<PAGE>   1
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                ----------------

                                    FORM 10-K
                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(MARK ONE)

 [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
        THE SECURITIES EXCHANGE ACT OF 1934

        FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

 [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
        THE SECURITIES EXCHANGE ACT OF 1934

        FOR THE TRANSITION PERIOD FROM              TO
                                      -------------    ------------

                         COMMISSION FILE NUMBER: 0-24639

                              RAILWORKS CORPORATION
             (Exact name of registrant as specified in its charter)

           DELAWARE                                     58-2382378
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

   6225 SMITH AVENUE, SUITE 200                           21209
        BALTIMORE, MARYLAND                             (Zip code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (410) 580-6000

        Securities registered pursuant to Section 12(b) of the Act: NONE

           Securities registered pursuant to Section 12(g) of the Act:

                     COMMON STOCK, PAR VALUE $.01 PER SHARE

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

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]

         The aggregate market value of the voting and nonvoting common equity
held by non-affiliates of the Registrant (assuming for these purposes, but
without conceding, that all executive officers and directors are "affiliates" of
the Registrant) as of March 15, 2001 (based on the closing sale price of the
Registrant's Common Stock as reported on The Nasdaq Stock Market on such date)
was approximately $32.8 million.


                                       1
<PAGE>   2

         As of March 15, 2001, the registrant had 15,369,759 shares of Common
Stock outstanding.


                       DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the Registrant's Consolidated Financial Statements and
Notes thereto for the fiscal year ended December 31, 2000 are incorporated by
references in Part I, II and IV. Portions of the Proxy Statement for the Annual
Meeting of Stockholders to be held on May 4, 2001 are incorporated by reference
in Part III.

================================================================================


                                       2
<PAGE>   3

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                      PAGE
                                                                    REFERENCE
                                                                    ---------
<S>          <C>                                                    <C>
                                     PART I
Item 1.      Business                                                   4
Item 2.      Properties                                                10
Item 3.      Legal Proceedings                                         11
Item 4.      Submission of Matters to a Vote of Security Holders       11

                                     PART II

Item 5.      Market for Registrant's Common Equity and Related         11
             Stockholder Matters
Item 6.      Selected Financial Data                                   11
Item 7.      Management's Discussion and Analysis of Financial         13
             Condition and Results of Operations
Item 7A.     Quantitative and Qualitative Disclosures About            24
             Market Risk
Item 8.      Financial Statements and Supplementary Data               24
Item 9.      Changes in and Disagreements with Accountants on          24
             Accounting and Financial Disclosure

                                    PART III

Item 10.     Directors and Executive Officers of the Registrant        25
Item 11.     Executive Compensation                                    26
Item 12.     Security Ownership of Certain Beneficial Owners           26
             and Management
Item 13.     Certain Relationships and Related Transactions            26

                                     PART IV

Item 14.     Exhibits, Financial Statement Schedules, and  Reports     26
             on Form 8-K
</TABLE>


                                       3
<PAGE>   4

                                     PART I


ITEM 1.    BUSINESS

         Unless the context otherwise requires, "we," "us," "our" or "RailWorks"
refers to the business of RailWorks Corporation and its subsidiaries.

COMPANY OVERVIEW

         Our company was formed in March 1998. In August 1998, we acquired in
separate concurrent transactions 14 groups of companies engaged principally in
the rail system services and products business and we consummated our initial
public offering, which we refer to as the IPO. We refer to these groups of
companies as the Founding Companies. Since August 1998 through December 31,
2000, we acquired an additional 21 companies or groups of companies. At December
31, 2000, we streamlined the structure of RailWorks by reducing the number of
individual operating companies through various mergers and dissolutions.

         We are a leading provider of integrated rail system services and
products to a diverse base of customers throughout North America. We provide a
full range of rail-related services and products on a "turnkey" basis throughout
North America and offer rail system solutions under the "RailWorks" brand. We
provide:

         -        track construction, rehabilitation, repair and maintenance;

         -        installation of electrification, communication and signaling
                  equipment and systems for rail applications; and

         -        related products and services.

         We provide these services to a wide variety of customers, including
Class I, regional and shortline railroads, passenger rail and rail transit
authorities and commercial and industrial companies. We also provide non-rail
products and services such as electrical contracting, bridge and highway support
structures and related concrete products to public agencies, commercial, power
and industrial customers.

SERVICES AND PRODUCTS

         We operate in three business lines:

         -        transit services;

         -        rail track services; and

         -        rail products and supplies.

         Information with respect to segment operations and segment financial
conditions as of and for the year ended December 31, 2000 is set forth in Note
18 of our Consolidated Financial Statements, which is incorporated herein by
reference.

Transit Services

         Our transit services business includes all products and services that
we provide to rail-based public transit agencies and authorities in various U.
S. metropolitan markets. We typically contract with these agencies to install:

         -        electric train traction power systems (by means of third rail
                  or overhead catenary wiring),

         -        train control and signal systems,

         -        train, station and control center communications systems,

         -        general electrical installations for lighting and other
                  applications, and

         -        tunnel and station track.

Projects for new public transit lines generally include the installation of all
of these systems. These projects may also involve track installation including
excavation, grading, paving and drainage improvements as well as other
rehabilitation projects.


                                       4
<PAGE>   5

         In addition, we leverage our knowledge of transit systems to provide
cost-effective mechanical services, including installation of heating and air
conditioning systems, ventilating and pump rooms, fan chambers, elevators and
escalators. We have experience with rubber tired vehicular people mover systems,
for which we have installed concrete guided trackway, power guide beams, central
guidance rails, walkways and handrails.

         The duration and size of our transit contracts vary greatly depending
on the scope of the project. Contracts for work on large-scale transit projects
can exceed $100 million in value and take four or more years to complete. We
have performed installations for most of the country's major transit
authorities, including those in Atlanta, Boston, Chicago, Los Angeles, New York,
Philadelphia, Portland (Oregon), San Diego, San Francisco, St. Louis and
Washington, D.C. We generally perform our services as either a prime contractor
directly to the transit agencies or as a subcontractor to large civil
engineering companies or equipment manufacturers.

         Contracts with transit authorities are competitively bid and awarded on
a fixed price basis generally to the lowest bidder. As a result, we focus our
business to:

         -        provide accurate bid estimating to both win contracts and
                  ensure a profit, and

         -        monitor costs to ensure that projects are completed on time
                  and within budget.

         Our bid preparation and submission process is highly involved and draws
on the expertise of many individuals within RailWorks. We carefully consider a
variety of factors, including material prices, local labor rates and practices,
our knowledge of the work site and practices of the transit authorities. We have
a rigorous project review process that continually monitors the incurred labor
and material costs against an initial plan in order to minimize overruns.

         As an outgrowth of our transit-related business, we also perform
commercial real estate electrical installation work in the New York City
metropolitan area and industrial electrical installation work throughout the
United States. Contracts for these projects are pursued on an opportunistic
basis; that is, when we have resources available and can realize attractive
returns.

Rail Track Services

         Our rail track services business consists of providing rail design,
construction and maintenance services to Class I, regional and shortline
railroads and industrial companies with on-site rail infrastructure. Rail design
is a highly specialized discipline and only a limited number of companies
provide these services. We utilize our rail design capabilities to facilitate
access to rail track construction and maintenance projects. By having the
ability to provide integrated design-build services, we have been successful in
increasing our project flow.

         Our rail track services primarily involve the construction of main line
segments, passing sidings, rail yards, connector segments between railroads and
industrial sites, turnouts and track and road intersections. Track maintenance
is generally provided under annual and multi-year contracts with customers.
Maintenance contracts provide recurring revenues and give us access to new track
projects from the same customer. Additional rail track services include the
removal of tracks that are no longer in use, switch grinding, railcar switching
and track equipment repair for railroads and rail transit agencies.

         Rail construction and maintenance are highly complex processes that
usually involve numerous separate parties that design, supply and construct the
different elements of the track. Following the design stage, construction
entails:

         -        site preparation and grading,

         -        the laying of gravel ballast or concrete surfacing to provide
                  a solid track fixation medium,

         -        the positioning of cross ties,

         -        securing rail with high precision using metal plates, spikes
                  and clamps,

         -        installing complex track crossings and turnouts, and

         -        installing other track related systems such as signal,
                  communications and automatic train control and safety devices.

         We believe that our ability to bundle these services on a turnkey basis
gives us a significant competitive advantage.


                                       5
<PAGE>   6

         We provide our rail services on a nationwide basis through a network of
regional operating centers. In contrast, most of our rail track services
competitors are focused on one geographic region. We believe that this results
in a competitive advantage for us due to our presence in virtually all regional
markets and our ability to direct equipment and labor resources to regions with
higher demand. We also maintain track and track material inventory at most of
our locations. By coordinating information across our network we are able to
maximize inventory utilization and improve supply for projects in different
regions.

Rail Products and Supplies

         Our rail products and supplies business consists of specialty wood and
concrete products, rail fastening systems and specialized track maintenance
services. We sell our rail products and supplies directly to contractors
(including our own subsidiaries) and to Class I, regional and shortline
railroads that perform their own track installation and maintenance. Some of our
products are used in non-rail applications such as highway construction (precast
concrete structures) and decorative landscaping (used wood ties).

         We provide full service handling of specialty wood products used by
railroads. Our wood products, which we manufacture in five of our facilities,
include cross ties and switch and bridge timbers. Our wood treating operations
consist of pressure-treating pre-cut hardwood beams to provide weather-proofing.
Treated cross-ties and timbers are used for securing rail for tracks or
assembled to construct bridge support structures. In addition, we operate five
facilities that prepare used, treated wood products for disposition utilizing a
proprietary technology.

         We manufacture concrete products, which consist primarily of pre-cast
structural components for bridges and other support structures. Our concrete
operations consist of pouring mixed concrete into large molds to create
specialized structural support components.

         We also design and manufacture rail fastening systems, which are
primarily used in overhead and portal crane rail applications.

         Our product capabilities provide us with an advantage in supplying our
track construction and maintenance operations. This is particularly important in
the context of wooden cross-ties as the market has experienced shortages in the
past. There are a limited number of cross-tie manufacturing facilities in North
America due to stringent environmental regulations. We have also developed
strong customer relationships through product sales, particularly with Class I,
regional and shortline railroads.

ACQUISITIONS/DISPOSITIONS

         We believe that, through the acquisition program that has been executed
by RailWorks since its formation, we have established RailWorks as one of the
few companies capable of providing its range of products and services throughout
North America. In September 2000, we suspended our active acquisition program
and re-directed our efforts to optimizing the efficiency of our operations and
improving strategic focus. As a result, we have determined that those operations
which do not enhance the opportunity for achievement of our long-term strategic
goals should be sold.

         During 2000 and for the period of 2001 prior to the date of preparation
of this report, we acquired or disposed of the following companies:

<TABLE>
<CAPTION>
                                                                  FISCAL 1999
   TRANSACTION                NAME OF            ACQUISITION/     REVENUE ($)
      DATE                    COMPANY            DISPOSITION     (in millions)      HEADQUARTERS      BUSINESS LINE
----------------    ---------------------------  ------------    -------------   ------------------  ---------------
<S>                 <C>                          <C>             <C>             <C>                 <C>
April 2000          Breaking Technology &         Acquisition          3.0       New York, NY        Transit services
                    Equipment, Inc.

May 2000            Hovey Industries, Ltd.        Acquisition          7.0       Gloucester, Ont.    Rail products
                                                                                 Canada              and services

May 2000            The Western Tar Products      Acquisition         15.0       Terre Haute, IN     Rail products
                    Corporation                                                                      and services

June 2000           HSQ Corporation               Acquisition         25.0       South San           Transit services
                                                                                 Francisco, CA
</TABLE>

                                       6
<PAGE>   7

<TABLE>
<S>                 <C>                           <C>                  <C>       <C>                 <C>
July 2000           Advanced Railroad             Acquisition          2.0       Prairieville, LA    Track services
                    Specialties, Inc.

February, 2001      FCM Rail, Ltd.                Disposition          5.6       Detroit, MI         Rail products
                                                                                                     and services
</TABLE>

SOURCES OF SUPPLY

         Our transit services group purchases equipment from a limited number of
suppliers. These suppliers include primarily manufacturers of communications,
electrification and signaling and control equipment and systems for rail
applications. Our rail track services business sources rail and other track
materials (primarily metal components such as plates and spikes) from

         -        the reclamation of existing track that is no longer in use,

         -        track materials brokers and

         -        manufacturers.

         We purchase new rail from a limited number of suppliers. New rail is
generally installed only on main lines, where the track may carry high volumes
of heavy traffic at high speeds. Over time, rail is removed, inspected and, if
in the appropriate condition, refurbished for sale as "re-lay" rail. Re-lay rail
is typically installed on secondary (non-main line) tracks, as well as yard or
branch tracks. Total rail life before scrapping may be as long as 60 years. We
also purchase a large volume of re-lay rail that is refurbished by third parties
for resale.

         Similarly, we regularly purchase entire sections of track that are
removed and subsequently disassembled at our facilities. We inspect the various
track components -- rail, ties and accessories -- and place items into our
inventory (either in their "as removed" condition or after being refurbished by
third parties) or sell these items for scrap.

         We also process creosote-treated wooden ties. These operations include
the purchase of raw lumber, trimming the lumber to specified sizes, pressurized
impregnation of the lumber with creosote preservative and finishing of the ties
(which could include the pre-drilling of spike holes and the attachment of
plates, as specified by the customer).

         We believe we can purchase materials in sufficient quantities to permit
us to realize purchasing economies and discounts from our suppliers.
Historically, the cost of the lumber used to produce wooden ties, steel used to
produce rail and copper used to produce electrical wiring has fluctuated
significantly due to market and industry conditions. Increasing demand for these
raw materials may result in cost increases. We may not be able to recoup any
such increases by increasing the prices of our products. Further, a reduction in
availability of lumber, steel or copper could have an adverse effect on our
business, financial condition and results of operations.

SALES AND MARKETING

         We maintain a targeted national sales program to assist in the
development of the business of each of our operating companies. The focus of
this initiative is on the Class I railroads and other large industrial companies
with facilities in several geographic regions. Prior to their acquisition by us,
our operating companies had been unable to serve such customers on a
comprehensive, nationwide basis. Our expansive geographic coverage enables
customers to use our services and products in multiple locations rather than
dealing with numerous regional or local companies. In addition, our ability to
offer electrical installation services together with rail construction,
rehabilitation, repair and maintenance services and related products provides us
with opportunities to cross-sell our services to large industrial companies.

         We have achieved significant synergies in our marketing programs. We
have developed and will continue to refine cross-selling programs under which:

         -        our design and engineering groups provide timely leads to our
                  rail services, product supply and electrical installation
                  subsidiaries,

         -        our electrical signaling and communications subsidiaries,
                  which have previously used third parties for track engineering
                  and construction, use other subsidiary operating companies for
                  these projects, and

         -        our rail services subsidiaries contract with other subsidiary
                  operating companies for signaling, communication and
                  electrical installation services.


                                       7
<PAGE>   8
          Similarly, our product supply subsidiaries have, over the years,
developed long-term relationships with the Class I railroads and large
industrial companies, and we believe that these relationships provide an
attractive basis for marketing our installation and maintenance services.

BIDDING AND CONTRACTS

         Our transit services group derives a substantial portion of its revenue
from contracts entered into through a competitive bidding process. Public
agencies, such as the New York City Transit Authority, which we refer to as
"NYCTA," that solicit bids are generally required to accept the lowest cost
proposal. In some cases, the party that submitted the low bid must first pass a
technical qualification before being awarded a project. Following the acceptance
of a bid, we typically enter into a contract with the customer. The activities
of our rail track services and rail products and supply groups usually do not
involve long-term contracts.

         Many projects that are competitively bid require the company that is
awarded the project to post a bond, which varies according to the size of the
project. Each company has a bonding limit, which is based on the company's
working capital, net worth and work in progress. The bond provides the customer
with insurance in the event that the company is unable to complete the project.
Our size, as compared to our operating companies on a stand-alone basis,
facilitates increased bonding limits for each operating company and thereby
improves their ability to bid on and undertake significantly larger projects. We
believe that our increased bonding capacity permits us to bid on and undertake
more projects than smaller companies in our industry.

CUSTOMERS

         The following table lists our top four customers for 2000 (by revenue
recognized) for each of our lines of business:

<TABLE>
                  <S>                                         <C>
                  TRANSIT SERVICES:
                  New York City Transit Authority             $105,108,000
                  Dick Corporation                              22,817,000
                  Turner Construction                           17,684,000
                  City and County of San Francisco              10,312,000

                  RAIL TRACK SERVICES:
                  Union Pacific Railroad                       $22,570,000
                  Kansas City Southern                          15,840,000
                  Louisiana Department of Transportation         7,896,000
                  Hensel Phelps                                  6,505,000

                  RAIL PRODUCTS AND SUPPLIES:
                  Burlington Northern & Santa Fe                $3,114,000
                  Jensen Construction Co.                        1,617,000
                  Ferguson Prestress                             1,240,000
                  AmericanStone-Mix, Inc.                        1,227,000
</TABLE>

         We derived approximately 37.4% of our revenue for the year ended
December 31, 2000 from our top ten customers. Approximately 17.1% of our 2000
revenue was derived from projects undertaken for the NYCTA. These projects were
undertaken under a number of separate contracts. If the NYCTA were to
significantly reduce the amount of business that it does with us or determine
not to do business with us in the future, it would have a material adverse
effect on our business, financial condition and results of operations. No
customer other than NYCTA accounted for more than 3.7% of our revenue for the
year ended December 31, 2000.

BACKLOG

         At December 31, 2000, our total order backlog was approximately $897
million, of which 78.1% represents backlog under transit services group
contracts. At December 31, 1999, our total order backlog was approximately $750
million, of which 72.6% represented backlog under transit services group
contracts. Our backlog is not necessarily indicative of total future revenue. We
expect to recognize revenue of approximately 60% of our ending 2000 backlog
during 2001.


                                       8
<PAGE>   9

COMPETITION

         The rail system services and products industry is highly competitive,
and projects are often awarded through competitive bidding. We compete with
other rail system services, rehabilitation and maintenance companies, electrical
contractors and suppliers of products. Certain competitors have significantly
greater resources than we do, provide a broad range of services and products and
have sufficient bonding capacity to undertake large projects. We compete on the
basis of our breadth of services and products, ability to take on large projects
and nationwide presence. Any inability to compete successfully against future
competitors would have a material adverse effect on our business, results of
operations and financial condition. Moreover, we may depend in part upon
opportunities for consolidation in the rail system services and products
industry in order to execute effectively our business strategy. If our customers
do not respond favorably to our strategy, they have numerous alternative sources
of services and supply.

RISK MANAGEMENT AND SAFETY

         Because our business is labor intensive, workers' compensation is a
significant operating expense for us. We could be exposed to liability for the
acts or negligence of our employees who cause personal injury or damage while on
assignment, as well as claims of misuse of customer proprietary information or
theft of client property. We have adopted policies and procedures intended to
reduce our exposure to these risks.

         We maintain insurance against these risks with policy limits that we
consider sufficient and consistent with industry standards. We have established
a risk management department that is responsible for claims management and the
establishment of appropriate reserves for the deductible portion of claims. We
hold regular meetings with the presidents of our operating companies at which
safety issues are discussed. We also conduct routine safety inspections of local
work sites.

EQUIPMENT

         We own and maintain specialized equipment used in rail construction,
rehabilitation, repair and maintenance. This equipment may be moved between job
sites and, consequently, we are seeking to increase the sharing of equipment
between our subsidiary operating companies where it is appropriate and cost
effective. For example, during the winter months, our operating companies
located in the Northern United States could relocate their equipment to our
operating companies located in the South. Each of our subsidiary operating
companies generally performs its own equipment maintenance.

GOVERNMENT REGULATION

         Overview. In addition to the environmental, safety and other
regulations generally applicable to all businesses, our business is impacted by
regulations that are administered by the Surface Transportation Board, which we
refer to as the STB, the successor to the Interstate Commerce Commission, which
we refer to as the ICC, the Federal Transit Administration, which we refer to as
the FTA, the Federal Railroad Administration, which we refer to as the FRA, and
by regulatory agencies in the various states in which we and our customers do
business. Since 1980, there has been a significant relaxation in regulations
governing the sale, leasing or other transfer of railroad properties, and this
change has favorably affected the operations of many of our customers. Various
interests in the United States have sought and continue to seek re-imposition of
government controls on the railroad industry in areas deregulated in whole or in
part since 1980, including stricter rate regulation and more onerous labor
protection conditions for rail line transfers.

         Railroad Regulations. The ICC Termination Act, which was enacted on
December 29, 1995, eliminated the ICC as an independent agency and created the
STB, a new agency within the Department of Transportation that began functioning
on January 1, 1996. The ICC Termination Act changed the procedure and timing for
federal approval of railroad projects, including abandonments, line sales,
mergers, rates and tariffs, simplifying and streamlining the abandonment
process. The FRA regulates railroad safety and equipment standards, including
track maintenance and train speed standards, special procedures for handling
hazardous shipments, locomotive and railcar inspection and repair requirements,
operating practices and crew qualifications. The Roadway Worker Protection
Rules, which were promulgated by the FRA, apply to rail contractors and
establish certain safety criteria that must be complied with on rail projects.


                                       9
<PAGE>   10

         Transit Regulations. The FTA regulates certain aspects of rail transit
operations and provides significant funding for rail transit construction and
operations. On June 9, 1998, the President signed the Transportation Equity Act
for the 21st Century ("TEA 21"), a six-year surface transportation program that
represents a significant development in federal funding of rail transit
programs. TEA 21, the largest infrastructure funding bill in U.S. history,
authorizes funding for transit in the amount of $42 billion through 2003. This
authorization is over 50% more than the funding under the 1991 Intermodal
Surface Transportation Efficiency Act, whose funding has expired.

         State Regulatory Agencies. State regulatory agencies no longer have
authority to engage in economic regulation of railroads that are part of the
intrastate network. State and local governments generally retain jurisdiction
over local rail safety matters, such as the installation of grade crossings and
grade crossing warning devices.

ENVIRONMENTAL MATTERS

         Our operations and properties are subject to environmental laws and
regulations relating to pollution and protection of the environment and public
and employee health and safety. The principal environmental regulatory
requirements applicable to our operations relate to the use of creosote to treat
lumber, and the generation, storage, transportation, treatment and disposal of
solid and hazardous wastes. We believe that our operations have all required
environmental permits and currently are in compliance, in all material respects,
with applicable regulatory requirements.

         We have had environmental assessments performed for recent
acquisitions. Based on these reports and available information, we are not aware
of any significant environmental exposures or claims against us. However, the
historical and current uses of our facilities may have resulted in spills or
releases of various hazardous materials, which now, or in the future, could
require remediation or special monitoring. We also may be subject to
requirements related to remediation of hazardous materials that have been
released into the environment at properties that we own or operate, or owned or
operated in the past or at properties to which we send, or may have sent,
hazardous materials for treatment or disposal. Such remediation requirements
generally are imposed without regard to fault, and liability for any required
environmental remediation can be substantial.

EMPLOYEES

         As of December 31, 2000, we employed approximately 3,320 employees. We
believe that our relations with our employees are good.

         Approximately 55% of our employees are members of labor unions and are
employed pursuant to collective bargaining agreements. Certain of our operating
companies are parties to collective bargaining agreements with the International
Brotherhood of Electrical Workers, Laborers' International Union of North
America, the International Union of Operating Engineers, United Brotherhood of
Carpenters and Joiners of America and the United Brotherhood of Teamsters.
Certain of our customers only hire unionized labor. Our largest collective
bargaining agreement, covering approximately 1,000 employees, expires in June
2001. We have not experienced any work stoppages in the past five years.

INFORMATION TECHNOLOGY SYSTEMS

         We have installed the basic elements of an integrated information
technology system that is being utilized by each of our operating companies for
a variety of purposes; including monitoring inventory levels, tracking the
progress of construction projects and integrating our financial, general ledger,
payables and receivables functions. In addition, we have networked our corporate
offices to the offices of our operating companies and are currently working on
the upgrade of selected features of the system. We expect upgrading of our
information technology systems to be a continuous process.

ITEM 2.    PROPERTIES

         Our corporate offices currently consist of approximately 15,000 square
feet of leased space in a suburb of Baltimore, Maryland. In addition to our
corporate offices, we lease or own numerous facilities throughout the United
States and Canada. These facilities consist of local offices, storage yards,
distribution facilities, warehouses and manufacturing and wood processing
plants. We believe our existing facilities are sufficient to meet the existing
demand for our services and that our facilities are in good condition.


                                       10
<PAGE>   11

ITEM 3.  LEGAL PROCEEDINGS

         From time to time, we may be involved, either as a plaintiff or a
defendant, in routine legal proceedings incidental to the conduct of our
business. In addition, on January 3, 2001, Steven G. Hutchinson, Douglas W.
Hutchinson and C. C. Hutchinson commenced an action against Neosho Incorporated
("Neosho," a subsidiary of the Company) and the Company in the District Court of
Shawnee County, Kansas. Plaintiffs allege breach of the contract between
plaintiffs and the Company, dated June 3, 1999, pursuant to which the Company
purchased all of the stock of Neosho (the "SPA"), and the related employment
agreements between each of the plaintiffs and Neosho. In addition, plaintiffs
allege fraudulent misrepresentation arising out of the same transaction. The
total amount claimed by plaintiffs cannot be determined at this time but could
exceed $5 million if plaintiffs are successful on all counts. The Company has
denied all allegations and has asserted counterclaims for indemnification under
the SPA which, if successful, would result in a recovery by the Company in the
maximum amount allowed under the SPA ($8 million). In the opinion of management,
the litigation to which we are currently a party is not likely, individually or
in the aggregate, to have a material adverse effect on our business, financial
condition and results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         Our Common Stock has been traded on the Nasdaq National Market since
July 29, 1998, under the symbol of "RWKS".

         Our initial public offering price was $12.00 per share. The following
table sets forth the range of high and low closing prices for the Common Stock
on the Nasdaq National Market for the periods indicated:

<TABLE>
<CAPTION>
                                  Year ended December 31,      Year ended December 31,      Year ended December 31,
                                  -----------------------    -------------------------   ---------------------------
                                           2001                         2000                        1999
                                  -----------------------    -------------------------   ---------------------------
                                    High           Low         High             Low        High               Low
                                  --------       --------    --------        ---------   --------          ---------
               <S>                <C>            <C>         <C>             <C>         <C>               <C>
               Fourth quarter          --           --       $  3.375         $1.5312     $ 11.00            $8.25
               Third quarter           --           --          10.50          3.4375      10.375             8.75
               Second Quarter          --           --          10.75           8.125       12.00             9.25
               First Quarter       2.8125         1.50        12.3125           9.375       11.50             7.75
</TABLE>

         As of March 15, 2001, there were 135 holders of record of our Common
Stock.

         We have not paid dividends on our Common Stock since inception. The
payment of dividends in the future, if any, will be determined by the Board of
Directors.

ITEM 6.  SELECTED FINANCIAL DATA

         The following table sets forth selected consolidated financial data
with respect to the Company and is qualified by reference to the Consolidated
Financial Statements and Notes thereto included in Part IV hereof.


                                       11
<PAGE>   12

<TABLE>
<CAPTION>
                                                      RAILWORKS                             PREDECESSOR
                                                                                              COMPANY
                                                              YEAR ENDED DECEMBER 31,
                                       -----------------------------------------------------------------------
                                        2000(4)         1999(3)         1998(2)         1997(1)       1996(1)
                                       ---------       ---------       ---------       ---------     ---------
                                                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                    <C>             <C>             <C>             <C>           <C>
STATEMENT OF OPERATIONS DATA:
Revenue                                $ 614,037       $ 468,105       $ 212,533       $ 153,610     $ 188,767
Cost of revenue
                                         500,604         369,083         182,817         136,678       169,303
Gross profit
                                         113,433          99,022          29,716          16,932        19,464
Selling, general and
 administrative expenses
                                          71,609          50,434          19,145          13,520        16,418
Restructuring and other unusual
 charges (6)
                                          63,338              --              --              --            --
Non-recurring expenses
                                              --              --          19,965              --            --
Transaction fees
                                              --              --           1,281              --            --
Operating income (loss)
                                         (21,514)         48,588         (10,675)          3,412         3,046
Interest expense
                                         (37,888)        (20,054)         (2,334)         (1,761)       (2,023)
Interest and other income
                                           2,282           2,615           1,634             975           476
Income (loss) before income taxes
                                         (57,120)         31,149         (11,375)          2,626           558
Net income (loss)
                                         (59,995)         20,086         (12,847)          1,428            58
Basic earnings (loss) per share
                                           (4.04)           1.44           (1.67)            .48            --
Diluted earnings (loss) per share
                                           (4.04)           1.31           (1.67)            .48            --

<CAPTION>

                                                      RAILWORKS                             PREDECESSOR
                                                                                              COMPANY
                                                                AS OF DECEMBER 31,
                                       ----------------------------------------------------------------------
                                        2000(4)         1999(3)         1998(2)         1997(1)      1996(1)
                                       ---------       ---------       ---------       ---------    ---------
                                                                  (DOLLARS IN THOUSANDS)
<S>                                    <C>             <C>             <C>             <C>          <C>
BALANCE SHEET DATA:
Working capital (5)                     $119,980       $119,270        $ 67,391         $26,500     $19,257

Total assets
                                         618,846        571,657         228,636          68,352      84,344
Total debt
                                         380,899        294,431          51,504          15,004      24,890
Stockholders' equity
                                          85,005        135,881         110,008           1,438      16,990
</TABLE>

----------------

(1)      The selected historical consolidated financial data as of and for the
         fiscal years ended December 31, 1996 and 1997 are derived from the
         financial statements of Comstock Holdings, Inc., and its predecessor,
         L. K. Comstock & Company, Inc., for the respective periods. For
         accounting and financial statement purposes, Comstock Holdings, Inc.
         (one of the Founding Companies, as defined below) was identified as the
         "Accounting Acquirer" consistent with the requirements of SAB No. 97 of
         the SEC. All other acquisitions have been accounted for as purchases in
         accordance with APB No. 16.

(2)      The selected historical consolidated financial data as of and for the
         year ended December 31, 1998 are derived from our Consolidated
         Financial Statements, which are comprised of financial data of:

         -        Comstock Holdings, Inc., the Accounting Acquirer, for the year
                  ended December 31, 1998;

         -        the 14 groups of companies which are engaged principally in
                  the rail system services and products business and which were
                  acquired in August 1998 in separate concurrent transactions
                  (the "Founding Companies"), other than Comstock Holdings,
                  Inc., for the period from August 1, 1998 through December 31,
                  1998; and

         -        the two companies we acquired in November 1998 (the "1998
                  Acquired Companies") from each of their respective dates of
                  acquisition through December 31, 1998.

(3)      The selected historical consolidated financial data as of and for the
         year ended December 31, 1999 are derived from our Consolidated
         Financial Statements, which are comprised of financial data of all
         companies that we owned as of January 1, 1999 and companies we acquired
         during 1999 from each of their respective dates of acquisition through
         December 31, 1999.


                                       12
<PAGE>   13

(4)      The selected historical consolidated financial data as of and for the
         year ended December 31, 2000 are derived from our Consolidated
         Financial Statements, which are comprised of financial data of all
         companies that we owned as of January 1, 2000 and companies we acquired
         during 2000 from each of their respective dates of acquisition through
         December 31, 2000.

(5)      Working capital is the sum of cash, accounts receivable, costs and
         estimated earnings in excess of billings on uncompleted contracts,
         inventories, net deferred taxes and other current assets, less the sum
         of cash overdrafts, current maturities of long-term debt, accounts
         payable and accrued liabilities, accrued payroll and related
         withholdings, billings in excess of costs and estimated earnings on
         uncompleted contracts and other current liabilities.

(6)      During the third and fourth quarters of 2000, the Company's management
         and Board of Directors conducted and completed a strategic review of
         RailWorks' operations. The resulting restructuring plan (the "Plan")
         involves systems integration, rationalization of real estate, equipment
         and inventory and maximization of human resource productivity around
         three lines of business. During the year ended December 31, 2000, the
         Company incurred $63.3 million of restructuring and other unusual
         charges in connection with the Plan.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         The following discussion of the financial condition and results of
operations should be read in conjunction with our Consolidated Financial
Statements and the Notes thereto included in Part IV hereof.

GENERAL

         We were formed in March 1998 to become a leading nationwide provider of
rail system services, including construction and rehabilitation, repair and
maintenance and related products. We primarily perform services pursuant to
contracts for the completion of specific projects, some of which take up to five
years to complete. On most projects, we contract directly with rail system
operators, while on other projects we act as a subcontractor.

         In August 1998, we acquired, in separate concurrent transactions,
fourteen companies (the "Founding Companies") engaged principally in the rail
system services and products business and we consummated our initial public
offering ("IPO") of Common Stock. In November 1998, we acquired two companies
(the "1998 Acquired Companies"); in 1999, we acquired fourteen companies or
groups of companies (the "1999 Acquired Companies"); and in 2000, we acquired
five companies or groups of companies (the "2000 Acquired Companies"). Except
for the acquisition of Comstock Holdings, Inc. ("Comstock"), a Founding Company,
all of our acquisitions have been accounted for as purchases in accordance with
APB No. 16. Comstock has been identified as the accounting acquirer for
accounting and financial statement purposes consistent with Staff Accounting
Bulletin No. 97 of the SEC because its owners received the largest portion,
34.6% of the shares of Common Stock issued to the owners of the Founding
Companies at the time of their acquisition.

         Our consolidated balance sheet as of December 31, 2000 includes all
companies that we owned as of December 31, 2000. Our consolidated statements of
operations and cash flows for the year ended December 31, 2000 include the
results of operations and cash flows of all companies acquired as of December
31, 1999 and the results of operations and cash flows of the 2000 Acquired
Companies from each of their respective dates of acquisition during the period.
Our consolidated balance sheet as of December 31, 1999 includes all companies
that we owned as of December 31, 1999. Our consolidated statements of operations
and cash flows for the year ended December 31, 1999 include the results of
operations and cash flows of all companies acquired as of December 31, 1998 and
the results of operations and cash flows of the 1999 Acquired Companies from
each of their respective dates of acquisition during the period. Our
consolidated statements of operations and cash flows for the year ended December
31, 1998 include the results of operations and cash flows of Comstock for the
entire period, the results of operations and cash flows of the Founding
Companies from August 1, 1998 and the results of operations and cash flows of
1998 Acquired Companies from November 4, 1998.

REVENUE AND COSTS

         We recognize revenue from fixed price contracts using the
percentage-of-completion method, measured by the percentage of costs incurred to
date to management's estimate of total cost for each contract. Changes in job
performance, job conditions and estimated profitability may result in revisions
to cost and income, which are


                                       13
<PAGE>   14

recognized in the period in which the revisions are determined. Revenue from
time-and-material contracts is recognized currently as the work is performed.

         Contract costs consist principally of wages and benefits of employees,
subcontracted services, materials, parts and supplies, depreciation and other
vehicle expenses and equipment rental, as well as indirect costs related to
contract performance. Contract costs are charged to expense as incurred.
Provisions for estimated losses on uncompleted contracts are made in the period
in which such losses are determined.

         In the case of product sales, we recognize revenue when products are
delivered to customers pursuant to shipping agreements. Cost of goods sold
includes raw materials and production costs.

RESULTS OF OPERATIONS

Year Ended December 31, 2000 Compared to the Year Ended December 31, 1999.

Revenue. Revenue increased $145.9 million, or 31.2%, from $468.1 million for the
year ended December 31, 1999 to $614.0 million for the year ended December 31,
2000. The increase in revenue for the year ended December 31, 2000 was due
primarily to the 1999 Acquired Companies being included for the full year in
2000, as well as the addition of revenues from the 2000 Acquired Companies.

         Transit services revenue increased $52.4 million, or 21.4%, from $244.9
million for the year ended December 31, 1999 to $297.3 million for the year
ended December 31, 2000. The increase in revenue for the year ended December 31,
2000 was due primarily to the addition of revenue from the acquisition of Twigg
Corporation, HSQ Technology Corporation and Breaking Technologies, Inc.

         Rail products and supplies revenue increased $30.0 million, or 61.2%,
from $49.0 million for the year ended December 31, 1999 to $79.0 million for
the year ended December 31, 2000. The increase in revenue for the year ended
December 31, 2000 was due primarily to the addition of revenue from the
acquisition of DuraWood LLC, Western Tar Corporation, the Pandrol Jackson switch
grinding operation and Hovey Industries, Ltd., as well as a full year of revenue
from Wood Waste Energy, Inc., which was acquired in August of 1999.

         Rail track services revenue increased $63.5 million, or 36.5%, from
$174.2 million for the year ended December 31, 1999 to $237.7 million for the
year ended December 31, 2000. The increase in revenue for the year ended
December 31, 2000 was due primarily to the addition of a full year of revenue
from W. T. Byler Company, Inc., which was acquired in October of 1999.

Gross Profit. Gross profit increased $14.4 million or 14.5% from $99.0 million
for the year ended December 31, 1999 to $113.4 million for the year ended
December 31, 2000. The increase in gross profit for the year ended December 31,
2000 was due primarily to gross profit from the 1999 Acquired Companies being
included for the full year in 2000 as well as additional gross profit from the
2000 Acquired Companies, offset by the gross profit associated with a 1999 NYCTA
project in the Transit Segment. This project accounted for $5 million of gross
profit in 1999. The gross profit percentage decreased from 21.2% for the year
ended December 31, 1999 to 18.5% for the year ended December 31, 2000. This
decrease was due primarily to the referenced NYCTA project.

         Transit services gross profit increased $5.4 million or 13.1% from
$41.3 million for the year ended December 31, 1999 to $46.7 million for the year
ended December 31, 2000. The increase in gross profit for the year ended
December 31, 2000 was due primarily to the addition of gross profit from the
three transit services companies acquired during 2000 offset by the reduction in
gross profit for the NYCTA project mentioned above. The gross profit percentage
decreased from 16.9% for the year ended December 31, 1999 to 15.7% for the year
ended December 31, 2000, due primarily to the NYCTA project mentioned above.

         Rail products and supplies gross profit increased $4.4 million, or
23.5%, from $18.7 million for the year ended December 31, 1999 to $23.1 million
for the year ended December 31, 2000. The increase in gross profit for the year
ended December 31, 2000 was due primarily to the addition of gross profit from
the four rail products and supplies companies acquired during 2000. The gross
profit percentage decreased from 38.1% for the year ended December 31, 1999 to
29.2% for the year ended December 31, 2000. This decrease was the result of the
general slowing of the Class I Railroad market and the overall increase in
competitive pressures that such a slowdown creates.


                                       14
<PAGE>   15

    Rail track services gross profit increased $3.5 million, or 9.0%, from $39.0
million for the year ended December 31, 1999 to $42.5 million for the year ended
December 31, 2000. The increase in gross profit for the year ended December 31,
2000 was due primarily to the addition of gross profit from W. T. Byler Company,
Inc. The gross profit percentage decreased from 22.4% for the year ended
December 31, 1999 to 17.9% for the year ended December 31, 2000. This decrease
was due to an overall increase in competitive pressures resulting from a general
slowing of the Class I Railroad market, as well as adverse weather conditions
during the fourth quarter of 2000.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $84.6 million or 167.9%, from $50.4 million
for the year ended December 31, 1999 to $135.0 million for the year ended
December 31, 2000. The increase in selling, general and administrative expenses
for the year ended December 31, 2000 was due primarily to the restructuring and
other unusual charges of $63.3 million (discussed below) that were recorded in
the third and fourth quarter of 2000. The remaining $21.3 million increase in
selling, general and administrative expenses for the year ended December 31,
2000 was due primarily to the selling, general and administrative expense of the
1999 Acquired Companies being included for the full year in 2000 as well as the
addition of the 2000 Acquired Companies. As a percentage of revenue, selling,
general and administrative expenses increased from 10.8% for the year ended
December 31, 1999 to 11.7% for the year ended December 31, 2000, exclusive of
the $63.3 million restructuring and other unusual charges. This increase was the
result of the addition of the higher selling, general and administrative cost
structures of the 2000 Acquired Companies.


                                       15
<PAGE>   16

         Transit services selling, general and administrative expenses increased
$3.7 million or 21.5%, from $17.2 million for the year ended December 31, 1999
to $20.9 million for the year ended December 31, 2000. The increase in selling,
general and administrative expenses for the year ended December 31, 2000 was due
primarily to the addition of selling, general and administrative expenses from
the three transit services companies acquired during 2000. As a percentage of
segment revenue, selling, general and administrative expenses remained constant
at 7.0% for the years ended December 31, 1999 and 2000.

         Rail products and supplies selling, general and administrative expenses
increased $5.3 million, or 67.9%, from $7.8 million for the year ended December
31, 1999 to $13.1 million for the year ended December 31, 2000. The increase in
selling, general and administrative expenses for the year ended December 31,
2000 was due primarily to the addition of selling, general and administrative
expenses from the four rail products and supplies companies acquired during
2000. As a percentage of segment revenue, selling, general and administrative
expenses increased from 16.0% for the year ended December 31, 1999 to 16.6% for
the year ended December 31, 2000. This percentage increase was the result of the
initial development expenses to create a centralized administration for the wood
division.

         Rail track services selling, general and administrative expenses
increased $5.6 million, or 41.8%, from $13.4 million for the year ended December
31, 1999 to $19.0 million for the year ended December 31, 2000. The increase in
selling, general and administrative expenses for the year ended December 31,
2000 was due primarily to the addition of selling, general and administrative
expenses from the acquisition of W.T. Byler Company, Inc. coupled with the
initial development expenses to create a centralized administration for the
geographic regions of the business. As a percentage of segment revenue, selling,
general and administrative expenses increased from 7.7% for the year ended
December 31, 1999 to 8.0% for the year ended December 31, 2000. This percentage
increase was primarily the result of W. T. Byler Company, Inc. having a slightly
larger overhead, selling, general and administrative cost structure than the
existing companies.

         Corporate selling, general and administrative expenses increased $6.7
million, or 55.8%, from $12.0 million for the year ended December 31, 1999 to
$18.7 million for the year ended December 31, 2000, exclusive of the $63.3
million of restructuring and other unusual charges mentioned above. The increase
in selling, general and administrative expenses for the year ended December 31,
2000 was due primarily to the increased level of overhead to administer the
larger operations in 2000 and anticipated expansion in the future. As a
percentage of total revenue, selling, general and administrative expenses
increased from 2.6% for the year ended December 31, 1999 to 3.0% for the year
ended December 31, 2000, exclusive of the $63.3 million of restructuring and
other unusual charges mentioned above. The increase in percentage results from
the development of a larger overhead structure compared to the prior year in
order to manage the anticipated increased size and complexity of the Company's
operations.

         We have analyzed our overhead structure and it is a focal point of our
human resources efficiency program. One component of the charge mentioned below
reflects adjustments and cutbacks to our overhead structure which are expected
to result in an overall annual savings of approximately $5.0 million company
wide beginning in 2001.

         Restructuring and Other Unusual Charges. During the third and fourth
quarters of 2000, the Company's management and Board of Directors conducted and
completed a strategic review of our operations. The resulting restructuring plan
(the "Plan") involves systems integration, rationalization of real estate,
equipment, inventory and human resources around three lines of business. We
intend to reduce headcount, consolidate certain facilities and identify other
synergies and cost reduction opportunities as a result of the Plan.

         Restructuring costs include costs directly related to the Plan.
Employee termination costs are recognized when benefit arrangements are
communicated to affected employees in sufficient detail to enable the employees
to determine the amount of benefits to be received on termination. Other exit
costs that do not benefit future activities are recognized at the date of
commitment to the Plan. These costs must be either incremental to the Plan or
represent amounts under contractual obligations which existed prior to the
commitment date and have no future economic benefit or result in a penalty to
cancel the obligation. Other costs directly related to the Plan which are not
eligible for recognition at the commitment date, such as relocation and other
integration costs, are expensed as incurred.

         During the year ended December 31, 2000, the Company incurred $63.3
million of restructuring and other unusual charges in connection with the Plan
and other events. These charges included approximately $2.2 million of employee
termination benefits for those employees who had been identified and notified.
These charges also


                                       16
<PAGE>   17

include approximately $0.7 million for non-cancelable lease costs in excess of
expected sublet income for leased property that will be vacated as part of the
Plan.

         In connection with the Plan and in accordance with SFAS 121 "Accounting
for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
Of", the Company also evaluated the future undiscounted cash flows of its
businesses to which goodwill relates in order to determine if the carrying value
of the goodwill had been impaired. Management's evaluation resulted in a third
quarter write-off of approximately $14.2 million of goodwill related to two of
the Company's acquired businesses because the estimated fair value of these
subsidiaries was less than their carrying value. In addition, in the fourth
quarter, the Company record an additional goodwill impairment charge of
approximately $6.4 million and a fixed asset write down of approximately $0.6
million related to the anticipated sale of certain non-strategic subsidiaries.
Management evaluated the fair value of these subsidiaries based on the expected
sale proceeds.

         The Plan also includes a focus on increasing internal cash flow, which
will involve, among other things, the acceleration of the settlement of
previously disclosed contract claims and other contract exposures, primarily
related to contracts completed by RailWorks' predecessor company, Comstock
Holdings, Inc. Management has estimated the recoverability of the recognized
accounts receivable and costs and estimated earnings in excess of billings on
these contracts under revised settlement scenarios and, as a result, has
recorded a charge of approximately $28.3 million to reflect their anticipated
net realizable value. The charge also includes the anticipated cost of
arbitration/litigation related to these matters and is net of the write off of
approximately $2.8 million of negative goodwill related to the now closed west
coast operations of Comstock Holdings, Inc.

         The Plan includes the suspension of our acquisition program. As such,
approximately $1.1 million of due diligence costs related to several
acquisitions that were not consummated have been expensed in the year ended
December 31, 2000.

         We also terminated discussions regarding the potential sale of the
Company to an investor group. Approximately $3.1 million of costs associated
with this potential transaction were expensed in the year ended December 31,
2000.

         Also, in the fourth quarter of 2000, our credit agreement was amended.
Included in restructuring and other unusual charges are approximately $1.5
million of costs associated with the amendment.

         In connection with their employment agreements, (the "Employment
Agreements") certain executives of the Company (the "Executives") have issued
promissory notes to the Company in the aggregate amount of $7.2 million (the
"Executive Notes"), which are included in Other Assets in the accompanying
balance sheet. Such Executive Notes are collateralized solely by shares of the
Company's common stock owned by the Executives. The Executive Notes are due June
30 and December 31, 2005. Generally, repayment of the Executive Notes is not
required until or unless the per share price of the Company's common stock
achieves 1.5 times its initial public offering price, or approximately $18 per
share. The Executive Notes bear interest at the Company's incremental borrowing
rate, as defined in the Employment Agreements. Payment of interest for 1999 was
forgiven by the Company. In 2000, the Company had recorded interest income of
approximately $0.6 million. The Executives have certain rights, as defined in
the Employment Agreements, including forgiveness of the indebtedness in
connection with a change in control of the Company and/or the achievement of
certain earnings targets and certain personal income tax indemnifications.

         The recent decline in market price of the Company's common stock has
increased the uncertainty regarding the ultimate repayment of the Executive
Notes. Therefore, we have recorded a valuation allowance of $3.6 million to
reflect the current estimate of the fair value of the Executive Notes. The
charge is included in restructuring and other unusual charges.

         Also included in the restructuring and other unusual charges is
approximately $1.6 million for settlement of certain non-contract related claims
against the Company, moving expenses incurred and paid, non-recurring
compensation expense and the uninsured portion of a third quarter fire loss
incurred at one of the Company's facilities.

Interest Expense. Interest expense increased $17.8 million, or 88.6%, from $20.1
million for the year ended December 31, 1999 to $37.9 million for the year ended
December 31, 2000. The increase in interest expense for the year ended December
31, 2000 was due primarily to the increase in average total debt outstanding of
$165.0 million


                                       17
<PAGE>   18

for the year ended December 31, 1999 at an effective interest rate of 10.31% to
$348.7 million for the year ended December 31, 2000 at an effective interest
rate of 10.48%. The increase in the effective rate was the result of having a
full year of high yield debt outstanding in 2000 at an effective rate of 11.9%.
General interest rates have also risen during this period, which adversely
affects our variable rate debt.

Taxes. Income taxes decreased $8.2 million from a provision of $11.1 million for
the year ended December 31, 1999 to a provision of $2.9 million for the year
ended December 31, 2000. The decrease in income taxes is primarily related to
elimination of a federal income tax provision due to losses generated by the
$63.3 million restructuring and other unusual charges mentioned above. The
remaining $2.9 million provision reflects a provision for state, local and
foreign income taxes.

Net Income. Net income decreased $80.1 million, from a profit of $20.1 million
for the year ended December 31, 1999 to a loss of $60.0 million for the year
ended December 31, 2000, as a result of the items mentioned above.

Year Ended December 31, 1999 Compared to the Year Ended December 31, 1998.

Revenue. Revenue increased $255.6 million, or 120.3%, from $212.5 million for
the year ended December 31, 1998 to $468.1 million for the year ended December
31, 1999. The increase was due to the fact that the 1998 data is that of
Comstock alone for the first seven months of the year and all fourteen original
Founding Companies for the remaining five months of the year. The 1999 data
includes all of the Founding Companies and the 1998 Acquired Companies for the
entire year, as well as the fourteen 1999 Acquired Companies from their date of
acquisition.

         Transit services revenue increased $78.9 million, or 47.5%, from $166.0
million for the year ended December 31, 1998 to $244.9 million for the year
ended December 31, 1999. The increase was due to the fact that the 1998 data is
that of Comstock alone for the first seven months of the year, one other
Founding Company for the next five months of the year, and one of the 1998
Acquired Companies for the final two months of the year. The 1999 data includes
all of the Founding Companies and one of the 1998 Acquired Companies for the
entire year, as well as, three 1999 Acquired Companies from their date of
acquisition.

         Rail products and supplies revenue increased $38.8 million, or 380.4%,
from $10.2 million for the year ended December 31, 1998 to $49.0 million for the
year ended December 31, 1999. The increase was due to the fact that the 1998
data is that of three Founding Companies for the last five months of the year,
whereas the 1999 data includes three Founding Companies for the entire year, as
well as, five 1999 Acquired Companies from their date of acquisition.

         Rail track services revenue increased $137.9 million, or 380.0%, from
$36.3 million for the year ended December 31, 1998 to $174.2 million for the
year ended December 31, 1999. The increase was due to the fact that the 1998
data is that of nine Founding Companies for the last five months of the year and
one of the 1998 Acquired Companies for the final two months of the year, whereas
the 1999 data includes nine Founding Companies and one of the 1998 Acquired
Companies for the entire year, as well as, six 1999 Acquired Companies from
their date of acquisition.

Gross Profit. Gross profit increased $69.3 million or 233.3% from $29.7 million
for the year ended December 31, 1998 to $99.0 million for the year ended
December 31, 1999. The increase was due to the fact that the 1998 data is that
of Comstock alone for the first seven months of the year and all fourteen
Founding Companies for the remaining five months of the year. The 1999 data
includes all of the Founding Companies and the 1998 Acquired Companies for the
entire year, as well as, all of the fourteen 1999 Acquired Companies from their
date of acquisition. The gross profit percentage increased from 14.0% for the
year ended December 31, 1998 to 21.2% for the year ended December 31, 1999. This
increase was the result of higher profitability associated with the mix and type
of work performed during 1999 by the consolidated group as compared to mix and
type of work performed during 1998.

         Transit services gross profit increased $21.1 million or 104.5% from
$20.2 million for the year ended December 31, 1998 to $41.3 million for the year
ended December 31, 1999. The increase was due to the fact that the 1998 data is
that of Comstock alone for the first seven months of the year, one other
Founding Company for the next five months of the year and one of the 1998
Acquired Companies for the final two months in the year. The 1999 data includes
all of the Founding Companies and one of the 1998 Acquired Companies for the
entire year, as well as, three 1999 Acquired Companies from their date of
acquisition. The gross profit percentage increased from 12.2% for the year ended
December 31, 1998 to 16.9% for the year ended December 31, 1999. This increase
was the result


                                       18
<PAGE>   19

of higher profitability associated with the mix and type of work performed
during 1999 by the consolidated group as compared to the mix and type of work
performed during 1998.

         Rail products and supplies gross profit increased $16.3 million, or
679.2%, from $2.4 million for the year ended December 31, 1998 to $18.7 million
for the year ended December 31, 1999. The increase was due to the fact that the
1998 data is that of three Founding Companies for the last five months in the
year, whereas the 1999 data includes three Founding Companies for the entire
year, as well as, five 1999 Acquired Companies from their date of acquisition.
The gross profit percentage increased from 23.5% for the year ended December 31,
1998 to 38.1% for the year ended December 31, 1999. This increase was the result
of higher profitability associated with the mix and type of work performed
during 1999 by the consolidated group as compared to the mix and type of work
performed during 1998.

         Rail track services gross profit increased $31.9 million, or 449.3%,
from $7.1 million for the year ended December 31, 1998 to $39.0 million for the
year ended December 31, 1999. The increase was due to the fact that the 1998
data is that of nine Founding Companies for the last five months in the year and
one of the 1998 Acquired Companies for the final two months of the year, whereas
the 1999 data includes nine Founding Companies and one of the 1998 Acquired
Companies for the entire year, as well as, six 1999 Acquired Companies from
their date of acquisition. The gross profit percentage increased from 19.6% for
the year ended December 31, 1998 to 22.4% for the year ended December 31, 1999.
This increase was the result of higher profitability associated with the mix and
type of work performed during 1999 by the consolidated group as compared to the
mix and type of work performed during 1998.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased $31.3 million or 163.9%, from $19.1 million
for the year ended December 31, 1998 to $50.4 million for the year ended
December 31, 1999. The increase was due to the fact that the 1998 data is that
of Comstock alone for the first seven months and all fourteen original Founding
Companies for the remaining five months in the year. The 1999 data includes all
of the Founding Companies and the 1998 Acquired Companies for the entire year,
as well as, all of the fourteen 1999 Acquired Companies from their date of
acquisition. As a percentage of revenue, selling, general and administrative
expenses increased from 9.0% for the year ended December 31, 1998 to 10.8% for
the year ended December 31, 1999. This increase was the result of the 1999
Acquired Companies having higher selling, general and administrative cost
structures than the original Founding Companies.

         Transit services selling, general and administrative expenses increased
$3.8 million or 28.4%, from $13.4 million for the year ended December 31, 1998
to $17.2 million for the year ended December 31, 1999. The increase was due to
the fact that the 1998 data is that of Comstock only for the first seven months
of the year, one other Founding Company for the next five months of the year and
one of the 1998 Acquired Companies for the final two months of the year. The
1999 data includes all of the Founding Companies and one of the 1998 Acquired
Companies for the entire year. As a percentage of segment revenue, selling,
general and administrative expenses decreased from 8.1% for the year ended
December 31, 1998 to 7.0% for the year ended December 31, 1999. This percentage
decrease was a result of the 1999 Acquired Companies having lower overhead
selling, general and administrative cost structures than Comstock.

         Rail products and supplies selling, general and administrative expenses
increased $7.1 million, or 1,014.3%, from $700,000 for the year ended December
31, 1998 to $7.8 million for the year ended December 31, 1999. The increase was
due to the fact that the 1998 data is that of three Founding Companies for the
last five months in the year, whereas the 1999 data includes three Founding
Companies for the entire year, as well as, five 1999 Acquired Companies from
their date of acquisition. As a percentage of segment revenue, selling, general
and administrative expenses increased from 6.8% for the year ended December 31,
1998 to 16.0% for the year ended December 31, 1999. This percentage increase was
a result of the 1999 Acquired Companies having higher overhead selling, general
and administrative cost structures than the Founding Companies.

         Rail track services selling, general and administrative expenses
increased $10.4 million, or 346.7%, from $3.0 million for the year ended
December 31, 1998 to $13.4 million for the year ended December 31, 1999. The
increase was due to the fact that the 1998 data is that of nine Founding
Companies for the last five months in the year and one of the 1998 Acquired
Companies for the final two months of the year, whereas the 1999 data includes
nine Founding Companies and one of the 1998 Acquired Companies for the entire
year, as well as, six 1999 Acquired Companies from their date of acquisition. As
a percentage of segment revenue, selling, general and administrative expenses
decreased from 8.3% for the year ended December 31, 1998 to 7.7% for the year
ended December 31,


                                       19
<PAGE>   20

1999. This percentage decrease was a result of the 1999 Acquired Companies
having lower overhead, selling, general and administrative cost structures than
the Founding Companies.

         Corporate selling, general and administrative expenses increased $10.0
million, or 500.0%, from $2.0 million for the year ended December 31, 1998 to
$12.0 million for the year ended December 31, 1999. The increase was due to the
fact that the 1998 expense is that of an overhead structure to support fourteen
Founding Companies for five months. The 1999 expense is that of an overhead
structure to support the Founding Companies, as well as, the 1999 Acquired
Companies for the entire year. As a percentage of total revenue, selling,
general and administrative expenses increased from 1.0% for the year ended
December 31, 1998 to 2.6% for the year ended December 31, 1999. The increase in
percentage is due to the larger corporate overhead structure required to support
thirty operating entities and a full year of corporate operations.

Net Income. Net income increased $32.9 million, from a loss of $12.8 million for
the year ended December 31, 1998 to a profit of $20.1 million for the year ended
December 31, 1999, as a result of the items mentioned above. In addition,
included in 1998 were non-recurring expenses of $20.0 million and transaction
fees of $1.3 million relating to the IPO.

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

         We experience quarterly variations in revenue, operating income
(including operating losses), net income (including net losses) and cash flows
(including operating cash flow deficits) as a result of various factors,
including seasonality, projects commenced and completed during a quarter, the
number of business days in a quarter and the size and scope of projects. A
variation in the number of projects, progress on projects or the timing of the
initiation or completion of projects can cause periods in which certain
operating resources are not generating revenue and can cause significant
variations in operating results between reporting periods. Negative fluctuations
have been and may be particularly pronounced, and net losses have been and may
be incurred, in the first and fourth calendar quarters, generally due to adverse
weather conditions. We expect to continue to experience such quarterly
fluctuations in operating results, including possible net losses.

Liquidity and Capital Resources

Working Capital. At December 31, 2000, we had working capital of approximately
$120.0 million. Net cash used in operating activities for the year ended
December 31, 2000 was approximately $35.7 million. Net cash used in investing
activities for the year ended December 31, 2000 was approximately $54.6 million,
which consisted primarily of cash payments for acquisitions and cash payments in
satisfaction of earn-out obligations related to prior acquisitions. Net cash
provided by financing activities for the year ended December 31, 2000 was
approximately $93.0 million, which included borrowings of approximately $152.6
offset by debt repayment of approximately $69.2 million.

         Capital expenditures were $27.3 million, $15.8 million and $1.3 million
in fiscal 2000, 1999 and 1998, respectively. Historically, capital expenditures
have been, and future expenditures are anticipated to be, primarily to support
expansion of our operations, including our management information systems. Our
capital expenditures over the next several years, as a percentage of revenues,
are expected to decrease compared to those of the past two fiscal years.

         We anticipate capital expenditures of approximately $15.0 million for
equipment and leasehold improvements in 2001. This investment, which we expect
to finance primarily with working capital and vendor financing, relates to the
anticipated facility consolidations of the operating companies, the installation
of a comprehensive financial reporting computer system and the purchase or lease
of supplemental machinery and equipment needed to meet operational demands.

         In connection with certain acquisitions, we have agreed to pay
additional consideration based on operating results of the acquired entity. The
payment of any such contingent consideration could result in an increase in the
purchase prices of such acquisitions and, as a result, additional goodwill.
Additional consideration recorded as goodwill at December 31, 2000 relating to
2000 operating performance amounted to approximately $12.8 million. Such amounts
are to be paid throughout 2001.


                                       20
<PAGE>   21

         Working capital is, and acquisitions have been, financed with funds
from operations together with borrowings under our credit facilities. We have a
$100 million amortizing term loan that matures on September 30, 2006 and a $150
million revolving credit facility that matures on November 5, 2004. The credit
facilities are secured by a first lien on all of the capital stock of our
subsidiaries and certain assets of our domestic subsidiaries. The credit
facilities contain a negative pledge on all of our domestic subsidiaries' assets
as well as other usual and customary covenants and events of default for
transactions of the type contemplated by the credit facilities. Borrowings under
the credit facilities bear interest, at our option, at an interest rate equal to
(1) LIBOR plus the applicable margin for LIBOR loans, which ranges from 125
basis points to 250 basis points based on the ratio of Funded Debt to EBITDA (as
such terms are defined in the credit facility) or (2) the Alternate Base Rate
(defined as the higher of (a) the Bank of America prime rate and (b) the Federal
Funds rate plus 50 basis points) plus up to 125 basis points based on the ratio
of Funded Debt to EBITDA. We may also finance future acquisitions with shares of
common stock and other contingent and deferred consideration. Borrowings under
the term loan are, at our option, at an interest rate based on (1) LIBOR plus
the applicable spread or (2) the Alternative Base Rate (ABR) plus the applicable
spread.

Credit Agreement. On April 28, 2000, we entered into a $250.0 million Amended
and Restated Credit Agreement (the "Credit Agreement"). At December 31, 2000, we
had an aggregate of $176.5 million of borrowings outstanding under the Credit
Agreement, which bore interest at a weighted average rate of 10.64% per annum at
such date, and had aggregate borrowing availability under the Credit Agreement
of $22.7 million (see Amendments below).

         Because we would have been in violation of three financial covenants in
the Credit Agreement, we obtained a waiver of these covenants from the lenders
that was effective from October 10, 2000 through November 10, 2000 ("the First
Waiver"). Pursuant to the First Waiver, we were granted a $5 million increase in
funding availability under an adjusted borrowing base. The First Waiver also
increased the interest cost for all borrowings under the Credit Agreement by
0.75% per annum. It was subsequently determined that we might also not be in
compliance with the minimum net worth and borrowing base requirements of the
Credit Agreement. As a result we obtained a second waiver that was effective
from September 30, 2000 through December 15, 2000 ("the Second Waiver").
Pursuant to the Second Waiver, we were granted a $10 million increase in funding
availability under an adjusted borrowing base. The Second Waiver maintained the
increase in interest cost that was established in the First Waiver but added an
"over-advance premium" of 1.25% per annum on any borrowings that exceeded the
borrowing base.

         On December 15, 2000 and February 13, 2001 the Company entered into
amendments to the Credit Agreement, (the "Amendments") pursuant to which the
Company was granted a $15 million increase in funding availability under an
adjusted borrowing base formula. The Amendments increased the interest cost for
all borrowings in accordance with an expanded pricing grid. The annual interest
rates in effect at December 31, 2000, for Prime and LIBOR borrowings were 11.25%
and 9.97%, respectively. The Amendments adjusted the Company's availability
under the Revolving Credit portion of the Credit Facility to $125 million under
which has been established an "Available Revolving Committed Amount" of $100
million that remains in effect until (i) the Company has met two consecutive
quarters of specified leverage ratios or (ii) an increase is approved by 100% of
the Revolving Credit lenders and two thirds of the Term Loan lenders. Commencing
June 30, 2002 availability under the Revolving Credit will be reduced in
graduated quarterly steps totaling $20,000,000 over two years but its final
maturity of November 5, 2004 remains unchanged. In addition, certain financial
covenants were adjusted by the Amendments. As of December 31, 2000, we were in
compliance with the terms of the Credit Agreement, as amended, and we expect to
remain in compliance for the foreseeable future.

Cash Management. We recently developed a new cash management program and
implemented a new cash management system. Under the program, excess funds are
applied against outstanding revolving credit balances. Cash overdrafts represent
checks outstanding under the program as of December 31, 2000.

         We believe that funds generated from operations, together with existing
cash and borrowings under our revolving credit facility, will be sufficient to
finance our current operations, planned capital expenditures and internal
growth.

INFLATION

         We do not believe that inflation has had a material effect on our
results of operations in recent years. However, there can be no assurance that
our business will not be affected by inflation in the future.

CAUTIONARY STATEMENTS


                                       21
<PAGE>   22

         This annual report to our stockholders contains forward-looking
statements within the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. You can find discussions containing forward-looking
statements in the section of this report entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" as well as in other
sections. We use the words "believes," "anticipates," "expects", "estimates,"
"plans," "intends" and similar expressions so as to identify forward-looking
statements. All forward-looking statements involve substantial risks and
uncertainties. There may be events in the future that we are not accurately able
to predict, or over which we have no control.

         Forward-looking statements include, without limitation, our
expectations and estimates as to development of our services and products and
expansion of our customer base, future financial performance, including growth
in revenues and earnings and the effect on new acquisitions on our financial
position and results of operations, cash flows from operations, acquisitions,
capital expenditures, the availability of funds from credit facilities and the
sale of securities. Consequently, you should regard forward-looking statements
only as our current plans, estimates and beliefs. We do not promise to notify
you if we learn that our assumptions or projections are wrong for any reason.
Additional information concerning the risk and uncertainties listed above, and
other factors that you may wish to consider, are contained in our filings with
the Securities and Exchange Commission. Copies of these filings are available
from us free of charge.

         Some factors that may cause actual results to differ from projected
results are:

Substantial Leverage. We have a substantial amount of debt outstanding, which
could adversely affect our financial health. Our substantial amount of debt
could have important consequences for you. For example, it could:

         -        limit our ability to obtain additional financing, if we need
                  it, for working capital, capital expenditures, acquisitions,
                  debt service requirements or other purposes;

         -        increase our vulnerability to adverse economic and industry
                  conditions;

         -        require us to dedicate a substantial portion of our cash flow
                  from operations to payments on our debt, thereby reducing
                  funds available for operations, future business opportunities
                  or other purposes;

         -        limit our flexibility in planning for, or reacting to, changes
                  in our business and the industry in which we compete; and

         -        place us at a competitive disadvantage compared to our
                  competitors that have less debt.

Lack of Combined Operating History. Our company was founded in March 1998 but
conducted no operations and generated no revenue until we completed the initial
public offering, or IPO, of our common stock in August 1998. We acquired 14
groups of companies concurrently with the completion of our IPO and have
acquired an additional 21 operating companies, or groups of companies, since the
IPO through December 31, 2000. The integration of our operating companies, while
allowing them to retain decentralized operations and management, is important to
our operating and growth strategies and the achievement of efficiencies in our
combined operations. We may not be able to integrate the operations or the
necessary systems and procedures, including accounting and financial reporting
systems and project management systems, to manage effectively the combined
enterprise. Certain members of our management group have only recently joined
our company and there can be no assurance that the management group will be able
to implement our operating strategies. We cannot assure you that we will be able
to establish, maintain or increase the profitability of the operating companies.
Our financial statements include results of operations for certain operating
companies when they were not under common control or management. As a result,
our financial statements may not be indicative of our future results of
operations. Any failure by our management group to implement our strategies,
integrate the operating companies without substantial costs, delays or other
operational or financial difficulties, dispose of non-strategic subsidiaries or
effectively oversee the combined entity could have a material adverse effect on
our business, financial condition and results of operations.

Internal Growth. Our ability to grow will be affected by various factors,
including demand for rail system services and products, our success in bidding
on new projects, the success of our cross-selling efforts and our ability to
develop a national accounts program. Our growth may also depend on increased
outsourcing by rail system operators. Many of these factors are beyond our
control. Our strategies may not be successful or we may be unable to generate
cash flow adequate for combined operations and to support internal growth. The
senior managers of the operating companies retain responsibility for day-to-day
operations. If proper business controls are not implemented and maintained, this
decentralized operating strategy could result in inconsistent operating and
financial practices of


                                       22
<PAGE>   23

the operating companies, which could have a material adverse effect on our
business, financial condition and results of operations.

Dependence on Certain Customers. We derived approximately 37.4% of our revenue
for the year ended December 31, 2000 from our top ten customers. Approximately
17.1% of our 2000 revenue was derived from projects undertaken for the New York
City Transit Authority, which we refer to as NYCTA. These projects were
undertaken under a number of separate contracts. If the NYCTA were to
significantly reduce the amount of business that it does with us or determine
not to do business with us in the future, it would have a material adverse
effect on our business, financial condition and results of operations.

Competition. The rail system services and products industry is highly
competitive. Numerous companies provide services to transit authorities,
construct and repair rail systems or sell related products or supplies, and some
of these companies operate in more than one of these lines of business. Some of
our competitors have greater resources than we have, may also provide a broad
range of services and products, and may have sufficient bonding capacity and
other resources to undertake large projects. Any inability to compete
successfully against our existing and future competitors would have a material
adverse effect on our business, financial condition and results of operations.
Certain of our operating companies also provide electrical contracting services
to non-rail industrial and commercial customers. While we believe that we
currently compete effectively in the non-rail electrical contracting business,
this industry is highly competitive and is served by small, owner-operated
private companies, public companies and several large regional companies.
Additionally, we could face competition in the future from other competitors
entering our markets.

Public Sector Contracts and Funding. The rail system services and products
business involves contracts that are supported by funding from federal, state
and local governmental agencies, as well as contracts with such agencies, which
we refer to as public sector contracts. Public sector contracts are subject to
detailed regulatory requirements and public policies, as well as funding
priorities. These contracts may be conditioned upon the continuing availability
of public funds; the availability of public funds depends upon lengthy and
complex budgetary procedures. These contracts may also be subject to significant
pricing constraints. Moreover, public sector contracts may generally be
terminated for reasons beyond the control of the contractor, including when such
termination is in the best interests of the governmental agency. We cannot
assure you that these factors or others unique to public sector contracts will
not have a material adverse effect on our business, financial condition and
results of operations.

Fixed Price Contracts. Fixed price contracts are typically awarded in the rail
system services industry pursuant to a competitive bidding process. In compiling
our bid on a particular project, we must estimate the time it will take to
complete the project, along with the project's labor and supply costs. These
costs may be affected by a variety of factors, some of which may be beyond our
control. If we cannot accurately predict the costs of fixed price contracts,
certain projects could have lower margins than anticipated or we could suffer
losses on the projects. From time to time we may incur unanticipated additional
contract costs for which we seek recovery from customers. Recovery of such
amounts involve various uncertainties and may require extended periods of
negotiation, litigation or other costs. As a result of these uncertainties,
amounts ultimately realized from these contracts may not be known for a
significant period following completion of a contract, and lower contract
margins or losses may result. Lower margins and losses could have a material
adverse effect on our business, financial condition and results of operations.

Reliance on Subcontractors and Suppliers. When we perform a contract for transit
signaling and communication systems, it may be as a subcontractor to the company
that designs the systems and manufactures or purchase the necessary equipment.
In other instances, we act as the prime contractor and subcontract the design of
the signal or communication system and necessary equipment. When we are a prime
contractor for such projects, we generally require subcontractors to post
performance bonds. We may not require a subcontractor to post a performance bond
in situations where (1) the subcontractor has strong experience with a specific
type of project and demonstrates financial stability and (2) the customer does
not require bonds from us as prime contractor. We sometimes depend upon the
subcontractor to perform design and other services and provide equipment. For
certain projects only a limited number of companies can perform the subcontract
if the initial subcontractor defaults. As a result, we depend upon our
subcontractors to perform under the subcontracts. Further, the major components
of signaling and communication systems for transit authorities are manufactured
to specifications and require long lead times for production. If a subcontractor
or supplier defaults, or if a supplier refuses or cannot do business with us, it
could have a material adverse effect on our business, financial condition and
results of operations.


                                       23
<PAGE>   24

Unionized Workforce. As of December 31, 2000, approximately 55% of our employees
were covered under collective bargaining agreements. We cannot assure you that
future work stoppages will not affect us. In addition, labor agreements are
generally negotiated on an industry-wide basis and the terms and conditions of
future labor agreements could be beyond our control. We may be subject to terms
and conditions in future labor agreements that could have a material adverse
effect on our business, financial condition and results of operations.

Environmental and Other Government Regulation. Our operations are subject to
extensive federal, state and local regulation under environmental laws and
regulations. Among other things, these laws and regulations cover emissions to
the air, discharges to waters and the generation, handling, storage,
transportation, treatment and disposal of waste, underground and aboveground
storage tanks and remediation of soil and groundwater contamination.
Environmental liability can extend to previously owned or operated properties,
leased properties and properties owned by third parties, as well as to
properties currently owned and used by us. Environmental liabilities may also
arise from claims asserted by adjacent landowners or other third parties in
toxic tort litigation. We could incur significant ongoing costs associated with
environmental regulatory compliance. Further, we sometimes use hazardous
materials in connection with our operations. Although we believe that we
materially comply with all of the various environmental regulations applicable
to our business, we cannot assure you that requirements will not change in the
future or that we will not incur significant costs to comply with such
requirements.

         In addition to safety, health and other regulations of general
applicability, our operations may be significantly affected by regulations of
the Surface Transportation Board, the Federal Railroad Administration, the
Occupational Safety and Health Administration, state departments of
transportation and other state and local regulatory agencies. Changes in
regulation of the rail and transit industries through legislative,
administrative, judicial or other action could have a material adverse effect on
our business, financial condition and results of operations.

Dependence on Key Personnel. Our success depends to a significant extent upon
the efforts and abilities of certain key senior managers at Company headquarters
and at various of the Company's operations. While we have entered into
employment agreements with certain of these senior managers, we cannot be sure
that such individuals will remain with us throughout the terms of their
agreements, or thereafter. The loss of the services of one or more of these key
employees before we are able to attract and retain qualified replacement
personnel could have a material adverse effect on our business, financial
condition and results of operation.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We are subject to market risk associated principally with changes in
interest rates. Interest rate exposure has been principally limited to the
$176.5 million of long-term debt under our revolving credit facility and term
loan agreement outstanding at December 31, 2000. All of that debt is priced at
interest rates that float with the market. A 50 basis point movement in the
interest rate on our floating rate debt would have resulted in an approximately
$883,000 annualized increase or decrease in interest expense and cash flows. We
will from time to time enter into interest rate swaps on our debt, when we
believe there is a clear financial advantage for doing so. We do not use
derivative financial or commodity instruments for trading purposes and the use
of such instruments is subject to strict approval levels by senior officers.
Typically, the use of such derivative instruments is limited to interest rate
swaps on our outstanding long-term debt. Our exposure related to such derivative
instruments is, in the aggregate, not material to our financial position,
results of operations and cash flows. There were no swap agreements in effect as
of December 31, 2000.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

         The Consolidated Financial Statements of our Company and our
subsidiaries, together with the report thereon of Arthur Andersen LLP, dated
February 28, 2001 and all Notes to such Consolidated Financial Statements are
attached hereto as an exhibit and are hereby incorporated herein by reference.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         Not applicable.


                                       24
<PAGE>   25
                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The information set forth under the caption "Election of Directors" in
the subsections entitled "What is the background of this years nominees?", "Who
are the directors continuing in office until 200l?" and "Who are the directors
continuing in office until 2002?" in our Proxy Statement for the Annual Meeting
of Stockholders to be held on May 4, 2001 is hereby incorporated by reference
for information regarding our directors.

         Our officers are elected annually by the Board of Directors immediately
following the annual meeting of stockholders. Each of our executive officers was
elected by the board of directors to hold office until the next annual election
of officers and until his successor is elected and qualified or until his
earlier resignation or removal. There are no arrangements or understandings
between any officer and any other person pursuant to which the officer was
selected. Information with respect to our officers is set forth in the table
below.

         The information under the caption "16(a) Beneficial Ownership Reporting
Compliance" in our Proxy Statement for the Annual Meeting of Stockholders to be
held May 4, 2001 is hereby incorporated herein by reference.


<TABLE>
<CAPTION>
       NAME                     AGE         POSITION HELD
------------------              ---         -----------------------------------------------------------
<S>                             <C>         <C>
John G. Larkin                  45          Chairman of the Board, Chief Executive Officer and Director
                                            since inception of RailWorks in March 1998; from December
                                            1994 to February 1998, Managing Director of BT Alex. Brown
                                            Incorporated.

Michael R. Azarela              43          President and Chief Operating Officer since September 2000
                                            and Director since May 1998; from May 1998 to September
                                            2000, Executive Vice President and Chief Financial Officer;
                                            from February 1998 to August 1998, Chief Executive Officer
                                            of L. K. Comstock & Company, Inc.; from May 1994 to
                                            February 1998, Senior Vice President and Chief Financial
                                            Officer of Comstock Group Inc. and Spie Group Inc.

Foster Beach                    56          Vice President - Corporate Business Development since May
                                            2000; from January 1998 to January 2000, Executive Vice
                                            President of Delon Hampton & Associates; from June 1996 to
                                            January 1998, Senior Vice President of ICF Kaiser
                                            Engineers; from October 1994 to June 1996, Senior Vice
                                            President of Daniel Mann Johnson & Mendenhall.

Gene J. Cellini                 43          Vice President - Tax since August 1998; from January 1985
                                            to August 1998, Vice President - Tax of L. K. Comstock &
                                            Company, Inc. and Spie Group Inc.

Edward M. Cumberledge           41          Vice President and Chief Financial Officer since September
                                            2000; from July 1994 to June 2000, Vice President and Chief
                                            Financial Officer of Robicon Corporation.

William R. Donley               44          Vice President - Rail Products and Services Group since
                                            April 1999; from April 1998 to April 1999, Vice President -
                                            Total Quality, Productivity and Strategic Planning of
                                            Koppers Industries Inc.; from October 1995 to April 1998,
                                            Vice President and General Manager of Koppers Industries
                                            Inc.
Harold C. Kropp, Jr.            43          Vice President - Chief Accounting Officer since March 1998;
                                            from May 1996 to March 1998, valuation specialist at
                                            Larson, Kellett & Associates, P. C.

C. William Moore                53          Vice President - Transit Systems Group since September 1999
                                            and President and CEO of L. K. Comstock &
</TABLE>


                                       25
<PAGE>   26

<TABLE>
<S>                             <C>         <C>
                                            Company, Inc. since April 1999; from 1991 to April 1999,
                                            founder and principal of Peninsula Associates, a consulting
                                            firm.

John P. Nuzzo                   53          Senior Vice President - Administration since November 2000;
                                            from August 1998 to November 2000, Vice President - Risk
                                            Management; from November 1992 to August 1998, Vice
                                            President - Administration of L. K. Comstock & Company, Inc.

John Polatz                     26          Vice President - Corporate Development since September
                                            2000; from August 1998 to September 2000, Manager - Special
                                            Projects; from May 1997 to August 1998, Corporate Financial
                                            Analyst for BT Alex Brown.

Michael P. Rivera               54          Vice President - Corporate Counsel since November 1999;
                                            from August 1997 to March 1999, Vice President & General
                                            Counsel of QuesTech, Inc.; from December 1989 to June 1997,
                                            Vice President & General Counsel of Union Switch & Signal
                                            Inc.

Barry Sullivan                  55          Vice President & Treasurer since January 2000; from
                                            February 1998 to October 1999, Vice President - Corporate
                                            Development & Treasurer of Harsco Corporation; from October
                                            1993 to January 1998, Vice President & Treasurer of Harsco
                                            Corporation.

Robert D. Wolff                 57          Vice President - Track Systems Group since July 1999; from
                                            January 1999 to July 1999, Vice President - Western Track
                                            Construction & Maintenance; from 1977 to January 1999,
                                            Chief Executive Officer of Midwest Railroad Construction &
                                            Maintenance Corporation of Wyoming.
</TABLE>

ITEM 11. EXECUTIVE COMPENSATION

         The information under (1) the caption "Election of Directors" in the
subsection entitled "How are directors compensated?" and (2) the caption
"Executive Compensation" in the subsection entitled "Summary Compensation Table"
and "Employment Agreements" in our Proxy Statement for the Annual Meeting of
Stockholders to be held on May 4, 2001 is hereby incorporated herein by
reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The information set forth under the caption "Security Ownership of
Certain Beneficial Owners" in our Proxy Statement for the Annual Meeting of
Stockholders to be held on May 4, 2001 is hereby incorporated herein by
reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The information set forth under the caption "Certain Relationships and
Related Party Transactions" in our Proxy Statement for the Annual Meeting of
Stockholders to be held on May 4, 2001 is hereby incorporated herein by
reference.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A)      1.  FINANCIAL STATEMENTS


                                       26
<PAGE>   27

         The following Consolidated Financial Statements of our company and our
subsidiaries and the Report of the Independent Auditors, are filed as part of
this report:

         Consolidated Balance Sheets as of December 31, 2000 and 1999
         Consolidated Statements of Operations for the Years Ended December 31,
         2000, 1999 and 1998
         Consolidated Statements of Stockholders' Equity for the Years Ended
         December 31,2000, 1999 and 1998
         Consolidated Statements of Cash Flows for the Years Ended December 31,
         2000, 1999 and 1998
         Report of Independent Public Accountants
         Notes to Consolidated Financial Statements

         2.       FINANCIAL STATEMENT SCHEDULES

                                   SCHEDULE II

                        VALUATION AND QUALIFYING ACCOUNTS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                        ADDITIONS
                                       BALANCE AT                      CHARGES TO
                                      BEGINNING OF      COSTS AND         OTHER                           BALANCE AT
DESCRIPTION                               YEAR           EXPENSES        ACCOUNTS       DEDUCTIONS(1)     END OF YEAR
-------------------------------       ------------      ----------     ----------       -------------     -----------
<S>                                   <C>               <C>            <C>              <C>               <C>
Allowance for doubtful accounts

Year Ended December 31, 2000             1,990              3,277              0            (3,685)           1,581
Year Ended December 31, 1999               442              1,566              0               (18)           1,990
Year Ended December 31, 1998                58                399              0               (15)             442
</TABLE>

(1)    Deductions represent uncollectible balances of accounts receivable
       written off, net of recoveries.

         All other schedules are omitted because they are not applicable or not
required.

         3.       EXHIBITS

         The list of exhibits to this Report is set forth on the accompanying
Index to Exhibits to this Annual Report and such list is incorporated herein by
reference.

(B)      REPORTS ON FORM 8-K

         A current Report on Form 8-K, which included and reported "Other
events" under item 5, was filed on January 26, 2001.

(C)      See Item 14(a)(3) and separate Exhibit Index attached hereto.

(D)      See Item 14(a)(2).


                                       27
<PAGE>   28

                                   SIGNATURES

         Pursuant to requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

                                    RAILWORKS CORPORATION


Dated: March 12, 2001               By:              /s/
                                       -------------------------------
                                               John G. Larkin
                                       Chairman of the Board and Chief
                                              Executive Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed by the following persons on behalf of the Registrant
and in the capacities and on the dates indicated:

<TABLE>
<CAPTION>
     SIGNATURE                                         TITLE                                        DATE
---------------------         ------------------------------------------------------           --------------
<S>                           <C>                                                              <C>


         /s/
---------------------
  Michael R. Azarela          President & Chief Operating                                      March 12, 2001
                              Officer and Director


         /s/
---------------------
Edward M. Cumberledge         Vice President & Chief Financial Officer (Principal              March 12, 2001
                              Financial Officer)


         /s/
---------------------
 Harold C. Kropp, Jr.         Vice President and Chief Accounting Officer (Principal           March 12, 2001
                              Accounting Officer)


         /s/
---------------------
    John Kennedy              Director - Business Development and Director                     March 12, 2001


         /s/
---------------------
   Scott D. Brace             Director                                                         March 12, 2001


         /s/
---------------------
  Ronald W. Drucker           Director                                                         March 12, 2001


         /s/
---------------------
    R.C. Matney               Director                                                         March 12, 2001


         /s/
---------------------
  Donald P. Traviss           Director                                                         March 12, 2001
</TABLE>


                                       28
<PAGE>   29

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT                                                               SEQUENTIAL
NUMBER                       DESCRIPTION OF EXHIBITS                   PAGE NO.
-------                      ------------------------                 ----------
<S>        <C>                                                        <C>
  3.1      --  Restated Certificate of Incorporation of the               *
               Company (incorporated by reference to Exhibit 3.1
               to Registration Statement on Form S-1, File No.
               333-53483)
  3.2      --  Bylaws of the Company (incorporated by reference           *
               to Exhibit 3.2 to Registration Statement on Form
               S-1, File No. 333-53483)
  3.3      --  Certificate of Designation of the Series A                 *
               Convertible Preferred Stock (incorporated by
               reference to Exhibit 3.1 to the Registrant's
               Current Report on Form 8-K filed on October 14,
               1998)
  4.1      --  Specimen Common Stock Certificate (incorporated            *
               by reference to Exhibit 4.1 to Registration
               Statement on Form S-4, File No. 333-53483)
  4.2      --  Specimen Preferred Stock Certificate                       *
               (incorporated by reference to Exhibit 4.2 to
               Registration Statement on Form S-4, File
               No. 333-79649)
  4.3      --  Indenture dated as of April 7, 1999 among                  *
               Railworks Corporation, the Guarantors named
               therein, and First Union National Bank, as
               Trustee (incorporated by reference to Exhibit 4.5
               to Registration Statement on Form S-4, File
               No. 333-79649)
  4.4      --  Form of 11 1/2% Senior Subordinated Notes due              *
               2009 (incorporated by reference to Exhibit
               4.3 to Registration Statement on Form
               S-4, File No. 333-79649)
 10.1      --  Uniform Provisions for the Acquisition of                  *
               Founding Companies (incorporated by Reference
               to Exhibit 10.1 to Registration Statement on Form
               S-1, File No. 333-53483)
 10.2      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Wildcats Alpha-Keystone Company, Alpha-Keystone
               Engineering, Inc. and the stockholders named
               therein (incorporated by reference to Exhibit 10.2
               to Registration Statement on Form S-1, File No.
               333-53483)
 10.3      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Bulldog Comtrak Company, Comtrak Construction,
               Inc. and the stockholders named therein
               (incorporated by reference to Exhibit
               10.3 to Registration Statement on Form
               S-1, File No. 333-53483)
 10.4      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Cardinal Annex Railroad Builders Company, Annex
               Railroad Builders, Inc. and the stockholders
               named therein (incorporated by reference to Exhibit
               10.4 to Registration Statement on Form S-1, File No.
               333-53483)
 10.5      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Huskies Condon Brothers Company, Condon Brothers
               Inc. and the stockholders named therein
               (incorporated by reference to Exhibit 10.5 to
               Registration Statement on Form S-1, File No.
               333-53483)
 10.6      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Commodores Concrete Company, CPI Concrete Products,
               Inc. and the stockholders named therein (incorporated
               by reference to Exhibit 10.6 to Registration Statement
               on Form S-1, File No. 333-53483)
 10.7      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Nittany Lions McGinley Company, HP McGinley Inc.
               and the stockholders named therein (incorporated by
               reference to Exhibit 10.7 to Registration
               Statement
</TABLE>


                                       29
<PAGE>   30

<TABLE>
<S>        <C>                                                            <C>
               on Form S-1, File No. 333-53483)
 10.8      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Owls Kennedy Railroad Builders Company, Kennedy
               Railroad Builders, Inc. and the stockholders named
               therein (incorporated by reference to Exhibit 10.8 to
               Registration Statement on Form S-1, File No.
               333-53483)
 10.9      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Red Storm Comstock Company, Inc., L.K. Comstock &
               Company, Inc. and the stockholders named therein
               (incorporated by reference to Exhibit 10.9 to
               Registration Statement on Form S-1, File No.
               333-53483)
10.10      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Sycamores Midwest Construction Company, Midwest
               Construction Services, Inc. and the stockholders
               named therein (incorporated by reference to
               Exhibit 10.10 to Registration Statement on Form S-1,
               File No. 333-53483)
10.11      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Bears Merit Company, Merit Railroad Contractors, Inc.
               and the stockholders named therein (incorporated by
               reference to Exhibit 10.11 to Registration
               Statement on Form S-1, File No. 333-53483)
10.12      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Hoosier Mize Company, Mize Construction Company
               and the stockholders named therein (incorporated by
               reference to Exhibit 10.12 to Registration
               Statement on Form S-1, File No. 333-53483)
10.13      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Husky New England Railroad Construction Company, New
               England Railroad Construction Company Inc. and
               the stockholders named therein (incorporated by
               reference to Exhibit 10.13 to Registration
               Statement on Form S-1, File No. 333-53483)
10.14      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Wolverines Northern Rail Services Company,
               Northern Rail Service and Supply Company, Inc. and
               the stockholders named therein (incorporated by
               reference to Exhibit 10.14 to Registration
               Statement on Form S-1, File No. 333-53483)
10.15      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Big Orange Minnesota Company, Minnesota Railroad
               Service Company and the stockholders named therein
               (incorporated by reference to Exhibit 10.15 to
               Registration Statement on Form S-1, File No.
               333-53483)
10.16      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Buckeye Railcorp, Inc., Railcorp Inc. and the
               stockholders named therein (incorporated by
               reference to Exhibit 10.16 to Registration
               Statement on Form S-1, File No. 333-53483)
10.17      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Runnin' Rebels Railroad Service Company, Railroad
               Service, Inc. and the stockholders named therein
               (incorporated by reference to Exhibit 10.17 to
               Registration Statement on Form S-1, File No.
               333-53483)
10.18      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Crusader Railroad Specialties Company, Railroad
               Specialties, Inc. and the stockholders named
               therein (incorporated by reference to Exhibit 10.18
               to Registration Statement on Form S-1, File No.
               333-53483)
10.19      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
</TABLE>


                                       30
<PAGE>   31

<TABLE>
<S>        <C>                                                            <C>
               Screaming Eagle Wood Preserving Company, Southern
               Indiana Wood Preserving Company, Inc. and the
               stockholders named therein (incorporated by
               reference to Exhibit 10.19 to Registration
               Statement on Form S-1, File No. 333-53483)
10.20      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Fighting Irish-U.S. Railway Supply Company, U.S.
               Railway Supply, Inc. and the stockholders named
               therein (incorporated by reference to Exhibit
               10.20 to Registration Statement on Form S-1, File
               No. 333-53483)
10.21      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Spartans Trackworks Company, U.S. Trackworks,
               Inc. and the stockholders named therein
               (incorporated by reference to Exhibit 10.21 to
               Registration Statement on Form S-1, File
               No. 333-53483)
10.22      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Mustang Smith Construction Company, Wm. A. Smith
               Construction Co., Inc. and the stockholders named
               therein (incorporated by reference to Exhibit
               10.22 to Registration Statement on Form S-1, File
               No. 333-53483)
10.23      --  Agreement and Plan of Reorganization dated as of           *
               May 21, 1998 by and between RailWorks Corporation,
               Longhorn Smith Rerailing Company, Wm. A. Smith
               Rerailing Services, Inc. and the stockholders named
               therein (incorporated by reference to Exhibit 10.23
               to Registration Statement on Form S-1, File No.
               333-53483)
10.24      --  Stock Purchase Agreement by and between RailWorks          *
               Corporation, W.T. Byler and William Troy Byler dated
               as of October 1, 1999, incorporated by reference to
               Exhibit 2.1 to Registrant's Current Report on Form 8-K
               filed on November 5, 1999.
10.25      --  Amended and Restated Employment Agreement between          *
               RailWorks Corporation and John G. Larkin dated as of
               August 4, 1998 (incorporated by reference to Exhibit
               10.1 to the Registrant's Quarterly Report on Form
               10-Q filed on September 11, 1998)
10.26      --  Amended and Restated Employment Agreement between          *
               RailWorks Corporation and Michael R. Azarela dated
               as of August 4, 1998 (incorporated by reference
               to Exhibit 10.2 to the Registrant's Quarterly Report
               on Form 10-Q filed on September 11, 1998)
10.27      --  Amended and Restated Employment Agreement between          *
               RailWorks Corporation and John Kennedy dated as of
               August 4, 1998 (incorporated by reference to Exhibit
               10.3 to the Registrant's Quarterly Report on Form
               10-Q filed on September 11, 1998)
10.28      --  Form of Employment Agreement between each Founding         *
               Company and Founding Company Officer (incorporated
               by reference to Exhibit 10.28 to Registration
               Statement on Form S-1, File No. 333-53483)
10.29      --  Amended and Restated RailWorks Corporation 1998            *
               Incentive Stock Plan effective January 1, 1999
               (incorporated by reference to Exhibit 10.5 to the
               Registrant's Quarterly Report on Form 10-Q filed on
               November 15, 1999)
10.30      --  Indemnity and Cooperation Agreement dated as of            *
               April 3, 1997 between Spie Enertrans S.A., Comstock
               Group, Inc., L.K. Comstock & Company and LKC
               Acquisition Corp., together with Memorandum of
               Understanding dated August 20, 1997 between Spie
               Enertrans S.A., Comstock Group, Inc., L.K. Comstock
               & Company and LKC Acquisition Corp. (incorporated by
               reference to Exhibit 10.30 to Registration Statement
               on Form S-1, File No. 333-53483)
10.31      --  Stock Purchase Agreement dated April 3, 1997 between       *
               Comstock Group, Inc. and LKC Acquisition Corp., as
               amended (incorporated by reference to Exhibit 10.31
               to Registration Statement on Form S-1, File No.
               333-53483)
10.32      --  Contingent Promissory Note dated April 3, 1997 made        *
               by L.K. Comstock & Company, Inc. to the order of
</TABLE>


                                       31
<PAGE>   32

<TABLE>
<S>        <C>                                                            <C>
               Spie Enertrans S.A. (incorporated by reference to
               Exhibit 10.32 to Registration Statement on Form S-1,
               File No. 333-53483)
10.33      --  Amended and Restated Credit Agreement dated as of          *
               August 5, 1999 among RailWorks Corporation, as
               Borrower, Certain Subsidiaries, as Guarantors, the
               Lenders named therein, Bank of America, N.A., as
               Domestic Administrative Agent, Bank of America,
               N.A., as Canadian Administrative Agent and First
               Union National Bank, as Documentation Agent
               (incorporated by reference to Exhibit 10.1 to the
               Registrant's Quarterly Report on Form 10-Q filed on
               November 15, 1999.
10.34      --  Amendment No. 1 to the Amended and Restated Credit         *
               Agreement dated September 29, 1999 among RailWorks
               Corporation, as Borrower, Certain Subsidiaries, as
               Guarantors, the Lenders named therein, Bank of
               America, N.A., as Domestic Administrative Agent and
               Bank of America, N.A., as Canadian Administrative
               Agent (incorporated by reference to Exhibit 10.2 to
               the Registrant's Quarterly Report on Form 10-Q filed
               on November 15, 1999)
10.35      --  Amendment No. 2 to the Amended and Restated Credit         *
               Agreement dated November 5, 1999 among RailWorks
               Corporation, as Borrower, Certain Subsidiaries, as
               Guarantors, the Lenders named therein, Bank of
               America, N.A., as Domestic Administrative Agent and
               Bank of America, N.A., as Canadian Administrative
               Agent (incorporated by reference to Exhibit 10.36 to
               Registration Statement on Form S-4/A (File No.
               333-90071)
10.36      --  Amendment No. 3 to the Amended and Restated Credit         *
               Agreement dated January 25, 2000 among RailWorks
               Corporation, as Borrower, Certain Subsidiaries, as
               Guarantors, the Lenders named therein, Bank of
               America Canada, as Canadian Administrative Agent and
               Bank of America, N.A., as Domestic Administrative Agent
               (incorporated by reference to Exhibit 10.36 to the
               Registrant's Annual Report on Form 10-K filed on
               February 29, 2000)
10.37      --  Term Loan Agreement dated as of November 5, 1999           *
               among RailWorks Corporation, as Borrower, Certain
               Subsidiaries of the Borrower, as Guarantors, the
               Lenders named herein, First Union National Bank, as
               Documentation Agent and Bank of America, N.A., as
               Administrative Agent (incorporated by reference to
               Exhibit 10.37 to Registration Statement on Form
               S-4/A (File No. 333-90071)
10.38      --  Employment Agreement between RailWorks Corporation         *
               and Kenneth R. Burk dated as of May 10, 1999
               (incorporated by reference to Exhibit 10.1 to the
               Registrant's Quarterly Report on Form 10-Q filed on
               May 14, 1999)
10.39      --  Amendment dated August 4, 1999 to the Employment           *
               Agreement dated as of August 4, 1998 between
               RailWorks Corporation and Michael R. Azarela
               (incorporated by reference to Exhibit 10.3 to the
               Registrant's Quarterly Report on Form 10-Q filed on
               November 15, 1999)
10.40      --  Amendment dated August 4, 1999 to the Employment           *
               Agreement dated as of August 4, 1998 between
               RailWorks Corporation and John G. Larkin
               (incorporated by reference to Exhibit 10.4 to the
               Registrant's Quarterly Report on Form 10-Q filed on
               November 15, 1999)
10.41      --  Amendment No. 4 to the Amended and Restated Credit         *
               Agreement dated March 30, 2000 among RailWorks
               Corporation, as Borrower, Certain Subsidiaries, as
               Guarantors, the Lenders named therein, Bank of
               America, N. A., as Domestic Administrative Agent and
               Bank of America, N. A., as Canadian Administrative
               Agent (incorporated by reference to Exhibit
               10.41 to Registrant's Quarterly Report on Form
               10-Q filed on May 12, 2000).
10.42      --  Amended and Restated Credit Agreement dated April          *
               28, 2000 among RailWorks Corporation, as Borrower,
               Certain Subsidiaries, as Guarantors, the Lenders
</TABLE>


                                       32
<PAGE>   33

<TABLE>
<S>        <C>                                                         <C>
               named therein, First Union National Bank, as
               Documentation Agent, and Bank of America, N. A., as
               Administrative Agent (incorporated by reference
               to Exhibit 10.42 to Registrant's Quarterly
               Report on Form 10-Q filed on May 12, 2000).
10.43      --  Amended and Restated Security Agreement dated              *
               April 28, 2000 among the persons identified therein
               as Grantors and Bank of America, N. A., as Collateral
               Agent for the Lenders (incorporated by reference
               to Exhibit 10.43 to Registrant's Quarterly
               Report on Form 10-Q filed on May 12, 2000).
10.44      --  Amended and Restated Pledge Agreement dated April          *
               28, 2000 among the persons identified therein as
               Pledgors and Bank of America, N. A., as Collateral
               Agent for the Lenders (incorporated by reference
               to Exhibit 10.44 to Registrant's Quarterly
               Report on Form 10-Q filed on May 12, 2000).
10.45      --  Amended and Restated Employment Agreement, dated           *
               January 1, 2000 between RailWorks Corporation and
               Michael R. Azarela (incorporated by reference to
               Exhibit 10.45 to Registrant's Quarterly Report
               on Form 10-Q filed on May 12, 2000).
10.46      --  Amended and restated Employment Agreement, dated           *
               January 1, 2000 between RailWorks Corporation and
               John Larkin (incorporated by reference to
               Exhibit 10.46 to Registrant's Quarterly Report
               on Form 10-Q filed on May 12, 2000).
10.47      --  First Amendment dated December 13, 2000, to the         34 - 56
               Amended and Restated Credit Agreement dated
               April 28, 2000 among RailWorks Corporation, as
               Borrower, Certain Subsidiaries, as Guarantors,
               the Lenders named therein, First Union National
               Bank, as Documentation Agent, and Bank of
               America, N. A., as Administrative Agent.
10.48      --  Second Amendment dated February, 2000, to the           57 - 64
               Amended and Restated Credit Agreement dated
               April 28, 2000 among RailWorks Corporation, as
               Borrower, Certain Subsidiaries, as Guarantors,
               the Lenders named therein, First Union National
               Bank, as Documentation Agent, and Bank of
               America, N. A., as Administrative Agent.
 12.1      --  Statement of Computation of Ratios                         65
 21.1      --  List of Subsidiaries                                       66
 23.1      --  Consent of Independent Public Accountant                   67
 99.1      --  Stock Exchange Agreement dated October 8, 1998             *
               between the Registrant and BT Alex. Brown
               Incorporated (incorporated by reference to Exhibit
               99.1 to the Registrant's Current Report on Form 8-K
               filed on October 14, 1998)
 99.2      --  Consolidated Financial Statements of Registrant,        68 - 98
               together with the report thereon of Arthur
               Andersen LLP, dated February 28, 2001 and all Notes
               to such Consolidated Financial Statements.
</TABLE>

---------------
* Previously filed; incorporated herein by reference.


                                       33