---

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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 September 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 ý    No o

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

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When we refer to "North American Van Lines", "NAVL", "our company", "our", "we" or "us", we are referring to North American Van Lines, Inc., a Delaware corporation, together with its
subsidiaries and their predecessors, except where the context otherwise requires. When we refer to "SIRVA," we are referring to our parent, SIRVA, Inc., a Delaware corporation.

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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 nine-month periods ended
September 30, 2002 filed on November 12, 2002. The Company is restating the three and nine-month periods ended September 30, 2002 for the following:



In
addition to the restatement adjustment, we have reclassified goodwill of $306.9 million and $247.6 million in the accompanying balance sheet at September 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 11. 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 September 30, 2002 and December 31, 2001  (Dollars in thousands except share data)
(Unaudited)

|                                           |                                                                                                                                         | September 30, 2002 |           | December 31, 2001 |  
|------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | --------- | ----------------- | -
|
|Assets                                     |                                                                                                                                        
|Current assets:                            |                                                                                                                                         |                    |           |                   |  
|                                           | Cash and cash equivalents                                                                                                               |                    | $         | 45,238            |  
|                                           | Accounts and notes receivable, net of allowance for doubtful accounts of $26,146 and $24,386, respectively                              |                    |           | 386,808           |  
|                                           | Other current assets                                                                                                                    |                    |           | 55,427            |  
|                                           | Deferred and recoverable income taxes                                                                                                   |                    |           | 37,157            |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Total current assets                       |                                                                                                                                         |                    | 524,630   |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Property and equipment, net                |                                                                                                                                         |                    | 175,836   |                   |  
|Goodwill, net                              |                                                                                                                                         |                    | 306,939   |                   |  
|Intangible assets, net                     |                                                                                                                                         |                    | 224,169   |                   |  
|Receivable from SIRVA, Inc.                |                                                                                                                                         |                    | 27,284    |                   |  
|Other assets                               |                                                                                                                                         |                    | 108,086   |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Total long-term assets                     |                                                                                                                                         |                    | 842,314   |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Total assets                               |                                                                                                                                         | $                  | 1,366,944 |                   | $
|                                           |                                                                                                                                         |                    |           |                   |  
|Liabilities and Stockholder's Equity       |                                                                                                                                        
|Current liabilities:                       |                                                                                                                                         |                    |           |                   |  
|                                           | Current portion of long-term debt                                                                                                       |                    | $         | 20,628            |  
|                                           | Current portion of capital lease obligations                                                                                            |                    |           | 3,036             |  
|                                           | Revolving credit facilities and notes payable                                                                                           |                    |           | 6,921             |  
|                                           | Accounts payable                                                                                                                        |                    |           | 138,270           |  
|                                           | Other current liabilities                                                                                                               |                    |           | 322,588           |  
|                                           | Accrued income tax payable                                                                                                              |                    |           | 1,059             |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Total current liabilities                  |                                                                                                                                         |                    | 492,502   |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Long-term debt                             |                                                                                                                                         |                    | 525,555   |                   |  
|Capital lease obligations                  |                                                                                                                                         |                    | 14,228    |                   |  
|Due to SIRVA, Inc.                         |                                                                                                                                         |                    | 15,112    |                   |  
|Other liabilities                          |                                                                                                                                         |                    | 47,870    |                   |  
|Deferred income taxes                      |                                                                                                                                         |                    | 41,222    |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Total long-term liabilities                |                                                                                                                                         |                    | 643,987   |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Total liabilities                          |                                                                                                                                         |                    | 1,136,489 |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Commitments and contingencies              |                                                                                                                                         |                    |           |                   |  
|Stockholder's equity:                      |                                                                                                                                         |                    |           |                   |  
|                                           | Common stock, $.01 par value, 1,000 shares authorized, issued and outstanding at September 30, 2002 and December 31, 2001, respectively |                    |           |                  |  
|                                           | Additional paid-in-capital                                                                                                              |                    |           | 271,987           |  
|                                           | Accumulated other comprehensive loss                                                                                                    |                    |           | (13,887           | )
|                                           | Accumulated deficit                                                                                                                     |                    |           | (27,645           | )
|                                           |                                                                                                                                         |                    |           |                   |  
|Total stockholder's equity                 |                                                                                                                                         |                    | 230,455   |                   |  
|                                           |                                                                                                                                         |                    |           |                   |  
|Total liabilities and stockholder's equity |                                                                                                                                         | $                  | 1,366,944 |                   | $
|                                           |                                                                                                                                         |                    |           |                   |  

See accompanying notes to condensed consolidated financial statements.

2

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

|                                                   |                                              | Three Months Ended                                          |         | Nine Months Ended |       
|-------------------------------------------------- | -------------------------------------------- | ----------------------------------------------------------- | ------- | ----------------- | ------
|
|
|                                                   |                                              |                                                             |         |                   |       
|Operating revenues                                 |                                              | $                                                           | 674,169 |                   | $     
|Operating expenses:                                |                                              |                                                             |         |                   |       
|                                                   | Purchased transportation expense             |                                                             |         | 414,716           |       
|                                                   | Other direct expense                         |                                                             |         | 116,767           |       
|                                                   |                                              |                                                             |         |                   |       
|Total direct expenses                              |                                              |                                                             | 531,483 |                   |       
|Gross margin                                       |                                              |                                                             | 142,686 |                   |       
|                                                   | Insurance and claims                         |                                                             |         | 15,367            |       
|                                                   | Other indirect expense                       |                                                             |         | 3,575             |       
|                                                   |                                              |                                                             |         |                   |       
|Total indirect expenses                            |                                              |                                                             | 18,942  |                   |       
|                                                   | Selling, general and administrative expenses |                                                             |         | 78,634            |       
|                                                   | Intangibles amortization                     |                                                             |         | 1,300             |       
|                                                   | Restructuring charge (credit)                |                                                             |         |                  |       
|                                                   |                                              |                                                             |         |                   |       
|                                                   |                                              | Income from operations                                      |         |                   | 43,810
|Non-operating income (expense)                     |                                              |                                                             | (8      | )                 |       
|                                                   |                                              |                                                             |         |                   |       
|                                                   |                                              | Income before interest and taxes                            |         |                   | 43,802
|Interest expense                                   |                                              |                                                             | 13,834  |                   |       
|                                                   |                                              |                                                             |         |                   |       
|                                                   |                                              | Income (loss) before income taxes                           |         |                   | 29,968
|Provision (benefit) for income taxes               |                                              |                                                             | 11,542  |                   |       
|                                                   |                                              |                                                             |         |                   |       
|                                                   |                                              | Income (loss) before cumulative effect of accounting change |         |                   | 18,426
|Cumulative effect of accounting change, net of tax |                                              |                                                             |        |                   |       
|                                                   |                                              |                                                             |         |                   |       
|                                                   |                                              | Net income (loss)                                           |         | $                 | 18,426
|                                                   |                                              |                                                             |         |                   |       

See
accompanying notes to condensed consolidated financial statements.

3

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NORTH AMERICAN VAN LINES, INC.        Consolidated Statement of Changes in Stockholder's Equity        For the nine months ended September 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 11)                                                                |       |         | 21,527              |   |                                               | 21,527 |              |         |                           
|                                                         | Unrealized hedging gain, net of tax of $872                                                          |       |         | 1,308               |   |                                               |        |              |         | 1,308                     
|                                                         | Net change in unrealized holding loss on available-for-sale securities, net of tax benefit of $(875) |       |         | (1,312              | ) |                                               |        |              |         | (1,312                    
|                                                         | Foreign currency translation adjustment, net of tax of $2,781                                        |       |         | 4,105               |   |                                               |        |              |         | 4,105                     
|                                                         |                                                                                                      |       |         |                     |   |                                               |        |              |         |                           
|                                                         | Total comprehensive income (As restated, see note 11)                                                |       |         | 25,628              |   |                                               |        |              |         |                           
|                                                         | Additional capital contribution                                                                      |       |         | 83,037              |   |                                               |        |              |         |                           
|                                                         |                                                                                                      |       |         |                     |   |                                               |        |              |         |                           
|Balance at September 30, 2002 (As restated, see note 11) |                                                                                                      | $     | 230,455 |                     | $ | (27,645                                       | )      | $            | (13,887 | )                         
|                                                         |                                                                                                      |       |         |                     |   |                                               |        |              |         |                           

See
accompanying notes to condensed consolidated financial statements.

4

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

|                                                     |                                                                               | Nine Months Ended |         
|---------------------------------------------------- | ----------------------------------------------------------------------------- | ----------------- | --------
|
|Net cash provided by operating activities            |                                                                               | $                 | 46,738  
|                                                     |                                                                               |                   |         
|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               |                                                                               |                   | (107,885
|                                                     |                                                                               |                   |         
|Cash flows from financing activities:                |                                                                               |                   |         
|                                                     | Borrowings (repayments) on revolving credit facilities and notes payable, 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 |                                                                               |                   | 73,348  
|                                                     |                                                                               |                   |         
|                                                     | Effect of translation adjustments on cash                                     |                   |         
|                                                     |                                                                               |                   |         
|Net increase (decrease) in cash and cash equivalents |                                                                               |                   | 13,119  
|Cash and cash equivalents at beginning of period     |                                                                               |                   | 32,119  
|                                                     |                                                                               |                   |         
|Cash and cash equivalents at end of period           |                                                                               | $                 | 45,238  
|                                                     |                                                                               |                   |         

See
accompanying notes to condensed consolidated financial statements.

5

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

(1) Basis of Presentation

This report covers North American Van Lines, Inc., a Delaware corporation, and its subsidiaries (the "Company"). See restatement as further described in
note 11.

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 September 30, 2002 presentation.

(2) Acquisition Commitment, Acquisitions and Related Party



6

---



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
Sept 30, 2002

Three Months
Ended
Sept 30, 2001

Nine Months
Ended
Sept 30, 2002

Nine Months
Ended
Sept 30, 2001(As restated,
see note 11)



(As restated,
see note 11)Revenue

$
674,169

$
690,761

$
1,668,048

$
1,834,645Income (loss) before cumulative effect of accounting change

$
18,776

$
(3,430
)
$
23,234

$
(2,106
)Cumulative effect of accounting change, net of tax











(843
)Net income (loss)

$
18,776

$
(3,430
)
$
23,234

$
(2,949
)


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.

On
April 12, 2002, the Company purchased the business ("NAIT") conducted by 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, a deferred amount of $3,000 payable subject to maintaining a certain number of insured members as of
December 31, 2002 and 2003 and an actuarially determined amount to be paid during 2003 and 2004, based on insurance losses incurred with respect to policies issued during the year ended
December 31, 2001. 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. SIRVA obtained those proceeds from the sale of its common stock to Fund VI.

7

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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 is finalized. The preliminary allocation has resulted in acquired goodwill of $9,308 (as restated, see note 11).

On
December 31, 2001, the Company and Moveline, Inc. ("Moveline") completed a merger under an agreement and plan of merger ("Merger Agreement") dated as November 9, 2001,
through a stock-for-stock merger of Moveline and a wholly owned subsidiary of the Company ("Merger") with such subsidiary as the surviving corporation. Under the terms of the Merger Agreement,
Moveline's stockholders received shares of common stock of SIRVA for Moveline shares acquired in the Merger. During the three months ended September 30, 2002, an intercompany payable with SIRVA
of $26,537 associated with the Merger was converted by SIRVA to additional paid-in-capital (non-cash).

(3) Cash and Cash Equivalents

Cash and cash equivalents included $18,127 and $13,474 primarily relating to the Company's wholly owned insurance subsidiaries, at September 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:

September 30, 2002

December 31, 2001(As restated,
see note 11)Trade names, net

$
224,169

$
165,670Goodwill, net


306,939


247,559$
531,108

$
413,229


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

Nine Months Ended
September 30, 2002(As restated,
see note 11)Balance as of January 1, 2002

$
247,559Goodwill acquired:NAIT


9,308SIRVA Relocation


48,873Other acquisitions


1,199Balance as of September 30, 2002

$
306,939


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

8

---

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:

September 30, 2002

December 31, 2001(As restated,
see note 11)Moving ServicesNorth America

$
70,403

$
70,141Moving ServicesEurope and Asia Pacific


116,433


115,496Insurance Services


54,276


44,968Relocation Services


48,873


Global Relocation Services


289,985


230,605Logistics Services


16,954


16,954$
306,939

$
247,559


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

Three Months
Ended
Sept 30, 2002

Three Months
Ended
Sept 30, 2001

Nine Months
Ended
Sept 30, 2002

Nine Months
Ended
Sept 30, 2001(As restated,
see note 11)



(As restated,
see note 11)Net income (loss), as reported

$
18,426

$
(3,929
)
$
21,527

$
(4,149
)Amortization of goodwill and trade names





2,749





8,267Income tax provision





(1,100
)




(3,307
)Pro forma net income (loss)

$
18,426

$
(2,280
)
$
21,527

$
811


(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.

9

---

(6) Long-term Debt

Long-term debt consisted of the following:

September 30, 2002

December 31, 2001Revolving credit facility

$
46,000


Note payableTranche A


123,750

$
135,000Note payableTranche B


209,887


171,500Senior subordinated notes


150,000


150,000Other


16,546


868Total debt


546,183


457,368Less current maturities


20,628


16,958Total long-term debt

$
525,555

$
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 and 50% will be
paid in cash. The amount of accretion at September 30, 2002 was $207 and $104 for Seller Note A and Seller Note B, respectively.

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

(7) Commitments and Contingencies



10

---



(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 September 30, 2002, the Company has five reportable segments1) Moving Services-North America, 2) Moving Services-Europe and Asia Pacific,

11

---

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. and 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 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 nine-month periods ended September 30, 2002, income
from operations for the Insurance Services segment has been restated to record $500 and $1,000, respectively, of intangible amortization expense. See note 11.

The
Relocation Services segment is comprised of SIRVA Relocation and its wholly owned subsidiaries, which provide comprehensive relocation services nationally to companies and their
employees, including home sale services and relocation coordination services. For the three-month and nine-month periods ended September 30, 2002, income from operations for the Relocation
Services segment has been restated to record $800 and $1,300, respectively, of intangible amortization expense. See note 11.

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 supply chain management 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.

12

---

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

Nine Months EndedSept 30, 2002

Sept 30, 2001

Sept 30, 2002

Sept 30, 2001(As restated,
see note 11)



(As restated,
see note 11)RevenuesMoving ServicesNorth America

$
387,975

$
419,307

$
883,341

$
1,026,691Moving ServicesEurope & Asia Pacific


103,692


94,250


260,215


248,957Insurance Services


24,837


12,325


58,164


35,061Relocation Services


26,708


582


45,323


1,525Global Relocation Services


543,212


526,464


1,247,043


1,312,234Logistics Services


130,957


145,432


393,924


461,325Consolidated revenues

$
674,169

$
671,896

$
1,640,967

$
1,773,559Income (loss) from operationsMoving ServicesNorth America

$
23,075

$
18,808

$
32,924

$
18,442Moving ServicesEurope & Asia Pacific


12,694


9,379


17,480


17,148Insurance Services


6,203


3,172


15,957


10,896Relocation Services


3,616


(390
)

5,048


(426
)Global Relocation Services


45,588


30,969


71,409


46,060Logistics Services


(1,778
)

497


1,783


(3,293
)Consolidated income from operations

$
43,810

$
31,466

$
73,192

$
42,767


As ofSept 30, 2002

Dec 31, 2001(As restated,
see note 11)Total assetsMoving ServicesNorth America

$
463,566

$
417,651Moving ServicesEurope & Asia Pacific


342,269


304,271Insurance Services


195,609


142,846Relocation Services


168,386


1,215Global Relocation Services


1,169,830


865,983Logistics Services


197,114


229,831Consolidated total assets

$
1,366,944

$
1,095,814


13

---



(9) Restructuring

The following table provides details of restructuring for the nine months ended September 30, 2002:

Restructuring
Accrual as of
Dec 31, 2001

Restructuring
Credit

Payments

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

$
40

$


$
(40
)
$
Building leases and other


2,197


(842
)

(524
)

831Total restructuring cost

$
2,237

$
(842
)
$
(564
)
$
831


In
June 2001, the Company's Logistics Services operating segment established a program to exit the Parts Center business. The program 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 nine months ended September 30, 2002, the restructuring accrual was reduced when the Company was able to sublease certain Parts
Centers facilities earlier than originally estimated. As of September 30, 2002, 293 employees had been terminated.

(10) 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).

In
addition to the restatement discussed in note 11, the Company has restated the presentation of its consolidating condensed balanced sheets at September 30, 2002 and
December 31, 2001 and its consolidating condensed statements of operations for the three and nine-month periods ended September 30, 2002 and 2001 to properly reflect the earnings of its
subsidiaries on the equity method of accounting.

For
the three and nine-month period ended September 30, 2002, total operating expenses for the Parent and NAVL Consolidated columns below have been restated to record $1,000 and
$2,300, respectively, of intangible amortization expense. The Parent and NAVL Consolidated columns of the consolidating condensed balance sheet at September 30, 2002 have been restated
accordingly. See Note 11.

14

---

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

|                                             |                                    | September 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   |                                    | $                 
|                                             |                                    |                   

15

---

|                                             |                                    | 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   |                                    | $                
|                                             |                                    |                  

16

---

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

|                                  |  | Three months ended September 30, 2002 |        
|--------------------------------- |  | ------------------------------------- | -------
|
|
|                                  |  |                                       |        
|Operating revenues                |  | $                                     | 236,749
|Total operating expenses          |  |                                       | 230,130
|                                  |  |                                       |        
|Income from operations            |  |                                       | 6,619  
|Non-operating income (expense)    |  |                                       | 828    
|Interest expense                  |  |                                       | 12,341 
|Dividend income                   |  |                                       |       
|                                  |  |                                       |        
|Income (loss) before income taxes |  |                                       | (4,894 
|Provision for income taxes        |  |                                       | 7,019  
|Equity (income) loss              |  |                                       | (30,339
|                                  |  |                                       |        
|Net income (loss)                 |  | $                                     | 18,426 
|                                  |  |                                       |        

|                                     |  | Three months ended September 30, 2001 |        
|------------------------------------ |  | ------------------------------------- | -------
|
|                                     |  |                                       |        
|Operating revenues                   |  | $                                     | 235,730
|Total operating expenses             |  |                                       | 229,535
|                                     |  |                                       |        
|Income from operations               |  |                                       | 6,195  
|Non-operating income (expense)       |  |                                       | (92    
|Interest expense (income)            |  |                                       | 15,546 
|Dividend income                      |  |                                       |       
|                                     |  |                                       |        
|Income (loss) before income taxes    |  |                                       | (9,443 
|Provision (benefit) for income taxes |  |                                       | 15,942 
|Equity (income) loss                 |  |                                       | (21,456
|                                     |  |                                       |        
|Net income (loss)                    |  | $                                     | (3,929 
|                                     |  |                                       |        

17

---

|                                                           |  | Nine months ended September 30, 2002 |        
|---------------------------------------------------------- |  | ------------------------------------ | -------
|
|
|                                                           |  |                                      |        
|Operating revenues                                         |  | $                                    | 581,564
|Total operating expenses                                   |  |                                      | 567,330
|                                                           |  |                                      |        
|Income from operations                                     |  |                                      | 14,234 
|Non-operating income (expense) and minority interest       |  |                                      | 2,556  
|                                                           |  |                                      |        
|Income before interest, income taxes and accounting change |  |                                      | 16,790 
|Interest expense (income)                                  |  |                                      | 35,652 
|Dividend income                                            |  |                                      |       
|                                                           |  |                                      |        
|Income (loss) before income taxes                          |  |                                      | (18,862
|Provision for income taxes                                 |  |                                      | 2,290  
|Equity (income) loss                                       |  |                                      | (42,679
|                                                           |  |                                      |        
|Net income (loss)                                          |  | $                                    | 21,527 
|                                                           |  |                                      |        

|                                                     |  | Nine months ended September 30, 2001 |        
|---------------------------------------------------- |  | ------------------------------------ | -------
|
|                                                     |  |                                      |        
|Operating revenues                                   |  | $                                    | 651,836
|Total operating expenses                             |  |                                      | 653,011
|                                                     |  |                                      |        
|Income (loss) from operations                        |  |                                      | (1,175 
|Non-operating income (expense) and minority interest |  |                                      | (89    
|                                                     |  |                                      |        
|Income (loss) before interest and income taxes       |  |                                      | (1,264 
|Interest expense (income)                            |  |                                      | 45,792 
|Dividend income                                      |  |                                      | 75,106 
|                                                     |  |                                      |        
|Income (loss) before income taxes                    |  |                                      | 28,050 
|Provision (benefit) for income taxes                 |  |                                      | (7,940 
|Equity (income) loss                                 |  |                                      | 40,139 
|                                                     |  |                                      |        
|Income (loss) before accounting change               |  |                                      | (4,149 
|Cumulative effect of accounting change, net of tax   |  |                                      |       
|                                                     |  |                                      |        
|Net income (loss)                                    |  | $                                    | (4,149 
|                                                     |  |                                      |        

18

---

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

|                                                     |                                                                  | Nine months ended September 30, 2002 |        
|---------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------ | -------
|
|Net cash provided by operating activities            |                                                                  | $                                    | 21,435 
|                                                     |                                                                  |                                      |        
|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               |                                                                  |                                      | (85,573
|                                                     |                                                                  |                                      |        
|Cash flows from financing activities:                |                                                                  |                                      |        
|                                                     | Borrowings on revolving credit facilities and notes payable, 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 |                                                                  |                                      | 74,922 
|                                                     |                                                                  |                                      |        
|Effect of translation adjustment on cash             |                                                                  |                                      |       
|                                                     |                                                                  |                                      |        
|Net increase (decrease) in cash and cash equivalents |                                                                  |                                      | 10,784 
|Cash and cash equivalents at beginning of period     |                                                                  |                                      | 5,687  
|                                                     |                                                                  |                                      |        
|Cash and cash equivalents at end of period           |                                                                  | $                                    | 16,471 
|                                                     |                                                                  |                                      |        

19

---

|                                                     |                                                                  | Nine months ended September 30, 2001 |        
|---------------------------------------------------- | ---------------------------------------------------------------- | ------------------------------------ | -------
|
|Net cash provided by (used for) operating activities |                                                                  | $                                    | 40,545 
|                                                     |                                                                  |                                      |        
|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               |                                                                  |                                      | (17,453
|                                                     |                                                                  |                                      |        
|Cash flows from financing activities:                |                                                                  |                                      |        
|                                                     | Repayments on revolving credit facilities and notes payable, net |                                      |        
|                                                     | Change in balance of outstanding checks                          |                                      |        
|                                                     | Principal payments on long-term debt                             |                                      |        
|                                                     | Other financing activities                                       |                                      |        
|                                                     |                                                                  |                                      |        
|Net cash provided by (used for) financing activities |                                                                  |                                      | (23,618
|                                                     |                                                                  |                                      |        
|Effect of translation adjustment on cash             |                                                                  |                                      |       
|                                                     |                                                                  |                                      |        
|Net decrease in cash and cash equivalents            |                                                                  |                                      | (526   
|Cash and cash equivalents at beginning of period     |                                                                  |                                      | 2,027  
|                                                     |                                                                  |                                      |        
|Cash and cash equivalents at end of period           |                                                                  | $                                    | 1,501  
|                                                     |                                                                  |                                      |        

---

20

---

|Name                                                                |  | Incorporated
|------------------------------------------------------------------- |  | ------------
|A Relocation Solutions Management Company                           |  | Delaware    
|Allied Freight Forwarding, Inc.                                     |  | Delaware    
|Allied International N.A., Inc.                                     |  | Delaware    
|Allied Transportation Forwarding, Inc.                              |  | Delaware    
|Allied Van Lines, Inc.                                              |  | Delaware    
|Allied Van Lines Terminal Company                                   |  | Delaware    
|Corporate Transfer Service, Inc.                                    |  | Minnesota   
|CRS Acquisition Corp.                                               |  | Delaware    
|Federal Traffic Service, Inc.                                       |  | Indiana     
|Fleet Insurance Management, Inc.                                    |  | Indiana     
|FrontRunner Worldwide, Inc.                                         |  | Delaware    
|Global Van Lines, Inc.                                              |  | Indiana     
|Great Falls North American, Inc.                                    |  | Montana     
|Meridian Mobility Resources, Inc.                                   |  | Delaware    
|NACAL, Inc.                                                         |  | California  
|National Association of Independent Truckers, LLC                   |  | Delaware    
|North American Logistics, Ltd.                                      |  | Indiana     
|North American Van Lines of Texas, Inc.                             |  | Texas       
|ProSource Properties, Ltd.                                          |  | Ohio        
|Relocation Management Systems, Inc.                                 |  | Delaware    
|SIRVA Freight Forwarding, Inc.                                      |  | Indiana     
|(formerly known as NAVTRANS International Freight Forwarding, Inc.) |  |             
|SIRVA Relocation LLC                                                |  | Delaware    
|SIRVA Title Agency, Inc.                                            |  | Ohio        
|(formerly known as CRS Title Agency, Inc.)                          |  |             
|StorEverything, Inc.                                                |  | Delaware    
|U.S. Relocation Services, Inc.                                      |  | Delaware    
|Vanguard Insurance Agency, Inc.                                     |  | Illinois    

Each
Guarantor (other than SIRVA Title Agency, Inc.) is a wholly owned subsidiary of North American Van Lines, Inc. or its subsidiary, Allied Van Lines, Inc. and jointly
and severally, irrevocably and fully and unconditionally guarantees the punctual payment of debt issued under North American Van Lines, Inc.'s senior credit facility and senior subordinated notes.

(11) Restatement

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



21

---



In
addition to the restatement adjustment, the Company has reclassified goodwill of $306,939 and $247,559 in the accompanying balance sheets at September 30, 2002 and
December 31, 2001, respectively, from Goodwill and Intangible Assets, as previously reported, to a separate line item.

The
impact of the adjustments on the Company's consolidated financial statements is as follows (amounts in thousands):

Three months endedSeptember 30, 2002, as
originally reported

September 30, 2002,
as restatedIntangibles amortization

$


$
1,300Provision for income taxes


12,042


11,542Net income

$
19,226

$
18,426


Nine months endedSeptember 30, 2002, as
originally reported

September 30, 2002,
as restatedIntangibles amortization

$


$
2,300Provision for income taxes


13,570


12,670Net income

$
22,927

$
21,527


September 30, 2002As originally reported

As restatedGoodwill, net

$


$
306,939Intangible assets, net





224,169Goodwill and intangible assets, net


533,408


Deferred income taxes


42,122


41,222Accumulated deficit

$
(26,245
)
$
(27,645
)


December 31, 2001As originally reported

As restatedGoodwill, net

$


$
247,559Intangible assets, net





165,670Goodwill and intangible assets, net

$
413,229

$



22

---



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

Overview

On July 29, 2002, RS Acquisition, LLC, a subsidiary of SIRVA, Inc. ("SIRVA"), our parent, acquired The Rowan Group PLC (UK) and Rowan Simmons Conveyancing Limited
(UK) (together "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 with RS Acquisition, LLC, we agreed to acquire Rowan Simmons, excluding the homes inventory and associated mortgage liabilities, from RS Acquisition, LLC within six months from the
date of purchase for approximately $14.0 million. Since the acquistion will be between entities under common control, the transaction will be accounted for in a manner similar to a
pooling-of-interests.

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, SIRVA Relocation LLC
("SIRVA Relocation"), which we own directly, purchased all of such business' assets and equity other than the equity relating to certain mortgage lending operations of the seller. The mortgage lending
operations of the seller were purchased by the other subsidiary, CMS Holding LLC ("CMS Holding"), which is directly owned by SIRVA. The mortgage lending operations share common customers with the
other operations of SIRVA Relocation. 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 CMS
Holding. 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, a Cayman Islands exempted limited partnership managed by Clayton
Dubilier and Rice, Inc. ("Fund VI") and an affiliate of Clayton, Dubilier & Rice Fund V Limited Partnership, a Cayman Islands exempted limited partnership ("Fund V"), the
controlling shareholder of SIRVA, 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 is finalized. The preliminary allocation has
resulted in acquired goodwill of $48.9 million.

On
April 12, 2002, we purchased the business ("NAIT") conducted by 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, a deferred amount of $3.0 million payable subject to the completion of
certain operating performance objectives during 2002 and 2003 and an actuarially determined amount to be paid during 2003 and 2004, based on the ultimate losses incurred with respect to policies
issued during the year ended December 31, 2001. 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. SIRVA obtained those proceeds from the sale of its common stock to Fund VI. The cost to acquire the NAIT assets has been preliminarily allocated
to the

23

---

assets
acquired and liabilities assumed according to estimated fair values and is subject to adjustment when additional information concerning asset and liability valuations is finalized. The
preliminary allocation has resulted in acquired goodwill of $9.3 million.

Due
to these acquisitions, we have 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 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 SIRVA Relocation and its wholly-owned subsidiaries, which provide comprehensive relocation services nationally 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 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,

24

---

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 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.

25

---

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:



Operating
expenses include our 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.

26

---

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

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

|                               |                                         | Three Months
Ended
September 30,
2002 |       | Three Months
Ended
September 30,
2001 |   | % Increase
(Decrease) from
Prior Period(a) |      
|------------------------------ | --------------------------------------- | ------------------------------------- | ----- | ------------------------------------- | - | ------------------------------------------ | -----
|
|
|Operating revenues:            |                                         |                                       |       |                                       |   |                                            |      
|                               | Moving ServicesNorth America           |                                       | $     | 388.0                                 |   | $                                          | 419.3
|                               | Moving ServicesEurope and Asia Pacific |                                       |       | 103.7                                 |   |                                            | 94.3 
|                               | Insurance Services                      |                                       |       | 24.8                                  |   |                                            | 12.3 
|                               | Relocation Services                     |                                       |       | 26.7                                  |   |                                            | 0.6  
|                               |                                         |                                       |       |                                       |   |                                            |      
|                               | Global Relocation Services              |                                       |       | 543.2                                 |   |                                            | 526.5
|                               | Logistics Services                      |                                       |       | 131.0                                 |   |                                            | 145.4
|                               |                                         |                                       |       |                                       |   |                                            |      
|Operating revenues             |                                         | $                                     | 674.2 |                                       | $ | 671.9                                      |      
|                               |                                         |                                       |       |                                       |   |                                            |      
|Gross margin                   |                                         | $                                     | 142.7 |                                       | $ | 129.7                                      |      
|                               | Operating expenses                      |                                       |       | 97.6                                  |   |                                            | 98.3 
|                               | Intangibles amortization                |                                       |       | 1.3                                   |   |                                            |     
|                               | Restructuring                           |                                       |       |                                      |   |                                            | (0.1 
|                               |                                         |                                       |       |                                       |   |                                            |      
|Income from operations         |                                         | $                                     | 43.8  |                                       | $ | 31.5                                       |      
|                               |                                         |                                       |       |                                       |   |                                            |      
|Income (loss) from operations: |                                         |                                       |       |                                       |   |                                            |      
|                               | Moving ServicesNorth America           |                                       | $     | 23.1                                  |   | $                                          | 18.8 
|                               | Moving ServicesEurope and Asia Pacific |                                       |       | 12.7                                  |   |                                            | 9.4  
|                               | Insurance Services                      |                                       |       | 6.2                                   |   |                                            | 3.2  
|                               | Relocation Services                     |                                       |       | 3.6                                   |   |                                            | (0.4 
|                               |                                         |                                       |       |                                       |   |                                            |      
|                               | Global Relocation Services              |                                       |       | 45.6                                  |   |                                            | 31.0 
|                               | Logistics Services                      |                                       |       | (1.8                                  | ) |                                            | 0.5  
|                               |                                         |                                       |       |                                       |   |                                            |      
|Income from operations         |                                         | $                                     | 43.8  |                                       | $ | 31.5                                       |      
|                               |                                         |                                       |       |                                       |   |                                            |      

---

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 ShipmentsThree Months
Ended
September 30, 2002

Three Months
Ended
September 30, 2001

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

69,400

72,900

(4.8
)%International

9,100

10,800

(15.7
)%Logistics services:Specialized transportation

96,000

94,000

2.1
%European operations

83,800

90,500

(7.4
)%


Operating Revenues.Operating revenues for the three months ended September 30, 2002 were
$674.2 million, an increase of $2.3 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 September 30, 2002 decreased $31.3 million as compared to the three months ended
September 30, 2001 due primarily to the general economic slowdown. Shipments were lower in the AVL and NAVL lines approximately 7% and 3%, respectively, as compared to the same period last
year. This is a sequential improvement from the quarter ended June 30, 2002, in which shipments were down in the AVL and NAVL lines approximately 11% and 9%, respectively.

Revenue
in moving servicesEurope and Asia Pacific increased $9.4 million in the three months ended September 30, 2002 as compared to the three months ended
September 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 September 30, 2002 as compared to the three months ended September 30, 2001. This was partially offset by softness in U.K. industrial moving.

Revenue
in insurance services for the three months ended September 30, 2002 was $12.5 million higher as compared to the three months ended September 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 September 30, 2002 was $26.1 million higher as compared to the three months ended September 30, 2001. The increase
was due to the CRS acquisition.

Revenue
in logistics services decreased $14.4 million in the three months ended September 30, 2002 as compared to the three months ended September 30, 2001 due
primarily to reduced shipments within Europe and reduced activity levels in freight forwarding, due to the general economic slowdown. Specialized transportation shipments were 2.1% higher in the three
months ended September 30, 2002 as compared to the three months ended September 30, 2001, although revenue decreased because revenue per shipment was lower due to a mix shift in the type of shipments
handled. Also, revenues were $3.7 million lower than in the three months ending September 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 September 30, 2002 was $142.7 million, an increase of
$13.0 million compared to the three months ended September 30, 2001. The gross margin (as a percentage of sales) was 21.2% for the three months ended September 30, 2002 and was
19.3% for the three months ended September 30, 2001. This increase was due primarily to acquisitions, customer mix and operating and service delivery efficiencies.

28

---

Operating Expenses.Operating expenses for the three months ended September 30, 2002 were $97.6 million, a
decrease of $0.7 million compared to the three months ended September 30, 2001. 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 $2.7 million. Partially offsetting the above were higher
general and administrative expenses due to the incremental expenses of the companies we acquired. Also, bad debt expense was $1.9 million higher, primarily due to a reserve for a moving services
customer. As a percentage of revenue, operating expenses were 14.5% for the three months ended September 30, 2002, compared to 14.6% for the three months ended September 30, 2001.

Intangibles amortization.Intangibles amortization for the three months ended September 30, 2002 was
$1.3 million, due to the CRS and NAIT acquisitions.

Restructuring.In the three months ended September 30, 2001, we recorded $0.1 million of restructuring credit pertaining to
the logistics parts centers restructuring reserve, which was established at June 30, 2001, as we were able to sublease certain parts centers facilities earlier than originally estimated.

Income (Loss) from Operations.Income from operations for the three months ended September 30, 2002 was
$43.8 million, compared to $31.5 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 September 30, 2002 as compared to the three months ended September 30, 2001
increased $4.3 million primarily due to lower cargo loss and damage expenses, reduced general and administrative expenses and the elimination of goodwill amortization which was $1.2 million in
the three months ended September 30, 2001. These favorable variances were partially offset by lower Allied and northAmerican lines margins as a result of the revenue decrease and $1.9 million of bad
debt expense associated with a reserve for a moving services customer.

Income
from operations in moving servicesEurope and Asia Pacific increased $3.3 million in the three months ended September 30, 2002 as compared to the three
months ended September 30, 2001. Gross margin was higher due to revenue mix and an increase in volume. Goodwill amortization was $0 while for the three months ended September 30, 2001 it was
$1.1 million. This was partially offset by an increase in general and administrative expenses, due primarily to increased customer claims and incremental expenses associated with acquisitions.

Income
from operations in insurance services for the three months ended September 30, 2002 as compared to the three months ended September 30, 2001 increased
$3.0 million primarily due to higher margins due to increased revenue and the NAIT acquisition.

Income
from operations in relocation services for the three months ended September 30, 2002 as compared to the three months ended September 30, 2001 increased
$4.0 million primarily due to the CRS acquisition.

Loss
from operations in logistics services for the three months ended September 30, 2002 was $1.8 million, as compared to income from operations of $0.5 million in
the three months ended September 30, 2001. Margins were lower due to customer mix change and increased third party hauling costs. Revenue per shipment also decreased as a result of the customer
mix change. Insurance claims expense increased year-over-year. These unfavorable variances were partially offset by lower general
and administrative expenses, due to general cost containment and reduced headcount, the elimination of $0.4 million of goodwill amortization and the elimination of $0.5 million of losses
related to the parts centers business, which we exited at the end of 2001. Also, in the three months ended September 30, 2001, there were hedging losses of $0.1 million.

Interest Expense.Interest expense for the three months ended September 30, 2002 was $13.8 million compared to
$16.5 million in the three months ended September 30, 2001. This decrease is due primarily to lower interest rates and lower average borrowings.

29

---

Provision for Income Taxes.For the three months ended September 30, 2002, income tax expense
was $11.5 million
based on pre-tax income of $30.0 million. For the three months ended September 30, 2001, income tax expense was $18.8 million based on pre-tax income of $14.9 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.

Nine Months Ended September 30, 2002 Compared to Nine Months Ended September 30, 2001.

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

|                               |                                         | Nine Months
Ended
September 30,
2002 |         | Nine Months
Ended
September 30,
2001 |   | % Increase
(Decrease) from
Prior Period(a) |        
|------------------------------ | --------------------------------------- | ------------------------------------ | ------- | ------------------------------------ | - | ------------------------------------------ | -------
|
|
|Operating revenues:            |                                         |                                      |         |                                      |   |                                            |        
|                               | Moving ServicesNorth America           |                                      | $       | 883.3                                |   | $                                          | 1,026.7
|                               | Moving ServicesEurope and Asia Pacific |                                      |         | 260.2                                |   |                                            | 249.0  
|                               | Insurance Services                      |                                      |         | 58.2                                 |   |                                            | 35.1   
|                               | Relocation Services                     |                                      |         | 45.3                                 |   |                                            | 1.5    
|                               |                                         |                                      |         |                                      |   |                                            |        
|                               | Global Relocation Services              |                                      |         | 1,247.0                              |   |                                            | 1,312.3
|                               | Logistics Services                      |                                      |         | 394.0                                |   |                                            | 461.3  
|                               |                                         |                                      |         |                                      |   |                                            |        
|Operating revenues             |                                         | $                                    | 1,641.0 |                                      | $ | 1,773.6                                    |        
|                               |                                         |                                      |         |                                      |   |                                            |        
|Gross margin                   |                                         | $                                    | 345.4   |                                      | $ | 340.7                                      |        
|                               | Operating expenses                      |                                      |         | 270.7                                |   |                                            | 293.0  
|                               | Intangibles amortization                |                                      |         | 2.3                                  |   |                                            |       
|                               | Restructuring                           |                                      |         | (0.8                                 | ) |                                            | 4.9    
|                               |                                         |                                      |         |                                      |   |                                            |        
|Income (loss) from operations  |                                         | $                                    | 73.2    |                                      | $ | 42.8                                       |        
|                               |                                         |                                      |         |                                      |   |                                            |        
|Income (loss) from operations: |                                         |                                      |         |                                      |   |                                            |        
|                               | Moving ServicesNorth America           |                                      | $       | 32.9                                 |   | $                                          | 18.4   
|                               | Moving ServicesEurope and Asia Pacific |                                      |         | 17.5                                 |   |                                            | 17.2   
|                               | Insurance Services                      |                                      |         | 16.0                                 |   |                                            | 10.9   
|                               | Relocation Services                     |                                      |         | 5.0                                  |   |                                            | (0.4   
|                               |                                         |                                      |         |                                      |   |                                            |        
|                               | Global Relocation Services              |                                      |         | 71.4                                 |   |                                            | 46.1   
|                               | Logistics Services                      |                                      |         | 1.8                                  |   |                                            | (3.3   
|                               |                                         |                                      |         |                                      |   |                                            |        
|Income from operations         |                                         | $                                    | 73.2    |                                      | $ | 42.8                                       |        
|                               |                                         |                                      |         |                                      |   |                                            |        

---

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

30

---

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            |                     | 170,000 |  | 189,000
|                               | International              |                     | 23,300  |  | 29,900 
|Logistics services:            |                            |                     |         |  |        
|                               | Specialized transportation |                     | 284,900 |  | 300,500
|                               | European operations        |                     | 262,300 |  | 283,400

Operating Revenues.Operating revenues for the nine months ended September 30, 2002 were
$1,641.0 million, a decrease of $132.6 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 nine months ended September 30, 2002 decreased $143.4 million or 14% as compared to the nine months ended
September 30, 2001 due primarily to the continuation of the general economic slowdown. Shipments were lower by approximately 12%, 8% and 22% in the Allied and northAmerican lines and in the
international unit, respectively. The percentage of revenue decrease in the Allied and northAmerican lines was higher than the percentage decrease in shipments primarily due to served market mix.

Revenue
in moving servicesEurope and Asia Pacific increased $11.2 million in the nine months ended September 30, 2002 as compared to the nine months ended
September 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 nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001. This was partially offset by softness in U.K. industrial
moving.

Revenue
in insurance services for the nine months ended September 30, 2002 was $23.1 million higher as compared to the nine months ended September 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 nine months ended September 30, 2002 was $43.8 million higher as compared to the nine months ended September 30, 2001. The increase
was due to the CRS acquisition.

Revenue
in logistics services decreased $67.3 million in the nine months ended September 30, 2002 as compared to the nine months ended September 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 $13.5 million lower than in the nine months ending September 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 program volume with existing customers.

Gross Margin.Gross margin for the nine months ended September 30, 2002 was $345.4 million, an increase of
$9.7 million compared to the nine months ended September 30, 2001. The gross margin (as a percentage of sales) was 21.0% for the nine months ended September 30, 2002 and was 19.2%
for the
nine months ended September 30, 2001. This increase was due primarily to acquisitions, customer mix and operating and service delivery efficiencies.

Operating Expenses.Operating expenses for the nine months ended September 30, 2002 were $270.7 million, a
decrease of $22.3 million compared to the nine months ended September 30, 2001. Cargo loss and damage expenses were $9.7 million lower than in the same period in the prior year
due to

31

---

favorable
development of claim frequency and severity trends. 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 $8.3 million. Partially offsetting the above were higher general and administrative expenses due to
incremental expenses of our acquisitions. As a percentage of revenue, operating expenses were 16.5% for the nine months ended September 30, 2002, compared to 16.5% for the nine months ended
September 30, 2001.

Intangibles amortization.Intangibles amortization for the nine months ended September 30, 2002 was
$2.3 million, due to the CRS and NAIT acquisitions.

Restructuring.In the nine months ended September 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 nine months ended September 30, 2001, we
incurred $4.9 million of expense, due primarily to the logistics parts center restructuring.

Income from Operations.Income from operations for the nine months ended September 30, 2002 was $73.2 million,
compared to $42.8 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 nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001
increased $14.5 million primarily due to lower cargo loss and damage expense, reduced general and administrative expenses and the elimination of goodwill amortization which was
$3.7 million for the nine months ended September 30, 2001. Income from operations in moving servicesNorth America for the nine months ended September 30, 2002 was
also higher than for the nine months ended September 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 volume decrease.

Income
from operations in moving servicesEurope and Asia Pacific increased $0.3 million in the nine months ended September 30, 2002 as compared to the nine
months ended September 30, 2001. Gross margin was higher due to revenue mix. Goodwill amortization was $0 in the nine months ended September 30, 2002 and $3.4 million in the nine
months ended September 30, 2001. These favorable variances were partially offset by an increase in general and administrative expenses, due primarily to severance costs and increased customer
claims, and a year-over-year decrease of $0.5 million relating to gains on outstanding foreign currency exchange contracts.

Income
from operations in insurance services for the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001 increased $5.1 million
primarily due to higher margins due to increased revenue, the NAIT acquisition and a year-over-year derivative gain of $0.7 million.

Income
from operations in relocation services for the nine months ended September 30, 2002 as compared to the nine months ended September 30, 2001 increased $5.4 million
primarily due to the CRS acquisition.

Income
from operations in logistics services for the nine months ended September 30, 2002 was $1.8 million, an increase of $5.1 million compared to the nine months
ended September 30, 2001 due to lower general and administrative expenses and the elimination of $1.2 million of goodwill amortization. Also, in the nine months ended
September 30, 2001, losses related to the parts centers business, which we exited at the end of 2001, were $5.8 million. These favorable variances were partially offset by lower margins
due to the reduction in specialized transportation shipment volume and reduced activity in freight forwarding.

32

---

Interest Expense.Interest expense for the nine months ended September 30, 2002 was
$38.7 million compared to
$48.1 million in the nine months ended September 30, 2001. This decrease is due primarily to lower interest rates and lower average borrowings.

Provision (Benefit) for Income Taxes.For the nine months ended September 30, 2002, income tax expense was
$12.7 million based on pre-tax income of $34.2 million. For the nine months ended September 30, 2001, the income tax benefit was $1.3 million based on a pre-tax loss of
$5.1 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.

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 September 30, 2002, we had $570.4 million of indebtedness comprised of indebtedness for borrowed money and capital leases, consisting of



33

---



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 governing our parent company's senior discount debt, which as at September 30, 2002, had accreted
to $54.1 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 at September 30, 2002, had accreted to $54.1 million,
contain a number of similar restrictions.



Capital expenditures for 2002 are expected to approximate $31.0 million for computer equipment, software development and transportation and warehouse
equipment.

Financing Sources.As of September 30, 2002, there was approximately $77.7 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
$46.7 million, primarily due to net income, depreciation, an increase in accounts payable and other current liabilities, partially offset by seasonal growth in accounts receivable for the nine
months ended September 30, 2002, together with amounts available under the revolving credit facility and any other available source of liquidity will be

34

---

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 September 30, 2002 and December 31, 2001, the outstanding balance
was $3.9 million and $1.2 million, respectively.

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."



On July 1, 2002, we entered into a ten year purchase commitment 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, approximately 50% of application software development.
Covansys Corporation is a related party, as approximately 23% of its outstanding common stock is owned by Fund VI, an affiliate of Fund V. As of September 30, 2002, the remaining purchase
commitment was $181.2 million.



We were a defendant in a personal injury suit resulting from a 1996 accident involving one of our agent's drivers. The case was tried in 1998, and we were found
liable. After appeals, a final judgment remains to be paid as of September 30, 2002 in the amount of approximately $15.0 million. We believe the loss is fully covered by insurance; however, one
of our several co-insurers of this case has filed suit contesting its coverage obligations. If the co-insurer prevails, there is the possibility that a portion of the judgment will be uninsured. The
potential uninsured portion of the judgment ranges from $0 to approximately $7.2 million. We have a reserve that we consider appropriate within this range.



EBITDA for the historical periods presented is generally calculated in accordance with the definition of that term given in the senior credit agreement governing
our senior credit facility (including certain allowable adjustments). EBITDA is determined by combining income from operations, restructuring charges or credits, depreciation and amortization,
non-operating income (expense) and allowable EBITDA adjustments.

35

---

EBITDA,
as defined, is calculated as follows:

|                               |  | Three Months Ended
September 30,
2002 |      | Three Months Ended
September 30,
2001 |   | Nine Months Ended
September 30,
2002 |   | Nine Months Ended
September 30,
2001
|------------------------------ |  | ------------------------------------- | ---- | ------------------------------------- | - | ------------------------------------ | - | ------------------------------------
|
|
|                               |  |                                       |      |                                       |   |                                      |   |                                     
|Income from operations         |  | $                                     | 43.8 |                                       | $ | 31.5                                 |   | $                                   
|Restructuring charge (credit)  |  |                                       |     |                                       |   | (0.1                                 | ) |                                     
|Depreciation and amortization  |  |                                       | 11.6 |                                       |   | 12.4                                 |   |                                     
|Non-operating income (expense) |  |                                       |     |                                       |   | (0.1                                 | ) |                                     
|EBITDA adjustments             |  |                                       | 0.5  |                                       |   | 4.6                                  |   |                                     
|                               |  |                                       |      |                                       |   |                                      |   |                                     
|EBITDA                         |  | $                                     | 55.9 |                                       | $ | 48.3                                 |   | $                                   
|                               |  |                                       |      |                                       |   |                                      |   |                                     

EBITDA
adjustments have been included in this line item as follows: (a) in the three months ended September 30, 2002, we incurred $0.5 million of EBITDA adjustments
consisting of $0.2 million of EBITDA losses incurred by Moveline, permitted under an amendment to the credit agreement governing our senior credit facility, referred to as "Moveline Related
Strategic Initiatives", $0.2 million of e-commerce spending and $0.1 million for the development and implementation of new information technology; (b) in the three months ended
September 30, 2001 we incurred $4.6 million of EBITDA adjustments consisting of $2.0 million of Moveline Related Strategic Initiatives, $1.0 million of e-commerce spending,
$0.9 million for the development and implementation of new information technology and $0.7 million for additional expenses pertaining to exiting the parts centers business; (c) in
the nine months ended September 30, 2002, we incurred $3.3 million of EBITDA adjustments, consisting of $0.8 million of Moveline Related Strategic Initiatives, $1.3 million
of e-commerce spending and $1.2 million for the development and implementation of new information technology and (d) in the nine months ended September 30, 2001, we incurred
$12.8 million of EBITDA adjustments consisting of $8.0 million of Moveline related initiatives, $2.7 million of e-commerce spending, $0.3 million of expense
relating to achieving certain cost savings through synergies arising as a result of the acquisition of the Allied and Pickfords moving van business on November 19, 1999, $1.1 million for
the development and implementation of new information technology and $0.7 million of additional expenses pertaining to exiting the parts centers.

EBITDA
does not represent and should not be considered as an alternative to net income or cash flow from operations as determined by generally accepted accounting principles, and our
calculation thereof may not be comparable to that reported by other companies. We believe that it is widely accepted that
EBITDA provides useful information regarding a company's ability to service and/or incur indebtedness. EBITDA does not take into account a company's working capital requirements, debt service
requirements and other commitments and, accordingly, is not necessarily indicative of amounts that may be available for discretionary use.

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

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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 adopted
SFAS 144 on January 1, 2002 and the adoption did not have a significant impact on our financial condition and results of operations.

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 $3.3 million in the next year, and $3.8 million annually thereafter.

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 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 September 30, 2002. The intent of these agreements is to reduce interest rate risk by swapping an unknown variable interest
rate for a fixed rate.

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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 nine months ended September 30, 2002 and 2001, we recognized currency gains of
$0.1 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 September 30, 2002 and December 31, 2001 were $8.4 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 September 30, 2002 would result in a hypothetical loss of approximately $0.84 million. Changes in fair value
relating to these derivatives are recognized in current period earnings. For the nine months ended September 30, 2002 and 2001 we recognized a loss of $0.2 million and a gain of
$0.4 million, respectively, resulting from changes in the fair value of foreign currency derivaties.

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 nine months ended September 30, 2002 and 2001, we recognized $0.3 million and $1.0 million of losses, respectively.

Other
assets at September 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 nine months ended September 30, 2002, $0.8 million of restructuring credit occurred when we were able to sublease certain
parts center facilities earlier than originally estimated.

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 our 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/

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operators
and suppliers and other factors discussed in our prior Securities and Exchange Commission filings. We assume no obligation to update these forward-looking statements or advise of changes in
the assumptions on which they were based.

Controls and Procedures

Under the supervision and with the participation of management, our chief executive officer and chief financial officer have evaluated the effectiveness of the
design and operation of our disclosure controls
and procedures within 90 days of the filing date of this quarterly report, and, based on their evaluation, the chief executive officer and chief financial officer have concluded that these
controls and procedures are effective. There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their
evaluation. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures are also designed to ensure that
information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

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PART II.    Other Information

Item 1.Legal Proceedings

We were a defendant in a personal injury suit resulting from a 1996 accident involving one of our agent's drivers. The case was tried in 1998, and we were found
liable. After appeals, a final judgment remains to be paid as of September 30, 2002 in the amount of approximately $15.0 million. We believe the loss is fully covered by insurance; however, one
of our several co-insurers of this case has filed suit contesting its coverage obligations. If the co-insurer prevails, there is the possibility that a portion of the judgment will be uninsured. The
potential uninsured portion of the judgment ranges from $0 to approximately $7.2 million. We have a reserve that we consider appropriate within this range.

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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