UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

     (Mark one)

Commission File Number 1-15629

IMPERIAL PARKING CORPORATION

     Registrant’s telephone number, including area code: (604) 681-7311

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

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

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. o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o No x

The aggregate market value of the Registrant’s voting and non-voting common equity held by non-affiliates of the Registrant on June 30, 2003 (based on the closing price of the Registrant’s Common Stock on the American Stock Exchange on June 30, 2003) was approximately $20,399,000. 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 5, 2004 was 1,828,326.

Portions of the Registrant’s definitive Proxy Statement to be filed for its 2004 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

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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:

-		costs and expenses associated with the proposed merger with The Gates Group, LLC (including the risk that the merger agreement could be terminated under circumstances that would require the Company to pay a fee of $2.0 million and reimburse expenses of up to $750,000);
-		failure to consummate the proposed merger, for any reason;
-		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.

Additional factors are described in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Certain Factors Affecting Future Operating Results.

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), a Delaware corporation, is a leading provider of parking services in North America. As of December 31, 2003, we managed, leased or owned 1,360 parking lots in Canada and 327 parking lots in the United States, containing more than 350,000 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.

On January 22, 2004, we announced that we had entered into a definitive merger agreement to be acquired by IPK Acquisition Corporation, an affiliate of The Gates Group, LLC (“Gates”). Under the terms of the merger agreement, which remains subject to our stockholders’ approval, stockholders would receive $26.00 per share in cash, without interest, subject to a downward adjustment to the extent that the Company’s post November 30, 2003 transaction costs exceed $1.55 million. The aggregate value of the merger transaction exceeds $55.7 million, including the repayment of indebtedness. A special committee of our board of directors unanimously approved the transaction. We currently anticipate consummating the merger in the second calendar quarter of 2004.

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 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:

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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;

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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

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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 some 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.

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Operating Arrangements

We operate parking facilities under three general types of arrangements: leases, management contracts, and fee ownership. As of December 31, 2003, we leased 592 parking facilities, operated 1,080 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 or structural improvements. In contrast to management contracts, lease arrangements are typically for terms of three to ten years and may have a renewal term, and usually 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, supervision, payroll processing, auditing, banking, equipment leasing and consulting. Responsibilities under a management contract include hiring, training and staffing parking personnel, and providing collections, accounting, record-keeping, insurance, auditing 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. 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, environmental, mechanical or electrical maintenance or repairs.

Enforcement and Collections

Approximately 60% 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 that 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, or follow-up notices, are handled by our collections operation and are included in our revenues.

Our collection practices are currently being challenged in Alberta, Canada, see “Certain Factors Affecting Future Operating Results – Changes in Privacy Legislation Could Harm Our Business By Making Collections More Difficult and Costly” for more information.

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

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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 five years, we have added New York, San Francisco, Chicago, Philadelphia, Seattle, Cincinnati, Cleveland, Atlanta, Columbus and Miami 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, we believe parking rates and average profits per facility can 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 market, 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 with facility owners. 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 four acquisitions in the last six years, adding approximately 130 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.

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 over 40 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, especially in larger US cities. 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, 2003 by the year that we opened the location.

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(1) Includes only those leased locations open as at December 31, 2003 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 592 locations above were 133 locations that incurred a loss for 2003 totaling $3.0 million. Of these 133 locations incurring a loss, 39 were opened in 2003 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 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, payment using cellular telephones at unmanned locations, 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.

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     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, video surveillance, 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 can be effective in minimizing loss of revenues at parking facilities. With banks providing better access to account information on a daily basis via the internet, we are able centrally to independently review daily deposits and identify unusual trends for further review.

     Specialization. We believe by focusing on specific market segments such as stadiums, arenas, universities and hospitals, we can create additional market share from those segments. We started a stadium/arena division in 2003, which successfully acquired the parking contracts at Miller Park in Milwaukee and RFK Stadium in Washington, DC during the year. Our subsidiary, DLC Management specializes in managing parking facilities in and around hospitals. We are also looking to expand the premium management service that is offered by our Advanced Parking division.

Acquisitions

We continue to look for opportunities to acquire small or medium-sized parking operators in target markets. However, none of the opportunities reviewed in 2003 resulted in an acquisition being completed during the year.

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, 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 Standard and Ampco System. We have lower revenues than Standard because Standard is 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 has not been 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. Laws

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and regulations that reduce the number of cars and vehicles could negatively affect our business. Although we do not generate a significant portion of our business from parking at airports, restrictions have been imposed following the September 11 terrorist attacks that limit parking at some US airport terminals. Changes in personal privacy or freedom of information legislation at the federal, state or provincial level could also harm our business by making collections of outstanding parking violations more difficult or costly. See “Certain Factors Affecting Future Operating Results – Changes in Privacy Legislation Could Harm Our Business by Making Collections More Difficult and Costly”. 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.

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, 2003, we employed approximately 3,400 individuals. We believe that our employee relations are satisfactory. Approximately 39% of our employees (some 1,345 employees) are represented by unions, including the Construction and Specialized Workers’ Union (British Columbia), Christian Labour Association of Canada (British Columbia), Manitoba Government and General Employees’ Union (Winnipeg), Teamsters (San Francisco, New York City and Chicago), SEIU, UFCW (Toronto), SEIU (London), and Garage Employees (New York).

Segment Information

Information about our foreign and domestic operations appears in Note 14 to our 2003 Consolidated Financial Statements that are included in response to Item 8 and are listed in Item 15 to this Annual Report on Form 10-K.

Available Information

We maintain a company website at www.impark.com. We make copies of our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed with or furnished to the Securities and Exchange Commission (“SEC”) available to investors on or through our website free of charge as soon as reasonably practicable after we have electronically filed them with or furnished them to the SEC. The contents of our website do not constitute a portion of this report.

The public may read and copy any materials filed by us with the SEC at the SEC’s Public Reference Room, located at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website at which reports, proxy and information statements and other information regarding issuers that file electronically with the SEC are available. This website may be accessed at www.sec.gov.

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Item 2. Properties

The following table summarizes certain information regarding our parking facilities and surface lots as of December 31, 2003. We believe that our owned facilities generally are in good condition and adequate for our present needs. Our owned facilities are also not subject to a mortgage or other significant encumbrance.

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
•		Western USA – Seattle, San Francisco and Oakland
•		Mid-western USA – Minneapolis, Milwaukee, Chicago, Cleveland, Cincinnati and Columbus
•		Eastern USA – New York City, Buffalo, Philadelphia, Atlanta, Washington DC, Wilmington, Atlantic City and Miami

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 Sterling Parking Ltd. and the City of Calgary in Calgary, Alberta and certain employees in Seattle, Washington, described below, there is no legal proceeding to which we are a party which, if decided adversely we anticipate could have a material adverse effect on our results of operation or 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 judgments, settlements or costs) will not have a material adverse effect on our financial condition, liquidity or results of operations. Apart from developments in the City of Calgary business tax matter and the Seattle matter, which are discussed below, there has been no material change in the status of the litigation described below since our quarterly report on Form 10-Q for the quarter ended September 30, 2003.

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 September 11, 1999. The co-defendant is First Union Management, Inc. (“FUMI”). At the time of the material events alleged in the lawsuit, FUMI was an affiliate of Impark Canada. The lawsuit 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 commenced their own action in British Columbia on November 12, 1999, 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. The B.C. action is in pre-trial

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proceedings and a trial date has been scheduled for June 7, 2004. First Union Real Estate Equity and Mortgage Investments (“FUR”) 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. FUR is an affiliate of FUMI and is publicly listed on the New York Stock Exchange.

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 $7.9 million (C$11.6 million). The lawsuit is in pre-trial proceedings. A trial has been scheduled to commence on November 22, 2004. 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, 2003 our best estimate of costs related to this action. However, any damages awarded against Impark Canada in excess of this amount could have a material effect on our financial position and results of operation.

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 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 of the 2001 business taxes at the Calgary City Assessment Review Board (“ARB”) and again at our second stage of appeal at the Alberta Municipal Government Board (“MGB”). 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 $1.1 million (C$1.4 million). We were unsuccessful in our first stage of appeal of the 2002 business taxes at the ARB and appealed this decision to the MGB in November 2002. The MGB released its decision in July 2003 and determined that the assessment method used by the City in 2002 was not assessed fairly in that year. The City chose not to appeal the MGB’s decision, and accordingly Impark Canada was entitled to a refund of a substantial portion of the assessed taxes for 2002, which in turn was applied directly by the City against amounts owing in respect of 2003. We are still determining the impact, if any, of this decision upon amounts paid to the City in 2001 and 2003. In February 2003, the City of Calgary passed a 2003 Business Tax Bylaw, which imposed the same rate and assessment method of business tax for Impark operations in Calgary for the 2003 calendar year as was used by the City in their initial assessments for 2002, at an amount of approximately $1.0 million (C$1.3 million). We were unsuccessful in our first stage of appeal of the 2003 business taxes at the ARB in April 2003 and have appealed this decision to the MGB. We do not expect to receive the MGB’s decision prior to September 2004. In February 2004, the City of Calgary passed a 2004 Business Tax Bylaw, which imposed the same rate and assessment method of business tax for Impark operations in Calgary for the 2004 calendar year as was used in 2003, at an amount of approximately $1.0 million (C$1.3 million). We will appeal the 2004 business taxes to the ARB. We have amended our lawsuit against the City of Calgary to include the 2002 and 2003 assessments, and intend to amend the lawsuit to include the 2004 assessment. The lawsuit is currently in pre-trial proceedings and no trial date has been set. We believe that the City’s 2001, 2002, 2003 and 2004 business tax bylaws are void and invalid. With respect to the 2001 business tax assessment, if we are unsuccessful in our lawsuit against the City of Calgary, then we will not be entitled to the return of any portion of the 2001 business tax assessment, which we have already paid in 2001. With respect to the 2003 business tax assessment, if we are unsuccessful in appealing the assessment and if we are unsuccessful in our lawsuit against the City of Calgary, we will not be entitled to any refund of the amounts already paid in respect of 2003. With respect to the 2004 business tax assessment, if we are unsuccessful in appealing the assessment and if we are unsuccessful in our lawsuit against the City of Calgary, we will be required to pay the full amount of the 2004 assessment, currently $1.0 million, for which we intend to accrue th e proportionate amount throughout the fiscal 2004 year.

On February 13, 2003, three former employees of Imperial Parking (U.S.), Inc. (“Impark US”) in Seattle, Washington started a lawsuit in the Superior Court of the State of Washington, King County, against Impark US in respect of alleged violations of the Washington Industrial Welfare Act. The plaintiffs are seeking to have the lawsuit certified as a class

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action on behalf of all current and former parking attendants of Impark US in Seattle. The plaintiffs allege that Impark US, during the three year period prior to the lawsuit and continuing to date: (a) failed to provide attendants with one ten-minute paid rest break for each four hours of work, and (b) failed to pay overtime pay to attendants. The plaintiffs seek monetary damages, statutory penalties and injunctive relief on behalf of the class. The total damages claimed by the plaintiffs are unspecified at this time and are stated to be proven at trial. The lawsuit is in pre-trial proceedings. On December 19, 2003, the court denied the plaintiff’s motion to certify the class, without making any findings on the underlying merits of the claim. The plaintiff has indicated its intention to appeal this decision. No trial date has been set. We believe that the plaintiffs’ allegations are without merit, the lawsuit should not be certified as a class action, and that the actual damages suffered by the plaintiffs, if any, are minimal. We have accrued at December 31, 2003 our best estimate of costs related to this action; however; any damages awarded against Impark US in excess of this amount could have a material effect on our financial position and results of operation.

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 2003.

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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. In the event the merger is consummated, the Company’s common stock will cease to be listed on the American Stock Exchange.

The number of holders of record of our common stock as of March 5, 2004, was approximately 1,131.

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.

No shares of common stock were repurchased and no unregistered equity securities were issued during the quarter ended December 31, 2003.

Equity Compensation Plan Information

The following table provides information as of December 31, 2003 regarding shares of common stock of the Company that may be issued under our existing equity compensation plans, including the Company’s 2000 Stock Incentive Plan.

⁽¹⁾ Consists of the 2000 Stock Incentive Plan

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Item 6. Selected Financial Data

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 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. 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;
	(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.”

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(1)

The amounts presented for these captions have been accumulated as follows:

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(2)		The operating loss for 1999 includes a recovery of previously overprovided amounts for severance of $1.8 million. The operating loss for 2003 includes a goodwill impairment charge of $33.5 million.
(3)		Other income (expense) principally includes interest income, except that in 2003, it also reflects $1.5 million of other expenses incurred related to the review of strategic alternatives available to the Company in the context of a significant shareholder’s decision to sell its ownership interest.
(4)		There was no amortization of goodwill commencing fiscal 2002. This is a result of adopting Financial Accounting Statement No. 142, which does not permit amortization of goodwill, but requires goodwill to be reviewed annually for any impairment in value. The annual test in 2003 resulted in a determination of the fair value of goodwill in excess of its carrying value and accordingly an impairment charge of $33.5 million was recorded. The basis of the fair value was the offer by affiliates of the Gates Group, LLC to purchase the common stock of the Company, pursuant to a merger agreement signed by the Company in January 2004.
(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.

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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.

Executive Summary

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.

Our results for fiscal 2003 were significantly impacted by the decision of Gotham Partners, L.P. and its affiliated investment funds to sell its shareholding in the Company. We incurred $1.5 million in costs during the year in connection with the review by a Special Committee of the Board of Directors of the alternatives available to the Company in light of Gotham’s decision. On January 22, 2004, we signed a merger agreement with IPK Acquisition Corporation, an affiliate of The Gates Group, LLC, whereby our shareholders would be entitled to receive $26.00 in cash per common share, subject to a downward adjustment to the extent that post-November 30, 2003 transactions costs exceed $1.55 million. As this transaction has not completed at the date of this annual report, we cannot provide guidance on the specific impacts the merger will have on our operations or financial results. However, as structured, the merger would result in us no longer being a publicly traded company.

In our review of the carrying value of goodwill at year-end, we concluded that, in light of the value that a number of independent bidders placed on the Company, the carrying value of goodwill exceeded its fair value and we recorded a goodwill impairment charge of $33.5 million.

Our net loss for 2003 was $33.5 million, which includes the $1.5 million of Special Committee costs and the $33.5 million goodwill impairment charge. On a pro forma basis, excluding these two items, our pro forma net income for 2003 would be $1.5 million, which compares to net income of $1.9 million in fiscal 2002. We refer to pro forma earnings because we believe it is a measure used by some investors as an indicator of our performance excluding the impact of the transactions and events arising from Gotham’s decision to sell its interest in the Company. We believe that excluding the charges arising from or related to the sale enhances management’s and investor’s ability to evaluate our historical operating results. This measure should not be considered in isolation to or as a substitute to net earnings as determined in accordance with GAAP. For a reconciliation of our pro forma earning to our net income for the year, please refer to our press release dated February 13, 2004, which is filed as an exhibit to our Current Report on Form 8-K filed with the SEC on February 17, 2004.

Our 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 revenues earned from each of the three operating arrangements for each of the three years ended December 31, 2003:

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

The performance of our leases, with their high fixed cost component, are significantly impacted by changes in revenue or operating costs. The poor winter weather in the first quarter of 2003 in most of Canada and the Eastern US resulted in lower parking revenues and higher snow clearing costs. The SARS health crisis in Canada had a negative effect on tourism and related businesses, depressing parking revenues at hotels and other tourist destinations. In addition, the general economic weakness in the U.S. and Canada affected our business in much of 2003. Also, as a significant component of our business operations are in Canada and transacted in Canadian dollars, we are exposed to the impact that changes in exchange rates can have on our US dollar reported results. These events contributed to our gross margin increasing from $22.2 million for 2002 to $23.3 million for 2003, as we benefited from an 11% improvement in the Canadian dollar from 2002 to 2003; a successful appeal of our 2002 business tax assessment in Calgary, Alberta; and an increase in total revenue of 3.9%, excluding the foreign currency effect. However, the percentage that our gross margin is of sales declined from 20.3% in 2002 to 19.1% in 2003, again reflecting the net impact of the factors described above.

During 2003 we generated $6.3 million of cash from operations and used this to fund $2.3 million of capital expenditures, $0.7 million in acquiring other long-term assets, $0.6 million of bank debt repayments, and $0.6 million to repay other long-term liabilities. After including $1.6 million for the effect of changes in exchange rates on cash balances, our cash balances increased by $3.7 million during the year.

We also used our credit facility to entirely fund a $3.0 million advance license fee in acquiring a ten-year license agreement for the parking at Miller Park in Milwaukee, Wisconsin.

During 2003 we also paid the second annual instalment of $1.1 million to the vendors of DLC Management, Inc, in accordance with the terms of the acquisition we completed in 2001. This payment was primarily funded by $1.0 million of cash received in final settlement of a note receivable from the San Francisco Giants for their share of development costs on the parking facilities at the PacBell baseball stadium in San Francisco.

Results of Operations

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Total revenues for fiscal 2003 increased $14.7 million, or 10.5%, to $154.5 million from $139.8 million for fiscal 2002. Excluding an increase of $2.9 million in the reimbursement of management contract expenses, which are directly offset by an equivalent increase in reimbursed management contract expenses classified within direct costs, there was an increase of $11.8 million in revenues. This was generally as a result of continuing to open new facilities and from a stronger Canadian dollar. If the Canadian dollar exchange rate in 2003 had remained the same as it was in 2002, total revenues for fiscal 2003 would have increased by only $5.4 million, or 3.9%.

Revenues from leased facilities for fiscal 2003 increased to $97.2 million from $86.9 million in fiscal 2002, an increase of $10.3 million, or 11.9 %. There was an increase of $4.7 million in the United States largely as a result of opening new locations, notably in Milwaukee, with Miller Park – the baseball stadium for the Milwaukee Brewers, and in Miami, which increased its number of leased facilities from six at December 31, 2002 to fourteen at December 31, 2003. This increase in revenue in the U.S. is net of a decrease of $4.6 million in Chicago and Minneapolis. The decrease in these cities was the result of the sale, by a landlord, of a significant leased facility in Chicago and the subsequent renewal of the agreement by the new landlord as a management contract effective January 2003, and our decision not to renew an unprofitable lease in Minneapolis in the fourth quarter of 2002. These two facilities contributed approximately $6.2 million of leased revenue in fiscal 2002. In Canada, there was a $5.6 million increase in leased revenue, which was largely due to a stronger Canadian dollar. The average exchange rate for 2003 was C$1.00 = US$0.71, compared to US$0.64 for

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2002. In local currency terms, however, leased revenue in Canada increased by only C$0.1 million in 2003, compared to 2002. An increase of C$2.1 million in Toronto, largely from a net increase of two lease locations during the year, was offset by a decrease of C$2.0 million in other Canadian cities as a result of severe winter weather in 2003 and a decline in hotel, tourism and other traffic.

Management contract revenues for fiscal 2003 increased by $1.2 million, or 5.6%, to $22.0 million from $20.8 million for fiscal 2002. Of this increase, approximately $0.8 million is due to the stronger Canadian dollar and $0.4 million to new contracts.

The direct costs incurred in providing services under parking and management contracts in 2003 increased to $97.8 million from $87.2 million in 2002, an increase of $10.6 million, or 12.3%. Rent expense increased by $7.5 million, or 13.4%, to $63.3 million for 2003 from $55.8 million for 2002. Rent as a percentage of leased revenues, increased to 65.1% in 2003 from 64.2% in 2002. The increase is due to an increase in Canada in rent as a percentage of leased revenues. We opened several new lease locations in Toronto, and as with any new lease we expect that rent as a percentage of leased revenues will be higher at the start of the lease term. The increase in other direct costs of $3.2 million, or 10.2%, from $31.4 million to $34.6 million, includes $1.2 million of costs associated with operating the new contracts at the Mirabel and Dorval airports in Montreal, Quebec and Miller Park in Milwaukee; $0.6 million for the effect of the stronger Canadian dollar on other direct costs; an increase in snow clearing and removal costs of $0.2 million from the harsher winter in 2003; and a discount of $0.1 million granted on the early settlement of the outstanding balance due from the San Francisco Giants for their share of development costs. The increases in other direct costs for fiscal 2003 were offset by recoveries of $0.8 million and $0.3 million for amounts previously accrued in 2002 for business taxes in Calgary and a property tax assessment, respectively, which we successfully appealed in 2003. The cost of parking and management contracts as a percentage of revenue from parking and management contracts increased to 80.8% in fiscal 2003 from 79.7% in fiscal 2002.

In 2003 we were successful in appealing our 2002 business tax assessments for our operations in Calgary, Alberta. The appeal resulted in City of Calgary reducing the 2002 assessment by $0.8 million from $1.0 million to $0.2 million. The City applied the reduction against amounts we owed for 2003 and, at December 31, 2003, there were no amounts owing to the City for either 2002 or 2003. We are continuing to appeal the 2003 assessments. We have provided further details of this issue in Part I, Item 3 - Legal Proceedings.

General and administrative expenses increased $1.0 million, or 6.4%, from $16.2 million for fiscal 2002 to $17.2 million for fiscal 2003. $0.9 million of the increase resulted from the stronger Canadian dollar. The remainder of the increase largely occurred in our U.S. expansion cities of Chicago and Miami, and from relocating our U.S. head office to Philadelphia, offset by a realized foreign exchange gain of $0.1 million. General and administrative expenses, as a percentage of total revenues, decreased to 11.1% for fiscal 2003 from 11.6% for fiscal 2002.

Prior to 2003, we accounted for stock options issued to employees using the intrinsic value method in accordance with the provisions of APB 25, Accounting for Stock Issued to Employees, and related interpretations, and recognized compensation expense to the extent the current market price of the underlying stock exceeded the exercise price. Effective January 1, 2003, we adopted the fair value recognition provisions of Statement of Financial Accounting No. 123 (“SFAS 123”), Accounting for Stock-Based Compensation, for stock-based employee compensation. All prior periods presented have been restated to reflect the compensation costs that would have been recognized had the recognition provisions of SFAS 123 been applied to all awards granted to employees after December 15, 1994. The effect of restating the results for fiscal 2002 is that stock-based compensation expense for the period, which is included in general and administrative expenses, increased by $398,000 from a recovery of $65,000, as previously reported, to an expense of $333,000.

As a result of the decision by our principal shareholder, Gotham Partners, L.P. and its affiliated investment funds (“Gotham”), to sell its ownership interest, a Special Committee of the Board of Directors was formed in January 2003 to explore the alternatives available to the Company. During 2003 we incurred $1.5 million of professional fees related to this review and these costs are included in other non-operating expenses for the year. In January 2004, the Company entered into a merger agreement with IPK Acquisition Corporation, an affiliate of The Gates Group, LLC, and pursuant to which the Company’s shareholders would be entitled to receive $26.00 in cash per share, subject to downward adjustment in the event that certain of the Company’s transaction costs exceed $1.55 million.

We completed our annual review of goodwill in the fourth quarter of 2003 to determine whether there had been any impairment in its carrying value. Based on the share price offer in the merger agreement above, details of which were available at the time of the impairment test, we determined that the amount of the Company’s fair value attributed to goodwill was less than its carrying value. As a result, we recorded a goodwill impairment charge of $33.5 million in 2003.

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Income tax expense for fiscal 2003 includes our current tax liability for Canadian operating profits, and capital and state taxes, and a deferred tax recovery for operating losses in the U.S. for fiscal 2003. The deferred tax recovery has been reduced by a deferred tax expense in Canada as we utilized the remainder of our previously recognized benefits of net operating losses for tax purposes in Canada. During the third quarter of 2003, we utilized all of our net operating losses in Canada, and have now started to incur a current, rather than a deferred, tax liability for any operating profits in Canada. We also provided a valuation allowance of $0.5 million in 2003 against the deductibility of $1.5 million in Special Committee expenses, as these costs are only deductible for tax purposes on a limited basis.

Excluding the goodwill impairment charge of $33.5 million in 2003, earnings for 2003 were $14,000 – a decrease of $1.9 million from earnings for 2002 of $1.9 million. This decrease is primarily due to higher general and administrative expenses of $1.0 million; higher depreciation and amortization of $0.2 million; $1.5 million of Special Committee expenses; and higher income tax expense of $0.6 million; offset by higher gross margin of $1.1 million; and an improvement in our share of Limited Liability company results of $0.3 million.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Total revenues for fiscal 2002 increased $21.9 million, or 18.6%, to $139.8 million from $117.9 million for fiscal 2001. The increase was due largely to an increase in revenue on leased facilities in the U.S., and includes the results for DLC, which was acquired effective July 1, 2001.

Revenues from leased facilities for fiscal 2002 increased to $86.9 million from $74.3 million in fiscal 2001, an increase of $12.6 million, or 16.9%. There was an increase of $12.9 million in the United States as a result of starting operations in Atlanta (August 2001) and Chicago (November 2001) and the acquisition of DLC in Philadelphia (July 2001). However, we have also experienced a drop in volume and in rates in our established cities of Minneapolis and Milwaukee as a result of layoffs by businesses operating downtown and pressure from competitors to lower rates. Consequently, we decided not to renew a significant lease in Minneapolis in the fourth quarter of 2002. Revenue from these two cities declined $0.6 million in 2002 from 2001. There was a $0.3 million decrease in leased revenue in Canada substantially due to a decline in the value of the Canadian dollar from an average rate for fiscal 2001 of C$1.00 = US$0.65 to US$0.64 for 2002, and to higher traffic volumes in fiscal 2001 as a result of public transit strikes in Calgary, Alberta and Vancouver, B.C. Leased revenue in Canada for fiscal 2001 also included the recovery of $0.2 million for taxes previously provided on parking violation revenue.

Management contract revenues for fiscal 2002 increased by $6.2 million, or 42.4%, to $20.8 million from $14.6 million for fiscal 2001. $5.7 million of the increase was due to a full year of operations from DLC, which was acquired in July 2001.

The cost of parking and management contracts in 2002 increased to $87.2 million from $70.0 million in 2001, an increase of $17.2 million, or 24.5%. Of this increase, $9.0 million was attributable to higher rent expense and $8.2 million to other directs costs. Rent expense increased $9.0 million, or 19.2%, from $46.8 million for 2001 to $55.8 million for 2002. Rent as a percentage of leased revenues, increased to 64.2% in 2002 from 63.0% for 2001. The increase is due to many of the leases in the U.S. being in the first or second year of their terms. As we continue to operate these leased facilities, we would expect growth in revenue to exceed any growth in rent and, therefore, rent as a percentage of revenues would decline. The increase in other direct costs of $8.2 million, or 35.0%, from $23.2 million to $31.4 million, is due to the acquisition of DLC, an increase in our business taxes in Calgary and the increase in leased revenues. Our business tax assessment in Calgary for 2002 was approximately $1.0 million, which was three times the amount of our assessment for 2001 of approximately $0.3 million. Although we appealed the 2002 assessment and were successful with the appeal in 2003, we recorded the full amount of the original assessment in 2002. The cost of parking and management contracts as a percentage of revenues from parking and management contracts increased to 79.7% in fiscal 2002 from 77.3% in fiscal 2001. The increase is due to a higher proportion of our business in 2002, compared to 2001, being generated in the U.S. where we are in a start-up phase in many cities. We expect only to be in a break-even position, or marginally profitable, in these new cities during their first one or two years of operation. The current weak U.S. economy may prolong this period, during which we may generate lower than average returns in these new cities.

General and administrative expenses increased $2.3 million, or 16.6%, from $13.9 million for fiscal 2001 to $16.2 million for fiscal 2002. The increase in general and administrative expenses is due, in large part, to including DLC for a full year, which added $1.5 million of general and administrative expenses and to an additional $0.2 million for cities started during 2001. General and administrative expenses, as a percentage of total revenues, decreased to 11.6% for fiscal 2002 compared to 11.8 % for fiscal 2001.

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Prior to 2003, we accounted for stock options issued to employees using the intrinsic value method in accordance with the provisions of APB 25, Accounting for Stock Issued to Employees, and related interpretations, and recognized compensation expense to the extent the current market price of the underlying stock exceeded the exercise price. Effective January 1, 2003, we adopted the fair value recognition provisions of Statement of Financial Accounting No. 123 (“SFAS 123”), Accounting for Stock-Based Compensation, for stock-based employee compensation. All prior periods presented have been restated to reflect the compensation costs that would have been recognized had the recognition provisions of SFAS 123 been applied to all awards granted to employees after December 15, 1994. The effect of restating the results for fiscal 2002 is that stock-based compensation expense for the period, which is included in general and administrative expenses, increased by $398,000 from a recovery of $65,000, as previously reported, to an expense of $333,000. Restating the results for fiscal 2001 resulted in stock-based compensation expense for the period decreasing by $454,000 from $780,000, as previously reported, to $326,000.

There was no amortization of goodwill in fiscal 2002, compared to $2.2 million for fiscal 2001. This is a result of adopting Financial Accounting Statement No. 142, which does not permit amortization of goodwill, but requires goodwill to be reviewed annually for any impairment in value.

Interest income decreased $0.1 million from $0.6 million for fiscal 2001 to $0.5 million for fiscal 2002 principally due to lower prevailing interest rates. Interest expense of $0.4 million was incurred in fiscal 2002 on the bank and other indebtedness to finance the DLC acquisition, which was $0.1 million more than the $0.3 million incurred in fiscal 2001. The expense in 2001 was for a partial year as the acquisition of DLC occurred during 2001.

Income tax expense for fiscal 2002 includes our current tax liability for capital and state taxes, and a deferred tax expense as we utilize our previously recognized benefits of 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 2002.

The net income for 2002 was $1.9 million, an increase of $0.7 million from the net income for 2001 of $1.2 million. This increase is primarily due to higher gross margin of $1.7 million; lower depreciation and amortization of management and lease agreements of $0.1 million; and discontinuation of goodwill amortization of $2.2 million; offset by higher general and administrative expenses of $2.3 million; a decrease in net interest income of $0.2 million and higher income tax expense of $0.8 million.

Liquidity and Capital Resources

As at December 31, 2003, we had cash and cash equivalents of $18.8 million. This represents an increase of $3.7 million for fiscal 2003 from the balance at December 31, 2002. The increase resulted from $6.4 million of cash generated from operations, $1.8 million provided by financing activities and $1.6 million for the effect of exchange rate changes on cash; offset by $6.1 million used in investing activities.

In fiscal 2003 we utilized the remaining net operating losses that we had in Canada to offset taxable income. Accordingly, we started to accrue for income taxes payable in Canada during the year and had accrued $1.4 million at December 31, 2003 in respect of the portion of profits in Canada for 2003 that were taxable after utilizing the remainder of the net operating losses. We started paying tax instalments in Canada in the fourth quarter of fiscal 2003 totalling $0.3 million on account of income taxes payable for fiscal 2003.

The cash used in investing activities during fiscal 2003 included $3.0 million in respect of an advance license fee under a ten year license agreement to manage the parking operations at Miller Park in Milwaukee, Wisconsin. This prepayment is included in other assets and is being amortized on a straight-line basis over the term of the agreement. We also paid $1.1 million to the former shareholders of DLC during fiscal 2003. This was the second of five annual deferred payments and was calculated pursuant to the Amended and Restated Share Purchase Agreement (Exhibit 10.8) and was based on the earnings of the acquired operations for the year ended June 30, 2003. We had previously accrued this payment as part of our acquisition. The difference of $135,000 from the amount previously accrued has been allocated to goodwill. We also received during fiscal 2003, $1.0 million from the San Francisco Giants in final settlement of the outstanding balance due from them of $1.1 million for their share of the parking facility development costs. The discount of $0.1 million was expensed in fiscal 2003. The balance was originally to be recovered from any future participation rent payable to the Giants.

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At December 31, 2003, we had $5.7 million of bank debt outstanding. We borrowed $3.0 million under our credit facility during 2003 to fund the advance license fee for Miller Park. After originally drawing down $6.9 million on the non-revolving loan facility and using $2.4 million for outstanding letters of credit, we have $10.7 million remaining of a $20.0 million credit facility with HSBC Canada to fund working capital requirements, acquisitions and other capital investment opportunities.

In April 2003, under the terms of the acquisition agreement for the purchase of E-Z Park Company Ltd., LLC in April 2000, we repaid the note payable of $0.5 million, including accrued interest, due to the vendor as deferred consideration.

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.

Depending on the timing and magnitude of future investment opportunities, which could be in the form of leased or purchased properties, joint ventures or acquisitions, we anticipate the cash required to come from operations, the bank credit facility, or an equity offering.

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 acquisition.

Contractual Obligations and Commercial Commitments

The following tables summarize our contractual obligations and commercial commitments as of December 31, 2003:

(1)

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 $105,000 through December 2007, and $43,000 thereafter until June 2010.

(2)

Other long-term obligations include an estimated $2.7 million payable to the former shareholders of DLC. The amounts ultimately payable to the former shareholders are calculated relative to the actual operating results of the acquired business for the three remaining annual periods ending June 30, 2006 and may differ from the amount estimated at December 31, 2003 to be payable.

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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 our estimates of the value of 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.

Beginning January 1, 2002, we have accounted for goodwill under the provisions of SFAS No. 142 Goodwill and Other Intangible Assets. As of December 31, 2003, we had $18.8 million of goodwill. The determination of fair value of goodwill, and any impairment loss, utilizes cash flow projections that assume certain future revenue and costs levels, assumed earnings’ multiples based upon current market conditions and other valuation factors, all of which involve the use of significant judgment and estimation. Future events may indicate that judgments and estimates that we made to support the carrying value of goodwill at December 31, 2003 are no longer appropriate. This could, in turn, result in impairment charges in the future. Future events that may result in impairment charges include increases in interest rates, which would impact earnings’ multiples, unfavourable economic conditions or other factors, which could decrease revenues and profitability of existing locations, and changes in the cost structure of existing facilities. Factors that could potentially have an unfavourable economic effect on our judgment and estimates include, among others: changes imposed by government and regulatory agencies, such as assessment of parking-related taxes; construction or other events that could change traffic patterns; and terrorism or other catastrophic events.

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. Changes in the timing of the recognition and amount of revenues and expenses in the future may impact our ability to utilize these deductions. The carrying value of our net deferred tax assets assumes that we will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions. If these estimates and related assumptions change in the future, we will be required to adjust our deferred tax valuation allowance.

Under the terms of the agreement to acquire DLC, we are required to make further annual payments to the former shareholders of DLC for each of the twelve month periods ending June 30, 2004 through 2006. The payments are calculated relative to the actual operating results of the acquired business determined 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 earnings before interest, taxes, depreciation and amortization (“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, 2003 we estimated this liability, based on operating results of the acquired business for 2003, 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, 2003. The 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 $350,000, in the EBITDA of the acquired business below $1.35 million for any of the twelve month periods through June 30, 2006. A change of 10% in our estimate of operating results would result in a change of approximately $0.1 million per annum in the amount payable to the former shareholders of DLC for each of the periods through June 30, 2006.

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New Accounting Pronouncements

During 2003, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard No. 150, Accounting for certain Financial Instruments with Characteristics of both Liabilities and Equity (“SFAS No. 150”) and related interpretations. SFAS No. 150 requires that certain financial instruments issued in the form of shares that are mandatorily redeemable as well as certain other financial instruments be classified as liabilities in the financial statements. SFAS No. 150 is effective for the Company’s December 31, 2003 financial statements. As the Company has no financial instruments with characteristics of both liabilities and equity or shares which are mandatorily redeemable, adoption of SFAS 150 had no impact on the consolidated financial statements.

FASB has issued Financial Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities”, which addresses the consolidation of variable interest entities (including those referred to as “Special-Purpose Entities”). The disclosure and measurement provisions of this Interpretation, as revised, are effective no later than the end of interim or annual periods ending after March 15, 2004. The Company is currently considering whether any of its contractual relationships, including management and lease agreements, notes receivable and equity method investments disclosed in these financial statements, will be subject to the provisions of the Interpretation.

Foreign Currency Exposure

We operate wholly owned subsidiaries in Canada. Total historical revenues (excluding reimbursement of management contract expenses) from Canadian operations amounted to $53.1 million and $60.8 million for fiscal years 2002 and 2003, 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 our Canadian dollar revenues to date have been significantly offset by Canadian dollar operating costs. Our net earnings, before the impairment in goodwill, in Canada for 2003 were approximately $3.6 million, or approximately C$5.0 million translated at the average exchange rate for 2003 of C$1.00 = US$0.71. If the exchange rate used in 2003 had been US$0.67 instead of US$0.71, the effect would be to reduce our net earnings, before the impairment in goodwill, by approximately $0.2 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, 2001, 2002 and 2003 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 earnings (loss) and earnings (loss) per share is disclosed in Note 15 to the Consolidated Financial Statements in this report.

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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.

We may incur significant expenses in connection with the proposed merger.

On January 22, 2004, the Company signed a merger agreement with IPK Acquisition Corporation, an affiliate of The Gates Group, LLC, pursuant to which the Company’s shareholders would be entitled to receive $26.00 in cash per share, subject to downward adjustment in the event that certain of the Company’s transaction costs incurred or paid after November 30, 2003 exceed $1.55 million. We expect to incur significant transaction costs to complete the merger. We estimate that we will incur an additional $1.2 million in expenses in addition to those already reflected in our results for the year ended December 31, 2003. This estimate is based on a number of assumptions regarding the timing of the merger and the expenses that we will incur to consummate the merger. No assurances can be made that our actual expenses will not significantly exceed our estimate. If the merger is not consummated we may be required to pay a termination fee of $2.0 million and reimburse expenses of up to $750,000. These costs could have a materially adverse effect on our future results of operations and on our financial condition.

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 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.

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

City Collection Company Limited (“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 February 2004, the provincial government of Alberta terminated our access to motor vehicle records for the province of Alberta, Canada. We are presently appealing this decision. If we are unsuccessful in reinstating our access to motor vehicle records, it could adversely impact our collection efforts and reduce the revenue we earn from parking violations in Alberta, Canada. 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 and changes in the insurance marketplace 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.

Additionally, due to changes in the insurance marketplace, including changes related to the terrorist attacks on September 11, 2001, we have experienced an increase in the premiums we pay for most types of insurance coverage. Changes in the insurance marketplace, including increased premium costs, could have a material adverse effect on our future results of operations and on our financial condition.

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.

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.

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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.

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 592 and owned 15 facilities as of December 31, 2003. 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. This is illustrated by the table below, which groups our leased locations that were active at December 31, 2003 by the year that the related agreement will expire, as follows:

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(1)

For leased locations that were open as at December 31, 2003.

(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 2003, approximately 8% 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 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.

The threat of terrorist activity could affect demand for parking

The threat of, or actual, terrorist activity in urban centres in North America may lead to restrictions on access to streets or buildings in the downtown areas. This may result in the access to parking facilities being more difficult, or not permitted at all, which will have an adverse effect on revenue generated from those facilities.

Furthermore, the threat of terrorist activity may affect consumer confidence. A loss of confidence may lead to the public being less likely to incur discretionary spending on restaurants, sporting events and theatres, which in turn means less demand and lower revenues at adjacent parking facilities.

Item 7a. Quantitative and Qualitative Disclosure about Market Risk

To December 31, 2003, we have not entered into significant derivative instruments either for hedging or speculative purposes. As of December 31, 2003, 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. As of December 31, 2003, we did not have any cash invested in short-term deposits. 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 expected to be significant.

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Our bank indebtedness of $5.7 million at December 31, 2003 bears interest at rates which vary with changes in the London Interbank Offered Rate (“LIBOR”). Based on our current borrowing level, a 1% change in LIBOR would impact net income by less than $0.1 million annually.

Foreign Currency Exposure:

We operate wholly owned subsidiaries in Canada. Total revenues (excluding reimbursement of management contract expenses) from Canadian operations amounted to $60.8 million for the year ended December 31, 2003 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, before the impairment in goodwill, in Canada for 2003 were approximately $3.6 million, or approximately C$5.0 million translated at the average exchange rate for 2003 of C$1.00 = US$0.71. If the exchange rate used in 2003 had been US$0.67 instead of US$0.71, the effect would be to reduce our net earnings, before the impairment in goodwill, by approximately $0.2 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 15(a)1 and 15(a)2 are included in this report on pages F-1 through F-7.

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

None

Item 9A. Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company’s management conducted an evaluation with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, regarding the effectiveness of the Company’s disclosure controls and procedures, as of the end of the last fiscal quarter. In designing and evaluating the Company’s disclosure controls and procedures, the Company and its management recognize that any controls and procedures, no matter how well designed and operated, can provide only a reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating and implementing possible controls and procedures. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that they believe the Company’s disclosure controls and procedures are reasonably effective to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. We intend to continue to review and document our disclosure controls and procedures, including our internal controls and procedures for financial reporting, and we may from time to time make changes to the disclosure controls and procedures to enhance their effectiveness and to ensure that our systems evolve with our business.

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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 2004 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 2004 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 2004 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 2004 Annual Meeting of Shareholders.

Item 14. Principal Accounting Fees and Services

Information concerning this Item is incorporated by reference to the Company’s definitive proxy materials for the Company’s 2004 Annual Meeting of Shareholders.

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Part IV

Item 15. 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:

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.

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Index to Exhibits

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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 24, 2004	By:	/s/ J. BRUCE NEWSOME
		J. 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.

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AUDITORS’ REPORT TO THE SHAREHOLDERS

We have audited the consolidated balance sheets of Imperial Parking Corporation as at December 31, 2003 and 2002 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, 2003. 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, 2003 and 2002 and the results of its operations and its cash flows for each of the years in the three year period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America.

As discussed in note 2(j) to the consolidated financial statements, effective January 1, 2002 the Company adopted the provisions of Statement of Financial Accounts Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets”, as required for goodwill and intangible assets resulting from business combinations consummated prior to July 1, 2001. As discussed in note 2(p) to the consolidated financial statements, effective January 1, 2003 the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock Based Compensation”, for stock-based employee compensation.

Chartered Accountants

Vancouver, Canada

January 30, 2004

F-1

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

December 31, 2003 and 2002

Commitments and contingencies (note 17)
Subsequent events (note 19)

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, 2003, 2002 and 2001

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, 2003, 2002 and 2001

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, 2003, 2002 and 2001