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U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q/A
Amendment No. 1 to Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002

Commission file number 333-96233

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NORTH AMERICAN VAN LINES, INC.(Exact name of registrant as specified in its charter)

DELAWARE(State or other jurisdiction of
incorporation or organization)

52-1840893(I.R.S. Employer
Identification Number)


5001 U.S. Highway 30 West
P.O. Box 988
Fort Wayne, Indiana 46801-0988(Address of principal executive offices)(Zip Code)

Registrant's telephone number, including area code: (260) 429-2511

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

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EXPLANATORY NOTE

This
Amendment No. 1 on Form 10-Q/A (the "Amendment") amends the Quarterly Report on Form 10-Q for the three and six-month
periods ended June 30, 2002 filed on August 13, 2002. The Company is restating the three and six-month periods ended June 30, 2002 for the following:



In
addition to the restatement adjustment, we have reclassified goodwill of $303.9 million and $247.6 million in the accompanying balance sheets at June 30, 2002 and
December 31, 2001, respectively, from Goodwill and Intangible Assets, as previously reported, to a separate line item.

The
adjustments reflected in this filing are described in more detail in note 12. Although we have revised this Amendment to give effect to the above noted adjustments, other 2002
information contained herein has not been updated. Therefore, you should read this Amendment together with our Annual Report on Form 10-K for the year ended December 31,
2002, as well as other documents that we have filed with the Securities and Exchange Commission. Information in such reports updates and supercedes certain information contained in this Amendment.

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NORTH AMERICAN VAN LINES, INC.        Condensed Consolidated Balance Sheets        At June 30, 2002 and December 31, 2001  (Dollars in thousands except share data)  (Unaudited)

|                                           |                                                                                                                                    | June 30, 2002 |           | December 31, 2001 |  
|------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------- | ------------- | --------- | ----------------- | -
|
|Assets                                     |                                                                                                                                   
|Current assets:                            |                                                                                                                                    |               |           |                   |  
|                                           | Cash and cash equivalents                                                                                                          |               | $         | 43,876            |  
|                                           | Accounts and notes receivable, net of allowance for doubtful accounts of $23,878 and $24,386, respectively                         |               |           | 341,459           |  
|                                           | Other current assets                                                                                                               |               |           | 51,140            |  
|                                           | Deferred and recoverable income taxes                                                                                              |               |           | 47,021            |  
|                                           |                                                                                                                                    |               |           |                   |  
|Total current assets                       |                                                                                                                                    |               | 483,496   |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Property and equipment, net                |                                                                                                                                    |               | 177,188   |                   |  
|Goodwill, net                              |                                                                                                                                    |               | 303,938   |                   |  
|Intangible assets, net                     |                                                                                                                                    |               | 223,669   |                   |  
|Receivable from SIRVA, Inc.                |                                                                                                                                    |               | 25,820    |                   |  
|Other assets                               |                                                                                                                                    |               | 113,758   |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Total long-term assets                     |                                                                                                                                    |               | 844,373   |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Total assets                               |                                                                                                                                    | $             | 1,327,869 |                   | $
|                                           |                                                                                                                                    |               |           |                   |  
|Liabilities and Stockholder's Equity       |                                                                                                                                   
|Current liabilities:                       |                                                                                                                                    |               |           |                   |  
|                                           | Current portion of long-term debt                                                                                                  |               | $         | 16,052            |  
|                                           | Current portion of capital lease obligations                                                                                       |               |           | 3,836             |  
|                                           | Revolving credit facility                                                                                                          |               |           | 8,593             |  
|                                           | Accounts payable                                                                                                                   |               |           | 134,153           |  
|                                           | Other current liabilities                                                                                                          |               |           | 311,355           |  
|                                           | Accrued income tax payable                                                                                                         |               |           | 1,652             |  
|                                           |                                                                                                                                    |               |           |                   |  
|Total current liabilities                  |                                                                                                                                    |               | 475,641   |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Long-term debt                             |                                                                                                                                    |               | 524,802   |                   |  
|Capital lease obligations                  |                                                                                                                                    |               | 15,386    |                   |  
|Due to SIRVA, Inc.                         |                                                                                                                                    |               | 40,585    |                   |  
|Other liabilities                          |                                                                                                                                    |               | 47,298    |                   |  
|Deferred income taxes                      |                                                                                                                                    |               | 39,975    |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Total long-term liabilities                |                                                                                                                                    |               | 668,046   |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Total liabilities                          |                                                                                                                                    |               | 1,143,687 |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Commitments and contingencies              |                                                                                                                                    |               |           |                   |  
|Stockholder's equity:                      |                                                                                                                                    |               |           |                   |  
|                                           | Common stock, $.01 par value, 1,000 shares authorized, issued and outstanding at June 30, 2002 and December 31, 2001, respectively |               |           |                  |  
|                                           | Additional paid-in-capital                                                                                                         |               |           | 245,450           |  
|                                           | Accumulated other comprehensive loss                                                                                               |               |           | (15,198           | )
|                                           | Accumulated deficit                                                                                                                |               |           | (46,070           | )
|                                           |                                                                                                                                    |               |           |                   |  
|Total stockholder's equity                 |                                                                                                                                    |               | 184,182   |                   |  
|                                           |                                                                                                                                    |               |           |                   |  
|Total liabilities and stockholder's equity |                                                                                                                                    | $             | 1,327,869 |                   | $
|                                           |                                                                                                                                    |               |           |                   |  

See accompanying notes to condensed consolidated financial statements.

1

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NORTH AMERICAN VAN LINES, INC.        Consolidated Statements of Operations        For the three and six months ended June 30, 2002 and 2001  (Dollars in thousands)  (Unaudited)

|                                                   |                                              | Three Months Ended                                          |         |         |        |         |        
|-------------------------------------------------- | -------------------------------------------- | ----------------------------------------------------------- | ------- | ------- | ------ | ------- | -------
|
|
|
|
|                                                   |                                              |                                                             |         |         |        |         |        
|Operating revenues                                 |                                              | $                                                           | 537,144 |         | $      | 591,292 |        
|Operating expenses:                                |                                              |                                                             |         |         |        |         |        
|                                                   | Purchased transportation expense             |                                                             |         | 319,687 |        |         | 375,774
|                                                   | Other direct transportation expense          |                                                             |         | 105,667 |        |         | 102,944
|                                                   |                                              |                                                             |         |         |        |         |        
|Total direct expenses                              |                                              |                                                             | 425,354 |         |        | 478,718 |        
|Gross margin                                       |                                              |                                                             | 111,790 |         |        | 112,574 |        
|                                                   | Insurance and claims                         |                                                             |         | 9,972   |        |         | 13,940 
|                                                   | Other indirect expense (income)              |                                                             |         | (124    | )      |         | 1,493  
|                                                   |                                              |                                                             |         |         |        |         |        
|Total indirect expenses                            |                                              |                                                             | 9,848   |         |        | 15,433  |        
|                                                   | Selling, general and administrative expenses |                                                             |         | 77,894  |        |         | 76,707 
|                                                   | Intangibles amortization                     |                                                             |         | 1,000   |        |         |       
|                                                   | Restructuring charge (credit)                |                                                             |         | (111    | )      |         | 4,773  
|                                                   |                                              |                                                             |         |         |        |         |        
|                                                   |                                              | Income from operations                                      |         |         | 23,159 |         |        
|Non-operating income (expense)                     |                                              |                                                             | (674    | )       |        | 456     |        
|                                                   |                                              |                                                             |         |         |        |         |        
|                                                   |                                              | Income before interest and taxes                            |         |         | 22,485 |         |        
|Interest expense                                   |                                              |                                                             | 12,268  |         |        | 15,750  |        
|                                                   |                                              |                                                             |         |         |        |         |        
|                                                   |                                              | Income (loss) before income taxes                           |         |         | 10,217 |         |        
|Provision (benefit) for income taxes               |                                              |                                                             | 3,808   |         |        | 5,503   |        
|                                                   |                                              |                                                             |         |         |        |         |        
|                                                   |                                              | Income (loss) before cumulative effect of accounting change |         |         | 6,409  |         |        
|Cumulative effect of accounting change,
net of tax |                                              |                                                             |        |         |        |        |        
|                                                   |                                              |                                                             |         |         |        |         |        
|                                                   |                                              | Net income (loss)                                           |         | $       | 6,409  |         | $      
|                                                   |                                              |                                                             |         |         |        |         |        

See
accompanying notes to condensed consolidated financial statements.

2

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NORTH AMERICAN VAN LINES, INC.        Consolidated Statement of Changes in Stockholder's Equity        For the six months ended June 30, 2002  (Dollars in thousands)  (Unaudited)

|                                                    |                                                                                                      | Total |         | Accumulated
deficit |   | Accumulated
other
comprehensive
income (loss) |       | Common stock |         | Additional
paid-in-capital
|--------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ----- | ------- | ------------------- | - | --------------------------------------------- | ----- | ------------ | ------- | --------------------------
|Balance at December 31, 2001                        |                                                                                                      | $     | 121,790 |                     | $ | (49,172                                       | )     | $            | (17,988 | )                         
|Comprehensive income (loss):                        |                                                                                                      |       |         |                     |   |                                               |       |              |         |                           
|                                                    | Net income (as restated, see note 12)                                                                |       |         | 3,102               |   |                                               | 3,102 |              |         |                           
|                                                    | Unrealized hedging gain, net of tax of $522                                                          |       |         | 782                 |   |                                               |       |              |         | 782                       
|                                                    | Net change in unrealized holding loss on available-for-sale securities, net of tax benefit of $(842) |       |         | (1,264              | ) |                                               |       |              |         | (1,264                    
|                                                    | Foreign currency translation adjustment, net of tax of $2,182                                        |       |         | 3,272               |   |                                               |       |              |         | 3,272                     
|                                                    |                                                                                                      |       |         |                     |   |                                               |       |              |         |                           
|                                                    | Total comprehensive income (as restated, see note 12)                                                |       |         | 5,892               |   |                                               |       |              |         |                           
|                                                    | Additional capital contribution                                                                      |       |         | 56,500              |   |                                               |       |              |         |                           
|                                                    |                                                                                                      |       |         |                     |   |                                               |       |              |         |                           
|Balance at June 30, 2002 (as restated, see note 12) |                                                                                                      | $     | 184,182 |                     | $ | (46,070                                       | )     | $            | (15,198 | )                         
|                                                    |                                                                                                      |       |         |                     |   |                                               |       |              |         |                           

See
accompanying notes to condensed consolidated financial statements.

3

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NORTH AMERICAN VAN LINES, INC.        Condensed Consolidated Statements of Cash Flows        For the six months ended June 30, 2002 and 2001  (Dollars in thousands)  (Unaudited)

|                                                     |                                                           | Six Months Ended |        
|---------------------------------------------------- | --------------------------------------------------------- | ---------------- | -------
|
|Net cash provided by operating activities            |                                                           | $                | 32,333 
|                                                     |                                                           |                  |        
|Cash flows from investing activities:                |                                                           |                  |        
|                                                     | Additions of property and equipment                       |                  |        
|                                                     | Proceeds from sale of property and equipment              |                  |        
|                                                     | Purchases of investments                                  |                  |        
|                                                     | Proceeds from maturity or sale of investments             |                  |        
|                                                     | Acquisitions                                              |                  |        
|                                                     | Other investing activities                                |                  |        
|                                                     |                                                           |                  |        
|Net cash used for investing activities               |                                                           |                  | (91,379
|                                                     |                                                           |                  |        
|Cash flows from financing activities:                |                                                           |                  |        
|                                                     | Borrowings (repayments) on revolving credit facility, net |                  |        
|                                                     | Change in balance of outstanding checks                   |                  |        
|                                                     | Borrowings on long-term debt                              |                  |        
|                                                     | Principal payments on long-term debt                      |                  |        
|                                                     | Capital contributions from SIRVA                          |                  |        
|                                                     | Other financing activities                                |                  |        
|                                                     |                                                           |                  |        
|Net cash provided by (used for) financing activities |                                                           |                  | 70,367 
|                                                     |                                                           |                  |        
|                                                     | Effect of translation adjustments on cash                 |                  |        
|                                                     |                                                           |                  |        
|Net increase (decrease) in cash and cash equivalents |                                                           |                  | 11,757 
|Cash and cash equivalents at beginning of period     |                                                           |                  | 32,119 
|                                                     |                                                           |                  |        
|Cash and cash equivalents at end of period           |                                                           | $                | 43,876 
|                                                     |                                                           |                  |        

See
accompanying notes to condensed consolidated financial statements.

4

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NORTH AMERICAN VAN LINES, INC.        Notes to Condensed Consolidated Financial Statements        June 30, 2002        (Dollars in thousands)  (Unaudited)

(1) Basis of Presentation

This report covers North American Van Lines, Inc. and its subsidiaries (the "Company"). See restatement as further described in note 12.

The
accompanying unaudited condensed consolidated financial statements should be read together with the Company's audited consolidated financial statements for the year ended
December 31, 2001. Certain information and footnote disclosures normally included in the aforementioned financial statements prepared in accordance with generally accepted accounting principles
are condensed or omitted. Management of the Company believes the interim financial statements include all adjustments, including normal recurring adjustments, necessary for a fair presentation of the
financial condition and results of operations for the interim periods presented.

Certain
reclassifications have been made to the condensed consolidated financial statements for the prior periods presented to conform with the June 30, 2002 presentation.

(2) Acquisitions and Related Party

On April 12, 2002, the Company purchased the assets ("NAIT") of the National Association of Independent Truckers, a leading provider of insurance services
to independent contract truck drivers, for $25,359 in cash, $3,611 in assumed net liabilities and a deferred amount of $3,000 payable subject to the completion of certain operating performance
objectives during 2002 and 2003. NAIT is an association of more than 11,000 independent contract truck drivers that provides its members with occupational accident, physical damage and
non-trucking liability insurance, as well as access to a suite of professional services. The purchase price was funded from the sale of securities, existing cash balances and $20,000 of
cash contributions from SIRVA, Inc. ("SIRVA"), the Company's parent. SIRVA obtained those proceeds from the sale of its common stock to Clayton, Dubilier and Rice Fund VI Limited Partnership, a Cayman
Islands exempted limited partnership managed by Clayton, Dubilier and Rice, Inc. ("Fund VI"), and an affiliate of Fund V, the controlling shareholder of SIRVA. The cost to acquire NAIT has been
preliminarily allocated to the assets acquired and liabilities assumed according to estimated fair values and is subject to adjustment when additional information concerning asset and liability
valuations are finalized. The preliminary allocation has resulted in acquired goodwill of $9,301 (as restated, see note 12).

On
May 3, 2002, SIRVA, through two wholly-owned subsidiaries, purchased the business ("CRS") conducted by Cooperative Resource Services, Ltd. that provides comprehensive
relocation services to companies and their employees, including home sale services, relocation coordinaton services and mortgage lending services. One of these two subsidiaries, which is wholly-owned
by the Company, purchased such business' acquired assets and equity other than equity relating to certain mortgage lending operations of the seller. The mortgage lending operations of the seller were
purchased by the other subsidiary, which is an indirect wholly-owned subsidiary of SIRVA. The mortgage lending operations share common customers with CRS. Subject to certain adjustments, the combined
cash purchase price for the acquisitions was approximately $60,000, of which $3,500 was paid for the assets of the mortgage lending operations. Approximately $45,000 of the purchase price was paid in
cash and $15,000 (non-cash) was paid in notes issued by the Company. In addition, certain liabilities relating to the acquired business were assumed in connection with the acquisition including
$26,572 of indebtedness under a revolving credit facility used to fund the mortgage lending operations, which was assumed by the SIRVA acquisition subsidiary. The cash purchase price for the
acquisition, as well as approximately $24,100 of other

5

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indebtedness
of the acquired business that was retired as part of the acquisition, were financed with proceeds of $36,500 of cash contributions from SIRVA. SIRVA obtained those proceeds from the sale
of its common stock to Fund VI and the incurrence of $50,000 additional senior indebtedness. The cost to acquire CRS has been preliminarily allocated to the assets acquired and liabilities assumed
according to estimated fair values and is subject to adjustment when additional information concerning asset and liability valuations are finalized. The preliminary allocation has resulted in acquired
goodwill of $46,395 (as restated, see note 12).

The
following unaudited pro forma consolidated information presents the results of operations of the Company as if the acquisition of CRS had taken place at the beginning of each period
presented:

Three Months
Ended
June 30, 2002

Three Months
Ended
June 30, 2001

Six Months
Ended
June 30, 2002

Six Months
Ended
June 30, 2001(As restated,
see note 12)



(As restated,
see note 12)Revenue

$
544,947

$
614,838

$
993,879

$
1,146,885Income (loss) before cumulative effect of accounting change

$
6,761

$
(4,513
)
$
4,459

$
1,324Cumulative effect of accounting change, net of tax











(843
)Net income (loss)

$
6,761

$
(4,513
)
$
4,459

$
481


The
unaudited pro forma consolidated results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations which would have actually
resulted had the combinations been in effect on January 1, 2001, or of future results of operations.

(3) Cash and Cash Equivalents

Cash and cash equivalents of $22,447 and $13,474, relating to the Company's wholly-owned insurance subsidiaries, at June 30, 2002 and December 31,
2001, respectively, require regulatory agency approval prior to being used for non-insurance related purposes.

(4) Goodwill and Intangible Assets

Goodwill and intangible assets consisted of the following:

June 30, 2002

December 31, 2001(As restated,
see note 12)Intangible assets, net

$
223,669

$
165,670Goodwill, net


303,938


247,559$
527,607

$
413,229


6

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The
changes in the carrying amount of goodwill for the six months ended June 30, 2002 are as follows:

Six Months Ended
June 30, 2002(As restated,
see note 12)Balance as of January 1, 2002

$
247,559Goodwill acquired:NAIT


9,301CRS


46,395Other acquisitions


683Balance as of June 30, 2002

$
303,938


In
June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"
("SFAS 142"), which requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but rather be tested for impairment at least annually. The company adopted
the provisions of SFAS 142 effective January 1, 2002 and has discontinued the amortization of goodwill and intangible assets with indefinite useful lives. Trade names consist of the
brand names northAmerican, Allied, Pickfords and Allied Pickfords. Goodwill and intangible assets have been identified as having indefinite useful lives and were tested for impairment consistent with
the provisions of SFAS 142. The Company completed such testing during the second quarter of 2002 and determined that there was no impairment of goodwill and intangible assets as of
January 1, 2002.

The
carrying amount of goodwill attributable to each reportable business segment was as follows:

June 30, 2002

December 31, 2001(As restated,
see note 12)Moving ServicesNorth America

$
70,403

$
70,141Moving ServicesEurope and Asia Pacific


115,917


115,496Logistics Services


16,954


16,954Insurance Services


54,269


44,968Relocation Services


46,395


$
303,938

$
247,559


7

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The
following represents a comparison of results for the three and six months ended June 30, 2002 and 2001 adjusted to exclude amortization expense:

|                                         |  | Three Months
Ended
June 30, 2002 |       | Three Months
Ended
June 30, 2001 |   | Six Months
Ended
June 30, 2002 |   | Six Months
Ended
June 30, 2001 |      
|---------------------------------------- |  | -------------------------------- | ----- | -------------------------------- | - | ------------------------------ | - | ------------------------------ | -----
|
|Net income (loss), as reported           |  | $                                | 6,409 |                                  | $ | (5,136                         | ) | $                              | 3,102
|Amortization of goodwill and trade names |  |                                  |      |                                  |   | 2,755                          |   |                                |     
|Income tax provision                     |  |                                  |      |                                  |   | (1,102                         | ) |                                |     
|                                         |  |                                  |       |                                  |   |                                |   |                                |      
|Pro forma net income (loss)              |  | $                                | 6,409 |                                  | $ | (3,483                         | ) | $                              | 3,102
|                                         |  |                                  |       |                                  |   |                                |   |                                |      

(5) Income Taxes

The Company's estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This is primarily due to
(1) the non-deductibility of certain items expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items
create taxable income that is greater than income reported for financial statement purposes.

(6) Long-term Debt

Long-term debt consisted of the following:

June 30, 2002

December 31, 2001Revolving credit facility

$
40,000


Note payableTranche A


124,709

$
135,000Note payableTranche B


209,887


171,500Senior subordinated notes


150,000


150,000Other


16,258


868Total debt


540,854


457,368Less current maturities


16,052


16,958Total long-term debt

$
524,802

$
440,410


On
April 30, 2002, as part of the financing of the acquisition of CRS, the Company amended its credit agreement to increase Note PayableTranche B by $50,000. The
incremental facility is subject to the same terms and conditions of the credit agreement.

On
May 3, 2002, as part of the financing of the acquisition of CRS, the Company issued two 10% notes payable, Seller Note A amounting to $10,000, and Seller Note B
amounting to $5,000 (the "Seller Notes"). The Seller Notes are subordinated to the Company's senior debt. Seller Note A is due May 3, 2007. Seller Note B is due May 3, 2012
or May 3, 2007 if certain conditions are met. On a quarterly basis, 50% of the interest on the outstanding principal amount will accrete and be added to the principal amount

8

---

and
50% will be paid in cash. The amount of accretion at June 30, 2002 was $79 and $50 of Seller Note A and Seller Note B, respectively.

During
the second quarter 2002, the Company determined that, due to the nature of the revolving credit facility borrowings, it should be classified as a component of long-term debt. The
revolving credit facility is a component of the Company's credit agreement, which matures in 2006.

(7) Commitments and Contingencies



9

---

(8) Operating Segments

Due to the acquisitions described in Note (2), the Company realigned certain businesses within its segment structure and created two additional segments.
As of June 30, 2002, the Company has five reportable segments1. Moving Services-North America, 2. Moving Services-Europe and Asia Pacific, 3. Insurance
Services, 4. Relocation Services and 5. Logistics Services. Segments 1. through 4. comprise Global Relocation Services. Intersegment transactions, principally relating to international
operations, are recorded at market rates as determined by management. The consolidation process
results in the appropriate elimination of intercompany transactions, with revenues reflected in the segment responsible for billing the end customer. Prior period segment information has been restated
to reflect these changes.

The
Moving Services-North America segment provides domestic and international residential moving services, operating as North American Van Lines, Allied Van Lines and Global Van Lines,
through a network of exclusive agents. It provides packing, loading, transportation, delivery and warehousing services for any type of household move in the U.S., Canada and also coordinates these
same services for customers on a global basis.

The
Moving Services-Europe and Asia Pacific segment, operating principally as Pickfords or Allied Pickfords, operates in the United Kingdom, portions of Europe, Australia, New Zealand
and other Asia Pacific locations and provides complete domestic and international moving and relocation services. It also provides a full range of office and industrial moving services including
records management in most of the aforementioned locations.

The
Insurance Services segment provides coverage against loss from certain risks, primarily cargo warehousing, commercial auto physical damage, commercial auto liability and general
liability to agents, owner-operators affiliated with the Company and various other parties in the transportation industry. It is comprised of Transguard, a multiple-line property and
casualty insurance company, and NAIT, a leading provider of insurance services to independent contract truck drivers. For the three-month and six-month periods ended June 30, 2002,
income from operations for the Insurance Services segment has been restated to record $0.5 million of intangible amortization expense. See note 12.

The
Relocation Services segment is comprised of CRS, a business that provides comprehensive relocation services nationally to companies and their employees, including home sale services
and relocation coordination services. For the three-month and six-month periods ended June 30, 2002, income from operations for the Relocation Services segment has been restated to
record $0.5 million of intangible amortization expense. See note 12.

The
Logistics Services segment operates in North America, the United Kingdom and mainland Europe and provides specialized transportation, handling and delivery services to principally
electronics, medical equipment and other suppliers of sensitive goods with unique service requirements. It also provides customized logistics solutions including serialized tracking, inventory and
stock management, in-transit product merge and configuration and other customized services principally to customers with unique requirements. It also provides freight forwarding and
brokerage services to customers, as well as vehicle and driver services to the Company, agents and owner-operators.

10

---

The
tables below represent information about revenues, income (loss) from operations and total assets by segment used by the chief decision-makers of the Company:

|                                    |                                       | Three Months Ended |         |         |   |         |        
|----------------------------------- | ------------------------------------- | ------------------ | ------- | ------- | - | ------- | -------
|
|
|
|
|Revenues                            |                                       |                    |         |         |   |         |        
|                                    | Moving ServicesNorth America         |                    | $       | 289,799 |   | $       | 346,701
|                                    | Moving ServicesEurope & Asia Pacific |                    |         | 77,366  |   |         | 76,260 
|                                    | Insurance Services                    |                    |         | 20,408  |   |         | 11,332 
|                                    | Relocation Services                   |                    |         | 17,551  |   |         | 560    
|                                    |                                       |                    |         |         |   |         |        
|Global Relocation Services          |                                       |                    | 405,124 |         |   | 434,853 |        
|Logistics Services                  |                                       |                    | 132,020 |         |   | 156,439 |        
|                                    |                                       |                    |         |         |   |         |        
|Consolidated revenues               |                                       | $                  | 537,144 |         | $ | 591,292 |        
|                                    |                                       |                    |         |         |   |         |        
|Income (loss) from operations       |                                       |                    |         |         |   |         |        
|                                    | Moving ServicesNorth America         |                    | $       | 12,085  |   | $       | 7,213  
|                                    | Moving ServicesEurope & Asia Pacific |                    |         | 2,485   |   |         | 4,886  
|                                    | Insurance Services                    |                    |         | 4,374   |   |         | 4,402  
|                                    | Relocation Services                   |                    |         | 1,549   |   |         | (35    
|                                    |                                       |                    |         |         |   |         |        
|Global Relocation Services          |                                       |                    | 20,493  |         |   | 16,466  |        
|Logistics Services                  |                                       |                    | 2,666   |         |   | (805    | )      
|                                    |                                       |                    |         |         |   |         |        
|Consolidated income from operations |                                       | $                  | 23,159  |         | $ | 15,661  |        
|                                    |                                       |                    |         |         |   |         |        

|                           |                                       | As of
|-------------------------- | ------------------------------------- | -----
|
|
|Total assets               |                                       |      
|                           | Moving ServicesNorth America         |      
|                           | Moving ServicesEurope & Asia Pacific |      
|                           | Insurance Services                    |      
|                           | Relocation Services                   |      
|                           |                                       |      
|Global Relocation Services |                                       |      
|Logistics Services         |                                       |      
|                           |                                       |      
|Consolidated total assets  |                                       | $    
|                           |                                       |      

11

---



(9) Restructuring

The following table provides details of restructuring for the six months ended June 30, 2002:

Restructuring
Accrual as of
December 31, 2001

Restructuring
Credit

Payments

Restructuring
Accrual as of
June 30, 2002Logistics Parts CentersSeverance cost

$
40

$


$
(40
)
$
Building leases and other


2,197


(842
)

(447
)

908Total restructuring cost

$
2,237

$
(842
)
$
(487
)
$
908


In
June 2001, the Company's Logistics Services operating segment established a program to exit the Parts Center business. The charges included severance and employee benefit costs for
293 employees, lease and asset impairment costs to shut down and exit the Parts Center business by the end of 2001. Due to lease terms and severance agreements, certain payments will continue through
September 2005. During the six months ended June 30, 2002, the restructuring accrual was reduced when the Company was able to sublease certain Parts Centers facilities sooner than originally
estimated. As of June 30, 2002, 293 employees had been terminated.

(10) Subsequent Events

On July 1, 2002, the Company entered into a ten year purchase commitment totaling $182,632 with Covansys Corporation and Affiliated Computer Services, Inc. to
provide outsourcing services for 100% of the Company's information systems infrastructure, including data center operations and telecommunications, and, initially, 50% of application software
development. Covansys Corporation is a portfolio holding of Clayton, Dubilier and Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership, a shareholder of SIRVA that is
managed by Clayton, Dubilier and Rice, Inc. and an affiliate of the controlling shareholder of SIRVA, Clayton, Dubilier & Rice Fund V Limited Partnership.

On
July 29, 2002, a subsidiary of SIRVA, RS Acquisition, LLC, acquired The Rowan Group PLC (UK) and Rowan Simmons Conveyancing Limited (UK) ("Rowan Simmons"), a U.K. based provider of
relocation services, including home sale and purchase assistance, management of tenant responsibilities, and other services to corporations that assist employees in their relocation needs, for
approximately $14,000. The purchase price was funded from the proceeds of a loan from Fleet National Bank. Under the terms of a purchase agreement between RS Acquisition, LLC and the Company, the
Company will acquire Rowan Simmons from RS Acquisition, LLC within six months from the date of purchase for approximately $14,000.

(11) Supplemental Information

The following summarized consolidating balance sheets, statements of operations and statements of cash flows were prepared to segregate such financial statements
between those entities that have guaranteed the Company's senior subordinated notes ("Guarantor" entities) and those entities that did not guarantee such debt ("Non-Guarantor" entities).

12

---

In
addition to the restatement discussed in note 12, the Company has restated the presentation of its consolidating condensed balance sheet at June 30, 2002 and
December 31, 2001 and its consolidating condensed statement of operations for the three and six-month periods ended, June 30, 2002 and 2001 to properly reflect the earnings
of its subsidiaries on the equity method of accounting.

For
the three and six-month periods ended June 30, 2002, total operating expenses for the Parent and NAVL Consolidated columns below have been restated to record
$1,000 of intangible amortization expense. The Parent and NAVL Consolidated columns of the consolidating condensed balance sheet at June 30, 2002 have been restated accordingly. See
note 12.

Consolidated
condensed balance sheet data as of June 30, 2002 and December 31, 2001 is summarized as follows:

|                                             |                                    | June 30, 2002
|-------------------------------------------- | ---------------------------------- | -------------
|
|
|Current assets:                              |                                    |              
|                                             | Accounts and notes receivable, net |              
|                                             | Other current assets               |              
|                                             |                                    |              
|Total current assets                         |                                    |              
|                                             |                                    |              
|Property and equipment, net                  |                                    |              
|Goodwill, net                                |                                    |              
|Intangible assets, net                       |                                    |              
|Other assets                                 |                                    |              
|                                             |                                    |              
|Total assets                                 |                                    | $            
|                                             |                                    |              
|Current liabilities                          |                                    | $            
|Long-term debt and capital lease obligations |                                    |              
|Other liabilities                            |                                    |              
|                                             |                                    |              
|Total liabilities                            |                                    |              
|Stockholder's equity                         |                                    |              
|                                             |                                    |              
|Total liabilities and stockholder's equity   |                                    | $            
|                                             |                                    |              

13

---

|                                             |                                    | December 31, 2001
|-------------------------------------------- | ---------------------------------- | -----------------
|
|Current assets:                              |                                    |                  
|                                             | Accounts and notes receivable, net |                  
|                                             | Other current assets               |                  
|                                             |                                    |                  
|Total current assets                         |                                    |                  
|                                             |                                    |                  
|Property and equipment, net                  |                                    |                  
|Goodwill, net                                |                                    |                  
|Intangible assets, net                       |                                    |                  
|Other assets                                 |                                    |                  
|                                             |                                    |                  
|Total assets                                 |                                    | $                
|                                             |                                    |                  
|Current liabilities                          |                                    | $                
|Long-term debt and capital lease obligations |                                    |                  
|Other liabilities                            |                                    |                  
|                                             |                                    |                  
|Total liabilities                            |                                    |                  
|Stockholder's equity                         |                                    |                  
|                                             |                                    |                  
|Total liabilities and stockholder's equity   |                                    | $                
|                                             |                                    |                  

14

---

Consolidated
condensed statements of operations data for the three and six months ended June 30, 2002 and 2001 are summarized as follows:

|                                  |  | Three months ended June 30, 2002 |        
|--------------------------------- |  | -------------------------------- | -------
|
|
|                                  |  |                                  |        
|Operating revenues                |  | $                                | 193,179
|Total operating expenses          |  |                                  | 186,644
|                                  |  |                                  |        
|Income from operations            |  |                                  | 6,535  
|Non-operating income (expense)    |  |                                  | 626    
|Interest expense (income)         |  |                                  | 11,615 
|Dividend income                   |  |                                  |       
|                                  |  |                                  |        
|Income (loss) before income taxes |  |                                  | (4,454 
|Provision for income taxes        |  |                                  | 452    
|Equity (income) loss              |  |                                  | (11,315
|                                  |  |                                  |        
|Net income (loss)                 |  | $                                | 6,409  
|                                  |  |                                  |        

|                                  |  | Three months ended June 30, 2001 |        
|--------------------------------- |  | -------------------------------- | -------
|
|                                  |  |                                  |        
|Operating revenues                |  | $                                | 224,539
|Total operating expenses          |  |                                  | 225,223
|                                  |  |                                  |        
|Income from operations            |  |                                  | (684   
|Non-operating income (expense)    |  |                                  | 10     
|Interest expense                  |  |                                  | 13,943 
|Dividend income                   |  |                                  | 75,105 
|                                  |  |                                  |        
|Income (loss) before income taxes |  |                                  | 60,488 
|Provision for income taxes        |  |                                  | 3,090  
|Equity (income) loss              |  |                                  | 62,534 
|                                  |  |                                  |        
|Net income (loss)                 |  | $                                | (5,136 
|                                  |  |                                  |        

15

---

|                                                                  |  | Six months ended June 30, 2002 |        
|----------------------------------------------------------------- |  | ------------------------------ | -------
|
|
|                                                                  |  |                                |        
|Operating revenues                                                |  | $                              | 344,815
|Total operating expenses                                          |  |                                | 337,200
|                                                                  |  |                                |        
|Income (loss) from operations                                     |  |                                | 7,615  
|Non-operating income (expense) and minority interest              |  |                                | 1,728  
|                                                                  |  |                                |        
|Income (loss) before interest, income taxes and accounting change |  |                                | 9,343  
|Interest expense (income)                                         |  |                                | 23,310 
|Dividend income                                                   |  |                                |       
|                                                                  |  |                                |        
|Income (loss) before income taxes and accounting change           |  |                                | (13,967
|Provision (benefit) for income taxes                              |  |                                | (4,729 
|Equity (income) loss                                              |  |                                | (12,340
|                                                                  |  |                                |        
|Net income (loss)                                                 |  | $                              | 3,102  
|                                                                  |  |                                |        

|                                                     |  | Six months ended June 30, 2001 |        
|---------------------------------------------------- |  | ------------------------------ | -------
|
|                                                     |  |                                |        
|Operating revenues                                   |  | $                              | 416,106
|Total operating expenses                             |  |                                | 423,476
|                                                     |  |                                |        
|Income (loss) from operations                        |  |                                | (7,370 
|Non-operating income (expense) and minority interest |  |                                | 3      
|                                                     |  |                                |        
|Income (loss) before interest and income taxes       |  |                                | (7,367 
|Interest expense (income)                            |  |                                | 30,246 
|Dividend income                                      |  |                                | 75,106 
|                                                     |  |                                |        
|Income (loss) before income taxes                    |  |                                | 37,493 
|Provision (benefit) for income taxes                 |  |                                | (23,881
|Equity (income) loss                                 |  |                                | 61,595 
|                                                     |  |                                |        
|Income (loss) before accounting change               |  |                                | (221   
|Cumulative effect of accounting change, net of tax   |  |                                |       
|                                                     |  |                                |        
|Net income (loss)                                    |  | $                              | (221   
|                                                     |  |                                |        

16

---

Consolidated
condensed statements of cash flows data for the six months ended June 30, 2002 and 2001 are summarized as follows:

|                                                     |                                                           | Six months ended June 30, 2002 |        
|---------------------------------------------------- | --------------------------------------------------------- | ------------------------------ | -------
|
|Net cash provided by (used for) operating activities |                                                           | $                              | 14,044 
|                                                     |                                                           |                                |        
|Cash flows from investing activities:                |                                                           |                                |        
|                                                     | Additions of property and equipment                       |                                |        
|                                                     | Proceeds from sale of property and equipment              |                                |        
|                                                     | Purchases of investments                                  |                                |        
|                                                     | Proceeds from maturity or sale of investments             |                                |        
|                                                     | Acquisitions                                              |                                |        
|                                                     | Other investing activities                                |                                |        
|                                                     |                                                           |                                |        
|Net cash provided by (used for) investing activities |                                                           |                                | (85,318
|                                                     |                                                           |                                |        
|Cash flows from financing activities:                |                                                           |                                |        
|                                                     | Borrowings (repayments) on revolving credit facility, net |                                |        
|                                                     | Change in balance of outstanding checks                   |                                |        
|                                                     | Borrowings on long-term debt                              |                                |        
|                                                     | Principal payments on long-term debt                      |                                |        
|                                                     | Capital contribution from SIRVA                           |                                |        
|                                                     | Other financing activities                                |                                |        
|                                                     |                                                           |                                |        
|Net cash provided by (used for) financing activities |                                                           |                                | 77,091 
|                                                     |                                                           |                                |        
|Effect of translation adjustment on cash             |                                                           |                                |       
|                                                     |                                                           |                                |        
|Net increase (decrease) in cash and cash equivalents |                                                           |                                | 5,817  
|Cash and cash equivalents at beginning of period     |                                                           |                                | 5,687  
|                                                     |                                                           |                                |        
|Cash and cash equivalents at end of period           |                                                           | $                              | 11,504 
|                                                     |                                                           |                                |        

17

---

|                                                     |                                               | Six months ended June 30, 2001 |        
|---------------------------------------------------- | --------------------------------------------- | ------------------------------ | -------
|
|Net cash provided by (used for) operating activities |                                               | $                              | 18,206 
|                                                     |                                               |                                |        
|Cash flows from investing activities:                |                                               |                                |        
|                                                     | Additions of property and equipment           |                                |        
|                                                     | Proceeds from sale of property and equipment  |                                |        
|                                                     | Purchases of investments                      |                                |        
|                                                     | Proceeds from maturity or sale of investments |                                |        
|                                                     | Other investing activities                    |                                |        
|                                                     |                                               |                                |        
|Net cash used for investing activities               |                                               |                                | (14,447
|                                                     |                                               |                                |        
|Cash flows from financing activities:                |                                               |                                |        
|                                                     | Repayments on revolving credit facility, net  |                                |        
|                                                     | Change in balance of outstanding checks       |                                |        
|                                                     | Principal payments on long-term debt          |                                |        
|                                                     | Other financing activities                    |                                |        
|                                                     |                                               |                                |        
|Net cash provided (used for) by financing activities |                                               |                                | (2,534 
|                                                     |                                               |                                |        
|Effect of translation adjustment on cash             |                                               |                                |       
|                                                     |                                               |                                |        
|Net increase (decrease) in cash and cash equivalents |                                               |                                | 1,225  
|Cash and cash equivalents at beginning of period     |                                               |                                | 2,027  
|                                                     |                                               |                                |        
|Cash and cash equivalents at end of period           |                                               | $                              | 3,252  
|                                                     |                                               |                                |        

---

18

---



(12) Restatement

The Company is restating the three and six-month periods ended June 30, 2002 for the following:



In
addition to the restatement adjustment, the Company has reclassified goodwill of $303,938 and $247,559 in the accompanying balance sheets at June 30, 2002 and
December 31, 2001, respectively, from Goodwill and Intangible Assets, as previously reported, to a separate line item.

19

---

The
impact of the adjustments on the Company's consolidated financial statements is as follows:

Three months endedJune 30, 2002, as
originally reported

June 30, 2002, as
restatedIntangibles amortization

$


$
1,000Provision for income taxes


4,208


3,808Net income

$
7,009

$
6,409


Six months endedJune 30, 2002, as
originally reported

June 30, 2002, as
restatedIntangibles amortization

$


$
1,000Provision for income taxes


1,528


1,128Net income

$
3,702

$
3,102


June 30, 2002As originally reported

As restatedGoodwill, net

$


$
303,938Intangible assets, net





223,669Goodwill and intangible assets, net


528,607


Deferred income taxes


40,375


39,975Accumulated deficit

$
(45,470
)
$
(46,070
)


December 31, 2001As originally reported

As restatedGoodwill, net

$


$
247,559Intangible assets, net





165,670Goodwill and intangible assets, net

$
413,229

$



20

---



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION  AND RESULTS OF OPERATIONS

Overview

On April 12, 2002, we purchased the assets ("NAIT") of the National Association of Independent Truckers a leading provider of insurance services to
independent contract truck drivers, for approximately $25.4 million in cash, $3.6 million in assumed net liabilities and a deferred amount of $3.0 million payable subject to the
completion of certain operating performance objectives during 2002 and 2003. NAIT is an association of more than 11,000 independent contract truck drivers that provides its members with occupational
accident, physical damage and non-trucking liability insurance, as well as access to a suite of professional services. The purchase price was funded from the sale of securities and
existing cash balances and $20.0 million of cash contributions from SIRVA, Inc. ("SIRVA"), the Company's parent. SIRVA obtained those proceeds from the sale of its common stock to Clayton,
Dubilier and Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership managed by Clayton Dubilier and Rice, Inc., and an affiliate of Clayton, Dubilier & Rice Fund
V Limited Partnership, the controlling shareholder of SIRVA. The cost to acquire NAIT has been preliminarily allocated to the assets acquired and liabilities assumed according to estimated fair values
and is subject to adjustment when additional information concerning asset and liability valuations are finalized. The preliminary allocation has resulted in acquired goodwill of $9.3 million.

On
May 3, 2002, SIRVA, through two wholly-owned subsidiaries, purchased the business ("CRS") conducted by Cooperative Resource Services, Ltd. that provides comprehensive
relocation services to companies and their employees, including home sale services, relocation coordination services and mortgage lending services. One of these two subsidiaries, which we own
directly, purchased all of such business' assets other than the assets relating to certain mortgage lending operations of the seller. The mortgage lending operations of the seller were purchased by
the other subsidiary, which is indirectly owned by SIRVA. Subject to certain adjustments, the combined cash purchase price for the acquisitions was approximately $60.0 million, of which
$3.5 million was paid for the assets of the mortgage lending operations. Approximately $45.0 million of the cash purchase price was paid in cash and $15.0 million (non-cash) was
paid in notes issued by us of which $10.0 million is due in 2007 and $5.0 million is due in 2012 or 2007 if certain conditions are met. In addition, certain liabilities relating to the
acquired business were assumed in connection with the acquisition, including $26.6 million of indebtedness under a revolving credit facility used to fund the mortgage lending operations, which
was assumed by the SIRVA acquisition subsidiary. The cash purchase price for the acquisition, as well as approximately
$24.1 million of other indebtedness of the acquired business that was refinanced as part of the acquisition, were financed with the proceeds of $36.5 million of cash contributions from
SIRVA. SIRVA obtained those proceeds from the sale of its common stock to Clayton, Dubilier & Rice Fund VI Limited Partnership, and the incurrence of $50.0 million of additional senior
indebtedness. The cost to acquire CRS has been preliminarily allocated to the assets acquired and liabilities assumed according to estimated fair values and is subject to adjustment when additional
information concerning asset and liability valuations are finalized. The preliminary allocation has resulted in acquired goodwill of $46.4 million.

Due
to these acquisitions, during the second quarter 2002, we realigned certain businesses within our segment structure and created two additional segments. Our operating revenues are
derived from the following five business segments: (1) our moving servicesNorth America segment, (2) our moving servicesEurope and Asia Pacific segment,
(3) our insurance services, (4) our relocation services, and (5) our logistics services. Segments (1) through (4) comprise global relocation services. Our operating income and
cash flow from operations are influenced by industry volume and market share as well as selling prices for our services. Additionally, they are impacted by the availability and cost of hauling
capacity and by a number of significant business, economic and competitive factors, many of which are not within our control.

Our
moving servicesNorth America segment operates under the northAmerican, Allied and Global brand names and provides two types of moving services: (1) domestic,
which provides residential moving services in the United States and Canada through a network of exclusive agents who provide the sales, packing, loading, transportation, delivery and warehousing
services; and (2) international, which primarily markets to multi-national companies most often based in the United States and provides or coordinates moving services for
residential shipments destined to or originating in foreign countries using our exclusive

21

---

agent
network in North America and authorized representatives around the world to complete the service offering.

Our
moving servicesEurope and Asia Pacific segment operates in the United Kingdom, Europe, Australia and Asia Pacific through a network of company-owned branches that
utilize the Pickfords or Allied Pickfords brand names among others. This segment provides complete domestic and international residential moving and relocation services, including sales, packing,
loading, transportation, delivery and warehousing. It also provides records management and office and industrial relocation services.

Our
insurance services segment provides coverage against loss from certain risks, primarily cargo warehousing, commercial auto physical damage, commercial auto liability and general
liability to agents, owner-operators affiliated with us and various other parties in the transportation industry. It is comprised of Transguard, a multiple-line property and casualty insurance
company, and NAIT, a leading provider of insurance services to independent contract truck drivers.

Our
relocation services segment is comprised of CRS, a business that provides comprehensive relocation services to companies and their employees, including home sale services and
relocation coordination services.

Our
logistics services segment consists of (1) logistics solutions, which includes finished goods distribution, order fulfillment, project-specific delivery management and the
tracking of products through the supply chain, with a focus on high-value products; (2) specialized transportation services, which facilitates the movement of computers,
electronics, telecommunications and medical equipment, trade show exhibition materials, fine art and other products that require specialized transportation, distribution or delivery solutions;
(3) network services, which provides freight forwarding and brokerage services to customers, as well as vehicle and driver services to agents and owner-operators; and (4) European
operations, which handle logistics solutions and specialized transportation of high-value products to and from any major cities in the United Kingdom and Europe.

The
following is a review of the more significant accounting policies and methods used by us:

Revenue recognition:We recognize estimated gross revenue to be invoiced to the transportation customer and all related
transportation expenses on the date a shipment is delivered or services are completed. The estimate of revenue remains in a receivable account called Delivered Not Processed ("DNP") until the customer
is invoiced. Concurrent with the DNP estimate, we recognize an accrual for Purchased Transportation Expenses ("PTE") to account for the estimated costs of packing services, transportation expenses and
other such costs associated with the service delivery. The estimate for PTE is not reversed until we receive actual charges.

Within
the relocation services segment, corporate fee income consists of fees for relocation services. Relocation services are billed to corporate customers at either a fixed price per
transferred employee or based upon a fixed percentage of the home's selling price. Relocation services provided at a fixed fee per transferred employee are recognized when services are performed.
Corporate fee income is recognized as revenue at the date a commitment is received from the ultimate buyer to purchase the home.

Insurance reserves:We estimate costs relating to cargo damage and delay claims based on actuarial methods and our history of
loss data, which approximates 10 years. Our multiple-line property and commercial liability insurance group sets its reserve rates based on a percentage of earned premium. The percentage is
based on historical data, run rates and actuarial methods.

Pensions and Other Postretirement Benefits:We provide a range of benefits to our employees and retired employees, including
defined benefit retirement plans, postretirement health care and life insurance benefits and post-employment benefits (primarily severance). We record annual amounts relating to these plans based on
calculations specified by U.S. GAAP, which include various actuarial assumptions, such as discount rates, assumed rates of return, compensation increases, turnover rates and health care cost trend
rates. We review our actuarial assumptions on an annual basis and make modifications to the assumptions based on current rates and trends when it is deemed appropriate to do so. As required by U.S.
GAAP, the effect of the modifications is generally recorded or amortized
over future periods. We believe that the assumptions utilized in recording the Company's obligations under our plans are reasonable based on our experience and advice from our actuaries.

Income taxes:We follow Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). Under the asset and liability method of SFAS 109, deferred tax assets and

22

---

liabilities
are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax laws and tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In addition, the amounts of
any future tax benefits are reduced by a valuation allowance to the extent such benefits are not expected to be realized on a more likely than not basis.

Use of estimates:The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of the areas where estimation is significant are as follows:
(a) DNP is the estimated revenues associated with shipments delivered or services completed and not invoiced; (b) PTE is the associated purchased transportation expense that is estimated
corresponding to the DNP revenue; (c) accounts and notes receivable reserves for doubtful accounts are estimated based on historical write-off data to establish the uncollectible portion of the
receivables; (d) costs relating to cargo damage and delay claims are estimated based on actuarial methods; and (e) loss reserves of our insurance subsidiaries are estimated using third
party actuaries to estimate insurance reserves.

Results of Operations

Our operating revenues are derived from our moving servicesNorth America, moving servicesEurope and Asia Pacific, insurance services,
relocation services and logistics services segments. Gross margin is a result of operating revenues less direct expenses associated with the movement of goods or the completion of services. Direct
expenses are defined as follows for each segment.

Moving
servicesNorth America's transportation expenses are comprised of payments to:



Moving
servicesEurope and Asia Pacific's transportation expenses are similar to those of moving servicesNorth America, except that expenses incurred to provide
moving and storage services are largely in the form of direct labor and equipment expenses rather than in the form of agent or owner/operator expenses.

Insurance
services direct expenses are primarily comprised of underwriting policies, payments of loss recovery to policy holders and loss adjustment expense.

Relocation
services direct expenses are primarily comprised of commissions paid to realtors, home closing costs and staff expenses associated with providing coordination services.

Logistics
services transportation expenses are comprised of the following:



23

---



Operating expenses include our consolidated insurance and claims, bad debt and general and administrative expenses. Employee compensation and benefits account for over 50% of general and
administrative expense. Other significant components of general and administrative expenses are communication costs, rent, supplies and other purchased services.

Three Months Ended June 30, 2002 Compared to Three Months Ended June 30, 2001.

The following table sets forth certain figures regarding our results of operations for the three months ended June 30, 2002, compared to the three months
ended June 30, 2001.

|                               |                                         | Three Months
Ended
June 30,
2002 |       | Three Months
Ended
June 30,
2001 |   | % Increase
(Decrease) from
Prior Period(a) |      
|------------------------------ | --------------------------------------- | -------------------------------- | ----- | -------------------------------- | - | ------------------------------------------ | -----
|
|
|Operating revenues:            |                                         |                                  |       |                                  |   |                                            |      
|                               | Moving ServicesNorth America           |                                  | $     | 289.8                            |   | $                                          | 346.7
|                               | Moving ServicesEurope and Asia Pacific |                                  |       | 77.4                             |   |                                            | 76.3 
|                               | Insurance Services                      |                                  |       | 20.4                             |   |                                            | 11.3 
|                               | Relocation Services                     |                                  |       | 17.5                             |   |                                            | 0.6  
|                               |                                         |                                  |       |                                  |   |                                            |      
|                               | Global Relocation Services              |                                  |       | 405.1                            |   |                                            | 434.9
|                               | Logistics Services                      |                                  |       | 132.0                            |   |                                            | 156.4
|                               |                                         |                                  |       |                                  |   |                                            |      
|Operating revenues             |                                         | $                                | 537.1 |                                  | $ | 591.3                                      |      
|                               |                                         |                                  |       |                                  |   |                                            |      
|Gross margin                   |                                         | $                                | 111.8 |                                  | $ | 112.6                                      |      
|                               | Operating expenses                      |                                  |       | 87.7                             |   |                                            | 92.1 
|                               | Intangibles amortization                |                                  |       | 1.0                              |   |                                            |     
|                               | Restructuring                           |                                  |       | (0.1                             | ) |                                            | 4.8  
|                               |                                         |                                  |       |                                  |   |                                            |      
|Income from operations         |                                         | $                                | 23.2  |                                  | $ | 15.7                                       |      
|                               |                                         |                                  |       |                                  |   |                                            |      
|Income (loss) from operations: |                                         |                                  |       |                                  |   |                                            |      
|                               | Moving ServicesNorth America           |                                  | $     | 12.1                             |   | $                                          | 7.2  
|                               | Moving ServicesEurope and Asia Pacific |                                  |       | 2.5                              |   |                                            | 4.9  
|                               | Insurance Services                      |                                  |       | 4.4                              |   |                                            | 4.4  
|                               | Relocation Services                     |                                  |       | 1.5                              |   |                                            |     
|                               |                                         |                                  |       |                                  |   |                                            |      
|                               | Global Relocation Services              |                                  |       | 20.5                             |   |                                            | 16.5 
|                               | Logistics Services                      |                                  |       | 2.7                              |   |                                            | (0.8 
|                               |                                         |                                  |       |                                  |   |                                            |      
|Income from operations         |                                         | $                                | 23.2  |                                  | $ | 15.7                                       |      
|                               |                                         |                                  |       |                                  |   |                                            |      

---

Shipment
counts are a measure of activity commonly used by the transportation industry. The following table represents shipments handled by the moving servicesNorth America
and logistics services segments. A moving servicesNorth America shipment is the movement of household goods from the point of origin to the final destination. Logistics services shipments
represent the movement of truckload or less-than-truckload quantities of products from the point of origin to the final destination. Our moving servicesEurope and
Asia Pacific segment, which operates outside of North America (principally the United Kingdom and Australia), primarily generates revenues among the following activities: domestic moving,
international moving, business moving services and records management. While shipments are an

24

---

indicator
of revenue in residential moving, aggregate shipment counts for our moving servicesEurope and Asia Pacific segment are not routinely prepared and therefore are not provided.

Number of ShipmentsThree Months
Ended
June 30, 2002

Three Months
Ended
June 30, 2001

% Increase
(Decrease) from
Prior PeriodMoving servicesNorth AmericaU.S. and Canada

61,500

67,700

(9.2
)%International

7,900

10,000

(21.0
)%Logistics services:Specialized transportation

94,000

101,200

(7.1
)%European operations

85,200

90,900

(6.3
)%


Operating Revenues.Operating revenues for the three months ended June 30, 2002 were
$537.1 million, a decrease of $54.2 million compared to the same period in 2001 primarily as a result of the factors discussed below.

Revenue
in moving servicesNorth America for the three months ended June 30, 2002 decreased $56.9 million as compared to the three months ended June 30,
2001 due primarily to the general economic slowdown which resulted in lower shipment activity of approximately 11% and 9% in the Allied and northAmerican lines, respectively, and in the international
unit.

Revenue
in moving servicesEurope and Asia Pacific increased $1.1 million in the three months ended June 30, 2002 as compared to the three months ended
June 30, 2001. This was primarily due to an increase in Asia Pacific revenue, as Asia business and the domestic and international moving business in Australia improved. Records management
business also improved for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001. This was partially offset by softness in U.K. industrial moving.

Revenue
in insurance services for the three months ended June 30, 2002 was $9.1 million higher as compared to the three months ended June 30, 2001. The increase was due to
the NAIT acquisition, a general increase in rates and additional market penetration.

Revenue
in relocation services for the three months ended June 30, 2002 was $16.9 million higher as compared to the three months ended June 30, 2001. The increase was due
to the CRS acquisition.

Revenue
in logistics services decreased $24.4 million in the three months ended June 30, 2002 as compared to the three months ended June 30, 2001 due primarily to
reduced shipments within specialized transportation and Europe and reduced activity levels in freight forwarding, due to the general economic slowdown, particularly in the technology and
telecommunications sectors. Also, revenues were $4.9 million lower than in the three months ending June 30, 2001 as we exited the parts center business at the end of 2001. These
reductions were partially offset by new volume in logistics solutions due to the addition of new customers and increased volume with existing customers.

Gross Margin.Gross margin for the three months ended June 30, 2002 was $111.8 million, a decrease of
$0.8 million compared to the three months ended June 30, 2001. The decrease was due primarily to a shipment volume decline due to the general economic slowdown. The gross margin (as a
percentage of sales) was 20.8% for the three months ended June 30, 2002 and was 19.0% for the three months ended June 30, 2001. This increase was due primarily to customer mix and
operating and service delivery efficiencies.

Operating Expenses.Operating expenses for the three months ended June 30, 2002 were $87.7 million, a decrease
of $4.4 million compared to the three months ended June 30, 2001. Cargo loss and damage expenses were $3.6 million lower than in the same period in the prior year due to favorable
development of claim frequency and severity trends. Bad debt expenses were $1.7 million lower primarily

25

---

due
to a decrease in aged receivables. Cost containment programs continue such as delayering the organization and generally reducing discretionary expenses. Also, effective January 2002, we
adopted Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", under which goodwill is no longer amortized but is reviewed at least annually for impairment. The
resultant decrease due to the elimination of goodwill amortization was $2.8 million. Partially offsetting the above were higher general and administrative expenses due to incremental expenses
of the acquisitions. As a percentage of revenue, operating expenses were 16.3% for the three months ended June 30, 2002, compared to 15.6% for the three months ended June 30, 2001.

Intangibles amortization.Intangibles amortization for the three months ended June 30, 2002 was $1.0 million,
due to the CRS and NAIT acquisitions.

Restructuring.In the three months ended June 30, 2002, we recorded $0.1 million of restructuring credit
pertaining to the logistics parts centers, as we were able to sublease certain parts centers facilities earlier than originally estimated. In the three months ended June 30, 2001, we incurred
$4.8 million of costs primarily relating to the logistics parts centers restructuring.

Income (Loss) from Operations.Income from operations for the three months ended June 30, 2002 was
$23.2 million, compared to $15.7 million for the same period in 2001 as a result of the factors discussed below.

Income
from operations in moving servicesNorth America for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001 increased
$4.9 million primarily due to lower cargo loss and damage expenses and reduced general and administrative expenses. These favorable variances were partially offset by lower Allied and
northAmerican lines margins as a result of the general economic slowdown.

Income
from operations for moving servicesEurope and Asia Pacific decreased $2.4 million in the three months ended June 30, 2002 as compared to the three
months ended June 30, 2001. Gross margin was higher due to revenue mix and an increase in volume. This was more than offset by an increase in general and administrative expenses, due primarily
to severance costs and increased cargo loss and damage expenses. This was partially offset by the elimination of goodwill amortization, which was $1.1 million in the three months ended
June 30, 2001.

Income
from operations in insurance services for the three months ended June 30, 2002 approximated the three months ended June 30, 2001 primarily due to higher margins due
to increased revenue and the NAIT acquisition, offset by a FAS 133 derivative loss of $1.0 million in 2002.

Income
from operations in relocation services for the three months ended June 30, 2002 as compared to the three months ended June 30, 2001 increased $1.5 million primarily
due to the CRS acquisition.

Income
from operations in logistics services for the three months ended June 30, 2002 was $2.7 million, an increase of $3.5 million compared to the three months
ended June 30, 2001 due to lower general and administrative expenses and the elimination of $0.4 million of goodwill amortization. This was partially offset by lower margins due to the
reduction in shipment volume.

Interest Expense.Interest expense for the three months ended June 30, 2002 was $12.3 million compared to
$15.8 million in the three months ended June 30, 2001. This decrease is due primarily to lower interest rates and lower average borrowings.

Provision for Income Taxes.For the three months ended June 30, 2002, income tax expense was $3.8 million based
on pre-tax income of $10.2 million. For the three months ended June 30, 2001, income tax expense was $5.5 million based on pre-tax income of $0.4 million. Our estimated
provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This difference is primarily due to (1) the non-deductibility of
certain items expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items create taxable income that is greater than income
reported for financial statement purposes.

26

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Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001.

The following table sets forth certain figures regarding our results of operations for the six months ended June 30, 2002, compared to the six months ended
June 30, 2001.

|                               |                                         | Six Months
Ended
June 30,
2002 |       | Six Months
Ended
June 30,
2001 |   | % Increase
(Decrease) from
Prior Period(a) |      
|------------------------------ | --------------------------------------- | ------------------------------ | ----- | ------------------------------ | - | ------------------------------------------ | -----
|
|
|Operating revenues:            |                                         |                                |       |                                |   |                                            |      
|                               | Moving ServicesNorth America           |                                | $     | 495.4                          |   | $                                          | 607.4
|                               | Moving ServicesEurope and Asia Pacific |                                |       | 156.5                          |   |                                            | 154.7
|                               | Insurance Services                      |                                |       | 33.3                           |   |                                            | 22.7 
|                               | Relocation Services                     |                                |       | 18.6                           |   |                                            | 1.0  
|                               |                                         |                                |       |                                |   |                                            |      
|                               | Global Relocation Services              |                                |       | 703.8                          |   |                                            | 785.8
|                               | Logistics Services                      |                                |       | 263.0                          |   |                                            | 315.9
|                               |                                         |                                |       |                                |   |                                            |      
|Operating revenues             |                                         | $                              | 966.8 |                                | $ | 1,101.7                                    |      
|                               |                                         |                                |       |                                |   |                                            |      
|Gross margin                   |                                         | $                              | 202.8 |                                | $ | 211.0                                      |      
|                               | Operating expenses                      |                                |       | 173.2                          |   |                                            | 194.7
|                               | Intangibles amortization                |                                |       | 1.0                            |   |                                            |     
|                               | Restructuring                           |                                |       | (0.8                           | ) |                                            | 5.0  
|                               |                                         |                                |       |                                |   |                                            |      
|Income from operations         |                                         | $                              | 29.4  |                                | $ | 11.3                                       |      
|                               |                                         |                                |       |                                |   |                                            |      
|Income (loss) from operations: |                                         |                                |       |                                |   |                                            |      
|                               | Moving ServicesNorth America           |                                | $     | 9.8                            |   | $                                          | (0.4 
|                               | Moving ServicesEurope and Asia Pacific |                                |       | 4.8                            |   |                                            | 7.8  
|                               | Insurance Services                      |                                |       | 9.8                            |   |                                            | 7.7  
|                               | Relocation Services                     |                                |       | 1.4                            |   |                                            |     
|                               |                                         |                                |       |                                |   |                                            |      
|                               | Global Relocation Services              |                                |       | 25.8                           |   |                                            | 15.1 
|                               | Logistics Services                      |                                |       | 3.6                            |   |                                            | (3.8 
|                               |                                         |                                |       |                                |   |                                            |      
|Income from operations         |                                         | $                              | 29.4  |                                | $ | 11.3                                       |      
|                               |                                         |                                |       |                                |   |                                            |      

---

Shipment
counts are a measure of activity commonly used by the transportation industry. The following table represents shipments handled by the moving servicesNorth America
and logistics services segments. A moving servicesNorth America shipment is the movement of household goods from the point of origin to the final destination. Logistics services shipments
represent the movement of truckload or less-than-truckload quantities of products from the point of origin to the final destination. Our moving servicesEurope and
Asia Pacific segment, which operates outside of North America (principally the United Kingdom and Australia), primarily generates revenues among the following activities: domestic moving,
international moving, business moving services and records management. While shipments are an

27

---

indicator
of revenue in residential moving, aggregate shipment counts for our moving servicesEurope and Asia Pacific segment are not routinely prepared and therefore are not provided.

|                               |                            | Number of Shipments |         |  |        
|------------------------------ | -------------------------- | ------------------- | ------- |  | -------
|
|Moving ServicesNorth America: |                            |                     |         |  |        
|                               | U.S. and Canada            |                     | 100,600 |  | 116,100
|                               | International              |                     | 14,100  |  | 19,100 
|Logistics services:            |                            |                     |         |  |        
|                               | Specialized transportation |                     | 188,800 |  | 206,500
|                               | European operations        |                     | 178,500 |  | 192,900

Operating Revenues.Operating revenues for the six months ended June 30, 2002 were $966.8 million, a decrease
of $134.9 million compared to the same period in 2001 primarily as a result of the factors discussed below.

Revenue
in moving servicesNorth America for the six months ended June 30, 2002 decreased $112.0 million as compared to the six months ended June 30,
2001 due primarily to the general economic slowdown which resulted in lower shipment activity of approximately 15% and 12% in the Allied and northAmerican lines, respectively, and in the international
unit.

Revenue
in moving servicesEurope and Asia Pacific increased $1.8 million in the six months ended June 30, 2002 as compared to the three months ended
June 30, 2001. This was primarily due to an increase in Asia Pacific revenue, as Asia business and the domestic and international moving business in Australia improved. Records management
business also improved for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001. This was partially offset by softness in U.K. industrial moving.

Revenue
in insurance services for the six months ended June 30, 2002 was $10.6 million higher as compared to the six months ended June 30, 2001. The increase was due to the
NAIT acquisition, a general increase in rates and additional market penetration.

Revenue
in relocation services for the six months ended June 30, 2002 was $17.6 million higher as compared to the six months ended June 30, 2001. The increase was due to
the CRS acquisition.

Revenue
in logistics services decreased $52.9 million in the six months ended June 30, 2002 as compared to the six months ended June 30, 2001 due primarily to
reduced shipments within specialized transportation and reduced activity levels in freight forwarding, due to the general economic slowdown, particularly in the technology and telecommunications
sectors. Also, revenues were $9.8 million lower than in the six months ending June 30, 2001 as we exited the parts center business at the end of 2001. These reductions were partially
offset by new volume in logistics solutions due to the addition of new customers and increased volume with existing customers.

Gross Margin.Gross margin for the six months ended June 30, 2002 was $202.8 million, a decrease of
$8.2 million compared to the six months ended June 30, 2001. The decrease was due primarily to a shipment volume decline due to the general economic slowdown. The gross margin (as a
percentage of sales) was 21.0% for the six months ended June 30, 2002 and was 19.2% for the six months ended June 30, 2001. This increase was due primarily to customer mix and operating
and service delivery efficiencies.

Operating Expenses.Operating expenses for the six months ended June 30, 2002 were $173.2 million, a decrease
of $21.5 million compared to the six months ended June 30, 2001. Cargo loss and damage expenses were $4.3 million lower than in the same period in the prior year due to favorable
development of claim frequency and severity trends. Bad debt expenses were $1.5 million lower than in the same period in 2001 primarily due to a decrease in aged receivables. Cost containment
programs continue such as delayering the organization and generally reducing discretionary expenses. Also, effective January 2002, we

28

---

adopted
Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", under which goodwill is no longer amortized but is reviewed at least annually for impairment. The
resultant decrease due to the elimination of goodwill amortization was $5.5 million. Partially offsetting the above were higher general and administrative expenses due to incremental expenses
of the acquisitions. As a percentage of revenue, operating expenses were 17.9% for the six months ended June 30, 2002, compared to 17.7% for the six months ended June 30, 2001.

Intangibles amortization.Intangibles amortization for the six months ended June 30, 2002 was $1.0 million, due
to the CRS and NAIT acquisitions.

Restructuring.In the six months ended June 30, 2002, we recorded $0.8 million of restructuring credit
pertaining to the logistics parts centers, as we were able to sublease certain parts centers facilities earlier than originally estimated. In the six months ended June 30, 2001, we incurred
$5.0 million of costs, due primarily to the logistics parts center restructuring.

Income from Operations.Income from operations for the six months ended June 30, 2002 was $29.4 million,
compared to $11.3 million for the same period in 2001 as a result of the factors discussed below.

Income
from operations in moving servicesNorth America for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001 increased
$10.2 million primarily due to lower cargo loss and damage expense, reduced general and administrative expenses and the elimination of goodwill amortization which was $2.5 million for
the six months ended June 30, 2001. Income from operations in the moving servicesNorth America for the six months ended June 30, 2002 was also higher than for the six months
ended June 30, 2001 due to the expenses associated with the January 2001 agent convention. These favorable variances were partially offset by lower Allied and northAmerican lines margins as a
result of the general economic slowdown.

Income
from operations for the moving servicesEurope and Asia Pacific decreased $3.0 million in the six months ended June 30, 2002 as compared to the six
months ended June 30, 2001. Gross margin was higher due to revenue mix. This was more than offset by an increase in general and administrative expenses, due primarily to severance costs and
increased customer claims. Also, there was a year-over-year decrease of $1.0 million relating to gains on outstanding foreign currency exchange contracts. This was partially offset by the elimination
of goodwill amortization, which was $2.3 million in the six months ended June 30, 2001.

Income
from operations in insurance services for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001 increased $2.1 million primarily due
to a year-over-year FAS 133 derivative gain of $0.8 million and higher margins due to increased revenue and the NAIT acquisition.

Income
from operations in relocation services for the six months ended June 30, 2002 as compared to the six months ended June 30, 2001 increased $1.4 million primarily due
to the CRS acquisition.

Income
from operations in logistics services for the six months ended June 30, 2002 was $3.6 million, an increase of $7.4 million compared to the six months ended
June 30, 2001 due to lower general and administrative expenses and the elimination of $0.8 million of goodwill amortization. This was partially offset by lower margins due to the
reduction in shipment volume.

Interest Expense.Interest expense for the six months ended June 30, 2002 was $24.8 million compared to
$31.6 million in the six months ended June 30, 2001. This decrease is due primarily to lower interest rates and lower average borrowings.

Provision (Benefits) for Income Taxes.For the six months ended June 30, 2002, income tax expense was
$1.1 million based on pre-tax income of $4.2 million. For the six months ended June 30, 2001, the income tax benefit was $20.1 million based on a pre-tax loss of
$20.0 million. Our estimated provision for income taxes differs from the amount computed by applying the federal and state statutory rates. This difference is primarily due to (1) the
non-deductibility of certain items expensed for book purposes and (2) limitations that exist on the availability of certain foreign income tax credits. These items create taxable
income that is greater than income reported for financial statement purposes.

29

---

Financial Condition

The information provided below about our cash flows, debt, credit facilities, capital and operating lease obligations and future commitments is included here to
facilitate a review of our liquidity.

Liquidity and Capital Resources

We broadly define liquidity as our ability to generate sufficient cash flow from operating activities to meet our obligations and commitments. In addition,
liquidity includes the ability to obtain appropriate debt and equity financing and to convert into cash those assets that are no longer required to meet existing strategic and financial objectives.
Therefore, liquidity cannot be considered separately from capital resources that consist of current or potentially available funds for use in achieving long-range business objectives and
meeting debt service commitments.

Our
short-term and long-term liquidity needs will arise primarily from:



The
seasonal nature of the moving business results in increased short-term working capital requirements in the summer months. This will result in an increase in receivables which are
typically collected, and revolving credit borrowings which are typically repaid, by late fall. Due to this seasonality, we can operate with negative working capital due to the turnover of our accounts
receivable and access to our revolving credit facility.

Debt Service.Principal and interest payments under our senior credit facility and interest payments on the notes represent
significant liquidity requirements for us. As of June 30, 2002, we had $568.7 million of indebtedness comprised of indebtedness for borrowed money and capital leases, consisting of



As
a result, we are required to devote a substantial amount of our cash flow to service this indebtedness. We are required to repay our note payabletranche A in quarterly principal
payments over seven years and our note payabletranche B in quarterly principal payments over eight years. We are required to repay any amounts borrowed under the revolving credit
facility forming part of our senior credit facility by the seventh anniversary of the initial borrowings under the senior credit facility. All borrowings under the senior credit facility bear interest
at floating rates based upon the interest rate option elected by us.

In
connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we borrowed an additional $50.0 million under the
note payabletranche B facility. See "Management's Discussion and Analysis of Financial Condition and of OperationsOverview."

Covenant Restrictions.The senior credit facility imposes restrictions on our ability to make capital expenditures.
Additionally, the senior credit facility, the indenture governing the notes and the agreements

30

---

governing
our parent company's senior discount debt, which as at June 30, 2002, had accreted to $52.0 million, limit our ability to incur additional indebtedness. Such restrictions could
limit our ability to



The
covenants in the senior credit facility also, among other things, limit our ability to



The
indenture governing our senior subordinated notes and the agreements governing our parent company's senior discount debt, which as at June 30, 2002, had accreted to $52.0 million,
contain a number of similar restrictions.



Capital expenditures for 2002 are expected to approximate $32.0 million for computer equipment, software development and transportation and warehouse
equipment.

Financing Sources.As of June 30, 2002, there was approximately $95.6 million available under the revolving
credit facility forming part of our senior credit facility to meet our future working capital and other business needs. We believe that cash generated from operations, which was $32.3 million,
primarily due to an increase in accounts payable and other current liabilities, partially offset by seasonal growth in accounts receivable for the six months ended June 30, 2002, together with
amounts available under the revolving credit facility and any other available source of liquidity will be adequate to permit us to meet our debt service obligations, capital expenditure program
requirements, ongoing operating costs and working capital needs for at least the next twelve months. Our future operating performance and ability to service or refinance the notes and to repay,
extend, or refinance our senior credit facility will be, among other things, subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

We
made a $21.9 million prepayment of notes payabletranche A and notes payabletranche B debt on March 29, 2002, due to excess cash
flow in 2001, as defined in our senior credit facility. Of that amount, approximately $4.2 million replaced principal payments due at that time, with the remaining approximately
$17.7 million reducing future principal payments.

In
addition, we guarantee operating lines of credit maintained by wholly-owned foreign subsidiaries. As of December 31, 2001 and 2000, the outstanding balance was
$1.2 million and $1.9 million, respectively.

31

---

In
connection with the purchase of the relocation services business of Cooperative Resource Services, Ltd. on May 3, 2002, we borrowed an additional $50.0 million under our
senior credit facility. See "Management's Discussion and Analysis of Financial Condition and of OperationsOverview."

Seasonality

Our operations are subject to seasonal trends common to the moving industry. Results of our operations for the quarters ending in December and March are typically
lower than the quarters ending in June and September due to reduced shipments in the winter months. With respect to moving servicesNorth America, over half of revenue is typically
generated from May through September. For logistics services, shipping requirements of the customer base result in higher shipment volumes at the end of each quarter. Moving
servicesEurope and Asia Pacific experiences seasonality with respect to residential relocations; however, this is somewhat diminished by the geographic diversity of our business moving
activities and involvement with other non-seasonal operations such as records management and office moving.

Recent Accounting Pronouncements

In
August 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets" ("SFAS 144"), superseding SFAS 121, effective for fiscal years beginning after December 15, 2001. The provisions of SFAS 144 are for long-lived assets to
be disposed of by sale or otherwise are effective for disposal activities initiated by an entity's commitment to a plan after the initial date of adoption of SFAS 144. We are currently
assessing the impact of SFAS 144 on our operating results and financial condition.

In
April 2002, the FASB issued Statement of Financial Accounting Standards No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement
No. 13, and Technical Corrections." The statement updates, clarifies and simplifies existing accounting pronouncements. The provisions of this statement related to rescission of Statement 4
shall be applied in fiscal years beginning after May 15, 2002. The provisions in paragraphs 8 and 9(c) of the statement related to Statement 13 shall be effective for transactions occurring
after May 15, 2002. We are considering the Standard and its effect on our financial statements.

In
July 2002, the FASB issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." The statement
requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. This statement replaces
previous accounting guidance provided by EITF (Emerging issues Task Force) Issue No. 94-3. Statement 146 is to be applied prospectively to exit or disposal activities initiated
after December 31, 2002. We are considering the Standard and its effect on our financial statements.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various market risks, including changes in interest rates and foreign currency exchange rates.

We
are exposed to various interest rate risks that arise in the normal course of business. We finance our operations with borrowings comprised primarily of variable rate indebtedness.
Significant increases in interest rates could adversely affect our operating margins, results of operations and our ability to service indebtedness. An increase of 1% in interest rates payable on our
variable rate indebtedness would increase our annual interest rate expense by approximately $3.2 million.

We
utilize interest rate agreements and foreign exchange contracts to manage interest rate and foreign currency exposures. The principal objective of such contracts is to minimize the
risks and/or costs associated with financial and international operating activities. We do not utilize financial instruments for

32

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trading
purposes. The counterparties to these contractual arrangements are financial institutions with which we also have other financial relationships. We are exposed to credit loss in the event of
nonperformance by these counterparties. However, we do not anticipate nonperformance by the other parties, and no material loss would be expected from their nonperformance.

We
had three open interest rate swap agreements as of June 30, 2002. The intent of these agreements is to reduce interest rate risk by swapping an unknown variable interest rate
for a fixed rate. These agreements qualify for hedge accounting treatment. Therefore, market rate changes are reported in Other Comprehensive Income. The following is a recap of each agreement.

Notional amount

$40.0 million

$70.0 million

$20.0 millionFixed rate paid

4.91%

5.44%

4.785%Variable rate received

3 month LIBOR

1 month LIBOR

1 month LIBORExpiration date

March 2003

December 2002

April 2003


Assets,
liabilities, and commitments that are to be settled in cash and are denominated in foreign currencies for transaction purposes are sensitive to changes in currency exchange
rates. All material trade receivable balances are denominated in the host currency of the local operation. For the six months ended June 30, 2002 and 2001, we recognized currency gains of
$0 million and $0.8 million, respectively, for transactional related items.

From
time to time, we utilize foreign currency forward contracts in the regular course of business to manage our exposure against foreign currency fluctuations. The forward contracts
establish the exchange rates at which we will purchase or sell the contracted amount of U.S. Dollars for specified foreign currencies at a future date. We utilize forward contracts which are
short-term in duration (less than one year). The major currency exposures hedged by us are the Australian dollar, the British pound sterling and the Euro. The contract amounts of foreign currency
forwards at June 30, 2002 and December 31, 2001 were $3.6 million and $3.5 million, respectively. A hypothetical 10% adverse movement in foreign exchange rates applied to
our foreign currency exchange rate sensitive instruments held as of December 31, 2001 would result in a hypothetical loss of approximately $0.35 million. Changes in fair value relating
to these derivatives are recognized in current period earnings. For the six months ended June 30, 2002 and 2001, we recognized $0.1 and $1.0 million, respectively, of gains resulting
from changes in the fair value of foreign currency derivatives.

The
company holds various convertible bonds in the investment portfolio of our insurance operations. The value of the conversion feature is bifurcated from the value of the underlying
bond. Changes in fair value are recorded in current period earnings. For the six months ended June 30, 2002 and 2001, we recognized $0.8 and $0 million of gains, respectively.

Other
assets at June 30, 2002, included marketable equity securities which are classified as available-for-sale and are recorded at fair value. Unrealized holding gains and
losses, net of the related tax effect, on available-for-sale securities are excluded from earnings and are reported as a separate component of other comprehensive income until realized.

Restructuring

In June 2001, our Logistics Services operating segment established a program to exit the Parts Center business. The charges included severance and employee
benefit costs for 293 employees, lease and asset impairment costs to shut down and exit the Parts Center business by the end of 2001. Due to lease terms and severance agreements, certain facility
lease payments will continue through September 2005. During the six months ended June 30, 2002, $0.8 million of restructuring credit occurred when we were able to sublease certain Parts
Center facilities earlier than originally estimated.

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Forward Looking Statements

This Form 10-Q may contain forward-looking statements which include assumptions about future market conditions, operations and results. These statements
are based on current expectations and are subject to risks and uncertainties. They are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Among the many
factors that could cause actual results to differ materially from any forward-looking statements are the changes in the markets for the Company's products and services, including the future growth of
the logistics and relocation markets, expected characteristics of competition, foreign exchange risk, expected actions of third parties such as agents, representatives, owner/operators and suppliers
and other factors discussed in prior Securities and Exchange Commission filings by the Company. The Company assumes no obligation to update these forward-looking statements or advise of changes in the
assumptions on which they were based.

Subsequent Events

On July 1, 2002, we entered into a ten year purchase commitment totaling $182.6 million with Covansys Corporation and Affiliated Computer Services,
Inc. to provide outsourcing services for 100% of the Company's information systems infrastructure, including data center operations and telecommunications, and, initially, 50% of application software
development. Clayton, Dubilier and Rice Fund VI Limited Partnership, a Cayman Islands exempted limited partnership, a shareholder of SIRVA that is managed by Clayton, Dubilier and Rice, Inc. and an
affiliate of the controlling shareholder of SIRVA, Clayton, Dubilier & Rice Fund V Limited Partnership, owns approximately 23% of the outstanding common stock of Covansys Corporation.

On
July 29, 2002, a subsidiary of SIRVA, RS Acquisition, LLC, acquired The Rowan Group PLC (UK) and Rowan Simmons Conveyancing Limited (UK) ("Rowan Simmons"), a U.K. based provider of
relocation services, including home sale and purchase assistance, management of tenant responsibilities, and other services to corporations that assist employees in their relocation needs, for
approximately
$14.0 million. The purchase price was funded from the proceeds of a loan from Fleet National Bank. Under the terms of a purchase agreement between RS Acquisition, LLC and the Company, the
Company will acquire Rowan Simmons from RS Acquisition, LLC within six months from the date of purchase for approximately $14.0 million.

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PART II.    Other Information

Item 1.Legal Proceedings

None

Item 2.Changes in Securities and Use of Proceeds

None

Item 3.Defaults upon Senior Securities

None

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

None

Item 5.Other Information

None

Item 6.Exhibits and Reports on Form 8-K



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

|                       |  | NORTH AMERICAN VAN LINES, INC.
|---------------------- |  | ------------------------------
|Date November 21, 2003 |  |                               
|Date November 21, 2003 |  |                               

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