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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                   FORM 10-K

(MARK ONE)

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

               FOR THE YEAR ENDED DECEMBER 31, 2000.

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

                         COMMISSION FILE NUMBER 0-22276

                             ALLIED HOLDINGS, INC.
             (Exact name of registrant as specified in its charter)

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                   GEORGIA                                      58-0360550
       (State or other jurisdiction of                  (I.R.S. Employer ID Number)
       incorporation or organization)
</TABLE>

            160 CLAIREMONT AVENUE, SUITE 200, DECATUR, GEORGIA 30030
                    (Address of principal executive office)

       Registrant's telephone number, including area code  (404) 373-4285

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

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          NO PAR VALUE COMMON STOCK                       NEW YORK STOCK EXCHANGE
              (Title of Class)                    (Name of Exchange on which Registered)
</TABLE>

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

                                      NONE
                                (Title of Class)

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months, 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 referenced in Part III of this Form 10-K or any amendment to
this Form 10-K.  [X]

     As of March 20, 2001 Registrant had outstanding 8,325,941 shares of common
stock. The aggregate market value of the common stock held by nonaffiliates of
the Registrant, based upon the closing sales price of the common stock on March
20, 2001 as reported on the New York Stock Exchange, was approximately $14.2
million.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the proxy statement for Registrant's 2001 Annual Meeting of
Shareholders to be held May 15, 2001 are incorporated by reference in Part III.
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                             ALLIED HOLDINGS, INC.

                               TABLE OF CONTENTS

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                                                                           PAGE
                                                                          NUMBER
                                                                          ------
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PART I
  Item 1.   Business....................................................     2
  Item 2.   Properties..................................................    10
  Item 3.   Legal Proceedings...........................................    10
  Item 4.   Submission of Matters to a Vote of Security Holders.........    11

PART II
  Item 5.   Market for Registrant's Common Equity and Related
              Stockholder Matters.......................................    12
  Item 6.   Selected Consolidated Financial Data........................    13
  Item 7.   Management's Discussion and Analysis of Financial Condition
              and Results of Operations.................................    14
  Item 7A.  Quantitative and Qualitative Disclosures About Market
              Risk......................................................    19
  Item 8.   Financial Statements and Supplementary Data.................    19
  Item 9.   Disagreements on Accounting and Financial Disclosure........    19

PART III
  Item 10.  Directors and Executive Officers of the Registrant..........    20
  Item 11.  Executive Compensation......................................    20
  Item 12.  Security Ownership of Certain Beneficial Owners and
              Management................................................    20
  Item 13.  Certain Relationships and Related Transactions..............    20

PART IV
  Item 14.  Exhibits, Financial Statement Schedules and Reports on Form
              8-K.......................................................    20
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                                     PART I

ITEM 1.  BUSINESS

1. GENERAL

     Allied Holdings, Inc. (the "Company" or "Allied"), founded in 1934, is a
holding company which operates through its wholly-owned subsidiaries. The
Company's principal operating subsidiaries are Allied Automotive Group, Inc.
(collectively with its subsidiaries referred to as the "Allied Automotive Group"
or "Automotive Group") and Axis Group, Inc. ("Axis" or the "Axis Group"). Allied
Automotive Group is the largest motor carrier in the world specializing in the
transportation of new and used automobiles and light trucks utilizing
specialized tractor trailers ("Rigs" or "Rig") and serves all of the major
domestic and foreign automotive manufacturers. The Axis Group provides logistics
and distribution services to the new and used vehicle distribution market and
other segments of the automotive industry. Axis is the global logistics services
arm of the Allied family of companies.

     Allied Automotive Group offers a full range of automotive delivery services
including transporting new, used and off-lease vehicles to dealers from plants,
rail ramps, ports and auctions, and providing vehicle rail-car loading and
unloading services. Allied Automotive Group represented approximately 97% of the
Company's consolidated 2000 revenues. Allied Automotive Group operates primarily
in the short-haul segment of the automotive transportation industry with an
average length of haul of less than 200 miles. General Motors, Ford and
DaimlerChrysler represent the Company's largest customers, accounting for in
total approximately 73% of 2000 revenues. Allied Automotive Group also provides
services to all of the major foreign manufacturers, including Honda, Mazda,
Nissan, Toyota, Isuzu, Volkswagen and Mitsubishi. Allied Automotive Group
participated in the transportation of approximately 62% of the new vehicles sold
in the United States and Canada in 2000. Most of the Company's major competitors
are privately held and there is minimal public information available with
respect to such companies, but the Company believes that its 2000 revenues were
over four times greater than its closest competitor.

     The Company provides logistics and distribution services to the automotive
market through the Axis Group that complement Allied's new vehicle distribution
services operations. Axis provides carrier management services for various
automotive clients, leases equipment for containerized international shipment of
vehicles, and provides vehicles processing services at ports and inland
distribution centers. In February 2000 Axis acquired CT Group, Inc. and its
subsidiaries, CT Services and Cordin Transportation, which provide a variety of
logistics services to the pre-owned vehicle market. In addition, Axis has
established joint ventures to manage the distribution of Ford vehicles in the
United Kingdom, a joint venture in Brazil to provide automotive logistics
services in the Mercosur region, and a subsidiary which provides logistics and
distribution services in Mexico. Also, Axis provides vehicle tracking for more
than 1.5 million Toyota vehicles annually.

2. SERVICES

     Allied Automotive Group is the largest motor carrier in the world
specializing in the transportation of new and used automobiles and light trucks
for all the major domestic and foreign automotive manufacturers. Allied
Automotive Group participated in the transportation of approximately 62% of the
new vehicles sold in the United States and Canada in 2000. Allied Automotive
Group believes it can capture a larger percentage of its major customers' North
American production by building upon its relationships with manufacturers and
leveraging its reputation for high quality services, competitive pricing and
value-added services. Allied Automotive Group also believes that it can expand
the types of services provided to its existing customers by utilizing its
sophisticated technology in order to deliver vehicles and provide other services
more efficiently and cost effectively than its competitors.

     The Company has made a significant commitment to providing complementary
services to its existing customers and to new customers through its Axis Group
subsidiary. Axis Group is aggressively pursuing opportunities to provide
logistics and distribution services to customers in the automotive industry and
seeks to leverage its proprietary information systems in order to efficiently
provide such services. These services include identifying new and innovative
distribution methods for customers, providing solutions relating to improving

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the management of inventory of new and used vehicles, and providing
reconditioning services relating to the used and remarketed vehicle market. The
Axis Group further believes that significant opportunities exist for it to
provide additional automotive distribution services to its existing customers in
the United States and internationally through acquisitions, and through the
formation of joint ventures or alliances with established local service
providers. For example, in February 2000 Axis Group acquired CT Group, Inc. and
its subsidiaries, CT Services and Cordin Transportation, which provide a variety
of logistics services to the pre-owned vehicle market. In 1999 Axis Group formed
two joint ventures for the purpose of managing the distribution of Ford vehicles
in the United Kingdom. In addition, Axis owns a minority interest in Axis
Sinimbu Logistica ("ASL"). ASL provides automotive distribution services to the
automotive industry in Brazil. ASL increased its share of the automotive
distribution market to roughly one-third as a result of the acquisition of
Translor Veiculos Ltda in January 2001. Axis has also formed a subsidiary which
provides logistics and distribution services in Mexico.

     Information regarding revenues, operating profit and total assets of each
operating segment of the Company for the fiscal years 1998 through 2000, and
information regarding revenues and long-lived assets of the Company attributed
to the geographic areas in which the Company conducted business during those
fiscal years, is set forth in Note 9 of the Company's consolidated financial
statements included in this Annual Report on Form 10-K.

3. CUSTOMER RELATIONSHIPS

     Allied Automotive Group has written contracts with most of its customers.
Allied Automotive Group's contracts with its customers establish rates for the
transportation of vehicles and generally are based upon a fixed rate per vehicle
transported and a variable rate for each mile a vehicle is transported. Certain
of these contracts provide that the rate per vehicle may vary depending on the
size and weight of the vehicle. The contracts between Allied Automotive Group
and its customers generally do not permit Allied Automotive Group to recover for
increases in fuel prices, fuel taxes or labor costs. Increases for fuel prices
or taxes and labor costs must be mutually agreed to by Allied Automotive Group
and its customers. Allied Automotive Group has negotiated fuel surcharges with
most of its customers as a result of fuel cost increases occurring in 2000.
Allied Automotive Group operates under a 30 day rolling contract with Ford which
provides that the Allied Automotive Group is the primary carrier for 36
locations in the United States and 15 Canadian locations. Allied Automotive
Group is the primary carrier for 19 locations in the United States and 16 in
Canada for DaimlerChrysler under a contract which expires on January 31, 2005.
This contract may be terminated on 150 day's notice by either party. Allied
Automotive Group has a contract with General Motors which expires in July 2001
and provides that Allied Automotive Group is the primary carrier for 15
locations in the United States. Allied Automotive Group operates under a second
contract with General Motors which has a rolling 60 day term and covers 11
locations in the United States and 15 locations in Canada.

4. PROPRIETARY MANAGEMENT INFORMATION SYSTEMS

     The Company, through its subsidiaries, has made a long-term commitment to
utilizing technology to serve its customers. Allied Automotive Group's advanced
management information system is a centralized, fully integrated information
system utilizing a mainframe computer together with client servers. The system
is based on a company-wide information database, which allows Allied Automotive
Group to quickly respond to customer information requests without having to
combine data files from several sources. Updates with respect to vehicle load,
dispatch and delivery are immediately available for reporting to customers and
for better control and tracking of customer vehicle inventories. Through
electronic data interchange ("EDI"), Allied Automotive Group communicates
directly with manufacturers in the process of delivering vehicles and
electronically bills and collects from manufacturers. Allied Automotive Group
also utilizes EDI to communicate with inspection companies, railroads, port
processors and other carriers.

     Subsidiaries of the Company also utilize the information system to allow
them to operate their business more efficiently. For example, the information
systems of Allied Automotive Group automatically design an optimal load for each
Rig, taking into account factors such as the capacity of the Rig, the size of
the vehicles, the route, the drop points, applicable weight and height
restrictions and the formula for paying drivers. The
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system also determines the most economical and efficient load sequence and drop
sequence for the vehicles to be transported.

5. MANAGEMENT STRATEGY

     The Company has adopted a performance management strategy which it believes
contributes to quality, enhanced efficiency, safety and profitability in its
operations. The Company's management strategy and culture is designed to enhance
employee performance through careful selection and continuous training of new
employees, with individual performance goals established for each employee and
performance measured regularly through the Company's management information
system. The Company believes that its performance management strategy is unique
with respect to the role that employees play in the form of participation in
this process.

     The Company has developed and implemented various programs to encourage and
reward increased employee productivity. The various programs developed by the
Company reward damage-free delivery by drivers, driver efficiency and driver
safety. The Company believes that these programs have improved customer and
employee satisfaction and driver related productivity in areas such as
damage-free deliveries.

     The Company has adopted an economic value added ("EVA") based performance
measurement and incentive compensation system. EVA is the measure used by the
Company to determine incentive compensation for senior management. EVA also
provides management with a measure to gauge financial performance, allocate
capital to appropriate projects, assist in providing valuations in regard to
proposed acquisitions, and evaluate daily operating decisions. The Company
believes that the EVA based performance measurement and incentive compensation
system promotes the creation of economic value and shareholder value by aligning
the interests of senior management with that of the Company's shareholders.

     The Board of Directors and the shareholders of the Company have also
adopted an Employee Stock Purchase Plan to provide all employees the opportunity
to purchase shares of the Company's common stock.

6. RISK MANAGEMENT AND INSURANCE

     Each of the Company's operating subsidiaries is responsible for defining
risks and securing appropriate insurance programs and coverages at cost
effective rates for the Company. Allied Automotive Group internally administers
all claims for auto and general liability and for workers compensation claims in
Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland,
Massachusetts, Michigan, Missouri, New York, North Carolina, Ohio, South
Carolina, Tennessee and Virginia. Liability and workers compensation claims are
subject to periodic audits by Allied Automotive Group's commercial insurance
carriers. In the United States, Allied Automotive Group currently retains up to
$650,000 of liability for each claim for workers' compensation and up to
$500,000 of liability for automobile and general liability, including personal
injury and property damage claims. In addition to the $500,000 per occurrence
deductible for automobile liability, there is a $1,500,000 aggregate deductible
for those claims which exceed the $500,000 per occurrence deductible, but less
than $1,000,000 per occurrence, and a $1,000,000 aggregate for claims which
exceed $1,000,000 but less than $2,000,000 per occurrence. Allied Automotive
Group also retains up to $250,000 of liability for each cargo damage claim. In
Canada, Allied Automotive Group retains up to C$100,000 of liability for each
claim for personal injury, property damage or cargo damage. If Allied Automotive
Group were to experience a material increase in the frequency or severity of
accidents or workers' compensation claims or unfavorable developments in
existing claims, the Company's operating results could be adversely affected.
Allied Automotive Group believes that a reduction in the number of vehicles
transported may result in an increase in the frequency of workers' compensation
claims. The Company formed Haul Insurance Limited in December 1995 as a captive
insurance subsidiary to provide reinsurance coverage to its licensed insurance
carriers for certain types of losses, as indicated above. Other coverages are
provided by non-related primary and reinsurance companies.

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7. EQUIPMENT, MAINTENANCE AND FUEL

     Allied Automotive Group operates approximately 4,600 Rigs with an average
age of 7.4 years. Allied Automotive Group has historically invested heavily in
both new equipment and equipment upgrades, which have served to increase
efficiency and extend the useful life of Rigs. Currently, new 75-foot Rigs cost
between $130,000 and $140,000 and have a useful life of between 10 to 15 years
when properly maintained.

     All of Allied Automotive Group's terminals have access to a central parts
warehouse through the management information system. The system calculates
maximum and minimum parts inventory quantities based upon usage and
automatically reorders parts. Minor modifications of equipment are performed at
terminal locations. Major modifications involving change in length,
configuration or load capacity are performed by the trailer manufacturers.

     In order to reduce fuel costs, Allied Automotive Group purchases
approximately 30% of its fuel in bulk. Also, fuel is purchased by drivers on the
road from a few major suppliers that offer discounts and central billing. Allied
Automotive Group periodically enters into futures contracts to manage a portion
of its exposure to fuel price fluctuations.

8. COMPETITION

     The transportation of vehicles in the long-haul segment of the automotive
industry has been primarily controlled by rail carriers. In the 1970s and 1980s,
following deregulation of the trucking industry by the Interstate Commerce
Commission and as importers obtained a more significant share of United States
automobile sales, new motor carriers, some without union contracts, began to
compete for automobile traffic. In some instances, these new carriers were
created, or their creation facilitated, by automotive manufacturers.

     Fundamental changes which are being made by automotive manufacturers are
beginning to increase competition. Automotive manufacturers are making changes
to their vehicle distribution systems in an effort to increase the speed of
delivery of finished vehicles to dealers with a goal of reducing inventory and
improving the reliability of delivery. Certain manufacturers are creating
vehicle consolidation centers where rail traffic from numerous manufacturing
plants is re-mixed for delivery to the dealers. In addition, manufacturers are
creating new rail ramps in order to place vehicles in more central locations
closer to the market but off the dealer lots. These new rail ramps may reduce
the average length of haul for motor carriers of automobiles. In metropolitan
areas, competition for traffic from the new rail ramps to the dealers may
increase as local delivery carriers and equipment and driver leasing companies
may become new competitors for the traffic. In addition, some parties may
attempt to utilize drive-away operators or dealer pick-ups to deliver vehicles.

     Another recent development, which is beginning to have an impact on
competition, is an increase in the use of fourth party logistics companies by
automotive manufacturers. An example is the joint venture between Ford and
Autogistics, Inc., a subsidiary of UPS Logistics whereby Ford had engaged
Autogistics to oversee its delivery network. All Ford vehicles in North America
are shipped under the direction of Autogistics. In addition, General Motors has
announced the formation of Vector SCM, a joint venture with CNF, Inc., which is
General Motors' global lead logistics service provider. Management of the
Company believes that the formation of these joint ventures will provide the
Company with an opportunity to participate more in the long haul segment of the
industry and improve the speed and reliability of vehicles delivered.

     Major motor carriers specializing in the delivery of new vehicles that are
competitors of the Allied Automotive Group include Leaseway, Jack Cooper,
Cassens, Hadley and E & L. Non-union carriers may be able to provide comparable
services to those provided by Allied Automotive Group at lower costs.
Additionally, motor carriers utilizing non-union labor have increased.

9. EMPLOYEES AND OWNER OPERATORS

     Subsidiaries of the Company have approximately 8,700 employees, including
approximately 5,900 drivers which are employees of Allied Automotive Group. All
drivers and shop and yard personnel are represented by various labor unions. The
majority of Allied Automotive Group's employees are covered by the Master
Agreement with the International Brotherhood of Teamsters ("IBT") which expires
on May 31, 2003. The
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Master Agreement was entered into in June 1999 and provides for an increase of
approximately 3% per year in wage and benefits in excess of the prior contract
with the IBT. The compensation and benefits paid by Allied Automotive Group to
union employees are established by union contracts. There can be no assurance
that renegotiation of union contracts as they expire will not result in
increased labor costs to the Company or work stoppages which could have a
material adverse effect on the Company. Allied Automotive Group also utilizes
approximately 725 owner-operators, with approximately 150 driving exclusively
for Allied Systems (Canada) Company, a subsidiary of Allied Automotive Group, in
Canada and approximately 575 driving exclusively from terminals in the United
States. The owner-operators are either paid a percentage of the revenues they
generate or receive normal driver pay plus a truck allowance.

10. REGULATION

     Certain subsidiaries of the Company are regulated in the United States by
the United States Department of Transportation ("DOT") and various state
agencies, and in Canada by the National Transportation Agency of Canada and
various provincial transport boards. Truck and trailer length, height, width,
maximum weight capacity and other specifications are regulated federally in the
United States, as well as by individual states and provinces. In recent years,
the automotive manufacturers have increased the percentage of vehicles that are
light trucks as well as increased the size and weight of many vehicles. Due to
the regulations on truck and trailer length, height, width and maximum weight
capacity, the number of vehicles Allied Automotive Group delivers per load has
decreased. Allied Automotive Group successfully negotiated rate increases on
most of its sports utility and light truck business in 1999 to account for this
reduction in the number of deliveries per load. Interstate motor carrier
operations are subject to safety requirements prescribed by the DOT. The DOT
also regulates certain safety features incorporated in the design of Rigs. The
motor carrier transportation industry is also subject to regulatory and
legislative changes which can affect the economics of the industry by requiring
changes in operating policies or influencing the demand for, and the cost of
providing, services to shippers. While the Company believes it is in material
compliance with these various regulatory requirements, any failure to so comply,
as well as any changes in the regulation of the Industry through legislative,
judicial, administrative or other action, could have a material adverse effect
on the Company.

     In addition, Allied Automotive Group's terminal operations are subject to
environmental laws and regulations enforced by federal, state, provincial and
local agencies, including those related to the treatment, storage and disposal
of wastes, and those related to the storage and handling of lubricants. Allied
Automotive Group maintains regular ongoing testing programs for those
underground storage tanks ("USTs") located at its terminals for compliance with
environmental laws and regulations.

11. SEASONALITY AND INFLATION

     The Company's revenues are seasonal, with the second and fourth quarters
generally experiencing higher revenues than the first and third quarters. The
volume of vehicles shipped during the second and fourth quarters is generally
higher due to the introduction of new models which are shipped to dealers during
those periods, and the higher spring and early summer sales of automobiles and
light trucks. During the first and third quarters, vehicle shipments typically
decline due to lower sales volume during those periods and scheduled plant
shutdowns.

12. RECENT MANAGEMENT CHANGES

     Effective February 2001, Robert J. Rutland was appointed by the Board of
Directors to become Chief Executive Officer, as well as Chairman of the Company.
Mr. Rutland has been Chairman of the Company since December 1995, and previously
served as Chief Executive Officer from 1995 through December 1999. A. Mitchell
Poole, Jr. ceased serving as Vice Chairman and Chief Executive Officer of the
Company in February 2001, and Randall E. West ceased serving as the President
and Chief Operating Officer of the Company in February 2001. In addition,
William Burgess was removed as the President of Allied Automotive Group, Inc. in
February 2001.

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13. RISK FACTORS

     The Company's future financial condition and results of operations are
subject to a number of risks and uncertainties, including those set forth below
and in other sections of this Annual Report on Form 10-K.

  Substantial Leverage

     The Company has consolidated indebtedness which is substantial in relation
to its stockholders' equity. As of December 31, 2000, the Company had total
long-term debt of approximately $325 million (excluding $205 million of trade
payables and other accrued liabilities) and stockholders' equity of
approximately $59 million. In addition, the Company has additional borrowings
available under its revolving credit facility which is discussed in the notes to
the Company's consolidated financial statements included in this Annual Report
on Form 10-K. The Company's leveraged financial position exposes it to the risk
of increased interest rates, may impede its ability to obtain financing in the
future for working capital, capital expenditures and general corporate purposes,
and may make the Company more vulnerable to economic downturns and limit its
ability to withstand competitive pressures.

     The Company's debt instruments contain a number of affirmative, negative
and financial covenants, which limit the ability of the Company to, among other
things, incur debt, incur liens, make investments, make dividend or other
distributions or enter into a merger or consolidation transaction. As of
December 31, 2000, the Company was noncompliant with a financial covenant under
its credit facility, but subsequently has negotiated amendments to the financial
covenants, thereby avoiding an event of default. As a result of the amendments,
the Company does not anticipate any covenant violations during 2001. There can
be no assurance, however, that the Company will be able to comply with its debt
covenants in the future or that, if it fails to do so, it will be able to obtain
amendments to or waivers of such covenants on commercially reasonable terms, if
at all.

     The Company will need to use a large portion of its future earnings to pay
principal and interest on its substantial debt obligations, which will reduce
the amount of money available for use in its operations or for responding to
potential business opportunities as they arise. The ability of the Company to
generate the cash necessary to service its debt is subject to a number of
factors beyond its control, and there can be no assurance that the Company will
be able to generate sufficient cash through its operations to enable it to meet
its obligations. If the Company does not generate enough cash to enable it to
meet its debt obligations, it may be required to take actions such as reducing
or delaying capital expenditures, selling assets, restructuring or financing its
debt or seeking additional equity capital. There can be no assurance that any of
these actions could be effected on commercially reasonable terms, if at all, and
the terms of existing or future indebtedness may restrict the Company from
adopting any of these alternatives.

     Any failure of the Company to comply with the covenants contained in its
debt instruments, if not waived, or to adequately service its debt obligations,
could result in a default under its debt instruments. If a default occurs under
any of the Company's debt instruments, the lenders thereunder may elect to
declare all borrowings outstanding, together with interest and other fees, to be
immediately due and payable. Borrowings under the Company's revolving credit
facility are collateralized with the assets of the Company and certain of its
subsidiaries. If the Company were to be unable to repay any borrowing under its
revolving credit facility when due, the lenders thereunder would have the right
to proceed against the collateral granted to them to secure the debt. Any
default under the Company's debt instruments, particularly any default that
resulted in acceleration of indebtedness or foreclosure on collateral, would
have a material adverse effect on the Company.

  Foreign Operations

     Although the majority of the Company's operations are in the United States,
the Company derives a substantial portion of its revenues and earnings from
operations in foreign countries (primarily Canada, but also including the United
Kingdom, Brazil and Mexico). The risks of doing business in foreign countries
include potential adverse changes in the political policies of foreign
governments and diplomatic relations of foreign countries with the United
States, hostility from local populations, adverse effects of currency exchange
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controls, deterioration of foreign economic conditions, currency fluctuations,
foreign exchange restrictions and changes in taxation structure. Due to the
foregoing risks, any of which, if realized, could have a material adverse effect
on the Company, the Company believes that its business activities outside of the
United States involve a higher degree of risk than its domestic activities.

 Increases in Fuel Prices

     Fuel is a major expense incident to the transportation of automotive
vehicles, and the cost and availability of fuel are subject to economic and
political factors and events which the Company can neither control nor
accurately predict. The Company attempts to minimize the effect of fuel price
fluctuations by periodically entering into futures contracts, but there can be
no assurance that such activity will effectively manage the Company's exposure.
In response to rising fuel charges during the past fiscal year, the Company has
negotiated fuel surcharges with most of its customers which enable it to pass on
these costs to such customers. Nevertheless, not all customers are subject to
fuel surcharges, and there can be no assurance that the Company will be able to
continue to impose fuel surcharges on its customers. Higher fuel prices
resulting from fuel shortages or other factors could materially adversely affect
the Company if the Company is unable to pass on the full amount of fuel price
increases to its customers through fuel surcharges or higher rates. In addition,
higher fuel prices, even if passed on to customers, or a shortage of supply,
could have a detrimental effect on the automotive transportation industry and
the business of the Company in general.

  Dependence on Automotive Industry

     The automotive transportation industry is dependent upon the volume of
automobiles and light trucks manufactured, imported and sold. The automotive
industry is highly cyclical, and the demand for new automobiles and light trucks
is directly affected by such factors as general economic conditions, consumer
confidence, and the availability of affordable new car financing. As a result,
the Company's results of operations are adversely affected by cyclical downturns
in the general economy or in the automotive industry and by consumer preferences
in purchasing new automobiles and light trucks. A significant decline in the
volume of automobiles and light trucks manufactured as well as sold in the
United States in the fourth quarter of 2000 and the first quarter of 2001 has
had a material adverse effect on the Company's results of operations, and any
future decline in such volume could similarly have a material adverse effect on
the Company.

 Dependence on Major Customers

     The Company's business is highly dependent upon General Motors, Ford and
DaimlerChrysler, its largest customers. The Company operates under written
contracts with General Motors, Ford and DaimlerChrysler which can be terminated
for any reason or no reason from a minimum of 30 to a maximum of 150 days
notice. Although the Company believes that its relationships with these
customers is mutually satisfactory, there can be no assurance that these
relationships will not be terminated in the future. A significant reduction in
the production by these manufacturers or the loss of General Motors, Ford, or
DaimlerChrysler as a customer, or a significant reduction in the services
provided for any of these customers by the Company would have a material adverse
effect upon the Company.

 Competition

     The automotive transportation industry is highly competitive, as the
Company currently competes with other motor carriers of varying sizes, as well
as with railroads. The Company also competes with non-union motor carriers that
may be able to provide comparable services at lower cost. The development of new
methods for hauling vehicles could also lead to increased competition.

 Dependence on Key Personnel

     The success of the Company is dependent upon its senior management team, as
well as its ability to attract and retain qualified personnel. There is no
assurance that the Company will be able to retain its existing

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senior management or to attract additional qualified personnel. The Company has
been subject to recent management changes as described in this Annual Report.

14. INDUSTRY OVERVIEW

     The following table summarizes historic new vehicle production and sales in
the United States and Canada, the primary sources of the Company's revenues:

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                                                                    1998             1999
                                                                    VS.              VS.
                                                                    1999             2000
                                                                   ------           ------
                                                     1998   1999   CHANGE    2000   CHANGE
                                                     ----   ----   ------    ----   ------
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New Vehicle Production
  (in millions of units)
United States:
  Big Three........................................   9.3   10.3    10.8%     9.9    (3.9)%
  Other............................................   2.3    2.3     0.0%     2.5     8.7%
                                                     ----   ----    ----     ----   -----
          Total....................................  11.6   12.6     8.6%    12.4     1.6%
                                                     ====   ====    ====     ====   =====
Canada:
  Big Three........................................   2.1    2.4    14.3%     2.3    (4.2)%
  Other............................................   0.4    0.6    50.0%     0.6     0.0%
                                                     ----   ----    ----     ----   -----
          Total....................................   2.5    3.0    20.0%     2.9    (3.3)%
                                                     ====   ====    ====     ====   =====
New Vehicle Sales
  (in millions of units)
United States:
  Big Three........................................  11.6   12.3     6.0%    12.1    (1.6)%
  Other............................................   4.0    4.6    15.0%     5.2    13.0%
                                                     ----   ----    ----     ----   -----
          Total....................................  15.6   16.9     8.3%    17.3     2.4%
                                                     ====   ====    ====     ====   =====
Canada:
  Big Three........................................   1.0    1.1    10.0%     1.1     0.0%
  Other............................................   0.4    0.4     0.0%     0.4     0.0%
                                                     ----   ----    ----     ----   -----
          Total....................................   1.4    1.5     7.1%     1.5     0.0%
                                                     ====   ====    ====     ====   =====
</TABLE>

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

Source: Standard & Poor's DRI

     Domestic automotive manufacturing plants are typically dedicated to
manufacturing a particular model or models. Vehicles destined for dealers within
a radius of approximately 250 miles from the plant are usually shipped by truck.
The remaining vehicles are shipped by rail to rail ramps throughout the United
States and Canada where trucking companies handle final delivery to dealers. The
rail or truck carrier is responsible for loading the vehicles on railcars or
trailers and for any damages incurred while the vehicles are in the carrier's
custody. Automobiles manufactured in Europe and Asia are shipped into the United
States and Canada and usually are delivered directly to dealers from seaports by
truck or shipped by rail to rail ramps and delivered by trucks to dealers.
Vehicles transported by ship are normally prepared for delivery in port
processing centers, which involves cleaning and may involve installing
accessories. The port processor releases the vehicles to the carrier which loads
the vehicles and delivers them to a rail ramp or directly to dealers.

             CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

     This Annual Report on Form 10-K contains, and from time to time the Company
and its officers, directors or employees may make other forward-looking
statements, including statements regarding, among other items, (i) the Company's
plans, intentions or expectations, (ii) general industry trends, competitive
conditions and customer preferences, (iii) the Company's management information
systems, (iv) the

                                        9
<PAGE>   11

Company's efforts to reduce costs, (v) the adequacy of the Company's sources of
cash to finance its current and future operations and (vi) resolution of
litigation without material adverse effect on the Company. This notice is
intended to take advantage of the "safe harbor" provided by the Private
Securities Litigation Reform Act of 1995 with respect to such forward-looking
statements. Without limiting the generality of the foregoing, the words
"believe," "anticipate," "seek," "expect," "estimate," "intend," "plan," and
similar expressions are intended to identify such forward-looking statements.
These forward-looking statements involve a number of risks and uncertainties.
Among others, factors that could cause actual results to differ materially from
historical results or results expressed or implied by such forward-looking
statements are the following: economic recessions or downturns in new vehicle
production or sales; the highly competitive nature of the automotive
distribution industry; dependence on the automotive industry; loss or reduction
of revenues generated by the Company's major customers or the loss of any such
customers; the variability of quarterly results and seasonality of the
automotive distribution industry; the Company's highly leveraged financial
position; labor disputes involving the Company or its significant customers; the
dependence on key personnel who have been hired or retained by the Company; the
availability of strategic acquisitions or joint venture partners; increases in
fuel prices; increased frequency and severity of work related accidents and
workers' compensation claims; increased expenses due to layoffs of employees;
changes in regulatory requirements which are applicable to the Company's
business; changes in vehicle sizes and weights which may adversely impact
vehicle deliveries per load; risks associated with doing business in foreign
countries; problems related to information technology systems and computations
that must be made by the Company or its customers and vendors in 2000 or beyond;
and other risk factors set forth from time to time in the Company's Securities
and Exchange Commission reports, including but not limited to, this Annual
Reports on Form 10-K. Many of these factors are beyond the Company's ability to
control or predict, and readers are cautioned not to put undue reliance on such
forward-looking statements. The Company disclaims any obligation to update or
review any forward-looking statements contained in this Annual Report or in any
statement referencing the risk factors and other cautionary statements set forth
in this Annual Report.

ITEM 2.  PROPERTIES

     The Company's executive offices are located in Decatur, Georgia, a suburb
of Atlanta. The Company leases approximately 96,000 square feet of space for its
executive offices, which is sufficient to permit the Company to conduct its
operations. Allied Automotive Group operates from 117 terminals throughout the
United States and Canada which are located at or near manufacturing plants,
ports, and railway terminals. Allied Automotive Group currently owns 28 of its
terminals. Allied Automotive Group leases the remainder of its facilities. Most
of the leased facilities are leased on a year to year basis from railroads at
rents that are not individually material to Allied Automotive Group.

     During the 1990's, changes in governmental regulations have gradually
permitted the lengthening of Rigs from 55 to 75 feet. Allied Automotive Group
has worked closely with manufacturers to develop specialized equipment to meet
the specific needs of manufacturers.

     Allied Automotive Group's Rigs are maintained at 53 shops located
throughout the United States and Canada by approximately 540 maintenance
personnel, including supervisors. These shops are located in 23 facilities owned
by the Company and 30 facilities leased by the Company. Rigs are scheduled for
regular preventive maintenance inspections. Each shop is equipped to handle
repairs resulting from inspection or driver write up, including repairs to
electrical systems, air conditioners, suspension, hydraulic systems, cooling
systems, and minor engine repairs. Major engine overhaul and engine replacement
can be handled at larger terminal facilities, while smaller terminals rely on
outside vendors. The trend has been to use engine suppliers' outlets for engine
repairs due to the long-term warranties obtained by Allied Automotive Group.

ITEM 3.  LEGAL PROCEEDINGS

     The Company is routinely a party to litigation incidental to its business,
primarily involving claims for personal injury and property damage incurred in
the transportation of vehicles. The Company does not believe that any of such
pending litigation, if adversely determined, would have a material adverse
effect on the Company.
                                        10
<PAGE>   12

     The Company is defending two pieces of related litigation in the Supreme
Court of Erie County, New York: Gateway Development & Manufacturing, Inc. v.
Commercial Carriers, Inc., et al., Index No. 1997/8920 (the "Gateway Case"), and
Commercial Carriers, Inc., v. Gateway Development & Manufacturing, Inc., et al.
(the "CCI Case"), Index No. I2000/8184. The claims at issue in both the Gateway
Case and the CCI Case center around the contention that the Company breached
legal duties with respect to a failed business transaction involving Gateway
Development & Manufacturing, Inc., Ryder Truck Rental, Inc., and Ryder System,
Inc. In the Gateway Case, the Company has sought and received summary judgment
in its favor on the sole claim (for tortious interference with contract)
asserted against it by Gateway Development & Manufacturing, Inc., but
anticipates the filing and service of cross-claims that the court has permitted
to be asserted against the Company by the other defendants in that action. In
the CCI Case, the Company has accepted or expects to accept service of a
separate complaint asserting claims against the Company that are virtually
identical to the cross-claims that the Company expects to be asserted against it
by the other defendants in the Gateway Case. It is anticipated that the claims
asserted in both the Gateway Case and the CCI Case will be resolved in a unified
proceeding. With respect to the entirety of this litigation, the Company intends
to continue its vigorous defense against the claims asserted it, as management
believes all of those claims are without merit. While the ultimate results of
this litigation cannot be predicted, management does not expect that the
resolution of these proceedings will have a material adverse effect on the
Company's consolidated financial position or results of operations.

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

     None.

EXECUTIVE OFFICERS OF THE REGISTRANT

     The following table sets forth certain information regarding the executive
officers of the Company and certain of its subsidiaries:

<TABLE>
<CAPTION>
NAME                                   AGE                        TITLE
----                                   ---                        -----
<S>                                    <C>   <C>
Robert J. Rutland....................  59    Chairman, Chief Executive Officer and Director
Guy W. Rutland, III..................  64    Chairman Emeritus and Director
Bernard O. De Wulf...................  52    Vice-Chairman, Executive Vice-President and
                                             Director
Guy W. Rutland, IV...................  37    Executive Vice President and Chief Operating
                                             Officer of Allied Automotive Group and Director
Joseph W. Collier....................  58    Executive Vice-President, Planning and
                                             Development and Director
John J. Gross........................  50    President and Chief Executive Officer of Axis
                                             Group, Inc.
Daniel H. Popky......................  36    Senior Vice President and Chief Financial
                                             Officer
Thomas M. Duffy......................  40    Senior Vice President, General Counsel and
                                             Secretary
</TABLE>

     Robert J. Rutland has been Chairman of the Company since December 1995 and
Chief Executive Officer since February 2001. Mr. Rutland previously served as
Chief Executive Officer from 1995 through December 1999. Mr. Rutland served as
President and Chief Executive Officer of the Company from 1986 to December 1995.
Prior to October 1993, Mr. Rutland was Chief Executive Officer of each of the
Company's subsidiaries.

     Guy Rutland, III was elected Chairman Emeritus in December 1995. Mr.
Rutland served as Chairman of the Board of the Company from 1986 to December
1995. Prior to October 1993, Mr. Rutland was Chairman or Vice Chairman of each
of the Company's subsidiaries.

     Mr. De Wulf has been Vice Chairman and an Executive Vice President of the
Company since October 1993. Prior to such time, Mr. De Wulf was Vice Chairman of
each of the Company's subsidiaries.

                                        11
<PAGE>   13

Mr. De Wulf was Vice Chairman of Auto Convoy from 1983 until 1988 when the
Company and Auto Convoy became affiliated.

     Guy W. Rutland IV has been Executive Vice President and Chief Operating
Officer of Allied Automotive Group since February 2001. Mr. Rutland was Senior
Vice President -- Operations of Allied Automotive Group from November 1997 to
February 2001. Mr. Rutland was Vice President -- Reengineering Core Team of
Allied Automotive Group from November 1996 to November 1997. From January 1996
to November 1996 Mr. Rutland was Assistant Vice President of the Central and
Southeast Region of Operations for Allied Systems, Ltd. From March 1995 to
January 1996 Mr. Rutland was Assistant Vice President of the Central Division of
Operations for Allied Systems, Ltd. From June 1994 to March 1995, Mr. Rutland
was Assistant Vice President of the Eastern Division of Operations for Allied
Systems, Ltd. From 1993 to June 1994 Mr. Rutland was assigned to special
projects with an assignment in Industrial Relations/Labor Department and from
1988 to 1993, Mr. Rutland was Director of Performance Management.

     Mr. Collier has been Executive Vice-President of Planning and Development
of the Company since January 2000. Mr. Collier was the President of Allied
Automotive Group from December 1995 through December 1999. Mr. Collier had been
Executive Vice President of Marketing and Sales and Senior Vice President of
Allied Systems, Ltd. since 1991. Prior to joining the Company in 1979, Mr.
Collier served in management positions with Bowman Transportation and also with
the Federal Bureau of Investigation.

     Mr. Gross has been President and Chief Executive Officer of Axis since May,
2000. Mr. Gross previously served as Vice President of Automotive Logistics at
Customized Transportation, Inc., an operating unit of CSX Corporation.

     Mr. Popky has been Senior Vice President and Chief Financial Officer of the
Company since November 1998. He was appointed President of Allied Industries,
Inc. in December 1997 and served in such capacity until Allied Industries was
merged with Allied Automotive Group in September 2000. Mr. Popky was Senior Vice
President, Finance of the Company from December 1997 to November 1998. From
December 1995 to December 1997, Mr. Popky was Vice President, Finance of the
Company. From January 1995 to December 1995 Mr. Popky was Vice President and
Controller and from October 1994 to January 1995 he was Assistant Vice President
and Controller for the Company. Prior to joining the Company, Mr. Popky held
various positions with Arthur Andersen LLP for 9 years.

     Mr. Duffy has been Senior Vice President, General Counsel and Secretary of
the Company since November 2000 and was Vice-President, General Counsel and
Secretary from June 1998 until November 2000. From May 1997 to June 1998, Mr.
Duffy was a partner with the law firm of Troutman Sanders LLP. Prior to May
1997, Mr. Duffy was a partner with the law firm of Peterson Dillard Young
Asselin & Powell LLP.

                                    PART II

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

     The Company's common stock is traded on the New York Stock Exchange under
the symbol AHI. The common stock began trading on September 29, 1993 on The
Nasdaq Stock Market and has been trading on the New York Stock Exchange since
March 3, 1998. Prior to September 29, 1993, there had been no established public
trading market for the common stock. Market information regarding the common
stock is set forth in Financial Statements and Supplementary Data included
elsewhere herein.

     As of March 20, 2001, there were approximately 2,500 record holders of the
Company's common stock.

     The Company has paid no cash dividends in the last two years.

     The Company is a party to a credit facility with a syndicate of banks, as
well as certain 8 5/8% Senior Notes maturing in 2007 and 12% Senior Subordinated
Notes maturing in 2003, each of which contains covenants restricting the payment
of dividends on the Company's Common Stock. See "Item 7 -- Management's

                                        12
<PAGE>   14

Discussions and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The selected consolidated financial data presented below for each of the
five years in the period ended December 31, 2000 are derived from the Company's
Consolidated Financial Statements which have been audited by Arthur Andersen
LLP, independent public accountants. The selected consolidated financial data
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Consolidated Financial
Statements and notes thereto.

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                          ----------------------------------------------------------
                                             2000         1999         1998        1997       1996
                                          ----------   ----------   ----------   --------   --------
                                                   (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                                       <C>          <C>          <C>          <C>        <C>
STATEMENT OF OPERATION DATA:
  Revenues..............................  $1,069,154   $1,081,309   $1,026,799   $581,530   $392,547
                                          ----------   ----------   ----------   --------   --------
  Operating expenses:
     Salaries, wages and fringe
       benefits.........................     584,527      585,380      547,780    302,539    204,838
     Operating supplies and expenses....     189,136      185,541      169,498     96,206     62,880
     Purchased transportation...........     104,545      103,967      109,884     59,925     34,533
     Insurance and claims...............      47,736       48,252       40,339     22,737     16,849
     Operating taxes and licenses.......      39,389       41,288       40,779     23,028     16,122
     Depreciation and amortization......      62,224       58,647       53,295     33,340     26,425
     Rent expense.......................       8,570        8,974       10,072      5,720      4,975
     Communications and utilities.......       7,333        9,060        9,341      4,530      3,111
     Other operating expenses...........      13,826       10,317        7,461      6,812      4,219
     Acquisition related
       realignment(1)...................          --           --           --      8,914         --
                                          ----------   ----------   ----------   --------   --------
          Total operating expenses......   1,057,286    1,051,426      988,449    563,751    373,952
                                          ----------   ----------   ----------   --------   --------
  Operating income......................      11,868       29,883       38,350     17,779     18,595
                                          ----------   ----------   ----------   --------   --------
  Equity in earnings (loss) of joint
     ventures, net of tax...............       5,066        1,733         (470)        --         --
  Interest expense......................     (33,813)     (32,001)     (26,146)   (14,095)   (10,720)
  Interest income.......................       5,509        2,112        3,270        868        603
                                          ----------   ----------   ----------   --------   --------
  (Loss) income before income taxes and
     extraordinary item.................     (11,370)       1,727       15,004      4,552      8,478
  Income tax benefit (provision)........       5,069         (178)      (6,527)    (2,150)    (3,557)
                                          ----------   ----------   ----------   --------   --------
  (Loss) income before extraordinary
     item...............................      (6,301)       1,549        8,477      2,402      4,921
  Extraordinary loss on early
     extinguishment of debt.............          --           --           --         --       (935)
                                          ----------   ----------   ----------   --------   --------
  Net (loss) income.....................  $   (6,301)  $    1,549   $    8,477   $  2,402   $  3,986
                                          ==========   ==========   ==========   ========   ========
  (Loss) income before extraordinary
     item per share -- basic............  $    (0.79)  $     0.20   $     1.09   $   0.31   $   0.64
  (Loss) income before extraordinary
     item per share -- diluted..........       (0.79)        0.20         1.08       0.31       0.64
  Net (loss) income per
     share -- basic.....................       (0.79)        0.20         1.09       0.31       0.52
  Net (loss) income per
     share -- diluted...................       (0.79)        0.20         1.08       0.31       0.52
  Weighted average common shares
     outstanding -- basic...............       7,946        7,810        7,747      7,728      7,725
  Weighted average common shares
     outstanding -- diluted.............       7,946        7,851        7,846      7,810      7,725
</TABLE>

                                        13
<PAGE>   15

<TABLE>
<CAPTION>
                                                           YEAR ENDED DECEMBER 31,
                                          ----------------------------------------------------------
                                             2000         1999         1998        1997       1996
                                          ----------   ----------   ----------   --------   --------
                                                   (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S>                                       <C>          <C>          <C>          <C>        <C>
BALANCE SHEET DATA:
  Current assets........................  $  213,492   $  225,617   $  195,759   $149,673   $ 49,202
  Current liabilities...................     125,571      128,771      145,730    157,679     48,494
  Total assets..........................     610,539      649,920      621,627    558,939    211,083
  Long-term debt & capital lease
     obligations, less current
     portion............................     324,876      330,101      291,096    228,003     93,708
  Stockholders' equity..................      59,141       66,914       62,853     57,328     56,709
</TABLE>

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

(1) Represents a non-cash charge the Company recorded during 1997 to write down
    Company Rigs and terminal facilities that were idled or closed as a result
    of the Ryder Automotive Group Acquisition.

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

RESULTS OF OPERATIONS

     The following table sets forth the percentage relationship of expense items
to revenues for the periods indicated:

<TABLE>
<CAPTION>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                              2000     1999     1998
                                                              -----    -----    -----
<S>                                                           <C>      <C>      <C>
Revenues....................................................  100.0%   100.0%   100.0%
                                                              -----    -----    -----
Operating Expenses:
  Salaries, wages and fringe benefits.......................   54.7     54.1     53.3
  Operating supplies and expenses...........................   17.7     17.2     16.5
  Purchased transportation..................................    9.8      9.6     10.7
  Insurance and claims......................................    4.5      4.5      3.9
  Operating taxes and licenses..............................    3.7      3.8      4.0
  Depreciation and amortization.............................    5.8      5.4      5.2
  Rent expense..............................................    0.8      0.8      1.0
  Communications and utilities..............................    0.7      0.8      0.9
  Other operating expenses..................................    1.2      1.0      0.8
                                                              -----    -----    -----
          Total operating expenses..........................   98.9     97.2     96.3
                                                              -----    -----    -----
Operating income............................................    1.1      2.8      3.8
                                                              -----    -----    -----
Other income(expense):
  Equity in earnings(loss) of joint ventures, net of tax....    0.5      0.2     (0.1)
  Interest expense..........................................   (3.2)    (3.0)    (2.5)
  Interest income...........................................    0.5      0.2      0.3
                                                              -----    -----    -----
                                                               (2.2)    (2.6)    (2.1)
                                                              -----    -----    -----
(Loss)/income before income taxes...........................   (1.1)     0.2      1.5
Income tax benefit (provision)..............................    0.5     (0.0)    (0.7)
                                                              -----    -----    -----
Net (Loss) income...........................................   (0.6)%    0.2%     0.8%
                                                              =====    =====    =====
</TABLE>

2000 COMPARED TO 1999

     Revenues were $1.07 billion in 2000 compared to $1.08 billion in 1999, a
decrease of $10.0 million, or 0.9%. The Company posted a net loss in 2000 of
$6.3 million compared to net income of $1.5 million in 1999. Basic and diluted
loss per share for 2000 were $0.79, versus basic and diluted earnings per share
of $0.20 in 1999. The operating ratio (operating expenses as a percentage of
revenues) for 2000 was 98.9%, compared to 97.2% in 1999.

                                        14
<PAGE>   16

     The decrease in revenues was primarily the result of a decrease in the
number of vehicles delivered due to a decline in new vehicle production in the
United States and Canada by the Big Three auto manufacturers. Total vehicle
deliveries declined 7.0% in 2000 versus 1999. That compares to a 4.0% drop in
new vehicle production from the Big Three auto manufacturers, the Company's
primary customers. The Company's vehicle deliveries declined more than the
production drop primarily due to the elimination of unprofitable business. The
Company expects to continue being impacted by the ongoing weakness in the
automotive marketplace, primarily in light of cutbacks in North America vehicle
production announced by Ford, General Motors, and Daimler Chrysler. Industry
analysts expect North American Automobile production to be in the range of 15.3
million to 16.3 million units for 2001. Offsetting the revenue decline from
lower delivery volumes was an increase in the revenue generated per vehicle
delivered from $86.63 in 1999 to $92.06 in 2000, a 6.3% increase. This increase
is primarily the result of customer rate increases to compensate the Company for
inflationary cost increases for higher fuel and labor costs and due to the shift
in automotive production to larger and heavier vehicles.

     During the first six months of 2000, the Company posted significantly
improved results with net income increasing from $127,000 in the first six
months of 1999 to $5.9 million in the first six months of 2000. The Company
benefited from higher new vehicle production and expanded business from the Axis
Group as well as improved operating performance from the Automotive Group.
However, the Company was adversely impacted by production declines in the last
half of 2000. In the third quarter, the Company's net loss increased from $3.8
million in 1999 to $4.6 million in 2000. The primary reason for the change was
the impact of the Firestone tire recall. Allied Automotive Group handles vehicle
deliveries from all three of the manufacturing plants that Ford closed due to
the recall. In the fourth quarter of 2000, the Company posted a net loss of $7.5
million, versus net income of $5.3 million in the fourth quarter of 1999. The
decline was primarily the result of the dramatic fall-off in new vehicle
production. Vehicle deliveries by the Company declined 18.5% in the fourth
quarter as the Big Three auto manufacturers lowered production approximately 5%
in October, 15% in November and 25% in December. The company estimates that the
market drop in production reduced vehicle deliveries by approximately 490,000,
which at an average margin per unit, reduced net earnings by approximately $9.5
million. The fourth quarter 2000 results were also reduced by a $1.5 million
charge relating to workforce reduction expenses.

     The following is a discussion of the changes in the Company's major expense
categories:

     Salaries, wages and fringe benefits increased from 54.1% of revenues in
1999 to 54.7% of revenues in 2000. The increase was primarily due to annual
salary and benefit increases combined with inefficiencies resulting from the
volume decline, which was offset by continued productivity and efficiency
improvements.

     Operating supplies and expenses increased from 17.2% of revenues in 1999 to
17.7% of revenues in 2000. The increase was due primarily to the inefficiencies
that resulted from the volume decline of vehicles delivered combined with the
effect of higher fuel prices. The Company negotiated fuel surcharges during the
first quarter of 2000 to offset higher fuel prices. The surcharges offset higher
fuel costs for the last three quarters of 2000; however, the Company estimates
that higher fuel costs, net of the surcharges, reduced first quarter earnings by
approximately $1.6 million.

     Purchased transportation increased from 9.6% of revenues in 1999 to 9.8% of
revenues in 2000. The increase was due primarily to the increase in the mix of
loads hauled by owner-operators versus company drivers. The number of
owner-operators in 2000 was lower than 1999; however, the owner-operators
generally have more seniority than Company drivers so as volumes decline, a
greater percentage of company trucks are idled as lay-offs are based on
seniority.

     Operating taxes and licenses decreased from 3.8% of revenues in 1999 to
3.7% of revenues in 2000. This was primarily due to a reduction in the number of
active rigs operating during 2000 versus 1999.

     Depreciation and amortization increased from 5.4% of revenues in 1999 to
5.8% of revenues in 2000. The increase was due to higher capital spending in the
later part of 1999 together with the disposition of older rigs, which resulted
in write-downs of approximately $1.3 million included in depreciation expense.

                                        15
<PAGE>   17

     Other operating expenses increased from 1.0% of revenues in 1999 to 1.2% of
revenues in 2000. The increase was primarily the result of higher legal and
professional fees.

     Equity in earnings of joint ventures, net of tax, increased from earnings
of $1.7 million, or 0.2% of revenues, in 1999 to $5.1 million, or 0.5% of
revenues, in 2000. The increase was due to earnings from the Company's joint
ventures in the United Kingdom "UK", which started operations in May 1999.
Earnings from the UK ventures were partially offset by small losses from the
Company's Brazilian venture, which began operations in February 1998.

     Interest expense increased from $32.0 million, or 3.0% of revenues, in 1999
to $33.8 million, or 3.2% of revenues, in 2000. The increase was primarily due
higher interest rates on the Company's revolving credit facility.

     Interest income increased from 0.2% of revenues in 1999 to 0.5% of revenues
in 2000. The increase was due to higher investment income from the Company's
captive insurance subsidiary Haul Insurance Limited.

1999 COMPARED TO 1998

     Revenues were $1.08 billion in 1999 compared to $1.03 billion in 1998, an
increase of $54.5 million, or 5.3%. The increase in revenues was primarily the
result of a 6.8% increase in the number of vehicles delivered due to increased
new vehicle sales in the United States and Canada, together with rate increases
implemented during the second half of 1999. Revenues from higher vehicle
delivery volumes were offset by lower revenue per vehicle delivered due to a
slightly lower average length of haul. Net income in 1999 was $1.5 million
compared with net income of $8.5 million in 1998. Basic and diluted earnings per
share for 1999 were $0.20, versus basic earnings per share of $1.09 and diluted
earnings per share of $1.08 in 1998. Net income during 1999 was adversely
impacted by the effect of reduced load averages.

     During 1999 the Company experienced a significant increase in the
percentage of vehicles delivered that were light trucks as well as an overall
increase in the size and weight of most vehicles delivered. Due to regulations
on tractor and trailer length, height, width, and maximum weight capacity, this
change in mix resulted in the number of vehicles delivered per load in 1999
being approximately 4% lower than in 1998. The change in mix negatively impacts
operating results as revenue is realized on a per vehicle basis, thus the
Company's revenue per load decreased. The Company estimates that operating
income for 1999 was reduced by approximately $5 million per quarter as a result
of the load average decline. Throughout the year, the Company discussed the load
average decline with its customers. The Company has put into effect rate
increases to offset the effect of the load average decline; however, the
increases were in effect for only a portion of the year.

     The operating ratio (operating expenses as a percentage of revenues) for
1999 was 97.2%, compared to 96.3% in 1998.

     The following is a discussion of the changes in the Company's major expense
categories:

     Salaries, wages and fringe benefits increased from 53.3% of revenues in
1998 to 54.1% of revenues in 1999. The increase was primarily due to annual
salary and benefit increases combined with inefficiencies resulting from the
load average decline, which was offset by continued productivity and efficiency
improvements.

     Operating supplies and expenses increased from 16.5% of revenues in 1998 to
17.2% of revenues in 1999. The increase was due primarily to the inefficiencies
that resulted in the decrease in load averages and certain one-time costs
related to contingency planning for US labor negotiations that occurred in 1999,
combined with the effect of higher fuel prices.

     Purchased transportation decreased from 10.7% of revenues in 1998 to 9.6%
of revenues in 1999. The decrease was due primarily to the decrease in the mix
of loads hauled by owner-operators and other carriers versus company drivers.
The number of owner-operators year-to-year was comparable; thus company drivers
delivered the additional loads hauled by the Company.

                                        16
<PAGE>   18

     Insurance and claims expense increased from 3.9% of revenues in 1998 to
4.5% of revenues in 1999. The increase was due primarily to an increase in the
frequency of damage claims.

     Operating taxes and licenses decreased from 4.0% of revenues in 1998 to
3.8% of revenues in 1999. This was due to a reduction in the number of active
rigs operating during 1999 versus 1998 resulting from operating efficiencies
realized in 1999.

     Depreciation and amortization increased from 5.2% of revenues in 1998 to
5.4% of revenues in 1999. The increase was related to an increase in the
Company's capital expenditures in 1999.

     Rent expense decreased from 1.0% of revenues in 1998 to 0.8% of revenues in
1999. The decrease was due primarily to terminal closures related to the Ryder
Acquisition Realignment.

     Equity in earnings of joint ventures, net of tax, increased from a loss of
$470,000, or 0.1% of revenues, in 1998 to earnings of $1.7 million, or 0.2% of
revenues, in 1999. The increase was due to earnings from the Company's joint
ventures in the United Kingdom "UK", which started operations in May 1999.
Earnings from the UK ventures offset losses from the Company's Brazilian
venture, which began operations in February 1998.

     Interest expense increased from $26.2 million, or 2.5% of revenues, in 1998
to $32.0 million, or 3.0% of revenues, in 1999. The increase was due to higher
long-term debt levels in 1999 versus 1998 and an increase in the interest rates
on the Company's revolving credit facility.

     Interest income decreased from 0.3% of revenues in 1998 to 0.2% of revenues
in 1999. The decrease was due to lower investment income from the Company's
captive insurance subsidiary, Haul Insurance Limited, which was a result of
increasing interest rates in 1999 that lowered the value of the its bond
portfolio.

     The effective tax rate decreased from 43.5% of pre-tax income in 1998 to
10.3% of pre-tax income in 1999. This decrease was due solely to the equity in
earnings of the joint ventures being presented net of taxes. Including income
taxes on earnings from joint ventures, the effective tax rate was 43.5% in both
1998 and 1999.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's sources of liquidity are funds provided by operations and
borrowings under its revolving credit facility with a syndicate of banks. The
Company's liquidity needs are for the acquisition and maintenance of Rigs and
terminal facilities, the payment of operating expenses and the payment of
interest on and repayment of long-term debt.

     Net cash provided by operating activities totaled $20.1 million in 1999
versus $46.5 million in 2000. A portion of the increase was due to an $8.3
million signing bonus, net of amortization, paid in 1999. The signing bonus was
negotiated under the new United States Teamsters Union contract and was in lieu
of a pay increase in the first year of the new contract. The signing bonus is
being amortized over the life of the new contract. In addition, receivables
declined in 2000 as a result of the sharp fall-off in volume in December 2000.
These items more than offset lower earnings.

     Net cash used in investing activities totaled $66.2 million in 1999 versus
$54.9 million in 2000. Cash paid to purchase capital items decreased $12.5
million to $32.5 million in 2000 from $45.0 million in 1999. As the volumes
declined in 2000, older rigs were taken out of service and not replaced, which
allowed the Company to reduce capital expenditures without materially increasing
the average age of the fleet. In addition, the company purchased CT Group in
February 2000 for $8.4 million.

     Net cash provided by financing activities totaled $37.7 million in 1999
versus net cash used of $2.6 million in 2000. The change was primarily due to
borrowings from the Company's revolving credit facility in 1999 to fund the
Teamsters Union signing bonus and higher working capital. During 2000, the
Company was able to reduce working capital needs and capital expenditures and
thus repaid $5.3 million of long-term debt even with an $8.4 million acquisition
and lower earnings.

                                        17
<PAGE>   19

     Concurrent with the issuance of the senior notes, the Company closed on a
revolving credit facility (the "Revolving Credit Facility"). As of December 31,
2000, the Company was noncompliant with a financial covenant under its Revolving
Credit Facility, but subsequently has negotiated amendments to the financial
covenants in April 2001, thereby avoiding an event of default. As amended, the
Revolving Credit Facility allows the Company to borrow under a revolving line of
credit and to issue letters of credit up to the lesser of $230,000,000 or a
borrowing base amount, as defined in the Revolving Credit Facility. Availability
under the Revolving Credit Facility at December 31, 2000 was $230,000,000. The
amended availability amount is $200,000,000 through June 29, 2001, $195,000,000
from June 30, 2001 through November 29, 2001, $180,000,000 from November 30,
2001 through December 30, 2001, and $170,000,000 from December 31, 2001 through
maturity. Annual commitment fees are due on the undrawn portion of the
commitment. Amounts outstanding under the Revolving Credit Facility mature on
January 31, 2002. The interest rate for the Revolving Credit Facility is, at the
Company's option, either (i) the bank's base rate, as defined, or (ii) the
bank's Eurodollar rate, as defined, as determined at the date of each borrowing
plus an applicable margin. The applicable margin for Eurodollar loans was 2% at
December 31, 2000. The applicable margin was increased to 3.5% through June 29,
2001. The applicable margin increases by 0.25% the last day of each calendar
quarter through maturity.

     The Revolving Credit Facility, as amended, requires a facility fee to be
paid if the Revolving Credit Facility is not refinanced by June 30, 2001. The
facility fee is $250,000 per quarter and accrues daily starting in the second
quarter of 2001. The facility fee will be reduced by 75% if the Revolving Credit
Facility is refinanced in the third quarter of 2001, and reduced by 25% if
refinanced in the fourth quarter of 2001. In addition, a $1,000,000 fee will be
payable if the refinancing occurs in 2002.

     Borrowings under the Revolving Credit Facility are secured by a first
priority security interest on assets of the Company and certain of its
subsidiaries, including a pledge of stock of certain subsidiaries. In addition,
certain subsidiaries of the Company jointly and severally guarantee the
obligations of the Company under the Revolving Credit Facility.

     The Revolving Credit Facility, the Senior Notes, and the Senior
Subordinated Notes each set forth a number of affirmative, negative, and
financial covenants binding on the Company. The negative covenants limit the
ability of the Company to, among other things, incur debt, incur liens, make
investments, make dividend or other distributions, or enter into any merger or
other consolidation transaction. The financial covenants include the maintenance
of a minimum consolidated earnings before interest, taxes and depreciation and
amortization amount, compliance with a leverage ratio and limitations on capital
expenditures. The Company anticipates limiting capital expenditures to a range
of $20 to $25 million in 2001 which is within the covenant limitations. The
Company was noncompliant with the required coverage ratio under its credit
facility as of December 31, 2000. However, the Company and its lenders have
negotiated an amended coverage ratio with which the Company is in compliance,
and no default under these credit instruments has occurred. As a result of these
amendments, the maturity date of the Revolving Credit Facility has been moved
from September 30, 2001 to January 31, 2002. As a result of projected covenant
noncompliance, the Senior Subordinates Notes were also amended in April 2001.
Prior to the amendment the interest rate on the Senior Subordinated Notes was
12%. As amended, the interest rate is 14% effective April 2001. The interest
rate will increase .25% each quarter effective July 1, 2001 for four quarters. A
portion of the interest (12%) is payable semi-annually, with the remaining
portion payable upon maturity.

 Disclosures About Market Risks

     The market risk inherent in the Company's market risk sensitive instruments
and positions is the potential loss arising from adverse changes in short-term
investment prices, interest rates, fuel prices, and foreign currency exchange
rates.

     Short-Term Investments -- The Company does not use derivative financial
instruments in its investment portfolio. The Company places its investments in
instruments that meet high credit quality standards, as specified in the
Company's investment policy guidelines. The policy also limits the amount of
credit exposure to any one issue, issuer, and type of instrument. Short-term
investments at December 31, 2000, which are recorded at fair value of $59.9
million, have exposure to price risk. This risk is estimated as the potential
loss in fair value resulting from a hypothetical 10% adverse change in quoted
prices and amounts to $6.0 million.
                                        18
<PAGE>   20

     Interest Rates -- The Company primarily issues long-term debt obligations
to support general corporate purposes including capital expenditures and working
capital needs. The majority of the Company's long-term debt obligations bear a
fixed rate of interest. A one-percentage point increase in interest rates
affecting the Company's floating rate long-term debt would reduce pre-tax income
by $1.4 million over the next fiscal year. A one-percentage point change in
interest rates would not have a material effect on the fair value of the
Company's fixed rate long-term debt.

     Fuel Prices -- The Company is dependent on diesel fuel to operate its fleet
of Rigs. Diesel fuel prices are subject to fluctuations due to unpredictable
factors such as weather, government policies, changes in global demand, and
global production. To reduce price risk caused by market fluctuations, the
Company generally follows a policy of hedging a portion of its anticipated
diesel fuel consumption. The instruments used are principally readily marketable
exchange traded futures contracts that are designated as hedges. The changes in
market value of such contracts have a high correlation to the price changes of
diesel fuel. Gains and losses resulting from fuel hedging transactions are
recognized when the underlying fuel being hedged is used. At December 31, 2000,
the Company did not have any fuel hedging contracts outstanding. A 10% increase
in diesel fuel prices would reduce pre-tax income by $4.0 million over the next
fiscal year.

     Foreign Currency Exchange Rates -- Although the majority of the Company's
operations are in the United States, the Company does have foreign subsidiaries
(primarily Canada). The net investments in foreign subsidiaries translated into
dollars using year-end exchange rates at December 31, 2000, is $101.7 million.
The potential loss in fair value impacting other comprehensive income resulting
from a hypothetical 10% change in quoted foreign currency exchange rates amounts
to $10.2 million. The Company does not use derivative financial instruments to
hedge its exposure to changes in foreign currency exchange rates.

  Seasonality and Inflation

     The Company's revenues are seasonal, with the second and fourth quarters
generally experiencing higher revenues than the first and third quarters. The
volume of vehicles shipped during the second and fourth quarters is generally
higher due to the introduction of new models which are shipped to dealers during
those periods and the higher spring and early summer sales of automobiles and
light trucks. During the first and third quarters, vehicle shipments typically
decline due to lower sales volume during those periods and scheduled plant shut
downs. Except for the impact of rising fuel costs discussed herein, inflation
has not significantly affected the Company's results of operations.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The information required under this item is provided under the caption
"Disclosures about Market Risks" under Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Financial statements and supplementary data are set forth beginning on page
F-1 of this Report.

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

                                    PART III

     Certain information required by Part III is omitted from this report in
that the Registrant will file a definitive Proxy Statement pursuant to
Regulation 14A (the "Proxy Statement") not later than 120 days after the end of
the fiscal year covered by this report, and certain information included therein
is incorporated herein by reference. Only those sections of the Proxy Statement
which specifically address the items set forth

                                        19
<PAGE>   21

herein are incorporated by reference. Such information does not include the
Compensation Committee Report, the Performance Graph or the Audit Committee
Report included in the Proxy Statement.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information concerning the Company's directors required by this Item is
incorporated by reference to the Company's Proxy Statement. The information
concerning the Company's executive officers required by this Item is
incorporated by reference to the section in Part I, entitled "Executive Officers
of the Registrant."

     The information regarding compliance with Section 16 of the Securities
Exchange Act of 1934, as amended, is to be set forth in the Proxy Statement and
is hereby incorporated by reference.

ITEM 11.  EXECUTIVE COMPENSATION

     The information required by this Item is incorporated by reference to the
Company's Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by this Item is incorporated by reference to the
Company's Proxy Statement.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by this Item is incorporated by reference to the
Company's Proxy Statement.

                                    PART IV

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

     (a) The following documents are filed as part of this report:

        (1) Financial Statements:

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Public Accountants....................  F-1
Consolidated Balance Sheets at December 31, 2000 and 1999...  F-2
Consolidated Statements of Operations for the Years Ended
  December 31, 2000, 1999, and 1998.........................  F-3
Consolidated Statements of Changes in Stockholders' Equity
  for the Years Ended December 31, 2000, 1999, and 1998.....  F-4
Consolidated Statements of Cash Flows for the Years Ended
  December 31, 2000, 1999 and 1998..........................  F-5
Notes to Consolidated Financial Statements..................  F-6
</TABLE>

        (2) Financial Statement Schedules:

                     INDEX TO FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
Report of Independent Public Accountants....................  S-1
Valuation and Qualifying Accounts for the Years Ended
  December 31, 2000, 1999 and 1998..........................  S-2
</TABLE>

     Exhibit 99.1 contains the Financial Statements of Ansa Logistics Limited.

     All other schedules are omitted as the required information is inapplicable
or the information is presented in the financial statements or related notes.
                                        20
<PAGE>   22

     (b) Reports on Form 8-K.

          (i) The Company filed a report on Form 8-K on December 14, 2000
     regarding the initiation of the repurchase of shares of its outstanding
     common stock in open market transactions pursuant to its previously
     disclosed repurchase plan.

     (c) Exhibits.

     Exhibit Index filed as part of this report

<TABLE>
<CAPTION>
EXHIBIT                               DESCRIPTION
-------                               -----------
<C>      <S>  <C>
   3.1   --   Amended and Restated Articles of Incorporation of the
              Company.(1)
   3.2   --   Amended and Restated Bylaws of the Company.
   4.1   --   Specimen Common Stock Certificate.(1)
   4.2   --   Indenture dated September 30, 1997 by and among the Company,
              the Guarantors and The First National Bank of Chicago, as
              Trustee.(6)
   4.3   --   Revolving Credit Agreement among Allied Holdings, Inc. and
              BankBoston, N.A., individually and as Administrative Agent,
              et al., dated January 20, 2000, as amended.
  10.1   --   Form of the Company's Employment Agreement with executive
              officers.(2)
  10.2   --   The Company's Amended and Restated Long Term Incentive Plan.
  10.3   --   The Company's 401(k) Retirement Plan and Defined Benefit
              Pension Plan and Trust.(3)
  10.4   --   Form of 12% Senior Subordinated Notes due February 1, 2003,
              as amended.
  10.5   --   Agreement between the Company and Ford Motor Company, as
              amended.(4)
  10.6   --   Agreement between the Company and DaimlerChrysler
              Corporation.(5)
  10.7   --   Agreement between the Company and General Motors
              Corporation.(5)
  10.8   --   Acquisition Agreement among Allied Holdings, Inc., AH
              Acquisition Corp., Canadian Acquisition Corp., and Axis
              International Incorporated and Ryder System, Inc. dated
              August 20, 1997.(7)
  10.9   --   The Company's 1999 Employee Stock Purchase Plan.(8)
  10.10  --   Allied Holdings, Inc. Deferred Compensation Plan.(9)
  21.1   --   List of subsidiary corporations.
  23.1   --   Consent of Arthur Andersen LLP.
  24.1   --   Powers of Attorney (included within the signature pages of
              this Report).
  99.1   --   Financial Statements of Ansa Logistics Limited for the Year
              ended December 31, 2000.
</TABLE>

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

(1) Incorporated by reference from Registration Statement (File Number 33-66620)
    as filed with the Securities and Exchange Commission on July 28, 1993 and
    amended on September 2, 1993 and September 17, 1993 and deemed effective on
    September 29, 1993.
(2) Incorporated by reference from Form 10-K filed with the commission on March
    29, 2000.
(3) Incorporated by reference from Registration Statement (File Number 33-76108)
    as filed with the SEC on March 4, 1994 and deemed effective on such date,
    and Annual Report on Form 10-K for the year ended December 31, 1993.
(4) Incorporated by reference from form 10-Q filed with the Commission on
    November 12, 1999. Portions of the agreement are omitted pursuant to a
    request for confidential treatment granted by the Commission.
(5) Portions of the agreement are omitted pursuant to a request for confidential
    treatment filed with the Commission on April 16, 2001.
(6) Incorporated by reference from Registration Statement (File Number 33-37113)
    as filed with the SEC on October 3, 1997.
(7) Incorporated by reference from Form 8-K filed with the Commission on August
    29, 1997. Portions of the agreement are omitted pursuant to a request for
    confidential treatment granted by the Commission.

                                        21
<PAGE>   23

(8) Incorporated by reference from Registration Statement (File Number
    333-72053) as filed with the SEC on February 9, 1999.
(9) Incorporated by reference from Registration Statement (File Number
    333-51102) as filed with the SEC on December 1, 2000.

                                        22
<PAGE>   24

                                   SIGNATURES

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

                                          ALLIED HOLDINGS, INC.

Date: 4/13/01                             By:     /s/ ROBERT J. RUTLAND
                                            ------------------------------------
                                                     Robert J. Rutland,
                                            Chairman and Chief Executive Officer

Date: 4/13/01                             By:      /s/ DANIEL H. POPKY
                                            ------------------------------------

                                                      Daniel H. Popky,
                                              Senior Vice President and Chief
                                                      Financial Officer
                                            (Principal Financial and Accounting
                                                           Officer)

                               POWER OF ATTORNEY

     KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert J. Rutland and Guy W. Rutland,
III, jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities to sign any amendments to this
Report on Form 10-K, and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

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

                /s/ ROBERT J. RUTLAND                  Chairman and Director                 4/13/01
-----------------------------------------------------
                  Robert J. Rutland

               /s/ GUY W. RUTLAND, III                 Chairman Emeritus and Director        4/13/01
-----------------------------------------------------
                 Guy W. Rutland, III

               /s/ BERNARD O. DE WULF                  Vice Chairman, Executive Vice         4/13/01
-----------------------------------------------------    President, and Director
                 Bernard O. De Wulf

                /s/ JOSEPH W. COLLIER                  Executive Vice-President and          4/13/01
-----------------------------------------------------    Director
                  Joseph W. Collier

               /s/ DAVID G. BANNISTER                  Director                              4/13/01
-----------------------------------------------------
                 David G. Bannister

                /s/ ROBERT R. WOODSON                  Director                              4/13/01
-----------------------------------------------------
                  Robert R. Woodson

                /s/ WILLIAM P. BENTON                  Director                              4/13/01
-----------------------------------------------------
                  William P. Benton

              /s/ BERNER F. WILSON, JR.                Director                              4/13/01
-----------------------------------------------------
                Berner F. Wilson, Jr.

               /s/ GUY W. RUTLAND, IV                  Director                              4/13/01
-----------------------------------------------------
                 Guy W. Rutland, IV

                                                       Director
-----------------------------------------------------
                   Randall E. West
</TABLE>

                                        23
<PAGE>   25

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Allied Holdings, Inc.:

     We have audited the accompanying consolidated balance sheets of ALLIED
HOLDINGS, INC. (a Georgia corporation) AND SUBSIDIARIES as of December 31, 2000
and 1999 and the related consolidated statements of operations, changes in
stockholders' equity, and cash flows for each of the three years in the period
ended December 31, 2000. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management as well as evaluating the overall financial
statement presentation. We believe that our audits and the report of other
auditors provide a reasonable basis for our opinion.

     We did not audit the financial statements of Ansa Logistics Limited, the
investment in which is reflected in the accompanying financial statements using
the equity method of accounting. The investment in Ansa Logistics Limited
represents less than 1% of total assets at December 31, 2000 and 1999 and the
equity in its net income for the year ended December 31, 2000 and the period
from its inception through December 31, 1999 is $2,197,000 and $1,870,000 of the
total Company's net (loss) income of $(6,301,000) and $1,549,000, respectively.
The statements of Ansa Logistics Limited were audited by other auditors whose
report has been furnished to us and our opinion, insofar as it relates to the
amounts included for Ansa Logistics Limited, is based solely on the report of
the other auditors.

     In our opinion, based on our audit and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the financial position of Allied Holdings, Inc. and subsidiaries as of December
31, 2000 and 1999 and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States.

                                          /s/ Arthur Andersen

Atlanta, Georgia
February 9, 2001
(except with respect to the matter
discussed in the fourth paragraph under
the sub-heading Equity Investments
within Note 2, as to which the date
is April 13, 2001)

                                       F-1
<PAGE>   26

                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
                                                                (IN THOUSANDS)
<S>                                                           <C>        <C>
                                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents.................................  $  2,373   $ 13,984
  Short-term investments....................................    59,892     44,325
  Receivables, net of allowance for doubtful accounts of
     $4,071 and $1,508 in 2000 and 1999, respectively.......   114,266    121,058
  Inventories...............................................     7,415      7,949
  Deferred tax assets.......................................    10,191     16,119
  Prepayments and other current assets......................    19,355     22,182
                                                              --------   --------
          Total current assets..............................   213,492    225,617
                                                              --------   --------
PROPERTY AND EQUIPMENT, NET.................................   259,362    287,838
                                                              --------   --------
OTHER ASSETS:
  Goodwill, net.............................................    95,159     93,104
  Other.....................................................    42,526     43,361
                                                              --------   --------
          Total other assets................................   137,685    136,465
                                                              --------   --------
          Total assets......................................  $610,539   $649,920
                                                              ========   ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Current maturities of long-term debt......................  $    109   $    185
  Trade accounts payable....................................    45,975     42,931
  Accrued liabilities.......................................    79,487     85,655
                                                              --------   --------
          Total current liabilities.........................   125,571    128,771
                                                              --------   --------
LONG-TERM DEBT, LESS CURRENT MATURITIES.....................   324,876    330,101
                                                              --------   --------
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS.................     9,943     11,973
                                                              --------   --------
DEFERRED INCOME TAXES.......................................    21,414     37,409
                                                              --------   --------
OTHER LONG-TERM LIABILITIES.................................    69,594     74,752
                                                              --------   --------
COMMITMENTS AND CONTINGENCIES (NOTES 4, 5, 6, AND 7)
STOCKHOLDERS' EQUITY:
  Common stock, no par value; 20,000 shares authorized,
     8,187 and 7,997 shares outstanding at December 31, 2000
     and 1999, respectively.................................         0          0
  Additional paid-in capital................................    45,990     44,437
  Treasury stock, 139 and 29 shares at cost at December 31,
     2000 and 1999, respectively............................      (707)      (186)
  Retained earnings.........................................    20,602     26,903
  Accumulated other comprehensive loss, net of tax..........    (6,744)    (4,240)
                                                              --------   --------
          Total stockholders' equity........................    59,141     66,914
                                                              --------   --------
          Total liabilities and stockholders' equity........  $610,539   $649,920
                                                              ========   ========
</TABLE>

   The accompanying notes are an integral part of these consolidated balance
                                    sheets.

                                       F-2
<PAGE>   27

                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
             FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

<TABLE>
<CAPTION>
                                                                2000          1999          1998
                                                             -----------   -----------   -----------
                                                              (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                          <C>           <C>           <C>
REVENUES...................................................  $1,069,154    $1,081,309    $1,026,799
                                                             ----------    ----------    ----------
OPERATING EXPENSES:
  Salaries, wages, and fringe benefits.....................     584,527       585,380       547,780
  Operating supplies and expenses..........................     189,136       185,541       169,498
  Purchased transportation.................................     104,545       103,967       109,884
  Insurance and claims.....................................      47,736        48,252        40,339
  Operating taxes and licenses.............................      39,389        41,288        40,779
  Depreciation and amortization............................      62,224        58,647        53,295
  Rent expense.............................................       8,570         8,974        10,072
  Communications and utilities.............................       7,333         9,060         9,341
  Other operating expenses.................................      13,826        10,317         7,461
                                                             ----------    ----------    ----------
          Total operating expenses.........................   1,057,286     1,051,426       988,449
                                                             ----------    ----------    ----------
          Operating income.................................      11,868        29,883        38,350
                                                             ----------    ----------    ----------
OTHER INCOME (EXPENSE):
  Equity in earnings (loss) of joint ventures, net of
     tax...................................................       5,066         1,733          (470)
  Interest expense.........................................     (33,813)      (32,001)      (26,146)
  Interest income..........................................       5,509         2,112         3,270
                                                             ----------    ----------    ----------
                                                                (23,238)      (28,156)      (23,346)
                                                             ----------    ----------    ----------
(LOSS) INCOME BEFORE INCOME TAXES..........................     (11,370)        1,727        15,004
INCOME TAX BENEFIT (PROVISION).............................       5,069          (178)       (6,527)
                                                             ----------    ----------    ----------
NET (LOSS) INCOME..........................................  $   (6,301)   $    1,549    $    8,477
                                                             ==========    ==========    ==========
PER COMMON SHARE:
  Net (loss) income per common share -- basic..............  $    (0.79)   $     0.20    $     1.09
                                                             ==========    ==========    ==========
  Net (loss) income per common share -- diluted............  $    (0.79)   $     0.20    $     1.08
                                                             ==========    ==========    ==========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
  Basic....................................................       7,946         7,810         7,747
                                                             ==========    ==========    ==========
  Diluted..................................................       7,946         7,851         7,846
                                                             ==========    ==========    ==========
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.

                                       F-3
<PAGE>   28

                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
             FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

<TABLE>
<CAPTION>
                                                                                                           ACCUMULATED
                                                      COMMON STOCK     ADDITIONAL                             OTHER
                                     COMPREHENSIVE   ---------------    PAID-IN     TREASURY   RETAINED   COMPREHENSIVE
                                        INCOME       SHARES   AMOUNT    CAPITAL      STOCK     EARNINGS      INCOME        TOTAL
                                     -------------   ------   ------   ----------   --------   --------   -------------   -------
                                                                            (IN THOUSANDS)
<S>                                  <C>             <C>      <C>      <C>          <C>        <C>        <C>             <C>
BALANCE, DECEMBER 31, 1997.........                  7,819      $0      $43,277      $   0     $16,877       $(2,826)     $57,328
  Net income.......................     $ 8,477          0       0            0          0       8,477             0        8,477
  Other comprehensive income
    (loss) -- foreign currency
    translation adjustment, net of
    income taxes of $2,089.........      (3,289)         0       0            0          0           0        (3,289)      (3,289)
                                        -------
  Comprehensive income.............     $ 5,188
                                        =======
  Issuance of common stock.........                      1       0           22          0           0             0           22
  Nonqualified options exercised...                      3       0           24          0           0             0           24
  Restricted stock, net............                     55       0          291          0           0             0          291
                                                     -----      --      -------      -----     -------       -------      -------
BALANCE, DECEMBER 31, 1998.........                  7,878       0       43,614          0      25,354        (6,115)      62,853
  Net income.......................     $ 1,549          0       0            0          0       1,549             0        1,549
  Other comprehensive
    income -- foreign currency
    translation adjustment, net of
    income taxes of $1,432.........       1,875          0       0            0          0           0         1,875        1,875
                                        -------
  Comprehensive income.............     $ 3,424
                                        =======
  Issuance of common stock.........                     71       0          415          0           0             0          415
  Nonqualified options exercised...                      3       0           27          0           0             0           27
  Repurchases of common stock......                    (29)      0            0       (186)          0             0         (186)
  Restricted stock, net............                     74       0          381          0           0             0          381
                                                     -----      --      -------      -----     -------       -------      -------
BALANCE, DECEMBER 31, 1999.........                  7,997       0       44,437       (186)     26,903        (4,240)      66,914
  Net loss.........................     $(6,301)         0       0            0          0      (6,301)            0       (6,301)
  Other comprehensive
    loss -- foreign currency
    translation adjustment, net of
    income taxes of $1,601.........      (2,504)         0       0            0          0           0        (2,504)      (2,504)
                                        -------
  Comprehensive loss...............     $(8,805)
                                        =======
  Issuance of common stock.........                    146       0          750          0           0             0          750
  Repurchases of common stock......                   (110)      0            0       (521)          0             0         (521)
  Restricted stock, net............                    154       0          803          0           0             0          803
                                                     -----      --      -------      -----     -------       -------      -------
BALANCE, DECEMBER 31, 2000.........                  8,187      $0      $45,990      $(707)    $20,602       $(6,744)     $59,141
                                                     =====      ==      =======      =====     =======       =======      =======
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.

                                       F-4
<PAGE>   29

                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

<TABLE>
<CAPTION>
                                                                2000       1999       1998
                                                              --------   --------   --------
                                                                      (IN THOUSANDS)
<S>                                                           <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income.........................................  $ (6,301)  $  1,549   $  8,477
                                                              --------   --------   --------
  Adjustments to reconcile net (loss) income to net cash
     provided by operating activities:
     Depreciation and amortization..........................    62,224     58,647     53,295
     Amortization (payment) of teamsters union signing
       bonus................................................     2,490     (8,298)         0
     Equity in (income) loss of joint ventures, net of
       tax..................................................    (5,066)    (1,733)       470
     Compensation expense related to restricted stock
       grants...............................................       803         33        291
     Deferred income taxes..................................    (8,419)       718      1,852
     Change in operating assets and liabilities, excluding
       effect of businesses acquired:
       Receivables, net.....................................     8,196    (16,123)   (30,321)
       Inventories..........................................       497     (1,090)    (1,505)
       Prepayments and other current assets.................     2,716     (3,102)     2,384
       Trade accounts payable...............................     2,056        359      6,366
       Accrued liabilities..................................   (12,658)   (10,839)   (15,751)
                                                              --------   --------   --------
          Total adjustments.................................    52,839     18,572     17,081
                                                              --------   --------   --------
          Net cash provided by operating activities.........    46,538     20,121     25,558
                                                              --------   --------   --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment.......................   (32,275)   (45,027)   (61,868)
  Proceeds from sale of property and equipment..............       977      2,749        606
  Purchase of businesses, net of cash acquired..............    (8,352)    (1,879)      (942)
  Investment in joint ventures..............................      (616)      (306)   (11,920)
  Cash received from joint ventures.........................     1,509          0          0
  Increase in short-term investments........................   (15,567)   (21,002)    (3,783)
  Increase in the cash surrender value of life insurance....      (541)      (773)    (1,373)
                                                              --------   --------   --------
          Net cash used in investing activities.............   (54,865)   (66,238)   (79,280)
                                                              --------   --------   --------
CASH FLOWS FROM FINANCING ACTIVITIES:
  (Repayments) proceeds of long-term debt, net..............    (5,301)    36,444     62,859
  Proceeds from exercise of stock options...................         0         27         24
  Proceeds from issuance of common stock....................       750        415          0
  Repurchase of common stock................................      (521)      (186)         0
  Other, net................................................     2,477        971      2,613
                                                              --------   --------   --------
          Net cash (used in) provided by financing
            activities......................................    (2,595)    37,671     65,496
                                                              --------   --------   --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
  EQUIVALENTS...............................................      (689)       453       (327)
                                                              --------   --------   --------
NET CHANGE IN CASH AND CASH EQUIVALENTS.....................   (11,611)    (7,993)    11,447
                                                              --------   --------   --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..............    13,984     21,977     10,530
                                                              --------   --------   --------
CASH AND CASH EQUIVALENTS AT END OF YEAR....................  $  2,373   $ 13,984   $ 21,977
                                                              ========   ========   ========
</TABLE>

 The accompanying notes are an integral part of these consolidated statements.

                                       F-5
<PAGE>   30

                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                       DECEMBER 31, 2000, 1999, AND 1998

1. ORGANIZATION AND OPERATIONS

     Allied Holdings, Inc. (the "Company"), a Georgia corporation, is a holding
company which operates through its wholly owned subsidiaries. The principal
operating divisions of the Company are Allied Automotive Group, Inc. ("Allied
Automotive Group") and Axis Group, Inc. ("Axis Group"). Allied Automotive Group,
through its subsidiaries, is engaged in the business of transporting automobiles
and light trucks from manufacturing plants, ports, auctions, and railway
distribution points to automobile dealerships. Axis Group, through its
subsidiaries, provides distribution, automotive inspection services and
logistics services for the automotive industry.

     The Company has one additional operating subsidiary, Haul Insurance Limited
("Haul"), which provides services to the Company, Allied Automotive Group, and
Axis Group. Haul, a captive insurance company, was formed for the purpose of
insuring general liability, automobile liability, and workers' compensation for
the Company and its subsidiaries.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany transactions and accounts
have been eliminated.

FOREIGN CURRENCY TRANSLATION

     The assets and liabilities of the Company's foreign subsidiaries are
translated into U.S. dollars using current exchange rates in effect at the
balance sheet date, and revenues and expenses are translated at average monthly
exchange rates. The resulting translation adjustments are recorded as
accumulated other comprehensive income in the accompanying consolidated
statements of changes in stockholders' equity, net of related income taxes.

REVENUE RECOGNITION

     Substantially all revenue is derived from transporting automobiles and
light trucks from manufacturing plants, ports, auctions, and railway
distribution points to automobile dealerships. Revenue is recorded by the
Company when the vehicles are delivered to the dealerships.

     During 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin 101 "Revenue Recognition in Financial Statements," which
clarifies the basic criteria for recognizing revenue. We adopted this bulletin
during the fourth quarter 2000. The adoption of this bulletin did not have a
material impact on our financial statements.

CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents.

INVENTORIES

     Inventories consist primarily of tires, parts, materials, and supplies for
servicing the Company's tractors and trailers. Inventories are recorded at the
lower of cost (on a first-in, first-out basis) or market.

                                       F-6
<PAGE>   31
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                      PREPAYMENTS AND OTHER CURRENT ASSETS

     Prepayments and other current assets consist of the following at December
31, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Tires on tractors and trailers..............................  $13,442   $13,506
Prepaid insurance...........................................      964       865
Other.......................................................    4,949     7,811
                                                              -------   -------
                                                              $19,355   $22,182
                                                              =======   =======
</TABLE>

TIRES ON TRACTORS AND TRAILERS

     New tires on tractors and trailers are capitalized and amortized to
operating supplies and expenses on a cents per mile basis.

PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost. Major property additions,
replacements, and betterments are capitalized, while maintenance and repairs
which do not extend the useful lives of these assets are expensed currently.
Depreciation is provided using the straight-line method for financial reporting
and accelerated methods for income tax purposes. The detail of property and
equipment at December 31, 2000 and 1999 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                        2000       1999     USEFUL LIVES
                                                      --------   --------   -------------
<S>                                                   <C>        <C>        <C>
Tractors and trailers...............................  $408,593   $395,288   4 to 10 years
Buildings and facilities (including leasehold
  improvements).....................................    51,814     51,033   4 to 25 years
Land................................................    17,589     17,722
Furniture, fixtures, and equipment..................    39,846     34,041   3 to 10 years
Service cars and equipment..........................     3,307      2,879   3 to 10 years
                                                      --------   --------
                                                       521,149    500,963
Less accumulated depreciation and amortization......   261,787    213,125
                                                      --------   --------
                                                      $259,362   $287,838
                                                      ========   ========
</TABLE>

     Depreciation expense amounted to $58,519,000, $55,219,000, and $49,422,000
for the years ended December 31, 2000, 1999, and 1998, respectively. During 2000
and 1999, the Company recorded a pretax charge of approximately $1,340,000 and
$628,000, respectively, to write down Company rigs that were idled from
operations to their estimated liquidation values. The charge is included in
depreciation expense recorded for the period.

                                       F-7
<PAGE>   32
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                               2000      1999      1998
                                                              -------   -------   -------
<S>                                                           <C>       <C>       <C>
Cash paid during the year for interest......................  $33,623   $31,982   $24,540
Cash paid during the year for income taxes, net of
  refunds...................................................      955     1,056       378
Liabilities assumed in connection with businesses
  acquired*.................................................      865         0         0
</TABLE>

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

* Includes trade accounts payable, accrued liabilities, deferred income taxes,
  and other long-term liabilities.

GOODWILL

     Goodwill is being amortized on a straight-line basis over 20 to 40 years.
Amortization (included in depreciation and amortization expense) for the years
ended December 31, 2000, 1999, and 1998 amounted to approximately $3,531,000,
$3,466,000, and $3,235,000, respectively. Accumulated amortization was
approximately $14,226,000 and $10,930,000 at December 31, 2000 and 1999,
respectively. The Company periodically evaluates the realizability of goodwill
based on expectations of nondiscounted cash flows and operating income for each
subsidiary having a material goodwill balance. In the opinion of management, no
impairment of goodwill exists at December 31, 2000.

     During 2000, Axis Group acquired the stock of CT Group, Inc. for
approximately $8.4 million and resulted in goodwill amounting to approximately
$6.6 million. The acquisition was accounted for as a purchase, and accordingly,
the consolidated statements of operations include the results of operations of
CT Group, Inc. since the date of acquisition. The acquisition of CT Group, Inc.
did not have a material impact on the Company's consolidated financial
statements.

CASH SURRENDER VALUE OF LIFE INSURANCE

     The Company maintains life insurance policies for certain employees of the
Company. Under the terms of the policies, the Company will receive, upon the
death of the insured, the lesser of aggregate premiums paid or the face amount
of the policy. Any excess proceeds over premiums paid are remitted to the
employee's beneficiary. The Company records the increase in cash surrender value
each year as a reduction of premium expense. The cash surrender value was
approximately $9,264,000 and $8,723,000 as of December 31, 2000 and 1999,
respectively, and is included in other assets on the accompanying balance
sheets.

USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements. Estimates also affect the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.

RECLASSIFICATION

     Certain amounts in the December 31, 1999 and 1998 financial statements have
been reclassified to conform to the current year presentation.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures
About Fair Value of Financial Instruments," requires disclosure of the following
information about the fair value of certain financial instruments for which it
is practicable to estimate that value. For purposes of the following disclosure,

                                       F-8
<PAGE>   33
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the fair value of a financial instrument is the amount at which the instrument
could be exchanged in a current transaction between willing parties, other than
in a forced sale or liquidation.

     The amounts disclosed represent management's best estimates of fair value.
In accordance with SFAS No. 107, the Company has excluded certain financial
instruments and all other assets and liabilities from its disclosure.
Accordingly, the aggregate fair value amounts presented are not intended to, and
do not, represent the underlying fair value of the Company.

     The methods and assumptions used to estimate fair value are as follows:

  Cash and Cash Equivalents

          The carrying amount approximates fair value due to the relatively
     short period to maturity of these instruments.

  Short-term Investments

          The Company's short-term investments are comprised of debt and equity
     securities, all classified as trading securities, which are carried at
     their fair value based on the quoted market prices of those investments.
     Accordingly, net realized and unrealized gains and losses on trading
     securities are included in net earnings.

  Long-term Debt

          The carrying amount of the revolving credit facility and the senior
     subordinated notes approximates fair value based on the borrowing rates
     currently available to the Company for borrowings with similar terms and
     average maturities. The fair value of the senior notes is based on the
     year-end quoted market price.

     The financial instruments are generally executed with major financial
institutions which expose the Company to acceptable levels of market and credit
risks and may at times be concentrated with certain counterparties or groups of
counterparties. The creditworthiness of counterparties is subject to continuing
review and full performance is anticipated.

     The asset and (liability) amounts recorded in the balance sheet and the
estimated fair values of financial instruments at December 31, 2000 consisted of
the following (in thousands):

<TABLE>
<CAPTION>
                                                              CARRYING      FAIR
                                                               AMOUNT       VALUE
                                                              ---------   ---------
<S>                                                           <C>         <C>
Cash and cash equivalents...................................  $   2,373   $   2,373
Short-term investments......................................     59,892      59,892
Long-term debt..............................................   (324,876)   (279,985)
</TABLE>

ACCRUED LIABILITIES

     Accrued liabilities consist of the following at December 31, 2000 and 1999
(in thousands):

<TABLE>
<CAPTION>
                                                               2000      1999
                                                              -------   -------
<S>                                                           <C>       <C>
Wages and benefits..........................................  $35,994   $39,728
Claims and insurance reserves...............................   23,105    24,691
Other.......................................................   20,388    21,236
                                                              -------   -------
                                                              $79,487   $85,655
                                                              =======   =======
</TABLE>

                                       F-9
<PAGE>   34
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     During 2000, the Company recorded an approximate $2.5 million workforce
reduction charge related to terminating approximately 100 employees. During
2000, severance payments amounted to approximately $900,000, and at December 31,
2000, approximately $1.6 million is outstanding and included in accrued
liabilities -- other above.

     The long-term portion of claims and insurance reserves is included in the
balance sheets as other long-term liabilities and amounts to approximately
$69,315,000 and $74,073,000 at December 31, 2000 and 1999, respectively.

CLAIMS AND INSURANCE RESERVES

     In the United States, the Company retains liability up to $650,000 for each
workers' compensation claim and $500,000 for each claim for automobile and
general liability, including personal injury and property damage claims. In
addition to the $500,000 per occurrence deductible for automobile liability,
there is a $1,500,000 aggregate deductible for those claims which exceed the
$500,000 per occurrence deductible, subject to a $1,000,000 per claim limit. In
addition, the Company retains liability up to $250,000 for each cargo damage
claim. In Canada, the Company retains liability up to CDN $100,000 for each
claim for personal injury, property damage, and cargo damage.

     Most reserves for self-insured workers' compensation, automobile, and
general liability losses are based on actuarial estimates that are discounted at
6% to their present value based on the Company's historical claims experience
adjusted for current industry trends. The undiscounted amount of the reserves
for claims and insurance at December 31, 2000 and 1999 was approximately
$103,085,000 and $103,365,000, respectively. The claims and insurance reserves
are adjusted periodically as such claims mature to reflect changes in actuarial
estimates based on actual experience.

     The estimated costs of all known and potential losses are accrued by the
Company. In the opinion of management, adequate provision has been made for all
incurred claims.

COMPREHENSIVE INCOME

     The Company has adopted SFAS No. 130, "Reporting Comprehensive Income,"
which requires companies to report all changes in equity during a period, except
those resulting from investment by owners and distribution to owners, in a
financial statement for the period in which they are recognized. The Company has
chosen to disclose comprehensive income, which encompasses net income and
foreign currency translation adjustment, net of income taxes, in the
accompanying consolidated statements of changes in stockholders' equity.

INCOME TAXES

     The Company follows the practice of providing for income taxes based on
SFAS No. 109, "Accounting for Income Taxes." SFAS No. 109 requires recognition
of deferred tax liabilities and assets for the expected future tax consequences
of events that have been included in the financial statements or tax returns
(Note 3).

EQUITY INVESTMENTS

     During 1999 and 1998, Axis Group completed the formation of three joint
ventures for the purpose of managing the distribution of vehicles in the United
Kingdom and Brazil. Axis Group initially invested $10,395,000 in the ventures.
The Company is accounting for the investments under the equity method of
accounting with its share of the ventures' earnings or loss reflected as equity
in earnings (loss) of joint ventures in the consolidated statements of
operations. The related equity investments are included in other assets in the
accompanying consolidated balance sheets.

                                       F-10
<PAGE>   35
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Equity in earnings for these joint ventures is recorded net of income taxes
in the consolidated statements of operations by the Company. Income taxes
related to the joint ventures for the years ended December 31, 2000, 1999, and
1998 were $2.1 million, $882,000, and a $231,000 benefit, respectively.

     The majority of the Company's equity in earnings of joint ventures in 2000
and 1999 was derived from its joint venture in the United Kingdom, Ansa
Logistics Limited. Summarized financial information of Ansa Logistics Limited
for the year ended December 31, 2000 and the period from its inception through
December 31, 1999 (in thousands):

<TABLE>
<CAPTION>
                                                                2000      1999
                                                              --------   -------
<S>                                                           <C>        <C>
Current assets..............................................  $ 34,799   $22,043
Other assets................................................     5,019     7,227
                                                              --------   -------
          Total assets......................................  $ 39,818   $29,270
                                                              ========   =======
Current liabilities.........................................  $ 32,194   $25,539
                                                              ========   =======
Revenues....................................................  $102,974   $86,794
                                                              ========   =======
Operating income............................................  $  6,858   $ 5,644
                                                              ========   =======
Income from continuing operations...........................  $  6,867   $ 5,589
                                                              ========   =======
Net income..................................................  $  4,394   $ 3,741
                                                              ========   =======
</TABLE>

     The summarized financial information above was derived from financial
statements of Ansa Logistics Limited, which were audited by other auditors whose
report thereon is dated April 13, 2001.

EARNINGS PER SHARE

     SFAS No. 128, "Earnings Per Share," requires presentation of basic and
diluted earnings per share. Basic earnings per share are calculated by dividing
net income available to common stockholders by the weighted average number of
common shares outstanding for the years presented. Diluted earnings per share
reflect the potential dilution that could occur if securities and other
contracts to issue common stock were exercised or converted into common stock or
resulted in the issuance of common stock that then shared in the earnings of the
entity. Basic and diluted earnings per share are not materially different for
the years presented. A reconciliation of the number of weighted average shares
used in calculating basic and diluted earnings per share is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                              2000    1999    1998
                                                              -----   -----   -----
<S>                                                           <C>     <C>     <C>
Weighted average number of common shares
  outstanding -- basic earnings per share...................  7,946   7,810   7,747
Effect of potentially dilutive shares outstanding...........      0      41      99
                                                              -----   -----   -----
Weighted average number of common shares
  outstanding -- diluted earnings per share.................  7,946   7,851   7,846
                                                              =====   =====   =====
</TABLE>

DERIVATIVES AND HEDGING ACTIVITIES

     In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." As amended, the
statement establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded in
other contracts) be recorded in the balance sheet as either an asset or
liability measured at its fair value. SFAS No. 133 requires that changes in the
derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. Special accounting for qualifying hedges
allows a

                                       F-11
<PAGE>   36
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

derivative's gains and losses to offset related results on the hedged item in
the income statement, and requires that a company must formally document,
designate, and assess the effectiveness of transactions that receive hedge
accounting.

     From time to time, the Company enters into future contracts to manage the
risk associated with changes in fuel prices. Gains and losses from fuel hedging
contracts are recognized as part of fuel expense when the Company uses the
underlying fuel being hedged. The Company does not enter into fuel hedging
contracts for speculative purposes. At December 31, 2000, the Company did not
have outstanding fuel hedging contracts or other derivative instruments that
fall under the provisions of SFAS No. 133. The Company will adopt SFAS No. 133
prior to entering into additional future fuel hedging contracts, and does not
expect it to have a material impact on its financial position or results of
operations.

3. INCOME TAXES

     The following summarizes the components of the income tax (benefit)
provision (in thousands):

<TABLE>
<CAPTION>
                                                              2000      1999      1998
                                                             -------   -------   ------
<S>                                                          <C>       <C>       <C>
Current:
  Federal..................................................  $   (10)  $    10   $  (38)
  State....................................................      249      (239)     795
  Foreign..................................................    3,111     1,058    1,316
Deferred:
  Federal..................................................   (6,800)   (3,533)   3,319
  State....................................................   (2,310)   (1,402)     215
  Foreign..................................................      691     4,284      920
                                                             -------   -------   ------
          Total income tax (benefit) provision.............  $(5,069)  $   178   $6,527
                                                             =======   =======   ======
</TABLE>

     The provision for income taxes differs from the amounts computed by
applying federal statutory rates due to the following (in thousands):

<TABLE>
<CAPTION>
                                                              2000      1999      1998
                                                             -------   -------   ------
<S>                                                          <C>       <C>       <C>
(Benefit)/Provision computed at the federal statutory
  rate.....................................................  $(3,866)  $   587   $5,101
State income taxes, net of federal income tax effects......   (1,360)   (1,083)     667
Insurance premiums, net of recovery........................        0       101        0
Amortization of goodwill...................................      505       423      405
Nondeductible expenses.....................................      346       272      304
Earnings (losses) in jurisdictions taxed at rates different
  from the statutory U.S. federal rate.....................      880     1,024     (121)
Equity income in affiliates, reflected net of tax..........   (1,729)   (1,014)       0
Other, net.................................................      155      (132)     171
                                                             -------   -------   ------
          Total income (benefit) tax provision.............  $(5,069)  $   178   $6,527
                                                             =======   =======   ======
</TABLE>

                                       F-12
<PAGE>   37
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The tax effect of significant temporary differences representing deferred
tax assets and liabilities at December 31, 2000 and 1999 is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Deferred tax assets:
  Claims and insurance expense..............................  $ 19,470   $ 19,729
  Accrued compensation expense..............................     5,455      7,179
  Postretirement benefits...................................     4,157      5,045
  Other liabilities not currently deductible................     3,483      3,599
  Tax carryforwards.........................................    19,112     11,095
  Other, net................................................     5,903      4,639
                                                              --------   --------
          Total deferred tax assets.........................    57,580     51,286
                                                              --------   --------
Deferred tax liabilities:
  Prepaids currently deductible.............................    (8,161)    (5,704)
  Depreciation and amortization.............................   (60,125)   (65,115)
  Postemployment benefits...................................         0     (1,192)
  Other, net................................................      (517)      (565)
                                                              --------   --------
          Total deferred tax liabilities....................   (68,802)   (72,576)
                                                              --------   --------
Net deferred tax liabilities................................  $(11,223)  $(21,290)
                                                              ========   ========
</TABLE>

     The Company has certain tax carryforwards available to offset future income
taxes consisting of net operating losses that expire from 2012 to 2020, foreign
tax credits that expire from 2002 to 2005, charitable contributions that expire
from 2001 to 2004, and alternative minimum tax credits that have no expiration
dates.

     Management believes that a valuation allowance is not necessary based on
the Company's earnings history and other relevant considerations over the
periods during which the deferred tax assets are deductible.

     The 1996 consolidated federal income tax return of the Company is presently
under examination by the Internal Revenue Service. The ultimate result of the
examination cannot be predicted at this time. In the opinion of management, any
additional tax liability resulting from the examination would not have a
material adverse impact on the consolidated financial position or operating
results of the Company.

4. LEASE COMMITMENTS

     The Company leases equipment, office space, and certain terminal facilities
under noncancelable operating lease agreements which expire in various years
through 2007. Rental expenses under these leases amounted to approximately
$10,918,000, $9,118,000, and $6,540,000, for the years ended December 31, 2000,
1999, and 1998, respectively.

     The Company also leases certain terminal facilities under cancelable leases
(i.e., month-to-month terms). The total rental expenses under these leases were
approximately $4,037,000, $3,686,000, and $5,187,000, for the years ended
December 31, 2000, 1999, and 1998, respectively.

     During 1999, the Company entered into a sublease agreement with a third
party for a leased building under which the Company's commitment expires in
2006. The sublease agreement with the third party expires in 2004. Total
sublease income earned during 2000 and 1999 was approximately $1,016,000 and
$623,000.

                                       F-13
<PAGE>   38
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Future minimum rental commitments and related sublease income under all
noncancelable operating lease agreements, excluding lease agreements that expire
within one year, are as follows as of December 31, 2000 (in thousands):

<TABLE>
<CAPTION>
                                                                            SUBLEASE
                                                              COMMITMENTS    INCOME
                                                              -----------   --------
<S>                                                           <C>           <C>
2001........................................................    $12,901      $  961
2002........................................................     11,533         986
2003........................................................     10,672       1,011
2004........................................................     10,260         361
2005........................................................      9,775           0
Thereafter..................................................     12,042           0
                                                                -------      ------
          Total.............................................    $67,183      $3,319
                                                                =======      ======
</TABLE>

5. LONG-TERM DEBT

     Long-term debt consisted of the following at December 31, 2000 and 1999 (in
thousands):

<TABLE>
<CAPTION>
                                                                2000       1999
                                                              --------   --------
<S>                                                           <C>        <C>
Revolving credit facility...................................  $134,866   $140,000
Senior notes................................................   150,000    150,000
Senior subordinated notes...................................    40,000     40,000
Other.......................................................       119        286
                                                              --------   --------
                                                               324,985    330,286
Less current maturities of long-term debt...................      (109)      (185)
                                                              --------   --------
                                                              $324,876   $330,101
                                                              ========   ========
</TABLE>

     In September 1997, the Company issued $150,000,000 of senior notes through
a private placement. Subsequently, the senior notes were registered with the
Securities and Exchange Commission. The senior notes mature October 1, 2007 and
bear interest at 8 5/8% annually. Interest on the senior notes is payable
semiannually in arrears on April 1 and October 1 of each year.

     Borrowings under the senior notes are general unsecured obligations of the
Company. The Company's obligations under the senior notes are guaranteed by
substantially all of the subsidiaries of the Company (the "Guarantors").
Subsidiaries that do not guarantee the senior notes include Haul Insurance Ltd.,
Arrendadora de Equipo Para el Transporte de Automotives, S. de R.L. de C.V.,
Axis Logistica, S. de R.L. de C.V., and Axis Netherlands C.V. (the "Nonguarantor
Subsidiaries"). There are no restrictions on the ability of Guarantors to make
distributions to the Company.

     The senior notes set forth a number of negative covenants binding on the
Company. The covenants limit the Company's ability to, among other things,
purchase or redeem stock, make dividend or other distributions, make
investments, and incur or repay debt (with the exception of payment of interest
or principal at stated maturity).

     Concurrent with the issuance of the senior notes, the Company closed on a
revolving credit facility (the "Revolving Credit Facility"). As of December 31,
2000, the Company was noncompliant with a financial covenant under its Revolving
Credit Facility, but subsequently has negotiated amendments to the financial
covenants in April 2001, thereby avoiding an event of default. As amended, the
Revolving Credit Facility allows the Company to borrow under a revolving line of
credit and to issue letters of credit up to the lesser of $230,000,000 or a
borrowing base amount, as defined in the Revolving Credit Facility. Availability
under the Revolving Credit Facility at December 31, 2000 was $230,000,000. The
amended availability amount is

                                       F-14
<PAGE>   39
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$200,000,000 through June 29, 2001, $195,000,000 from June 30, 2001 through
November 29, 2001, $180,000,000 from November 30, 2001 through December 30, 2001
and $170,000,000 from December 31, 2001 through maturity. Annual commitment fees
are due on the undrawn portion of the commitment. Amounts outstanding under the
Revolving Credit Facility mature on January 31, 2002. The interest rate for the
Revolving Credit Facility is, at the Company's option, either (i) the bank's
base rate, as defined, or (ii) the bank's Eurodollar rate, as defined, as
determined at the date of each borrowing plus an applicable margin. The
applicable margin for Eurodollar loans was 2% at December 31, 2000. The
applicable margin was increased to 3.5% through June 29, 2001. The applicable
margin increases by 0.25% the last day of each calendar quarter through
maturity.

     The Revolving Credit Facility, as amended, requires a facility fee to be
paid if the Revolving Credit Facility is not refinanced by June 30, 2001. The
facility fee is $250,000 per quarter and accrues daily starting in the second
quarter 2001. The facility fee will be reduced by 75% if the Revolving Credit
Facility is refinanced in the third quarter of 2001, and reduced by 25% if
refinanced in the fourth quarter 2001. In addition, a $1,000,000 fee will be
payable if refinancing occurs in 2002. The Company expects to refinance the
Revolving Credit Facility prior to December 31, 2001.

     Borrowings under the Revolving Credit Facility are secured by a first
priority security interest on assets of the Company and certain of its
subsidiaries, including a pledge of stock of certain subsidiaries. In addition,
certain subsidiaries of the Company jointly and severally guarantee the
obligations of the Company under the Revolving Credit Facility.

     The Company has also previously issued $40,000,000 of senior subordinated
notes ("Senior Subordinated Notes") through a private placement. The Senior
Subordinated Notes mature February 1, 2003.

     As a result of projected covenant noncompliance, the Senior Subordinated
Notes were also amended in April 2001. Prior to the amendment the interest rate
on the Senior Subordinated Notes was 12%. As amended, the interest rate is 14%
effective April 2001. The interest rate will increase .25% each quarter
effective July 1, 2001 for four quarters. A portion of the interest (12%) is
payable semi-annually, with the remaining portion payable upon maturity.

     The amended Revolving Credit Facility and the Senior Subordinated Notes set
forth a number of affirmative, negative, and financial covenants binding on the
Company. The negative covenants limit the ability of the Company to, among other
things, incur debt, incur liens, make investments, make dividend or other
distributions, or enter into any merger or other consolidation transaction. The
financial covenants include the maintenance of a minimum consolidated earnings
before interest, taxes and depreciation and amortization amount, compliance with
a tangible net asset ratio, and limitations on capital expenditures.

     As discussed above, the Company in April 2001 negotiated amendments to
certain affirmative, negative and financial covenants of the Revolving Credit
Facility and the Senior Subordinated Notes. As a result of the amendments, the
Company does not anticipate any covenant violations during 2001. There can be no
assurance, however, that the Company will be able to comply with these or its
other debt covenants or that, if it fails to do so, it will be able to obtain
amendments to or waivers of such covenants. Failure of the Company to comply
with covenants contained in its debt instruments, if not waived, or to
adequately service debt obligations, could result in a default under its debt
instruments. Any default under the Company's debt instruments, particularly any
default that results in acceleration of indebtedness or foreclosure on
collateral, could have a material adverse effect on the Company.

                                       F-15
<PAGE>   40
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Future maturities of long-term debt are as follows at December 31, 2000 (in
thousands):

<TABLE>
<S>                                                           <C>
2001........................................................  $    109
2002........................................................   134,876
2003........................................................    40,000
2004........................................................         0
2005........................................................         0
Thereafter..................................................   150,000
                                                              --------
                                                              $324,985
                                                              ========
</TABLE>

     At December 31, 2000, the weighted average interest rate on borrowings
under the Revolving Credit Facility was 8.7%, and approximately $13,400,000 was
committed under letters of credit. At December 31, 2000, the Company had
available borrowings under the Revolving Credit Facility of approximately
$82,000,000.

6. EMPLOYEE BENEFITS

  Pension and Postretirement Benefit Plans

     The Company maintains the Allied Defined Benefit Pension Plan, a trusteed
noncontributory defined benefit pension plan for management and office personnel
in the United States, and the Pension Plan for Employees of Allied Systems
(Canada) Company and Associated Companies for management and office personnel in
Canada (the "Canada Plan") (collectively, the "Plans"). Under the Plans,
benefits are paid to eligible employees upon retirement based primarily on years
of service and compensation levels at retirement. Contributions to the Plans
reflect benefits attributed to employees' services to date and services expected
to be rendered in the future. The Company's funding policy is to contribute
annually at a rate that is intended to fund future service benefits at a level
percentage of pay and past service benefits over a 30-year period. At December
31, 1998, participation in the Canada Plan was frozen.

     The Company also provides certain health care and life insurance benefits
for eligible employees who retired prior to July 1, 1993 and their dependents,
except for certain employees participating in the Voluntary Early Retirement
Plan. Generally, the health care plan pays a stated percentage of most medical
expenses reduced for any deductibles and payments by government programs or
other group coverage. The life insurance plan pays a lump-sum death benefit
based on the employee's salary at retirement. These plans are unfunded.
Employees retiring after July 1, 1993 are not entitled to any postretirement
medical or life insurance benefits.

     In conjunction with a prior acquisition, the Company took over a
postretirement benefit plan to provide retired employees with certain health
care and life insurance benefits. Substantially all employees not covered by
union-administered medical plans and who had retired as of September 30, 1997
are eligible for these benefits. Benefits are generally provided to qualified
retirees under age 65 and eligible dependents. Furthermore, the Company took
over two defined pension plans for a certain terminal. One of the plan's benefit
provides a monthly benefit based on years of service upon retirement. The other
plan provides benefits to eligible employees upon retirement based primarily on
years of service and compensation levels at retirement.

     All disclosures related to the Company's pension and postretirement benefit
plans have been prepared in accordance with SFAS No. 132.

                                       F-16
<PAGE>   41
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The change in the projected benefit obligation of the defined benefit
pension plans and the postretirement benefit plans consisted of the following
during fiscal years 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>
                                                     DEFINED BENEFIT     POSTRETIREMENT
                                                      PENSION PLANS       BENEFIT PLANS
                                                    -----------------   -----------------
                                                     2000      1999      2000      1999
                                                    -------   -------   -------   -------
<S>                                                 <C>       <C>       <C>       <C>
Change in benefit obligation:
  Benefit obligation at beginning of fiscal
     year.........................................  $41,608   $35,887   $ 8,808   $10,164
     Service cost.................................    2,727     2,932         0         0
     Interest cost................................    3,038     2,519       616       607
     Foreign currency translation.................     (208)      348         0         0
     Plan amendments and other....................        0    (3,046)        0      (152)
     Actuarial (gain) loss........................     (553)    4,536      (455)     (696)
     Benefits paid................................   (2,509)   (1,568)   (1,150)   (1,115)
                                                    -------   -------   -------   -------
  Benefit obligation at end of fiscal year........  $44,103   $41,608   $ 7,819   $ 8,808
                                                    =======   =======   =======   =======
</TABLE>

     The change in plan assets and funded status of the defined benefit pension
plans and the postretirement benefit plans consisted of the following during
fiscal years 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>
                                                  DEFINED BENEFIT       POSTRETIREMENT
                                                   PENSION PLANS         BENEFIT PLANS
                                                 ------------------   -------------------
                                                   2000      1999       2000       1999
                                                 --------   -------   --------   --------
<S>                                              <C>        <C>       <C>        <C>
Change in plan assets:
  Fair value of plan assets at beginning of
     year......................................  $ 31,776   $28,403   $      0   $      0
     Actual return on plan assets..............       848     3,415          0          0
     Foreign currency translation..............         0       367          0          0
     Employer contribution.....................     2,845     1,159      1,150      1,115
     Benefits paid.............................    (2,509)   (1,568)    (1,150)    (1,115)
                                                 --------   -------   --------   --------
  Fair value of plan assets at end of year.....  $ 32,960   $31,776   $      0   $      0
                                                 ========   =======   ========   ========
Funded status..................................  $(11,144)  $(9,832)  $ (7,819)  $ (8,808)
Unrecognized actuarial loss (gain).............     5,678     5,347     (2,244)    (3,505)
Unrecognized prior service cost................       626       859       (220)         0
Unrecognized transition asset..................      (119)     (168)         0          0
                                                 --------   -------   --------   --------
Accrued benefit cost...........................  $ (4,959)  $(3,794)  $(10,283)  $(12,313)
                                                 ========   =======   ========   ========
Amounts recognized in the consolidated balance
  sheets consist of:
  Accrued liabilities..........................  $ (4,959)  $(3,794)  $   (340)  $   (340)
  Postretirement benefits other than
     pensions..................................         0         0     (9,943)   (11,973)
                                                 --------   -------   --------   --------
                                                 $ (4,959)  $(3,794)  $(10,283)  $(12,313)
                                                 ========   =======   ========   ========
</TABLE>

     The following assumptions were used in determining the actuarial present
value of the projected pension benefit obligation and postretirement benefit
obligation at December 31, 2000 and 1999:

<TABLE>
<CAPTION>
                                                          DEFINED BENEFIT     POSTRETIREMENT
                                                           PENSION PLANS      BENEFIT PLANS
                                                          ----------------    --------------
                                                           2000      1999     2000     1999
                                                          ------    ------    -----    -----
<S>                                                       <C>       <C>       <C>      <C>
Weighted average discount rate..........................   7.77%     7.64%     8.0%    7.75%
Weighted average expected long-term rate of return on
  assets................................................   9.19      9.20      N/A      N/A
Weighted average rate of compensation increase..........   3.03      3.71      N/A      N/A
</TABLE>

                                       F-17
<PAGE>   42
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The net periodic benefit cost recognized for the defined benefit pension
plans and the postretirement benefit plans includes the following components at
December 31, 2000 and 1999 (in thousands):

<TABLE>
<CAPTION>
                                                          DEFINED BENEFIT    POSTRETIREMENT
                                                           PENSION PLANS      BENEFIT PLANS
                                                          ----------------   ---------------
                                                           2000     1999      2000     1999
                                                          ------   -------   ------   ------
<S>                                                       <C>      <C>       <C>      <C>
Components of net periodic benefit cost:
  Service cost..........................................  $2,727   $ 2,932    $  0     $  0
  Interest cost.........................................   3,038     2,519     616      607
  Expected return on plan assets........................  (2,876)   (2,642)      0        0
  Amortization of unrecognized net actuarial (gain)
     loss...............................................     192         0       0        0
  Amortization of prior service cost....................     233       246       0        0
  Amortization of transition asset......................     (50)      (50)      0        0
  Recognized actuarial loss (gain)......................     679       878     (87)     (41)
                                                          ------   -------    ----     ----
Net periodic benefit cost...............................  $3,943   $ 3,883    $529     $566
                                                          ======   =======    ====     ====
</TABLE>

     The weighted average annual assumed rate of increase in the per capital
cost of covered benefits (i.e., health care trend rate) for the health plans is
7.15% for 1999 and 7.44% for 2000, grading to 5.0% over five years. The effect
of a 1% increase in the assumed trend rate would have increased the accumulated
postretirement benefit obligation as of December 31, 2000 by approximately
$290,000. The effect of this change on the periodic postretirement benefit cost
for 2000 would be approximately $23,000.

     At December 31, 2000, plan assets consisted primarily of U.S. and
international corporate bonds and stocks, convertible equity securities, and
U.S. and Canadian government securities.

     A substantial number of the Company's employees are covered by
union-sponsored, collectively bargained multiemployer pension plans. The Company
contributed and charged to expense approximately $46,192,000, $43,451,000, and
$38,068,000, for the years ended December 31, 2000, 1999, and 1998,
respectively, for such plans. These contributions are determined in accordance
with the provisions of negotiated labor contracts and are generally based on the
number of man-hours worked.

     Also, a substantial number of the Company's employees are covered by
union-sponsored, collectively bargained multiemployer health and welfare benefit
plans. The Company contributed and charged to expense approximately $47,040,000,
$47,027,000, and $44,796,000, in 2000, 1999, and 1998, respectively, in
connection with these plans. These required contributions are determined in
accordance with the provisions of negotiated labor contracts and are for both
active and retired employees.

  401(k) Plan

     The Company has a 401(k) plan covering all of its employees in the United
States. The Company's administrative expense for the 401(k) plan was
approximately $101,000, $110,000, and $69,000 in fiscal years 2000, 1999, and
1998, respectively. The Company contributes the lesser of 3% of participant
wages or $1,000 per year for each nonbargaining unit participant of the plan.
The Company contributed approximately $682,000, $760,000, and $625,000 to the
plan during the years ended December 31, 2000, 1999, and 1998, respectively.

  Employee Stock Purchase Plan

     During December 1998, the Company approved an Employee Stock Purchase Plan
(the "ESPP"). The ESPP allows eligible employees, as defined, the right to
purchase common stock of the Company on a quarterly basis at 85% of the lower of
the fair market value on the first business day of the calendar quarter or on
the last business day of the calendar quarter. There are 350,000 shares of the
Company's common stock

                                       F-18
<PAGE>   43
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

reserved under the ESPP, of which 146,000 and 71,000 shares were issued to
employees during 2000 and 1999, respectively.

  Deferred Compensation Plan

     During 2000, the Company approved a Deferred Compensation Plan (the
"Plan"). Effective January 1, 2001, the Plan allows eligible employees, as
defined, the right to defer receipt of all or a portion of the cash portion of
their annual compensation as defined. All deferred compensation accrues
interest, as defined, from date of the deferral until the date of final
distribution.

     The obligation of the Company under the Plan to make payments of amounts
deferred and any interest thereon to plan participants in the future in
accordance with the terms of the Plan will be unsecured general obligations of
the Company and will rank equally with other unsecured and unsubordinated
indebtedness of the Company outstanding from time to time. The aggregate
principal amount shall not exceed $4,000,000.

7. COMMITMENTS AND CONTINGENCIES

     The Company negotiates fixed rates with its customers for the delivery of
vehicles. The delivery rates are based on contract agreements that expire at
various dates through 2005. During 1999 and 2000, the Company renegotiated rates
for the majority of its customers to adjust its contract pricing to reflect the
higher fuel costs and continuing trend toward shipments with larger vehicles.

     The Company is involved in various litigation and environmental matters
relating to employment practices, damages, and other matters arising from
operations in the ordinary course of business. In the opinion of management, the
ultimate disposition of these matters will not have a material adverse effect on
the Company's financial position or results of operations.

     The Company is defending two pieces of related litigation in the Supreme
Court of Erie County, New York: Gateway Development & Manufacturing, Inc. v.
Commercial Carrier, Inc. et al., Index No. 1997/8920 (the "Gateway Case"), and
Commercial Carrier, Inc. v. Gateway Development & Manufacturing, Inc., et al.
(the "CCI Case"), Index No. 12000/8184. The claims at issue in both the Gateway
Case and CCI Case center around the contention that the Company breached legal
duties with respect to a failed business transaction involving Gateway
Development & Manufacturing, Inc., Ryder Truck Rental, Inc., and Ryder System,
Inc. In the Gateway Case, the Company has sought and received summary judgment
in its favor on the sole claim (for tortious interference with contract)
asserted against it by Gateway Development & Manufacturing, Inc. but anticipates
the filing and service of cross-claims that the court has permitted to be
asserted against the Company by the other defendants in that action. In the CCI
Case, the Company has accepted or expects to accept service of a separate
complaint asserting claims against the Company that are virtually identical to
the cross-claims that the Company expects to be asserted against it by the other
defendants in the Gateway Case. It is anticipated that the claims asserted in
both the Gateway Case and the CCI Case will be resolved in a unified proceeding.
With respect to the entirety of this litigation, the Company intends to continue
its vigorous defense against the claims asserted against it, as management
believes that all of those claims are without merit. While the ultimate results
of this litigation cannot be predicted, management does not expect that the
resolution of these proceedings will have a material adverse effect on the
Company's consolidated financial position or results of operations.

     The Company has entered into employment agreements with certain executive
officers of the Company. The agreements provide for compensation to the officers
in the form of annual base salaries and bonuses based on earnings. The
employment agreements also provide for severance benefits upon the occurrence of
certain events, including a change in control, as defined.

                                       F-19
<PAGE>   44
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Approximately 86% of the Company's total labor force is covered by
collective bargaining agreements. Collective bargaining agreements representing
the majority of the total workforce were renewed during 1999 and expire in 2003.

8. REVENUES FROM MAJOR CUSTOMERS

     Substantially all of the Company's revenues are realized through the
automotive industry.

     In 2000, 1999, and 1998, approximately 73%, 75%, and 73%, respectively, of
the Company's revenues were derived from the three largest domestic automobile
manufacturers. In 2000, 1999, and 1998, General Motors Corporation accounted for
approximately 31%, 33%, and 32%, respectively, of revenues, Ford Motor Company
accounted for approximately 27%, 26%, and 26%, respectively, of revenues, and
Chrysler Corporation accounted for 15%, 16%, and 15%, respectively, of revenues.

9. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION

     In accordance with the requirements of SFAS No. 131, "Disclosure About
Segments of an Enterprise and Related Information," the Company has identified
two reportable industry segments through which it conducts its operating
activities: Allied Automotive Group and Axis Group. These two segments reflect
the organization used by management for internal reporting. Allied Automotive
Group is engaged in the business of transporting automobiles and light trucks
from manufacturing plants, ports, auctions, and railway distribution points to
automobile dealerships. Axis Group provides distribution, automobile inspection,
auction, and logistics services for the automotive industry.

<TABLE>
<CAPTION>
                                                                2000         1999         1998
                                                             ----------   ----------   ----------
<S>                                                          <C>          <C>          <C>
Revenues -- unaffiliated customers:
  Allied Automotive Group..................................  $1,040,644   $1,057,889   $1,010,582
  Axis Group...............................................      28,439       23,368       16,151
  Corporate/other..........................................          71           52           66
                                                             ----------   ----------   ----------
          Total............................................  $1,069,154   $1,081,309   $1,026,799
                                                             ==========   ==========   ==========
Depreciation and amortization:
  Allied Automotive Group..................................  $   54,023   $   52,182   $   49,637
  Axis Group...............................................       3,075        1,904          962
  Corporate/other..........................................       5,126        4,561        2,696
                                                             ----------   ----------   ----------
          Total............................................  $   62,224   $   58,647   $   53,295
                                                             ==========   ==========   ==========
Operating profit (loss):
  Allied Automotive Group..................................  $   13,686   $   28,375   $   40,978
  Axis Group...............................................         733        1,679           98
  Corporate/other..........................................      (2,551)        (171)      (2,726)
                                                             ----------   ----------   ----------
          Total............................................      11,868       29,883       38,350
Reconciling items:
  Equity income in joint ventures..........................       5,066        1,733         (470)
  Interest expense.........................................     (33,813)     (32,001)     (26,146)
  Interest income..........................................       5,509        2,112        3,270
                                                             ----------   ----------   ----------
  (Loss) income before income taxes........................  $  (11,370)  $    1,727   $   15,004
                                                             ==========   ==========   ==========
</TABLE>

                                       F-20
<PAGE>   45
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                                                2000         1999         1998
                                                             ----------   ----------   ----------
<S>                                                          <C>          <C>          <C>
Total assets:
  Allied Automotive Group..................................  $  437,945   $  514,080   $  505,330
  Axis Group...............................................      64,869       45,136       32,769
  Corporate/other..........................................     107,725       90,704       83,528
                                                             ----------   ----------   ----------
          Total............................................  $  610,539   $  649,920   $  621,627
                                                             ==========   ==========   ==========
Capital expenditures:
  Allied Automotive Group..................................  $   23,657   $   29,556   $   58,502
  Axis Group...............................................       2,671        6,662        2,172
  Corporate/other..........................................       5,947        8,809        1,194
                                                             ----------   ----------   ----------
          Total............................................  $   32,275   $   45,027   $   61,868
                                                             ==========   ==========   ==========
</TABLE>

     Geographic financial information for 2000, 1999, and 1998 is as follows (in
thousands):

<TABLE>
<CAPTION>
                                                                2000         1999         1998
                                                             ----------   ----------   ----------
<S>                                                          <C>          <C>          <C>
Revenues:
  United States............................................  $  882,009   $  902,364   $  858,772
  Canada...................................................     187,145      178,945      168,027
                                                             ----------   ----------   ----------
                                                             $1,069,154   $1,081,309   $1,026,799
                                                             ==========   ==========   ==========
Long-lived assets:
  United States............................................  $  326,793   $  352,556   $  350,897
  Canada...................................................      70,254       71,747       74,971
                                                             ----------   ----------   ----------
                                                             $  397,047   $  424,303   $  425,868
                                                             ==========   ==========   ==========
</TABLE>

     Revenues are attributed to the respective countries based on the location
of the origination terminal.

10. STOCKHOLDERS' EQUITY

     The Company has authorized 5,000,000 shares of preferred stock with no par
value. No shares have been issued, and therefore, there were no shares
outstanding at December 31, 2000 and 1999. The board of directors has the
authority to issue these shares and to fix dividends, voting and conversion
rights, redemption provisions, liquidation preferences, and other rights and
restrictions.

     During 1999, the Company's board of directors authorized the repurchase of
up to 500,000 shares of the Company's outstanding common stock through fiscal
year 2000 in open market transactions. As of December 31, 2000 and 1999, the
Company had repurchased approximately 139,000 and 29,000 shares, respectively,
which are included as treasury stock in the accompanying consolidated balance
sheets.

     The Company has a long-term incentive plan which allows the issuance of
grants or awards of incentive stock options, restricted stock, stock
appreciation rights, performance units, and performance shares to employees and
directors of the Company to acquire up to 1,500,000 shares of the Company's
common stock.

     During 2000 and 1999, the Company granted 168,398 and 83,759 shares,
respectively, of restricted stock to certain employees of the Company. In
connection with the awards of the restricted stock, during 2000, 1999, and 1998,
the Company recorded compensation expense of $803,000, $33,000, and $291,000,
respectively. Compensation expense is recorded over five years, the vesting
period of the restricted stock. During 2000, 1999, and 1998, 14,188, 9,700, and
5,282 shares, respectively, of restricted stock were canceled.

                                       F-21
<PAGE>   46
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In addition, the Company has granted nonqualified and incentive stock
options under the long-term incentive plan. Options granted become exercisable
after one year in 20% or 33 1/3% increments per year and expire ten years from
the date of the grant.

<TABLE>
<CAPTION>
                                                                                       WEIGHTED
                                                                                       AVERAGE
                                                                        OPTION PRICE   EXERCISE
                                                              SHARES    (PER SHARE)     PRICE
                                                              -------   ------------   --------
<S>                                                           <C>       <C>            <C>
Outstanding as of December 31, 1998.........................  157,555   $9.00-$17.13    $10.14
  Granted...................................................  170,000          $7.06    $ 7.06
  Exercised.................................................   (2,750)  $9.50-$11.75    $ 9.70
  Canceled..................................................  (40,255)  $9.50-$11.75    $ 9.70
Outstanding as of December 31, 1999.........................  284,550   $7.06-$17.13    $ 8.37
  Granted...................................................   75,000   $6.12-$ 8.63    $ 6.46
  Canceled..................................................  (69,250)  $6.13-$11.75    $ 6.32
Outstanding as of December 31, 2000.........................  290,300   $7.06-$17.13    $ 8.37
</TABLE>

<TABLE>
<CAPTION>
                                                               2000      1999     1998
                                                              -------   ------   -------
<S>                                                           <C>       <C>      <C>
Options exercisable at year-end.............................  155,300   87,882   115,855
Weighted average exercise price of options exercisable at
  year-end..................................................  $  9.15   $10.13   $  9.85
Per share weighted average fair value of options granted
  during the year...........................................  $  4.18   $ 3.86   $  5.09
</TABLE>

     The weighted average remaining contractual life of options outstanding at
December 31, 2000 was eight years.

     The Company has adopted the disclosure-only provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," and applies Accounting Principles
Board Opinion No. 25 and related interpretations in accounting for the long-term
incentive plan. If the Company had elected to recognize compensation cost for
the long-term incentive plan based on the fair value at the grant dates for
awards under the plan, consistent with the method prescribed by SFAS No. 123,
net income and earnings per share would have been changed to the pro forma
amounts indicated below at December 31, 2000, 1999, and 1998 (in thousands,
except per share data):

<TABLE>
<CAPTION>
                                                               2000      1999     1998
                                                              -------   ------   ------
<S>                                                           <C>       <C>      <C>
Net (loss) income:
  As reported...............................................  $(6,301)  $1,549   $8,477
  Pro forma.................................................   (6,602)   1,421    8,367
(Loss) earnings per share:
  As reported:
     Basic..................................................  $  (.79)  $  .20   $ 1.09
     Diluted................................................     (.79)     .20     1.08
  Pro forma:
     Basic..................................................  $  (.83)  $  .18   $ 1.08
     Diluted................................................     (.83)     .18     1.07
</TABLE>

     The fair value of the Company's stock options used to compute pro forma net
income and earnings per share disclosures is the estimated present value at
grant date using the Black-Scholes option pricing model with the following
weighted average assumptions for 2000, 1999, and 1998: dividend yield of 0%,
expected volatility of 65%, 55%, and 49%, respectively, a risk-free interest
rate of 5.65%, 5.84%, and 5.09%, respectively, and an expected holding period of
five years.

     The Black-Scholes option pricing model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models
                                       F-22
<PAGE>   47
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

require the input of highly subjective assumptions, including expected stock
price volatility. Because the Company's employee stock options have
characteristics significantly different from those of traded options and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion, the existing models do not necessarily
provide a reliable single measure of the fair value of its employee stock
options.

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                                                          2000
                                                        -----------------------------------------
                                                         FIRST      SECOND     THIRD      FOURTH
                                                        --------   --------   --------   --------
                                                        (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                     <C>        <C>        <C>        <C>
Revenues..............................................  $282,884   $295,897   $236,347   $254,026
Operating income (loss)...............................     3,961     17,287     (2,984)    (6,396)
Net (loss) income.....................................    (1,035)     6,889     (4,610)    (7,545)
Basic and diluted net (loss) income per share.........  $  (0.13)  $   0.87   $  (0.58)  $  (0.94)
Average shares outstanding:
  Basic...............................................     7,898      7,916      7,961      7,988
  Diluted.............................................     7,898      7,916      7,961      7,988
Stock prices:
  High................................................  $  9.750   $ 7.5000   $  7.000   $  5.625
  Low.................................................     5.250     5.3125      5.375      2.750
</TABLE>

<TABLE>
<CAPTION>
                                                                          2000
                                                        -----------------------------------------
                                                         FIRST      SECOND     THIRD      FOURTH
                                                        --------   --------   --------   --------
                                                        (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                     <C>        <C>        <C>        <C>
Revenues..............................................  $261,249   $286,984   $240,058   $293,018
Operating income (loss)...............................        30     14,741       (734)    15,846
Net (loss) income.....................................    (4,005)     4,132     (3,823)     5,245
Basic and diluted net (loss) income per share.........  $  (0.51)  $   0.53   $  (0.49)  $   0.67
Average shares outstanding:
  Basic...............................................     7,790      7,792      7,818      7,842
  Diluted.............................................     7,790      7,800      7,818      7,859
Stock prices:
  High................................................  $ 14.438   $  9.563   $  9.313   $  7.688
  Low.................................................     9.563      6.500      6.063      5.000
</TABLE>

12. SUPPLEMENTAL GUARANTOR INFORMATION

     The following condensed consolidating balance sheets, statements of
operations, and statements of cash flows present the financial statement of the
parent company, and the combined financial statements of the guarantor
subsidiaries and Nonguarantor Subsidiaries. The Guarantors are jointly and
severally liable for the Company's obligations under the notes and there are no
restrictions on the ability of the Guarantors to make distributions to the
Company.

                                       F-23
<PAGE>   48
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The supplemental condensed consolidating balance sheet as of December 31,
2000 is as follows (in thousands):

<TABLE>
<CAPTION>
                                          ALLIED     GUARANTOR     NONGUARANTOR
                                         HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                         --------   ------------   ------------   ------------   ------------
<S>                                      <C>        <C>            <C>            <C>            <C>
Current assets:
  Cash and cash equivalents............  $ (1,213)    $  2,063       $ 1,523       $       0       $  2,373
  Short-term investments...............         0            0        59,892               0         59,892
  Receivables, net of allowance for
     doubtful accounts.................       805      112,876           585               0        114,266
  Inventories..........................         0        7,415             0               0          7,415
  Deferred tax asset -- current........     8,009        1,600           582               0         10,191
  Prepayments and other current
     assets............................     1,974       15,007         2,374               0         19,355
                                         --------     --------       -------       ---------       --------
          Total current assets.........     9,575      138,961        64,956               0        213,492
                                         --------     --------       -------       ---------       --------
Property and equipment, net............    16,319      239,866         3,177               0        259,362
                                         --------     --------       -------       ---------       --------
Other assets:
  Goodwill, net........................     1,633       93,526             0               0         95,159
  Other................................    15,732       16,372        10,422               0         42,526
  Deferred tax asset -- noncurrent.....    17,585            0             0         (17,585)             0
  Intercompany receivables.............   260,850            0             0        (260,850)             0
  Investment in subsidiaries...........    80,057       14,072             0         (94,129)             0
          Total other assets...........   375,857      123,970        10,422        (372,564)       137,685
                                         --------     --------       -------       ---------       --------
          Total assets.................  $401,751     $502,797       $78,555       $(372,564)      $610,539
                                         ========     ========       =======       =========       ========
Current liabilities:
  Current maturities of long-term
     debt..............................  $      0     $    109       $     0       $       0       $    109
  Trade accounts payable...............     1,590       43,475           910               0         45,975
  Intercompany payables................         0      259,268         1,582        (260,850)             0
  Accrued liabilities..................    16,592       51,684        11,211               0         79,487
                                         --------     --------       -------       ---------       --------
          Total current liabilities....    18,182      354,536        13,703        (260,850)       125,571
                                         --------     --------       -------       ---------       --------
Long-term debt, less current
  maturities...........................   324,428          448             0               0        324,876
                                         --------     --------       -------       ---------       --------
Postretirement benefits other than
  pensions.............................         0        9,943             0               0          9,943
                                         --------     --------       -------       ---------       --------
Deferred income taxes..................         0       38,999             0         (17,585)        21,414
                                         --------     --------       -------       ---------       --------
Other long-term liabilities............         0       36,660        32,934               0         69,594
                                         --------     --------       -------       ---------       --------
Stockholders' equity:
  Common stock, no par value...........         0            0             0               0              0
  Additional paid-in capital...........    45,990       81,180        13,612         (94,792)        45,990
  Retained earnings....................    20,602      (10,171)       20,309         (10,138)        20,602
  Cumulative other comprehensive
     income, net of tax................    (6,744)      (8,798)       (2,003)         10,801         (6,744)
  Treasury stock.......................      (707)           0             0               0           (707)
                                         --------     --------       -------       ---------       --------
          Total stockholders' equity...    59,141       62,211        31,918         (94,129)        59,141
                                         --------     --------       -------       ---------       --------
          Total liabilities and
            stockholders' equity.......  $401,751     $502,797       $78,555       $(372,564)      $610,539
                                         ========     ========       =======       =========       ========
</TABLE>

                                       F-24
<PAGE>   49
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The supplemental condensed consolidating balance sheet as of December 31,
1999 is as follows (in thousands):

<TABLE>
<CAPTION>
                                          ALLIED     GUARANTOR     NONGUARANTOR
                                         HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                         --------   ------------   ------------   ------------   ------------
<S>                                      <C>        <C>            <C>            <C>            <C>
Current assets:
  Cash and cash equivalents............  $  1,852     $  3,179       $ 8,953       $       0       $ 13,984
  Short-term investments...............         0            0        44,325               0         44,325
  Receivables, net of allowance for
     doubtful accounts.................        14      119,978         1,066               0        121,058
  Inventories..........................         0        7,949             0               0          7,949
  Deferred tax asset -- current........     1,558       14,561             0               0         16,119
  Prepayments and other current
     assets............................     1,611       20,257           314               0         22,182
                                         --------     --------       -------       ---------       --------
          Total current assets.........     5,035      165,924        54,658               0        225,617
                                         --------     --------       -------       ---------       --------
Property and equipment, net............         0      285,665         2,173               0        287,838
                                         --------     --------       -------       ---------       --------
Other assets:
  Goodwill, net........................     1,751       91,353             0               0         93,104
  Other................................     7,665       24,509        11,187               0         43,361
  Deferred tax asset -- noncurrent.....    17,004            0             0         (17,004)             0
  Intercompany receivables.............   262,361            0             0        (262,361)             0
  Investment in subsidiaries...........   112,848       13,571             0        (126,419)             0
                                         --------     --------       -------       ---------       --------
          Total other assets...........   401,629      129,433        11,187        (405,784)       136,465
                                         --------     --------       -------       ---------       --------
          Total assets.................  $406,664     $581,022       $68,018       $(405,784)      $649,920
                                         ========     ========       =======       =========       ========
Current liabilities:
  Current maturities of long-term
     debt..............................  $      0     $    185       $     0       $       0       $    185
  Trade accounts payable...............       345       42,089           497               0         42,931
  Intercompany payables................         0      260,977         1,384        (262,361)             0
  Accrued liabilities..................     9,405       66,350         9,900               0         85,655
                                         --------     --------       -------       ---------       --------
          Total current liabilities....     9,750      369,601        11,781        (262,361)       128,771
                                         --------     --------       -------       ---------       --------
Long-term debt, less current
  maturities...........................   330,000          101             0               0        330,101
                                         --------     --------       -------       ---------       --------
Postretirement benefits other than
  pensions.............................         0       11,973             0               0         11,973
                                         --------     --------       -------       ---------       --------
Deferred income taxes..................         0       54,413             0         (17,004)        37,409
                                         --------     --------       -------       ---------       --------
Other long-term liabilities............         0       45,237        29,515               0         74,752
                                         --------     --------       -------       ---------       --------
Stockholders' equity:
  Common stock, no par value...........         0            0             0               0              0
  Additional paid-in capital...........    44,437       81,449        13,229         (94,678)        44,437
  Retained earnings....................    26,903       23,485        14,984         (38,469)        26,903
  Cumulative other comprehensive
     income, net of tax................    (4,240)      (5,237)       (1,491)          6,728         (4,240)
  Treasury stock.......................      (186)           0             0               0           (186)
                                         --------     --------       -------       ---------       --------
          Total stockholders' equity...    66,914       99,697        26,722        (126,419)        66,914
                                         --------     --------       -------       ---------       --------
          Total liabilities and
            stockholders' equity.......  $406,664     $581,022       $68,018       $(405,784)      $649,920
                                         ========     ========       =======       =========       ========
</TABLE>

                                       F-25
<PAGE>   50
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The supplemental condensed consolidated income statement for the twelve
months ended December 31, 2000 is as follows (in thousands):

<TABLE>
<CAPTION>
                                         ALLIED     GUARANTOR     NONGUARANTOR
                                        HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                        --------   ------------   ------------   ------------   ------------
<S>                                     <C>        <C>            <C>            <C>            <C>
Revenues..............................  $  8,213    $1,067,742      $33,679        $(40,480)     $1,069,154
                                        --------    ----------      -------        --------      ----------
Operating expenses:
  Salaries, wages, and fringe
     benefits.........................     5,802       578,725            0               0         584,527
  Operating supplies and expenses.....     1,209       187,899           28               0         189,136
  Purchased transportation............         0       104,545            0               0         104,545
  Insurance and claims................        80        51,026       28,897         (32,267)         47,736
  Operating taxes and licenses........        16        39,373            0               0          39,389
  Depreciation and amortization.......     1,208        60,647          369               0          62,224
  Rents...............................       535         8,035            0               0           8,570
  Communications and utilities........        19         7,314            0               0           7,333
  Other operating expenses............     2,794        18,898          347          (8,213)         13,826
                                        --------    ----------      -------        --------      ----------
          Total operating expenses....    11,663     1,056,462       29,641         (40,480)      1,057,286
                                        --------    ----------      -------        --------      ----------
       Operating (loss) income........    (3,450)       11,280        4,038               0          11,868
                                        --------    ----------      -------        --------      ----------
Other income (expense):
  Equity in earnings (loss) of joint
     ventures, net of tax.............         0         5,173         (107)              0           5,066
  Interest expense....................   (30,128)      (34,500)        (166)         30,981         (33,813)
  Interest income.....................    30,965           362        5,163         (30,981)          5,509
  Intercompany dividends..............     1,000             0       (1,000)              0               0
  Equity in net loss of
     subsidiaries.....................    (9,986)            0            0           9,986               0
                                        --------    ----------      -------        --------      ----------
                                          (8,149)      (28,965)       3,890           9,986         (23,238)
                                        --------    ----------      -------        --------      ----------
(Loss) income before income taxes.....   (11,599)      (17,685)       7,928           9,986         (11,370)
Income tax benefit (provision)........     5,298         2,299       (2,528)              0           5,069
                                        --------    ----------      -------        --------      ----------
Net (loss) income.....................  $ (6,301)   $  (15,386)     $ 5,400        $  9,986      $   (6,301)
                                        ========    ==========      =======        ========      ==========
</TABLE>

                                       F-26
<PAGE>   51
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The supplemental condensed consolidated income statement for the twelve
months ended December 31, 1999 is as follows (in thousands):

<TABLE>
<CAPTION>
                                         ALLIED     GUARANTOR     NONGUARANTOR
                                        HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                        --------   ------------   ------------   ------------   ------------
<S>                                     <C>        <C>            <C>            <C>            <C>
Revenues..............................  $  4,988    $1,080,365      $32,304        $(36,348)     $1,081,309
                                        --------    ----------      -------        --------      ----------
Operating expenses:
  Salaries, wages, and fringe
     benefits.........................     3,267       582,113            0               0         585,380
  Operating supplies and expenses.....     1,295       184,232           14               0         185,541
  Purchased transportation............         0       103,967            0               0         103,967
  Insurance and claims................        35        53,270       26,323         (31,376)         48,252
  Operating taxes and licenses........        30        41,258            0               0          41,288
  Depreciation and amortization.......       256        58,070          321               0          58,647
  Rents...............................        51         8,923            0               0           8,974
  Communications and utilities........        31         9,029            0               0           9,060
  Other operating expenses............     1,938        13,225          126          (4,972)         10,317
                                        --------    ----------      -------        --------      ----------
          Total operating expenses....     6,903     1,054,087       26,784         (36,348)      1,051,426
                                        --------    ----------      -------        --------      ----------
          Operating (loss) income.....    (1,915)       26,278        5,520               0          29,883
                                        --------    ----------      -------        --------      ----------
Other income (expense):
  Equity in earnings (loss) of joint
     ventures, net of tax.............         0         2,059         (326)              0           1,733
  Interest expense....................   (31,295)      (33,312)        (441)         33,047         (32,001)
  Interest income.....................    33,033           497        1,629         (33,047)          2,112
  Equity in net loss of
     subsidiaries.....................    (1,332)            0            0           1,332               0
                                        --------    ----------      -------        --------      ----------
                                             406       (30,756)         862           1,332         (28,156)
                                        --------    ----------      -------        --------      ----------
(Loss) income before income taxes.....    (1,509)       (4,478)       6,382           1,332           1,727
Income tax benefit (provision)........     3,058        (1,068)      (2,168)              0            (178)
                                        --------    ----------      -------        --------      ----------
Net income (loss).....................  $  1,549    $   (5,546)     $ 4,214        $  1,332      $    1,549
                                        ========    ==========      =======        ========      ==========
</TABLE>

                                       F-27
<PAGE>   52
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The supplemental condensed consolidated income statement for the twelve
months ended December 31, 1998 is as follows (in thousands):

<TABLE>
<CAPTION>
                                         ALLIED     GUARANTOR     NONGUARANTOR
                                        HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                        --------   ------------   ------------   ------------   ------------
<S>                                     <C>        <C>            <C>            <C>            <C>
Revenues..............................  $  5,001    $1,026,785      $35,553        $(40,540)     $1,026,799
                                        --------    ----------      -------        --------      ----------
Operating expenses:
  Salaries, wages, and fringe
     benefits.........................     5,779       542,001            0               0         547,780
  Operating supplies and expenses.....         4       169,494            0               0         169,498
  Purchased transportation............         0       109,884            0               0         109,884
  Insurance and claims................        53        43,345       32,494         (35,553)         40,339
  Operating taxes and licenses........        12        40,767            0               0          40,779
  Depreciation and amortization.......       214        53,081            0               0          53,295
  Rents...............................        25        10,047            0               0          10,072
  Communications and utilities........        16         9,325            0               0           9,341
  Other operating expenses............     3,959         8,304          185          (4,987)          7,461
                                        --------    ----------      -------        --------      ----------
          Total operating expenses....    10,062       986,248       32,679         (40,540)        988,449
                                        --------    ----------      -------        --------      ----------
          Operating (loss) income.....    (5,061)       40,537        2,874               0          38,350
                                        --------    ----------      -------        --------      ----------
Other income (expense):
  Equity in loss of joint ventures,
     net of tax.......................         0             0         (470)              0            (470)
  Interest expense....................   (25,208)      (24,910)           0          23,972         (26,146)
  Interest income.....................    23,977           728        2,537         (23,972)          3,270
  Equity in net income of
     subsidiaries.....................    18,917             0            0         (18,917)              0
                                        --------    ----------      -------        --------      ----------
                                          17,686       (24,182)       2,067         (18,917)        (23,346)
                                        --------    ----------      -------        --------      ----------
Income before income taxes............    12,625        16,355        4,941         (18,917)         15,004
Income tax provision..................    (4,148)         (537)      (1,842)              0          (6,527)
                                        --------    ----------      -------        --------      ----------
Net income............................  $  8,477    $   15,818      $ 3,099        $(18,917)     $    8,477
                                        ========    ==========      =======        ========      ==========
</TABLE>

     The supplemental condensed consolidating statement of cash flows for the
twelve months ended December 31, 2000 (in thousands):

<TABLE>
<CAPTION>
                                         ALLIED     GUARANTOR     NONGUARANTOR
                                        HOLDINGS   SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS   CONSOLIDATED
                                        --------   ------------   -------------   ------------   ------------
<S>                                     <C>        <C>            <C>             <C>            <C>
Cash flows from operating activities:
  Net (loss) income...................  $ (6,301)    $(15,386)      $  5,400        $ 9,986        $ (6,301)
                                        --------     --------       --------        -------        --------
  Adjustments to reconcile net (loss)
     income to net cash provided by
     (used in) operating activities:
     Depreciation and amortization....     1,208       60,647            369              0          62,224
     Deferred income taxes............    (5,463)      (2,374)          (582)             0          (8,419)
     Compensation expense related to
       stock options and grants.......       803            0              0              0             803
     Equity in (earnings) loss of
       joint venture..................         0       (5,173)           107              0          (5,066)
     Equity in net loss of
       subsidiaries...................     9,986            0              0         (9,986)              0
     Amortization of Teamsters Union
       signing bonus..................         0        2,490              0              0           2,490
</TABLE>

                                       F-28
<PAGE>   53
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                         ALLIED     GUARANTOR     NONGUARANTOR
                                        HOLDINGS   SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS   CONSOLIDATED
                                        --------   ------------   -------------   ------------   ------------
<S>                                     <C>        <C>            <C>             <C>            <C>
     Change in operating assets and
       liabilities:
       Receivables, net of allowance
          for doubtful accounts.......  $   (791)    $  8,506       $    481        $     0        $  8,196
       Inventories....................         0          497              0              0             497
       Prepayments and other current
          assets......................      (363)       5,139         (2,060)             0           2,716
       Trade accounts payable.........     1,245          398            413              0           2,056
       Intercompany receivables and
          (payables), net.............     1,511       (1,709)           198              0               0
       Accrued liabilities............     7,187      (24,575)         4,730              0         (12,658)
                                        --------     --------       --------        -------        --------
          Total adjustments...........    15,323       43,846          3,656         (9,986)         52,839
                                        --------     --------       --------        -------        --------
          Net cash provided by
            operating activities......     9,022       28,460          9,056              0          46,538
                                        --------     --------       --------        -------        --------
Cash flows from investing activities:
  Purchases of property and
     equipment........................    (2,037)     (29,122)        (1,373)             0         (32,532)
  Intercompany sale of property and
     equipment........................   (15,372)      15,372              0              0               0
  Proceeds from sale of property and
     equipment........................         0        1,234              0              0           1,234
  Purchase of business, net of cash
     acquired.........................         0       (8,352)             0              0          (8,352)
  Investment in joint ventures........         0         (616)             0              0            (616)
  Cash received from joint ventures...         0        1,509              0              0           1,509
  Return of capital...................    11,999      (11,999)             0              0               0
  Intercompany dividend received
     (paid)...........................     6,585       (6,585)             0              0               0
  Increase in short-term
     investments......................         0            0        (15,567)             0         (15,567)
  Increase in cash surrender value of
     life insurance...................    (9,264)       8,723              0              0            (541)
                                        --------     --------       --------        -------        --------
          Net cash used in investing
            activities................    (8,089)     (29,836)       (16,940)             0         (54,865)
                                        --------     --------       --------        -------        --------
Cash flows from financing activities:
  (Repayment of) proceeds from
     long-term debt, net..............    (5,572)         271              0              0          (5,301)
  Proceeds from issuance of common
     stock............................       750            0              0              0             750
  Repurchase of common stock..........      (521)           0              0              0            (521)
  Other, net..........................     1,345          166            966              0           2,477
                                        --------     --------       --------        -------        --------
          Net cash (used in) provided
            by financing activities...    (3,998)         437            966              0          (2,595)
                                        --------     --------       --------        -------        --------
Effect of exchange rate changes on
  cash and cash equivalents...........         0         (177)          (512)             0            (689)
                                        --------     --------       --------        -------        --------
Net decrease in cash and cash
  equivalents.........................    (3,065)      (1,116)        (7,430)             0         (11,611)
Cash and cash equivalents at beginning
  of year.............................     1,852        3,179          8,953              0          13,984
                                        --------     --------       --------        -------        --------
Cash and cash equivalents at end of
  year................................  $ (1,213)    $  2,063       $  1,523        $     0        $  2,373
                                        ========     ========       ========        =======        ========
</TABLE>

                                       F-29
<PAGE>   54
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The supplemental condensed consolidating statement of cash flows for the
twelve months ended December 31, 1999 (in thousands):

<TABLE>
<CAPTION>
                                          ALLIED     GUARANTOR     NONGUARANTOR
                                         HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                         --------   ------------   ------------   ------------   ------------
<S>                                      <C>        <C>            <C>            <C>            <C>
Cash flows from operating activities:
  Net income (loss)....................  $  1,549     $ (5,546)      $  4,214       $ 1,332        $  1,549
                                         --------     --------       --------       -------        --------
  Adjustments to reconcile net income
     (loss) to net cash provided by
     (used in) operating activities:
     Depreciation and amortization.....       256       58,070            321             0          58,647
     Deferred income taxes.............     3,026       (2,308)             0             0             718
     Compensation expense related to
       stock options and grants........        33            0              0             0              33
     Equity in (earnings) loss of joint
       venture.........................         0       (2,059)           326             0          (1,733)
     Equity in net loss of
       subsidiaries....................     1,332            0              0        (1,332)              0
     Payment of Teamsters Union signing
       bonus...........................         0       (8,298)             0             0          (8,298)
     Change in operating assets and
       liabilities:
       Receivables, net of allowance
          for doubtful accounts........        (6)     (15,361)          (756)            0         (16,123)
       Inventories.....................         0       (1,090)             0             0          (1,090)
       Prepayments and other current
          assets.......................    (1,472)      (2,157)           527             0          (3,102)
       Trade accounts payable..........      (151)         827           (317)            0             359
       Intercompany (payables) and
          receivables, net.............   (49,284)      48,600            684             0               0
       Accrued liabilities.............    (3,850)     (13,364)         6,375             0         (10,839)
                                         --------     --------       --------       -------        --------
          Total adjustments............   (50,116)      62,860          7,160        (1,332)         18,572
                                         --------     --------       --------       -------        --------
          Net cash (used in) provided
            by operating activities....   (48,567)      57,314         11,374             0          20,121
                                         --------     --------       --------       -------        --------
Cash flows from investing activities:
  Purchases of property and
     equipment.........................         0      (43,251)        (1,776)            0         (45,027)
  Proceeds from sale of property and
     equipment.........................         0        2,749              0             0           2,749
  Purchase of business, net of cash
     acquired..........................         0       (1,879)             0             0          (1,879)
  Investment in joint ventures.........         0         (306)             0             0            (306)
  Intercompany dividend (received)
     paid..............................     6,974       (6,974)             0             0               0
  Increase in short-term investments...         0            0        (21,002)            0         (21,002)
  Increase in cash surrender value of
     life insurance....................         0         (773)             0             0            (773)
                                         --------     --------       --------       -------        --------
          Net cash provided by (used
            in) investing activities...     6,974      (50,434)       (22,778)            0         (66,238)
                                         --------     --------       --------       -------        --------
Cash flows from financing activities:
  Proceeds from issuance of long-term
     debt, net.........................    40,000       (3,556)             0             0          36,444
  Proceeds from issuance of common
     stock.............................       763         (348)             0             0             415
</TABLE>

                                       F-30
<PAGE>   55
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                          ALLIED     GUARANTOR     NONGUARANTOR
                                         HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                         --------   ------------   ------------   ------------   ------------
<S>                                      <C>        <C>            <C>            <C>            <C>
  Repurchase of common stock...........  $   (186)    $      0       $      0       $     0        $   (186)
  Proceeds from exercise of stock
     options...........................        27            0              0             0              27
  Other, net...........................     1,946       (2,084)         1,109             0             971
                                         --------     --------       --------       -------        --------
          Net cash provided by (used
            in) financing activities...    42,550       (5,988)         1,109             0          37,671
                                         --------     --------       --------       -------        --------
Effect of exchange rate changes on cash
  and cash equivalents.................         0          438             15             0             453
                                         --------     --------       --------       -------        --------
Net (decrease) increase in cash and
  cash equivalents.....................       957        1,330        (10,280)            0          (7,993)
Cash and cash equivalents at beginning
  of year..............................       895        1,849         19,233             0          21,977
                                         --------     --------       --------       -------        --------
Cash and cash equivalents at end of
  year.................................  $  1,852     $  3,179       $  8,953       $     0        $ 13,984
                                         ========     ========       ========       =======        ========
</TABLE>

     The supplemental condensed consolidating statement of cash flows for the
twelve months ended December 31, 1998 (in thousands):

<TABLE>
<CAPTION>
                                          ALLIED     GUARANTOR     NONGUARANTOR
                                         HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                         --------   ------------   ------------   ------------   ------------
<S>                                      <C>        <C>            <C>            <C>            <C>
Cash flows from operating activities:
  Net income...........................  $  8,477     $ 15,818       $  3,099       $(18,917)      $  8,477
                                         --------     --------       --------       --------       --------
  Adjustments to reconcile net income
     to net cash (used in) provided by
     operating activities:
     Depreciation and amortization.....       214       53,081              0              0         53,295
     Deferred income taxes.............     3,071       (1,219)             0              0          1,852
     Compensation expense related to
       stock options and grants........       291            0              0              0            291
     Equity in loss of joint venture...         0            0            470              0            470
     Equity in net income of
       subsidiaries....................   (18,917)           0              0         18,917              0
     Change in operating assets and
       liabilities:
       Receivables, net of allowance
          for doubtful accounts........        27      (32,125)         1,777              0        (30,321)
       Inventories.....................         0       (1,505)             0              0         (1,505)
       Prepayments and other current
          assets.......................       168        3,045           (829)             0          2,384
       Trade accounts payable..........      (863)       7,387           (158)             0          6,366
       Intercompany (payables) and
          receivables, net.............   (74,654)      73,903            751              0              0
       Accrued liabilities.............     6,512      (39,235)        16,972              0        (15,751)
                                         --------     --------       --------       --------       --------
          Total adjustments............   (84,151)      63,332         18,983         18,917         17,081
                                         --------     --------       --------       --------       --------
          Net cash (used in) provided
            by operating activities....   (75,674)      79,150         22,082              0         25,558
                                         --------     --------       --------       --------       --------
Cash flows from investing activities:
  Purchases of property and
     equipment.........................         0      (61,150)          (718)             0        (61,868)
  Proceeds from sale of property and
     equipment.........................         0          606              0              0            606
</TABLE>

                                       F-31
<PAGE>   56
                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
                                          ALLIED     GUARANTOR     NONGUARANTOR
                                         HOLDINGS   SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                         --------   ------------   ------------   ------------   ------------
<S>                                      <C>        <C>            <C>            <C>            <C>
  Purchase of business, net of cash
     acquired..........................  $      0     $      0       $   (942)      $      0       $   (942)
  Investment in joint ventures.........         0            0        (11,920)             0        (11,920)
  Capital contribution.................                (10,829)        10,829              0              0
  Intercompany dividend (received)
     paid..............................     6,213       (6,213)             0              0              0
  Increase in short-term investments...         0            0         (3,783)             0         (3,783)
  Increase in cash surrender value of
     life insurance....................         0       (1,373)             0              0         (1,373)
                                         --------     --------       --------       --------       --------
          Net cash provided by (used
            in) investing activities...     6,213      (78,959)        (6,534)             0        (79,280)
                                         --------     --------       --------       --------       --------
Cash flows from financing activities:
  Proceeds from (repayment of)
     long-term debt, net...............    65,000       (2,141)             0              0         62,859
  Proceeds from exercise of stock
     options...........................        24            0              0              0             24
  Other, net...........................     1,402       (3,763)         4,974              0          2,613
                                         --------     --------       --------       --------       --------
          Net cash provided by (used
            in) financing activities...    66,426       (5,904)         4,974              0         65,496
                                         --------     --------       --------       --------       --------
Effect of exchange rate changes on cash
  and cash equivalents.................         0        1,179         (1,506)             0           (327)
                                         --------     --------       --------       --------       --------
Net (decrease) increase in cash and
  cash equivalents.....................    (3,035)      (4,534)        19,016              0         11,447
Cash and cash equivalents at beginning
  of year..............................     3,930        6,383            217              0         10,530
                                         --------     --------       --------       --------       --------
Cash and cash equivalents at end of
  year.................................  $    895     $  1,849       $ 19,233       $      0       $ 21,977
                                         ========     ========       ========       ========       ========
</TABLE>

13. SUBSEQUENT EVENTS

     The Company anticipates recording an after-tax charge of approximately $3
million in the first quarter of 2001 related to executive severance and
workforce reduction expenses.

                                       F-32
<PAGE>   57

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Allied Holdings, Inc.:

     We have audited in accordance with auditing standards generally accepted in
the United States, the consolidated financial statements included in Allied
Holdings, Inc.'s 2000 annual report to stockholders and this Form 10-K, and have
issued our report thereon dated February 9, 2001. Our audit was made for the
purpose of forming an opinion on those financial statements taken as a whole.
The schedule listed in Item 14 of this Form 10-K is the responsibility of the
Company's management, is presented for purposes of complying with the Securities
and Exchange Commission's rules, and is not part of the basic financial
statements. This schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, fairly
states in all material respects the financial data required to be set forth
therein in relation to the basic financial statements taken as a whole.

                                          (/s/ OF ARTHUR ANDERSEN)

Atlanta, Georgia
February 9, 2001
(except with respect to the matter
discussed in the fourth paragraph under
the sub-heading Equity Investments
within Note 2 of the financial
statements referred to above, as to
which the date is April 13, 2001.)

                                       S-1
<PAGE>   58

                     ALLIED HOLDINGS, INC. AND SUBSIDIARIES

                       VALUATION AND QUALIFYING ACCOUNTS
             FOR THE YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

<TABLE>
<CAPTION>
                                                                     ADDITIONS
                                                        BALANCE AT   CHARGED TO                 BALANCE
                                                        BEGINNING    COSTS AND                  AT END
CLASSIFICATION                                          OF PERIOD     EXPENSES    DEDUCTIONS    OF YEAR
--------------                                          ----------   ----------   ----------    -------
                                                                        (IN THOUSANDS)
<S>                                                     <C>          <C>          <C>           <C>
YEAR ENDED DECEMBER 31, 2000:
  Allowance for doubtful accounts.....................    $1,508       $2,768       $(205)(a)   $4,071
YEAR ENDED DECEMBER 31, 1999:
  Allowance for doubtful accounts.....................     1,545          136        (173)(a)    1,508
YEAR ENDED DECEMBER 31, 1998:
  Allowance for doubtful accounts.....................     2,078          201        (734)(a)    1,545
</TABLE>

     (a) Write-off of uncollectable accounts.

                                       S-2