                                               |      |               
|Armand E. Lasky            |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/  BETH A. STEWART       |  | Director                                                                      |      | March 20, 2002
|                           |  |                                                                               |      |               
|Beth A. Stewart            |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/ MARY ANN TIGHE         |  | Director                                                                      |      | March 20, 2002
|                           |  |                                                                               |      |               
|Mary Ann Tighe             |  |                                                                               |      |               
|                           |  |                                                                               |      |               
|/s/ DAVID J. WOODS         |  | Director                                                                      |      | March 20, 2002
|                           |  |                                                                               |      |               
|David J. Woods             |  |                                                                               |      |               

31



---



##### 



AUDITORS REPORT TO THE SHAREHOLDERS

We have audited the consolidated balance sheets of Imperial Parking Corporation
as at December 31, 2001 and 2000 and the related consolidated statements of
operations, stockholders equity and cash flows for each of the years in the
three year period ended December 31, 2001. These consolidated financial
statements are the responsibility of the Companys management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 Imperial Parking
Corporation as at December 31, 2001 and 2000 and the results of its operations
and its cash flows for each of the years in the three year period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States of America.

As discussed in note 18(a) to the consolidated financial statements, effective
July 1, 2001, the Company adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 141, Business Combinations, and certain
provisions of SFAS No. 142, Goodwill and Other Intangible Assets, as required
for goodwill and intangible assets resulting from business combinations
consummated after June 30, 2001.

KPMG LLP
Chartered Accountants

Vancouver, Canada

January 31, 2002

F-1



---



##### 



IMPERIAL PARKING CORPORATION
Consolidated Balance Sheets
(Stated in thousands of United States dollars)

December 31, 2001 and 2000

|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|---------------------------------------- | ----------------------------------------------------------------------------- | - | ------ | ------ | ------ | ---- | ------ | ------ | ------ | - |  | 
|                                        
|                                         |                                                                               |   |        |        |        | 2001 |        | 2000  
|                                        
|Assets                                   |                                                                               |   |        |        |        |      |        |        |       
|Current assets:                          |                                                                               |   |        |        |        |      |        |        |       
|                                         | Cash and cash equivalents                                                     | $ |        | 10,991 |        | $    |        | 5,615  |       
|                                         | Restricted cash                                                               |   |        |       |        |      |        | 2,688  |       
|                                         | Accounts receivable                                                           |   |        | 6,875  |        |      |        | 3,561  |       
|                                         | Current portion of recoverable development costs                              |   |        | 880    |        |      |        | 969    |       
|                                         | Inventory                                                                     |   |        | 781    |        |      |        | 748    |       
|                                         | Deposits and prepaid expenses                                                 |   |        | 1,135  |        |      |        | 821    |       
|                                         | Deferred income taxes (note 10)                                               |   |        | 2,412  |        |      |        | 1,700  |       
|                                         |                                                                              
|                                         |                                                                               |   | 23,074 |        |        |      | 16,102 |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Recoverable development costs            |                                                                               |   |        | 3,940  |        |      |        | 4,614  |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Fixed assets (note 4)                    |                                                                               |   |        | 14,661 |        |      |        | 14,299 |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Management and lease agreements (note 5) |                                                                               |   |        | 336    |        |      |        | 416    |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Other assets (note 6)                    |                                                                               |   |        | 2,975  |        |      |        | 2,829  |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Goodwill (note 7)                        |                                                                               |   |        | 44,259 |        |      |        | 41,131 |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|                                        
|                                         | $                                                                             |   | 89,245 |        | $      |      | 79,391 |       
|                                        
|                                        
|Liabilities
and Stockholders Equity     |                                                                               |   |        |        |        |      |        |       
|Current liabilities:                     |                                                                               |   |        |        |        |      |        |       
|                                         | Rents payable                                                                 |   | $      |        | 7,288  |      | $      |        | 6,871  |  
|                                         | Trade accounts payable and other accrued liabilities                          |   |        |        | 5,007  |      |        |        | 4,345  |  
|                                         | Payable to employees and former employees                                     |   |        |        | 1,936  |      |        |        | 1,703  |  
|                                         | Sales tax payable                                                             |   |        |        | 1,367  |      |        |        | 1,370  |  
|                                         | Bank indebtedness (note 8)                                                    |   |        |        | 3,900  |      |        |        |       |  
|                                         | Current portion of other long-term liabilities                                |   |        |        | 1,204  |      |        |        |       |  
|                                         | Deferred revenue                                                              |   |        |        | 2,081  |      |        |        | 1,717  |  
|                                         |                                                                              
|                                         |                                                                               |   | 22,783 |        |        |      | 16,006 |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Other long-term liabilities (note 9)     |                                                                               |   | 4,921  |        |        |      | 1,656  |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Deferred income taxes (note 10)          |                                                                               |   | 3,280  |        |        |      | 1,700  |       
|                                        
|                                         |                                                                               |   | 30,984 |        |        |      | 19,362 |       
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Stockholders equity (note 11):          |                                                                               |   |        |        |        |      |        |       
|                                         | Common stock $0.01 par value; 10,000,000 shares authorized:                   |   |        |        |        |      |        |        |        |  
|                                         | 1,818,017 (2000 - 1,843,000 shares) shares issued
      and outstanding       |   |        |        | 18     |      |        |        | 18     |  
|                                         | Additional paid-in capital                                                    |   |        |        | 60,718 |      |        |        | 59,991 |  
|                                         | Retained earnings                                                             |   |        |        | 2,183  |      |        |        | 1,464  |  
|                                         | Accumulated other comprehensive loss:
Foreign currency translation adjustment |   |        |        | (4,658 | )    |        |        | (1,444 | )
|                                         |                                                                              
|                                         |                                                                               |   | 58,261 |        |        |      | 60,029 |       
|                                        
|                                         | $                                                                             |   | 89,245 |        | $      |      | 79,391 |       
|                                        
|                                         |                                                                               |   |        |        |        |      |        |        |        |   |  | 
|Commitments and contingencies (note 16)  |                                                                               |   |        |        |        |      |        |       

See accompanying notes to consolidated financial statements.

F-2



---



##### 



IMPERIAL PARKING CORPORATION
Consolidated Statements of Operations
(Stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

|                                    |                                                                  |   |        |        |      |   |        |       |   |   |         |         |  
|----------------------------------- | ---------------------------------------------------------------- | - | ------ | ------ | ---- | - | ------ | ----- | - | - | ------- | ------- | -
|                                   
|                                    |                                                                  |   | 2001   |        | 2000 |   | 1999  
|                                   
|Revenues                            |                                                                  | $ | 87,824 |        |      | $ | 53,305 |       |   | $ | 582     |        
|Direct costs                        |                                                                  |   | 67,303 |        |      |   | 39,818 |       |   |   | 2       |        
|                                   
|Gross margin                        |                                                                  |   | 20,521 |        |      |   | 13,487 |       |   |   | 580     |        
|Other expenses:                     |                                                                  |   |        |        |      |   |        |       |   |   |         |        
|                                    | General and administrative                                       |   |        | 14,362 |      |   |        | 8,758 |   |   |         |        |  
|                                    | Depreciation and amortization of management
and lease agreements |   |        | 2,523  |      |   |        | 2,009 |   |   |         | 43      |  
|                                    | Amortization of goodwill                                         |   |        | 2,206  |      |   |        | 1,701 |   |   |         |        |  
|                                    | Equity share of limited liability company losses                 |   |        | 168    |      |   |        |      |   |   |         |        |  
|                                   
|                                    |                                                                  |   | 19,259 |        |      |   | 12,468 |       |   |   | 43      |        
|                                   
|Operating earnings                  |                                                                  |   | 1,262  |        |      |   | 1,019  |       |   |   | 537     |        
|                                    |                                                                  |   |        |        |      |   |        |       |   |   |         |         |  
|Other income (expense):             |                                                                  |   |        |        |      |   |        |       |   |   |         |        
|                                    | Interest income                                                  |   |        | 577    |      |   |        | 744   |   |   |         |        |  
|                                    | Interest income on notes receivable from
related companies       |   |        |       |      |   |        | 1,035 |   |   |         | 4,032   |  
|                                    | Interest expense on note payable to First Union                  |   |        |       |      |   |        | (786  | ) |   |         | (3,044  | )
|                                    | Allowance for credit losses                                      |   |        |       |      |   |        |      |   |   |         | (19,000 | )
|                                    | Other interest expense                                           |   |        | (298   | )    |   |        |      |   |   |         | 66      |  
|                                   
|                                    |                                                                  |   | 279    |        |      |   | 993    |       |   |   | (17,946 | )      
|                                   
|                                    |                                                                  |   |        |        |      |   |        |       |   |   |         |         |  
|Earnings (loss) before income taxes |                                                                  |   | 1,541  |        |      |   | 2,012  |       |   |   | (17,409 | )      
|                                    |                                                                  |   |        |        |      |   |        |       |   |   |         |         |  
|Income taxes (note 10):             |                                                                  |   |        |        |      |   |        |       |   |   |         |        
|                                    | Current (recovery)                                               |   |        | 173    |      |   |        | 272   |   |   |         | (97     | )
|                                    | Deferred                                                         |   |        | 649    |      |   |        |      |   |   |         | 11      |  
|                                   
|                                    |                                                                  |   | 822    |        |      |   | 272    |       |   |   | (86     | )      
|                                   
|                                    |                                                                  |   |        |        |      |   |        |       |   |   |         |         |  
|Net earnings (loss)                 |                                                                  |   | 719    |        |      |   | 1,740  |       |   |   | (17,323 | )      
|                                    |                                                                  |   |        |        |      |   |        |       |   |   |         |         |  
|Other comprehensive income (loss):  |                                                                  |   |        |        |      |   |        |       |   |   |         |        
|                                    | Foreign currency translation adjustments                         |   |        | (3,214 | )    |   |        | (782  | ) |   |         | 1,143   |  
|                                   
|                                    |                                                                  |   |        |        |      |   |        |       |   |   |         |         |  
|Comprehensive income (loss)         |                                                                  | $ | (2,495 | )      |      | $ | 958    |       |   | $ | (16,180 | )      
|                                   
|Earnings (loss) per share (note 12) |                                                                  |   |        |        |      |   |        |       |   |   |         |        
|                                    | Basic                                                            |   | $      | 0.40   |      |   | $      | 0.83  |   |   | $       | (8.14   | )
|                                    | Diluted                                                          |   | $      | 0.39   |      |   | $      | 0.83  |   |   | $       | (8.14   | )
|                                   

See accompanying notes to consolidated financial statements.

F-3



---



##### 



IMPERIAL PARKING CORPORATION
Consolidated Statements of Stockholders Equity
(Stated in thousands of United States dollars)

Years ended December 31, 2001, 2000 and 1999

|                                                       |                                                                                |  |              |   |            |   |          |   |                  |   |            |        |       |   |         |   |  |   |        |   |  |   |         |        | 
|------------------------------------------------------ | ------------------------------------------------------------------------------ |  | ------------ | - | ---------- | - | -------- | - | ---------------- | - | ---------- | ------ | ----- | - | ------- | - |  | - | ------ | - |  | - | ------- | ------ | 
|                                                      
|                                                       |                                                                                |  |              |   |            |   |          |   |                  |   |            |        |       |   |         |   |  |   |       
|                                                       |                                                                                |  | Common stock |   | Additional |   | Retained |   | Foreign currency |   |            |        |      
|                                                       |                                                                                |  |              |   | paid-in    |   | earnings |   | translation      |   |            |        |      
|                                                       |                                                                                |  | Number       |   | Amount     |   | capital  |   | (deficit)        |   | adjustment |        | Total
|                                                      
|Balance, December 31, 1998                             |                                                                                |  |             |   |            | $ |         |   |                  | $ | 17,017     |        |       | $ | 2,339   |   |  | $ | (1,805 | ) |  | $ | 17,551  |       
|Loss for the year                                      |                                                                                |  |             |   |            |   |         |   |                  |   |           |        |       |   | (17,323 | ) |  |   |       |   |  |   | (17,323 | )     
|Foreign currency translation adjustment                |                                                                                |  |             |   |            |   |         |   |                  |   |           |        |       |   |        |   |  |   | 1,143  |   |  |   | 1,143   |       
|                                                      
|Balance, December 31, 1999                             |                                                                                |  |             |   |            |   |         |   |                  |   | 17,017     |        |       |   | (14,984 | ) |  |   | (662   | ) |  |   | 1,371   |       
|Contributions by First Union:                          |                                                                                |  |              |   |            |   |          |   |                  |   |            |        |       |   |         |   |  |   |        |   |  |   |         |       
|                                                       | To repay outstanding credit facility                                           |  |              |  |            |   |          |  |                  |   |            | 26,369 |       |   |         |  |  |   |        |  |  |   |         | 26,369 | 
|                                                       | Interest in limited liability company                                          |  |              |  |            |   |          |  |                  |   |            | 3,413  |       |   |         |  |  |   |        |  |  |   |         | 3,413  | 
|                                                       | Cash for working capital and to fund future
costs of limited liability company |  |              |  |            |   |          |  |                  |   |            | 5,879  |       |   |         |  |  |   |        |  |  |   |         | 5,879  | 
|                                                       | In settlement of obligations to related parties                                |  |              |  |            |   |          |  |                  |   |            | 8,020  |       |   |         |  |  |   |        |  |  |   |         | 8,020  | 
|                                                       | To acquire net assets of FUMI parking related business                         |  |              |  |            |   |          |  |                  |   |            | 18,604 |       |   |         |  |  |   |        |  |  |   |         | 18,604 | 
|Net earnings                                           |                                                                                |  |             |   |            |   |         |   |                  |   |           |        |       |   | 1,740   |   |  |   |       |   |  |   | 1,740   |       
|Foreign currency translation adjustment                |                                                                                |  |             |   |            |   |         |   |                  |   |           |        |       |   |        |   |  |   | (782   | ) |  |   | (782    | )     
|Capitalization of Impark, par value of $0.01 per share |                                                                                |  | 2,121,318    |   |            |   | 21       |   |                  |   | (14,708    | )      |       |   | 14,708  |   |  |   |       |   |  |   | 21      |       
|Shares issued to directors                             |                                                                                |  | 6,444        |   |            |   |         |   |                  |   | 114        |        |       |   |        |   |  |   |       |   |  |   | 114     |       
|Purchase of fractional shares                          |                                                                                |  |             |   |            |   |         |   |                  |   | (24        | )      |       |   |        |   |  |   |       |   |  |   | (24     | )     
|                                                      
|                                                       |                                                                                |  | 2,127,762    |   |            |   | 21       |   |                  |   | 64,684     |        |       |   | 1,464   |   |  |   | (1,444 | ) |  |   | 64,725  |       
|Shares repurchased                                     |                                                                                |  | (284,762     | ) |            |   | (3       | ) |                  |   | (4,693     | )      |       |   |        |   |  |   |       |   |  |   | (4,696  | )     
|                                                      
|Balance, December 31, 2000                             |                                                                                |  | 1,843,000    |   |            |   | 18       |   |                  |   | 59,991     |        |       |   | 1,464   |   |  |   | (1,444 | ) |  |   | 60,029  |       
|Net earnings for the period                            |                                                                                |  |             |   |            |   |         |   |                  |   |           |        |       |   | 719     |   |  |   |       |   |  |   | 719     |       
|Foreign currency translation adjustment in period      |                                                                                |  |             |   |            |   |         |   |                  |   |           |        |       |   |        |   |  |   | (3,214 | ) |  |   | (3,214  | )     
|Stock-based compensation                               |                                                                                |  |             |   |            |   |         |   |                  |   | 1,186      |        |       |   |        |   |  |   |       |   |  |   | 1,186   |       
|Options exercised                                      |                                                                                |  | 5,875        |   |            |   |         |   |                  |   | 84         |        |       |   |        |   |  |   |       |   |  |   | 84      |       
|Shares repurchased                                     |                                                                                |  | (30,858      | ) |            |   |         |   |                  |   | (543       | )      |       |   |        |   |  |   |       |   |  |   | (543    | )     
|                                                      
|Total stockholders equity, December 31, 2001          |                                                                                |  | 1,818,017    |   |            | $ | 18       |   |                  | $ | 60,718     |        |       | $ | 2,183   |   |  | $ | (4,658 | ) |  | $ | 58,261  |       
|                                                      

See accompanying notes to consolidated financial statements.

F-4



---



##### 



IMPERIAL PARKING CORPORATION
Consolidated Statements of Cash Flows
(Stated in thousands of United States dollars)

Years ended December 31, 2001, 2000 and 1999

|                            |                                                                               |                                                                  |        |        |        |      |         |         |        |   |     |         |        |  
|--------------------------- | ----------------------------------------------------------------------------- | ---------------------------------------------------------------- | ------ | ------ | ------ | ---- | ------- | ------- | ------ | - | --- | ------- | ------ | -
|                           
|                            |                                                                               |                                                                  |        | 2001   |        | 2000 |         | 1999   
|                           
|Cash provided by (used in): |                                                                               |                                                                  |        |        |        |      |         |         |        |   |     |        
|                            |                                                                               |                                                                  |        |        |        |      |         |         |        |   |     |         |        |  
|Operations:                 |                                                                               |                                                                  |        |        |        |      |         |         |        |   |     |        
|                            | Net earnings (loss)                                                           |                                                                  | $      | 719    |        |      | $       | 1,740   |        |   | $   | (17,323 | )     
|                            | Adjustments to reconcile net income to cash
provided by operating activities: |                                                                  |        |        |        |      |         |         |        |   |     |         |       
|                            |                                                                               | Depreciation and amortization
of management and lease agreements |        |        | 2,523  |      |         |         | 2,009  |   |     |         | 43     |  
|                            |                                                                               | Amortization of goodwill                                         |        |        | 2,206  |      |         |         | 1,701  |   |     |         |       |  
|                            |                                                                               | Recovery of recoverable development costs                        |        |        | 1,057  |      |         |         | 811    |   |     |         |       |  
|                            |                                                                               | Interest income capitalized to note
receivable                   |        |        |       |      |         |         | (697   | ) |     |         | (2,688 | )
|                            |                                                                               | Interest expense capitalized to note
payable to First Union      |        |        |       |      |         |         | 786    |   |     |         | 2,740  |  
|                            |                                                                               | Equity share of limited liability company losses                 |        |        | 168    |      |         |         |       |   |     |         |       |  
|                            |                                                                               | Non-cash interest expense                                        |        |        | 154    |      |         |         |       |   |     |         |       |  
|                            |                                                                               | Stock-based compensation                                         |        |        | 780    |      |         |         | 114    |   |     |         |       |  
|                            |                                                                               | Deferred income taxes                                            |        |        | 649    |      |         |         |       |   |     |         | 11     |  
|                            |                                                                               | Allowance for credit losses                                      |        |        |       |      |         |         |       |   |     |         | 19,000 |  
|                            | Changes in non-cash working capital items:                                    |                                                                  |        |        |        |      |         |         |        |   |     |         |       
|                            |                                                                               | Restricted cash                                                  |        |        | 2,688  |      |         |         | (2,688 | ) |     |         |       |  
|                            |                                                                               | Accounts receivable                                              |        |        | (1,026 | )    |         |         | (714   | ) |     |         | (21    | )
|                            |                                                                               | Inventory                                                        |        |        | (80    | )    |         |         | 135    |   |     |         |       |  
|                            |                                                                               | Deposits and prepaid expenses                                    |        |        | (126   | )    |         |         | (156   | ) |     |         |       |  
|                            |                                                                               | Rents payable                                                    |        |        | 681    |      |         |         | (397   | ) |     |         |       |  
|                            |                                                                               | Trade accounts payable and other
accrued liabilities             |        |        | 468    |      |         |         | 571    |   |     |         | (53    | )
|                            |                                                                               | Payable to employees and former
employees                        |        |        | (486   | )    |         |         | (11    | ) |     |         |       |  
|                            |                                                                               | Sales tax payable                                                |        |        | (97    | )    |         |         | (1,578 | ) |     |         |       |  
|                            |                                                                               | Deferred revenue                                                 |        |        | 444    |      |         |         | (4,211 | ) |     |         |       |  
|                            |                                                                               | Interest receivable on notes receivable
from related parties     |        |        |       |      |         |         | 8      |   |     |         | (346   | )
|                            |                                                                               | Receivables from related parties                                 |        |        |       |      |         |         | (127   | ) |     |         | (582   | )
|                           
|                            |                                                                               |                                                                  | 10,722 |        |        |      | (2,704  | )       |        |   | 781 |        
|                            |                                                                               |                                                                  |        |        |        |      |         |         |        |   |     |         |        |  
|Investments:                |                                                                               |                                                                  |        |        |        |      |         |         |        |   |     |        
|                            | Purchase of fixed assets                                                      |                                                                  |        | (2,624 | )      |      |         | (1,115  | )      |   |     | (5      | )     
|                            | Acquisition of minority interest in FUMI parking
related business             |                                                                  |        |       |        |      |         | (453    | )      |   |     |        |       
|                            | Repayment of outstanding credit facilities                                    |                                                                  |        |       |        |      |         | (26,369 | )      |   |     |        |       
|                            | Cash portion of business acquired                                             |                                                                  |        |       |        |      |         | 8,123   |        |   |     |        |       
|                            | Acquisition of parking business, net of cash acquired                         |                                                                  |        | (4,601 | )      |      |         | (1,219  | )      |   |     |        |       
|                            | Change in other assets                                                        |                                                                  |        | (686   | )      |      |         | 1,597   |        |   |     |        |       
|                            | Increase in recoverable development costs                                     |                                                                  |        | (266   | )      |      |         | (1,852  | )      |   |     |        |       
|                           
|                            |                                                                               |                                                                  | (8,177 | )      |        |      | (21,288 | )       |        |   | (5  | )      

F-5



---



##### 



IMPERIAL PARKING CORPORATION
Consolidated Statements of Cash Flows, (Continued)
(Stated in thousands of United States dollars)

Years ended December 31, 2001, 2000 and 1999

|                                                             |                                |                                                 |        |       |   |      |        |        |     |   |       |     |       | 
|------------------------------------------------------------ | ------------------------------ | ----------------------------------------------- | ------ | ----- | - | ---- | ------ | ------ | --- | - | ----- | --- | ----- | 
|                                                            
|                                                             |                                |                                                 |        | 2001  |   | 2000 |        | 1999  
|                                                            
|Financing:                                                   |                                |                                                 |        |       |   |      |        |        |     |   |       |    
|                                                             | Cash contributions             |                                                 |        |      |   |      |        | 32,701 |     |   |       |    |      
|                                                             | Purchase of common shares      |                                                 |        | (543  | ) |      |        | (4,720 | )   |   |       |    |      
|                                                             | Options exercised              |                                                 |        | 84    |   |      |        |       |     |   |       |    |      
|                                                             | Increase in bank indebtedness  |                                                 |        | 3,900 |   |      |        |       |     |   |       |    |      
|                                                             | Change in other liabilities    |                                                 |        | (75   | ) |      |        | (25    | )   |   |       |    |      
|                                                             | Increase in amount due to FUMI |                                                 |        |      |   |      |        |       |     |   |       | (11 | )    
|                                                             |                               
|                                                             |                                |                                                 | 3,366  |       |   |      | 27,956 |        |     |   | (11   | )  
|Effect of exchange rate changes on cash and cash
equivalents |                                |                                                 | (535   | )     |   |      | (333   | )      |     |   | 91    |    
|                                                            
|Increase in cash and cash equivalents                        |                                |                                                 | 5,376  |       |   |      | 3,631  |        |     |   | 856   |    
|Cash and cash equivalents, beginning of year                 |                                |                                                 | 5,615  |       |   |      | 1,984  |        |     |   | 1,128 |    
|                                                            
|Cash and cash equivalents, end of year                       |                                | $                                               | 10,991 |       |   | $    | 5,615  |        |     | $ | 1,984 |    
|                                                            
|Supplementary information:                                   |                                |                                                 |        |       |   |      |        |        |     |   |       |    
|                                                             | Interest paid                  |                                                 | $      | 87    |   |      | $      |       |     |   | $     | 408 |      
|                                                             | Income taxes paid              |                                                 |        | 254   |   |      |        | 491    |     |   |       |    |      
|                                                             | Non-cash transactions:         |                                                 |        |       |   |      |        |        |     |   |       |     |      
|                                                             |                                | Interest income capitalized to notes
receivable |        |       |  |      |        |        | 697 |   |       |     | 2,688 | 
|                                                             |                                | Interest expense capitalized to note payable    |        |       |  |      |        |        | 786 |   |       |     | 2,740 | 
|                                                            

See accompanying notes to consolidated financial statements.

F-6



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

1. Operations:



| |                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Imperial Parking Corporation (the Company) is the corporation, which
resulted from the combination, on March 27, 2000, of the Canadian parking
facilities of First Union Real Estate Equity and Mortgage Investments (the
FUR Parking Business) and the parking related businesses of First Union
Management, Inc. (the FUMI Parking Business) which consisted of the
following:



| |                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FUR Parking Business  The FUR Parking Business, constituting the parking
assets and operations of First Union Real Estate Equity and Mortgage
Investments (First Union), consisted primarily of 15 owned parking
properties in Canada. Since April 1997, subsidiaries of First Union
operated this business, including leasing the properties to First Union
Management, Inc. (FUMI) for operations and management.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | FUMI Parking Business  The FUMI Parking Business consisted of the parking
services and related ancillary activities that have been continued into
Impark. Since April 1997, subsidiaries of FUMI carried on these activities.
The continuing operations of FUMIs indirect subsidiaries, Imperial Parking
Limited and Impark Services Ltd., consisted of operating and managing
parking facilities in Canada and the United States and carrying on other
parking related activities.



| |                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For financial reporting purposes, the Company is considered to be a
continuation of the FUR Parking Business and the comparative financial
statements solely reflect its operations prior to the Companys acquisition
of the FUMI Parking Business, which has been accounted for with effect from
the close of business on March 31, 2000 (note 3(a)).

2. Significant accounting policies:



| | (a) |  | Basis of presentation:
| | --- |  | ----------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | These financial statements are prepared on a consolidated basis to
present the financial positions and results of operations of the Company
and its subsidiaries all of which are wholly owned. The results of
parking business acquired in the year are included in these financial
statements from the date of their acquisition. All significant
intercompany balances and transactions have been eliminated. Limited
liability companies over which the Company exercises significant
influence are accounted for by the equity method.



| |                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------
| | These consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States.

F-7



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

2. Significant accounting policies (continued):



| | (b) |  | Use of estimates:
| | --- |  | -----------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The preparation of financial statements in conformity with United States
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 reporting period. Significant areas requiring the
use of management estimates relate to assessment of the outcome of
contingencies, valuation of goodwill, estimation of the useful lives of
fixed assets, management and lease agreements and goodwill in determining
depreciation and amortization, and the extent and timing of
recoverability of deferred tax assets. Actual amounts may differ from
the estimates applied in the preparation of these financial statements.



| | (c) |  | Cash equivalents:
| | --- |  | -----------------



| |                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash equivalents includes certificates of deposit and other highly liquid
instruments with original terms to maturity of three months or less when
acquired to be cash equivalents.



| | (d) |  | Inventory:
| | --- |  | ----------



| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys inventory consists of equipment parts and supplies and is
recorded at the lower of cost, determined on a first-in, first-out basis,
and replacement cost.



| | (e) |  | Fixed assets:
| | --- |  | -------------



| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | Fixed assets are recorded at cost. Depreciation and amortization is
provided as follows:

|                           |  |                   |  |               |    |   |  | 
|-------------------------- |  | ----------------- |  | ------------- | -- | - |  | 
|                          
|Asset                      |  | Basis             |  | Rate         
|                          
|Buildings and improvements |  | straight-line     |  | over 40 years
|Furniture and fixtures     |  | declining-balance |  |               | 20 | %
|Equipment                  |  | declining-balance |  |               | 30 | %
|Automotive equipment       |  | declining-balance |  |               | 30 | %
|                          



| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Leasehold improvements are depreciated straight-line over the shorter of
the lease term or the estimated useful life of the asset. Routine
maintenance and repairs are expensed as incurred.

F-8



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

2. Significant accounting policies (continued):



| | (f) |  | Management and lease agreements:
| | --- |  | --------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Management and lease agreements are recorded at cost and represent the
Companys investment in parking lot agreements. Cost is based upon the
estimated fair value of the agreements at the time of acquisition
determined using the discounted estimated future cash flow from these
agreements. Amortization is provided over the lives of the related
agreements in amounts equal to the discounted future cash flows used to
measure their original cost.



| | (g) |  | Impairment of fixed assets and management and lease agreements:
| | --- |  | ---------------------------------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company accounts for fixed assets and management and lease agreements
in accordance with the provisions of SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
Of. This Statement requires that long-lived assets and certain
identifiable intangibles be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying value of an asset may
not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying value of the asset to future net
cash flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment to be recognized is measured by
the amount by which the carrying amount of the asset exceeds its fair
value. Assets to be disposed of are reported at the lower of their
carrying value or fair value less costs to sell.



| | (h) |  | Recoverable development costs:
| | --- |  | ------------------------------



| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Recoverable development costs are recoverable from landlords on a
straight-line basis over the term of the related parking lot leases which
range from 1.5 to 9.5 years.



| | (i) |  | Goodwill:
| | --- |  | ---------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Goodwill represents the excess of cost over the value assigned to the net
assets acquired on business acquisitions. Goodwill is amortized on a
straight line basis over 20 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | The Company assesses the recoverability of goodwill by determining
whether the amortization of the goodwill balance over its remaining life
can be recovered through undiscounted future operating cash flows of the
acquired operation. When the undiscounted future operating cash flows
are less than the carrying value, the amount of goodwill impairment is
measured based on projected discounted future operating cash flows using
a discount rate reflecting the Companys average cost of funds. The
assessment of the recoverability of goodwill will be impacted if
estimated future operating cash flows are not achieved.

F-9



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

2. Significant accounting policies (continued):



| | (j) |  | Income taxes:
| | --- |  | -------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Income taxes are accounted for under the asset and liability method.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to (i) differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and (ii) operating loss and tax credit carry
forwards. 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. To
the extent that it is not more likely than not that deferred tax assets
will be realized, a valuation allowance is provided.



| | (k) |  | Revenue recognition:
| | --- |  | --------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Revenues consist of the parking revenues from managed and leased
locations. Revenues from managed locations represent revenues (both
fixed fees and additional payments based upon parking revenues) from
facilities managed for other parties and miscellaneous management fees
for accounting, insurance and other ancillary services such as consulting
and transportation management services. Parking and management contract
revenues are recognized when earned in accordance with the terms of the
agreements. Revenues from leased locations are recognized in accordance
with the terms of the agreements. Deferred revenue primarily represents
revenue received in advance of its due date.



| | (l) |  | Foreign currency translation:
| | --- |  | -----------------------------



| |                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The functional currency of the Companys operations in the United States
is the United States dollar. For facilities and operations located in
Canada, the functional currency is the Canadian dollar (Cdn.).



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The assets and liabilities of the Canadian operations are translated into
United States dollars at exchange rates in effect at the balance sheet
date. Revenue and expense items are translated at the rates of exchange
prevailing during the year. The gains or losses resulting from these
translations are excluded from the determination of income and included
in the separate foreign currency translation account within shareholders
equity. Other exchange gains and losses are included in the
determination of income.



| | (m) |  | Comprehensive income (loss):
| | --- |  | ----------------------------



| |                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | To the Company, comprehensive income (loss) consists of net earnings and
the change in the foreign currency translation adjustment amount for the
year. Comprehensive income does not affect the Companys financial
position, results of operations or earnings (loss) per share.

F-10



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

2. Significant accounting policies (continued):



| | (n) |  | Earnings per share:
| | --- |  | -------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Basic earnings per common share is calculated by dividing net earnings
(loss) by the weighted average number of common shares outstanding during
the year. Diluted earnings per common share is calculated by adjusting
the weighted average number of outstanding shares by that number which
assumes that the proceeds received on exercise of dilutive securities is
applied to the repurchase of common shares at the average market price
for the period. The weighted average number of shares outstanding gives
retroactive effect to the shares issued on the formation of the Company.



| | (o) |  | Stock option plan:
| | --- |  | ------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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,
in accounting for stock options granted to employees and directors. As
such, compensation expense for fixed stock option plans is recorded on
the date of grant only if the current market price of the underlying
stock exceeded the exercise price. Compensation for variable stock
option plans is recorded on an ongoing basis based on the change in
intrinsic value of the options. For accounting purposes, the date of the
stockholder approval is considered to be the date on which the
measurement of any compensatory effect occurs. SFAS No. 123, Accounting
for Stock-Based Compensation, established accounting and disclosure
requirements using a fair value-based method of accounting for
stock-based employee compensation plans. As allowed by SFAS 123, the
Company has elected to apply the intrinsic value-based method of
accounting described above, and adopt only the disclosure requirements of
SFAS No. 123 (see note 11(b)).



| | (p) |  | Comparative figures:
| | --- |  | --------------------



| |                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------
| | Certain comparative figures have been reclassified to conform with the
presentation adopted in the current year.

F-11



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

3. Acquisition of businesses:



| | (a) |  | DLC Management Group, Inc.:
| | --- |  | ---------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Effective July 1, 2001, the Company acquired all of the issued and
outstanding shares of DLC Management Group, Inc. (DLC) for net cash of
$4.6 million, including acquisition costs of $0.2 million. The former
shareholders of DLC are also entitled to additional cash consideration
equal to a proportion of the actual operating results of the acquired
business, calculated in accordance with the acquisition agreement, for
each of the twelve month periods ending June 30, 2002 through 2006. The
present value of these future payments has been estimated to be $4.4
million and has been included in the cost of the acquisition. The
liability for these payments has been included on the Companys balance
sheet in other long-term liabilities as it is more likely than not at
December 31, 2001 that these amounts will be payable.



| |                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The acquisition of DLC has been accounted for by the purchase method and
accordingly the aggregate purchase price, including related costs, has
been allocated to assets acquired and liabilities assumed based on their
estimated fair values as of the acquisition date as follows:

|                                                 |                                                                         |   |       |       | 
|------------------------------------------------ | ----------------------------------------------------------------------- | - | ----- | ----- | 
|                                                
|Cost of acquisition:                             |                                                                         |   |       |      
|                                                 | Cash                                                                    |   | $     | 4,601 | 
|                                                 | Present value of future payments to former
shareholders of DLC (note 9) |   |       | 4,386 | 
|                                                
|                                                 |                                                                         | $ | 8,987 |      
|                                                
|Working capital, including cash acquired of $259 |                                                                         | $ | 796   |      
|Fixed assets                                     |                                                                         |   | 558   |      
|Management and lease agreements                  |                                                                         |   | 344   |      
|Goodwill                                         |                                                                         |   | 7,289 |      
|                                                
|                                                 |                                                                         | $ | 8,987 |      
|                                                



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The purchase price paid by the Company is subject to certain adjustments
related to working capital calculations on the acquisition date pursuant
to the terms of the purchase agreement which have not been finalized.
Adjustments are not subject to the vendor remaining as an employee.
Management has made its best estimate of the purchase price ultimately
payable by the Company. Any adjustments made to the purchase price will
be accounted for in the period the adjustments are made.



| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The results of operations of DLC from July 1, 2001, being the effective
date of acquisition by the Company, are included in these consolidated
financial statements.

F-12



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

3. Acquisition of businesses (continued):



| | (a) |  | DLC Management Group, Inc. (continued):
| | --- |  | ---------------------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following unaudited pro forma information for the years ended
December 31, 2001 and 2000 reflect the acquisition of DLC as if it had
been completed as of January 1, 2000. These pro forma amounts do not
purport to be indicative of the results that would have actually been
obtained if the acquisition occurred as of the dates indicated or that
may be obtained in the future.

|                      |         |   |        |      |      |   |        |      | 
|--------------------- | ------- | - | ------ | ---- | ---- | - | ------ | ---- | 
|                     
|                      |         |   | 2001   |      | 2000
|                     
|Revenue               |         | $ | 91,522 |      |      | $ | 58,958 |     
|Earnings for the year |         |   | 769    |      |      |   | 1,731  |     
|Earnings per share:   |         |   |        |      |      |   |        |     
|                      | Basic   |   |        | 0.42 |      |   |        | 0.82 | 
|                      | Diluted |   |        | 0.41 |      |   |        | 0.82 | 
|                     



| | (b) |  | FUMI Parking Business:
| | --- |  | ----------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On March 27, 2000 the Company was formed through a series of transactions
involving the combination of the FUR Parking Business and the FUMI
Parking Business. For accounting purposes the FUR Parking Business has
been treated as acquiring the FUMI Parking Business with effect from the
close of business on March 31, 2000 and has accounted for the acquisition
using the purchase method. The fair value of the assets acquired and
liabilities assumed of the FUMI Parking Business were as follows:

|                                  |  |   |         |  
|--------------------------------- |  | - | ------- | -
|                                 
|Working capital deficit           |  | $ | (10,281 | )
|Other assets and liabilities, net |  |   | 6,276   |  
|Fixed assets                      |  |   | 5,659   |  
|Management and lease agreements   |  |   | 763     |  
|Goodwill                          |  |   | 42,556  |  
|                                 
|                                  |  |   | 44,973  |  
|Indebtedness                      |  |   | (26,369 | )
|                                 
|                                  |  | $ | 18,604  |  
|                                 



| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | Included in the working capital deficit was $8.1 million of cash in the
FUMI Parking Business.

F-13



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

3. Acquisition of businesses (continued):



| | (b) |  | FUMI Parking Business (continued):
| | --- |  | ----------------------------------



| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The results of operations of the FUMI Parking Business for the year ended
December 31, 1999 and the three months ended March 31, 2000, are
summarized as follows:

|                                |                               |   |             |       |              |   |        |        | 
|------------------------------- | ----------------------------- | - | ----------- | ----- | ------------ | - | ------ | ------ | 
|                               
|                                |                               |   | March 31,   |       | December 31,
|                                |                               |   | 2000        |       | 1999        
|                               
|                                |                               |   | (unaudited) |      
|                               
|Revenues                        |                               | $ | 14,901      |       |              | $ | 60,145 |       
|Direct costs                    |                               |   | 10,997      |       |              |   | 44,939 |       
|                               
|Gross margin                    |                               |   | 3,904       |       |              |   | 15,206 |       
|                               
|Other expenses:                 |                               |   |             |       |              |   |        |       
|                                | General and administrative    |   |             | 2,667 |              |   |        | 10,236 | 
|                                | Depreciation and amortization |   |             | 1,051 |              |   |        | 4,984  | 
|                               
|                                |                               |   | 3,718       |       |              |   | 15,220 |       
|                               
|Operating earnings (loss)       |                               |   | 186         |       |              |   | (14    | )     
|Other expense                   |                               |   | (1,507      | )     |              |   | (6,303 | )     
|                               
|Loss from continuing operations |                               | $ | (1,321      | )     |              | $ | (6,317 | )     
|                               



| |                                                                                            
| | -------------------------------------------------------------------------------------------
| | Results from April 1, 2000 onwards are included in the consolidated
results of the Company.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following unaudited pro forma statements of operations for the years
ended December 31, 2000 and 1999 reflect the acquisition of the FUMI
Parking Business as if it had been completed as of January 1, 1999.
Certain inter-company transactions have been eliminated and acquisition
transactions reflected in the pro forma statement as noted below. These
pro forma amounts do not purport to be indicative of the results that
would have actually been obtained if the acquisition occurred as of the
dates indicated or that may be obtained in the future.

F-14



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

3. Acquisition of businesses (continued):

(b)  FUMI Parking Business (continued):

|                                              |                               |   |             |        |      |   |        |        | 
|--------------------------------------------- | ----------------------------- | - | ----------- | ------ | ---- | - | ------ | ------ | 
|                                             
|                                              |                               |   | 2000        |        | 1999
|                                             
|                                              |                               |   | (unaudited)
|                                             
|Revenue                                       |                               | $ | 67,809      |        |      | $ | 59,065 |       
|Direct costs                                  |                               |   | 50,688      |        |      |   | 44,359 |       
|                                             
|Gross margin                                  |                               |   | 17,121      |        |      |   | 14,706 |       
|                                             
|Other expenses:                               |                               |   |             |        |      |   |        |       
|                                              | General and administrative    |   |             | 11,425 |      |   |        | 10,236 | 
|                                              | Depreciation and amortization |   |             | 4,761  |      |   |        | 5,027  | 
|                                             
|                                              |                               |   | 16,186      |        |      |   | 15,263 |       
|                                             
|Operating earnings (loss)                     |                               |   | 935         |        |      |   | (557   | )     
|Other income (expense)                        |                               |   | 411         |        |      |   | (279   | )     
|                                             
|Earnings (loss) for the year                  |                               | $ | 1,346       |        |      | $ | (836   | )     
|                                             
|Earnings (loss) per share  basic and diluted |                               | $ | 0.64        |        |      | $ | (0.39  | )     
|                                             



| |                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Unaudited pro forma consolidated results after giving effect to the other
businesses acquired during the year would not have been materially
different from the reported amounts for the year.



| |                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In preparing the pro forma statements of operations the results of the
Company and the FUMI Parking Business were combined and the following
transactions eliminated:

|                           |                                              |  |           |        |              |  |   |        |  
|-------------------------- | -------------------------------------------- |  | --------- | ------ | ------------ |  | - | ------ | -
|                          
|                           |                                              |  | March 31, |        | December 31,
|                           |                                              |  | 2000      |        | 1999        
|                          
|Revenue:                   |                                              |  |           |        |              |  |   |       
|                           | Inter-entity lease fees                      |  | $         | 127    |              |  | $ | 582    |  
|                           | Asset management fee                         |  |           | 270    |              |  |   | 1,080  |  
|                          
|Direct cost:               |                                              |  |           |        |              |  |   |       
|                           | Inter-entity lease fees                      |  |           | 127    |              |  |   | 582    |  
|                          
|Interest expense (income): |                                              |  |           |        |              |  |   |       
|                           | Inter-entity interest income                 |  |           | (1,035 | )            |  |   | (4,032 | )
|                           | Inter-entity interest expenses               |  |           | 1,035  |              |  |   | 4,032  |  
|                           | Interest expense on note payable capitalized |  |           | 786    |              |  |   | 3,044  |  
|                           | Interest expense on long-term debt           |  |           | 411    |              |  |   | 1,840  |  
|                          
|Other expense:             |                                              |  |           |        |              |  |   |       
|                           | Allowance for credit losses                  |  |           |       |              |  |   | 19,000 |  
|                          

F-15



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

3. Acquisition of businesses (continued):



| | (c) |  | E-Z Park Company, Ltd. LLC:
| | --- |  | ---------------------------



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Effective April 1, 2000, the Company purchased the business of E-Z Park
Company, Ltd. LLC for cash consideration of $1.2 million and a note
payable of $0.4 million. The purchase price has been allocated as to
$1.5 million to goodwill and $0.1 million to management and lease
agreements. The acquisition has been accounted for by the purchase
method with the results of operations included in these consolidated
financial statements from the date of acquisition.

4. Fixed assets:

|                           |  |      |        |              |  |             |       |          |  |   |        | 
|-------------------------- |  | ---- | ------ | ------------ |  | ----------- | ----- | -------- |  | - | ------ | 
|                          
|                           |  |      |        |              |  | Accumulated |       | Net book
|2001                       |  | Cost |        | depreciation |  | value      
|                          
|Land                       |  | $    | 6,446  |              |  | $           |      |          |  | $ | 6,446  | 
|Buildings and improvements |  |      | 1,582  |              |  |             | 183   |          |  |   | 1,399  | 
|Leasehold improvements     |  |      | 3,980  |              |  |             | 1,280 |          |  |   | 2,700  | 
|Furniture and fixtures     |  |      | 374    |              |  |             | 92    |          |  |   | 282    | 
|Equipment                  |  |      | 5,359  |              |  |             | 1,909 |          |  |   | 3,450  | 
|Automotive equipment       |  |      | 500    |              |  |             | 116   |          |  |   | 384    | 
|                          
|                           |  | $    | 18,241 |              |  | $           | 3,580 |          |  | $ | 14,661 | 
|                          

|                           |  |      |        |              |  |             |       |          |  |   |        | 
|-------------------------- |  | ---- | ------ | ------------ |  | ----------- | ----- | -------- |  | - | ------ | 
|                          
|                           |  |      |        |              |  | Accumulated |       | Net book
|2000                       |  | Cost |        | depreciation |  | value      
|                          
|Land                       |  | $    | 6,847  |              |  | $           |      |          |  | $ | 6,847  | 
|Buildings and improvements |  |      | 1,689  |              |  |             | 152   |          |  |   | 1,537  | 
|Leasehold improvements     |  |      | 3,048  |              |  |             | 586   |          |  |   | 2,462  | 
|Furniture and fixtures     |  |      | 265    |              |  |             | 42    |          |  |   | 223    | 
|Equipment                  |  |      | 3,876  |              |  |             | 865   |          |  |   | 3,011  | 
|Automotive equipment       |  |      | 259    |              |  |             | 40    |          |  |   | 219    | 
|                          
|                           |  | $    | 15,984 |              |  | $           | 1,685 |          |  | $ | 14,299 | 
|                          

5. Management and lease agreements:

|                         |  |      |       |      |  |   |      |  
|------------------------ |  | ---- | ----- | ---- |  | - | ---- | -
|                        
|                         |  | 2001 |       | 2000
|                        
|Cost                     |  | $    | 1,061 |      |  | $ | 841  |  
|Accumulated amortization |  |      | (725  | )    |  |   | (425 | )
|                        
|                         |  | $    | 336   |      |  | $ | 416  |  
|                        

F-16



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

5. Management and lease agreements (continued):



| |                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under certain parking management agreements, the Company is committed to pay
fees to landlords based on either a fixed monthly rate, a percentage of
gross parking revenues or a percentage of net income. These fees payable
are recognized in accordance with the terms of the specific agreement.

6. Other assets:

|                    |  |      |       |      |  |   |       | 
|------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                   
|                    |  | 2001 |       | 2000
|                   
|Note receivable (a) |  | $    | 1,900 |      |  | $ | 2,068 | 
|Other               |  |      | 1,075 |      |  |   | 761   | 
|                   
|                    |  | $    | 2,975 |      |  | $ | 2,829 | 
|                   



| | (a) |  | The note is receivable from a director of a subsidiary of the
Company and bears interest at 8% per annum to April, 2004 and 9.25%
thereafter. Principal repayments of $18,834 are required each quarter.
In addition, one principal payment of $0.4 million is required on
April 30, 2004 and monthly blended interest and principal repayments of
$13,608 until April 30, 2004 and $15,875 from May 1, 2004 until the
note matures on April 30, 2009. The note is secured by all issued and
outstanding shares of Robbins Parking Limited.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7. Goodwill:

|                                                                         |  |      |        |      |  |   |        |  
|------------------------------------------------------------------------ |  | ---- | ------ | ---- |  | - | ------ | -
|                                                                        
|                                                                         |  | 2001 |        | 2000
|                                                                        
|Cost, beginning of year                                                  |  | $    | 44,067 |      |  | $ |       |  
|Acquisition of businesses                                                |  |      | 7,289  |      |  |   | 44,067 |  
|Adjustments to prior year acquisitions on payment of
contingent payments |  |      | 203    |      |  |   |       |  
|                                                                        
|Cost, end of year                                                        |  |      | 51,559 |      |  |   | 44,067 |  
|Effect of exchange rates                                                 |  |      | (3,393 | )    |  |   | (1,235 | )
|Accumulated amortization                                                 |  |      | (3,907 | )    |  |   | (1,701 | )
|                                                                        
|                                                                         |  | $    | 44,259 |      |  | $ | 41,131 |  
|                                                                        

F-17



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

8. Bank indebtedness:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has a credit facility (the Credit Facility) providing for
borrowings of up to $20 million, consisting of a $12.5 million non-revolving
loan; a $5 million revolving credit facility; and $2.5 million for standby
letters of credit. The non-revolving loan facility bears interest at LIBOR
plus 1.625% per annum and is repayable on demand. The revolving credit
facility bears interest at the lending banks prime rate. The amount
outstanding under the Companys Credit Facility as of December 31, 2001 was
$3.9 million with a weighted average interest rate of 3.5%. This is solely
comprised of amounts drawn under the non-revolving loan facility and is
currently being repaid in blended monthly payments of principal and interest
of $60,074 through December 2007. The remaining amount available under the
Credit Facility was $13.3 million at December 31, 2001.



| |                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The bank credit facilities are secured by a general assignment by the
Company in favour of the bank, debentures over certain real property,
assignment of rents and leases, securities pledge agreements and assignment
of insurance. Advances require certain conditions precedent to be met and
are subject to the banks written approval.

9. Other long-term liabilities:

|                                                                  |  |      |       |      |  |   |       | 
|----------------------------------------------------------------- |  | ---- | ----- | ---- |  | - | ----- | 
|                                                                 
|                                                                  |  | 2001 |       | 2000
|                                                                 
|Present
value of future payments to formershareholders of DLC (a) |  | $    | 4,540 |      |  | $ |      | 
|Other                                                             |  |      | 1,585 |      |  |   | 1,656 | 
|                                                                 
|                                                                  |  |      | 6,125 |      |  |   | 1,656 | 
|Current portion                                                   |  |      | 1,204 |      |  |   |      | 
|                                                                 
|                                                                  |  | $    | 4,921 |      |  | $ | 1,656 | 
|                                                                 



| | (a) |  | The present value of future payments represents the estimated
additional cash consideration required to be paid in future years
pursuant to the DLC purchase agreement (note 3(a)). Interest on the
balance is accrued at 7% per annum.
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-18



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

10. Income taxes:



| |                                           
| | ------------------------------------------
| | Income tax expense (recovery) consists of:

|                              |               |   |         |     |          |   |       |        |   |   |     |        |  
|----------------------------- | ------------- | - | ------- | --- | -------- | - | ----- | ------ | - | - | --- | ------ | -
|                             
|                              |               |   | Current |     | Deferred |   | Total
|                             
|Year ended December 31, 2001: |               |   |         |     |          |   |       |        |   |   |     |       
|                              | Canada        |   | $       | 86  |          |   | $     | 2,192  |   |   | $   | 2,278  |  
|                              | United States |   |         | 87  |          |   |       | (1,543 | ) |   |     | (1,456 | )
|                             
|                              |               | $ | 173     |     |          | $ | 649   |        |   | $ | 822 |       
|                             
|Year ended December 31, 2000: |               |   |         |     |          |   |       |        |   |   |     |       
|                             
|                              | Canada        |   | $       | 153 |          |   | $     |       |   |   | $   | 153    |  
|                              | United States |   |         | 119 |          |   |       |       |   |   |     | 119    |  
|                             
|                              |               | $ | 272     |     |          | $ |      |        |   | $ | 272 |       
|                             
|Year ended December 31, 1999: |               |   |         |     |          |   |       |        |   |   |     |       
|                              | Canada        |   | $       | (97 | )        |   | $     | 11     |   |   | $   | (86    | )
|                             



| |                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Income tax expense attributable to income from continuing operations
differed from the amounts computed by applying the U.S. federal income tax
rate of 35% to income before income taxes as a result of the following:

|                                                     |                                                                            |   |      |        |      |   |      |        |   |   |        |       |  
|---------------------------------------------------- | -------------------------------------------------------------------------- | - | ---- | ------ | ---- | - | ---- | ------ | - | - | ------ | ----- | -
|                                                    
|                                                     |                                                                            |   | 2001 |        | 2000 |   | 1999
|                                                    
|Computed expected tax expense                      |                                                                            | $ | 539  |        |      | $ | 698  |        |   | $ | (6,093 | )    
|Increase (reduction) in income taxes resulting from: |                                                                            |   |      |        |      |   |      |        |   |   |        |      
|                                                     | Impact of difference between U.S. federal and
Canadian effective tax rates |   |      | 326    |      |   |      | 223    |   |   |        | (786  | )
|                                                     | Effect of change in enacted tax rates                                      |   |      | 445    |      |   |      |       |   |   |        |      |  
|                                                     | Change in valuation allowance                                              |   |      | (829   | )    |   |      | (1,683 | ) |   |        |      |  
|                                                     | Reduction in deferred income tax liability
on inter-company debt           |   |      | (5,219 | )    |   |      |       |   |   |        |      |  
|                                                     | Income from Canadian subsidiary taxable
in the United States               |   |      | 4,434  |      |   |      |       |   |   |        |      |  
|                                                     | Amortization of non-deductible goodwill                                    |   |      | 954    |      |   |      | 765    |   |   |        |      |  
|                                                     | Corporation capital and state tax                                          |   |      | 173    |      |   |      | 272    |   |   |        |      |  
|                                                     | Other                                                                      |   |      | (1     | )    |   |      | (3     | ) |   |        | (112  | )
|                                                     | Deductions allocated to the FUR Parking
Business by First Union            |   |      |       |      |   |      |       |   |   |        | (190  | )
|                                                     | Allowance for credit losses                                                |   |      |       |      |   |      |       |   |   |        | 7,095 |  
|                                                    
|                                                     |                                                                            | $ | 822  |        |      | $ | 272  |        |   | $ | (86    | )    
|                                                    

F-19



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

10. Income taxes (continued):



| |                                                                                                                                                                                     
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at December
31, 2001 and 2000 are as follows:

|                                         |                                                                   |   |        |        |      |   |        |        |  
|---------------------------------------- | ----------------------------------------------------------------- | - | ------ | ------ | ---- | - | ------ | ------ | -
|                                        
|                                         |                                                                   |   | 2001   |        | 2000
|                                        
|Deferred tax assets:                     |                                                                   |   |        |        |      |   |        |       
|                                         | Loss carry forwards                                               |   | $      | 3,656  |      |   | $      | 7,442  |  
|                                         | Accrued liabilities                                               |   |        | 247    |      |   |        | 410    |  
|                                         | Management agreements                                             |   |        | 333    |      |   |        |       |  
|                                        
|                                         |                                                                   |   | 4,236  |        |      |   | 7,852  |       
|Valuation allowance                      |                                                                   |   | (266   | )      |      |   | (857   | )     
|                                        
|Net deferred tax assets                  |                                                                   |   | 3,970  |        |      |   | 6,995  |       
|                                        
|Deferred tax liabilities:                |                                                                   |   |        |        |      |   |        |       
|                                         | Long-lived assets, principally due to differences in
depreciation |   |        | (507   | )    |   |        | (1,494 | )
|                                         | Tax basis in goodwill                                             |   |        |       |      |   |        | (4,997 | )
|                                         | Income from Canadian subsidiary taxable in the
United States      |   |        | (3,952 | )    |   |        |       |  
|                                         | Other assets                                                      |   |        | (379   | )    |   |        | (504   | )
|                                        
|Total deferred tax liabilities           |                                                                   |   | (4,838 | )      |      |   | (6,995 | )     
|                                        
|Net deferred tax liability               |                                                                   | $ | (868   | )      |      | $ |       |       
|                                        
|Reflected on consolidated balance sheet: |                                                                   |   |        |        |      |   |        |       
|                                         | Current deferred asset, net                                       |   | $      | 2,412  |      |   | $      | 1,700  |  
|                                         | Non-current deferred liability, net                               |   |        | (3,280 | )    |   |        | (1,700 | )
|                                        
|Net deferred tax liability               |                                                                   | $ | (868   | )      |      | $ |       |       
|                                        

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | The valuation allowance for deferred tax assets as of December 31, 2001 and
2000 was $0.3 million and $0.9 million, respectively. In assessing the
realizability of deferred tax assets, management considers whether it is
more likely than not that some portion or all of the deferred tax assets
will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in
which those temporary differences become deductible. Management considers
the scheduled reversal of deferred tax liabilities, projected future taxable
income, and tax planning strategies in making this assessment.



F-20



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

10. Income taxes (continued):



| |                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys Canadian subsidiaries had total income tax losses and
deductions of approximately $8.9 million available at December 31, 2001 to
reduce future income taxes payable in Canada which are available and expire
as follows:

|     |  |   |      
|---- |  | - | -----
|    
|2005 |  | $ | 388  
|2006 |  |   | 8,531
|    
|     |  | $ | 8,919
|    

11. Stockholders equity:



| |                    
| | -------------------
| | (a) Treasury stock:



| |     |                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | In June 2000, the Board of Directors approved a voluntary
Odd-Lot Tender program, whereby shareholders, on closing at June 13,
2000, owning less than 100 shares, could sell their shares of common
stock at $16.00 without incurring brokerage commissions.



| |                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------
| | The program closed on July 27, 2000 with shareholders tendering 38,298
shares at a cost of $632,901, including expenses.



| |      |                                                                                                                                                                                                                                            
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | In October 2000, the Board of Directors authorized $1,000,000
for the repurchase of the Companys outstanding common stock. Under
this buy-back authorization, the Company repurchased 31,370 shares
in October 2000 at a cost of $511,000.



| |       |                                                                                                                               
| | ----- | ------------------------------------------------------------------------------------------------------------------------------
| | (iii) | In December 2000, the Board of Directors authorized the
repurchase of 215,094 shares in December 2000 at a cost of
$3,553,000.



| |      |                                                                                                                                                                                                                                                                                                    
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (iv) | In January 2001, the Board of Directors of the Company
increased the authorization limit for the repurchase of the
Companys outstanding common stock from $1,000,000 to $1,250,000.
Under the buy back authorization, the Company repurchased 30,858
shares in January 2001 at a cost of $543,500.



| |     |                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (v) | In September 2001, the Board of Directors increased the
authorization limit for the repurchase of the Companys outstanding
common stock from $1,250,000 to $2,000,000.



| |                   
| | ------------------
| | (b) Stock options:



| |                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In March 2000, the Board of Directors approved the 2000 Stock Incentive
Plan (the Plan) prior to filing its Registration Statement on Form 10
to distribute common stock. A total of 315,000 shares were reserved for
issuance under the Plan.                     
|
| | In May 2001, the stockholders of the Company approved the Plan allowing
the Company to grant stock options to executives and management. The plan
includes variable stock options whereby the exercise price of the options
increases during the term of the options.

F-21



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

11. Stockholders equity (continued):



| |                               
| | ------------------------------
| | (b) Stock options (continued):



| |                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------
| | A summary of the status of the Companys stock option plan as of December
31, 2001 and changes during the year then ended is presented below:

|                             |  |                     |         |                |  |                  |       | 
|---------------------------- |  | ------------------- | ------- | -------------- |  | ---------------- | ----- | 
|                            
|                             |  |                     |         |                |  | Weighted average
|                             |  | Options outstanding |         | Exercise price
|                            
|Balance at January 1, 2001   |  |                     |        |                |  | $                |      | 
|Options granted              |  |                     | 251,652 |                |  |                  | 13.04 | 
|Options exercised            |  |                     | (5,875  | )              |  |                  | 14.09 | 
|Options cancelled/forfeited  |  |                     | (2,750  | )              |  |                  | 12.81 | 
|                            
|Balance at December 31, 2001 |  |                     | 243,027 |                |  | $                | 15.13 | 
|                            



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company measures employee stock compensation expense in these
consolidated financial statements based on the intrinsic value of the
options. Had compensation expense been determined using the fair value
method in accordance with SFAS No. 123, Accounting for Stock Based
Compensation, the Companys net earnings and earnings per share would
have been as follows (there would be no effect on the years ended
December 31, 2000 and 1999):

|                        |                                 |             |   |       |      | 
|----------------------- | ------------------------------- | ----------- | - | ----- | ---- | 
|                       
|Net earnings:           |                                 |             |   |      
|                        | As reported                     |             | $ | 719   |     
|                        | Pro forma                       |             |   | 1,173 |     
|                       
|Net earnings per share: |                                 |             |   |      
|                        | As reported                     |             |   | 0.40  |     
|                        | Pro forma                       |             |   | 0.65  |     
|                       
|                        | Diluted net earnings per share: |             |   |       |     
|                        |                                 | As reported |   |       | 0.39 | 
|                        |                                 | Pro forma   |   |       | 0.63 | 
|                       

F-22



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

11. Stockholders equity (continued):



| |                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company used the Black-Scholes option pricing model to determine the
fair value of grants made in fiscal 2001. The following assumptions were
applied in determining the pro forma compensation cost:

|                                               |  |   |      |  
|---------------------------------------------- |  | - | ---- | -
|                                              
|Risk-free interest rate                        |  |   | 4.04 | %
|Expected dividend yield                        |  |   | 0.00 | %
|Expected option life (years)                   |  |   | 5    |  
|Expected stock price volatility                |  |   | 22.0 | %
|Fair value of options granted at market prices |  | $ | 3.97 |  
|                                              



| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | The following table summarizes stock options outstanding and exercisable at December 31, 2001:

|                     |  |             |         |             |                  |           |     |          |  |       |       |          |  |          |        |  |  |   |       | 
|-------------------- |  | ----------- | ------- | ----------- | ---------------- | --------- | --- | -------- |  | ----- | ----- | -------- |  | -------- | ------ |  |  | - | ----- | 
|                    
|                     |  | Outstanding |         | Exercisable |                  |           |     |         
|                     |  |             |         |             |                  |           |     |         
|                     |  |             |         |             |                  | Weighted  |     |          |  |       |       |          |  |          |        |  |  |  
|                     |  |             |         |             |                  | average   |     | Weighted |  |       |       |          |  | Weighted
|                     |  |             |         |             |                  | remaining |     | average  |  |       |       |          |  | average 
|                     |  |             |         |             | contractual life | exercise  |     |          |  |       |       | exercise
|Exercise price range |  | Options     |         | (years)     |                  | price     |     | Options  |  | price
|                    
|$14.09 - $25.85      |  |             | 264,027 |             |                  |           | 8.4 |          |  | $     | 15.71 |          |  |          | 63,101 |  |  | $ | 15.79 | 
|                    

12. Earnings per share:



| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | The following table sets forth the computation of basic and diluted earnings
per share:

|                                     |                                       |                   |     |                          |   |                    |       |                |    |                          |      |                    |       |                |       |                          |   |                    |       |                |   |   |      |      |   |   |         |         |   |  |       |       |   |   |       |       |   | 
|------------------------------------ | ------------------------------------- | ----------------- | --- | ------------------------ | - | ------------------ | ----- | -------------- | -- | ------------------------ | ---- | ------------------ | ----- | -------------- | ----- | ------------------------ | - | ------------------ | ----- | -------------- | - | - | ---- | ---- | - | - | ------- | ------- | - |  | ----- | ----- | - | - | ----- | ----- | - | 
|                                    
|                                     |                                       |                   |     |                          |   |                    |       | 2001           |    |                          |      |                    |       |                |       |                          |   | 2000               |       |                |   |   |      |      |   |   |         | 1999    |   |  |       |      
|                                     |                                       |                   |     |                          |   |                    |       |                |    |                         
|                                     |                                       |                   |     | Earningsavailable($000s) |   | Commonshares(000s) |       | Pershareamount |    | Earningsavailable($000s) |      | Commonshares(000s) |       | Pershareamount |       | Earningsavailable($000s) |   | Commonshares(000s) |       | Pershareamount
|                                    
|Basic earnings per share:            |                                       |                   |     |                          |   |                    |       |                |    |                          |      |                    |       |                |       |                          |   |                    |       |                |   |   |      |      |   |   |         |         |   |  |       |       |   |   |       |      
|Net earnings                         |                                       |                   |     |                          |   |                    |       |                |    |                          |      |                    |       |                |       |                          |   |                    |       |                |   |   |      |      |   |   |         |         |   |  |       |       |   |   |       |      
|                                     | Effect of dilutive
stock and options: |                   | $   | 719                      |   |                    |       | 1,816          |    |                          |      | 0.40               |       |                | $     | 1,740                    |   |                    |       | 2,100          |   |   | $    | 0.83 |   |   | $       | (17,323 | ) |  |       | 2,127 |   |   | $     | (8.14 | )
|                                     |                                       | Stock option plan |     |                          |  |                    |       |                | 45 |                          |      |                    | (0.01 | )              |       |                          |  |                    |       |                |  |   |      |      |  |   |         |         |  |  |       |       |  |   |       |       |  | 
|                                    
|Diluted earnings per share           |                                       | $                 | 719 |                          |   |                    | 1,861 |                |    |                          | 0.39 |                    |       | $              | 1,740 |                          |   |                    | 2,100 |                |   | $ | 0.83 |      |   | $ | (17,323 | )       |   |  | 2,127 |       |   | $ | (8.14 | )    
|                                    
|Basic pro forma earnings
per share:  |                                       |                   |     |                          |   |                    |       |                |    |                          |      |                    |       |                |       |                          |   |                    |       |                |   |   |      |      |   |   |         |         |   |  |       |       |   |   |       |      
|                                     | Pro forma earnings                    |                   |     | n/a                      |   |                    |       | n/a            |    |                          |      | n/a                |       |                | $     | 1,346                    |   |                    |       | 2,100          |   |   | $    | 0.64 |   |   | $       | (836    | ) |  |       | 2,127 |   |   | $     | (0.39 | )
|                                     | Effect of dilutive stock
and options: |                   |     |                          |   |                    |       |                |    |                          |      |                    |       |                |       |                          |   |                    |       |                |   |   |      |      |   |   |         |         |   |  |       |       |   |   |       |       |  
|                                     |                                       | Stock option plan |     |                          |  |                    |       |                |   |                          |      |                    |      |                |       |                          |  |                    |       |                |  |   |      |      |  |   |         |         |  |  |       |       |  |   |       |       |  | 
|                                    
|Diluted pro forma earnings
per share |                                       |                   | n/a |                          |   |                    | n/a   |                |    |                          | n/a  |                    |       | $              | 1,346 |                          |   |                    | 2,100 |                |   | $ | 0.64 |      |   | $ | (836    | )       |   |  | 2.127 |       |   | $ | (0.39 | )    
|                                    

F-23



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

13. Business segments:



| |                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Senior management of the Company reviews the revenue and overall results of
operations by geographic regions. The following table summarizes the
revenue, operating results and assets for these geographic regions:

|                              |  |        |        |      |  |       |        |        |  |      |        |       |  |        |        |  |  |   |        |   |  |   |        |  |  |   |        |  
|----------------------------- |  | ------ | ------ | ---- |  | ----- | ------ | ------ |  | ---- | ------ | ----- |  | ------ | ------ |  |  | - | ------ | - |  | - | ------ |  |  | - | ------ | -
|                             
|                              |  | 2001   |        | 2000 |  | 1999 
|                              |  |        |        |      |  |      
|                              |  | Canada |        | U.S. |  | Total |        | Canada |  | U.S. |        | Total |  | Canada
|                             
|Revenue                       |  | $      | 53,451 |      |  | $     | 34,373 |        |  | $    | 87,824 |       |  | $      | 38,338 |  |  | $ | 14,967 |   |  | $ | 53,305 |  |  | $ | 582    |  
|Depreciation and
amortization |  |        | 3,785  |      |  |       | 944    |        |  |      | 4,729  |       |  |        | 3,162  |  |  |   | 548    |   |  |   | 3,710  |  |  |   | 43     |  
|Operating earnings            |  |        | 3,641  |      |  |       | (2,379 | )      |  |      | 1,262  |       |  |        | 1,063  |  |  |   | (44    | ) |  |   | 1,019  |  |  |   | 537    |  
|Income tax expense            |  |        | 2,278  |      |  |       | (1,456 | )      |  |      | 822    |       |  |        | 153    |  |  |   | 119    |   |  |   | 272    |  |  |   | (86    | )
|Long-lived assets             |  |        | 47,726 |      |  |       | 14,505 |        |  |      | 62,231 |       |  |        | 52,841 |  |  |   | 10,448 |   |  |   | 63,289 |  |  |   | 26,382 |  
|Total assets                  |  |        | 60,870 |      |  |       | 28,375 |        |  |      | 89,245 |       |  |        | 63,405 |  |  |   | 15,986 |   |  |   | 79,391 |  |  |   | 30,113 |  
|                             



| |                                                      
| | -----------------------------------------------------
| | The Companys operations in 1999 were only in Canada.

14. Unaudited quarterly financial information:



| |                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------
| | The following tables sets forth selected unaudited quarterly information for
the Companys last eight fiscal quarters.

|                                       |  |                         |        |              |  |         |        |          |  |   |        |  |  |   |        |  
|-------------------------------------- |  | ----------------------- | ------ | ------------ |  | ------- | ------ | -------- |  | - | ------ |  |  | - | ------ | -
|                                      
|                                       |  | Fiscal 2001 Quarter End
|                                       |  |                        
|                                       |  | December 31             |        | September 30 |  | June 30 |        | March 31
|                                      
|Revenues                               |  | $                       | 23,450 |              |  | $       | 24,008 |          |  | $ | 22,306 |  |  | $ | 18,060 |  
|Gross margin                           |  |                         | 5,037  |              |  |         | 5,547  |          |  |   | 6,104  |  |  |   | 3,833  |  
|Net earnings (loss) for the period     |  |                         | (133   | )            |  |         | 292    |          |  |   | 936    |  |  |   | (376   | )
|Net earnings (loss) per share, basic   |  |                         | (0.07  | )            |  |         | 0.16   |          |  |   | 0.52   |  |  |   | (0.21  | )
|Net earnings (loss) per share, diluted |  |                         | (0.06  | )            |  |         | 0.15   |          |  |   | 0.51   |  |  |   | (0.21  | )
|                                      

|                                                 |  |                         |        |              |  |         |        |          |  |   |        |  |  |   |      | 
|------------------------------------------------ |  | ----------------------- | ------ | ------------ |  | ------- | ------ | -------- |  | - | ------ |  |  | - | ---- | 
|                                                
|                                                 |  | Fiscal 2000 Quarter End
|                                                 |  |                        
|                                                 |  | December 31             |        | September 30 |  | June 30 |        | March 31
|                                                
|Revenues                                         |  | $                       | 16,788 |              |  | $       | 18,529 |          |  | $ | 17,861 |  |  | $ | 127  | 
|Gross margin                                     |  |                         | 3,932  |              |  |         | 4,733  |          |  |   | 4,695  |  |  |   | 127  | 
|Net earnings (loss) for the period               |  |                         | (21    | )            |  |         | 574    |          |  |   | 911    |  |  |   | 276  | 
|Net earnings (loss) per share, basic
and diluted |  |                         | (0.01  | )            |  |         | 0.27   |          |  |   | 0.43   |  |  |   | 0.13 | 
|                                                

F-24



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

15. Fair value of financial instruments:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair values of cash and cash equivalents, accounts receivable, rent,
trade accounts payable and accrued liabilities, payable to employees and
former employees and sales tax payable are estimated to equal their carrying
value due to their short-term to maturity or ability for prompt liquidation.
The carrying value of the bank indebtedness and other long-term liabilities
approximate their fair values based on market rates of interest.



| |                                                                                                                                                                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair value of notes receivable is not readily determinable due to the
nature of the relationship between the Company and the other party. The
fair value of bank indebtedness is not materially different from its
carrying value based on current market rates of interest on similar
instruments.

16. Commitments and contingencies:



| |                                 
| | --------------------------------
| | (a) 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 2020. Lease agreements provide for minimum payments or
contingent payments based upon either a fixed annual rent, a percentage
of gross customer collections, or a combination thereof to the property
owner. The aggregate annual minimum lease commitments under operating
leases on premises originally for a period of more than one year in each
of the next five years are as follows:

|     |  |   |        | 
|---- |  | - | ------ | 
|    
|2002 |  | $ | 33,991 | 
|2003 |  |   | 22,708 | 
|2004 |  |   | 17,399 | 
|2005 |  |   | 14,762 | 
|2006 |  |   | 9,409  | 
|    



| |                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company also leases certain of its office premises, automobiles and
office equipment under long-term operating leases. The aggregate annual
minimum lease payments required under operating leases in each of the
next five years are as follows:

|     |  |   |       | 
|---- |  | - | ----- | 
|    
|2002 |  | $ | 4,073 | 
|2003 |  |   | 2,967 | 
|2004 |  |   | 1,317 | 
|2005 |  |   | 606   | 
|2006 |  |   | 165   | 
|    

F-25



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

16. Commitments and contingencies (continued):



| |                   
| | ------------------
| | (b) Contingencies:



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | The Company is disputing development costs in the amount of
$2.4 million claimed by a development contractor. The Company has
completed mediation proceedings with the contractor and anticipates
a resolution to these claims in early 2002. An accrual has been
recorded for the estimated settlement costs. In order to remove
property liens by the contractor, the Company has issued a letter of
credit for $2.3 million.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As part of its regular operations, the Company periodically becomes
involved with legal claims or potential claims related to damage to
vehicles or personal injuries for which the Company carries insurance,
or disagreements with individual employees or on the interpretation of
management or lease agreements. In the opinion of management, the
resolution of these matters will not have a material effect on the
financial condition, results of operations or cash flows of the
Company.



| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii) | Imperial Parking Canada Corporation, a wholly owned
subsidiary of the Company, is a defendant in a lawsuit filed by
Sterling Parking Ltd. (Sterling) in April 2001, in the Queens
Bench of Alberta. The suit involves an alleged breach by Imperial
Parking Canada Corporation of a confidentiality agreement entered
into with Sterling in October 2000 relating to the potential
management of certain Sterling lots in Calgary. The proposed
transaction with Sterling was not completed and Sterling claims in
the lawsuit that Imperial Parking Canada Corporation wrongfully bid
on certain lots and improperly used Sterling confidential
information, all in breach of the confidentiality agreement. The
total damages claimed by Sterling are approximately $6.3 million
(Cdn. $10 million). The Company believes that Sterlings
allegations are largely without merit and that the amount of damages
claimed is far in excess of the actual damages suffered by Sterling,
if any. The parties are currently negotiating a settlement. If a
settlement is not reached, the Company intends to defend itself
vigorously. The Company expects that any damages awarded against
Imperial Parking Canada Corporation will not have a material effect
on its financial position or results of operations.



| |                       
| | ----------------------
| | (c) Letters of credit:



| |                                                                      
| | ---------------------------------------------------------------------
| | The Company has outstanding letters of credit totalling $2.8
million.

17. Related parties:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | In 2001, the Company leased three properties from an entity controlled by
the Companys Vice-Chairman and an employee of the Company. The terms of
the leases are up to five years and minimum annual rent for the three
properties is $5.1 million, increasing to $5.2 million over the lease terms.
Percentage rent is also payable. The Company also sub-leases a portion of
its office premises in New York City to the same entity, with rent
receivable of $0.2 million per annum. The net amount paid in 2001 under the
terms of these leases is $1.6 million.

F-26



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

---

17. Related parties (continued):



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 2001, the Company leased two properties and operates one property under a
management agreement from entities controlled by a director of the Company.
The leased properties have combined minimum annual rent of $2.9 million,
increasing to $3.2 million during the terms of the leases which are up to 15
years. Under the management agreement, which has a one year term, the
Company is entitled to an annual management fee of $30,000. In 2001 the
Company paid the net amount of $2.4 million under the terms of these
agreements.



| |                                                                                                                                                                                                                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company operates one property under a management agreement from an
entity controlled by the Chairman of the Company, which agreement was
entered into in 2001. Under the management agreement, which is on a
month-to-month basis, the Company is entitled to a management fee based on
operating performance of the property. The Company did not earn any fees in
2001.



| |                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 1999, the Company entered into a ten year exclusive agreement for outdoor
advertising on its parking facilities in Canada with an entity whose
President at such time is now also a director of the Company. In 2001, the
Company earned $368,000 (2000  $170,000) pursuant to this agreement.



| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Management believes that the transactions above have been on terms no less
favourable to the Company than those that could have been obtained from
unaffiliated persons.

18. Recent accounting pronouncements:



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | During the year ended December 31, 2001, the Financial Accounting
Standards Board (the Board) announced new rules related to the
accounting for goodwill. Financial Accounting Statement No. 141,
Business Combination (SFAS 141) eliminates the pooling of interest
method of accounting for business combinations and is effective for all
transactions initiated after June 30, 2001. The Company adopted SFAS
141 effective July 1, 2001. The acquisition subsequent to June 30,
2001 (note 3(a)) has been accounted for using the allocation principles
in SFAS 141.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In addition, Financial Accounting Statement No. 142, Goodwill and Other
Intangible Assets (SFAS 142) which will require that goodwill no
longer be amortized, but the carrying value of goodwill will be subject
to a regular impairment test. SFAS 142 will be effective for the first
fiscal quarter beginning after December 15, 2001. The effect on the
financial statements of the Company is that amortization of existing
goodwill will cease as of December 31, 2001. In addition, goodwill
resulting from the acquisition described in note 3(a) has not been
amortized in fiscal 2001. The Companys goodwill amounts at December 31,
2001 will be subject to the impairment test commencing with the Companys
first quarter ended March 31, 2002.

F-27



---



##### 



IMPERIAL PARKING CORPORATION
Notes to Consolidated Financial Statements
(Tabular dollar amounts stated in thousands of United States dollars, except per share amounts)

Years ended December 31, 2001, 2000 and 1999

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18. Recent accounting pronouncements (continued):



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| | (b) | In October 2001, the Board issued Financial Accounting Statement
No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets (SFAS 144) which addresses financial accounting and reporting
for the impairment or disposal of long-lived assets. While SFAS 144
supersedes SFAS 121, the fundamental recognition and measurement
principles of SFAS 121 for assets to be held and used, and the
fundamental measurement principles for assets to be held for sale, are
retained.



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| | Under SFAS 144, an asset to be sold would be classified as held for sale
in the period when the criteria for a qualifying plan of sale are met,
and depreciation would cease at that time. The statement also addresses
assets that will be disposed of other than by sale (e.g., abandonment),
and will require that they be classified as held and used until the
entity disposes of the asset (or ceases to use it in the case of
abandonment). The Statement extends the reporting of discontinued
operations to all components of an entity and requires that results of
operations of a component of an entity that has been disposed of, or is
classified as held for sale, be reported in discontinued operations if
its activities, operations and assets will be eliminated in the disposal
transaction.



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| | There is no material effect of SFAS 144 on the consolidated financial
statements as the Company is not presently contemplating any disposal of
long-lived assets.



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| | (c) | Effective January 1, 2001, the Company adopted the recommendations
outlined in Financial Accounting Standards Board Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities (SFAS
133). The Company does not currently have any derivative instruments
and does not engage in hedging activities and accordingly there is no
impact on the consolidated financial statements of adopting this new
standard.

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