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		Per
		Share				Total
Public offering price			$9.00				$96,359,742
Underwriting discount			$.495				$5,299,786
Proceeds, before expenses, to Coinmach Service Corp.			$8.505				$91,059,956

	Deutsche Bank Securities

	Jefferies & Company

	SunTrust Robinson Humphrey

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SUMMARY			1
RISK FACTORS			20
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			30
USE OF PROCEEDS			32
MARKET PRICE OF IDSs			34
DIVIDEND POLICY AND RESTRICTIONS			35
CAPITALIZATION			50
DILUTION			52
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA			54
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			61
BUSINESS			85
MANAGEMENT			94
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			107
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			111
THE TRANSACTIONS			117
DESCRIPTION OF CAPITAL STOCK			122
DESCRIPTION OF IDSs			134
SECURITIES ELIGIBLE FOR FUTURE SALE			136
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES			137
CERTAIN ERISA CONSIDERATIONS			141
UNDERWRITING			143
LEGAL MATTERS			146
EXPERTS			146
WHERE YOU CAN FIND MORE INFORMATION			147
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES			F-1

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	If we have insufficient cash flow to cover dividend payments under our dividend policy or to make such payments in compliance with our and our subsidiaries’ outstanding indebtedness, we will need to reduce or eliminate dividends or, to the extent permitted under our debt agreements, fund a portion of our dividends with additional borrowings.

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	•	make it more difficult for us to pay dividends on our common stock;
	•	reduce or eliminate your ability to recover any of your investment in any bankruptcy proceedings involving us;
	•	limit our flexibility to adjust to changing market conditions, reduce our ability to withstand competitive pressures and increase our vulnerability to general adverse economic and industry conditions;
	•	limit our ability to borrow additional amounts for working capital, capital expenditures, future business opportunities, including strategic acquisitions, and other general corporate requirements or hinder us from obtaining such financing on terms favorable to us or at all;
	•	limit our ability to raise cash through the issuance of additional securities;
	•	require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, future business opportunities and other general corporate purposes;

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	•	limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and
	•	limit our ability to refinance our indebtedness.

	We may be able to incur substantially more indebtedness, which could exacerbate the risks described above.

	Restrictive covenants in our current and future indebtedness could adversely restrict our operating flexibility.

	•	incur additional indebtedness or, in the case of our restricted subsidiaries, issue preferred stock;
	•	create liens;
	•	pay dividends or make other restricted payments;
	•	make certain investments;
	•	sell or make certain dispositions of assets;
	•	engage in sale and leaseback transactions;
	•	engage in transactions with affiliates;
	•	place restrictions on the ability of its restricted subsidiaries to pay dividends, or make other payments, to CSC; and
	•	engage in mergers or consolidations and transfers of all, or substantially all of the assets of CSC.

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	Lack of a significant amount of cash could adversely affect our growth, financial condition and results of operations.

	•	sales of certain assets to meet our debt service requirements;
	•	sales of equity; and
	•	negotiations with our lenders to restructure the applicable debt.

	You will experience immediate and substantial dilution if you purchase shares of Class A common stock in this offering.

	Voting control of us by Holdings may create conflicts of interest.

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	The separate public trading market for IDSs and the ability to separate and create IDSs may diminish the value of your investment in shares of Class A common stock.

	The Tender Offer may cause or exacerbate fluctuations in the market price of IDSs.

	The success of the Tender Offer may impede your ability to combine your shares of Class A common stock with 11% notes in order to create IDSs.

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	You will not be a registered holder of shares of Class A common stock and therefore will be reliant on your broker or other financial institution to monitor and maintain your position and to provide you with information distributed to stockholders of record.

	If an active trading market for the shares of Class A common stock does not develop, their liquidity and value could be harmed. The price of the shares of Class A common stock could be subject to volatile fluctuations.

	Future sales or the possibility of future sales of a substantial amount of shares of Class A common stock or IDSs may depress the price of the shares of Class A common stock, including the shares offered hereby.

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	We have a history of net losses and may not generate profits in the future.

	Our business could suffer if we are unsuccessful in negotiating lease renewals.

	We may not be able to successfully identify attractive “tuck-in” acquisitions, successfully integrate acquired operations or realize the intended benefits of acquisitions.

	•	an inability to obtain sufficient financing to complete our acquisitions;
	•	an inability to negotiate definitive acquisition agreements on satisfactory terms;
	•	difficulty in integrating the operations, systems and management of acquired assets and absorbing the increased demands on our administrative, operational and financial resources;
	•	the diversion of our management’s attention from their other responsibilities;
	•	the loss of key employees following completion of our acquisitions;
	•	the failure to realize the intended benefits of our acquisitions; and
	•	our being subject to unknown liabilities.

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	If our required capital expenditures exceed our projections, we may not have sufficient funding, which could adversely affect our growth, financial condition and results of operations.

	Reduced occupancy levels could adversely affect us.

	Our dividend policy may negatively impact our ability to finance our working capital requirements, capital expenditures or operations.

	Our business could be adversely affected by the loss of one or more of our key personnel.

	Our industry is highly competitive, which could adversely affect our business.

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	Our business may be adversely affected by compliance obligations and liabilities under environmental laws and regulations.

	Recently enacted federal legislation concerning energy and water efficiency standards on commercial clothes washers could require a significant increase in our capital expenditures and consequently reduce our profit margins.

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	•	the results of the Tender Offer, including the amount of any reduction in the aggregate principal amount of 11% notes, the effectiveness of the Proposed Amendments, the entrance into any future financing arrangements (whether to fund the Total Tender Offer Consideration or otherwise) and the use of any borrowings under the revolver portion of the amended and restated credit facility;
	•	the restrictive debt covenants and other requirements related to our substantial leverage that could restrict our operating flexibility;
	•	our ability to continue to renew our lease contracts with property owners and management companies;
	•	extended periods of reduced occupancy which could result in reduced revenues and cash flow from operations in certain areas;
	•	our ability to compete effectively in a highly competitive and capital intensive industry which is fragmented nationally, with many small, private and family-owned businesses operating throughout all major metropolitan areas;
	•	compliance obligations and liabilities under regulatory, judicial and environmental laws and regulations, including, but not limited to, governmental action imposing heightened energy and water efficiency standards or other requirements with respect to commercial clothes washers;
	•	our ability to maintain borrowing flexibility and to meet our projected and future cash needs, including capital expenditure requirements with respect to maintaining our machine base, given our substantial level of indebtedness, history of net losses and cash dividend payments on our common stock pursuant to our dividend policy;
	•	our ability to complete the merger event and eliminate the Intercompany Loan;

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	•	assuming proceeds from this offering are remaining after completion of the Tender Offer, any repurchase shares of Class A common stock owned by an affiliate of GTCR;
	•	assuming the underwriters’ overallotment option is exercised, our ability to repurchase shares of Class B common stock in compliance with the indenture governing the 11% notes;
	•	risks associated with expansion of our business through “tuck-ins” and other acquisitions and integration of acquired operations into our existing business;
	•	the risk of adverse tax consequences should the 11% notes not be respected as debt for U.S. federal income tax purposes;
	•	risks associated with changes in accounting standards promulgated by the Financial Accounting Standards Board, the SEC or the American Institute of Certified Public Accountants; and
	•	other factors discussed elsewhere in this prospectus.

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Sources						Uses
(in millions)
Class A common stock		$	96.36			Purchase of 11% notes		$	50.00
						Repurchase of Class A common stock(1)			18.71
						General corporate purposes			13.55
						Fees, cost and expenses(2)			14.10
Total		$	96.36			Total		$	96.36

(1)	Represents the total amount to be used to repurchase all of the 2,199,413 shares of Class A common stock underlying the IDSs that are currently owned by an affiliate of GTCR at a repurchase price of $8.505 per share (equal to the public offering price of the Class A common stock offered hereby, net of any underwriting discounts and commissions).
(2)	Amount includes an estimated $5.3 million underwriting discount in connection with this offering and approximately $3.0 million in estimated fees, costs and expenses. In addition, amount includes an estimated $5.0 million of tender premium in respect of the Early Tender Amount of 11% notes in the Tender Offer and approximately $0.8 million in estimated fees, costs and expenses related to the Tender Offer.

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Fiscal Year Ended March 31, 2005		High				Low
Quarter ended December 31, 2004		$	13.80			$	13.10
Quarter ended March 31, 2005		$	13.75			$	12.30

Fiscal Year Ending March 31, 2006		High				Low
Quarter ended June 30, 2005		$	13.56			$	12.70
Quarter ended September 30, 2005		$	13.99			$	13.14
Quarter ended December 31, 2005		$	15.85			$	13.72
Quarter ended March 31, 2006 (through February 2, 2006)		$	16.90			$	14.75

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	•	although our dividend policy contemplates the distribution of our excess cash, this policy can be modified or revoked at any time;
	•	even if our dividend policy is not modified or revoked, the actual amount of dividends distributed under the policy and the decision to make any distribution is entirely at the discretion of our board of directors;
	•	the amount of dividends distributed is subject to state law restrictions;
	•	there is no legal, contractual or other requirement that we pay dividends in the amounts stated, or at all, and the dividends are neither mandatory nor guaranteed;
	•	we may not have enough cash to pay dividends due to changes in our operating income, working capital requirements, anticipated cash needs, and borrowing capacity (including as a result of borrowings to fund prior dividend payments); and
	•	the payment of dividends is subject to covenant restrictions in documents or agreements governing our indebtedness:

	•	the indenture governing the 11% notes contains a restricted payments covenant that limits our ability to pay dividends; and
	•	the amended and restated credit facility requires us to, among other things, meet quarterly financial maintenance tests.

	•	our consolidated interest expense must be less than 90% of our distributable cash flow;
	•	we and our restricted subsidiaries must also have cash or borrowings available in excess of reasonably anticipated consolidated interest expense on outstanding indebtedness and on indebtedness we intend to incur for the two subsequent fiscal quarters; and
	•	we must have amounts available or owed to us from our restricted subsidiaries sufficient to make cash interest payments on our indebtedness, including the notes, during the two subsequent fiscal quarters and on indebtedness that we intend to incur during the two subsequent fiscal quarters.

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	Dividends on the Class A common stock:

		Amount
Period		per Share				Payment Date
Period ended December 31, 2004(1)		$	0.08704			March 1, 2005
Quarter ended March 31, 2005		$	0.20615			June 1, 2005
Quarter ended June 30, 2005		$	0.20615			September 1, 2005
Quarter ended September 30, 2005		$	0.20615			December 1, 2005

	Dividends on the Class B common stock:

		Amount
Period		per Share				Payment Date
Period ended December 31, 2004(1)		$	0.04226			March 1, 2005

(1)	Represents a partial quarterly dividend payment for the period from November 24, 2004 (the date of completion of our IPO) to December 31, 2004.

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	Periods Ending on or Prior to March 31, 2007

	Fiscal Years Ending After March 31, 2007

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	Waiver of Cash Dividends by Holders of Class B Common Stock

	•	we will continue to pay quarterly cash dividends on the Class A common stock at the rates currently set forth under our dividend policy;
	•	no more than $12.5 million in dividends will be paid on the Class B common stock in respect of the five fiscal quarter period ending March 31, 2006, since the rights of holders of shares of Class B common stock to receive cash dividends during such period are subordinated to the cash dividend rights of holders of Class A common stock;
	•	not more than $86.1 million aggregate principal amount of 11% notes will continue to be outstanding after completion of the Tender Offer and be treated as debt for U.S. federal income tax purposes (assumes at least $50.0 million aggregate principal amount of 11% notes are tendered and purchased in the Tender Offer);
	•	the Proposed Amendments do not become effective;
	•	the Coinmach Corp. 9% notes will not be outstanding;
	•	we will not enter into any new financing arrangements and/or borrow any amounts under the revolver portion of the amended and restated credit facility in order to fund the Total Tender Offer Consideration;

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	•	an additional $340.0 million of borrowings under the amended and restated credit facility will have been incurred to retire all of the outstanding Coinmach Corp. 9% notes;
	•	no IDSs or shares of Class A common stock will be issued pursuant to any existing CSC equity-based incentive plans or otherwise, other than any shares of Class A common stock through the exercise of the overallotment option; and
	•	no outstanding shares of Class B common stock are repurchased with proceeds from this offering or the exercise of the underwriters’ overallotment option.

	Basis for Dividend Rate

	•	our operating and financial performance in recent years;
	•	the anticipated cash requirements associated with our capital structure (including, but not limited to, interest payments on the 11% notes);
	•	our anticipated capital expenditure requirements, suspension of discretionary capital expenditures in AWA, the termination of further investments in Super Laundry and the completion of our technology upgrades;
	•	our other expected cash needs for working capital;
	•	the terms of our debt agreements, including the indenture governing the 11% notes (assuming the Proposed Amendments do not become operative) and the amended and restated credit facility; and
	•	potential sources of liquidity, including borrowings under the amended and restated credit facility (to the extent borrowings are available after the use of any amounts thereunder to fund the Tender Offer).

	(i) the indenture governing the 11% notes, which permits quarterly dividend payments to the extent our distributable cash flow exceeds our consolidated interest expense so long as we satisfy an interest coverage test and no default is continuing; and

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	(ii) the amended and restated credit facility, which requires Coinmach Corp. (and would require CSC, as borrower under such credit facility upon the completion of the merger event) to meet quarterly financial maintenance tests.

			Amount
			(In thousands)
Estimated minimum EBITDA(1)(9)			$	155,200
Less:
	Estimated capital expenditures(2)			66,853
	Estimated interest expense(3)			47,094
	Estimated amortization payments on credit facility term debt			2,300
	Estimated cash taxes(4)			—
Estimated cash available to pay dividends			$	38,953
Intended amount of dividends on Class A common stock(5)			$	23,934
Intended amount of dividends on Class B common stock(5)			$	12,500
Interest coverage test under the indenture governing the 11% notes(6)(7):
Estimated distributable cash flow			$	86,047
90% of estimated distributable cash flow			$	77,442
Estimated interest expense(3)			$	47,094
Permitted amount of dividends(8)			$	38,953

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			Fiscal Year Ended				Twelve Months Ended
			March 31, 2005				September 30, 2005
Cash flow from cash flow provided by operating activities			$	104,998			$	108,662
Interest expense				58,572				60,593
Interest expense-escrow interest				941				941
Gain on sale of investment and equipment				557				476
Loss on redemption of Coinmach Corp. 9% notes				(14,770	)			(14,770	)
Stock based compensation				(74	)			(49	)
Change in operating assets and liabilities				(5,206	)			(10,296	)
Deferred taxes				10,166				10,359
Amortization of debt discount and deferred issue costs				(2,326	)			(2,182	)
Benefit for income taxes				(10,166	)			(10,394	)
EBITDA				142,692				143,340
Transaction costs				17,389				17,389
EBITDA (adjusted to exclude transaction costs)(10)				160,081				160,729
Less:
	Actual capital expenditures(2):
	Additions to property and equipment			53,444				55,718
	Advance location payments			18,051				15,896
	Acquisition of net assets related to acquisitions of businesses			628				1,200
	Principal payments on capital lease obligations			4,331				4,767
	Estimated interest expense(3)			47,094				47,094
	Estimated amortization payments on credit facility term debt			2,300				2,300
	Estimated net change in working capital			—				—
	Estimated cash taxes(4)			—				—
	Additional public filing costs and one time charges(1)			600				200
	Excess cash that would have been available to pay dividends		$	33,633			$	33,534
Intended amount of dividends on Class A common stock(5)			$	23,934			$	23,934

	(1)	Our estimated minimum EBITDA excludes approximately $32.5 million in one-time transaction costs that will be incurred during this period in connection with this offering and the Current Transactions, including fees and expenses. See “Use of Proceeds.” Our historical EBITDA for the period prior to November 24, 2004 (the closing date of the IPO) does not include approximately $1.0 million annually in incremental ongoing expenses associated with being a public issuer, including estimated incremental director and officer liability insurance, additional directors’ fees, investor and public relations expenses, expenses relating to the annual stockholders’ meeting, printing expenses, additional filing fees, additional trustee fees, registrar and transfer agent fees, listing fees, additional administrative fees and miscellaneous fees.
	(2)	Capital expenditures represent amounts expended for property and laundry equipment, including washers and dryers and other equipment, such as our fleet of vehicles, used in servicing our customers and advance location payments paid to location owners. Capital expenditures do not include expenses related to repairs of our existing assets, costs of spare parts or expenses related to refurbishments or overhauls, which, in each case, are expensed in the ordinary course of our business.

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	The following table sets forth an analysis of our capital expenditures for the fiscal year ended March 31, 2005 and the twelve months ended September 30, 2005.

					Fiscal Year				Twelve Months
					Ended				Ended
					March 31,				September 30,
					2005				2005
Additions to property and equipment					$	53.4			$	55.7
Advance location payments						18.1				15.9
Acquisition of net assets related to acquisitions of businesses						0.6				1.2
Principal payments on capitalized lease obligations						4.3				4.8
	Total capital expenditures					76.4				77.6
		Less:
		AWA expenditures*			$	4.7			$	5.8
		Technology upgrades*				2.2				3.3
		Super Laundry expenditures*				0.4				0.4
		Acquisition of net assets related to acquisitions of businesses				0.6				1.2
			Residual route capital expenditures		$	68.5			$	66.9

	*	Represents total capital expenditures related to the businesses of AWA and Super Laundry as well as technology upgrade expenses during the periods presented.

	The amount of residual route capital expenditures set forth in the table above represents the minimum capital expenditures required to maintain our existing machine base. Given that our customer contracts typically mature each year at a consistent rate, our capital expenditures for maintaining our existing machine base have generally been predictable and recurring in nature without significant fluctuation.
	Through a heightened focus on capital spending, we have been able to generate steady cash flow returns on our core route business, and have been operating under this model for the past several fiscal quarters. We therefore do not expect total annual capital expenditures relating to maintaining our machine base to vary significantly from the amount estimated for the twelve months ending December 31, 2006.
	Additionally, while our focus on AWA has historically been to generate internal growth, we do not expect to continue to incur capital expenditures for such purpose unless we generate cash flow from operations in excess of that required to maintain our route business and to pay dividends on our common stock in accordance with our dividend policy as described above.
	With respect to technology upgrades, we are currently completing several upgrade programs related to the collection and tracking of our route business which are not expected to be repeated in the future. With respect to Super Laundry, we have chosen to end further investment in the operations of the business given our return on capital thresholds. As such, we consider all expenditures listed above related to technology upgrades and Super Laundry to be non-recurring capital expenditures.
	Moreover, while expansion through acquisition was an important component of our historical business strategy, we believe it has allowed us to achieve significant economies of scale. Although we continue to evaluate acquisition opportunities on a selective basis as they arise from time to time, and future acquisition activity may produce accretive marginal cash flow, the execution of this strategy is not critical to our long-term financial condition. If, however, we choose to pursue an acquisition opportunity, we intend to fund such acquisition through available borrowings under the amended and restated credit facility to the extent we do not generate excess cash flow from our operations.

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	(3)	For purposes of this estimate, we have assumed that an aggregate of $50.0 million principal amount of 11% notes are tendered in the Tender Offer and that all of the Coinmach Corp. 9% notes are redeemed with borrowings of delayed draw term loans under the amended and restated credit facility. Accordingly, such amount includes interest at a rate of 11.0% per annum on an aggregate principal amount of approximately $86.1 million of 11% notes outstanding and interest on an average balance of approximately $570.0 million for such periods under the amended and restated credit facility at an assumed interest rate of 6.60% per annum.

	(4)	We estimate that our cash taxes for each of the periods shown will be approximately zero. Although we estimate that our cash taxes for the Initial Four Quarters will be approximately zero, we may be subject to cash income tax expenses in future periods.
	(5)	Estimated cash dividend payments on the Class A and Class B common stock for the Initial Four Quarters are as follows (assumes 2,199,413 shares of Class A common stock are repurchased and that the overallotment option is exercised and 1,605,995 shares of Class B common stock are repurchased):

Intended

Dividends

Quarterly Base

Number of

Dividend per

Quarterly

Annual

Shares

Share

Aggregate

Aggregate

(In thousands)

Class A common stock

29,024,752

$

0.20615

$

5,983

$

23,934

Number of

Aggregate Maximum

Shares

Dividends

Class B common stock

23,374,450

$12,500

	(6)	The indenture governing the 11% notes treats cash dividends paid on our common stock as restricted payments and generally limits the making of those payments to an amount equal to the sum of a percentage of cumulative consolidated net income and certain other specified items and requires us to satisfy a fixed charge coverage test. We expect to be unable to pay cash dividends on the Class A common stock in an amount equal to the intended quarterly dividend under the general terms of that covenant due to an insufficient amount of cumulative consolidated net income. We intend to rely on an exception to that covenant that permits cash dividends on our common stock to be paid on a quarterly basis for the life of the 11% notes in an amount based on our distributable cash flow so long as we are able to satisfy an interest coverage test and no default under the indenture is continuing. See footnote (7) below and “— Limitations on Our Ability to Pay Dividends — Indenture Governing the 11% Notes.”
		The table below sets forth our calculations illustrating, for the Initial Four Quarters, our estimated distributable cash flow calculated in accordance with the indenture governing the notes based on our estimated minimum EBITDA for such Initial Four Quarters as calculated in the table set forth on page 40.

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			Amount
			(In thousands)
Estimated minimum EBITDA(a)			$	155,200
Less:
	Estimated cash taxes(b)			—
	Estimated capital expenditures(c)			66,853
	Estimated cash principal payments on indebtedness(d)			2,300
	Estimated net changes in working capital			—
	Estimated extraordinary cash charges			—
Plus:
	Estimated cash tax refunds			—
	Estimated extraordinary cash gains			—
Estimated distributable cash flow			$	86,047

	(a)	See footnote (1) above.
	(b)	See footnote (4) above.
	(c)	See footnote (2) above.
	(d)	Excludes, in accordance with the indenture governing the 11% notes, (i) payments on intercompany obligations, (ii) payments made from amounts borrowed pursuant to indebtedness or amounts received from the issuance or sale of qualified capital stock, in each case that has refinanced, renewed or replaced such repaid indebtedness in such period and (iii) payments made on indebtedness under working capital facilities to the extent such amounts remain available to be reborrowed.

	(7)	The indenture governing the 11% notes permits us to pay dividends on our common stock so long as our consolidated interest expense is less than 90% of our distributable cash flow for the most recent fiscal quarter. We and our restricted subsidiaries must also have cash or borrowings available in excess of reasonably anticipated consolidated interest expense on outstanding indebtedness and on indebtedness that we or they intend to incur for the two subsequent fiscal quarters. In addition, we must have amounts available or owed to us from our restricted subsidiaries sufficient to make cash interest payments on our indebtedness, including the 11% notes, during such period and indebtedness that we intend to incur during such period. Although we are presenting the amount of each item set forth under the heading “interest coverage test under the indenture governing the notes” that is set forth in the table as the estimated aggregate amount for such item for the Initial Four Quarters, rather than the estimated amount for any of the fiscal quarters during that period, we believe that we will be able to satisfy the interest coverage test for each of the four fiscal quarters during that period and pay dividends on our Class A common stock at the intended quarterly base dividend level with respect to each such fiscal quarter.
	(8)	The indenture governing the 11% notes permits the payment of dividends on our common stock in an amount equal to our distributable cash flow less interest expense, in each case for the most recent fiscal quarter. Although we are presenting the permitted amount of dividends set forth in the table as the estimated aggregate amount for the Initial Four Quarters rather than the estimated amount for any one fiscal quarter, we believe that the permitted amount of dividends for each of the Initial Four Quarters will be sufficient to pay dividends on our Class A common stock at the quarterly base dividend level set forth in our dividend policy with respect to each such fiscal quarter.
	(9)	In addition, assuming that the payment of cash dividends on the Class B common stock was not subordinated to the payment of cash dividends on the Class A common stock or subject to an annual dividend payment limitation, we estimate that the amount of EBITDA necessary to pay cash dividends on the Class A common stock at the quarterly base dividend level set forth in our dividend policy and on the Class B common stock at the intended annual base dividend level (equal to 105% of the aggregate amount of dividends payable on each share of Class A common stock for four fiscal

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		quarters), in each case for the Initial Four Quarters, would be approximately $161.5 million. If these assumptions were satisfied and that level of EBITDA were achieved, the aggregate amount of cash dividends that would be paid for such period on the Class A common stock and the Class B common stock would be approximately $23.9 million and $20.2 million, respectively. We have not recently been able to achieve this level of annual EBITDA and no assurances can be given that this level of EBITDA will be achieved in the future.

(10)

Represents for the fiscal year ended March 31, 2005 and the twelve months ended September 30, 2005 EBITDA as adjusted to take into account one-time transaction costs aggregating approximately $17.4 million in connection with the IDS Transactions consisting of (a) approximately $11.3 million of redemption premium on the portion of the Coinmach Corp. 9% notes redeemed, (b) the write-off of unamortized deferred financing costs relating to the redemption of the Coinmach Corp. 9% notes and the term loans repaid aggregating approximately $3.5 million, (c) expenses relating to the amendment on November 15, 2004 of the Coinmach Corp. credit facility, aggregating approximately $1.8 million, and (d) special bonuses to senior management related to the IDS Transactions aggregating approximately $0.8 million.

	Assumptions and Considerations

	•	our EBITDA for the fiscal years ended March 31, 2005, 2004 and 2003 was approximately $142.7 million (or $160.1 million, as adjusted for certain transaction costs described in footnote 10 above), $155.7 million and $159.5 million, respectively, and our EBITDA (as adjusted for certain transaction costs described in footnote 10 above) for the twelve months ended September 30, 2005 was approximately $160.7 million;
	•	term loans under the amended and restated credit facility are not required to be fully repaid until December 19, 2012; and
	•	while our working capital balances may vary, our business generally is not seasonal, there has not been a recent trend toward material working capital growth and we do not expect to have cash needs to fund changes in working capital in the aggregate for the Initial Four Quarters.

	•	that our general business climate, including such factors as customer attraction and retention, regulatory compliance and lease renewal costs and fluctuations in occupancy levels, will remain consistent with previous financial periods; and
	•	the absence of extraordinary business events such as unforeseen regulatory requirements, unanticipated adverse tax treatment of our debt or other events that might adversely affect our financial results.

	General

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	Indenture Governing the 11% Notes

	(i) there is no existing or resulting default or an event of default under the indenture;
	(ii) prior to and following such dividend payments we are in compliance with the consolidated fixed charge coverage ratio then in effect, and
	(iii) the aggregate amount of any dividend payment (combined with any other restricted payments we have made under such indenture) does not exceed the sum of:

	(y) 50% of our cumulative consolidated net income (or, if consolidated net income is a loss, minus 100% of such loss) earned during the period beginning on January 1, 2005 and ending on the last day of the fiscal quarter immediately preceding such dividend payment, plus
	(z) the aggregate net cash proceeds received at any time subsequent to December 31, 2004 from purchases of certain of our securities and from certain types of equity contributions by our stockholders.

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	(i) there may not be a default or event of default under the indenture;
	(ii) Consolidated Interest Expense must be less than 90% of Distributable Cash Flow; and
	(iii) we must determine in good faith that, notwithstanding such dividend payments, we will be able to satisfy our future liquidity needs as specified in the indenture.

	Amended and Restated Credit Facility

	•	we fail to maintain minimum EBITDA (as defined in the amended and restated credit facility) for any period consisting of four consecutive fiscal quarters ending on or prior to March 31, 2008 of at least $150.0 million, ending after March 31, 2008 and on or prior to March 31, 2009 of at least $155.0 million, ending after March 31, 2009 and on or prior to March 31, 2010 of at least $160.0 million, ending after March 31, 2010 and on or prior to March 31, 2011 of at least $162.5 million and ending after March 31, 2011 of at least $165.0 million;
	•	we fail to maintain a minimum fixed charge coverage ratio (generally defined as the ratio of EBITDA less capital expenditures to fixed charges) for any such period of at least 1.0 to 1.0; and
	•	we fail to maintain a maximum pro forma leverage ratio (generally defined as net debt (at the end of any such period ) to EBITDA) for any such period ending on or prior to September 30, 2007 of not more than 4.50 to 1.0, ending after September 30, 2007 and on or prior to March 31, 2009 of not more than 4.25 to 1.0 and ending after March 31, 2009 of not more than 4.0 to 1.0.

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			As of September 30, 2005
							As Adjusted
							Minimum Tender				Early Tender				Maximum Tender
			Actual				Amount				Amount				Amount
			(In thousands)
Cash and cash equivalents			$	49,692			$	77,366			$	54,616			$	38,694
Debt:
	11% notes(1)		$	136,117			$	106,117			$	86,117			$	—
	Coinmach Corp. 9% notes			324,500				—				—				—
	Coinmach Corp. credit facility			229,284	(2)			570,000	(3)(4)			570,000	(3)(4)			633,330	(5)
	Other long-term debt			8,444				8,444				8,444				8,444
Total long-term debt				698,345				684,561				664,561				641,774
Stockholders’ equity:
	Class A common stock — $0.01 par value, 100,000,000 shares authorized; 18,911,532 shares issued historically, or 29,618,170 shares issued after giving effect to this offering			189				296				296				296
	Class B common stock — $0.01 par value, 100,000,000 shares authorized; 24,980,445 shares issued and outstanding			250				250				250				250
Capital in excess of par value				319,038				406,991				406,991				406,991
Less treasury stock — 2,199,413 shares of Class A common stock acquired at cost				—				(18,706	)			(18,706	)			—
Carryover basis adjustment				(7,988	)			(7,988	)			(7,988	)			(7,988	)
Accumulated other comprehensive loss, net of tax				467				467				467				467
Accumulated deficit				(213,814	)			(241,635	)			(245,410	)			(261,658	)
	Total stockholders’ equity			98,142				139,675				135,900				138,358
Total capitalization			$	796,487			$	824,236			$	800,461			$	780,132

(1)	Includes 11% notes both issued as part of IDSs and 11% notes issued separate and apart from IDSs.
(2)	Does not include undrawn amounts available to be borrowed under the revolver portion of the Coinmach Corp. credit facility.
(3)	Reflects $570.0 million aggregate principal amount of term debt to be borrowed under the amended and restated credit facility, of which (i) $230.0 million was used to refinance outstanding term debt under the Coinmach Corp. credit facility and to pay related expenses, and (ii) $340.0 million is used to retire on February 1, 2006 all of the $324.5 million outstanding principal amount of Coinmach

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	Corp. 9% notes (plus approximately $14.6 million of related redemption premium) and to pay related fees and expenses.
(4)	Does not include undrawn amounts available to be borrowed under the revolver portion of the amended and restated credit facility.
(5)	Reflects $570.0 million aggregate principal amount of term debt to be borrowed under the amended and restated credit facility, of which (i) $230.0 million was used to refinance outstanding term debt under the Coinmach Corp. credit facility and to pay related expenses, and (ii) $340.0 million was used to retire on February 1, 2006 all of the $324.5 million outstanding principal amount of Coinmach Corp. 9% notes (plus approximately $14.6 million of related redemption premium) and to pay related fees and expenses and includes approximately $63.3 million aggregate principal amount of indebtedness under the revolver portion of the amended and restated credit facility to redeem the Maximum Tender Amount.

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			Per Share of
			Class A Common Stock
			Without				With
			Overallotment				Overallotment
Public offering price per share of Class A common stock			$	9.00			$	9.00
	Net tangible book value per share as of September 30, 2005			(9.35	)			(9.35	)
	Increase per share attributable to cash payments made by investors in this offering			2.24				2.24
Pro forma as adjusted net tangible book value per share after this offering (52,399,202 shares (or 52,399,202 shares if the underwriters’ overallotment option is exercised in full))(a)				(7.11	)			(7.11	)
Dilution in net tangible book value per share to new investors			$	16.11			$	16.11

	(a)	Assumes the repurchase of all 2,199,413 shares of Class A common stock owned by an affiliate of GTCR and, if the underwriters’ overallotment option is exercised in full, assumes the repurchase of 1,605,995 shares of Class B common stock.

	•	the total shares of our Class A common stock purchased by new investors in this offering, the total shares of our Class A common stock purchased by IDS investors in the IPO and the total shares of Class B common stock purchased by Holdings in the IDS Transactions;
	•	the total consideration paid to us (in cash or other property) by Holdings, by IDS investors in the IPO, and by new investors in this offering, in each case before deducting the estimated underwriting discounts and commissions and offering expenses paid or payable by us in connection with the IPO and the IDS Transactions and this offering; and

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	•	the average price per share of Class A common stock paid (in cash or other property) by new investors in this offering, the average price per share of Class A common stock paid by IDS investors in the IPO and the average price per share of Class B common stock paid by Holdings in the IDS Transactions:

			Shares of Common
			Stock Purchased
			Purchased								Total				Average Price
			Number				Percent				Consideration				per Share
											(In thousands)
Holdings				24,980,445				47.67	%		$	206,999	(1)		$	8.29
IDS investors				18,911,532				36.09				141,836				7.50
New investors				10,706,638				20.43				96,360				9.00
Repurchased shares of Class A common stock				(2,199,413	)			(4.19	)			(18,706	)			8.505
	Total			52,399,202				100.00	%		$	426,489			$	8.135

(1)	Represents the fair market value of the shares of Laundry Corp. capital stock and AWA non-voting common stock exchanged by Holdings in return for the shares of CSC Class B common stock.

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			Three Months				Nine Months
			April 1, 2000 to				July 1, 2000 to																				Six Months Ended								Twelve
			June 30, 2000				March 31, 2001																												Months
			Pre-Going				Post-Going				Fiscal Year Ended March 31,																								Ended
			Private				Private																				September 30,				September 30,				September 30,
			Transaction(11)				Transaction(10)				2002				2003				2004				2005				2004				2005				2005
																											(Unaudited)				(Unaudited)				(Unaudited)
Operations Data:
	Revenues		$	134,042			$	393,608			$	538,895			$	535,179			$	531,088			$	538,604			$	266,449			$	266,150			$	538,305
	Transaction costs(1)			—				—				(11,402	)			—				—				(17,389	)			—				—				(17,389	)
	Operating income			10,597				17,528				36,270				55,348				47,112				49,641				23,420				25,234				51,455
	Net loss(2)			(4,759	)			(29,063	)			(42,335	)			(3,200	)			(31,331	)			(35,325	)			(16,652	)			(3,263	)			(21,936	)
	Basic and diluted net income (loss) attributable to common stockholders per Class A common share(3)			—				—				—				—				—				(1.13	)			—				0.16				(0.18	)

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			Three Months				Nine Months
			April 1, 2000 to				July 1, 2000 to																				Six Months Ended								Twelve
			June 30, 2000				March 31, 2001																												Months
			Pre-Going				Post-Going				Fiscal Year Ended March 31,																								Ended
			Private				Private																				September 30,				September 30,				September 30,
			Transaction(11)				Transaction(10)				2002				2003				2004				2005				2004				2005				2005
																											(Unaudited)				(Unaudited)				(Unaudited)
	Basic and diluted net loss attributable to common stockholders per Class B common share(3)			(0.19	)			(1.16	)			(2.51	)			(0.96	)			(1.25	)			(1.18	)			(0.67	)			(0.25	)			(0.85	)
Balance Sheet Data (at end of period):
	Cash and cash equivalents						$	25,859			$	27,820			$	27,428			$	31,620			$	57,271			$	37,605			$	49,692			$	49,692
	Property and equipment, net							276,004				284,413				286,686				283,688				264,264				276,315				262,130				262,130
	Contract rights, net							373,352				348,462				335,327				323,152				309,698				316,561				303,676				303,676
	Advance location payments							74,233				69,257				70,911				73,253				72,222				72,937				70,179				70,179
	Goodwill, net							218,744				204,284				203,860				204,780				204,780				204,780				204,780				204,780
	Total assets							1,017,012				992,075				976,163				959,508				956,676				951,386				935,165				935,165
	Total long-term debt(4)							698,719				737,555				718,112				717,631				708,391				715,775				698,345				698,345
	Preferred stock							200,065				220,362				241,200				265,914				—				279,282				—				—
	Stockholders’ (deficit) equity							(51,543	)			(113,743	)			(138,460	)			(169,619	)			109,215				(184,672	)			98,142				98,142
Financial Information and Other Data:
	Cash flow provided by operating activities		$	17,314			$	68,014			$	77,799			$	103,900			$	97,052			$	104,998			$	48,344			$	52,008			$	108,662
	Cash flow used in investing activities			(24,273	)			(66,202	)			(82,255	)			(81,330	)			(88,449	)			(70,927	)			(37,282	)			(37,786	)			(71,431	)
	Cash flow provided by (used in) financing activities			8,362				(530	)			6,417				(22,962	)			(4,411	)			(8,420	)			(5,077	)			(21,801	)			(25,144	)
	EBITDA(5)(6)			42,154				117,920				154,565				159,526				155,689				142,692				78,590				79,238				143,340
	EBITDA margin(7)			31.5	%			30.0	%			28.7	%			29.8	%			29.3	%			26.5	%			29.5	%			29.8	%			26.6	%
	Operating margin(8)			7.9	%			4.5	%			6.7	%			10.3	%			8.9	%			9.2	%			8.8	%			9.5	%			9.6	%
	Capital expenditures(9):
	Capital expenditures		$	24,273			$	60,620			$	79,464			$	86,685			$	86,732			$	71,495			$	36,955			$	37,074			$	71,614
	Acquisition capital expenditures			—				5,582				3,723				1,976				3,615				628				618				1,210				1,220

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			Three Months				Nine Months
			April 1, 2000 to				July 1, 2000 to																				Six Months Ended								Twelve
			June 30, 2000				March 31, 2001																												Months
			Pre-Going				Post-Going				Fiscal Year Ended March 31,																								Ended
			Private				Private																				September 30,				September 30,				September 30,
			Transaction(11)				Transaction(10)				2002				2003				2004				2005				2004				2005				2005
																											(Unaudited)				(Unaudited)				(Unaudited)
Pro Forma Financial Data (unaudited)(12):
	Pro forma net loss			—				—				—				—				—				(43,056	)			—				(16,380	)			(31,724	)
	Pro forma basic and diluted net loss attributable to common Stockholders per Class A common share			—				—				—				—				—				(1.08	)			—				(0.45	)			(0.35	)
	Pro forma basic and diluted net loss attributable to common Stockholders per Class B common share			—				—				—				—				—				(1.13	)			—				(0.45	)			(1.02	)
	Pro forma total assets (at end of period)			—				—				—				—				—				977,877				—				957,221				957,221
	Pro forma total long-term debt (at end of period)			—				—				—				—				—				694,607				—				684,561				684,561
	Pro forma stockholders’ equity (at end of period)			—				—				—				—				—				149,893				—				139,675				139,675

(1)	Transaction costs in the 2005 Fiscal Year and the twelve months ended September 30, 2005 consist of the following costs incurred in connection with the IDS Transactions: (a) approximately $11.3 million of redemption premium on the portion of the Coinmach Corp. 9% notes redeemed, (b) the write-off of unamortized deferred financing costs relating to the redemption of the Coinmach Corp. 9% notes and the term loans repaid aggregating approximately $3.5 million, (c) expenses relating to the amendment of the Coinmach Corp. credit facility, aggregating approximately $1.8 million and (d) special bonuses to senior management related to the IDS Transactions aggregating approximately $0.8 million. Transaction costs in the 2002 Fiscal Year consist of costs incurred in connection with Coinmach Corp.’s refinancing on January 25, 2002.
(2)	For the 2005 Fiscal Year, net loss includes approximately $18.2 million of preferred stock dividend recorded as interest expense. For the 2004 Fiscal Year, net loss includes approximately $24.7 million of preferred stock dividend recorded as interest expense. For the six months ended September 30, 2004, net loss includes approximately $13.4 million of preferred stock dividend recorded as interest expense. For the twelve months ended September 30, 2005, net loss includes approximately $4.9 million of preferred stock dividend recorded as interest expense. As required by SFAS No. 150, accrued and unpaid dividends prior to adoption of SFAS No. 150 have not been reclassified to interest expense. Preferred stock dividends for the 2003 Fiscal Year and the 2002 Fiscal Year and for the nine-month period from July 1, 2000 to March 31, 2001 were approximately $20.8 million, $20.4 million and $12.7 million, respectively.

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(3)	Basic and diluted net loss attributable to common stockholders per share of Class A common stock and Class B common stock for the 2005 Fiscal Year, the six months ended September 30, 2005 and the twelve months ended September 30, 2005 was calculated by dividing the net loss attributable to Class A common stock and Class B Common Stock by the respective weighted average number of shares outstanding. For the 2004 Fiscal Year, 2003 Fiscal Year, 2002 Fiscal Year and for the nine-month period from July 1, 2000 to March 31, 2001 and the three month period from April 1, 2000 to June 30, 2000 and the six months ended September 30, 2004, there was no Class A common stock outstanding. For these periods, the calculation of net loss attributable to common stockholders per share of Class B Common Stock assumes that 24,980,445 shares of Class B Common Stock were outstanding.
(4)	Total long-term debt at March 31, 2001 does not include unamortized premium of $5,555, recorded as a result of the issuance by Coinmach Corp. of $100 million aggregate principal amount of 113/4% Series C Senior Notes due 2005 (the “113/4% Senior Notes”) in October 1997. The 113/4% Senior Notes were redeemed on February 25, 2002 and the unamortized premium on such date was included in the determination of the loss on extinguishment of debt.
(5)	EBITDA represents earnings from continuing operations before deductions for interest, income taxes and depreciation and amortization. Management believes that EBITDA is useful as a means to evaluate our ability to service existing debt, to sustain potential future increases in debt and to satisfy capital requirements. EBITDA is also used by management as a measure of evaluating the performance of our three operating segments. Management further believes that EBITDA is useful to investors as a measure of comparative operating performance as it is less susceptible to variances in actual performance resulting from depreciation, amortization and other non-cash charges and more reflective of changes in pricing decisions, cost controls and other factors that affect operating performance. Management uses EBITDA to develop compensation plans, to measure sales force performance and to allocate capital assets. Additionally, because we have historically provided EBITDA to investors, we believe that presenting this non-GAAP financial measure provides consistency in our financial reporting. Management’s use of EBITDA, however, is not intended to represent cash flows for the period, nor has it been presented as an alternative to either (a) operating income (as determined by GAAP) as an indicator of operating performance or (b) cash flows from operating, investing and financing activities (as determined by GAAP) as a measure of liquidity. Given that EBITDA is not a measurement determined in accordance with U.S. generally accepted accounting principles and is thus susceptible to varying calculations, EBITDA may not be comparable to other similarly titled measures of other companies. The following tables reconcile our net loss and cash flow provided by operating activities to EBITDA for each period presented (in thousands).

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		Three Months				Nine Months
		April 1, 2000 to				July 1, 2000 to																				Six Months Ended								Twelve
		June 30, 2000				March 31, 2001																												Months
		Pre-Going				Post-Going				Fiscal Year Ended March 31,																								Ended
		Private				Private																				September 30,				September 30,				September 30,
		Transaction				Transaction				2002				2003				2004				2005				2004				2005				2005
Net loss		$	(4,759	)		$	(29,063	)		$	(42,335	)		$	(3,200	)		$	(31,331	)		$	(35,325	)		$	(16,652	)		$	(3,263	)		$	(21,936	)
(Benefit) provision for income taxes			(1,329	)			(8,620	)			(5,833	)			381				(3,648	)			(10,166	)			(1,921	)			(2,149	)			(10,394	)
Interest expense			16,685				52,461				73,036				58,167				57,377				58,572				28,625				30,646				60,593
Interest expense — preferred stock			—				—				—				—				24,714				18,230				13,368				—				4,862
Interest expense — escrow interest			—				—				—				—				—				941				—				—				941
Depreciation and amortization			31,557				103,142				129,697				104,178				108,577				110,440				55,170				54,004				109,274
EBITDA(6)		$	42,154			$	117,920			$	154,565			$	159,526			$	155,689			$	142,692			$	78,590			$	79,238			$	143,340

		Three Months				Nine Months
		April 1, 2000 to				July 1, 2000 to																				Six Months Ended								Twelve
		June 30, 2000				March 31, 2001																												Months
		Pre-Going				Post-Going				Fiscal Year Ended March 31,																								Ended
		Private				Private																				September 30,				September 30,				September 30,
		Transaction				Transaction				2002				2003				2004				2005				2004				2005				2005
Cash flow provided by operating activities		$	17,314			$	68,014			$	77,799			$	103,900			$	97,052			$	104,998			$	48,344			$	52,008			$	108,662
Loss on extinguishment of debt(i)			—				—				(11,402	)			—				—				—				—				—				—
Interest expense			16,685				52,461				73,036				58,167				57,377				58,572				28,625				30,646				60,593
Interest expense — escrow interest			—				—				—				—				—				941				—				—				941
Gain (loss) on sale of investment and equipment			—				—				147				3,532				1,232				557				54				(27	)			476
Loss on redemption of Coinmach Corp. 9% notes			—				—				—				—				—				(14,770	)			—				—				(14,770	)
Stock based compensation			(118	)			(1,125	)			(530	)			(338	)			(176	)			(74	)			(37	)			(12	)			(49	)
Change in operating assets and liabilities			7,874				(1,161	)			18,100				(3,693	)			2,513				(5,206	)			2,776				(2,314	)			(10,296	)
Deferred taxes			1,873				8,478				4,247				16				3,753				10,166				1,956				2,149				10,359
Amortization of debt discount and deferred issue costs			(454	)			(1,052	)			(2,008	)			(2,439	)			(2,414	)			(2,326	)			(1,207	)			(1,063	)			(2,182	)

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		Three Months				Nine Months
		April 1, 2000 to				July 1, 2000 to																				Six Months Ended								Twelve
		June 30, 2000				March 31, 2001																												Months
		Pre-Going				Post-Going				Fiscal Year Ended March 31,																								Ended
		Private				Private																				September 30,				September 30,				September 30,
		Transaction				Transaction				2002				2003				2004				2005				2004				2005				2005
Amortization of premium on 113/4% Senior Notes			309				925				1,009				—				—				—				—				—				—
(Benefit) provision for income taxes			(1,329	)			(8,620	)			(5,833	)			381				(3,648	)			(10,166	)			(1,921	)			(2,149	)			(10,394	)
EBITDA(6)		$	42,154			$	117,920			$	154,565			$	159,526			$	155,689			$	142,692			$	78,590			$	79,238			$	143,340

	(i)	Loss on extinguishment of debt for the fiscal year ended March 31, 2002 consists of costs incurred in connection with Coinmach Corp.’s refinancing on January 25, 2002.

(6)

The computation of EBITDA for the 2005 Fiscal Year and the twelve months ended September 30, 2005 has not been adjusted to take into account transaction costs aggregating approximately $17.4 million in connection with the IDS Transactions consisting of (a) approximately $11.3 million of redemption premium on the portion of the Coinmach Corp. 9% notes redeemed, (b) the write-off of unamortized deferred financing costs relating to the redemption of the Coinmach Corp. 9% notes and the term loans repaid aggregating approximately $3.5 million, (c) expenses relating to the Coinmach Corp. credit facility amendment aggregating approximately $1.8 million, and (d) special bonuses to senior management related to the IDS Transactions aggregating approximately $0.8 million. The computation of EBITDA for the 2002 Fiscal Year has not been adjusted to take into account transaction costs consisting of costs incurred in connection with Coinmach Corp.’s refinancing on January 25, 2002.

(7)	EBITDA margin represents EBITDA as a percentage of revenues. Management believes that EBITDA margin is a useful measure to evaluate our performance over various sales levels. EBITDA margin should not be considered as an alternative for measurements determined in accordance with U.S. generally accepted accounting principles.
(8)	Operating margin represents operating income as a percentage of revenues.
(9)	Capital expenditures represent amounts expended for property, equipment and leasehold improvements, as well as for advance location payments to location owners. Acquisition capital expenditures represent the amounts expended to acquire local, regional and multiregional route operators.

(10)	Includes the results of operations for the period July 1, 2000 to March 31, 2001, representing the results subsequent to the “going private” transaction (the “Going Private Transaction”).
(11)	As a result of the Going Private Transaction that was accounted for using the purchase method of accounting, and due to a practice known as “push down” accounting, as of July 1, 2000 (the beginning of the accounting period closest to the date on which control was effective), Coinmach Corp. adjusted its consolidated assets and liabilities to their estimated fair values, based on valuations, estimations and other studies. Therefore, the financial statements presented for the Post-Going Private Transaction period are not comparable to the financial statements presented for the Pre-Going Private Transaction period. Had the Going Private Transaction taken place at April 1, 2000, on an unaudited pro forma basis, depreciation and amortization and net loss would have been $3.5 million higher than reported for the Pre-Transaction period ended June 30, 2000. This includes the results of operations for the period April 1, 2000 to June 30, 2000, representing the results prior to the Going Private Transaction. For more information regarding the Going Private Transaction, please see “Business — General Development of Business.”
(12)	The unaudited pro forma financial data for the 2005 Fiscal Year, the six months ended September 30, 2005 and the twelve months ended September 30, 2005 give effect to (i) this offering, (ii) Coinmach Corp.’s refinancings and (iii) the Tender Offer (assuming the tender of the

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	Minimum Tender Amount) as if such transactions had occurred at the beginning of the respective periods or in the case of balance sheet data as of the date of such data.

										Twelve Months
		Fiscal Year Ended				Six Months Ended				Ended
		March 31, 2005				September 30, 2005				September 30, 2005
Net loss as reported		$	(35,325	)		$	(3,263	)		$	(21,936	)
Additional transaction costs(a)			(28,676	)			(27,821	)			(27,821	)
Reduction in interest expense			15,573				5,589				11,232
Tax benefit (41%)			5,372				9,115				6,801
		$	(43,056	)		$	(16,380	)		$	(31,724	)

(a)

Additional transaction costs represent (i) approximately $14.6 million of redemption premium on the portion of the Coinmach Corp. 9% notes redeemed, (ii) write-off of deferred financial costs relating to the redemption of the Coinmach Corp. 9% notes totaling approximately $5.4 million, $4.8 million and $4.8 million in the 2005 Fiscal Year, the six months ended September 30, 2005 and the twelve months ended September 30, 2005, respectively, (iii) write-off of unamortized deferred financing costs relating to the refinancing of the Coinmach Corp. credit facility totaling approximately $2.0 million, $1.8 million and $1.8 million in the 2005 Fiscal Year, the six months ended September 30, 2005 and the twelve months ended September 30, 2005, respectively, (iv) approximately $0.6 million in non-recurring transaction fees and expenses, (v) approximately $3.6 million relating to costs and expenses of the Tender Offer and (vi) write-off of unamortized deferred financing costs relating to the repurchase of the 11% notes totaling approximately $2.4 million.

		Early Tender Amount												Maximum Tender Amount
		Fiscal								Twelve				Fiscal								Twelve
		Year				Six Months				Months				Year				Six Months				Months
		Ended				Ended				Ended				Ended				Ended				Ended
		March 31,				September 30,				September 30,				March 31,				September 30,				September 30,
		2005				2005				2005				2005				2005				2005
Pro forma net loss		$	(43,992	)		$	(17,935	)		$	(32,613	)		$	(50,497	)		$	(25,865	)		$	(38,919	)
Pro forma basic and diluted net loss attributable to common stockholders per Class A common share(a)			(1.10	)			(0.50	)			(0.37	)			(1.15	)			(0.83	)			(0.48	)
Pro forma basic and diluted net loss attributable to common stockholders per Class B common share(a)			(1.15	)			(0.48	)			(1.04	)			(1.25	)			(0.58	)			(1.14	)
Pro forma total long-term debt (at end of period)			674,607				664,561				664,561				651,820				641,774				641,774

(a)

Pro forma basic and diluted net loss attributable to common stockholders per share of Class A common stock and Class B common stock for the 2005 Fiscal Year, the six months ended September 30, 2005 and the twelve months ended September 30, 2005 was calculated by dividing the pro forma net loss attributable to Class A common stock and Class B Common Stock by the respective weighted average number of shares outstanding.

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	Accounting Treatment for IDSs

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		Year Ended March 31,
		2005				2004				2003
Revenues			100.0	%			100.0	%			100.0	%
Laundry operating expenses			68.3				68.9				68.5
General and administrative expenses			1.8				1.8				1.8
Depreciation and amortization			14.2				13.6				12.5
Amortization of advance location payments			3.6				3.9				4.0
Amortization of intangibles			2.7				2.9				3.0
Other items, net			0.2				—				(0.1	)
Operating income			9.2				8.9				10.3
Interest expense			10.9				10.8				10.9
Interest expense — preferred stock			3.4				4.7				—
Interest expense — escrow interest			0.2				—				—
Transaction costs			3.2				—				—
Net loss(1)			(6.6	)			(5.9	)			(0.6	)
EBITDA margin			26.5				29.3				29.8

(1)

For the 2005 Fiscal Year, net loss includes approximately $18.2 million of preferred stock dividend recorded as interest expense. For the 2004 Fiscal Year, net loss includes approximately $24.7 million of preferred stock dividend recorded as interest expense. As required by SFAS No. 150, for fiscal years ending prior to March 31, 2004, accrued and unpaid dividends have not been reclassified to interest expense. Preferred stock dividends for the 2003 Fiscal Year were approximately $20.8 million.

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	Six Months Ended September 30, 2005 Compared to the Six Months Ended September 30, 2004.

		Six Months Ended
		September 30,
		2005				2004				Change
Route		$	236.5			$	234.2			$	2.3
Rental			17.5				16.9				0.6
Distribution			12.1				15.3				(3.2	)
		$	266.1			$	266.4			$	(0.3	)

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		Six Months Ended
		September 30,
		2005				2004				Change
Route		$	77.5			$	76.7			$	0.8
Rental			7.2				6.6				0.6
Distribution			0.4				0.5				(0.1	)
Other items, net			(0.3	)			(0.5	)			0.2
Corporate expenses			(5.6	)			(4.7	)			(0.9	)
Total EBITDA		$	79.2			$	78.6			$	0.6

	Fiscal Year Ended March 31, 2005 Compared to the Fiscal Year Ended March 31, 2004

		Year Ended March 31,
		2005				2004				Change
Route		$	472.5			$	469.6			$	2.9
Rental			34.4				32.6				1.8
Distribution			31.7				28.9				2.8
		$	538.6			$	531.1			$	7.5

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		Year Ended March 31,
		2005				2004				Change
Route		$	155.4			$	154.4			$	1.0
Rental			13.8				12.2				1.6
Distribution			1.4				(1.2	)			2.6
Other items, net			(0.8	)			(0.2	)			(0.6	)
Corporate expenses			(9.7	)			(9.5	)			(0.2	)
Transaction costs			(17.4	)			—				(17.4	)
Total EBITDA(1)		$	142.7			$	155.7			$	(13.0	)

(1)

The computation of EBITDA for the 2005 Fiscal Year has not been adjusted to take into account IDS transaction costs aggregating approximately $17.4 million consisting of (a) approximately $11.3 million of redemption premium on the portion of the Coinmach Corp. 9% notes redeemed in connection with the IDS Transactions, (b) the write-off of deferred financing costs relating to the Coinmach Corp. 9% notes redeemed and term loans repaid in connection with the IDS Transactions aggregating approximately $3.5 million, (c) expenses relating to the Coinmach Corp. credit facility amendment aggregating approximately $1.8 million and (d) special bonuses related to the IDS Transactions aggregating approximately $0.8 million.

	Fiscal Year Ended March 31, 2004 Compared to the Fiscal Year Ended March 31, 2003

		Year Ended March 31,
		2004				2003				Change
Route		$	469.6			$	471.5			$	(1.9	)
Rental			32.6				28.7				3.9
Distribution			28.9				35.0				(6.1	)
		$	531.1			$	535.2			$	(4.1	)

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		Year Ended March 31,
		2004				2003				Change
Route		$	154.4			$	158.9			$	(4.5	)
Rental			12.2				11.4				0.8
Distribution			(1.2	)			(1.7	)			0.5
Other items, net			(0.2	)			0.5				(0.7	)
Corporate expenses			(9.5	)			(9.6	)			0.1
Total EBITDA		$	155.7				159.5			$	(3.8	)

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	Dividend Policy

	Financing Activities

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	The IDS Offering

	11% Notes

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	Amended and Restated Credit Facility

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	Coinmach Corp. 9% Notes

	The Intercompany Loan

	Operating and Investing Activities

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		Six Months Ended
		September 30,
		2005				2004				Change
Route		$	30.4			$	32.5			$	(2.1	)
Rental			3.5				2.6				0.9
Distribution			0.2				0.2				—
Corporate			2.5				1.4				1.1
		$	36.6			$	36.7			$	(0.1	)

		Year Ended March 31,
		2005				2004				Change
Route		$	64.2			$	75.4			$	(11.2	)
Rental			3.8				7.1				(3.3	)
Distribution			0.4				0.6				(0.2	)
Corporate			1.9				1.7				0.2
		$	70.3			$	84.8			$	(14.5	)

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	Summary of Contractual Obligations

						Payments Due in Fiscal Year
		Total				2006				2007				2008				2009				2010				After
Long-Term Debt Obligations		$	690.4			$	1.3			$	2.5			$	12.0			$	11.9			$	526.5			$	136.2
Interest on Long-Term Debt(1)			480.4				30.5				59.8				59.5				58.7				52.3				219.6
Capital Lease Obligations(2)			9.2				2.1				3.5				2.2				1.2				0.2				—
Operating Lease Obligations			26.3				4.2				7.0				5.1				4.0				3.0				3.0
		$	1,206.3			$	38.1			$	72.8			$	78.8			$	75.8			$	582.0			$	358.8

(1)	As of September 30, 2005, approximately $229.3 million of our long-term debt outstanding under the Coinmach Corp. credit facility term loans was subject to variable rates of interest. Interest expense on these variable rate borrowings for future years was calculated using a weighted average interest rate of 6.88% based on the Eurodollar rate in effect at September 30, 2005. In addition, at September 30, 2005, $324.5 million of our long-term debt outstanding was subject to a fixed interest rate of 9.0% and approximately $136.1 million of our long-term debt outstanding was subject to a fixed interest rate of 11.0%. In addition, in connection with the Coinmach Corp. credit facility, Coinmach Corp. is a party to three separate interest rate swap agreements totaling $150.0 million which expire on February 1, 2006. Such agreements effectively convert $150.0 million principal amount of floating rate term loans under the Coinmach Corp. credit facility to a fixed interest rate of 5.66%.
(2)	Includes both principal and interest.

	Off-balance Sheet Arrangements

	Future Capital Needs and Resources

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	Description of Principal Operations

	Sales and Marketing

	Location Leasing

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	Service

	Information Management

	Remanufacturing

	Revenue Collection and Security

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	Description of Complementary Operations

	Rental Operations

	Distribution Operations

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	•	New Customers and Locations. Our sales and marketing efforts focus on adding new customers as well as increasing the number of locations from our existing customers. We add new customers by marketing our products and services to building managers and property owners whose leases with other laundry equipment services providers are near expiration or who currently manage their own laundry facilities. According to information provided by the Multi-housing Laundry Association, there are approximately 1.1 million machines installed in locations that continue to be managed by owner-operators. Building owners or managers can eliminate cash outlays and equipment servicing costs by contracting with us to purchase, service and maintain laundry equipment. We offer a full range of services from the design, construction and installation of new laundry equipment facilities to the refurbishment of existing facilities which we believe provides us a competitive advantage in securing new customers.
	•	Operating Efficiencies. We focus on improving our net contribution per machine by increasing operating efficiencies. Each additional location added to our existing base provides us the ability to further leverage our well-developed operating infrastructure and positions us to achieve higher returns on our established base.
	•	Price Changes. We actively monitor our installed base to identify those locations in which to implement price changes. Pricing strategy is established at the corporate level, and implemented by the regional managers, at their discretion, as local competition and other factors unique to a local region are analyzed in determining the efficacy of price changes. Since our regional managers’ compensation is linked to the financial performance of their

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		region, they are provided certain latitude to implement pricing changes and other operational policies to maximize the revenues and operating cash flow of their local business.
	•	Disciplined Approach to Capital Expenditures. Whether a new contract or an acquisition, we are focused on the ability to generate the revenues and operating cash flow to validate any capital investment decision. As such, every new contract, renewal and/or acquisition undergoes a comprehensive financial analysis to ensure that our return criteria are met.
	•	Continued Development of Integrated Computer Systems. While we believe that we have the most advanced management information systems in the industry, we are constantly working with our vendors to upgrade our integrated computer systems, given the rapid changes in technology. To that end, we initiated a comprehensive program through which we will improve communications among our regions and maximize cost savings, including programs related to field service management sales force automation, and business intelligence. We invested approximately $2.2 million in this program in the fiscal year ended March 31, 2005 and approximately $2.5 million in the six months ended September 30, 2005, with an additional $2.0 million budgeted for the remainder of the current fiscal year. We believe that the results of this investment program will result in improved financial performance through increased operational efficiency, quicker response time and reduced costs.
	•	Expansion of Rental Opportunities. We believe that AWA is well-positioned for growth in both new and existing markets. As a result, we will continue to evaluate our investment opportunities in AWA, including in laundry equipment, computer systems, and regional offices to improve customer service and reduce operating costs.

	•	Growth Through Disciplined Acquisitions. While the number of significant acquisition opportunities has diminished, due in part to our successful execution of our acquisition strategy, we have focused our efforts over the past several years on selectively acquiring smaller routes within our fragmented industry. We believe that there are numerous private, family-owned businesses that often lack the financial resources to compete effectively with larger independent operators such as us to secure new or existing contracts. Consequently, such independent operators, especially those that are undergoing generational ownership changes, continue to represent potential acquisition opportunities. Determination of attractive acquisition targets is based on many factors, including the size of the business in terms of cash flow and ongoing machine base, existing contract terms and potential operating efficiencies and cost savings.
	•	Develop Complementary Lines of Business. We believe that our leading market position and our access to over six million individual housing units provide us with additional growth and diversification opportunities both within and beyond our existing laundry business. We believe that our existing sales, service, collections and security infrastructure could potentially be extended into other collections or service-based route businesses that are unrelated to our existing laundry business. We regularly explore strategic alliances with other companies in an effort to develop these ancillary revenue streams, such as payphone and parking meter collection services. For example,we currently outsource collection and related services to an independent pay phone service provider with phones located in the Southeast and Southcentral regions of the United States. We will continue to evaluate opportunities in this area in order to generate incremental revenue and operating income from our core route business infrastructure.

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	The AWA Transactions

	The IDS Offering and Related Transactions

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Name		Title		Age
Stephen R. Kerrigan		Chairman of the Board, President, Chief Executive Officer and Director			52
Robert M. Doyle		Chief Financial Officer, Senior Vice President, Secretary and Treasurer			48
James N. Chapman		Director			43
David A. Donnini		Director			40
William M. Kelly		Director			56
Woody M. McGee		Director			54
Bruce V. Rauner		Director			49
John R. Scheessele		Director			58

Name		Title		Age
Stephen R. Kerrigan		Chairman of the Board and Chief Executive Officer			52
Mitchell Blatt		President and Chief Operating Officer			54
Robert M. Doyle		Chief Financial Officer, Senior Vice President, Treasurer, Secretary			48
Ramon Norniella		President and Secretary of AWA; Senior Vice President of Coinmach Corp.			46
Michael E. Stanky		Senior Vice President			54

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	Election of Directors

	Committees of the Board

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														Long-Term Compensation
		Annual Compensation																Securities
														Other Annual				Underlying				All Other
		Fiscal				Salary				Bonus				Compensation				Options/SARs				Compensation
Name and Principal Position		Year				($)				($)				($)				(#)				(16)($)
Stephen R. Kerrigan			2005				446,250				448,000				163,298	(1)							2,157
Chairman of the Board and Chief			2004				446,250				223,500				171,610	(2)							2,243
Executive Officer; President (CSC)			2003				440,120				348,125				131,952	(3)							2,946
Mitchell Blatt			2005				352,753				178,000				236,555	(4)							2,157
President and Chief Operating Officer			2004				352,753				88,000				65,893	(5)							2,243
(Laundry Corp. and Coinmach Corp.)			2003				350,753				113,000				57,639	(6)							3,016
Robert M. Doyle			2005				274,808				169,000				66,221	(7)							2,220
Chief Financial Officer, Senior			2004				257,500				75,000				36,856	(8)							2,258
Vice President, Secretary and Treasurer			2003				255,337				89,375				32,723	(9)							2,324
Ramon Norniella			2005				156,923				65,000				16,000	(10)							2,016
President and Secretary (AWA);			2004				150,000				26,500				9,472	(11)							2,243
Senior Vice President (Coinmach Corp.)			2003				150,000				70,000				9,227	(12)							2,827
Michael E. Stanky			2005				202,800				85,500				33,199	(13)							2,559
Senior Vice President			2004				202,800				21,600				28,368	(14)							2,243
(Laundry Corp. and Coinmach Corp.)			2003				200,550				29,300				29,125	(15)							2,833

	(1)	Includes $70,427 in forgiven indebtedness of Mr. Kerrigan and MCS Capital, Inc., an entity controlled by Mr. Kerrigan (“MCS”); $11,250 in interest, calculated at a rate of 7.5% per annum on a loan made by Coinmach Corp. to Mr. Kerrigan; $27,486 in interest calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of Laundry Corp. relating to the Going Private Transaction; $2,448 in automobile allowances; $15,058 in club membership fees; $1,774 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Kerrigan; $15,955 in forgiven indebtedness relating to additional units of Holdings issued in July 2004 and $18,900 relating to the taxable event of the distribution of shares of AWA to Holdings. In connection with the IDS Transactions, Mr. Kerrigan received $691,538 relating to the redemption of Laundry Corp. Class B preferred stock.

	(2)	Includes $115,907 in forgiven indebtedness of Mr. Kerrigan and MCS; $6,057 in interest, calculated at a rate of 7.5% per annum on a loan made by Coinmach Corp. to Mr. Kerrigan; $28,916 in interest calculated at a rate of 7% per annum on a loan made in connection with the purchase of common

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		stock of Laundry Corp. relating to the Going Private Transaction; $3,688 in automobile allowances; $15,268 in club membership fees; and $1,774 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Kerrigan.
	(3)	Includes $77,429 in forgiven indebtedness of Mr. Kerrigan and MCS; $3,750 in interest, calculated at a rate of 7.5% per annum on a loan made by Coinmach Corp. to Mr. Kerrigan; $30,187 in interest calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of Laundry Corp. relating to the Going Private Transaction; $2,084 in automobile allowances; $16,728 in club membership fees; and $1,774 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Kerrigan.
	(4)	Includes $127,130 in forgiven indebtedness; $40,716 in interest, calculated at a rate of 8% per annum on a loan issued by Coinmach Corp. to Mr. Blatt; $16,696 in interest calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of Laundry Corp. relating to the Going Private Transaction; $2,031 in automobile allowances; $15,690 in club membership fees; $2,488 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Blatt; $16,109 in forgiven indebtedness relating to additional units of Holdings issued in July 2004 and $15,695 relating to the taxable event of the distribution of shares of AWA to Holdings. In connection with the IDS Transactions, Mr. Blatt received $504,089 relating to the redemption of Laundry Corp. Class B preferred stock.
	(5)	Includes $28,749 in forgiven indebtedness; $17,678 in interest calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of Laundry Corp. relating to the Going Private Transaction; $2,938 in automobile allowances; $14,040 in club membership fees; and $2,488 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Blatt.
	(6)	Includes $23,301 in forgiven indebtedness; $15,304 in interest calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of CLC relating to the Going Private Transaction; $3,188 in automobile allowances; $13,398 in club membership fees; and $2,448 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Blatt.
	(7)	Includes $10,433 in forgiven indebtedness; $12,416 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of Laundry Corp. relating to the Going Private Transaction; $5,676 in automobile allowances; $1,450 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Doyle; $29,659 in forgiven indebtedness relating to additional units of Holdings issued in July 2004 and $6,587 relating to the taxable event of the distribution of shares of AWA to Holdings. In connection with the IDS Transactions, Mr. Doyle received $340,612 relating to the redemption of Laundry Corp. Class B preferred stock.
	(8)	Includes $17,164 in forgiven indebtedness; $13,146 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of Laundry Corp. relating to the Going Private Transaction; $5,096 in automobile allowances; and $1,450 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Doyle.
	(9)	Includes $14,859 in forgiven indebtedness; $13,876 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock of Laundry Corp. relating to the Going Private Transaction; $2,563 in automobile allowances; and $1,425 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Doyle.

(10)

Includes $3,960 in forgiven indebtedness; $4,712 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock and preferred stock of Laundry Corp. relating to the Going Private Transaction; $875 in automobile allowances; $6,183 in forgiven indebtedness relating to additional units of Holdings issued in July 2004 and $270 relating to the taxable event of the distribution of shares of AWA to Holdings. In connection with the IDS Transactions, Mr. Norniella received $3,237 relating to the redemption of Laundry Corp. Class B preferred stock.

(11)	Includes $3,960 in forgiven indebtedness; $4,990 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock and preferred stock of Laundry Corp. relating to the Going Private Transaction; and $522 in automobile allowances.

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(12)	Includes $3,960 in forgiven indebtedness; $5,267 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock and preferred stock of Laundry Corp. relating to the Going Private Transaction.
(13)	Includes $10,574 in forgiven indebtedness; $12,583 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock and preferred stock of Laundry Corp. relating to the Going Private Transaction; $192 in automobile allowances; $1,803 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Stanky; $5,420 in forgiven indebtedness relating to additional unit of Holdings issued in July 2004 and $2,627 relating to the taxable event of the distribution of shares of AWA to Holdings. In connection with the IDS Transactions, Mr. Stanky received $119,454 relating to the redemption of Laundry Corp. Class B preferred stock.
(14)	Includes $13,027 in forgiven indebtedness; $13,323 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock and preferred stock of Laundry Corp. relating to the Going Private Transaction; $305 in automobile allowances; and $1,713 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Stanky.
(15)	Includes $13,029 in forgiven indebtedness; $14,063 in interest expense calculated at a rate of 7% per annum on a loan made in connection with the purchase of common stock and preferred stock of Laundry Corp. relating to the Going Private Transaction; $363 in automobile allowances; and $1,670 in life insurance premiums paid by Coinmach Corp. on behalf of Mr. Stanky.
(16)	Represents matching contributions made by Coinmach Corp. to the 401(k) Plan administered by Coinmach Corp. See “— 401(k) Savings Plan.”

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	The 2004 LTIP

	Option Awards

	Stock Appreciation Rights

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	Full Value Awards

	•	the grant may be in return for previously performed services, or in return for the participant surrendering other compensation that may be due;
	•	the grant may be contingent on the achievement of performance or other objectives during a specified period; and
	•	the grant may be subject to a risk of forfeiture or other restrictions that lapse upon the achievement of one or more goals relating to completion of service by the participant, or the achievement of performance or other objectives.

	Performance-Based Awards

	2004 Unit Incentive Sub-Plan

	Restricted Stock Grants under 2004 LTIP

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		Class A								Class B								% of Aggregate
		Common Stock								Common Stock								Voting Power
						% of								% of								Adjusted for this
Name and Address of Beneficial Owner(1)		# of Shares				Class				# of Shares				Class				Actual				Offering(2)
Coinmach Holdings, LLC			—				—				24,980,445				100	%			72.5	%			62.8	%
Stephen R. Kerrigan			—				—				—				—				—				—
Mitchell Blatt			—				—				—				—				—				—
Robert M. Doyle			4,000				*				—				—				*				*
Michael E. Stanky			5,625				*				—				—				*				*
Ramon Norniella			—				—				—				—				—				—
James N. Chapman			3,000				*				—				—				*				*
Bruce V. Rauner(3)			2,199,413				11.6	%			24,980,445				100	%			75.7	%			65.5	%
David A. Donnini(3)			2,199,413				11.6	%			24,980,445				100	%			75.7	%			65.5	%
John R. Scheessele			—				—				—				—				—				—
Woody M. McGee			—				—				—				—				—				—
William M. Kelly			—				—				—				—				—				—
All Officers and Directors as a group (11 persons)(3)(4)			2,212,038				11.7	%			24,980,445				100	%			75.8	%			65.6	%
Other Stockholders
GTCR-CLC, LLC(3)(5)			2,199,413				11.6	%			24,980,445				100	%			75.7	%			65.5	%
FMR Corp.(6)(7)			2,407,900	(8)			12.7	%			—				—				3.5	%			3.0	%
The Northwestern Mutual Life Insurance Company(9)(10)			1,450,000	(11)			7.7	%			—				—				2.1	%			1.8	%
SAB Overseas Master Fund, L.P. (12)(13)			1,214,733				6.4	%			—				—				1.8	%			1.5	%

*	Does not exceed 1 percent of the issued and outstanding shares of such class.
(1)	All addresses for directors and executive officers are c/o Coinmach Service Corp., 303 Sunnyside Blvd., Suite 70, Plainview, New York 11803.
(2)	Assumes (i) no repurchase of shares of Class A common stock, (ii) no exercise of the underwriters’ overallotment option and (iii) no repurchase of shares of Class B common stock.
(3)	All shares of Class B common stock shown are held by Holdings. GTCR-CLC, LLC, of which GTCR Fund VII, L.P. is the Managing Member, is a member of and effectively controls Holdings. The shares of Class A common stock shown are held by GTCR Capital Partners, L.P., and this table assumes no use of proceeds from this offering to repurchase any of such shares. Messrs. Rauner and Donnini are principals of GTCR Golder Rauner, L.L.C., the General Partner of GTCR Partners VII L.P., which is the General Partner of GTCR Fund VII, L.P. and GTCR Capital Partners, L.P. Messrs. Rauner and Donnini disclaim beneficial ownership of such shares.

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(4)	In calculating the common stock beneficially owned by executive officers and directors as a group, the common stock owned by GTCR-CLC, LLC and included in the beneficial ownership amounts of each of Messrs. Rauner and Donnini are included only once.
(5)	Address is c/o GTCR Golden Rauner LLC, Sears Tower #6100, Chicago, Illinois 60606-6402.
(6)	Beneficial ownership is based on information contained in a Schedule 13G filed by FMR Corp. with the SEC on January 10, 2005.
(7)	Address is 82 Devonshire Street, Boston, Massachusetts 02109.
(8)	Based on information contained on Schedule 13G filed by FMR Corp. with the SEC on January 10, 2005, Fidelity Management & Research Company, a wholly-owned subsidiary of FMR Corp. and an investment advisor registered under Section 203 of the Investment Advisers Act of 1940, is the beneficial owner of the securities as a result of acting as investment advisor to various investment companies registered under Section 8 of the Investment Company Act of 1940. Additionally, the ownership of one investment company, Fidelity Capital & Income Fund, amounted to 1,522,000 shares or 8.048% of the IDSs outstanding.
(9)	Beneficial ownership is based on information contained in a Schedule 13G filed by The Northwestern Mutual Life Insurance Company with the SEC on February 10, 2005.

(10)	Address is 720 East Wisconsin Avenue, Milwaukee, Wisconsin, 53202.
(11)	Based on information contained in a Schedule 13G filed by Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) with the SEC on February 10, 2005, 1,450,000 shares are beneficially owned, of which 1,400,000 shares are owned directly by The Northwestern Mutual. Northwestern Mutual may be deemed to be the indirect beneficial owner of the balance of such shares, 50,000 shares are owned by The Northwestern Mutual Life Insurance Company Group Annuity Separate Account.
(12)	Beneficial ownership is based on information contained in a Schedule 13G filed by SAB Capital Partners, L.P. with the SEC on May 20, 2005.
(13)	Address is 712 Fifth Avenue, 42nd Floor, New York, New York 10019.

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		Number of Units								Percent of Each Unit Class
						Class C								Class C
Name and Address of Beneficial Owner(1)		Common Units				Preferred Units				Common Units				Preferred Units
Stephen R. Kerrigan(2)			9,270,914				2,917.97				5.14	%			2.18	%
Mitchell Blatt			8,326,400				3,478.87				4.61	%			2.60	%
Robert M. Doyle			4,865,898				523.59				2.70	%			*
Michael E. Stanky			2,458,122				283.61				1.36	%			*
Ramon Norniella			700,000				60.64				*				*
James N. Chapman			1,456,436				105.69				*				*
Bruce V. Rauner(3)			116,133,474				101,195.00				64.35	%			75.73	%
David A. Donnini(4)			116,133,474				101,195.00				64.35	%			75.73	%
John R. Scheessele			—				—				—				—
Woody M. McGee			—				—				—				—
William M. Kelly			—				—				—				—
All Officers and Directors as a group (11 persons)(5)(6)			143,211,244				108,565.37				79.36	%			81.25	%
Other Stockholders
GTCR-CLC, LLC(3)(4)(7)			116,133,474				101,195.00				64.35	%			75.73	%
Filbert Investment Pte Ltd(8)			15,384,615				13,405.66				8.53	%			10.03	%
TCW(8)(9)			7,692,311				6,702.84				4.26	%			5.02	%

*	Percentage of units beneficially owned does not exceed 1% of the outstanding units of such class.

(1)	All addresses for directors and officers are c/o Coinmach Service Corp., 303 Sunnyside Blvd., Suite 70, Plainview, New York 11803
(2)	All common units and Class C preferred units are beneficially owned by MCS Capital, Inc., a corporation controlled by Mr. Kerrigan.
(3)	All common units and Class C preferred units are held by GTCR-CLC, LLC, of which GTCR Fund VII, L.P. is the managing member. Mr. Rauner is a principal of GTCR Golder Rauner, L.L.C., the General Partner of GTCR Partners VII, L.P., which is the General Partner of GTCR Fund VII, L.P. Mr. Rauner disclaims beneficial ownership of such units.
(4)	All common units and Class C preferred units are held by GTCR-CLC, LLC, of which GTCR Fund VII, L.P. is the managing member. Mr. Donnini is a principal of GTCR Golder Rauner, L.L.C., the General Partner of GTCR Partners VII, L.P., which is the General Partner of GTCR Fund VII, L.P. Mr. Donnini disclaims beneficial ownership of such units.
(5)	In calculating the common units beneficially owned by executive officers and directors as a group, 116,133,474 units owned by GTCR-CLC, LLC and included in the beneficial ownership amounts of each of Messrs. Rauner and Donnini are included only once.
(6)	In calculating the Class C preferred units beneficially owned by the executive officers and directors as a group, 104,520 Class C preferred units owned by GTCR-CLC, LLC and included in the beneficial ownership amounts of each of Messrs. Rauner and Donnini are included only once.
(7)	Address is c/o GTCR Golden Rauner LLC, Sears Tower #6100, Chicago, Illinois 60606-6402.
(8)	Address is c/o Coinmach Laundry Corporation, 303 Sunnyside Blvd., Suite 70, Plainview, New York 11803.

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(9)

TCW affiliates currently own approximately 7,692,311 common units and 6,703 Class C preferred units as follows: (a) TCW Crescent Mezzanine Partners II, L.P. owns 4,953,193 common units and 4,316 Class C preferred units; (b) TCW Crescent Mezzanine Trust II owns 1,200,655 common units and 1,046 Class C preferred units; (c) TCW Leveraged Income Trust, L.P. owns 512,821 common units and 447 Class C preferred units; (d) TCW Leveraged Income Trust II, L.P. owns 512,821 common units and 447 Class C preferred units; and (e) TCW Leveraged Income Trust IV, L.P. owns 512,821 common units and 447 Class C preferred units. The managing owner of TCW/ Crescent Mezzanine Partners II, L.P. and TCW/ Crescent Mezzanine Trust II is TCW/ Crescent Mezzanine, L.L.C. The investment advisor for TCW/ Crescent Mezzanine Partners II, L.P. and TCW/ Crescent Mezzanine Trust II is TCW/ Crescent Mezzanine, L.L.C. The general partner of TCW Leveraged Income Trust, L.P. is TCW Advisors (Bermuda), Ltd. The investment advisor for TCW Leveraged Income Trust, L.P. is TCW Investment Management Company. The general partners of TCW Leveraged Income Trust II, L.P. are TCW (LINC II), L.P. and TCW Advisers (Bermuda), Ltd. The investment advisor of TCW Leveraged Income Trust II, L.P. is TCW Investment Management Company. The general partner of TCW Leveraged Income Trust IV, L.P. is TCW (LINC IV), L.L.C. The investment advisor of TCW Leveraged Income Trust IV, L.P. is TCW Asset Management Company.

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	The IDS Transactions

	IDS Transaction Bonuses

	Redemption of Class B Common Stock

	Sales of Class B Common Stock by Class B Common Stockholders

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	Redemption of Class B Common Stock by CSC

	Limitation on Redemption

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	Generally

	Equity Purchase Loans

	Relocation and Other Loans

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	•	CSC would cease being a holding company and become an operating company,
	•	the subsidiaries of Coinmach Corp., including AWA and Super Laundry, would become the direct subsidiaries of CSC and would become senior unsecured guarantors of the 11% notes (if 11% notes are still outstanding after completion of the Tender Offer),
	•	the Intercompany Loan (as increased as a result of the Additional Intercompany Loan) would no longer be outstanding,
	•	certain covenants under the indenture governing the 11% notes (if 11% notes are still outstanding after completion of the Tender Offer) relating to the Intercompany Loan would no longer be applicable, and
	•	CSC would replace Coinmach Corp. as the borrower under the amended and restated credit facility.

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	•	100,000,000 authorized shares of Class A common stock, par value $0.01 per share;
	•	100,000,000 authorized shares of Class B common stock, par value $0.01 per share; and
	•	1,000,000 authorized shares of preferred stock, par value $0.01 per share.

	Class A Common Stock Held Separate From IDSs and Class A Common Stock Underlying IDSs

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	Voting Rights

	Common Stock Voting Rights Generally

	Class A Common Stock Voting Rights

	Class B Common Stock Voting Rights

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	Election of Directors

	Dividends

	Periods Ending on or Prior to March 31, 2007

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	Fiscal Years Ending After March 31, 2007

	Waiver of Cash Dividends by Holders of Class B Common Stock

	Class A Common Stock Book-Entry Settlement and Clearance

	General

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	Book-Entry Procedures

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	•	changes in DTC’s policies and procedures that deviate from DTC’s policies and procedures as described in or contemplated by this prospectus,
	•	the accuracy of the records of DTC, its nominee or any participant or any record of beneficial ownership interest in the securities on DTC’s books, or
	•	any payments to, or the providing of notice, to participants or beneficial owners.

	Redemption of Class B Common Stock

	Sales of Class B Common Stock by Class B Common Stockholders

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	Redemption of Class B Common Stock by CSC

	Limitation on Redemption

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	Subdivisions and Combinations

	Rights Upon Merger or Consolidation; Reclassification

	•	the same kind and amount of shares of stock and other securities and property, provided that if shares of common stock are converted into or exchanged for shares of capital stock, the capital stock may differ to the extent that the Class A common stock and Class B common stock differ as provided for in the certificate of incorporation; or
	•	if holders of each class of common stock receive different distributions, then the holders shall receive a distribution equal to the value per share into which each share of any other class of common stock is converted or exchanged, as determined by an independent investment banking firm of national reputation selected by the board.

	Rights Upon Liquidation

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	Other Rights

	•	the “business combination,” or the transaction which resulted in the stockholder becoming an “interested stockholder,” is approved by the board of directors prior to the time the “interested stockholder” attained that status;
	•	upon consummation of the transaction that resulted in the stockholder becoming an “interested stockholder,” the “interested stockholder” owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding those shares owned by persons who are directors and also officers, and employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or
	•	at or subsequent to the time a person became an “interested stockholder,” the “business combination” is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the “interested stockholder.”

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	•	for breach of duty of loyalty to CSC and its stockholders;
	•	for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law;

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	•	under Section 174 of the General Corporation Law of the State of Delaware regarding unlawful payment of dividends and unlawful stock repurchases or redemptions; or
	•	for any transaction from which the director derived an improper personal benefit.

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	•	one share of our Class A common stock; and
	•	an 11% senior secured note due 2024 in a principal amount of $6.14.

	(i) in the event the IDSs were automatically separated as a result of the occurrence of certain events of default under the indenture governing the 11% notes, IDSs may thereafter only be created or recombined after the related default or event of default has been cured or waived in accordance with the indenture governing the 11% notes,
	(ii) prior to the completion of the merger event, in the event the IDSs were automatically separated on a date on which both (i) our debt or debt of our subsidiaries is treated as held substantially proportionately with our equity or equity of our subsidiaries, as measured by a test in the indenture governing the 11% notes, and (ii) in general terms, the remaining payments to be made by Coinmach Corp. to us under the intercompany note are insufficient to cover the remaining payments to be made by us on the 11% notes, IDSs may thereafter only be created or recombined on or after the first to occur of the merger event and a date on which either of such tests is once again met,
	(iii) in the event the IDSs were automatically separated because of any failure to maintain a qualified securities depositary for the IDSs, IDSs may thereafter only be created or combined at such time as CSC has established a successor depositary willing and able to provide such services to CSC, and

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	(iv) any holder whose ownership of shares of Class A common stock is represented by a stock certificate issued to such holder, prior to combining such shares with 11% notes in order to form IDSs, must surrender such stock certificate to the transfer agent in order that such shares be included in the global stock certificate or certificates representing the shares of Class A common stock.

	(1) the 15th anniversary of IPO,
	(2) the redemption or repurchase of all of the 11% notes (provided, however, that a redemption or repurchase of a portion thereof will cause solely those IDSs associated with the 11% notes redeemed or repurchased to separate), or
	(3) the date on which all remaining principal on the 11% notes becomes due and payable.

	(1) certain events of default under the indenture governing the 11% notes, provided that the IDSs may generally be recombined at the holder’s option upon the cure or waiver of such events of default in accordance with the indenture governing the 11% notes,
	(2) prior to the completion of the merger event, the last business day of any calendar month on which both (i) our debt or debt of our subsidiaries is treated as held substantially proportionately with our equity or equity of our subsidiaries, as measured by a test in the indenture governing the 11% notes, and (ii) in general terms, the remaining payments to be made by Coinmach Corp. to us under the intercompany note are insufficient to cover the remaining payments to be made by us on the 11% notes, provided that IDSs may generally be recombined at the holder’s option on or after the first to occur of the merger event and any date on which we once again meet either of such tests, or
	(3) any failure to maintain a qualified securities depositary for the IDSs, provided that IDSs may generally be combined at the holder’s option following any such failure if we are subsequently able to establish a successor depositary.

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	•	dealers and traders in securities or currencies,
	•	banks and other financial institutions,
	•	regulated investment companies,
	•	real estate investment trusts,
	•	tax-exempt organizations,
	•	insurance companies,
	•	persons holding Class A common stock as a part of a hedging, integrated, synthetic security, conversion or constructive sale transaction or a straddle,
	•	persons liable for alternative minimum tax,
	•	partnerships or other pass-through entities and their investors,
	•	S Corporations and their shareholders, or
	•	U.S. Holders (as defined below) whose “functional currency” is not the U.S. dollar.

	•	an individual who is a citizen or resident of the U.S.,
	•	a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or any political subdivision thereof, or
	•	an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

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	Dividends

	Sale or Exchange

	Information Reporting and Backup Withholding

	•	a nonresident alien individual;
	•	a foreign corporation; or
	•	a foreign estate or trust.

	•	U.S. expatriates;
	•	“controlled foreign corporations”;
	•	“passive foreign investment companies”;
	•	corporations that accumulate earnings to avoid U.S. federal income tax; and
	•	Non-U.S. Holders that are engaged in the conduct of a U.S. trade or business.

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	Dividends

	•	complete IRS Form W-8BEN (or other applicable form) providing a U.S. taxpayer identification number and certifying under penalties of perjury that you are not a U.S. person and that you are entitled to the benefits of the applicable treaty, or
	•	if the shares of our common stock are held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable U.S. Treasury regulations.

	Sale or Exchange

	•	if you are an individual, you are present in the U.S. for 183 or more days in the taxable year of the sale or other disposition and certain other conditions are met, or
	•	we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes.

	United States Federal Estate Tax

	Information Reporting and Backup Withholding

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		Number of Shares
Underwriter
Merrill Lynch, Pierce, Fenner & Smith Incorporated			4,727,988
Deutsche Bank Securities Inc.			2,626,660
Jefferies & Company, Inc.			1,575,995
SunTrust Capital Markets, Inc.			1,575,995
Oppenheimer & Co. Inc.			100,000
Susquehanna Financial Group, LLLP			100,000
Total			10,706,638

		Per Share				Without Option				With Option
Public offering price			$9.00				$96,359,742				$110,813,697
Underwriting discount			$.495				$5,299,786				$6,094,753
Proceeds, before expenses, to Coinmach Service Corp.			$8.505				$91,059,956				$104,718,944

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	•	sell any option or contract to purchase any IDSs, common stock or notes,
	•	purchase any option or contract to sell any IDSs, common stock or notes,
	•	grant any option, right or warrant for the sale of any IDSs, common stock or notes,
	•	lend or otherwise dispose of or transfer any IDSs, common stock or notes, or
	•	enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of IDSs, common stock or notes whether any such swap or transaction is to be settled by delivery of IDSs, shares, notes or other securities, in cash or otherwise.

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	•	the market value of our outstanding IDSs;
	•	the valuation multiples of publicly traded companies that the underwriters believe to be comparable to us,
	•	our financial information,
	•	the history of, and the prospects for, our company and the industry in which we compete,
	•	an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues,
	•	the present state of our development, and
	•	the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

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Coinmach Service Corp. and Subsidiaries
Report of Independent Registered Public Accounting Firm				F-3
As of March 31, 2005 and March 31, 2004:
	Consolidated Balance Sheets			F-4
For the years ended March 31, 2005, March 31, 2004 and March 31, 2003:
	Consolidated Statements of Operations			F-5
	Consolidated Statements of Stockholders’ (Deficit) Equity			F-6
	Consolidated Statements of Cash Flows			F-7
	Notes to Consolidated Financial Statements			F-9
Schedule II — Valuation and Qualifying Accounts:
	For the years ended March 31, 2005, March 31, 2004 and March 31, 2003			F-40
Financial Information:
As of September 30, 2005:
	Condensed Consolidated Balance Sheet (Unaudited)			F-41
For the six months ended September 30, 2005 and September 30, 2004:
	Condensed Consolidated Statements of Operations (Unaudited)			F-42
	Condensed Consolidated Statements of Cash Flows (Unaudited)			F-43
	Notes to Condensed Consolidated Financial Statements (Unaudited)			F-44
Coinmach Laundry Corporation and Subsidiaries
Report of Independent Registered Public Accounting Firm				F-66
As of March 31, 2005 and March 31, 2004:
	Consolidated Balance Sheets			F-67
For the years ended March 31, 2005, March 31, 2004 and March 31, 2003:
	Consolidated Statements of Operations			F-68
	Consolidated Statements of Stockholders’ Deficit			F-69
	Consolidated Statements of Cash Flows			F-70
	Notes to Consolidated Financial Statements			F-71
Schedule I — Condensed Financial Information:
As of March 31, 2005 and March 31, 2004:
	Condensed Balance Sheets			F-91
For the years March 31, 2005, March 31, 2004 and March 31, 2003
	Condensed Statements of Operations			F-92
	Condensed Statements of Cash Flows			F-93
	Notes to Condensed Financial Statements			F-94
Schedule II — Valuation and Qualifying Accounts:
	For the years ended March 31, 2005, March 31, 2004 and March 31, 2003			F-97
Financial Information:
As of September 30, 2005:
	Condensed Consolidated Balance Sheet (Unaudited)			F-98
For the six months ended September 30, 2005 and September 30, 2004:
	Condensed Consolidated Statements of Operations and Accumulated Deficit (Unaudited)			F-99
	Consolidated Statements of Cash Flows (Unaudited)			F-100
	Notes to Consolidated Financial Statements (Unaudited)			F-101

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Table of Contents

Coinmach Corporation and Subsidiaries
Report of Independent Registered Public Accounting Firm				F-113
As of March 31, 2005 and March 31, 2004:
	Consolidated Balance Sheets			F-114
For the years ended March 31, 2005, March 31, 2004 and March 31, 2003:
	Consolidated Statements of Operations			F-115
	Consolidated Statements of Stockholder’s Equity			F-116
	Consolidated Statements of Cash Flows			F-117
	Notes to Consolidated Financial Statements			F-118
Schedule II — Valuation and Qualifying Accounts:
	For the years ended March 31, 2005, March 31, 2004 and March 31, 2003			F-142
Financial Information:
As of September 30, 2005:
	Condensed Consolidated Balance Sheet (Unaudited)			F-143
For the six months ended September 30, 2005 and September 30, 2004
	Condensed Consolidated Statements of Operations and Accumulated Deficit (Unaudited)			F-144
	Condensed Consolidated Statements of Cash Flows (Unaudited)			F-145
	Notes to Condensed Consolidated Financial Statements (Unaudited)			F-146

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	/s/ ERNST & YOUNG LLP

F-3

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Table of Contents

			March 31,
			2005				2004
			(In thousands except
			share data)
ASSETS
Current assets:
	Cash and cash equivalents		$	57,271			$	31,620
	Receivables, less allowance of $3,794 and $2,892			6,486				6,207
	Inventories			12,432				11,508
	Assets held for sale			2,475				2,560
	Prepaid expenses			4,994				5,097
	Interest rate swap asset			832				—
	Other current assets			2,625				1,974
Total current assets				87,115				58,966
Advance location payments				72,222				73,253
Property, equipment and leasehold improvements:
	Laundry equipment and fixtures			526,158				479,781
	Land, building and improvements			34,729				30,053
	Trucks and other vehicles			32,507				27,590
				593,394				537,424
Less accumulated depreciation and amortization				(329,130	)			(253,736	)
Net property, equipment and leasehold improvements				264,264				283,688
Contract rights, net of accumulated amortization of $100,975 and $87,139				309,698				323,152
Goodwill				204,780				204,780
Other assets				18,597				15,669
Total assets			$	956,676			$	959,508
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
	Accounts payable		$	22,536			$	20,385
	Accrued expenses			11,447				8,421
	Accrued rental payments			30,029				31,855
	Accrued interest			9,512				7,549
	Interest rate swap liability			—				3,597
	Current portion of long-term debt			17,704				9,149
Total current liabilities				91,228				80,956
Deferred income taxes				65,546				73,775
Long-term debt				690,687				708,482
Redeemable preferred stock — $2.5 million par value; 82 shares authorized; 74.89 shares issued and outstanding (liquidation preference of $265,914 at March 31, 2004)				—				265,914
Total liabilities				847,461				1,129,127
Stockholders’ equity (deficit):
	Class A Common Stock — $0.01 par value; 100,000,000 shares authorized, 18,911,532 shares issued and outstanding			189				—
	Class B Common Stock — $0.01 par value; 100,000,000 shares authorized; 24,980,445 shares issued and outstanding			250				—
	Common stock — $2.50 par value; 76,000 shares authorized; 66,825.83 shares issued and outstanding at March 31, 2004			—				167
	Capital in excess of par value			319,038				5,022
	Carryover basis adjustment			(7,988	)			(7,988	)
	Accumulated other comprehensive income (loss), net of tax			492				(2,006	)
	Accumulated deficit			(202,754	)			(164,728	)
	Deferred compensation			(12	)			(86	)
Total stockholders’ equity (deficit)				109,215				(169,619	)
Total liabilities and stockholders’ equity (deficit)			$	956,676			$	959,508

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			Year Ended March 31,
			2005				2004				2003
			(In thousands except share data)
Revenues			$	538,604			$	531,088			$	535,179
Costs and expenses:
	Laundry operating expenses (exclusive of depreciation and amortization and amortization of advance location payments)			367,974				365,709				366,539
	General and administrative (including stock-based compensation expense of $74, $176 and $338, respectively			9,694				9,460				9,568
	Depreciation and amortization			76,431				72,529				67,161
	Amortization of advance location payments			19,578				20,576				21,214
	Amortization of intangibles			14,431				15,472				15,803
	Other items, net			855				230				(454	)
				488,963				483,976				479,831
Operating income				49,641				47,112				55,348
Interest expense				58,572				57,377				58,167
Interest expense — non cash preferred stock dividends				18,230				24,714				—
Interest expense — escrow interest				941				—				—
Transaction costs				17,389				—				—
Loss before income taxes				(45,491	)			(34,979	)			(2,819	)
(Benefit) provision for income taxes:
	Current			—				105				397
	Deferred			(10,166	)			(3,753	)			(16	)
				(10,166	)			(3,648	)			381
Net loss				(35,325	)			(31,331	)			(3,200	)
Preferred Stock dividends				—				—				(20,838	)
Net loss attributable to common stockholders			$	(35,325	)		$	(31,331	)		$	(24,038	)
Net loss attributable to common stockholders per common share:
Basic and diluted distributed earnings:
	Class A Common Stock		$	0.09			$	—			$	—
	Class B Common Stock		$	0.04			$	—			$	—
Basic and diluted net loss:
	Class A Common Stock		$	(1.13	)		$	—			$	—
	Class B Common Stock		$	(1.18	)		$	(1.25	)		$	(0.96	)
Weighted average common stock outstanding:
	Class A Common Stock			6,255,661				—				—
	Class B Common Stock			24,980,445				24,980,445				24,980,445
Pro-forma basic and diluted net loss:
	Class A Common Stock		$	(0.78	)
	Class B Common Stock		$	(0.83	)
Pro-forma weighted average common stock outstanding:
	Class A Common Stick			18,911,532
	Class B Common Stock			24,980,445

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			Class A				Class B								Capital in				Carryover				Accumulated Other												Total
			Common				Common				Common				Excess of				Basis				Comprehensive Income				Accumulated				Deferred				Stockholders’
			Stock				Stock				Stock				Par				Adjustment				(Loss), Net of Tax				Deficit				Compensation				(Deficit) Equity
																							(In thousands)
Balance March 31, 2002			$	—			$	—			$	167			$	4,037			$	(7,988	)		$	—			$	(109,359	)		$	(600	)		$	(133,743	)
Common stock retired				—				—				—				(10	)			—				—				—				—				(10	)
Comprehensive loss:
	Net loss			—				—				—				—				—				—				(3,200	)			—				(3,200	)
	Loss on derivative instruments, net of income tax of $1,338			—				—				—				—				—				(2,007	)			—				—				(2,007	)
Total comprehensive loss																																				(5,207	)
Capital contribution				—				—				—				1,000				—				—				—				—				1,000
Dividends on preferred stock				—				—				—				—				—				—				(20,838	)			—				(20,838	)
Stock-based compensation				—				—				—				—				—				—				—				338				338
	Balance, March 31, 2003			—				—				167				5,027				(7,988	)			(2,007	)			(133,397	)			(262	)			(138,460	)
Common stock retired				—				—				—				(5	)			—				—				—				—				(5	)
Comprehensive loss:
	Net loss			—				—				—				—				—				—				(31,331	)			—				(31,331	)
	Gain on derivative instruments			—				—				—				—				—				1				—				—				1
Total comprehensive loss																																				(31,330	)
Stock-based compensation				—				—				—				—				—				—				—				176				176
	Balance, March 31, 2004			—				—				167				5,022				(7,988	)			(2,006	)			(164,728	)			(86	)			(169,619	)
Issuance of common stock (net of issuance costs of $12,479)				189				—				—				129,169				—				—				—				—				129,358
Exchange of preferred and common stock for Class B Common Stock				—				250				(167	)			184,847				—				—				—				—				184,930
Comprehensive loss:
	Net loss			—				—				—				—				—				—				(35,325	)			—				(35,325	)
	Gain on derivative instruments, net of income tax of $1,971			—				—				—				—				—				2,498				—				—				2,498
Total comprehensive loss																																				(32,827	)
Dividends				—				—				—				—				—				—				(2,701	)			—				(2,701	)
Stock-based compensation				—				—				—				—				—				—				—				74				74
	Balance March 31, 2005		$	189			$	250			$	—			$	319,038			$	(7,988	)		$	492			$	(202,754	)		$	(12	)		$	109,215

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				Year Ended March 31,
				2005				2004				2003
				(In thousands)
Operating activities
Net loss				$	(35,325	)		$	(31,331	)		$	(3,200	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization				76,431				72,529				67,161
	Amortization of advance location payments				19,578				20,576				21,214
	Amortization of intangibles				14,431				15,472				15,803
	Interest expense — preferred stock				18,230				24,714				—
	Gain on sale of investment and equipment				(557	)			(1,232	)			(3,532	)
	Deferred income taxes				(10,166	)			(3,753	)			(16	)
	Amortization of deferred issue costs				2,326				2,414				2,439
	Premium on redemption of 9% Senior Notes				11,295				—				—
	Write-off of deferred issue costs				3,475				—				—
	Stock based compensation				74				176				338
	Change in operating assets and liabilities, net of businesses acquired:
		Other assets			968				(1,384	)			126
		Receivables, net			(279	)			4,246				1,430
		Inventories and prepaid expenses			(702	)			2,247				(1,214	)
		Accounts payable and accrued expenses, net			3,256				(7,077	)			2,797
		Accrued interest			1,963				(545	)			554
Net cash provided by operating activities					104,998				97,052				103,900
Investing activities
Additions to property, equipment and leasehold improvements					(53,444	)			(65,460	)			(66,238	)
Advance location payments to location owners					(18,051	)			(21,272	)			(20,447	)
Additions to net assets related to acquisitions of businesses					(628	)			(3,615	)			(1,976	)
Proceeds from sale of investment					277				1,022				6,585
Proceeds from sale of property and equipment					919				876				746
Net cash used in investing activities					(70,927	)			(88,449	)			(81,330	)

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		Year Ended March 31,
		2005				2004				2003
		(In thousands)
Financing activities
Proceeds from issuance of IDSs		$	257,983			$	—			$	—
Proceeds from issuance of third party senior secured notes			20,000				—				—
Proceeds from credit facility			—				8,700				18,000
Repayments under credit facility			(19,830	)			(9,613	)			(36,750	)
Redemption of 9% Senior Notes			(125,500	)			—				—
Payment of premium on 9% Senior Notes			(11,295	)			—				—
IDS and third party senior secured notes issuance costs			(23,643	)			—				—
Principal payments on capitalized lease obligations			(4,331	)			(3,995	)			(3,981	)
Borrowings (repayments) from bank and other borrowings			105				498				(266	)
Cash dividends paid			(2,701	)			—				—
Redemption of preferred stock			(99,208	)			—				—
Receivables from stockholders			—				(1	)			35
Net cash used in financing activities			(8,420	)			(4,411	)			(22,962	)
Net increase (decrease) in cash and cash equivalents			25,651				4,192				(392	)
Cash and cash equivalents, beginning of year			31,620				27,428				27,820
Cash and cash equivalents, end of year		$	57,271			$	31,620			$	27,428
Supplemental disclosure of cash flow information
Interest paid		$	55,224			$	55,614			$	55,300
Income taxes paid		$	301			$	158			$	475
Noncash investing and financing activities
Acquisition of fixed assets through capital leases		$	4,199			$	3,929			$	3,554

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Table of Contents

1.	Basis of Presentation

F-9

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Table of Contents

F-10

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Table of Contents

	Appliance Warehouse Transfer

2.	Summary of Significant Accounting Policies

	Recognition of Revenues

F-11

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Table of Contents

	Use of Estimates

	Cash Equivalents

	Inventories

		March 31,
		2005				2004
Laundry equipment		$	8,882			$	7,973
Machine repair parts			3,550				3,535
		$	12,432			$	11,508

	Long-Lived Assets

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Table of Contents

	Assets Held for Sale

Laundry equipment, installation costs and fixtures			5 to 8  years
Leasehold improvements and decorating costs			5 to 8  years
Trucks and other vehicles			3 to 4  years

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		March 31,
		2005				2004
Route		$	195,026			$	195,026
Rental			6,837				6,837
Distribution			2,917				2,917
		$	204,780			$	204,780

		March 31,
		2005				2004
Goodwill — beginning of year		$	204,780			$	203,860
Acquisitions			—				920
Goodwill — end of year		$	204,780			$	204,780

	Contract Rights

Years Ending March 31,
2006		$	13.5
2007			13.2
2008			12.9
2009			12.6
2010			12.3

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Table of Contents

	Advance Location Payments

	Comprehensive Income (Loss)

	Income Taxes

	Derivatives

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Table of Contents

3.	Long-Term Debt

		March 31,				March 31,
		2005				2004
9% Senior Notes due 2010		$	324,500			$	450,000
Credit facility indebtedness			240,507				260,337
IDS 11% Senior Secured Notes			116,117				—
Third party 11% Senior Secured Notes			20,000				—
Obligations under capital leases			6,630				6,762
Other long-term debt with varying terms and maturities			637				532
			708,391				717,631
Less current portion			17,704				9,149
		$	690,687			$	708,482

	a.     9% Senior Notes

	b.     Credit Facility

F-16

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F-17

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Table of Contents

		March 31,
		2005				2004
Tranche term loan B, semi-annual payments of approximately $1,240, increasing to approximately $6,199 on June 30, 2007 with the final payment of approximately $210,753 on July 25, 2009 (Interest rate of 5.65% at March 31, 2005)		$	240,507			$	242,986
Tranche term loan A			—				17,351
Revolving line of credit			—				—
		$	240,507			$	260,337

	c.     11% Senior Secured Notes

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Table of Contents

	Intercompany Loan

		Principal
Years Ending March 31,		Amount
2006		$	17,704
2007			4,695
2008			12,985
2009			12,080
2010			524,738
Thereafter			136,189
Total debt		$	708,391

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Table of Contents

	d.     Interest Rate Swaps

4.	Retirement Savings Plan

5.	Income Taxes

		March 31,
		2005				2004
Deferred tax liabilities:
Accelerated tax depreciation and contract rights		$	108,058			$	111,103
Interest rate swap			340				—
Other			1,798				1,246
			110,196				112,349
Deferred tax assets:
Interest rate swap			—				1,591
Net operating loss carryforwards			41,464				34,272
Covenant not to compete			1,073				1,202
Other			2,113				1,509
			44,650				38,574
Net deferred tax liability		$	65,546			$	73,775

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Table of Contents

		Year Ended March 31,
		2005				2004				2003
Federal		$	(7,926	)		$	(2,948	)		$	(13	)
State			(2,240	)			(700	)			394
		$	(10,166	)		$	(3,648	)		$	381

		Year Ended March 31,
		2005				2004				2003
Expected tax benefit		$	(15,921	)		$	(12,243	)		$	(885	)
Non deductible interest — Preferred Stock			6,381				8,649				—
State tax (benefit) provision, net of federal taxes			(1,456	)			(473	)			256
Permanent book/tax differences:			830				419				1,010
Tax (benefit) provision		$	(10,166	)		$	(3,648	)		$	381

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6.	Loss per Common Share

			Year Ended March 31,
			2005				2004				2003
Net loss attributable to common stockholders			$	(35,325	)		$	(31,331	)		$	(24,038	)
Add: Dividends paid on common stock				(2,701	)			—				—
Undistributed loss available to Class A and Class B common stock			$	(38,026	)		$	(31,331	)		$	(24,038	)
Basic and diluted allocation of undistributed loss:
	Class A Common Stock		$	(7,615	)		$	—			$	—
	Class B Common Stock			(30,411	)			(31,331	)			(24,038	)
	Total		$	(38,026	)		$	(31,331	)		$	(24,038	)
Weighted average common stock outstanding:
	Class A Common Stock			6,255,661				—				—
	Class B Common Stock			24,980,445				24,980,445				24,980,445
	Total			31,236,106				24,980,445				24,980,445
Distributed earnings per share:
	Class A Common Stock		$	0.09			$	—			$	—
	Class B Common Stock		$	0.04			$	—			$	—
Undistributed loss per share:
	Class A Common Stock		$	(1.22	)		$	—			$	—
	Class B Common Stock		$	(1.22	)		$	(1.25	)		$	(0.96	)
Basic and diluted loss per share:
	Class A Common Stock		$	(1.13	)			—			$	—
	Class B Common Stock		$	(1.18	)		$	(1.25	)		$	(0.96	)

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Table of Contents

	Pro-Forma Presentation

			Year Ended March 31,
			2005				2004				2003
Net loss attributable to common stockholders			$	(35,325	)		$	(31,331	)		$	(24,038	)
Add: Dividends paid on common stock				(2,701	)			—				—
Undistributed loss available to Class A and Class B common stock			$	(38,026	)		$	(31,331	)		$	(24,038	)
Basic and diluted allocation of undistributed loss:
	Class A Common Stock		$	(16,384	)		$	(13,499	)		$	(10,357	)
	Class B Common Stock			(21,642	)			(17,832	)			(13,681	)
	Total		$	(38,026	)		$	(31,331	)		$	(24,038	)
Weighted average common stock outstanding:
	Class A Common Stock			18,911,532				18,911,532				18,911,532
	Class B Common Stock			24,980,445				24,980,445				24,980,445
	Total			43,891,977				43,891,977				43,891,977
Distributed earnings per share:
	Class A Common Stock		$	0.09			$	—			$	—
	Class B Common Stock		$	0.04			$	—			$	—
Undistributed loss per share:
	Class A Common Stock		$	(0.87	)		$	(0.71	)		$	(0.55	)
	Class B Common Stock		$	(0.87	)		$	(0.71	)		$	(0.55	)
Basic and diluted loss per share:
	Class A Common Stock		$	(0.78	)		$	(0.71	)		$	(0.55	)
	Class B Common Stock		$	(0.83	)		$	(0.71	)		$	(0.55	)

7.	Redeemable Preferred Stock and Stockholders’ Deficit

F-23

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Table of Contents

F-24

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Table of Contents

8.	Guarantor Subsidiaries

F-25

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Table of Contents

	Condensed Consolidating Balance Sheets

		March 31, 2005
										Coinmach
		Coinmach				Coinmach				Corporation				Adjustments
		Service				Laundry				and				and
		Corp.				Corporation				Subsidiaries				Eliminations				Consolidated
Assets
Current assets, consisting of cash, receivables, inventory, assets held for sale, prepaid expenses and other current assets		$	474			$	—			$	86,678			$	(37	)		$	87,115
Advance location payments			—				—				72,222				—				72,222
Property, equipment and leasehold improvements, net			—				—				264,264				—				264,264
Intangible assets, net			—				—				514,478				—				514,478
Deferred income taxes			1,087				2,307				—				(3,394	)			—
Intercompany loans and advances			2,060				49,475				—				(51,535	)			—
Investment in subsidiaries			(34,770	)			99,698				—				(64,928	)			—
Investment in preferred stock			186,034				—				—				(186,034	)			—
Other assets			94,866				162				7,619				(84,050	)			18,597
Total assets		$	249,751			$	151,642			$	945,261			$	(389,978	)		$	956,676
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses		$	4,797			$	—			$	71,145				(2,418	)		$	73,524
Current portion of long-term debt			—				—				17,704				—				17,704
Total current liabilities			4,797				—				88,849				(2,418	)			91,228
Deferred income taxes			—				—				68,940				(3,394	)			65,546
Long-term debt, less current portion			136,117				—				554,570				—				690,687
Loan payable to Parent			—				—				81,670				(81,670	)			—
Due to parent/subsidiary			—				—				51,534				(51,534	)			—
Preferred stock and dividends payable			—				186,034				—				(186,034	)			—
Total stockholders’ equity (deficit)			108,837				(34,392	)			99,698				(64,928	)			109,215
Total liabilities and stockholders’ equity (deficit)		$	249,751			$	151,642			$	945,261			$	(389,978	)		$	956,676

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Table of Contents

			March 31, 2004
							Coinmach
			Coinmach				Corporation				Adjustments
			Laundry				and				and
			Corporation				Subsidiaries				Eliminations				Consolidated
Assets
Current assets, consisting of cash, receivables, inventory, assets held for sale, prepaid expenses and other current assets			$	—			$	58,966			$	—			$	58,966
Advance location payments				—				73,253				—				73,253
Property, equipment and leasehold improvements, net				—				283,688				—				283,688
Deferred income taxes				1,974				—				(1,974	)			—
Intangible assets, net				—				527,932				—				527,932
Intercompany loans and advances				50,036				21,822				(71,858	)			—
Investment in subsidiaries				43,757				(27,460	)			(16,297	)			—
Investment in preferred stock				—				16,777				(16,777	)			—
Other assets				528				15,670				(529	)			15,669
Total assets			$	96,295			$	970,648			$	(107,435	)		$	959,508
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable and accrued expenses			$	—			$	72,336			$	(529	)		$	71,807
Current portion of long-term debt				—				9,149				—				9,149
	Total current liabilities			—				81,485				(529	)			80,956
Deferred income taxes				—				75,749				(1,974	)			73,775
Long-term debt, less current portion				—				730,304				(21,822	)			708,482
Preferred stock and dividends payable — Coinmach Laundry				265,914				—				—				265,914
Due to Parent				—				50,036				(50,036	)			—
Preferred stock and dividends payable — AWA				—				16,777				(16,777	)			—
Total stockholders’ (deficit) equity				(169,619	)			16,297				(16,297	)			(169,619	)
Total liabilities and stockholders’ (deficit) equity			$	96,295			$	970,648			$	(107,435	)		$	959,508

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	Condensed Consolidating Statements of Operations

		Year Ended March 31, 2005
										Coinmach
		Coinmach				Coinmach				Corporation
		Service				Laundry				and
		Corp.				Corporation				Subsidiaries				Eliminations				Consolidated
Revenues		$	—			$	—			$	538,604			$	—			$	538,604
Costs and expenses			342				509				488,112				—				488,963
Operating (loss) income			(342	)			(509	)			50,492				—				49,641
Transaction costs			—				—				17,389				—				17,389
Interest expense — preferred stock			(4,436	)			22,666				—				—				18,230
Interest expense — escrow interest			—				—				941				—				941
Interest expense, net			2,319				—				56,253				—				58,572
Income (loss) before taxes			1,775				(23,175	)			(24,091	)			—				(45,491	)
Income taxes			(1,087	)			(334	)			(8,745	)			—				(10,166	)
			2,862				(22,841	)			(15,346	)			—				(35,325	)
Equity in loss (income) of subsidiaries			38,187				15,346				—				(53,533	)			—
Net loss		$	(35,325	)		$	(38,187	)		$	(15,346	)		$	53,533			$	(35,325	)

		Year Ended March 31, 2004
						Coinmach
		Coinmach				Corporation
		Laundry				and
		Corporation				Subsidiaries				Eliminations				Consolidated
Revenues		$	—			$	531,088			$	—			$	531,088
Costs and expenses			704				483,272				—				483,976
Operating (loss) income			(704	)			47,816				—				47,112
Interest expense — preferred stock			24,714				—				—				24,714
Interest expense			—				57,377				—				57,377
Loss before taxes			(25,418	)			(9,561	)			—				(34,979	)
Income tax benefit			(133	)			(3,515	)			—				(3,648	)
			(25,285	)			(6,046	)			—				(31,331	)
Equity in loss of subsidiaries			—				975				(975	)			—
			(25,285	)			(7,021	)			975				(31,331	)
Dividend income			—				(1,642	)			1,642				—
Net loss		$	(25,285	)		$	(5,379	)		$	(667	)		$	(31,331	)

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		Year Ended March 31, 2003
						Coinmach
		Coinmach				Corporation
		Laundry				and
		Corporation				Subsidiaries				Eliminations				Consolidated
Revenues		$	—			$	535,179			$	—			$	535,179
Costs and expenses			999				478,832				—				479,831
Operating (loss) income			(999	)			56,347				—				55,348
Interest expense			—				58,167				—				58,167
Loss before taxes			(999	)			(1,820	)			—				(2,819	)
Income tax obligations (benefit)			(87	)			468				—				381
			(912	)			(2,288	)			—				(3,200	)
Equity in loss of subsidiaries			—				917				(917	)			—
			(912	)			(3,205	)			917				(3,200	)
Dividend income			—				(535	)			535				—
Net loss		$	(912	)		$	(2,670	)		$	382			$	(3,200	)

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	Condensed Consolidating Statements of Cash Flows

		Year Ended March 31, 2005
										Coinmach
		Coinmach				Coinmach				Corporation
		Service				Laundry				and
		Corp.				Corporation				Subsidiaries				Eliminations				Consolidated
Operating Activities
Net income (loss)		$	2,862			$	(22,841	)		$	(15,346	)		$	—			$	(35,325	)
Noncash adjustments			(5,336	)			22,406				118,047				—				135,117
Change in operating assets and liabilities			2,830				36				2,340				—				5,206
Net cash provided by (used in) operating activities			356				(399	)			105,041				—				104,998
Investing Activities
Capital expenditures			—				—				(71,495	)			—				(71,495	)
Acquisition of assets			—				—				(628	)			—				(628	)
Proceeds from sale of investment			—				—				277				—				277
Proceeds from sale of property and equipment			—				—				919				—				919
Net cash used in investing activities			—				—				(70,927	)			—				(70,927	)
Financing Activities
Repayment of debt			—				—				(145,330	)			—				(145,330	)
Other financing items			75				399				54,766				81,670				136,910
Loan from parent			—				—				81,670				(81,670	)			—
Net cash provided by (used in) financing activities			75				399				(8,894	)			—				(8,420	)
Net increase in cash and cash equivalents			431				—				25,220				—				25,651
Cash and cash equivalents, beginning of year			—				—				31,620				—				31,620
Cash and cash equivalents, end of year		$	431			$	—			$	56,840			$	—			$	57,271

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		Year Ended March 31, 2004
						Coinmach
		Coinmach				Corporation
		Laundry				and
		Corporation				Subsidiaries				Eliminations				Consolidated
Operating activities
Net loss		$	(25,285	)		$	(5,379	)		$	(667	)		$	(31,331	)
Noncash adjustments			24,756				106,140				—				130,896
Change in operating assets and liabilities			(297	)			(2,216	)			—				(2,513	)
Net cash (used in) provided by operating activities			(826	)			98,545				(667	)			97,052
Investing activities
Investment in and advances to Subsidiaries			—				(667	)			667				—
Capital expenditures			—				(86,732	)			—				(86,732	)
Acquisition of assets			—				(3,615	)			—				(3,615	)
Sale of investment			—				1,022				—				1,022
Sale of property and equipment			—				876				—				876
Net cash used in investing activities			—				(89,116	)			667				(88,449	)
Financing Activities
Proceeds from debt			—				8,700				—				8,700
Repayment of debt			—				(9,613	)			—				(9,613	)
Other financing items			826				(4,324	)			—				(3,498	)
Net cash provided by (used in) financing activities			826				(5,237	)							(4,411	)
Net increase in cash and cash equivalents			—				4,192				—				4,192
Cash and cash equivalents, beginning of year			—				27,428				—				27,428
Cash and cash equivalents, end of year		$	—			$	31,620			$	—			$	31,620

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		Year Ended March 31, 2003
						Coinmach
		Coinmach				Corporation
		Laundry				and
		Corporation				Subsidiaries				Eliminations				Consolidated
Operating activities
Net loss		$	(912	)		$	(2,670	)		$	382			$	(3,200	)
Noncash adjustments			213				103,194				—				103,407
Change in operating assets and liabilities			(75	)			3,768				—				3,693
Net cash (used in) provided by operating activities			(774	)			104,292				382				103,900
Investing activities
Investment in and advances to Subsidiaries			—				382				(382	)			—
Capital expenditures			—				(86,685	)			—				(86,685	)
Acquisition of assets			—				(1,976	)			—				(1,976	)
Sale of investment			—				6,585				—				6,585
Sale of property and equipment			—				746				—				746
Net cash used in investing activities			—				(80,948	)			(382	)			(81,330	)
Financing Activities
Proceeds from debt			—				18,000				—				18,000
Repayment of debt			—				(36,750	)			—				36,750
Other financing items			774				(4,986	)			—				(4,212	)
Net cash provided by (used in) financing activities			774				(23,736	)			—				(22,962	)
Net decrease in cash and cash equivalents			—				(392	)			—				(392	)
Cash and cash equivalents, beginning of year			—				27,820				—				27,820
Cash and cash equivalents, end of year		$	—			$	27,428			$	—			$	27,428

9.	Commitments and Contingencies

		2005				2004
		(In thousands)
Laundry equipment and fixtures		$	1,148			$	962
Trucks and other vehicles			22,862				18,849
			24,010				19,811
Less accumulated amortization			(15,930	)			(11,865	)
		$	8,080			$	7,946

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		Capital				Operating
2006		$	3,550			$	8,010
2007			2,459				6,231
2008			1,255				4,279
2009			263				3,246
2010			—				2,346
Thereafter			—				2,472
Total minimum lease payments			7,527			$	26,584
Less amounts representing interest			897
Present value of net minimum lease payments (including current portion of $3,032)		$	6,630

10.	Related Party Transactions

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11.	Fair Value of Financial Instruments

		Carrying				Estimated
		Amount				Fair Value
9% Senior Notes at March 31, 2005		$	324,500			$	332,613
9% Senior Notes at March 31, 2004		$	450,000			$	483,750
IDS 11% Senior Secured Notes at March 31, 2005		$	116,117			$	114,226
Third Party 11% Senior Secured Notes at March 31, 2005		$	20,000			$	19,674

12.	Segment Information

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			Year Ended March 31,
			2005				2004				2003
Revenue:
Route			$	472,484			$	469,641			$	471,443
All other:
	Rental			34,372				32,572				28,743
	Distribution			31,748				28,875				34,993
Subtotal				66,120				61,447				63,736
Total revenue			$	538,604			$	531,088			$	535,179
EBITDA(1):
Route			$	155,378			$	154,436			$	158,938
All other:
	Rental			13,840				12,197				11,381
	Distribution			1,412				(1,254	)			(1,679	)
Subtotal				15,252				10,943				9,702
Other items, net				(855	)			(230	)			454
Transaction costs(2)				(17,389	)			—				—
Corporate expenses				(9,694	)			(9,460	)			(9,568	)
Total EBITDA				142,692				155,689				159,526
Reconciling items:
Depreciation and amortization expense, amortization of advance location payments and amortization of intangibles:
	Route			(98,921	)			(98,148	)			(94,489	)
	All other			(8,242	)			(8,062	)			(7,746	)
	Corporate expenses			(3,277	)			(2,367	)			(1,943	)
Total depreciation				(110,440	)			(108,577	)			(104,178	)
Interest expense				(58,572	)			(57,377	)			(58,167	)
Interest expense — preferred stock				(18,230	)			(24,714	)			—
Interest expense — escrow				(941	)			—				—
Consolidated loss before income taxes			$	(45,491	)		$	(34,979	)		$	(2,819	)

(1)	See description of “Non-GAAP Financial Measures” immediately following this table for a reconciliation of net loss to EBITDA for the periods indicated above.
(2)	The computation of EBITDA has not been adjusted to take into account transaction costs consisting of (i) approximately $11.3 million redemption premium on the 9% Senior Notes redeemed, (ii) the write-off of the deferred financing costs relating to the 9% Senior Notes redeemed and term loans repaid aggregating approximately $3.5 million, (iii) expenses relating to an amendment to the Senior Secured Credit Facility aggregating approximately $2.0 million to, among other things, permit the

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	IDS Transactions and (iv) special bonuses related to the IDS Transactions aggregating approximately $0.6 million.

			Year Ended March 31,
			2005				2004				2003
Expenditures for acquisitions and additions of long-lived assets:
	Route		$	64,844			$	81,685			$	78,939
	All other			7,279				8,662				9,722
Total			$	72,123			$	90,347			$	88,661
Segment assets:
	Route		$	910,980			$	899,714			$	901,672
	All other			28,209				48,535				60,404
	Corporate assets			17,487				11,259				14,087
Total			$	956,676			$	959,508			$	976,163

	Non-GAAP Financial Measures

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		Year Ended March 31,
		2005				2004				2003
Net loss		$	(35.3	)		$	(31.3	)		$	(3.2	)
(Benefit) provision for income taxes			(10.1	)			(3.7	)			0.3
Interest expense			58.6				57.4				58.2
Interest expense — preferred stock			18.2				24.7				—
Interest expense — escrow interest			0.9				—				—
Depreciation and amortization			110.4				108.6				104.2
EBITDA*		$	142.7			$	155.7			$	159.5

	*	The computation of EBITDA for the 2005 Fiscal Year has not been adjusted to take into account transaction costs consisting of (1) approximately $11.3 million redemption premium on the portion of the 9% Senior Notes redeemed, (2) the write-off of the deferred financing costs relating to the 9% Senior Notes redeemed and term loans repaid aggregating approximately $3.5 million, (iii) expenses relating to an amendment to the Senior Secured Credit Facility aggregating approximately $2.0 million to, among other things, permit the IDS Transactions and (iv) special bonuses related to the IDS Transactions aggregating approximately $0.6 million.

13.	Other Items, net

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14.	2004 Long-Term Incentive Plan

15.	Subsequent Events

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16.	Quarterly Financial Information (Unaudited)

			Three Months Ended
			June 30,				September 30,				December 31,				March 31,
			2004				2004				2004				2005
Revenues			$	133,499			$	132,950			$	135,627			$	136,528
Operating income				12,335				11,085				13,318				12,903
Loss before income taxes				(8,452	)			(10,121	)			(24,401	)			(2,517	)
Net loss attributable to common stockholders				(7,780	)			(8,872	)			(16,301	)			(2,372	)
Basic and diluted loss per share:
	Class A Common Stock			—				—				(0.52	)			(0.03	)
	Class B Common Stock			(0.31	)			(0.35	)			(0.52	)			(0.07	)

			Three Months Ended
			June 30,				September 30,				December 31,				March 31,
			2003				2003				2003				2004
Revenues			$	132,517			$	129,951			$	135,740			$	132,880
Operating income				12,338				11,061				12,711				11,002
Loss before income taxes				(7,883	)			(9,458	)			(8,005	)			(9,633	)
Net loss attributable to common stockholders				(7,169	)			(8,747	)			(7,360	)			(8,055	)
Basic and diluted loss per share:
	Class A Common Stock			—				—				—				—
	Class B Common Stock			(0.29	)			(0.35	)			(0.29	)			(0.32	)

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						Additions
		Balance at				Charged to				Charged								Balance at
		Beginning of				Costs and				to Other								End of
Description		Period				Expenses				Accounts				Deductions(1)				Period
Year ended March 31, 2005
Reserves and allowances deducted from asset accounts: Allowance for uncollected accounts		$	2,892,000				1,617,000				—				(715,000	)			3,794,000
Year ended March 31, 2004
Reserves and allowances deducted from asset accounts: Allowance for uncollected accounts			1,553,000				1,831,000				—				(492,000	)			2,892,000
Year ended March 31, 2003
Reserves and allowances deducted from asset accounts: Allowance for uncollected accounts			1,342,000				1,188,000				—				(977,000	)			1,553,000

(1)	Write-off to accounts receivable

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					(In thousands of dollars,
					except share data)
ASSETS:
Current assets:
	Cash and cash equivalents				$	49,692
	Receivables, net					5,702
	Inventories					12,536
	Assets held for sale					349
	Prepaid expenses					3,944
	Interest rate swap asset					790
	Other current assets					2,303
		Total current assets				75,316
	Advance location payments					70,179
	Property, equipment and leasehold improvements, net of accumulated depreciation and amortization of $366,441					262,130
	Contract rights, net of accumulated amortization of $107,733					303,676
	Goodwill					204,780
	Other assets					19,084
		Total assets			$	935,165
LIABILITIES AND STOCKHOLDERS’ EQUITY:
	Current liabilities:
	Accounts payable and accrued expenses				$	32,461
	Accrued rental payments					33,603
	Accrued interest					9,234
	Current portion of long-term debt					5,961
		Total current liabilities				81,259
	Deferred income taxes					63,380
	Long-term debt, less current portion					692,384
		Total liabilities				837,023
Stockholders’ equity:
	Class A Common Stock — $0.01 par value; 100,000,000 shares authorized; 18,911,532 shares issued and outstanding					189
	Class B Common Stock — $0.01 par value; 100,000,000 shares authorized; 24,980,445 shares issued and outstanding					250
	Capital in excess of par value					319,038
	Carryover basis adjustment					(7,988	)
	Accumulated other comprehensive income, net of tax					467
	Accumulated deficit					(213,814	)
			Total stockholders’ equity			98,142
			Total liabilities and stockholders’ equity		$	935,165

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					Six Months Ended
					September 30,
					2005				2004
					(In thousands of dollars)
REVENUES					$	266,150			$	266,449
COSTS AND EXPENSES:
Laundry operating expenses (exclusive of depreciation and amortization and amortization of advance location payments)						181,032				182,632
General and administrative (including stock-based compensation expense of $12 and $37, respectively)						5,570				4,727
Depreciation and amortization						37,861				38,058
Amortization of advance location payments						9,173				9,852
Amortization of intangibles						6,970				7,260
Other items, net						310				500
						240,916				243,029
OPERATING INCOME						25,234				23,420
	INTEREST EXPENSE					30,646				28,625
	INTEREST EXPENSE — preferred stock					—				13,368
LOSS BEFORE INCOME TAXES						(5,412	)			(18,573	)
	BENEFIT FOR INCOME TAXES:
			Current			—				35
			Deferred			(2,149	)			(1,956	)
						(2,149	)			(1,921	)
NET LOSS					$	(3,263	)		$	(16,652	)
Basic and diluted distributed earnings:
		Class A Common Stock			$	0.41			$	—
		Class B Common Stock			$	—			$	—
Basic and diluted net income (loss):
		Class A Common Stock			$	0.16			$	—
		Class B Common Stock			$	(0.25	)		$	(0.67	)
Weighted average common stock outstanding:
		Class A Common Stock				18,911,532				—
		Class B Common Stock				24,980,445				24,980,445
Cash Dividends per Share:
		Class A Common Stock			$	0.41			$	—
		Class B Common Stock			$	—			$	—

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						Six Months Ended
						September 30,
						2005				2004
						(In thousands of dollars)
OPERATING ACTIVITIES:
	Net loss					$	(3,263	)		$	(16,652	)
		Adjustments to reconcile net loss to net cash provided by operating activities:
				Depreciation and amortization			37,861				38,058
				Amortization of advance location payments			9,173				9,852
				Amortization of intangibles			6,970				7,260
				Deferred income taxes			(2,149	)			(1,956	)
				Interest expense — preferred stock			—				13,368
				Amortization of deferred issue costs			1,063				1,207
				Loss (gain) on sale of equipment			27				(54	)
				Stock based compensation			12				37
	Change in operating assets and liabilities, net of businesses acquired:
			Other assets				(1,190	)			925
			Receivables, net				784				(2,624	)
			Inventories and prepaid expenses				946				(20	)
			Accounts payable and accrued expenses, net				2,052				(1,259	)
			Accrued interest				(278	)			202
	Net cash provided by operating activities						52,008				48,344
INVESTING ACTIVITIES:
	Additions to property and equipment						(29,944	)			(27,670	)
	Advance location payments to location owners						(7,130	)			(9,285	)
	Acquisition of net assets related to acquisitions of businesses						(1,210	)			(618	)
	Proceeds from sale of property and equipment						498				291
	Net cash used in investing activities						(37,786	)			(37,282	)
FINANCING ACTIVITIES:
	Repayments under credit facility						(11,223	)			(3,066	)
	Principal payments on capitalized lease obligations						(2,660	)			(2,224	)
	(Repayments) borrowings from bank and other borrowings						(121	)			217
	Cash dividends paid						(7,797	)			—
	Receivables from shareholders						—				(4	)
	Net cash used in financing activities						(21,801	)			(5,077	)
	Net (decrease) increase in cash and cash equivalents						(7,579	)			5,985
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD							57,271				31,620
CASH AND CASH EQUIVALENTS, END OF PERIOD						$	49,692			$	37,605
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Interest paid					$	29,861			$	27,285
	Income taxes paid					$	251			$	197
NON-CASH FINANCING ACTIVITIES:
	Acquisition of fixed assets through capital leases					$	3,958			$	3,217
	Transfer of assets held for sale to fixed assets					$	1,936			$	—

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1.	Basis of Presentation

F-44

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F-45

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F-46

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2.	Inventories

		September 30,
		2005
Laundry equipment		$	8,872
Machine repair parts			3,664
		$	12,536

3.	Assets Held for Sale

4.	Goodwill and Contract Rights

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Route		$	195,026
Rental (AWA)			6,837
Distribution (Super Laundry)			2,917
		$	204,780

Years Ending March 31,
2006 (remainder of year)		$	6.8
2007			13.3
2008			13.0
2009			12.6
2010			12.3

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5.	Long-Term Debt

		September 30,
		2005
9% Senior Notes due 2010		$	324,500
Credit facility indebtedness			229,284
IDS 11% Senior Secured Notes			116,117
Third party 11% Senior Secured Notes			20,000
Obligations under capital leases			7,928
Other long-term debt with varying terms and maturities			516
			698,345
Less current portion			5,961
		$	692,384

	11% Senior Secured Notes

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	9% Senior Notes

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	Senior Secured Credit Facility

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	Intercompany Loan

	Interest Rate Swaps

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6.	Guarantor Subsidiaries

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			September 30, 2005
											Coinmach
							Coinmach				Corporation				Adjustments
			Coinmach				Laundry				and				and
			Service Corp.				Corporation				Subsidiaries				Eliminations				Consolidated
Assets
Current assets, consisting of cash, receivables, inventory, assets held for sale, prepaid expenses and other current assets			$	437			$	—			$	74,925			$	(46	)		$	75,316
Advance location payments				—				—				70,179				—				70,179
Property, equipment and leasehold improvements, net				—				—				262,130				—				262,130
Intangible assets, net				—				—				508,456				—				508,456
Deferred income taxes				—				5,416				—				(5,416	)			—
Intercompany loans and advances				491				49,275				—				(49,766	)			—
Investment in subsidiaries				(39,564	)			88,185				—				(48,621	)			—
Investment in preferred stock				182,595				—				—				(182,595	)			—
Other assets				94,617				155				8,374				(84,062	)			19,084
Total assets			$	238,576			$	143,031			$	924,064			$	(370,506	)		$	935,165
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses			$	4,095			$	—			$	73,641			$	(2,438	)		$	75,298
Current portion of long-term debt				—				—				5,961				—				5,961
	Total current liabilities			4,095				—				79,602				(2,438	)			81,259
Deferred income taxes				222				—				68,574				(5,416	)			63,380
Long-term debt, less current portion				136,117				—				556,267				—				692,384
Loan Payable to Parent				—				—				81,670				(81,670	)			—
Due to parent/subsidiary				—				—				49,766				(49,766	)			—
Preferred stock and dividends payable				—				182,595				—				(182,595	)			—
Total stockholders’ equity (deficit)				98,142				(39,564	)			88,185				(48,621	)			98,142
Total liabilities and stockholders’ equity (deficit)			$	238,576			$	143,031			$	924,064			$	(370,506	)		$	935,165

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		Six Months Ended September 30, 2005
										Coinmach
		Coinmach				Coinmach				Corporation
		Service				Laundry				and
		Corp.				Corporation				Subsidiaries				Eliminations				Consolidated
Revenues		$	—			$	—			$	266,150			$	—			$	266,150
Costs and expenses			905				218				239,793				—				240,916
Operating (loss) income			(905	)			(218	)			26,357				—				25,234
Interest expense — preferred stock			(7,391	)			7,391				—				—				—
Interest expense, net			3,282				—				27,364				—				30,646
Income (loss) before taxes			3,204				(7,609	)			(1,007	)			—				(5,412	)
Income tax provision (benefit)			1,308				(3,108	)			(349	)			—				(2,149	)
			1,896				(4,501	)			(658	)			—				(3,263	)
Equity in loss (income) of subsidiaries			(5,159	)			(658	)			—				(5,817	)			—
Net loss		$	(3,263	)		$	(5,159	)		$	(658	)		$	5,817			$	(3,263	)

		Six Months Ended September 30, 2004
						Coinmach
		Coinmach				Corporation
		Laundry				and
		Corporation				Subsidiaries				Eliminations				Consolidated
Revenues		$	—			$	266,449			$	—			$	266,449
Costs and expenses			250				242,779				—				243,029
Operating (loss) income			(250	)			23,670				—				23,420
Interest expense — preferred stock			13,368				—				—				13,368
Interest expense, net			—				28,625				—				28,625
Loss before taxes			(13,618	)			(4,955	)			—				(18,573	)
Income tax provision (benefit)			10				(1,931	)			—				(1,921	)
			(13,628	)			(3,024	)			—				(16,652	)
Equity in loss of subsidiaries			3,024				—				(3,024	)			—
Net loss		$	(16,652	)		$	(3,024	)		$	3,024			$	(16,652	)

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		Six Months Ended September 30, 2005
										Coinmach
						Coinmach				Corporation
		Coinmach				Laundry				and
		Service Corp.				Corporation				Subsidiaries				Eliminations				Consolidated
Operating Activities
Net income (loss) income		$	1,896			$	(4,501	)		$	(658	)		$	—			$	(3,263	)
Noncash adjustments			(5,814	)			4,294				54,477				—				52,957
Change in operating assets and liabilities			(684	)			8				2,990				—				2,314
Net cash (used in) provided by operating activities			(4,602	)			(199	)			56,809				—				52,008
Investing Activities
Capital expenditures			—				—				(37,074	)			—				(37,074	)
Acquisition of assets			—				—				(1,210	)			—				(1,210	)
Proceeds from sale of property and equipment			—				—				498				—				498
Net cash used in investing activities			—				—				(37,786	)			—				(37,786	)
Financing Activities
Repayment of debt			—				—				(11,223	)			—				(11,223	)
Other financing items			4,602				199				(15,379	)			—				(10,578	)
Net cash provided by (used in) financing activities			4,602				199				(26,602	)			—				(21,801	)
Net decrease in cash and cash equivalents			—				—				(7,579	)			—				(7,579	)
Cash and cash equivalents, beginning of period			431				—				56,840				—				57,271
Cash and cash equivalents, end of period		$	431			$	—			$	49,261			$	—			$	49,692

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		Six Months Ended September 30, 2004
						Coinmach
		Coinmach				Corporation
		Laundry				and
		Corporation				Subsidiaries				Eliminations				Consolidated
Operating Activities
Net loss		$	(13,628	)		$	(3,024	)		$	—			$	(16,652	)
Noncash adjustments			13,433				54,339				—				67,772
Change in operating assets and liabilities			(233	)			(2,543	)			—				(2,776	)
Net cash (used in) provided by operating activities			(428	)			48,772				—				48,344
Investing Activities
Capital expenditures			—				(36,955	)			—				(36,955	)
Acquisition of assets			—				(618	)			—				(618	)
Proceeds from sale of property and equipment			—				291				—				291
Net cash used in investing activities			—				(37,282	)			—				(37,282	)
Financing Activities
Repayment of debt			—				(3,066	)			—				(3,066	)
Other financing items			428				(2,439	)			—				(2,011	)
Net cash provided by (used in) financing activities			428				(5,505	)			—				(5,077	)
Net increase in cash and cash equivalents			—				5,985				—				5,985
Cash and cash equivalents, beginning of period			—				31,620				—				31,620
Cash and cash equivalents, end of period		$	—			$	37,605			$	—			$	37,605

7.	Segment Information

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				Six Months Ended
				September 30,
				2005				2004
Revenue:
	Route			$	236,516			$	234,238
	All other:
		Rental			17,496				16,880
		Distribution			12,138				15,331
	Subtotal				29,634				32,211
Total revenue				$	266,150			$	266,449
EBITDA(1):
	Route			$	77,493			$	76,730
	All other:
		Rental			7,212				6,646
		Distribution			413				441
	Subtotal				7,625				7,087
Other items, net					(310	)			(500	)
Corporate expenses					(5,570	)			(4,727	)
Total EBITDA					79,238				78,590
Reconciling items:
Depreciation and amortization expense, amortization of advance location payments and amortization of intangibles:
	Route				(48,099	)			(49,376	)
	All other				(4,271	)			(4,271	)
	Corporate				(1,634	)			(1,523	)
		Total depreciation			(54,004	)			(55,170	)
Interest expense					(30,646	)			(28,625	)
Interest expense — Preferred Stock					—				(13,368	)
Consolidated loss before income taxes				$	(5,412	)		$	(18,573	)

(1)	See description of “Non-GAAP Financial Measures” immediately following this table for more information regarding EBITDA and a reconciliation of net loss to EBITDA for the periods indicated above.

	Non-GAAP Financial Measures

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		Six Months Ended
		September 30,
		2005				2004
Net loss		$	(3.3	)		$	(16.7	)
Benefit for income taxes			(2.1	)			(1.9	)
Interest expense			30.6				28.6
Interest expense — preferred stock			—				13.4
Depreciation and amortization			54.0				55.2
EBITDA		$	79.2			$	78.6

8.	Income Taxes

		September 30, 2005
Deferred tax liabilities:
Accelerated tax depreciation and contract rights		$	106,269
Interest rate swap			323
Other			1,971
			108,563
Deferred tax assets:
Net operating loss carryforwards			41,815
Covenant not to compete			1,009
Other			2,359
			45,183
Net deferred tax liability		$	63,380

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		Six Months Ended
		September 30,
		2005				2004
Federal		$	(1,676	)		$	(1,524	)
State			(473	)			(397	)
		$	(2,149	)		$	(1,921	)

		Six Months Ended
		September 30,
		2005				2004
Expected tax benefit		$	(1,896	)		$	(6,500	)
State tax benefit, net of federal taxes			(308	)			(258	)
Non deductible interest — Preferred Stock			—				4,679
Permanent book/tax differences			55				158
Tax benefit		$	(2,149	)		$	(1,921	)

9.	Loss per Common Share

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				Six Months Ended
				September 30,
				2005				2004
Net loss attributable to common stockholders				$	(3,263	)		$	(16,652	)
Add: Dividends paid on Class A common stock					(7,797	)			—
Undistributed loss available to Class A and Class B common stock				$	(11,060	)		$	(16,652	)
Basic and diluted allocation of undistributed loss:
	Class A Common Stock			$	(4,765	)		$	—
	Class B Common Stock				(6,295	)			(16,652	)
		Total		$	(11,060	)		$	(16,652	)
Weighted average common stock outstanding:
	Class A Common Stock				18,911,532				—
	Class B Common Stock				24,980,445				24,980,445
		Total			43,891,977				24,980,445
Distributed earnings per share:
	Class A Common Stock			$	0.41			$	—
	Class B Common Stock			$	—			$	—
Undistributed loss per share:
	Class A Common Stock			$	(0.25	)		$	—
	Class B Common Stock			$	(0.25	)		$	(0.67	)
Basic and diluted income (loss) per share:
	Class A Common Stock			$	0.16			$	—
	Class B Common Stock			$	(0.25	)		$	(0.67	)

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				Six Months Ended
				September 30,
				2005				2004
Net loss attributable to common stockholders				$	(3,263	)		$	(16,652	)
Add: Dividends paid on Class A common stock					(7,797	)			—
Undistributed loss available to Class A and Class B common stock				$	(11,060	)		$	(16,652	)
Basic and diluted allocation of undistributed loss:
	Class A Common Stock			$	(4,765	)		$	(7,175	)
	Class B Common Stock				(6,295	)			(9,477	)
		Total		$	(11,060	)		$	(16,652	)
Weighted average common stock outstanding:
	Class A Common Stock				18,911,532				18,911,532
	Class B Common Stock				24,980,445				24,980,445
		Total			43,891,977				43,891,977
Distributed earnings per share:
	Class A Common Stock			$	0.41			$	—
	Class B Common Stock			$	—			$	—
Undistributed loss per share:
	Class A Common Stock			$	(0.25	)		$	(0.38	)
	Class B Common Stock			$	(0.25	)		$	(0.38	)
Basic and diluted income (loss) per share:
	Class A Common Stock			$	0.16			$	(0.38	)
	Class B Common Stock			$	(0.25	)		$	(0.38	)

10.	Redeemable Preferred Stock and Stockholders’ Deficit

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F-63

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11.	2004 Long-Term Incentive Plan

12.	Subsequent Events

F-64

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	/s/ Ernst & Young LLP

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			March 31,
			2005				2004
			(In thousands,
			except share data)
ASSETS
Current assets:
	Cash and cash equivalents		$	56,840			$	31,620
	Receivables, less allowance of $3,794 and $2,892			6,486				6,207
	Inventories			12,432				11,508
	Assets held for sale			2,475				2,560
	Prepaid expenses			4,994				5,097
	Interest rate swap asset			832				—
	Other current assets			2,582				1,974
Total current assets				86,641				58,966
Advance location payments				72,222				73,253
Property, equipment and leasehold improvements:
	Laundry equipment and fixtures			526,158				479,781
	Land, building and improvements			34,729				30,053
	Trucks and other vehicles			32,507				27,590
				593,394				537,424
Less accumulated depreciation and amortization				(329,130	)			(253,736	)
Net property, equipment and leasehold improvements				264,264				283,688
Contract rights, net of accumulated amortization of $100,975 and $87,139				309,698				323,152
Goodwill				204,780				204,780
Other assets				7,619				15,669
Total assets			$	945,224			$	959,508
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
	Accounts payable		$	22,535			$	20,385
	Accrued expenses			10,394				8,421
	Accrued rental payments			30,029				31,855
	Accrued interest			7,987				7,549
	Interest rate swap liability			—				3,597
	Current portion of long-term debt			17,704				9,149
Total current liabilities				88,649				80,956
Deferred income taxes				66,633				73,775
Long-term debt				554,570				708,482
Intercompany loan				81,670				—
Due to Parent				2,060				—
Redeemable preferred stock — $2.5 million par value; 82 shares authorized; 54.12 shares issued and outstanding at March 31, 2005 and 74.89 shares issued and outstanding at March 31, 2004 (liquidation preference of $186,034 at March 31, 2005) — owned by Parent				186,034				265,914
	Total liabilities			979,616				1,129,127
Stockholders’ deficit:
Common stock — $2.50 par value; 76,000 shares authorized; 66,790.27 shares issued and outstanding at March 31, 2005 and 66,825.83 shares issued and outstanding at March 31, 2004				167				167
	Capital in excess of par value			175,864				5,022
	Carryover basis adjustment			(7,988	)			(7,988	)
	Accumulated other comprehensive income (loss), net of tax			492				(2,006	)
	Accumulated deficit			(202,915	)			(164,728	)
	Deferred compensation			(12	)			(86	)
Total stockholders’ deficit				(34,392	)			(169,619	)
Total liabilities and stockholders’ deficit			$	945,224			$	959,508

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			Year Ended March 31,
			2005				2004				2003
			(In thousands)
Revenues			$	538,604			$	531,088			$	535,179
Costs and expenses:
	Laundry operating expenses (exclusive of depreciation and amortization and amortization of advance location payments)			367,974				365,709				366,539
	General and administrative (including stock-based compensation expense of $74, $176 and $338, respectively)			9,352				9,460				9,568
	Depreciation and amortization			76,431				72,529				67,161
	Amortization of advance location payments			19,578				20,576				21,214
	Amortization of intangibles			14,431				15,472				15,803
	Other items, net			855				230				(454	)
				488,621				483,976				479,831
Operating income				49,983				47,112				55,348
Interest expense				56,253				57,377				58,167
Interest expense — non cash preferred stock dividends				22,666				24,714				—
Interest expense — escrow interest				941				—				—
Transaction costs				17,389				—				—
Loss before income taxes				(47,266	)			(34,979	)			(2,819	)
(Benefit) provision for income taxes:
	Current			—				105				397
	Deferred			(9,079	)			(3,753	)			(16	)
				(9,079	)			(3,648	)			381
Net loss				(38,187	)			(31,331	)			(3,200	)
Preferred stock dividends				—				—				(20,838	)
Net loss attributable to common stockholders			$	(38,187	)		$	(31,331	)		$	(24,038	)

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																Accumulated
																Other
												Carryover				Comprehensive												Total
				Common				Capital in				Basis				Income (Loss),				Accumulated				Deferred				Stockholders’
				Stock				Excess of Par				Adjustment				Net of Tax				Deficit				Compensation				Deficit
				(In thousands)
Balance, March 31, 2002				$	167			$	4,037			$	(7,988	)		$	—			$	(109,359	)		$	(600	)		$	(113,743	)
	Common stock retired				—				(10	)			—				—				—				—				(10	)
	Comprehensive loss:
		Net loss			—				—				—				—				(3,200	)			—				(3,200	)
		Loss on derivative instruments, net of income tax of $1,338			—				—				—				(2,007	)			—				—				(2,007	)
Total comprehensive loss					—				—				—				—				—				—				(5,207	)
Capital contribution					—				1,000				—				—				—				—				1,000
Dividends on preferred stock					—				—				—				—				(20,838	)			—				(20,838	)
Stock-based compensation					—				—				—				—				—				338				338
Balance, March 31, 2003					167				5,207				(7,988	)			(2,007	)			(133,397	)			(262	)			(138,460	)
Common stock retired					—				(5	)			—				—				—				—				(5	)
Comprehensive loss:
		Net loss			—				—				—				—				(31,331	)			—				(31,331	)
		Gain on derivative instruments			—				—				—				1				—				—				1
		Total comprehensive loss			—				—				—				—				—				—				(31,330	)
Stock-based compensation					—				—				—				—				—				176				176
Balance, March 31, 2004					167				5,022				(7,988	)			(2,006	)			(164,728	)			(86	)			(169,619	)
Capital contributions					—				170,842				—				—				—				—				170,842
Comprehensive loss:
		Net loss			—				—				—				—				(38,187	)			—				(38,187	)
		Gain on derivative instruments, net of income tax of $1,931			—				—				—				2,498				—				—				2,498
Total comprehensive loss																													(35,689	)
Stock-based compensation					—				—				—				—				—				74				74
Balance, March 31, 2005				$	167			$	175,864			$	(7,988	)		$	492			$	(202,915	)		$	(12	)		$	(34,392	)

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				Year Ended March 31,
				2005				2004				2003
				(In thousands)
Operating activities
Net loss				$	(38,187	)		$	(31,331	)		$	(3,200	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization				76,431				72,529				67,161
	Amortization of advance location payments				19,578				20,576				21,214
	Amortization of intangibles				14,431				15,472				15,803
	Interest expense — preferred stock				22,666				24,714				—
	Gain on sale of investment and equipment				(557	)			(1,232	)			(3,532	)
	Deferred income taxes				(9,079	)			(3,753	)			(16	)
	Amortization of deferred issue costs				2,139				2,414				2,439
	Premium on redemption of 9% Senior Notes				11,295				—				—
	Write-off of deferred issue costs				3,475				—				—
	Stock based compensation				74				176				338
	Change in operating assets and liabilities, net of businesses acquired:
		Other assets			1,017				(1,384	)			126
		Receivables, net			(279	)			4,246				1,430
		Inventories and prepaid expenses			(702	)			2,247				(1,214	)
		Accounts payable and accrued expenses, net			2,232				(7,077	)			2,797
		Accrued interest			438				(545	)			554
Net cash provided by operating activities					104,972				97,052				103,900
Investing activities
Additions to property, equipment and leasehold improvements					(53,444	)			(65,460	)			(66,238	)
Advance location payments to location owners					(18,051	)			(21,272	)			(20,447	)
Additions to net assets related to acquisitions of businesses					(628	)			(3,615	)			(1,976	)
Proceeds from sale of investment					277				1,022				6,585
Proceeds from sale of property and equipment					919				876				746
Net cash used in investing activities					(70,927	)			(88,449	)			(81,330	)
Financing activities
Proceeds from credit facility					—				8,700				18,000
Repayments under credit facility					(19,830	)			(9,613	)			(36,750	)
Redemption of 9% Senior Notes					(125,500	)			—				—
Payment of premium on 9% Senior Notes					(11,295	)			—				—
Principal payments on capitalized lease obligations					(4,331	)			(3,995	)			(3,981	)
Borrowings (repayments) from bank and other borrowings					105				498				(266	)
Proceeds from Intercompany Loan					81,670				—				—
Net advances from Parent					2,060				—				—
Capital contributions					170,842				—				—
Cash dividends paid					(3,338	)			—				—
Redemption of preferred stock					(99,208	)			—				—
Receivables from stockholders					—				(1	)			35
Net cash used in financing activities					(8,825	)			(4,411	)			(22,962	)
Net increase (decrease) in cash and cash equivalents					25,220				4,192				(392	)
Cash and cash equivalents, beginning of year					31,620				27,428				27,820
Cash and cash equivalents, end of year				$	56,840			$	31,620			$	27,428
Supplemental disclosure of cash flow information
Interest paid				$	54,617			$	55,614			$	55,300
Income taxes paid				$	301			$	158			$	475
Noncash investing and financing activities
Acquisition of fixed assets through capital leases				$	4,199			$	3,929			$	3,554

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1.	Basis of Presentation

	Appliance Warehouse Transfer

F-71

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2.	Summary of Significant Accounting Policies

	Recognition of Revenues

	Use of Estimates

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	Cash Equivalents

	Inventories

		March 31,
		2005				2004
Laundry equipment		$	8,882			$	7,973
Machine repair parts			3,550				3,535
		$	12,432			$	11,508

	Long-Lived Assets

	Assets Held for Sale

	Property, Equipment and Leasehold Improvements

Laundry equipment, installation costs and fixtures		5 to 8 years
Leasehold improvements and decorating costs		5 to 8 years
Trucks and other vehicles		3 to 4 years

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	Goodwill

		March 31,
		2005				2004
Route		$	195,026			$	195,026
Rental			6,837				6,837
Distribution			2,917				2,917
			204,780				204,780

		March 31,
		2005				2004
Goodwill — beginning of year		$	204,780			$	203,860
Acquisitions			—				920
Goodwill — end of year		$	204,780			$	204,780

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	Contract Rights

Years Ending March 31,
2006		$	13.5
2007			13.2
2008			12.9
2009			12.6
2010			12.3

	Advance Location Payments

	Comprehensive Income (Loss)

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	Income Taxes

	Derivatives

3.	Long-Term Debt

		March 31,
		2005				2004
9% Senior Notes due 2010		$	324,500			$	450,000
Credit facility indebtedness			240,507				260,337
Obligations under capital leases			6,630				6,762
Other long-term debt with varying terms and maturities			637				532
			572,274				717,631
Less current portion			17,704				9,149
		$	554,570			$	708,482

	a.     9% Senior Notes

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	b.     Credit Facility

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		March 31,
		2005				2004
Tranche term loan B, semi-annual payments of approximately $1,240, increasing to approximately $6,199 on June 30, 2007 with the final payment of approximately $210,753 on July 25, 2009 (Interest rate of 5.65% at March 31, 2005)		$	240,507			$	242,986
Tranche term loan A			—				17,351
Revolving line of credit			—				—
		$	240,507			$	260,337

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		Principal
Years Ending March 31,		Amount
2006		$	17,704
2007			4,695
2008			12,985
2009			12,080
2010			524,738
Thereafter			72
Total debt		$	572,274

	c.     Interest Rate Swaps

4.	Intercompany Loan

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5.	Retirement Savings Plan

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6.	Income Taxes

		March 31,
		2005				2004
Deferred tax liabilities:
Accelerated tax depreciation and contract rights		$	108,058			$	111,103
Interest rate swap			340				—
Other			1,798				1,246
			110,196				112,349
Deferred tax assets:
Interest rate swap			—				1,591
Net operating loss carryforwards			40,356				34,272
Covenant not to compete			1,072				1,202
Other			2,135				1,509
			43,563				38,574
Net deferred tax liability		$	66,633			$	73,775

		Year Ended March 31,
		2005				2004				2003
Federal		$	(7,079	)		$	(2,948	)		$	(13	)
State			(2,000	)			(700	)			394
		$	(9,079	)		$	(3,648	)		$	381

		Year Ended March 31,
		2005				2004				2003
Expected tax benefit		$	(16,543	)		$	(12,243	)		$	(885	)
NOL Valuation Allowance			—				—				—
Non deductible interest — Preferred Stock			7,933				8,649				—
State tax (benefit) provision, net of federal taxes			(1,300	)			(473	)			256
Permanent book/tax differences:			831				419				1,010
Tax (benefit) provision		$	(9,079	)		$	(3,648	)		$	381

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7.	Redeemable Preferred Stock and Stockholders’ Deficit

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8.	Commitments and Contingencies

		2005				2004
		(In thousands)
Laundry equipment and fixtures		$	1,148			$	962
Trucks and other vehicles			22,862				18,849
			24,010				19,811
Less accumulated amortization			(15,930	)			(11,865	)
		$	8,080			$	7,946

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		Capital				Operating
2006		$	3,550			$	8,010
2007			2,459				6,231
2008			1,255				4,279
2009			263				3,246
2010			—				2,346
Thereafter			—				2,472
Total minimum lease payments			7,527			$	26,584
Less amounts representing interest			897
Present value of net minimum lease payments (including current portion of $3,032)		$	6,630

9.	Related Party Transactions

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10.	Fair Value of Financial Instruments

		Carrying				Estimated
		Amount				Fair Value
9% Senior Notes at March 31, 2005		$	324,500			$	332,613
9% Senior Notes at March 31, 2004		$	450,000			$	483,750

11.	Segment Information

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				Year Ended March 31,
				2005				2004				2003
Revenue:
	Route			$	472,484			$	469,641			$	471,443
	All other:
		Rental			34,372				32,572				28,743
		Distribution			31,748				28,875				34,993
	Subtotal				66,120				61,447				63,736
Total revenue				$	538,604			$	531,088			$	535,179
EBITDA(1):
	Route			$	155,378			$	154,436			$	158,938
	All other:
		Rental			13,840				12,197				11,381
		Distribution			1,412				(1,254	)			(1,679	)
	Subtotal				15,252				10,943				9,702
	Other items, net				(855	)			(230	)			454
	Transaction costs(2)				(17,389	)			—				—
	Corporate expenses				(9,352	)			(9,460	)			(9,568	)
Total EBITDA					143,034				155,689				159,526
Reconciling items:
Depreciation and amortization expense, amortization of advance location payments and amortization of intangibles:
	Route				(98,921	)			(98,148	)			(94,489	)
	All other				(8,242	)			(8,062	)			(7,746	)
	Corporate expenses				(3,277	)			(2,367	)			(1,943	)
Total depreciation					(110,440	)			(108,577	)			(104,178	)
Interest expense					(56,253	)			(57,377	)			(58,167	)
Interest expense — preferred stock					(22,666	)			(24,714	)			—
Interest expense — escrow					(941	)			—				—
Consolidated loss before income taxes				$	(47,266	)		$	(34,979	)		$	(2,819	)

(1)	See description of “Non-GAAP Financial Measures” immediately following this table for a reconciliation of net loss to EBITDA for the periods indicated above.
(2)	The computation of EBITDA for the fiscal year ended March 31, 2005 has not been adjusted to take into account transaction costs consisting of (i) approximately $11.3 million redemption premium on the 9% Senior Notes redeemed, (ii) the write-off of the deferred financing costs relating to the 9% Senior Notes redeemed and term loans repaid aggregating approximately $3.5 million, (iii) expenses aggregating approximately $2.0 million relating to an amendment to the Senior Secured

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	Credit Facility effected on November 15, 2004 to, among other things, permit the IDS Transactions and (iv) special bonuses related to the IDS Transactions aggregating approximately $0.6 million.

			Year Ended March 31,
			2005				2004				2003
Expenditures for acquisitions and additions of long-lived assets:
	Route		$	64,844			$	81,685			$	78,939
	All other			7,279				8,662				9,722
Total			$	72,123			$	90,347			$	88,661
Segment assets:
	Route		$	910,980			$	891,980			$	901,672
	All other			28,209				56,269				60,404
	Corporate assets			6,035				11,259				14,087
Total			$	945,224			$	959,508			$	976,163

	Non-GAAP Financial Measures

		Year Ended March 31,
		2005				2004				2003
Net loss		$	(38.2	)		$	(31.3	)		$	(3.2	)
(Benefit) provision for income taxes			(9.1	)			(3.7	)			0.3
Interest expense			56.3				57.4				58.2
Interest expense — preferred stock			22.7				24.7				—
Interest expense — escrow interest			0.9				—				—
Depreciation and amortization			110.4				108.6				104.2
EBITDA*		$	143.0			$	155.7			$	159.5

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*

The computation of EBITDA for the fiscal year ended March 31, 2005 has not been adjusted to take into account transaction costs consisting of (1) approximately $11.3 million redemption premium on the portion of the 9% Senior Notes redeemed, (2) the write-off of the deferred financing costs relating to the 9% Senior Notes redeemed and term loans repaid aggregating approximately $3.5 million, (3) expenses aggregating approximately $2.0 million relating to an amendment to the Senior Secured Credit Facility effected on November 15, 2004 to, among other things, permit the IDS Transactions and (4) special bonuses related to the IDS Transactions aggregating approximately $0.6 million.

12.	Other Items, net

13.	Dividends

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14.	Quarterly Financial Information (Unaudited)

		Three Months Ended
		June 30,				September 30,				December 31,				March 31,
		2004				2004				2004				2005
Revenues		$	133,499			$	132,950			$	135,627			$	136,528
Operating income			12,335				11,085				13,318				13,245
Loss before income taxes			(8,452	)			(10,121	)			(24,401	)			(4,292	)
Net loss attributable to common stockholders			(7,780	)			(8,872	)			(16,820	)			(4,715	)

		Three Months Ended
		June 30,				September 30,				December 31,				March 31,
		2003				2003				2003				2004
Revenues		$	132,517			$	129,951			$	135,740			$	132,880
Operating income			12,338				11,061				12,711				11,002
Loss before income taxes			(7,883	)			(9,458	)			(8,005	)			(9,633	)
Net loss attributable to common stockholders			(7,169	)			(8,747	)			(7,360	)			(8,055	)

15.	Subsequent Events

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		March 31,
		2005				2004
		(In thousands of dollars,
		except share data)
ASSETS
Deferred income tax		$	2,307			$	1,974
Other assets (principally investment in and amounts due from wholly owned subsidiaries)			149,335				94,321
Total assets		$	151,642			$	96,295
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Redeemable preferred stock — $2.5 million par value; 82 shares authorized; 34.12 shares issued and outstanding (liquidation preference of $186,034 at March 31, 2005) — owned by Parent		$	186,034			$	265,914
Total liabilities			186,034				265,914
Commitments and contingencies
Stockholders’ deficit:
Common stock — $2.50 par value; 76,000 shares authorized; 66,790.27 shares issued and outstanding at March 31, 2005 and 66,825.83 shares issued and outstanding at March 31, 2004			167				167
Capital in excess of par value			175,864				5,022
Carryover basis adjustment			(7,988	)			(7,988	)
Accumulated other comprehensive income (loss), net of tax			492				(2,006	)
Accumulated deficit			(202,915	)			(164,728	)
Deferred compensation			(12	)			(86	)
Total stockholders’ deficit			(34,392	)			(169,619	)
Total liabilities and stockholders’ deficit		$	151,642			$	96,295

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			Year Ended March 31,
			2005				2004				2003
			(In thousands of dollars)
Costs and expenses:
	General and administrative		$	509			$	704			$	999
Operating loss				(509	)			(704	)			(999	)
Interest expense — Preferred Stock				22,666				24,714				—
Loss before income taxes and equity in net loss of subsidiaries				(23,175	)			(25,418	)			(999	)
Benefit for income taxes:
	Current			—				1				38
	Deferred			(334	)			(134	)			(125	)
				(334	)			(133	)			(87	)
Loss before equity in net loss of subsidiaries				(22,841	)			(25,285	)			(912	)
Equity in net loss of subsidiaries				(15,346	)			(6,046	)			(2,288	)
Net loss				(38,187	)			(31,331	)			(3,200	)
Preferred stock dividends				—				—				(20,838	)
Net loss attributable to common stockholders			$	(38,187	)		$	(31,331	)		$	(24,038	)

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			Year Ended March 31,
			2005				2004				2003
			(In thousands of dollars)
Operating activities
Net loss			$	(38,187	)		$	(31,331	)		$	(3,200	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in net loss of subsidiaries				15,346				6,046				2,288
Deferred income taxes				(334	)			(134	)			(125	)
Interest expense — Preferred Stock				22,666				24,714				—
Stock based compensation				74				176				338
Change in operating assets and liabilities, net of businesses acquired:
	Other assets			36				(297	)			(153	)
	Prepaid expenses			—				—				78
Net cash used in operating activities				(399	)			(826	)			(774	)
Financing activities
Net (repayments) borrowings from subsidiary				(489	)			827				989
Repayments of bank and other borrowings				—				—				(250	)
Due to Parent				888				—				—
Receivables from stockholders				—				(1	)			35
Net cash provided by financing activities				399				826				774
Net increase in cash and cash equivalents				—				—				—
Cash and cash equivalents, beginning of year				—				—				—
Cash and cash equivalents, end of year			$	—			$	—			$	—

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1.	Basis of Presentation

2.	Redeemable Preferred Stock and Stockholders’ Deficit

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3.	Commitments and Contingencies

4.	Subsequent Events

F-95

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								Additions
				Balance at				Charged to				Charged to								Balance at
				Beginning of				Costs and				Other								End of
Description				Period				Expenses				Accounts				Deductions(1)				Period
Year ended March 31, 2005
	Reserves and allowances deducted from asset accounts:
		Allowance for uncollected accounts		$	2,892,000			$	1,617,000			$	—			$	(715,000	)		$	3,794,000
Year ended March 31, 2004
	Reserves and allowances deducted from asset accounts:
		Allowance for uncollected accounts			1,553,000				1,831,000				—				(492,000	)			2,892,000
Year ended March 31, 2003
	Reserves and allowances deducted from asset accounts:
		Allowance for uncollected accounts			1,342,000				1,188,000				—				(977,000	)			1,553,000

(1)	Write-off to Accounts Receivable.

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ASSETS:
Current assets:
	Cash and cash equivalents		$	49,261
	Receivables, net			5,702
	Inventories			12,536
	Assets held for sale			349
	Prepaid expenses			3,944
	Interest rate swap asset			790
	Other current assets			2,297
Total current assets				74,879
Advance location payments				70,179
Property, equipment and leasehold improvements, net of accumulated depreciation and amortization of $366,441				262,130
Contract rights, net of accumulated amortization of $107,733				303,676
Goodwill				204,780
Other assets				8,374
Total assets			$	924,018
LIABILITIES AND STOCKHOLDERS’ DEFICIT:
Current liabilities:
	Accounts payable and accrued expenses		$	32,113
	Accrued rental payments			33,603
	Accrued interest			7,726
	Current portion of long-term debt			5,961
Total current liabilities				79,403
Deferred income taxes				63,156
Intercompany loan				81,670
Due to Parent				491
Redeemable preferred stock — $2.5 million par value; 82 shares authorized; 54.12 shares issued and outstanding (liquidation preference of $182,595)				182,595
Long-term debt, less current portion				556,267
Total liabilities				963,582
Stockholders’ deficit:
	Common stock			167
	Capital in excess of par value			175,864
	Carryover basis adjustment			(7,988	)
	Accumulated other comprehensive loss, net of tax			467
	Accumulated deficit			(208,074	)
Total stockholders’ deficit				(39,564	)
Total liabilities and stockholders’ deficit			$	924,018

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					Six Months Ended
					September 30,
					2005				2004
					(In thousands of dollars,
					except per share data)
Revenues					$	266,150			$	266,449
Costs and expenses:
	Laundry operating expenses (exclusive of depreciation and amortization of advance location payments)					181,032				182,632
	General and administrative					4,665				4,727
	Depreciation and amortization					37,861				38,058
	Amortization of advance location payments					9,173				9,852
	Amortization of intangibles					6,970				7,260
	Other items, net					310				500
						240,011				243,029
Operating income						26,139				23,420
Interest expense						27,364				28,625
Interest expense — preferred stock						7,391				13,368
Loss before income taxes						(8,616	)			(18,573	)
Benefit for income taxes:
		Current				—				35
		Deferred				(3,457	)			(1,956	)
						(3,457	)			(1,921	)
Net loss					$	(5,159	)		$	(16,652	)
Net loss per common share					$	(77.24	)		$	(249.25	)
Weighted average common shares						66,790.27				66,805.83
			Accumulated deficit, beginning of period		$	(202,915	)
			Net loss			(5,159	)
			Accumulated deficit, end of period		$	(208,074	)

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			Six Months Ended
			September 30,
			2005				2004
			(Dollars in thousands)
Operating activities
Net loss			$	(5,159	)		$	(16,652	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization			37,861				38,058
	Amortization of advance location payments			9,173				9,852
	Amortization of intangibles			6,970				7,260
	Interest expense — preferred stock			7,391				13,368
	Loss (gain) on sale of equipment			27				(54	)
	Deferred income taxes			(3,457	)			(1,956	)
	Amortization of deferred issue costs			795				1,207
	Stock based compensation			12				37
Change in operating assets and liabilities, net of businesses acquired:
	Other assets			(1,226	)			927
	Receivables, net			784				(2,624	)
	Inventories and prepaid expenses			946				(20	)
	Accounts payable and accrued expenses, net			2,758				(1,261	)
	Accrued interest			(261	)			202
Net cash provided by operating activities				56,610				48,344
Investing activities
Additions to property and equipment				(29,944	)			(27,670	)
Advance location payments to location owners				(7,130	)			(9,285	)
Acquisition of net assets related to acquisitions of businesses				(1,210	)			(618	)
Proceeds from sale of property and equipment				498				291
Net cash used in investing activities				(37,786	)			(37,282	)
Financing activities
Repayments under credit facility				(11,223	)			(3,066	)
(Repayments) borrowings from bank and other borrowings				(121	)			217
Principal payments on capitalized lease obligations				(2,660	)			(2,224	)
Net repayments to Parent				(1,569	)			—
Dividend paid to Parent				(10,830	)			—
Receivables from stockholders				—				(4	)
Net cash used in financing activities				(26,403	)			(5,077	)
Net (decrease) increase in cash and cash equivalents				(7,579	)			5,985
Cash and cash equivalents, beginning of period				56,840				31,620
Cash and cash equivalents, end of period			$	49,261			$	37,605
Supplemental disclosure of cash flow information
Interest paid			$	26,830			$	27,285
Income taxes paid			$	251			$	197
Non-cash financing activities
Acquisition of fixed assets through capital leases			$	3,958			$	3,217
Transfer of assets held for sale to fixed assets			$	1,936			$	—

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1.	Basis of Presentation

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2.	Inventories

		September 30,
		2005
Laundry equipment		$	8,872
Machine repair parts			3,664
		$	12,536

3.	Assets Held for Sale

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4.	Goodwill and Contract Rights

Route		$	195,026
Rental (AWA)			6,837
Distribution (Super Laundry)			2,917
		$	204,780

Years Ending March 31,
2006 (remainder of year)		$	6.8
2007			13.3
2008			13.0
2009			12.6
2010			12.3

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5.	Long-Term Debt

		September 30,
		2005
9% Senior Notes due 2010		$	324,500
Credit facility indebtedness			229,284
Obligations under capital leases			7,928
Other long-term debt with varying terms and maturities			516
			562,228
Less current portion			5,961
		$	556,267

	9% Senior Notes

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	Senior Secured Credit Facility

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	Interest Rate Swap

6.	Intercompany Loan

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7.	Segment Information

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				Six Months Ended
				September 30,
				2005				2004
Revenue
	Route			$	236,516			$	234,238
	All other:
		Rental			17,496				16,880
		Distribution			12,138				15,331
	Subtotal				29,634				32,211
Total revenue				$	266,150			$	266,449
EBITDA(1):
	Route			$	77,493			$	76,730
	All other:
		Rental			7,212				6,646
		Distribution			413				441
	Subtotal				7,625				7,087
	Other items, net				(310	)			(500	)
	Corporate expenses				(4,665	)			(4,727	)
Total EBITDA					80,143				78,590
Reconciling items:
Depreciation and amortization expense, amortization of advance location payments and amortization of intangibles:
	Route				(48,099	)			(49,376	)
	All other				(4,271	)			(4,271	)
	Corporate				(1,634	)			(1,523	)
		Total depreciation			(54,004	)			(55,170	)
Interest expense					(27,364	)			(28,625	)
Interest expense — preferred stock					(7,391	)			(13,368	)
Consolidated loss before income taxes				$	(8,616	)		$	(18,573	)

(1)	See description of “Non-GAAP Financial Measures” immediately following this table for a reconciliation of net loss to EBITDA for the periods indicated above.

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	Non-GAAP Financial Measures

		Six Months Ended
		September 30,
		2005				2004
Net loss		$	(5.2	)		$	(16.7	)
Benefit for income taxes			(3.5	)			(1.9	)
Interest expense			27.4				28.6
Interest expense — preferred stock			7.4				13.4
Depreciation and amortization			54.0				55.2
EBITDA		$	80.1			$	78.6

8.	Redeemable Preferred Stock and Stockholders’ Deficit

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9.	Income Taxes

		September 30, 2005
Deferred tax liabilities:
Accelerated tax depreciation and contract rights		$	106,269
Interest rate swap			323
Other			1,971
			108,563
Deferred tax assets:
Net operating loss carryforwards			42,039
Covenant not to compete			1,009
Other			2,359
			45,407
Net deferred tax liability		$	63,156

		Six Months Ended
		September 30,
		2005				2004
Federal		$	(2,695	)		$	(1,525	)
State			(762	)			(396	)
		$	(3,457	)		$	(1,921	)

		Six Months Ended
		September 30,
		2005				2004
Expected tax benefit		$	(3,016	)		$	(6,501	)
State tax benefit, net of federal taxes			(495	)			(257	)
Non deductible interest — preferred stock			—				4,679
Permanent book/tax differences			54				158
Tax benefit		$	(3,457	)		$	(1,921	)

10.	2004 Long-Term Incentive Plan

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11.	Subsequent Events

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	/s/ Ernst & Young LLP

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				March 31,
				2005				2004
				(In thousands,
				except share data)
ASSETS
Current assets:
Cash and cash equivalents				$	56,840			$	31,620
	Receivables, less allowance of $3,794 and $2,892				6,486				6,207
	Inventories				12,432				11,508
	Assets held for sale				2,475				2,560
	Prepaid expenses				5,031				5,097
	Interest rate swap asset				832				—
	Other current assets				2,582				1,974
		Total current assets			86,678				58,966
Advance location payments					72,222				73,253
Property, equipment and leasehold improvements:
	Laundry equipment and fixtures				526,158				479,781
	Land, building and improvements				34,729				30,053
	Trucks and other vehicles				32,507				27,590
					593,394				537,424
Less accumulated depreciation and amortization					(329,130	)			(253,736	)
Net property, equipment and leasehold improvements					264,264				283,688
Contract rights, net of accumulated amortization of $100,975 and $87,139					309,698				323,152
Goodwill					204,780				204,780
Other assets					7,619				15,670
	Total assets			$	945,261			$	959,509
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable			$	22,554			$	20,407
	Accrued expenses				10,575				8,928
	Accrued rental payments				30,029				31,855
	Accrued interest				7,987				7,549
	Interest rate swap liability				—				3,597
	Current portion of long-term debt				17,704				9,149
Total current liabilities					88,849				81,485
Deferred income taxes					68,940				75,749
Long-term debt					554,570				708,482
Intercompany loan					81,670				—
Due to Parent					51,534				50,036
	Total liabilities				845,563				915,752
Stockholders’ equity:
	Common stock, par value $.01:
		1,000 shares authorized, 100 shares issued and outstanding			—				—
	Capital in excess of par value				286,629				121,065
	Accumulated other comprehensive income (loss), net of tax				492				(2,006	)
	Accumulated deficit				(187,423	)			(75,302	)
Total stockholder’s equity					99,698				43,757
Total liabilities and stockholders’ deficit				$	945,261			$	959,509

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			Year Ended March 31,
			2005				2004				2003
			(In thousands)
Revenues			$	538,604			$	531,088			$	535,179
Costs and expenses:
Laundry operating expenses (exclusive of depreciation and amortization and amortization of advance location payments)				367,974				365,709				366,539
General and administrative				8,843				8,756				8,569
Depreciation and amortization				76,431				72,529				67,161
Amortization of advance location payments				19,578				20,576				21,214
Amortization of intangibles				14,431				15,472				15,803
Other items, net				855				230				(454	)
				488,112				483,272				478,832
Operating income				50,492				47,816				56,347
Interest expense				56,253				57,377				58,167
Interest expense — escrow interest				941				—				—
Transaction costs				17,389				—				—
Loss before income taxes				(24,091	)			(9,561	)			(1,820	)
(Benefit) provision for income taxes:
	Current			—				104				359
	Deferred			(8,745	)			(3,619	)			109
				(8,745	)			(3,515	)			468
Net loss			$	(15,346	)		$	(6,046	)		$	(2,288	)

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															Accumulated
			Common Stock								Capital in				Other								Total
											Excess of				Comprehensive				Accumulated				Stockholder’s
			Shares				Amount				Par Value				Income (Loss)				Deficit				Equity
			(In thousands, except share data)
Balance, March 31, 2002				100			$	—			$	117,391			$	—			$	(66,968	)		$	50,423
	Net loss			—				—				—				—				(2,288	)			(2,288	)
	Loss on derivative instruments, net of income tax of $1,338			—				—				—				(2,007	)			—				(2,007	)
Total comprehensive loss																								(4,295	)
	Capital contribution			—				—				1,000				—				—				1,000
	Contribution of RDI Investment			—				—				2,674				—				—				2,674
Balance, March 31, 2003				100				—				121,065				(2,007	)			(69,256	)			49,802
	Net loss			—				—				—				—				(6,046	)			(6,046	)
	Gain on derivative instruments			—				—				—				1				—				1
Total comprehensive loss																								(6,045	)
Balance, March 31, 2004				100				—				121,065				(2,006	)			(75,302	)			43,757
	Capital contribution			—				—				165,564				—				—				165,564
	Dividends			—				—				—				—				(96,775	)			(96,775	)
	Net loss			—				—				—				—				(15,346	)			(15,346	)
	Gain on derivative instruments, net of income tax of $1,931			—				—				—				2,498				—				2,498
Total comprehensive loss																								(12,848	)
Balance, March 31, 2005				100			$	—			$	286,629			$	492			$	(187,423	)		$	99,698

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				Year Ended March 31,
				2005				2004				2003
				(In thousands)
Operating activities
Net loss				$	(15,346	)		$	(6,046	)		$	(2,288	)
Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization				76,431				72,529				67,161
	Amortization of advance location payments				19,578				20,576				21,214
	Amortization of intangibles				14,431				15,472				15,803
	Gain on sale of investment and equipment				(557	)			(1,232	)			(3,532	)
	Deferred income taxes				(8,745	)			(3,619	)			109
	Amortization of deferred issue costs				2,139				2,414				2,439
	Premium on redemption of 9% Senior Notes				11,295				—				—
	Write-off of deferred issue costs				3,475				—				—
	Change in operating assets and liabilities, net of businesses acquired:
		Other assets			1,013				(1,383	)			126
		Receivables, net			(279	)			4,246				1,430
		Inventories and prepaid expenses			(738	)			2,246				(1,292	)
		Accounts payable and accrued expenses, net			1,906				(6,780	)			2,950
		Accrued interest			438				(545	)			(554	)
Net cash provided by operating activities					105,041				97,878				104,674
Investing activities
Additions to property, equipment and leasehold improvements					(53,444	)			(65,460	)			(66,238	)
Advance location payments to location owners					(18,051	)			(21,272	)			(20,447	)
Additions to net assets related to acquisitions of businesses					(628	)			(3,615	)			(1,976	)
Proceeds from sale of investment					277				1,022				6,585
Proceeds from sale of property and equipment					919				876				746
Net cash used in investing activities					(70,927	)			(88,449	)			(81,330	)
Financing activities
Proceeds from credit facility					—				8,700				18,000
Repayments under credit facility					(19,830	)			(9,613	)			(36,750	)
Redemption of 9% Senior Notes					(125,500	)			—				—
Payment of premium on 9% Senior Notes					(11,295	)			—				—
Capital contribution from Parent					165,564				—				—
Dividends paid to Parent					(96,775	)			—				—
Principal payments on capitalized lease obligations					(4,331	)			(3,995	)			(3,981	)
Borrowings (repayments) from bank and other borrowings					105				498				(16	)
Net borrowings (repayments) to parent					1,498				(827	)			(989	)
Proceeds from intercompany loan					81,670				—				—
Net cash used in financing activities					(8,894	)			(5,237	)			(23,736	)
Net increase (decrease) in cash and cash equivalents					25,220				4,192				(392	)
Cash and cash equivalents, beginning of year					31,620				27,428				27,820
Cash and cash equivalents, end of year				$	56,840			$	31,620			$	27,428
Supplemental disclosure of cash flow information
Interest paid				$	54,617			$	55,614			$	55,300
Income taxes paid				$	301			$	60			$	325
Noncash investing and financing activities
Acquisition of fixed assets through capital leases				$	4,199			$	3,929			$	3,554
Contribution of RDI Investment				$	—			$	—			$	2,674

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1.	Basis of Presentation

	Appliance Warehouse Transfer

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2.	Summary of Significant Accounting Policies

	Recognition of Revenues

	Use of Estimates

	Cash Equivalents

	Inventories

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		March 31,
		2005				2004
Laundry equipment		$	8,882			$	7,973
Machine repair parts			3,550				3,535
		$	12,432			$	11,508

	Long-Lived Assets

	Assets Held for Sale

	Property, Equipment and Leasehold Improvements

Laundry equipment, installation costs and fixtures			5 to 8  years
Leasehold improvements and decorating costs			5 to 8  years
Trucks and other vehicles			3 to 4  years

	Goodwill

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		March 31
		2005				2004
Route		$	195,026			$	195,026
Rental			6,837				6,837
Distribution			2,917				2,917
		$	204,780			$	204,780

		March 31
		2005				2004
Goodwill — beginning of year		$	204,780			$	203,860
Acquisitions			—				920
Goodwill — end of year		$	204,780			$	204,780

	Contract Rights

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Years Ending March 31,
2006		$	13.5
2007			13.2
2008			12.9
2009			12.6
2010			12.3

	Advance Location Payments

	Comprehensive Income (Loss)

	Income Taxes

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	Derivatives

3.	Long-Term Debt

		March 31,				March 31,
		2005				2004
9% Senior Notes due 2010		$	324,500			$	450,000
Credit facility indebtedness			240,507				260,337
Obligations under capital leases			6,630				6,762
Other long-term debt with varying terms and maturities			637				532
			572,274				717,631
Less current portion			17,704				9,149
		$	554,570			$	708,482

	a.     Senior Notes

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	b.     Credit Facility

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		March 31,
		2005				2004
Tranche term loan B, semi-annual payments of approximately $1,240, increasing to approximately $6,199 on June 30, 2007 with the final payment of approximately $210,753 on July 25, 2009 (Interest rate of 5.65% at March 31, 2005)		$	240,507			$	242,986
Tranche term loan A			—				17,351
Revolving line of credit			—				—
		$	240,507			$	260,337

			Principal
Years Ending March 31,			Amount
2006			$	17,704
2007				4,695
2008				12,985
2009				12,080
2010				524,738
Thereafter				72
	Total debt		$	572,274

	c.     Interest Rate Swaps

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4.	Intercompany Loan

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5.	Retirement Savings Plan

6.	Income Taxes

		March 31
		2005				2004
Deferred tax liabilities:		$	108,429			$	111,103
Accelerated tax depreciation and contract rights			340				—
Interest rate swap			1,798				1,246
Other			110,567				112,349
Deferred tax assets			—				1,591
Interest rate swap			38,432				32,294
Net operating loss carryforwards			1,074				1,202
Covenant not to compete			2,121				1,513
Other			41,627				36,600
Net deferred tax liability		$	68,940			$	75,749

		Year Ended March 31,
		2005				2004				2003
Federal		$	(6,818	)		$	(2,815	)		$	85
State			(1,927	)			(700	)			383
		$	(8,745	)		$	(3,515	)		$	468

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		Year Ended March 31,
		2005				2004				2003
Expected tax benefit		$	(8,431	)		$	(3,346	)		$	(616	)
State tax (benefit) provision, net of federal taxes			(1,252	)			(473	)			249
Permanent book/tax difference			938				304				835
Tax (benefit) provision		$	(8,745	)		$	(3,515	)		$	468

7.	Guarantor Subsidiaries

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	Condensed Consolidating Balance Sheets

			March 31, 2005
			Coinmach and								Adjustments
			Non-Guarantor				Guarantor				and
			Subsidiaries				Subsidiaries				Eliminations				Consolidated
Assets
Current assets, consisting of cash, receivables, inventory, assets held for sale, prepaid expenses and other current assets			$	69,403			$	17,275			$	—			$	86,678
Advance location payments				72,171				51				—				72,222
Property, equipment and leasehold improvements, net				236,781				27,483				—				264,264
Intangible assets, net				504,724				9,754				—				514,478
Intercompany loans and advances				50,019				(26,372	)			(23,647	)			—
Investment in subsidiaries				(25,753	)			—				25,753				—
Investment in preferred stock				18,405				—				(18,405	)			—
Other assets				7,601				18				—				7,619
Total assets			$	933,351			$	28,209			$	(16,299	)		$	945,261
Liabilities and Stockholder’s Equity (Deficit)
Current liabilities:
	Accounts payable and accrued expenses		$	59,868			$	11,277			$	—			$	71,145
	Current portion of long-term debt			17,539				165				—				17,704
	Total current liabilities			77,407				11,442				—				88,849
Deferred income taxes				66,071				2,869				—				68,940
Long-term debt less current portion				554,165				24,051				(23,646	)			554,570
Intercompany loan				81,670				—				—				81,670
Due to Parent				51,534				—				—				51,534
Preferred stock and dividends payable				—				18,405				(18,405	)			—
Total stockholder’s equity (deficit)				102,504				(28,558	)			24,752				99,698
Total liabilities and stockholder’s equity (deficit)			$	933,351			$	28,209			$	(16,299	)		$	945,261

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			March 31, 2004
			Coinmach and								Adjustments
			Non-Guarantor				Guarantor				and
			Subsidiaries				Subsidiaries				Eliminations				Consolidated
Assets
Current assets, consisting of cash, receivables, inventory, assets held for sale, prepaid expenses and other current assets			$	43,578			$	15,388			$	—			$	58,966
Advance location payments				73,253				—				—				73,253
Property, equipment and leasehold improvements, net				252,624				31,064				—				283,688
Intangible assets, net				518,178				9,754				—				527,932
Intercompany loans and advances				56,648				(34,826	)			(21,822	)			—
Investment in subsidiaries				(27,460	)			—				27,460				—
Investment in preferred stock				16,777				—				(16,777	)			—
Other assets				15,606				64				—				15,670
Total assets			$	949,204			$	21,444			$	(11,139	)		$	959,509
Liabilities and Stockholder’s Equity (Deficit)
Current liabilities:
	Accounts payable and accrued expenses		$	64,029			$	8,307			$	—			$	72,336
	Current portion of long-term debt			9,004				145				—				9,149
	Total current liabilities			73,033				8,452				—				81,485
Deferred income taxes				72,872				2,877				—				75,749
Long-term debt less current portion				708,329				21,975				(21,822	)			708,482
Due to Parent				50,036				—				—				50,036
Preferred stock and dividends payable				—				16,777				(16,777	)			—
Total stockholder’s equity (deficit)				44,934				(28,637	)			27,460				43,757
Total liabilities and stockholder’s equity (deficit)			$	949,204			$	21,444			$	(11,139	)		$	959,509

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	Condensed Consolidating Statement of Operations

		Year Ended March 31, 2005
		Coinmach and								Adjustments
		Non-Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Revenues		$	472,484			$	66,120			$	—			$	538,604
Costs and expenses			426,810				61,302				—				488,112
Operating income			45,674				4,818				—				50,492
Transaction costs			17,389				—				—				17,389
Interest expense			54,401				1,852				—				56,253
Interest expense — escrow interest			941				—				—				941
(Loss) income before taxes			(27,057	)			2,966				—				(24,091	)
Income tax (benefit) provision			(10,004	)			1,259				—				(8,745	)
			(17,053	)			1,707				—				(15,346	)
Equity in loss of subsidiaries			(1,707	)			—				1,707				—
			(15,346	)			1,707				(1,707	)			(15,346	)
Dividend income			(1,628	)			—				1,628				—
Net (loss) income		$	(13,718	)		$	1,707			$	(3,335	)		$	(15,346	)

		Year Ended March 31, 2004
		Coinmach and								Adjustments
		Non-Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Revenues		$	469,640			$	61,448			$	—			$	531,088
Costs and expenses			421,845				61,427				—				483,272
Operating income			47,795				21				—				47,816
Interest expense			55,639				1,738				—				57,377
Loss before taxes			(7,844	)			(1,717	)			—				(9,561	)
Income tax benefit			(2,773	)			(742	)			—				(3,515	)
			(5,071	)			(975	)			—				(6,046	)
Equity in loss of subsidiaries			975				—				(975	)			—
			(6,046	)			(975	)			975				(6,046	)
Dividend income			(1,642	)			—				1,642				—
Net loss		$	(4,404	)		$	(975	)		$	(667	)		$	(6,046	)

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		Year Ended March 31, 2003
		Coinmach and								Adjustments
		Non-Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Revenues		$	471,443			$	63,736			$	—			$	535,179
Costs and expenses			414,107				64,725				—				478,832
Operating income (loss)			57,336				(989	)			—				56,347
Interest expense			57,595				572				—				58,167
Loss before taxes			(259	)			(1,561	)			—				(1,820	)
Income tax provision (benefit)			1,112				(644	)			—				468
			(1,371	)			(917	)			—				(2,288	)
Equity in loss of subsidiaries			917				—				(917	)			—
			(2,288	)			(917	)			917				(2,288	)
Dividend income			(535	)			—				535				—
Net loss		$	(1,753	)		$	(917	)		$	382			$	(2,288	)

	Condensed Consolidating Statements of Cash Flows

		Year Ended March 31, 2005
		Coinmach and								Adjustments
		Non-Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Operating activities
Net (loss) income		$	(13,718	)		$	1,707			$	(3,335	)		$	(15,346	)
Noncash adjustments			108,254				9,793				—				118,047
Change in operating assets and liabilities			(357	)			2,697				—				2,340
Net cash provided by operating activities			94,179				14,197				(3,335	)			105,041
Investing activities
Investment in and advances to Subsidiaries			(3,335	)			—				3,335				—
Capital expenditures			(66,204	)			(5,291	)			—				(71,495	)
Acquisition of assets			(628	)			—				—				(628	)
Sale of investment			277				—				—				277
Sale of property and equipment			—				919				—				919
Net cash used in investing activities			(69,890	)			(4,372	)			3,335				(70,927	)
Financing activities
Repayment of debt			(145,330	)			—				—				(145,330	)
Other financing items			62,948				(8,182	)			—				54,766
Loan from Parent			81,670				—				—				81,670
Net cash used in financing activities			(712	)			(8,182	)			—				(8,894	)
Net increase in cash and cash equivalents			23,577				1,643				—				25,220
Cash and cash equivalents, beginning of year			30,621				999				—				31,620
Cash and cash equivalents, end of year		$	54,198			$	2,642			$	—			$	56,840

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		Year Ended March 31, 2004
		Coinmach and								Adjustments
		Non-Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Operating activities
Net loss		$	(4,404	)		$	(975	)		$	(667	)		$	(6,046	)
Noncash adjustments			96,581				9,559				—				106,140
Change in operating assets and liabilities			(3,171	)			955				—				(2,216	)
Net cash provided by operating activities			89,006				9,539				(667	)			97,878
Investing activities
Investment in and advances to Subsidiaries			(667	)			—				667				—
Capital expenditures			(77,957	)			(8,775	)			—				(86,732	)
Acquisition of assets			(3,615	)			—				—				(3,615	)
Sale of investment			1,022				—				—				1,022
Sale of property and equipment			—				876				—				876
Net cash used in investing activities			(81,217	)			(7,899	)			667				(88,449	)
Financing activities
Proceeds from debt			8,700				—				—				8,700
Repayment of debt			(9,613	)			—				—				(9,613	)
Other financing items			(2,309	)			(2,015	)			—				(4,324	)
Net cash used in financing activities			(3,222	)			(2,015	)			—				(5,237	)
Net increase (decrease) in cash and cash equivalents			4,567				(375	)			—				4,192
Cash and cash equivalents, beginning of year			26,054				1,374				—				27,428
Cash and cash equivalents, end of year		$	30,621			$	999			$	—			$	31,620

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		Year Ended March 31, 2003
		Coinmach and								Adjustments
		Non-Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Operating activities
Net loss		$	(1,753	)		$	(917	)		$	382			$	(2,288	)
Noncash adjustments			95,952				7,242				—				103,194
Change in operating assets and liabilities			3,678				90				—				3,768
Net cash provided by operating activities			97,877				6,415				382				104,674
Investing activities
Investment in and advances to Subsidiaries			382				—				(382	)			—
Capital expenditures			(77,163	)			(9,522	)			—				(86,685	)
Acquisition of assets			(1,776	)			(200	)			—				(1,976	)
Sale of investment			6,585				—				—				6,585
Sale of property and equipment			—				746				—				746
Net cash used in investing activities			(71,972	)			(8,976	)			(382	)			(81,330	)
Financing activities
Proceeds from debt			18,000				—				—				18,000
Repayment of debt			(36,750	)			—				—				(36,750	)
Other financing items			(8,900	)			3,914				—				(4,986	)
Net cash (used in) provided by financing activities			(27,650	)			3,914				—				(23,736	)
Net (decrease) increase in cash and cash equivalents			(1,745	)			1,353				—				(392	)
Cash and cash equivalents, beginning of year			27,799				21				—				27,820
Cash and cash equivalents, end of year		$	26,054			$	1,374			$	—			$	27,428

8.	Commitments and Contingencies

		2005				2004
		(In thousands)
Laundry equipment and fixtures		$	1,148			$	962
Trucks and other vehicles			22,862				18,849
			24,010				19,811
Less accumulated amortization			(15,930	)			(11,865	)
		$	8,080			$	7,946

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		Capital				Operating
2006		$	3,550			$	8,010
2007			2,459				6,231
2008			1,255				4,279
2009			263				3,246
2010			—				2,346
Thereafter			—				2,472
Total minimum lease payments			7,527			$	26,584
Less amounts representing interest			897
Present value of net minimum lee payments (including current portion of $3,032)		$	6,630

9.	Related Party Transactions

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10.	Fair Value of Financial Instruments

		Carrying				Estimated
		Amount				Fair Value
9% Senior Notes at March 31, 2005		$	324,500			$	332,613
9% Senior Notes at March 31, 2004		$	450,000			$	483,750

11.	Segment Information

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				Year Ended March 31,
				2005				2004				2003
Revenue:
	Route			$	472,484			$	469,641			$	471,443
	All other:
		Rental			34,372				32,572				28,743
		Distribution			31,748				28,875				34,993
	Subtotal				66,120				61,447				63,736
Total revenue				$	538,604			$	531,088			$	535,179
EBITDA(1):
	Route			$	155,378			$	154,436			$	158,938
	All other:
		Rental			13,840				12,197				11,381
		Distribution			1,412				(1,254	)			(1,679	)
	Subtotal				15,252				10,943				9,702
	Other items, net				(855	)			(230	)			454
	Transaction costs(2)				(17,389	)			—				—
	Corporate expenses				(8,843	)			(8,756	)			(8,569	)
Total EBITDA					143,543				156,393				160,525
Reconciling items:
Depreciation and amortization expense, amortization of advance location payments and amortization of intangibles:
		Route			(98,921	)			(98,148	)			(94,489	)
		All other			(8,242	)			(8,062	)			(7,746	)
		Corporate expenses			(3,277	)			(2,367	)			(1,943	)
Total depreciation					(110,440	)			(108,577	)			(104,178	)
Interest expense					(56,253	)			(57,377	)			(58,167	)
Interest expense-escrow					(941	)			—				—
Consolidated loss before income taxes				$	(24,091	)		$	(9,561	)		$	(1,820	)

(1)	See description of “Non-GAAP Financial Measures” immediately following this table for a reconciliation of net loss to EBITDA for the periods indicated above.
(2)	The computation of EBITDA for the fiscal year ended March 31, 2005 has not been adjusted to take into account transaction costs consisting of (i) approximately $11.3 million redemption premium on the 9% Senior Notes redeemed (ii) the write-off of the deferred financing costs relating to the 9% Senior Notes redeemed and term loans repaid aggregating approximately $3.5 million, (iii) expenses relating to an amendment to the Senior Secured Credit Facility aggregating approximately $2.0 million to, among other things, permit the IDS Transactions and (iv) special bonuses related to the IDS Transactions aggregating approximately $0.6 million.

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			Year Ended March 31,
			2005				2004				2003
Expenditures for acquisitions and additions of long-lived assets:
	Route		$	64,844			$	81,685			$	78,939
	All other			7,279				8,662				9,722
Total			$	72,123			$	90,347			$	88,661
Segment assets:
	Route		$	910,980			$	899,714			$	901,672
	All other			28,209				48,535				60,404
	Corporate assets			6,072				11,260				14,085
Total			$	945,261			$	959,509			$	976,161

	Non-GAAP Financial Measures

		Year Ended March 31,
		2005				2004				2003
Net loss		$	(15.3	)		$	(6.0	)		$	(2.3	)
(Benefit) provision for income taxes			(8.8	)			(3.6	)			0.4
Interest expense			56.3				57.4				58.2
Interest expense-escrow interest			0.9				—				—
Depreciation and amortization			110.4				108.6				104.2
EBITDA*		$	143.5			$	156.4			$	160.5

	*	The computation of EBITDA for the fiscal year ended March 31, 2005 has not been adjusted to take into account transaction costs consisting of (1) approximately $11.3 million redemption premium on

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		the portion of the 9% Senior Notes redeemed, (2) the write-off of the deferred financing costs relating to the 9% Senior Notes redeemed and term loans repaid aggregating approximately $3.5 million, (iii) expenses relating to an amendment to the Senior Secured Credit Facility aggregating approximately $2.0 million to, among other things, permit the IDS Transactions and (iv) special bonuses related to the IDS Transactions aggregating approximately $0.6 million.

12.	Other Items, net

13.	Dividends

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14.	Quarterly Financial Information (Unaudited)

		Three Months Ended
		June 30,				September 30,				December 31,				March 31,
		2004				2004				2004				2005
Revenues		$	133,499			$	132,950			$	135,627			$	136,528
Operating income			12,459				11,211				13,555				13,267
Loss before income taxes			(1,768	)			(3,187	)			(18,658	)			(478	)
Net loss			(1,088	)			(1,936	)			(12,017	)			(305	)

		Three Months Ended
		June 30,				September 30,				December 31,				March 31,
		2003				2003				2003				2004
Revenues		$	132,517			$	129,951			$	135,740			$	132,880
Operating income			12,525				11,385				12,904				11,002
Loss before income taxes			(1,791	)			(3,007	)			(1,520	)			(3,243	)
Net loss			(1,127	)			(2,397	)			(937	)			(1,585	)

15.	Subsequent Events

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								Additions
				Balance at				Charged to				Charged to								Balance at
				Beginning of				Costs and				Other								End of
Description				Period				Expenses				Accounts				Deductions(1)				Period
Year ended March 31, 2005
	Reserves and allowances deducted from asset accounts:
		Allowance for uncollected accounts		$	2,892,000			$	1,617,000			$	—			$	(715,000	)		$	3,794,000
Year ended March 31, 2004
	Reserves and allowances deducted from asset accounts:
		Allowance for uncollected accounts			1,553,000				1,831,000				—				(492,000	)			2,892,000
Year ended March 31, 2003
	Reserves and allowances deducted from asset accounts:
		Allowance for uncollected accounts			1,342,000				1,188,000				—				(977,000	)			1,553,000

(1)	Write-off to accounts receivable.

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ASSETS
Current assets:
Cash and cash equivalents			$	49,261
Receivables, net				5,702
Inventories				12,536
Assets held for sale				349
Prepaid expenses				3,990
Interest rate swap asset				790
Other current assets				2,297
	Total current assets			74,925
Advance location payments				70,179
Property, equipment and leasehold improvements, net of accumulated depreciation and amortization of $366,441				262,130
Contract rights, net of accumulated amortization of $107,733				303,676
Goodwill				204,780
Other assets				8,374
	Total assets		$	924,064
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities:
Accounts payable and accrued expenses			$	32,312
Accrued rental payments				33,603
Accrued interest				7,726
Current portion of long-term debt				5,961
	Total current liabilities			79,602
Deferred income taxes				68,574
Long-term debt, less current portion				556,267
Intercompany loan				81,670
Due to Parent				49,766
	Total liabilities			835,879
Stockholder’s equity:
Common stock and capital in excess of par value				286,629
Accumulated other comprehensive income, net of tax				467
Accumulated deficit				(198,911	)
	Total stockholder’s equity			88,185
	Total liabilities and stockholder’s equity		$	924,064

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			Six Months Ended
			September 30,
			2005				2004
			(In thousands of dollars)
REVENUES			$	266,150			$	266,449
COSTS AND EXPENSES:
	Laundry operating expenses (exclusive of depreciation and amortization and amortization of advance location payments)			181,032				182,632
	General and administrative			4,447				4,477
	Depreciation and amortization			37,861				38,058
	Amortization of advance location payments			9,173				9,852
	Amortization of intangibles			6,970				7,260
	Other items, net			310				500
				239,793				242,779
OPERATING INCOME				26,357				23,670
INTEREST EXPENSE				27,364				28,625
LOSS BEFORE INCOME TAXES				(1,007	)			(4,955	)
BENEFIT FOR INCOME TAXES:
	Current			—				53
	Deferred			(349	)			(1,984	)
				(349	)			(1,931	)
NET LOSS			$	(658	)		$	(3,024	)
	Accumulated deficit, beginning of period		$	(187,423	)
	Net loss			(658	)
	Dividends paid to Parent			(10,830	)
	Accumulated deficit, end of period		$	(198,911	)

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					Six Months Ended
					September 30,
					2005				2004
					(In thousands of dollars)
OPERATING ACTIVITIES:
	Net loss				$	(658	)		$	(3,024	)
		Adjustments to reconcile net loss to net cash provided by operating activities:
			Depreciation and amortization			37,861				38,058
			Amortization of advance location payments			9,173				9,852
			Amortization of intangibles			6,970				7,260
			Loss (gain) on sale of investment and equipment			27				(54	)
			Deferred income taxes			(349	)			(1,984	)
			Amortization of deferred issue costs			795				1,207
	Change in operating assets and liabilities, net of businesses acquired:
			Other assets			(1,227	)			927
			Receivables, net			784				(2,624	)
			Inventories and prepaid expenses			937				(39	)
			Accounts payable and accrued expenses, net			2,757				(1,009	)
			Accrued interest			(261	)			202
	Net cash provided by operating activities					56,809				48,772
INVESTING ACTIVITIES:
	Additions to property and equipment					(29,944	)			(27,670	)
	Advance location payments to location owners					(7,130	)			(9,285	)
	Acquisition of net assets related to acquisitions of businesses					(1,210	)			(618	)
	Proceeds from sale of property and equipment					498				291
	Net cash used in investing activities					(37,786	)			(37,282	)
FINANCING ACTIVITIES:
	Repayments under credit facility					(11,223	)			(3,066	)
	Dividends paid to Parent					(10,830	)			—
	Net repayments to Parent					(1,768	)			(432	)
	(Repayments) borrowings from bank and other borrowings					(121	)			217
	Principal payments on capitalized lease obligations					(2,660	)			(2,224	)
	Net cash used in financing activities					(26,602	)			(5,505	)
	Net (decrease) increase in cash and cash equivalents					(7,579	)			5,985
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD						56,840				31,620
CASH AND CASH EQUIVALENTS, END OF PERIOD					$	49,261			$	37,605
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
	Interest paid				$	26,830			$	27,285
	Income taxes paid				$	251			$	197
NON-CASH FINANCING ACTIVITIES:
	Acquisition of fixed assets through capital leases				$	3,958			$	3,217
	Transfer of assets held for sale to fixed assets				$	1,936			$	—

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1.	Basis of Presentation

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2.	Inventories

		September 30,
		2005
Laundry equipment		$	8,872
Machine repair parts			3,664
		$	12,536

3.	Assets Held for Sale

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4.	Goodwill and Contract Rights

Route		$	195,026
Rental (AWA)			6,837
Distribution (Super Laundry)			2,917
		$	204,780

Years Ending March 31,
2006(remainder of year)		$	6.8
2007			13.3
2008			13.0
2009			12.6
2010			12.3

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5.	Long-Term Debt

		September 30,
		2005
9% Senior Notes due 2010		$	324,500
Credit facility indebtedness			229,284
Obligations under capital leases			7,928
Other long-term debt with varying terms and maturities			516
			562,228
Less current portion			5,961
		$	556,267

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	Senior Secured Credit Facility

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	Interest Rate Swap

6.	Intercompany Loan

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7.	Guarantor Subsidiaries

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	Condensed Consolidating Balance Sheet

			September 30, 2005
			Coinmach and
			Non-								Adjustments
			Guarantor				Guarantor				and
			Subsidiaries				Subsidiaries				Eliminations				Consolidated
Assets
Current assets, consisting of cash, receivables, inventory, assets held for sale, prepaid expenses and other current assets			$	62,492			$	12,433			$	—			$	74,925
Advance location payments				70,147				32				—				70,179
Property, equipment and leasehold improvements, net				234,909				27,221				—				262,130
Intangible assets, net				498,702				9,754				—				508,456
Intercompany loans and advances				46,469				(21,851	)			(24,618	)			—
Investment in subsidiaries				(24,867	)			—				24,867				—
Investment in preferred stock				19,222				—				(19,222	)			—
Other assets				8,368				6				—				8,374
Total assets			$	915,442			$	27,595			$	(18,973	)		$	924,064
Liabilities and Stockholder’s Equity (Deficit)
Current liabilities:
Accounts payable and accrued expenses			$	64,620			$	9,021				—			$	73,641
Current portion of long-term debt				5,859				102				—				5,961
	Total current liabilities			70,479				9,123				—				79,602
Deferred income taxes				65,589				2,985				—				68,574
Long-term debt, less current portion				556,128				24,757				(24,618	)			556,267
Intercompany loan				81,670				—				—				81,670
Due to Parent				49,766				—				—				49,766
Preferred stock and dividends payable				—				19,222				(19,222	)			—
Total stockholder’s equity (deficit)				91,810				(28,492	)			24,867				88,185
Total liabilities and stockholder’s equity (deficit)			$	915,442			$	27,595			$	(18,973	)		$	924,064

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	Condensed Consolidating Statements of Operations

		Six Months Ended September 30, 2005
		Coinmach and
		Non-								Adjustments
		Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Revenues		$	236,515			$	29,635			$	—			$	266,150
Costs and expenses			212,734				27,059				—				239,793
Operating income			23,781				2,576				—				26,357
Interest expense			26,370				994				—				27,364
			(2,589	)			1,582				—				(1,007	)
Income tax (benefit) provision			(1,045	)			696				—				(349	)
			(1,544	)			886				—				(658	)
Equity in income of subsidiaries			(886	)			—				886				—
			(658	)			886				(886	)			(658	)
Dividend income			(816	)			—				816				—
Net income (loss)		$	158			$	886			$	(1,702	)		$	(658	)

		Six Months Ended September 30, 2004
		Coinmach and
		Non-								Adjustments
		Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Revenues		$	234,238			$	32,211			$	—			$	266,449
Costs and expenses			212,292				30,487				—				242,779
Operating income			21,946				1,724				—				23,670
Interest expense			27,708				917				—				28,625
			(5,762	)			807				—				(4,955	)
Income tax (benefit) provision			(2,278	)			347				—				(1,931	)
			(3,484	)			460				—				(3,024	)
Equity in income of subsidiaries			(460	)			—				460				—
			(3,024	)			460				(460	)			(3,024	)
Dividend income			(816	)			—				816				—
Net (loss) income		$	(2,208	)		$	460			$	(1,276	)		$	(3,024	)

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	Condensed Consolidating Statements of Cash Flows

		Six Months Ended September 30, 2005
		Coinmach
		and Non-								Adjustments
		Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Operating Activities
Net income (loss)		$	158			$	886			$	(1,702	)		$	(658	)
Noncash adjustments			49,506				4,971				—				54,477
Change in operating assets and liabilities			2,144				846				—				2,990
Net cash provided by operating activities			51,808				6,703				(1,702	)			56,809
Investing Activities
Investment in and advances to subsidiaries			(1,702	)			—				1,702				—
Capital expenditures			(32,798	)			(4,276	)			—				(37,074	)
Acquisition of assets			(1,210	)			—				—				(1,210	)
Sale of property and equipment			—				498				—				498
Net cash used in investing activities			(35,710	)			(3,778	)			1,702				(37,786	)
Financing Activities
Repayment of debt			(11,223	)			—				—				(11,223	)
Other financing items			(10,735	)			(4,644	)			—				(15,379	)
Net cash used in financing activities			(21,958	)			(4,644	)			—				(26,602	)
Net increase (decrease) in cash and cash equivalents			(5,860	)			(1,719	)			—				(7,579	)
Cash and cash equivalents, beginning of period			55,602				1,238				—				56,840
Cash and cash equivalents, end of period		$	49,742			$	(481	)		$	—			$	49,261

		Six Months Ended September 30, 2004
		Coinmach
		and Non-								Adjustments
		Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Operating Activities
Net (loss) income		$	(2,208	)		$	460			$	(1,276	)		$	(3,024	)
Noncash adjustments			49,232				5,107				—				54,339
Change in operating assets and liabilities			(3,246	)			703				—				(2,543	)
Net cash provided by operating activities			43,778				6,270				(1,276	)			48,772
Investing Activities
Investment in and advances to subsidiaries			(1,276	)			—				1,276				—
Capital expenditures			(33,883	)			(3,072	)			—				(36,955	)
Acquisition of assets			(618	)			—				—				(618	)
Sale of property and equipment			—				291				—				291
Net cash used in investing activities			(35,777	)			(2,781	)			1,276				(37,282	)

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		Six Months Ended September 30, 2004
		Coinmach
		and Non-								Adjustments
		Guarantor				Guarantor				and
		Subsidiaries				Subsidiaries				Eliminations				Consolidated
Financing Activities
Repayment of debt			(3,066	)			—				—				(3,066	)
Other financing items			328				(2,767	)			—				(2,439	)
Net cash used in by financing activities			(2,738	)			(2,767	)			—				(5,505	)
Net increase in cash and cash equivalents			5,263				722				—				5,985
Cash and cash equivalents, beginning of period			30,621				999				—				31,620
Cash and cash equivalents, end of period		$	35,884			$	1,721			$	—			$	37,605

8.	Segment Information

				Six Months Ended
				September 30
				2005				2004
Revenue
	Route			$	236,516			$	234,238
	All other:
		Rental			17,496				16,880
		Distribution			12,138				15,331
	Subtotal				29,634				32,211
Total revenue				$	266,150			$	266,449

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				Six Months Ended
				September 30
				2005				2004
EBITDA(1):
	Route			$	77,493			$	76,730
	All other:
		Rental			7,212				6,646
		Distribution			413				441
	Subtotal				7,625				7,087
	Other items, net				(310	)			(500	)
	Corporate expenses				(4,447	)			(4,477	)
Total EBITDA					80,361				78,840
Reconciling items:
Depreciation and amortization expense, amortization of advance location payments and amortization of intangibles:
	Route				(48,099	)			(49,376	)
	All other				(4,271	)			(4,271	)
	Corporate				(1,634	)			(1,523	)
		Total depreciation			(54,004	)			(55,170	)
Interest expense					(27,364	)			(28,625	)
Consolidated loss before income taxes				$	(1,007	)		$	(4,955	)

(1)	See description of “Non-GAAP Financial Measures” immediately following this table for a reconciliation of net loss to EBITDA for the periods indicated above.

	Non-GAAP Financial Measures

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		Six Months Ended
		September 30
		2005				2004
Net loss		$	(0.7	)		$	(3.0	)
Benefit for income taxes			(0.3	)			(2.0	)
Interest expense			27.4				28.6
Depreciation and amortization			54.0				55.2
EBITDA		$	80.4			$	78.8

9.	Income Taxes

		September 30,
		2005
Deferred tax liabilities:
Accelerated tax depreciation and contract rights		$	106,641
Interest rate swap			323
Other			1,971
			108,935
Deferred tax assets:
Net operating loss carryforwards			36,983
Covenant not to compete			1,010
Other			2,368
			40,361
Net deferred tax liability		$	68,574

		Six Months Ended
		September 30
		2005				2004
Federal		$	(272	)		$	(1,547	)
State			(77	)			(384	)
		$	(349	)		$	(1,931	)

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		Six Months Ended
		September 30
		2005				2004
Expected tax benefit		$	(352	)		$	(1,734	)
State tax benefit, net of federal taxes			(50	)			(250	)
Permanent book/tax difference			53				53
Tax benefit		$	(349	)		$	(1,931	)

10.	Dividends

11.	Subsequent Events

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