UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

(Mark One)

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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2004.

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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from        to

Commission file number 001-13950

CENTRAL PARKING CORPORATION

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. YES x NO o

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

The aggregate market value of the Common Stock held by non-affiliates of the registrant, based on the closing price of the Common Stock on the New York Stock Exchange on March 31, 2004 (the last business day of the most recently completed second fiscal quarter) was $299,901,728. For purposes of this response, the registrant has assumed that its directors, executive officers, and beneficial owners of 5% or more of its Common Stock are the affiliates of the registrant.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date.

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DOCUMENTS INCORPORATED BY REFERENCE

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

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TABLE OF CONTENTS

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IMPORTANT INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

     Certain information discussed in this Annual Report on Form 10-K, including but not limited to, information under the captions “Business”; “Properties”; “Legal Proceedings”; “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and “Quantitative and Qualitative Disclosures About Market Risk”, and the information incorporated herein by reference, may constitute forward-looking statements for purposes of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks and uncertainties, including, without limitation, the factors set forth under the caption “Risk Factors.” Forward-looking statements include, but are not limited to, discussions regarding the Company’s operating strategy, growth strategy, acquisition strategy, cost savings initiatives, industry, economic conditions, financial condition, liquidity and capital resources, results of operations and impact of new accounting pronouncements. Such statements include, but are not limited to, statements preceded by, followed by or that otherwise include the words “believes,” “expects,” “anticipates,” “intends,” “seeks,” “estimates,” “projects,” “objective,” “strategy,” “outlook,” “assumptions,” “guidance,” “forecasts,” “goal,” “intends,” “pursue,” “will likely result,” “will continue” or similar expressions. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

     The following important factors, in addition to those discussed elsewhere in this document, and the documents which are incorporated herein by reference, could affect the future financial results of the Company and could cause actual results to differ materially from those expressed in forward-looking statements contained in news release and other public statements by the Company and incorporated by reference in this document:

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the Company’s ability to achieve the goals described in this report and other reports filed with the Securities and Exchange Commission, including but not limited to, the Company’s ability to

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increase cash flow by reducing operating costs, accounts receivable and indebtedness;

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cover the fixed costs of its leased and owned facilities and maintain adequate liquidity through its cash resources and credit facility;

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integrate future acquisitions, in light of challenges in retaining key employees, synchronizing business processes and efficiently integrating facilities, marketing, and operations;

	-		comply with the terms of its credit facility or obtain waivers of noncompliance;
	-		reduce operating losses at unprofitable locations;
	-		form and maintain strategic relationships with certain large real estate owners and operators; and
	-		renew existing insurance coverage and to obtain performance and surety bonds on favorable terms;

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successful implementation of the Company’s operating and growth strategy;

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interest rate fluctuations;

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the loss, or renewal on less favorable terms, of existing management contracts and leases and the failure to add new locations on favorable terms;

	-		the timing of property-related gains and losses;
	-		pre-opening, start-up and break-in costs of parking facilities;

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player strikes or other events affecting major league sports;

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changes in economic and business conditions at the local, regional, national or international levels;

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changes in patterns of air travel or automobile usage, including but not limited to effects of weather on travel and transportation patterns;

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	-		the impact of litigation, including but not limited to, the securities class action lawsuit pending against the Company;
	-		higher premium and claims costs relating to medical, liability, worker’s compensation and other insurance programs;

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compliance with, or changes in local, state, national and international laws and regulations, including, without limitation, local regulations, restrictions and taxation on real property, parking and automobile usage, security measures, environmental, anti-trust and consumer protection laws;

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changes in current parking rates and pricing of services to clients;

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extraordinary events affecting parking facilities that the Company manages, including labor strikes, emergency safety measures, military or terrorist attacks and natural disasters;

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the loss of key employees; and

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the other factors discussed under the heading “Risk Factors” included in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.

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PART I

Item 1. Business

General

     Central Parking Corporation (“Central Parking” or the “Company”) is a leading provider of parking and related services. As of September 30, 2004, Central Parking operated 3,433 parking facilities containing 1,529,302 spaces in 38 states, the District of Columbia, Canada, Puerto Rico, Mexico, Chile, Colombia, Peru, Venezuela, the United Kingdom, the Republic of Ireland, Spain, Germany, Poland, Greece and Switzerland.

     Central Parking operates or manages multi-level parking facilities and surface lots. It also provides ancillary services, including parking consulting, shuttle bus, valet, parking meter collection and enforcement, and billing services. Central Parking operates parking facilities under three general types of arrangements: management contracts, leases and fee ownership. As of September 30, 2004, Central Parking operated 1,615 parking facilities under management contracts and 1,626 parking facilities under leases. In addition, the Company owned 192 parking facilities either independently or through joint ventures.

Parking Industry

     The commercial parking services business is very fragmented, consisting of a few national companies and numerous small, privately held local and regional operators. Central Parking believes it has certain competitive advantages over many of these companies, including advantages of scale, financial resources and technology.

     During the 1980’s, the high level of construction activity in the United States resulted in a significant increase in the number of parking facilities. Since that time, construction activity has slowed and the primary growth opportunity for parking companies has become “take-aways” or competing with other parking operators for existing locations. Although some growth in revenues from existing operations is possible through redesign, increased operational efficiency, or increased facility use and prices, such growth is ultimately limited by the size of a facility and market conditions.

     Management believes that most commercial real estate developers and property owners view services such as parking as potential profit centers rather than cost centers. Many of these parties outsource parking operations to parking management companies in an effort to maximize profits or leverage the original rental value to a third-party lender. Parking management companies can increase profits by using managerial skills and experience, operating systems, and operating controls unique to the parking industry.

     Management continues to view privatization of certain governmental operations and facilities as an opportunity for the parking industry. For example, privatization of on-street parking fee collection and enforcement in the United Kingdom has provided significant opportunities for private sector parking companies. In the United States, several cities have awarded on-street parking fee collection and enforcement and parking meter service contracts to private sector parking companies such as Central Parking.

Growth Strategy

     Central Parking seeks to increase the number of profitable parking facilities it operates by focusing its marketing efforts on adding facilities at the local level, targeting real estate managers and developers with a national presence, pursuing strategic acquisitions of other parking service operators on a selective basis, and expanding its international operations. The key elements of Central Parking’s growth strategy are described below.

     Increase Market Presence

     Central Parking continually seeks to establish and increase its operations in new and existing markets through take-aways of competitors’ contracts, obtaining new management and lease contracts and entering into joint venture arrangements. Management believes that Central Parking’s relative size, financial resources and systems give it a competitive advantage in winning new business and make it an attractive partner for joint venture and other opportunities. In addition, Central Parking believes that its performance-based compensation system, which is designed to reward managers for increasing profitability in their respective areas of responsibility, is an important element of this strategy.

     Pursue Strategic Acquisitions

     A significant portion of the Company’s growth over the past six years has been through targeted acquisitions. Central Parking intends to continue to pursue acquisition opportunities on a selective basis. Central Parking’s acquisition strategy is to focus on

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opportunities that enable Central Parking to (i) become a more efficient provider in selected markets, (ii) generate economies of scale and cost savings, and (iii) increase cash flow.

     Pursue Privatization Opportunities and Airports

     The Company pursues privatization opportunities, including on-street parking fee collection and enforcement, shuttle services and airport parking management. The Company currently has contracts for parking meter collection and enforcement in 29 cities, including; Charlotte, North Carolina; Toledo, Ohio; Daytona Beach, Florida; and Edinburgh, Scotland. The Company currently provides airport parking management services to approximately 30 airports, including airports in Miami, New Orleans, Houston, and Detroit and Washington Dulles.

     Expand International Operations

     Management believes that there are international opportunities for parking companies, particularly companies that are interested in making significant investments in equipment and construction, either independently or with foreign partners. Central Parking typically enters foreign markets either through consulting projects or by forming joint ventures with established local entities. Central Parking currently has operations in Canada, Puerto Rico, Mexico, Chile, Colombia, Peru, Venezuela, the United Kingdom, the Republic of Ireland, Spain, Germany, Poland, Greece and Switzerland. Approximately 7% of the Company’s total revenues, excluding reimbursed management costs, in fiscal year 2004 were from international operations.

Operating Strategy

     Central Parking seeks to to increase the revenues and profitability of its parking facilities through a variety of operating strategies, including the following:

     Manage Costs

     To provide competitively priced services, the Company must contain costs. Managers analyze staffing and cost control issues, and each is tracked on a monthly basis to determine whether financial results are within budgeted ranges. Because of the substantial performance-based components of their compensation, general (city) managers are motivated to contain the costs of their operations.

     Emphasize Sales and Marketing Efforts

     Central Parking’s management is actively involved in developing and maintaining business relationships and in exploring opportunities for growth. Central Parking’s marketing efforts are designed to expand its operations by developing lasting relationships with major real estate developers and asset managers, business and government leaders, and other clients. Central Parking encourages its managers to pursue new opportunities at the local level while simultaneously targeting key clients and projects at a national level.

     Leverage Established Market Presence

     Central Parking has an established presence in multiple markets, representing platforms from which it can build. Because of the relatively fixed nature of certain overhead at the city level and the resources that can be shared in specific markets, management believes it has the opportunity to increase the Company’s profit margins as it grows its presence in established markets.

     Opportunistic Sales of Properties.

     Through the years of operations, the Company has acquired a significant portfolio of real estate properties. In certain situations, some of these properties may increase in value significantly such that the best use for the property is something other than as a parking facility. In these situations, the Company will consider selling the property for a different use. During the fiscal year, the Company sold 14 properties for a total of $50.1 million and anticipates similar sales during the next fiscal year.

     Empower Local Managers; Provide Corporate Support

     The Company’s strategy is to establish a successful balance between centralized and decentralized management. Because its business is dependent, to some extent, on relationships with clients, Central Parking provides its managers with a significant degree of autonomy in order to encourage prompt and effective responses to local market demands. In conjunction with this local operational authority, the Company provides, through its corporate office, services that may not be readily available to independent operators such as management support, human resources management, marketing and business expertise, training, and financial and information systems. Services performed primarily at the corporate level include billing, quality improvement oversight, financial and accounting functions, human resources, legal services, policy and procedure development, systems design, and corporate acquisitions and development.

     The Company’s operations are managed based on segments administered by senior vice presidents. These segments are generally organized geographically, with exceptions depending on the needs of specific regions. See Note 17 to the Consolidated Financial Statements for financial information regarding the Company’s business segments.

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     Utilize Performance-Based Compensation

     Central Parking’s performance-based compensation system rewards managers at the general (city) manager level for the profitability of their respective areas of responsibility.

     Maintain Well-Defined Professional Management Organization

     In order to ensure professionalism and consistency in Central Parking’s operations, provide a career path opportunity for its managers, and achieve a balance between autonomy and accountability, Central Parking has established a structured management organization.

     For its managerial positions, Central Parking seeks to recruit college graduates or people with previous parking services or hospitality industry experience, and requires that they undergo a training program. New managers typically are assigned to a particular facility where they are supervised as they manage one to five employees. The Company’s management trainee program teaches a wide variety of skills, including organizational skills and basic management techniques. As managers develop and gain experience, they have the opportunity to assume expanded responsibility, be promoted to higher management levels and increase the performance-based component of their compensation. This well-defined structure provides a career path that is designed to be an attractive opportunity for prospective new hires. In addition, management believes the training and advancement program has enabled Central Parking to instill a high level of professionalism in its employees.

     Implement Technology

     Management believes that the Company’s application of technology to its operations represents a competitive advantage over smaller operators with more limited resources. Central Parking has implemented computerized access card tracking and accounting systems and automated paystations in certain of its facilities and is considering the implementation of automated payment and tracking systems at additional facilities.

     Strategically Expand Ancillary Service Offerings

     Central Parking provides services that are complementary to parking facility management. These services include consulting services (parking facility design, layout and utilization); on-street parking fee collection and enforcement services; parking and user fee collection and enforcement services in parks and recreational areas; shuttle bus and van services; automated paystations; accounts receivable billing systems and services; and airport luggage carts. These ancillary services did not constitute a significant portion of Central Parking’s revenues in fiscal year 2004, but management believes that the provision of ancillary services can be important in obtaining new business and preparing the Company for future changes in the parking industry.

     Focus on Retention of Patrons

     For the Company to succeed, its parking patrons must have a positive experience at Company facilities. Accordingly, the Company seeks to have well lit, clean facilities and cordial employees. Each facility manager has primary responsibility for the environment at the facility, and is evaluated on his or her ability to retain parking patrons. The Company also monitors customer satisfaction through customer surveys.

     Maintain Disciplined Facility Site Selection Analysis

     In existing markets, the facility site selection process begins with identification of a possible facility site and the analysis of projected revenues and costs at the site by general managers and regional managers. The managers then typically conduct an examination of a location’s potential demand based on traffic patterns and counts, area demographics, and potential competitors. Pro forma financial statements are then developed and a Company representative will meet with the property owner to discuss the terms and structure of the agreement.

     The Company seeks to distinguish itself from its competitors by combining a reputation for professionalism and quality management with operating strategies designed to increase the revenues of parking operations for its clients. The Company’s clients include some of the nation’s largest owners, developers and managers of mixed-use projects, office buildings and hotels as well as municipalities and other governmental agencies and airport authorities. Parking facilities operated by the Company include, among others, certain terminals operated by BAA Heathrow International Airport (London), Houston Airport, Detroit Airport, Strategic Rail Authority Parking (London), the Prudential Center (Boston), Turner Field (Atlanta), Coors Field (Denver), and various parking facilities owned by the Hyatt and Westin hotel chains, the Rouse Company, Faison Associates, May Department Stores, Trizec Office Properties, Jones Lang LaSalle, Millenium Partners, Shorenstein and Crescent Real Estate. None of these clients accounted for more than 5% of the Company’s total revenues for fiscal year 2004.

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Acquisitions

     The Company’s acquisition strategy is very selective and focuses primarily on acquisitions that the Company believes will enable it to become a more efficient and cost-effective provider in selected markets. The strategy also focuses on businesses that have the potential to enhance future cash flows and can be acquired at reasonable valuations. Central Parking believes it has the opportunity to recognize certain economies of scale by making acquisitions in markets where the Company already has a presence. Management believes acquisitions also can be an effective means of entering new markets, thereby quickly obtaining both operating presence and management personnel. The Company’s acquisitions over the last three years, all of which were accounted for under the purchase method of accounting, are as follows: USA Parking Systems, Inc. and Universal Park Holdings in October 2001; a 70% interest in Lexis Systems, Inc. in October 2001; Park One of Louisiana, LLC in January 2002; and Sterling Parking LTD in May 2003. No acquisitions were made in 2004. See Note 2 to the Consolidated Financial Statements and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Sales and Marketing

     Central Parking’s sales and marketing efforts are designed to expand its operations by developing and maintaining relationships with major real estate developers and asset managers, business and government leaders, and other clients. Central Parking encourages its managers to pursue new opportunities at the local level while selectively targeting key clients and projects at a national level.

     Local

     At the local level, Central Parking’s sales and marketing efforts are decentralized and directed towards identifying new expansion opportunities within a particular city or region. Managers are trained to develop the business contacts necessary to generate new opportunities and monitor their local markets for take-away and outsourcing opportunities. Central Parking provides its managers with a significant degree of autonomy in order to encourage prompt and effective responses to local market demands, which is complemented by management support and marketing training through Central Parking’s corporate offices. By developing business contacts locally, Central Parking’s managers often get the opportunity to bid on projects when asset managers and property owners are dissatisfied with other operators and also learn in advance of possible new projects.

     National

     At the national level, Central Parking’s marketing efforts are undertaken primarily by upper-level management, which targets developers, governmental entities, the hospitality industry, mixed-use projects, and medical facilities. These efforts are directed at operations that generally have national name recognition, substantial demand for parking related services, and the potential for nationwide growth. For example, Central Parking’s current clients include, among other national real estate companies and hotel chains, the Rouse Company, Millennium Partners, Faison Associates, Shorenstein, May Department Stores, Crescent Real Estate, Trizec Office Properties, Jones Lang LaSalle, Westin Hotels, Ritz Carlton Hotels and Hyatt Hotels. Management believes that providing high-quality, efficient services to such companies can lead to additional opportunities as those clients expand their operations. Management believes outsourcing by parking facility owners will continue to be a source for additional facilities, and management believes the Company’s global presence, experience and reputation with large real estate asset managers give it a competitive advantage in this area.

     International

     Central Parking’s international operations began in the early 1990’s with the formation of an international division. The Company typically enters foreign markets either through consulting projects or by forming joint ventures with established local entities. Consulting projects allow Central Parking to establish a presence and evaluate the prospects for growth in a given market without investing a significant amount of capital. Likewise, forming joint ventures with local partners allows Central Parking to enter new foreign markets with reduced operating and investment risks.

     Operations in London began in 1991 with a single consulting agreement and, as of September 30, 2004, had grown to 86 locations in the United Kingdom including four airports, eight rail operating companies and parking meter enforcement and ticketing services for thirteen local governments that have privatized these services. Central Parking began expansion into Mexico in July 1994 by forming a joint venture with Gaccion, (formerly Fondo Opcion), an established Mexican developer, and as of September 30, 2004, operated 105 facilities in Mexico. As of September 30, 2004, Central Parking also operated 142 facilities in Canada, 5 facilities in Spain, 7 in Poland, 25 in Chile, 9 in Venezuela, 12 in Colombia, 7 in Peru, 1 in Switzerland, and 6 in Greece. The Company also operates on-street parking services in the United Kingdom, Germany and the Republic of Ireland. In 1996, Central Parking acquired a

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50% equity interest in a joint venture, which operated 19 facilities in Germany as of September 30, 2004. To manage its international expansion efforts, the Company has allocated responsibilities for international operations to the President of International Operations.

Operating Arrangements

Central Parking operates parking facilities under three general types of arrangements: management contracts, leases, and fee ownership. The following table sets forth certain information regarding the number of managed, leased, or owned facilities as of the specified dates:

     See Item 2. Properties for certain information regarding the Company’s managed, leased and owned facilities. The general terms and benefits of these types of arrangements are discussed below. Financial information regarding these types of arrangements is set forth in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

     Management Contracts

     Management contract revenues consist of management fees (both fixed and performance based) and fees for ancillary services such as insurance, accounting, benefits administration, equipment leasing, and consulting. The cost of management contracts includes insurance premiums and claims and other indirect overhead. The Company’s responsibilities under a management contract as a facility manager generally include hiring, training, and staffing parking personnel, and providing collections, accounting, record keeping and insurance. Most management contracts provide that the Company is reimbursed for out-of-pocket expenses. Central Parking is not responsible under most of its management contracts for structural, mechanical, or electrical maintenance or repairs, or for providing security or guard services or for paying property taxes. In general, management contracts are for terms of one to three years and are renewable for successive one-year terms, but are typically cancelable by the property owner on 30 days’ notice. With respect to insurance, the Company’s clients have the option of obtaining liability insurance on their own or having Central Parking provide insurance as part of the services provided under the management contract. Because of the Company’s size and claims experience, management believes it can purchase such insurance at lower rates than the Company’s clients can generally obtain on their own.

     Leases

     The Company’s leases generally require the payment of a fixed amount of rent, regardless of the amount of revenues or profitability generated by the parking facility. In addition, many leases also require the payment of a percentage of gross revenues above specified threshold levels. In general, leased facilities require a longer commitment, a larger capital investment for the Company, and represent a greater risk than managed facilities due to the relatively fixed nature of expenses. However, leased facilities often provide a greater opportunity for long-term growth in revenues and profits. The cost of parking includes rent, payroll and related benefits, depreciation, maintenance, insurance, and general operating expenses. Under its leases, the Company is typically responsible for all facets of the parking operations, including pricing, utilities, and routine maintenance. In short to medium term leases, the Company is generally not responsible for structural, mechanical or electrical maintenance or repairs, or property taxes. However, the Company does often have these responsibilities in longer-term leases. Lease arrangements are typically for terms of three to twenty years, and generally provide for increases in base rent that are either pre-determined and recognized on a straight line basis or based on indices changes, such as the Consumer Price Index, and recognized when incurred.

     Fee Ownership

     Ownership of parking facilities, either independently or through joint ventures, typically requires a larger capital investment and greater risk than managed or leased facilities, but provides maximum control over the operation of the parking facility and the greatest profit potential of the three types of operating arrangements. All owned facility revenues flow directly to the Company, and the Company has the potential to realize benefits of appreciation in the value of the underlying real estate if the property is sold. The ownership of a parking facility brings the Company complete responsibility for all aspects of the property, including all structural, mechanical or electrical maintenance or repairs and property taxes.

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     Joint Ventures

     The Company often seeks joint venture partners who are established local or regional real estate developers pursuing financing alternatives for development projects. Joint ventures typically involve a 50% interest in a development where the parking facility is a part of a larger multi-use project, allowing the Company’s joint venture partners to benefit from a capital infusion to the project. Joint ventures offer the revenue growth potential of ownership with a partial reduction in capital requirements. The Company has interests in joint ventures that own or operate parking facilities located in the United States as well as Mexico, Germany, Poland, Greece, Venezuela, Colombia and Peru.

     DBE Partnerships

     Central Parking is a party to a number of disadvantaged business enterprise partnerships. These are generally partnerships formed by Central Parking and a disadvantaged business person to manage a facility. Central Parking generally owns 60% to 75% of the partnership interests in each partnership and typically receives management fees before partnership distributions are made to the partners.

Competition

     The parking industry is fragmented and highly competitive with relatively low barriers to entry. The Company competes with a variety of other companies to manage, lease and own parking facilities, and faces competition for customers and employees to operate parking facilities. Although there are relatively few large, national parking companies that compete with the Company, numerous companies, including real estate developers, hotel and property management companies, and national financial services companies either compete currently or have the potential to compete with parking companies. Municipalities and other governmental entities also operate parking facilities that compete with Central Parking. In addition, the Company faces competition from numerous regional and local parking companies and from owner-operators of facilities who are potential clients for the Company’s management services. Construction of new parking facilities near the Company’s existing facilities increases the competition for customers and employees and can adversely affect the Company’s business.

     Management believes that it competes for management clients based on a variety of factors, including fees charged for services; ability to generate revenues and control expenses for clients; accurate and timely reporting of operational results; quality of customer service; and ability to anticipate and respond to industry changes. Factors that affect the Company’s ability to compete for leased and owned locations include the ability to make capital investments, pre-paid rent payments and other financial commitments; long-term financial stability; and the ability to generate revenues and control expenses. The Company competes for parking customers based primarily on rates charged for parking; convenience (location) of the facility; and quality of customer service. Factors affecting the Company’s ability to compete for employees include wages, benefits and working conditions.

Seasonality

     The Company’s business is subject to a modest amount of seasonality. Historically, the Company’s results have been strongest during the quarters that end on December 31 and June 30. The Company attributes the relative weakness of the quarters that end on March 31 and September 30 to, among other factors, winter weather and summer vacations. There can be no assurance that this trend will continue in future years. For further discussion of this issue see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Insurance

     The Company purchases comprehensive liability insurance covering certain claims that occur at parking facilities it owns, leases or manages. The primary amount of such coverage is $1 million per occurrence and $2 million in the aggregate per facility. In addition, the Company purchases umbrella/excess liability coverage. The Company’s various liability insurance policies have deductibles of up to $350,000 that must be met before the insurance companies are required to reimburse the Company for costs and liabilities relating to covered claims. The Company purchases a worker’s compensation policy with a per claim deductible of $250,000. The Company utilizes a third party administrator to process and pay filed worker’s compensation claims. The Company also provides health insurance for many of its employees and purchases a stop-loss policy with a deductible of $150,000 per claim. As a result, the Company is, in effect, self-insured for all claims up to the deductible levels.

     Because of the size of the operations covered and its claims experience, the Company purchases liability insurance policies at prices that management believes represent a discount to the prices that would typically be charged to parking facility owners on a stand-alone basis. Pursuant to its management contracts, the Company charges its management clients for insurance at rates it believes are competitive. In each case, the Company’s management clients have the option of purchasing their own policies, provided the

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Company is named as an additional insured. A reduction in the number of clients that purchase insurance through the Company could have a material adverse effect on the operating earnings of the Company. In addition, a material increase in insurance costs due to an increase in the number of claims, higher claims costs or higher premiums paid by the Company could have a material adverse effect on the operating earnings of the Company. In this regard, the Company has experienced a substantial increase in the premiums it pays for insurance in recent years and the Company has experienced a significant increase in claims costs, including liability, group health, and worker’s compensation. These increased costs have adversely affected the Company’s profitability. The Company has been able to recover a portion of these increased costs through cost sharing programs, however, there can be no assurance the Company will be able to fully recover or reduce these increased costs.

Regulation

     The Company’s business is subject to numerous federal, state and local laws and regulations, and in some cases, municipal and state authorities directly regulate parking facilities. The facilities in New York City are, for example, subject to extensive governmental restrictions concerning numbers of cars, pricing, structural integrity and certain prohibited practices. Many cities impose a tax or surcharge on parking services, which generally range from 10% to 50% of revenues collected. Several state and local laws have been passed in recent years that encourage car-pooling and the use of mass transit or impose certain restrictions on automobile usage. These types of laws have adversely affected the Company’s revenues and could continue to do so in the future. An example was the restrictions imposed by the City of New York in the wake of the September 11 terrorist attacks, which included street closures, traffic flow restrictions and a requirement for passenger cars entering certain bridges and tunnels to have more than one occupant during the morning rush hour. Although these restrictions have been eased, the City of New York has considered other actions, including higher tolls, increased taxes and vehicle occupancy requirements in certain circumstances, which could adversely impact the Company. The Company is also affected by zoning and use restrictions, increases in real estate taxes, and other laws and regulations that are common to any business that owns real estate.

     The Company is subject to numerous federal, state and local employment and labor laws and regulations, including Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Family Medical Leave Act, wage and hour laws, and various state and local employment discrimination and human rights laws. Several cities in which the Company has operations either have adopted or are considering the adoption of so-called “living wage” ordinances which could adversely impact the Company’s profitability by requiring companies that contract with local governmental authorities and other employers to increase wages to levels substantially above the federal minimum wage. In addition, the Company is subject to provisions of the Occupational Safety and Health Act of 1970, as amended (“OSHA”) and related regulations. Various other governmental regulations affect the Company’s operation of parking facilities, both directly and indirectly, including the Americans with Disabilities Act (“ADA”). Under the ADA, public accommodations, including many parking facilities, are required to meet certain federal requirements related to access and use by disabled persons. For example, the ADA generally requires garages to include handicapped spaces, headroom for wheelchair vans, and elevators that are operable by disabled persons.

     Under various federal, state and local environmental laws, ordinances and regulations, a current or previous owner or operator of real property may be liable for the costs of removal or remediation of hazardous or toxic substances on, under or in such property. Such laws typically impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. In connection with the ownership or operation of parking facilities, the Company may be liable for any such costs. Although Central Parking is currently not aware of any material environmental claims pending or threatened against it, there can be no assurance that a material environmental claim will not be asserted against the Company. The cost of defending against claims of liability, or remediating a contaminated property, could have a material adverse effect on the Company’s financial condition or results of operations.

     The Company also is subject to various federal and state antitrust and consumer laws and regulations including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), which requires notification filings and waiting periods in connection with certain mergers and acquisitions. In connection with the Company’s merger with Allright Corporation (“Allright”) in March 1999, the Antitrust Division of the United States Department of Justice filed a complaint in U.S. District Court for the District of Columbia seeking to enjoin the merger on antitrust grounds. In addition, the Company received notices from several states, including Tennessee, Texas, Illinois and Maryland, that the attorneys general of those states were reviewing the merger from an antitrust perspective. Several of these states also requested certain information relating to the merger and the operations of Central Parking and Allright in the form of civil investigative demands. Central Parking and Allright entered into a settlement agreement with the Antitrust Division on March 16, 1999, under which the two companies agreed to divest a total of 74 parking facilities in 18 cities, representing approximately 18,000 parking spaces. The settlement agreement also prohibited Central Parking and Allright from,

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among other things, operating any of the divested properties for a period of two years following the divestiture of each facility. The two-year prohibition on operating the divested properties has expired. None of the states that reviewed the transaction from an antitrust perspective became a party to the settlement agreement with the Antitrust Division and several of the states continued their investigation of the merger after the Allright merger was consummated. The completion of any future mergers or acquisitions by the Company is subject to the filing requirements described above and possible review by the Department of Justice or the Federal Trade Commission and various state attorneys general. Certain of the Company’s fee collection activities are subject to federal and state consumer protection or debt collection laws and regulations.

Employees

     As of September 30, 2004, the Company employed 22,537 individuals, including 17,410 full-time and 5,127 part-time employees. Approximately 4,300 U.S. employees are represented by labor unions. Various union locals represent parking attendants and cashiers at the New York City facilities. Other cities in which some of the Company’s employees are represented by labor unions include Washington, D.C., Miami, Detroit, Philadelphia, San Francisco, Jersey City, Newark, Atlantic City, Pittsburgh, Los Angeles, St. Louis, Columbus, Chicago and San Juan, Puerto Rico. The Company frequently is engaged in collective bargaining negotiations with various union locals but has not experienced any significant labor strikes. Management believes that the Company’s employee relations are good.

Service Marks and Trademarks

     The Company has registered the names CPC, Central Parking System and Central Parking Corporation, and its logo with the United States Patent and Trademark Office and has the right to use them throughout the United States except in certain areas, including the Chicago and Atlantic City areas where two other companies have the exclusive right to use the name “Central Parking.” The Company also owns registered trademarks for Square Industries, Kinney System, Allied Parking and Allright Parking and operates various parking locations under those names. The Company uses the name “Chicago Parking System” in Chicago and “CPS Parking” in Seattle and Milwaukee. The Company has registered the name “Control Plus” and its symbol in London and has registered that name and symbol in association with its on-street parking activities in Richmond, Virginia. The Company has registered the name “Centra” and its symbol in London in connection with the Company’s transportation operations. The Company has registered, or intends to register, its name and logo in various international locations where it does business.

Foreign and Domestic Operations

     For information about the Company’s foreign and domestic operations refer to Note 17 to the Consolidated Financial Statements.

Available Information

     The Company files reports with the Securities and Exchange Commission (“SEC”), including annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Copies of the Company’s reports filed with the SEC may be obtained by the public at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The Company files such reports with the SEC electronically, and the SEC maintains an Internet site at www.sec.gov that contains the Company’s reports, proxy and information statements, and other information filed electronically. The Company’s website address is www.parking.com. The Company also makes available, free of charge through the Company’s website, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other materials filed with the SEC as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC. The information provided on the Company’s website is not part of this report, and is therefore not incorporated by reference unless such information is otherwise specifically referenced elsewhere in this report.

Item 2. Properties

     The Company’s facilities, as of September 30, 2004, are organized into 8 segments which are subdivided into 23 regions as detailed below. Each region is supervised by a regional manager who reports directly to one of the senior vice presidents. Regional managers oversee four to six general managers who each supervise the Company’s operations in a particular city. The following table summarizes certain information regarding the Company’s facilities as of September 30, 2004

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     The Company’s facilities include both surface lots and structured parking facilities (garages). Approximately 17% of the Company’s owned parking properties are in structured parking facilities, with the remainder in surface lots. Each year the Company expends significant funds to repair and maintain parking facilities. Management believes the Company’s owned facilities generally are in good condition and are adequate for its present needs.

A summary of the facilities operated domestically and internationally by Central Parking as of September 30, 2004 is as follows:

(1)

Operated through unconsolidated 50% owned joint ventures

The table below sets forth certain information regarding the Company’s managed, leased and owned facilities in the periods indicated.

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(1)

The renewal rate calculation is 100% minus deleted locations divided by the sum of the beginning of the year, acquired and added during the year for management locations.

(2)

Includes the Company’s corporate headquarters in Nashville, Tennessee.

Item 3. Legal Proceedings

     The ownership of property and provision of services to the public entails an inherent risk of liability. Although the Company is engaged in routine litigation incidental to its business, there is no legal proceeding to which the Company is a party which, in the opinion of management, is likely to have a material adverse effect upon the Company’s financial condition, results of operations, or liquidity, except as set forth below. The Company carries liability insurance against certain types of claims such as bodily injury that management believes meets industry standards; however, there can be no assurance that any legal proceedings (including any related judgments, settlements or costs) will not have a material adverse effect on the Company’s financial condition, liquidity or results of operations.

     In June and July 2003, four stockholders filed separate lawsuits against the Company, its former CEO, its former CFO and its current CEO in the U. S. District Court for the Middle District of Tennessee. The plaintiff in each case sought to represent a plaintiff class of purchasers of Central Parking’s Common Stock. The plaintiff in each case claimed that the defendants made material misrepresentations and/or omissions in connection with the Company’s financial statements for the quarter and fiscal year ended September 30, 2002 and about the Company’s internal controls in violation of the Securities Exchange Act of 1934, which allegedly caused the plaintiffs to buy Company stock at inflated prices. The cases have been consolidated by the Court. By order dated December 10, 2003, the Court has consolidated the cases now identified as In re: Central Parking Corporation Securities Litigation, civil action No. 03-CV-0546, appointed two individuals as co-lead plaintiffs and approved their selection of counsel. The plaintiffs filed an amended complaint on February 13, 2004, in which plaintiffs added the Company’s Independent Registered Public Accountant as a defendant and in which the plantiffs added a number of allegations. The amended complaint also seeks to extend the putative class period during which investors purchased the Company’s Common Stock by approximately nine months (the new class period is February 5, 2002 to February 13, 2003). On April 23, 2004, the defendants filed motions to dismiss the lawsuit. On August 11, 2004, the court dismissed all claims against the Company’s Independent Registered Public Accountant, but denied the motion to dismiss with respect to the Company and the individual defendants. The parties have agreed to participate in non-binding mediation, and trial has been scheduled for September 6, 2005. The litigation is in its preliminary stages and the amount of potential loss, if any, cannot reasonably be estimated.

     In October 2004, two shareholders filed separate derivative complaints asserting breaches of fiduciary duty by certain present and former officers and directors of the Company. The Company was named as a nominal defendant in these cases. No demand to initiate either action was made prior to the filing of these lawsuits. The complaints allege that the defendants breached their fiduciary

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duty by failing to insure that the Company maintained adequate internal controls over its financial reporting regarding accounts payable and receivables. These cases have been consolidated under the name Earl Porter, Derivatively on Behalf of Nominal Defendant, Central Parking Corporation v. James H. Bond, Monroe J. Carell, Jr., Cecil Conlee, Hiram A. Cox, Lewis Katz, Edward G. Nelson, William C. O’Neil, Jr., Julia Carell Stadler, Richard H. Sinkfield, and William J. Vareschi, Jr., Docket No. 04-2857-I, Chancery Court for the State of Tennessee, Davidson County. The individual defendants have filed a motion for summary judgement or, in the alternative, to dismiss the case. The parties have tentatively agreed to participate in non-binding mediation of these claims, but the litigation is in its preliminary stages, and no prediction can be made regarding the ultimate outcome.

     The Company arbitrated a rent dispute relating to a five-year real estate lease extension that began in December 2003. The extension provided for a base rent equal to the greater of $4.75 million annually or fair market value, with an annual rent increase of 1.5%. On December 13, 2004, the arbitrator ruled that the annual base rent would increase to $7.45 million for the five-year extension period.

Item 4. Submission of Matters to a Vote of Security-Holders

     No matter was submitted to a vote of the Company’s security-holders during the fourth quarter of the fiscal year ended September 30, 2004.

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PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

     (a) The Registrant’s common stock is listed on the NYSE under the symbol “CPC.” The following table sets forth, for the periods indicated, the high and low sales prices for the Company’s common stock as reported by the NYSE.

     (b) There were, as of September 30, 2004, approximately 6,862 holders of the Company’s common stock, based on the number of record holders of the Company’s common stock and an estimate of the number of individual participants represented by security position listings.

     (c) Since April 1997, Central Parking has distributed a quarterly cash dividend of $0.015 per share of Central Parking common stock. The Company’s Board currently intends to declare a cash dividend each quarter depending on Central Parking’s profitability and future capital requirements. Central Parking reserves the right, however, to retain all or a substantial portion of its earnings to finance the operation and expansion of Central Parking’s business. As a result, the future payment of dividends will depend upon, among other things, the Company’s profitability, capital requirements, financial condition, growth, business opportunities, and other factors that the Central Parking Board may deem relevant, including restrictions in any then-existing credit agreement. The Company’s existing credit facility contains certain covenants including those that require the Company to maintain certain financial ratios, restrict further indebtedness, and limit the amount of dividends payable; however, the Company does not believe these restrictions limit its ability to pay currently anticipated cash dividends. In addition, Central Parking Finance Trust (the “Trust”), a Delaware statutory business trust, of which all of the common securities are owned by the Company, has issued preferred securities (the “Trust Issued Preferred Securities”) and has invested the proceeds thereof in an equivalent amount of 5.25% Convertible Subordinated Debentures (“Convertible Debentures”) of the Company. Pursuant to the Convertible Debentures, the Company is prohibited from paying dividends on its common stock if the quarterly distributions on the Trust Issued Preferred Securities are not made. See Note 10 to the Consolidated Financial Statements.

     (d) The following table is for the presentation of securities authorized for issuance under equity compensation plans as of September 30, 2004.

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Item 6. Selected Financial Data

     Selected financial data of the Company is set forth below for each of the periods indicated. Certain of the statement of operations, per share, and balance sheet data were derived from the audited consolidated financial statements of the Company. All of the information set forth below should be read in conjunction with Item 8. Company’s “Financial Statements and Supplementary Data” and with Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Amounts in thousands, except share and employee data

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(1)		Reflects the Company’s adoption in 2002 of Statement of Financial Accounting Standards (SFAS) No. 142 for the transitional impairment of goodwill of $9.3 million, net of tax of $28 thousand. Reflects the Company’s adoption in 2001 of Staff Accounting Bulletin (SAB) 101 related to revenue recognition of $259 thousand, net of tax of $171 thousand.
(2)		Reflects information as of September 30 of the respective fiscal year.
(3)		Based on number of shares outstanding and closing market price as of September 30.
(4)		Reflects return on equity calculated using fiscal year net earnings (loss) divided by average shareholders’ equity for the fiscal year.
NM		Not meaningful

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

Overview

     The Company operates parking facilities under three types of arrangements: leases, fee ownership, and management contracts. Revenues from leased and owned properties are categorized in the Company’s financial statements as parking revenues. Cost of parking relates to both leased and owned facilities and includes rent, payroll and related benefits, depreciation, maintenance, insurance and general operating expenses. The Company experienced a net decline in the number of leased and owned locations in 2004 of 185 locations (110 additional leased and owned locations offset by 236 lost or sold locations and 59 locations that were converted to management agreements or consolidated with existing locations). Management contract revenues consist of management fees (both fixed and performance based) and fees for ancillary services such as insurance, accounting, benefits administration, equipment leasing, and consulting. The cost of management contracts includes insurance premiums and claims and other indirect overhead. The Company experienced a net decline in the number of managed facilities in 2004 of 99 locations (225 additional managed locations offset by 324 lost locations during the year).

Critical Accounting Policies

     Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. Accounting estimates are an integral part of the preparation of the financial statements and the financial reporting process and are based upon current judgments. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Certain accounting estimates are particularly sensitive because of their complexity and the possibility that future events affecting them may differ materially from the Company’s current judgments and estimates.

     This listing of critical accounting policies is not intended to be a comprehensive list of all of the Company’s accounting policies. In many cases, the accounting treatment of a particular transaction is specifically dictated by U. S. generally accepted accounting principles, with no need for management’s judgment regarding accounting policy. The Company believes that of its significant accounting policies, as discussed in Note 1 to the consolidated financial statements included herein for the year ended September 30, 2004, the following involve a higher degree of judgment and complexity:

     Impairment of Long-Lived Assets and Goodwill

     As of September 30, 2004, the Company’s long-lived assets were comprised primarily of $380.3 million of property, equipment and leasehold improvements and $89.0 million of contract and lease rights. In accounting for the Company’s long-lived assets, other than goodwill and other intangible assets, the Company applies the provisions of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. As of September 30, 2004, the Company had $232.6 million of goodwill. The Company accounts for goodwill and other intangible assets under the provisions of SFAS No. 142, Goodwill and Other Intangible Assets.

     The determination and measurement of an impairment loss under these accounting standards require the significant use of judgment and estimates. The determination of fair value of these assets utilizes cash flow projections that assume certain future revenue and cost levels, assumed discount rates based upon current market conditions and other valuation factors, all of which involve the use of significant judgment and estimation. The Company recorded impairment losses of approximately $5.5 million in property related losses and an additional $1.3 million in discontinued operations during the year ended September 30, 2004 as a result of certain locations that were either under performing, terminated, disposed, or prematurely closed. Future events may indicate differences from management’s judgments and estimates which could, in turn, result in increased impairment charges in the future. Future events that may result in increased impairment charges include increases in interest rates, which would impact discount rates, unfavorable economic conditions or other factors which could decrease revenues and profitability of existing locations, and changes in the cost structure of existing facilities. For the fiscal year ended September 30, 2003, the Company recorded $7.6 million of impairment charges related to long-lived assets in continuing operations and $4.4 million of impairment charges related to long-lived assets in discontinued operations.

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     Contract and Lease Rights

     As of September 30, 2004, the Company had $89.0 million of contract and lease rights. The Company capitalizes payments made to third parties, which provide the Company the right to manage or lease facilities. Lease rights and management contract rights which are purchased individually are amortized on a straight-line basis over the terms of the related agreements, which range from 5 to 30 years. Management contract rights acquired through acquisition of an entity are amortized as a group over the estimated term of the contracts, including anticipated renewals and terminations based on the Company’s historical experience (typically 15 years). If the renewal rate of contracts within an acquired group is less than initially estimated, accelerated amortization or impairment may be necessary.

     Allowance for Doubtful Accounts

     As of September 30, 2004, the Company had $50.1 million of trade receivables, including management accounts receivable and accounts receivable - other. Additionally, the Company had a recorded allowance for doubtful accounts of $3.2 million. The Company reports management accounts receivable, net of an allowance for doubtful accounts, to represent its estimate of the amount that ultimately will be realized in cash. The Company reviews the adequacy of its allowance for doubtful accounts on an ongoing basis, using historical collection trends, analyses of receivable portfolios by region and by source, aging of receivables, as well as review of specific accounts, and makes adjustments in the allowance as necessary. Changes in economic conditions, specifically in the Northeast United States, could have an impact on the collection of existing receivable balances or future allowance considerations. As of September 30, 2003, the Company had $49.6 million of trade receivables, including management accounts receivable and accounts receivable — other.

     Lease Termination Costs

     The Company has recognized lease termination costs related to disposal activities initiated after December 31, 2002 in accordance with SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities, in its financial statements. Lease termination costs related to disposal activities initiated prior to December 31. 2002, were recognized in accordance with Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). Lease termination costs are based upon certain estimates of liabilities related to costs to exit an activity. Liability estimates may change as a result of future events, such as the settlement of a lease termination for an amount less than the amount contractually required.

     Insurance

     The Company purchases comprehensive liability insurance covering certain claims that occur at parking facilities it owns, leases or manages. The primary amount of such coverage is $1 million per occurrence and $2 million in the aggregate per facility. In addition, the Company purchases umbrella/excess liability coverage. The Company’s various liability insurance policies have deductibles of up to $350,000 that must be met before the insurance companies are required to reimburse the Company for costs incurred relating to covered claims. In addition, the Company’s worker’s compensation program has a deductible of $250,000. The Company also provides health insurance for many of its employees and purchases a stop-loss policy with a deductible of $150,000 per claim. As a result, the Company is, in effect, self-insured for all claims up to the deductible levels. The Company applies the provisions of SFAS No. 5, Accounting for Contingencies, in determining the timing and amount of expense recognition associated with claims against the Company. The expense recognition is based upon management’s determination of an unfavorable outcome of a claim being deemed as probable and reasonably estimable, as defined in SFAS No. 5. This determination requires the use of judgment in both the estimation of probability and the amount to be recognized as an expense. The Company engages an actuary to assist in determining the estimated liabilities for customer injury, employee medical costs and worker’s compensation claims. Management utilizes historical experience with similar claims along with input from legal counsel in determining the likelihood and extent of an unfavorable outcome for certain general litigation. Future events may indicate differences from these judgments and estimates and result in increased expense recognition in the future.

     Income Taxes

     The Company uses the asset and liability method of SFAS No. 109, Accounting for Income Taxes, to account for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company has certain net operating loss carry forwards which expire between 2005 and 2018. The ability of the Company to fully utilize these net operating losses to offset taxable income is limited due to changes in ownership of the companies which generated these losses. These limitations have been

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considered in the determination of the Company’s deferred tax asset valuation allowance. The valuation allowance was established for certain net operating loss carry forwards where their recoverability is deemed to be uncertain. The carrying value of the Company’s net deferred tax assets assumes that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions. If these estimates and related assumptions change in the future, the Company will be required to adjust its deferred tax valuation allowances.

     During fiscal year 2003, the Company eliminated deferred tax valuation allowances on acquired operating loss carry forwards totaling $11,949,000, because management determined that the deferred tax assets from these operating loss carry forwards would be realized. Since these deferred tax assets were obtained from previous acquisitions where goodwill was recorded, the Company reduced such goodwill by the amount of the elimination of the deferred tax valuation allowance.

Results of Operations

     Year Ended September 30, 2004 Compared to Year Ended September 30, 2003

     Parking revenues in fiscal year 2004 decreased to $585.8 million from $589.4 million in fiscal year 2003, a decrease of $3.6 million, or 0.6%. The decrease resulted from the conversion of certain contracts from lease agreements to management agreements which totaled $15.3 million, partially offset by a net gain of $11.6 million in revenues from new locations. The Company experienced an increase in same store sales of $4.0 million for fiscal year 2004 compared to fiscal year 2003 for the Company.

     Management contract and other revenues (excluding reimbursement of management contract expenses) increased in fiscal year 2004 to $127.1 million from $119.5 million in fiscal year 2003, an increase of $7.6 million, or 6.3%. The majority of the increase is due to the conversion of certain contracts from lease arrangements to management agreements and $3.8 million of new business and increased ancillary income.

     Cost of parking in fiscal year 2004 decreased to $534.6 million or 91.3% of parking revenues from $547.2 million or 92.8% of parking revenues in fiscal year 2003, a decrease of $12.6 million, or 2.3%. The decrease is primarily due to a decrease in payroll expense of $5.7 million, lower rent expense of $2.4 million, $2.6 million decrease in depreciation expense, $1.5 million decrease in supplies, and $0.4 million decrease in snow removal and other expenses.

     Cost of management contracts in fiscal year 2004 decreased to $58.2 million from $65.6 million in fiscal year 2003. The cost of management contracts, as a percentage of management contract and other revenues, excluding reimbursement of management contract expenses, was 45.8% in fiscal year 2004 compared to 54.9% in fiscal year 2003. The decrease in cost was primarily caused by a decrease of $3.9 million in bad debt expense, a decrease in commercial and employment claims of $1.4 million, a decrease of $1.0 million of liability insurance expense, and $1.0 million decrease in other miscellaneous costs.

     General and administrative expenses decreased to $71.9 million in 2004 from $83.4 million in 2003, a decrease of $11.5 million, or 13.8%. This decrease is due to a reduction of $5.3 million in severance expense, $4.8 million in compensation expense, and $1.4 million in professional fees and other expenses. General and administrative expenses decreased as a percentage of total revenue (excluding reimbursement of management contract expenses) to 10.1% in 2004 from 11.8% in 2003.

     Net property-related gains for fiscal year 2004 were $7.7 million compared to losses of $7.6 million in fiscal year 2003. The $7.7 million gain was comprised of a $6.3 million gain on the sale of property in New York, a $5.8 million gain on the sale of property in Rhode Island and $2.2 million of gains on other properties sold, which the Company plans to continue to operate. The gains on the sale of property were offset by $6.6 million of impairments of contract rights, deferred expenses and leasehold improvements related to locations which management plans to continue to operate. The $7.6 million loss in 2003 was comprised of impairments of $3.6 million of contract rights and deferred expenses and $4.0 million of leasehold improvements related to locations which management plans to continue to operate. Impairment charges recognized in fiscal year 2004 and 2003 were based on estimated fair values using projected cash flows of the applicable parking facility discounted at the Company’s average cost of funds. Management determined that the projected cash flows for these locations would not be enough to recover the remaining value of the assets.

     The Company adopted the provisions of SFAS No. 144 on October 1, 2002. In addition to providing enhanced guidance on identifying and measuring impairments of long-lived assets, SFAS No. 144 requires that the operating results from certain disposals of a parking facility be reflected as discontinued operations. SFAS No. 144 also requires that gains, losses and impairments resulting from the designation of a parking facility as held-for-sale be reflected as discontinued operations. For fiscal year 2004, the Company either disposed of or designated as held-for-sale or disposal certain locations, resulting in loss from cost of parking as a percent of revenues is anticipated to increase in fiscal year 2005 due to rent escalations and arbitration results. See Item 3 for additional information.

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discontinued operations of $3.0 million. Included in discontinued operations in 2004 is $1.9 million of losses from the sale of property and $1.3 million of impairment charges related to certain properties held for sale, offset by earnings from discontinued operations of $0.2 million. The Company’s 2003 and 2002 results were reclassified to reflect the operations of these locations as discontinued operations, net of related income taxes.

     Interest income in fiscal year 2004 increased to $4.9 million from $4.7 million in fiscal year 2003. Interest expense decreased in fiscal year 2004 to $20.5 million from $22.0 million in fiscal year 2003 due primarily to a decrease in the average balance outstanding in 2004. The weighted average balance outstanding for the Company’s debt obligations and subordinated convertible debentures was $306.3 million during the fiscal year ended September 30, 2004, at a weighted average interest rate of 5.9% compared to a weighted average balance outstanding of $361.0 million at a weighted average rate of 5.8% during the fiscal year ended September 30, 2003. Deferred finance costs were included in the calculation of the weighted average interest rate.

     On June 28, 2002, the Company repurchased 138,800 shares of the subordinated convertible debentures for $2.5 million. On March 30, 2002, the Company repurchased 500,000 shares of the subordinated convertible debentures for $9.3 million. On December 28, 2001, the Company repurchased 637,795 shares of the subordinated convertible debentures for $10.0 million. For the year ended September 30, 2002, these transactions resulted in pre-tax gains of $9.2 million, net of write-downs of a proportionate share of the related deferred finance costs of $0.9 million. There were no purchases in either fiscal year 2003 or 2004.

     Equity in partnership and joint venture (losses) earnings was a loss of $3.0 million in fiscal year 2004 compared to earnings of $2.2 million in fiscal year 2003. The decrease is primarily related to operating results for the Company’s 50% owned, non-consolidated affiliate in Mexico. During the second quarter of fiscal 2004, the Company’s Mexican affiliate reported to the Company that the affiliate would be taking certain impairments and losses as part of the year-end audit performed by independent auditors. As the entity is a 50% owned, non-consolidated investment, results are recorded on the equity method. The losses reported to us were mostly non-cash, and totaled $2.6 million. $1.5 million was related to the current quarter and $1.1 million related to prior periods. The $1.5 million current-quarter impact is the result of non-cash impairments, primarily related to notes receivable and other assets. The recent prior-period impact is due to corrections in the recording of equipment leases, and interest-expense accruals. Due to the immateriality of the effect on any one prior period, the total adjustment was made to the current quarter.

     The Company’s effective income tax rate after minority interest and before cumulative effect of accounting change and discontinued operations was 42.2% in fiscal year 2004 compared to 41.6% in fiscal year 2003. The increase in the effective tax rate is primarily attributable to a decrease in jobs credit. The Company’s effective tax rate is expected to be approximately 38% before discontinued operations for fiscal year 2005. See footnote 13. Income taxes for further discussion.

     Year Ended September 30, 2003 Compared to Year Ended September 30, 2002

     Parking revenues in fiscal year 2003 increased to $589.4 million from $579.4 million in fiscal year 2002, an increase of $10.0 million, or 1.7%. The increase resulted from a $6.9 million increase in same-store revenues in the New York region as locations in that area recovered from the effects of the September 11, 2001 terrorist attacks. The increase was also the result of $3.1 million of revenues from locations added during fiscal years 2003 and 2002. Despite the modest increase in fiscal 2003, parking revenues were affected by continued weakness in the economy, which reduced demand for parking and limited the Company’s ability to increase rates.

     Management contract and other revenues (excluding reimbursement of management contract expenses) increased in fiscal year 2003 to $119.5 million from $116.9 million in fiscal year 2002, an increase of $2.6 million, or 2.2%. The majority of the increase is due to new business and increased insurance charges.

     Cost of parking in fiscal year 2003 increased to $547.2 million or 92.8% of parking revenues from $509.9 million or 88.0% of parking revenues in fiscal year 2002, an increase of $37.3 million, or 7.3%. The increase is due to higher rent expense of $11.5 million primarily due to rents on new locations, a $5.0 million increase in insurance claims expense primarily due to settlements in commercial claims and increases in the number of bodily injury and property damage claims, higher costs per claim, increased premiums and, due to the higher number of claims and claim cost, an increase in the actuarial valuation, $3.5 million increase in equipment expense, $3.1 million increase in property taxes expense and $2.7 million increase in snow removal expense.

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     Cost of management contracts in fiscal year 2003 increased to $65.6 million from $48.8 million in fiscal year 2002. The cost of management contracts, as a percentage of management contract and other revenues, excluding reimbursement of management contract expenses, was 54.9% in fiscal year 2003 compared to 41.8% in fiscal year 2002. The increase in cost was primarily caused by an increase in insurance related items of $12.0 million, including group insurance and general liability claims, $3.7 million increase in bad debt expense and $1.1 million increase in other costs. The increase in bad debt expense was attributed to deterioration in aging of select accounts, and balances whose resolution is in litigation. The Company has implemented cost sharing programs for medical, liability and worker’s compensation insurance and has taken other steps it believes are likely to reduce insurance claim costs.

     General and administrative expenses increased to $83.4 million in 2003 from $69.8 million in 2002, an increase of $13.6 million, or 19.5%. This increase is due to $7.2 million in payroll and severance expense, $1.5 million in deferred compensation, primarily due the former CEO and other executive level positions, $4.1 million in professional services and $0.8 million in other general and administrative expenses. General and administrative expenses increased as a percentage of total revenue (excluding reimbursement of management contract expenses) to 11.8% in 2003 from 10.0% in 2002.

     Net property-related losses for fiscal year 2003 were $7.6 million compared to $5.0 million in fiscal year 2002. The $7.6 million loss was comprised of impairments of $3.6 million of contract rights and deferred expenses and $4.0 million of leasehold improvements related to locations which management plans to continue to operate. Impairment charges recognized in fiscal year 2003 were based on estimated fair values using projected cash flows of the applicable parking facility discounted at the Company’s average cost of funds. Management determined that the projected cash flows for these locations would not be enough to recover the remaining value of the assets. On January 28, 2002, the Company sold its 50% interest in Civic Parking, LLC (“Civic”) for $18.4 million. The transaction resulted in a pre-tax gain of $3.9 million, which is included as a property-related gain for the year ended September 30, 2002. Additionally, the Company recognized $1.4 million of pre-tax gains on sales of property during 2002. These gains were offset by impairment charges of $10.3 million for leasehold improvements, contract rights and prepaid rent primarily at locations in New York City.

     The Company adopted the provisions of SFAS No. 144 on October 1, 2002. For fiscal year 2003, the Company either disposed of or designated as held-for-sale or disposal certain locations, resulting in income from discontinued operations of $1.7 million. Included in discontinued operations in 2003 is $653,000 of impairment charges related to certain properties sold or held for sale. The Company’s 2002 results were reclassified to reflect the operations of these locations as discontinued operations, net of related income taxes.

     Interest income in fiscal year 2003 decreased to $4.7 million from $6.9 million in fiscal year 2002. Interest expense increased in fiscal year 2003 to $22.0 million from $17.3 million in fiscal year 2002 due primarily to an increase in the interest rate of the Company’s credit facility, which was refinanced in February of 2003 and amended in August 2003. The Company’s variable rate debt was negatively impacted by the increase in the spread it pays to its lender group as a result of the refinancing. Deferred finance cost of $0.8 million and interest rate swap costs of $0.9 million were written off to interest expense during the second quarter of 2003 as a result of the refinancing. The Company also incurred waiver related fees of $0.4 million that were included in interest expense.

     The weighted average balance outstanding for the Company’s debt obligations and subordinated convertible securities was $361.0 million during the fiscal year ended September 30, 2003, at a weighted average interest rate of 5.9% compared to a weighted average balance outstanding of $365.5 million at a weighted average rate of 4.7% during the fiscal year ended September 30, 2002. Deferred finance costs were included in the calculation of the weighted average interest rate.

     Equity in partnership and joint venture earnings decreased to $2.2 million in fiscal year 2003 from $2.7 million in fiscal year 2002, due to the Company purchasing some of the underlying properties of the partnerships and including the earnings from those properties in revenues due to the change in status of the property.

     The Company’s effective income tax rate after minority interest and before cumulative effect of accounting change and discontinued operations was 41.6% in fiscal year 2003 compared to 33.4% in fiscal year 2002. The increase in the effective tax rate is primarily attributable to an increase in jobs credit coupled with a decrease in operating earnings.

Quarterly Results

     The Company has and may continue to experience fluctuations in revenues and related expenses due to a variety of factors, including but not limited to acquisitions, pre-opening and start-up costs relating to new locations, travel and transportation patterns

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affected by weather and calendar related events, and local, regional and national economic conditions. The Company’s concentration of parking facilities in the northeastern and mid-Atlantic part of the United States continues to expose the Company to the risk of negative financial fluctuations that may result from severe winter weather and other local or regional factors, including acts of terrorism. Additionally, the Company services the parking for a number of sports stadiums and arenas, and the operating results of such parking facilities can be impacted by strikes and the relative degree of success of various sports teams. The following table sets forth certain quarterly statements of operations data for the eight fiscal year quarters preceding the end of the fiscal year and the percentage of net revenues represented by the line items presented (except in the case of per share amounts). The quarterly statement of operations data set forth below was derived from unaudited financial statements of the Company and includes all adjustments which the Company considers necessary for a fair presentation thereof.

Amounts in thousands, except per share data