<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

                        COMMISSION FILE NUMBER 333-42607

                            GEOLOGISTICS CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

         DELAWARE                                                22-3438013
(STATE OF OTHER JURISDICTION OF                               (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION)                               IDENTIFICATION NO.)

                         1251 EAST DYER ROAD, SUITE 200
                      SANTA ANA, CALIFORNIA           92705
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:  (714) 513-3000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  NONE.

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                          Yes   X         No
                              -----          -----

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  X
          -----
The aggregate market value of the equity of the Registrant held by nonaffiliates
of the registrant is not applicable as the equity of the registrant is privately
held.

At March 28, 2000, 2,129,893 shares of the Registrant's Common Stock, $.001
par value, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:  NONE

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                                TABLE OF CONTENTS

PART I.

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<S>           <C>                                                                           <C>
Item 1.       Business of the Company......................................................  2
Item 2.       Properties................................................................... 15
Item 3.       Legal Proceedings............................................................ 15
Item 4.       Submission of Matters to a Vote of Security Holders.......................... 15

PART II.

Item 5.       Market for the Registrant's Common Stock and Related Stockholder Matters..... 16
Item 6.       Selected Consolidated Financial Data of the Company.......................... 16
Item 7.       Management's Discussion and Analysis of Financial Condition and
              Results of Operations........................................................ 18
Item 7a.      Quantitative and Qualitative Disclosures About Market Risk................... 28
Item 8.       Consolidated Financial Statements and Supplementary Data..................... 30
Item 9.       Change in and Disagreements with Accountants on Accounting and Financial
                Disclosure................................................................. 30

PART III.

Item 10.      Directors and Executive Officers of the Registrant........................... 32
Item 11.      Executive Compensation....................................................... 34
Item 12.      Security Ownership of Certain Beneficial Owners and Management............... 40
Item 13.      Certain Relationships and Related Transactions............................... 41

Part IV.

Item 14.      Exhibits, Financial Statement Schedules and Reports on Form 8-K.............. 42

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                                     PART I.

ITEM 1.  BUSINESS OF THE COMPANY

HISTORY

         GeoLogistics Corporation (the "Company") is a leading provider of
global logistics services for major multinational companies. The Company offers
comprehensive logistics and freight forwarding services that fulfill the
individual requirements of multinational customers that outsource their
logistics needs. The Company has assembled, through a series of strategic
acquisitions, a core platform of leading domestic and international logistics
companies that serve the niche markets that the Company has targeted for future
growth.

         In May 1996, the Company acquired a business formerly known as The
Bekins Company ("Bekins"). Founded in 1891, Bekins has historically been a
provider of household goods ("HHG") hauling and storage services. In recent
years, Bekins has expanded its service offerings to include inventory
management, distribution, specialized truck transportation and TimeLok, a
network-based transportation and warehouse logistics operation which services
manufacturers and distributors of high value products ("Bekins Worldwide
Solutions" or "BWS"). In 1999, Bekins introduced a specialized
business-to-consumer transportation solution under the name "HomeDirectUSA"
to service the growing market for residential delivery and installation of
high value oversized products like furniture. As of December 31, 1999, Bekins
operated through a United States network of 75 BWS service centers and 312
HHG service centers, all of which were owned by independent agents.

         In October 1996, the Company acquired LEP-USA ("Americas") and
LEP-Canada ("Canada") from LEP International Worldwide Limited ("LIW") in the
first step of the overall acquisition of LIW. Founded in 1973, Americas was a
non-asset-based freight forwarder serving niche transport segments of both the
United States and international freight forwarding and logistics markets. In
September 1999, the Company exited the domestic freight forwarding portion of
the Americas business. As of December 31, 1999, Americas operated 26 full
service international freight forwarding offices throughout the United States
which are utilized to service the international logistics and freight forwarding
business. Founded in 1930, Canada operates 13 offices located throughout Canada
and provides international freight forwarding and logistics services, focusing
on inbound transportation, customs clearance activities and trade fairs and
exhibitions.

         In November 1996, the Company acquired Matrix ("Services"). Founded in
1986, Services offers specialized international household goods relocation
services for executives of multinational companies and government agencies and
project forwarding for major infrastructure development projects. As part of its
restructuring efforts, the Company has initiated a plan to integrate the project
forwarding business into the Americas and the household goods relocation
services into Bekins. Services operates through 8 offices in the United States,
1 in Holland, one exclusive agent in Canada and 5 joint venture offices in the
Commonwealth of Independent States (the former Soviet Union).

         In September 1997, the Company expanded its international operations by
acquiring LIW. Founded in 1849, LIW provides complete freight forwarding and




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logistics services through 171 branches in 23 countries as of December 31, 1999.
In Europe, LIW operates a pan-European transportation network and has offices in
11 countries including one of the largest freight forwarding businesses in the
United Kingdom. In the Asia Pacific region, LIW maintains locations in 12
countries and is particularly well-established in the Hong Kong, Singapore and
Philippines markets. Additionally, through strategic alliances in Latin America
and the Middle East, LIW provides freight forwarding and logistics services in
an additional 52 countries as of December 31, 1999.

         In July 1998, GeoLogistics Air Services ("GLAS"), a subsidiary of the
Company purchased substantially all of the operating assets and assumed certain
of the liabilities of Caribbean Air Services, Inc. ("CAS"). CAS is a provider of
air logistics services between the United States, Puerto Rico, and the Dominican
Republic. In September 1998, the Americas business unit transferred operations
and business offices related to its Puerto Rico business to GLAS to benefit from
combined operational efficiencies. On September 10, 1999, the Company sold
substantially all of the assets of its GLAS business unit. See discussion of the
sale in "Management's Discussion and Analysis of Financial Condition and Results
of Operations".

OVERVIEW

         The Company is one of the largest non-asset-based providers of
worldwide logistics and transportation services headquartered in the United
States. The Company's primary business operations involve obtaining shipment or
material orders from customers, creating and delivering a wide range of
logistics solutions to meet customer specific requirements for transportation
and related services, and arranging and monitoring all aspects of material
supply chain activity utilizing advanced information technology systems. These
logistics solutions include international freight forwarding and door-to-door
delivery services using a wide range of transportation modes, including air,
ocean, truck and rail. The Company also provides value-added services such as
warehousing, inventory management, assembly, customs brokerage, distribution and
installation for manufacturers and retailers of commercial and consumer products
such as copiers, computers, pharmaceutical supplies, medical equipment, consumer
durables and aviation products. The Company also specializes in arranging for
the worldwide transportation of goods for major infrastructure projects, such as
power plants, oil refineries, oil fields and mines, to lesser developed
countries and remote geographic locations. In addition, the Company provides
international and domestic relocation services through the HHG divisions of
Bekins and Services.

         As a non-asset-based logistics services provider, the Company arranges
for and subcontracts services on a non-committed basis to airlines, truck lines,
van lines, express companies, steamship lines, rail lines and warehousing and
distribution operators. By concentrating on network-based solutions, the Company
avoids competition with logistics services providers that offer dedicated
outsourcing solutions for single elements of the supply chain. Such dedicated
logistics companies typically provide expensive, customized infrastructure and
systems for a customer's specific application and, as a result, dedicated
solutions that are generally asset-intensive, inflexible and invariably
localized to address only one or two steps in the supply chain. Conversely,
network-based services leverage common infrastructure and technology systems so
that solutions are scaleable, replicable and require


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a minimum amount of customization (typically only at the interface with the
customer). This non-asset ownership approach maximizes the Company's flexibility
in creating and delivering a wide range of end-to-end logistics solutions on a
global basis while simultaneously allowing the Company to exercise significant
control over the quality and cost of the transportation services provided.

         The Company operates a global network that provides a broad range of
transportation and logistics services through points of service in both
industrialized and developing nations with a strong local presence in North
America, Europe and Asia. As of December 31, 1999, the Company serviced over
45,000 active customers through a global network of 161 countries consisting of
operations located in 109 countries and strategic alliance partners located in
52 countries.

         Within the logistics services and freight forwarding industries, the
Company targets specific markets in which the Company believes it has a
competitive edge. For example, in the freight forwarding market, the Company
arranges transportation for shipments of heavy cargo that are generally larger
than shipments handled by integrated carriers, such as United Parcel Service of
America and FedEx Corporation. In the logistics market, the Company provides
specialized combinations of services that traditional freight forwarders cannot
cost-effectively provide, including time-definite delivery requirements,
direct-to-store distribution and merge-in-transit movement of products from
various vendors in a single coordinated delivery and/or installation to the
end-user.

INDUSTRY OVERVIEW

 GENERAL. As business requirements for efficient and cost-effective distribution
services have increased, so has the importance and complexity of effectively
managing freight transportation. Businesses increasingly strive to minimize
inventory levels, perform manufacturing and assembly operations in lowest cost
locations and distribute their products to numerous global markets. As a result,
companies frequently desire expedited or time-definite shipment services. To
assist in accomplishing these tasks, many businesses turn to freight forwarders
and logistics providers. A freight forwarder receives shipments from customers,
makes arrangements for transportation of the cargo on a carrier and may arrange
both for pick-up from the shipper to the carrier and for delivery of the
shipment from the carrier to the recipient. A logistics provider moves and
manages goods from suppliers to end customers with the goal of meeting specific
customer requirements, working capital objectives and overall customer
satisfaction.

         Historically, most transportation services have been provided by
companies with capabilities in only one or a very limited number of modes. The
Company believes it has differentiated itself by providing traditional
transportation services in virtually every mode, as well as by combining these
services with value-added logistics services, including pick-and-pack services,
merge-in-transit, inventory management, warehousing, reverse logistics,
dedicated trucking and regional and local distribution. The Company's logistics
managers have the ability to utilize a portfolio of transportation products and
design optimal transportation solutions for its customers. The Company believes
that it has a competitive advantage resulting from the experience and knowledge


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of its logistics managers and in the market information it possesses from its
diverse client base.

         Shippers increasingly use computer technology to control inventory
carrying costs and improve customer service by decreasing shipping time through
just-in-time delivery systems. The complex distribution systems that result
require not only selection of the proper mode to transport freight, but also
hands-on management to minimize overall logistics costs. At the same time, in an
effort to reduce overhead costs and introduce the expertise necessary to manage
their distribution systems, many shippers have sought to downsize their
transportation departments by outsourcing all or a portion of the traffic
function.

     FREIGHT FORWARDING. Freight forwarding services are provided through the
following modes of transportation:

     -    AIR FREIGHT. The air freight forwarding industry is highly fragmented.
          Many industry participants are capable of meeting only a portion of
          their customers' required transportation service needs. Some national
          domestic air freight forwarders rely on networks of terminals operated
          by franchisees or non-exclusive agents. The Company believes that the
          development and operation of Company-owned and exclusive agent-owned
          service centers under the supervision of the Company's management have
          enabled it to provide a higher degree of financial and operational
          control and service assurance than that offered by franchise-based
          networks.

     -    OCEAN. The ocean freight forwarding industry is highly fragmented,
          consisting of dedicated freight forwarders, private owners and
          operators of shipping fleets, and state-controlled shipping companies.
          The demand for ocean freight forwarding services is largely a factor
          of the level of worldwide economic activity and the distance between
          major trade areas. Freight rates are determined in a highly
          competitive global market and have been characterized by a steady
          decline since the early 1990s.

     -    TRUCKING. The largest segment of the non-local trucking industry is
          comprised of private fleets owned and operated by shippers. This
          segment has been gradually shrinking since 1980 as truckload carriers
          have become more service oriented in a deregulated environment. The
          shipper's focus on profitability has driven a trend toward outsourcing
          of private fleets. The next largest segment, for-hire truckload, is
          comprised primarily of specialized niches such as household goods,
          pad-wrapped products, temperature-controlled flats and tanks.
          Truckload carriers have traditionally focused on providing services
          within only one of these niches, with few dominating any particular
          niche or operating equipment in multiple niches. Less than truckload
          services are provided by a large number of carriers who specialize in
          consolidating smaller shipments into truckload quantities for
          transportation across regional and national networks. Freight
          forwarders such as the Company have been able to capitalize on these
          trends in the trucking industry by purchasing excess capacity at
          reduced rates and by providing incremental freight business to


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          truckload carriers in regions where the marketing presence of the
          truckload carriers may not be as strong as the freight forwarders.

 LOGISTICS SERVICES. Demand for these services is a result of increasing demands
by traditional freight forwarding customers for more than the simple movement of
freight from their transportation suppliers. To meet these needs, suppliers,
such as the Company, seek to customize their services by, among other things,
providing information on the status of materials, components and finished goods
through the logistics pipeline and providing performance reports on and proof of
delivery for each shipment. The growing emphasis of some manufacturers on
just-in-time manufacturing and production practices has also added to the demand
for rapid deliveries that are available through air freight. As a result of
these developments, many companies are realizing that they perform freight
transportation management and logistics functions less effectively than
third-party providers, such as the Company, and are relying increasingly on
partial or complete outsourcing of these functions. At the same time, major
shippers are seeking to utilize fewer firms to service their transportation
management and logistics needs. The Company believes that the continuing trend
toward outsourcing and the continuing concentration of transportation suppliers
by major shippers offers significant opportunities for those forwarders, with
extensive, global networks and advanced logistics information systems.

 RELOCATION SERVICES. The domestic HHG relocation services market is competitive
and highly fragmented. The Company competes with approximately 2,000 carriers
for the domestic interstate transportation of household goods. These carriers
are generally van lines that use the services of independent moving and storage
agencies that contractually affiliate with the carrier, although some carriers
own and operate company-owned branches. The relocation services industry
generally markets to three distinct customer groups: (i) corporate accounts who
pay for the relocations of their employees, (ii) private transferees paying for
their own moves and (iii) the U.S. Government, which pays for both civilian and
military relocations of their personnel. The Motor Carrier Act of 1980 (the
"Motor Carrier Act") reduced regulation in the trucking industry and provided
the opportunity for increased competition which has resulted in generally lower
profit margins due to the escalation of discounts against tariffs within the HHG
industry.

         The international HHG relocation services market has grown due to
increasing globalization of economics and the advent of free trade.
International relocation services are principally offered by specialist
companies that generally provide services through non-exclusive agents at the
destination locations around the world. There are a few larger companies that
own and operate their own businesses in major markets, although that is the
exception rather than the rule. A significant number of domestic HHG carriers
offer international relocation services through wholly-owned subsidiaries or
separate departments that specialize in international relocation services.

GLOBAL NETWORK

         As of December 31, 1999, the Company operated a global network in 109
countries consisting of 822 locations and strategic partnerships in 52 countries
with 400 locations. Within this network of approximately 1,200 locations, the
Company maintains a strong local presence in North and South


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America, Europe and Asia Pacific through Company locations, exclusive agents,
strategic alliance partners and non-exclusive agents.

 COMPANY LOCATIONS. Offices operated by Company employees rather than agents are
generally structured as stand-alone business units that operate in largely the
same manner as the independent, exclusive agents. Customers and carriers
generally do not distinguish between agent locations and Company-owned locations
as both must display, utilize and promote the Company's image, information
technology systems, processes and provide consistently high levels of customer
service.

 EXCLUSIVE AGENTS. The Company's contracts with its agents have terms ranging
from 30 days to as much as 10 years. Short-term cancelable contracts are the
exception rather than the norm, particularly for larger agents, and the majority
of the Company's contracts with agents range from 3 to 5 years. Contracts with
agents call for exclusive representation of the Company in respect of the
services provided by the Company. Agents are required to utilize the logo, image
and information systems of the Company. Each agent operates as an independent
business responsible for all costs associated with sales, operations, billing
and any related overhead for these items and are compensated by sharing in the
revenue generated by the business handled by such agent. An agent can (i)
generate sales which generally result in a sales commission or sharing of the
gross profit produced and (ii) provide services on behalf of the Company such as
origin, destination or other transportation services for which the agent is
compensated based on a prescribed revenue distribution formula.

 STRATEGIC ALLIANCE PARTNERS. Arrangements with foreign strategic alliance
partners are generally less stringent than with independent agents but generally
involve exclusive representation by the strategic partner on behalf of the
Company. Although strategic alliance partners are encouraged to utilize the logo
and image of the Company, they are required to acknowledge that they have no
rights to the Company's trademarks and use it only with the Company's
permission. Strategic alliance partners are encouraged to utilize the Company's
information technology systems but are not required to do so. Strategic alliance
agreements are generally not for a specified period and are terminable by either
party providing various periods of notice.

 NON-EXCLUSIVE AGENTS. In countries where the Company does not have
Company-owned operations, exclusive agents or strategic alliance partners, the
Company utilizes the services of non-exclusive agents. Non-exclusive agents have
no contractual commitment to the Company and do not use its name, logo or
systems.

 NORTH AMERICA. As of December 31, 1999, the Company had 31 Company-managed
offices located in 25 cities with approximately 1,547 employees and had agents
covering an additional 67 locations in the United States. The Company developed
its North American network through the acquisition and integration of Bekins HHG
and BWS in May 1996 and Americas and Canada in October 1996. In addition, as of
December 31, 1999, Americas and Canada provided international freight
forwarding, customs brokerage, and logistics services through 34 offices located
throughout the United States and Canada. Services provided project cargo and HHG
relocation services through 12 offices located in the United States.


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 EUROPE. The Company is a major provider of freight forwarding and
transportation and logistics services throughout Europe. As of December 31,
1999, Europe employed approximately 2,421 employees in 163 locations in 11
European countries. Through its United Kingdom subsidiary, the Company is one of
the largest freight forwarders in the United Kingdom, with approximately 43
locations with 825 employees as of December 31, 1999. Services maintains
international operations through 5 joint venture offices in the former Soviet
Union and numerous non-exclusive and unaffiliated HHG agents worldwide.

 ASIA PACIFIC. As of December 31, 1999, the Company had 77 locations in 12
countries in the Asia Pacific region with approximately 2,205 employees. The
Company is a major participant in the freight forwarding markets of Hong Kong,
Singapore and the Philippines.

SERVICES PROVIDED

         The Company's services can be broadly classified into the following
categories:

FREIGHT FORWARDING SERVICES. The Company offers domestic and international
air, ocean, road and rail freight forwarding for shipments of heavy cargo
that are generally larger than shipments handled by integrated carriers of
primarily small parcels such as FedEx Corporation and United Parcel Service
of America. The Company's basic freight forwarding business includes the
following services which are complemented by customized and information
technology-based options to meet customers' specific needs:

     -    International door-to-door shipment of freight, including service to
          remote destinations, lesser developed countries and locations which
          are difficult to reach.

     -    Value-added complementary services including customs brokerage, full
          tracking of goods in transit, warehousing, packing/unpacking and
          insurance.

 LOGISTICS SERVICES. Logistics services involve taking responsibility for
several or all steps in the supply chain of raw materials and products. The
Company's access to worldwide distributions systems, together with its
experience in coordinating deliveries from various supply sources and its
advanced information systems have enabled the Company to capitalize on
outsourcing of distribution functions by manufacturers and retailers and other
companies. Shippers that avail themselves of the Company's logistics services
often realize financial savings due to reduced fixed costs associated with
outsourcing distribution, the Company's volume discounts and information base
and the Company's ability to perform complex, multi-phased distribution
projects. The Company's logistics services provide value to the Company's
customers by providing access to low cost materials and product sources,
reducing distribution times and facilitating rapid movement and integration of
products and materials. For example, the Company currently provides the
following logistics-based management services:

     -    Direct-to-consumer distribution which involves coordination and
          delivery of purchases from internet retailers to consumers as well


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          as customer service and follow-up.

     -    Direct-to-store logistics for retail clients involving coordination of
          product receipt directly from manufacturers and dividing large
          shipments from the manufacturer into numerous smaller shipments for
          delivery directly to retail outlets or distribution centers to meet
          time-definite product launch dates.

     -    Merge-in-transit logistics involving movement of products from various
          vendors at multiple locations to a Company facility and the subsequent
          merger of the various deliveries into a single coordinated delivery to
          the final destinations. For example, such services are useful to
          technology manufacturers and resellers where major installations are
          organized to meet a customer's need to minimize disruptions to its
          clients' businesses and maximize the efficiency of the customer's
          technical support staff/field engineers.

     -    Value-added, high-speed, time-definite, total-destination programs
          that include packaging, transportation, unpacking and placement of a
          new product. The Company will also package and remove the old
          equipment that is being replaced by the equipment that the Company
          delivers.

     -    Packaging, transportation, unpacking and stand installation for
          domestic and international trade shows and major expositions.

     -    Global project cargo logistics for major infrastructure developments,
          including shipments of equipment to prepare a site for the
          development, materials used in construction of the project and final
          products manufactured following construction of the project.

     -    Reverse logistics involving the return of products from end users to
          manufacturers, retailers, resellers or remanufacturers, including
          verification of working order, defect analysis, serial number
          tracking, inventory management and disposal of sensitive materials in
          accordance with regulations. An example of such services is the
          removal of an old photocopying system for reuse, recycling or
          remanufacture at the time of delivery of a new photocopying system.

 RELOCATION SERVICES. The Company's domestic and international relocation
services are generally provided through Bekins and Services in the United
States. The domestic business is generally handled by Bekins and offers a full
range of relocation services within the United States focusing on corporate
accounts, private transferees and the government/military sectors. As of
December 31, 1999, Bekins operated through a network of 312 independent HHG
agents. Based on 1998 revenue data filed with the Surface Transportation Board
("STB"), Bekins is the sixth largest carrier of household goods.

         The Company's international relocation services are provided primarily
through Services from its Connecticut, Virginia and California offices. The
Company's principal customers for international relocation services are


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U.S.-based, multi-national corporations, various United States government
agencies and the United Nations. The Company handles relocations from the United
States to other countries, relocations from other countries to the United States
and relocations between two international destinations on behalf of its
customers. The Company uses a number of non-exclusive HHG agents in the
countries in which it provides services.

INFORMATION SYSTEMS

         The Company believes that its ability to provide its customers with
timely access to accurate information regarding the status of cargo-in-transit
is a point of differentiation from its competitors and is a critical factor to
customer retention and expansion on a multi-modal basis of the Company's
customer base and services provided to existing customers. The Company also
believes that the ability to monitor all purchased transportation costs and
compare them to anticipated costs on a job-by-job basis is critical to improving
margins. The Company utilizes CONTROL, a global, multi-modal, multi-currency and
multi-lingual integrated freight forwarding and job costing system that provides
international tracking, custom services, document preparation, document
transmittal and electronic data interchange ("EDI") interfaces with customers,
carriers and internal business units. CONTROL is currently installed in the
majority of the Company's operations in Europe, the United States and key
locations in Asia. The Company's Purchase Order Management System ("ORDERS")
provides item level tracking at the purchase order level and links multiple
purchase orders to fulfill customer service requirements. ORDERS is currently
installed in the Company's operations worldwide. BUSINESS 400 is a financial
system that is fully integrated with CONTROL and is utilized in the Company's
operations throughout Europe and Asia. PeopleSoft is the financial system used
by the Company's operations in the United States and is also integrated with
CONTROL. Geo-Vista is the Company's global e-commerce system that provides
access to the Company's systems and databases over the Internet. The Company
believes that it is well positioned to exploit emerging e-commerce
technologies. The Company's Bekins HHG and BWS operations currently utilize the
Direct Connect Solutions and Warehouse Management Systems, mainframe and server
systems that provide ground transportation, warehouse and reverse logistic
information services including a nationwide asset/inventory tracking and
shipment monitoring systems which feature state-of-the-art barcoding technology.
The Company's Services operations currently utilize MATRAK. The Company's
Americas subsidiary also utilizes CONTROL for all international shipments.

         The Company believes that its information systems that integrate
independent agents and select strategic alliance partners with the Company's
operations are a competitive advantage and provide an incentive for the
Company's independent agents and strategic alliance partners to continue to do
business with the Company. The Company believes that its information systems
result in increased efficiencies and reduced costs by providing direct interface
between the Company, its customers, agents and strategic alliance partners.

         In 1999, the Company completed its comprehensive project to upgrade
its information technology to properly recognize the year 2000. The Company,
its key customers and suppliers, and agents were not materially impacted by
the Year 2000 change. See discussion of Company initiatives in "Management's
Discussion and Analysis of Financial Condition and Results of Operations".

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MARKETING

         The Company believes that its target customer base consists of:
buyers of traditional transportation services that are motivated by cost and
transit-time considerations and buyers of logistics management services that
are seeking operating efficiencies, increased revenues and improved customer
service resulting from the end-to-end management of inventory. Global and
national sales personnel focus their sales efforts on senior transportation
executives, financial officers and materials managers of companies that are
complex users of international transportation logistics services. The
Company's goal is to provide such customers with effective transportation
programs that reduce the customers' total cost of shipping goods.

COMPETITION AND BUSINESS CONDITIONS

         The Company's principal businesses are directly impacted by the volume
of domestic and international trade. The volume of such trade is influenced by
many factors, including economic and political conditions in the United States
and abroad, major work stoppages, exchange controls, currency fluctuations, war
and other armed conflicts, and United States and international laws relating to
tariffs, trade restrictions, foreign investments and taxation.

         The global logistics services and transportation services industries
are intensely competitive and are expected to remain so for the foreseeable
future. The Company competes against other integrated logistics companies, as
well as transportation services companies, consultants and information
technology vendors. The Company also competes against carriers' internal sales
forces and shippers' transportation departments. This competition is based
primarily on freight rates, quality of service (such as damage-free shipments,
on-time delivery and consistent transit times), reliable pickup and delivery and
scope of operations.

         The Company also competes with transportation services companies for
the services of independent agents, and with truck carriers for the services
of independent contractors and drivers. The Company encounters competition
from a large number of firms with respect to the services provided by the
Company. Much of this competition comes from local or regional firms which
have only one or a small number of offices and do not offer the breadth of
services and integrated approach offered by the Company. However, some of
this competition comes from major United States and foreign-owned firms which
have networks of offices and offer a wide variety of services, many of which
are more extensive than the Company's. The Company believes that quality of
service, including information systems capability, global network capacity,
reliability, responsiveness, expertise and convenience, scope of operations,
customized program design and implementation, and price are important
competitive factors in its industry.

         The Company encounters competition from regional and local air freight
forwarders, cargo sales agents and brokers, surface freight forwarders and
carriers, and associations of shippers organized for the purpose of


                                      11
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consolidating their members' shipments to obtain lower freight rates from
carriers. As an ocean freight forwarder, the Company encounters strong
competition in every country in which it operates. This includes competition
from steamship companies and both large forwarders with multiple offices and
local and regional forwarders with one or a small number of offices. As an air
freight forwarder, the Company encounters strong competition from other air
freight forwarders in the United States and overseas. The Company believes that
quality of service, including reliability, responsiveness, expertise and
convenience, scope of operations, information technology and price are the most
important competitive factors in its industry.

         Competition for the domestic interstate transportation of household
goods is intense and long-term relationships with corporate accounts are
difficult to obtain and retain. In the HHG market, the Company encounters
competition from larger van lines such as North American Van Lines Inc.,
Allied Van Lines Inc., Atlas Van Lines, Inc. and UniGroup, Inc. (United Van
Lines, Inc. and Mayflower Transit, Inc.). Based on revenue data filed with
the STB, Bekins has been the sixth largest HHG carrier in the United States
for more than a decade. The Motor Carrier Act reduced regulation in the
trucking industry, and provided the opportunity for increased competition,
which resulted in generally lower profit margins within the domestic HHG
relocation industry. The international relocations services industry is
competitive and much more highly fragmented than the domestic HHG business.
Services competes with a large number of specialized competitors although the
Company believes that Services differentiates its offerings from many of its
competitors by focusing on "high-end" executive relocation services for
leading multinational companies and organizations.

REGULATION

         The air freight forwarding industry is subject to regulatory and
legislative changes which can affect the economics of the industry by requiring
changes in operating practices or influencing the demand for, and the costs of
providing, services to customers. In its ocean freight forwarding business, the
Company is licensed as an ocean freight forwarder by the Federal Maritime
Commission ("FMC"). The FMC does not regulate the level of Company's fees in any
material respect. The Company's ocean freight Nonvessel Operating Common Carrier
("NVOCC") business is subject to regulation as an NVOCC under the FMC tariff
filing and surety bond requirements, and under the Shipping Act of 1984,
particularly those terms proscribing rebating practices.

         In the United States, the Company is subject to federal, state and
local provisions relating to the discharge of materials into the environment or
otherwise for the protection of the environment. Similar laws apply in many
foreign jurisdictions in which the Company presently operates or may operate in
the future. Although the Company's current operations have not been
significantly affected by compliance with these environmental laws, governments
are becoming increasingly sensitive to environmental issues, and the Company
cannot predict what impact future environmental regulations may have on its
business. The Company does not anticipate making any material capital
expenditures for environmental control purposes during the remainder of the
current or succeeding fiscal years.

         Certain federal officials are considering implementing increased
security


                                      12
<PAGE>

measures with respect to air cargo. There can be no assurance as to what, if
any, regulations will be adopted or, if adopted, as to their ultimate effect on
the Company. The Company does not believe that costs of regulatory compliance
have had a material adverse impact on its operations to date. However, failure
of the Company to comply with the applicable regulations or to maintain required
permits or licenses could result in substantial fines or revocation of the
Company's operating permits or authorities. There can be no assurance as to the
degree or cost of future regulations on the Company's business.

         As a customs broker operating in the United States, the Company is
licensed by the United States Department of the Treasury and regulated by the
United States Customs Service. The Company's fees for acting as a customs broker
are not regulated.

         The Company's local pick-up and delivery operations are subject to
various state and local regulations and, in many instances, require
registrations with state authorities. In addition, certain of the Company's
local pick-up and delivery operations are regulated by the State Transportation
Board ("STB") and Federal Highway Administration ("FHWA"). Federal authorities
have broad power to regulate the delivery of certain types of shipments and
operations within certain geographic areas, and the STB has the power to
regulate motor carrier operations, approve certain rates, charges and accounting
systems and require periodic financial reporting. Interstate motor carrier
operations are also subject to safety requirements prescribed by the FHWA. In
some potential locations for the Company's delivery operations, state and local
registrations may be difficult to obtain.

         The Company is regulated as a motor carrier of property by the FHWA, by
which the Company is registered as both a common carrier, freight forwarder and
a property broker. For dispatch purposes, the Company also holds Federal
Communications Commission radio licenses. Certain of the Company's offshore
operations are subject to similar regulation by the regulatory authorities of
the respective foreign jurisdictions. Certain of the Company's warehouse
operations are licensed as container freight stations, public bonded warehouses
and customs examination sites by the United States and other sovereign
countries' customs services.

         Traditionally, HHG pricing had been based upon tariffs accepted by the
Department of Transportation ("DOT") or state regulatory agencies for each class
of goods hauled by an interstate carrier. These tariffs are generally based upon
the weight of the shipment, distance traveled, type of goods transported and
points of origin and destination. Most HHG moves are now priced significantly
below tariffs through individual discount programs, binding estimates negotiated
between the carrier and individual residential customers or on the basis of a
contract between the carrier and a corporate customer. HHG carriers participate
in rate bureaus through which competitors jointly establish and publish tariffs
and rates. The Company is currently a member of the Household Goods Carrier
Bureau, which is comprised of approximately 2,000 other common carriers of
household goods, including the ten largest carriers in the industry. The Motor
Carrier Act permits certain collective ratemaking activities through rate
bureaus by exempting such ratemaking from the antitrust laws. Management
believes prices in the industry are determined by market forces.


                                      13
<PAGE>

         The Company operates nationwide as an interstate common carrier through
its subsidiaries, Bekins HHG and BWS, who hold Certificates of Public
Convenience and Necessity that were granted by the DOT. These certificates
authorize Bekins to transport various classes of goods and products. The
Company's subsidiaries also operate as contract carriers, pursuant to contract
authority originally granted by the DOT. The Company is required to comply with
STB and FHWA regulations. In addition, the FHWA regulates the hours of service
of the Company's drivers and other safety related aspects of operations.

         The Company is also subject to similar and other laws in the foreign
jurisdictions in which it operates. Numerous jurisdictions in Asia prohibit or
restrict foreign ownership of local logistics operations, and although the
Company believes its ownership structure in Asia conforms to such laws, the
matter is often subject to considerable regulatory discretion and there can be
no assurance local authorities would agree with the Company.

         A failure by the Company to comply with the foregoing laws, rules and
regulations could subject it to suspension or revocation of its operating
authority or civil or criminal liabilities, or any combination of such penalties
or both. In addition, the Company-owned service centers hold intrastate
operating authority which subjects them to the jurisdiction of various state
regulatory commissions.

         From time to time, United States tax authorities have sought to assert
that owner-operators in the trucking industry are employees, rather than
independent contractors. No such claim has been successfully made with respect
to owner-operators serving the Company, and management is confident the
owner-operators of the Company could not be properly characterized as employees
of the Company under existing interpretations of federal and state tax law.
However, there can be no assurance that tax authorities will not successfully
challenge this position, or that such interpretations will not change, or that
the tax laws will not change.

TRADEMARKS

         The Company has registered trademarks on a number of variations of the
Bekins name and corporate logo in the United States and the LEP trademarks.
Depending on the jurisdiction of registration, trademarks are generally
protected for ten to twenty years (if they are in continuous use during that
period) and are renewable. These trademarks are material to the Company in the
marketing of its services because of the high name recognition possessed by
Bekins in the transportation services industry. Additionally, in 1998, the
Company registered the GeoLogistics name and a related "G" logo in the countries
in which the Company operates.

EMPLOYEES

         As of December 31, 1999, the Company and its subsidiaries had
approximately 6,200 employees, excluding employees of agents and strategic
alliance partners. Management believes that it has good relationships with its
employees. In the United States, a total of approximately 102 employees at 5
locations are members of collective bargaining units affiliated with the
teamsters, out of a total of approximately 1,283 employees as of December 31,
1999.


                                      14
<PAGE>

ITEM 2.  PROPERTIES

         The properties used in the Company's operations consist principally of
leased freight forwarding offices and warehouse and distribution facilities. As
of December 31, 1999, the Company had 183 office facilities, 7 of which were
owned and 176 of which were leased, and 140 warehouse facilities, 13 of which
were owned and 127 of which were leased, constituting, in the aggregate,
approximately 1.1 million square feet of office space and 3.2 million square
feet of warehouse space in 32 countries.

         The following table sets forth certain information relating to the
Company's domestic and foreign properties as of December 31, 1999.

<TABLE>
<CAPTION>

                   NUMBER OF FACILITIES
                  OWNED   LEASED   TOTAL
                  -----   ------   -----

<S>               <C>      <C>      <C>
United States       --       53       53
Canada ......        1       12       13
Asia Pacific         1       93       94
Europe ......       18      145      163
                   ---      ---      ---
   Total ....       20      303      323
                   ===      ===      ===

</TABLE>

         The Company believes that its office and warehouse facilities are
generally well-maintained, are suitable to support the Company's business and
are adequate for the Company's present needs.

ITEM 3.  LEGAL PROCEEDINGS

         The Company is currently defending a claim brought by Danish Customs
and Excise for payment of customs duties and excise taxes of approximately
$5.5 million related to alleged irregularities in connection with a number of
shipments of freight out of Denmark. The Company and its subsidiaries are
also defendants in legal proceedings arising in the ordinary course of
business and are subject to certain claims. The Company believes it has
established adequate reserves for the total alleged liabilities. Although the
outcome of the proceedings cannot be determined, it is the opinion of
management, that the resolution of these matters will not have a material
adverse effect on the Company.

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

         During the fourth quarter of 1999, no matters were submitted to a
vote of the security holders.

                                      15
<PAGE>

                                    PART II.

ITEM 5.  MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS.

         The Company was formed in 1996 by investment entities managed by
William E. Simon & Sons, LLC, ("WESS") and Oaktree Capital Management, LLC,
("OCM"). WESS and OCM collectively own 82.9% of the outstanding common stock of
the Company. The remaining 17.1% of the outstanding shares are owned by
employees and certain qualified non-employee investors. There are 69
shareholders of record of the Company's common stock as of December 31, 1999.

         The Company is restricted in the payment of dividends to common and
preferred shareholders by the terms of its 9 3/4% Senior Notes and its Series
A Participating Preferred Stock. These agreements provide for the payment of
dividends only in the event that certain conditions are met.

         In accordance with the terms of these agreements, the Company did not
pay any cash dividends in 1999 or 1998 and does not intend to pay cash dividends
in the future.

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY

         The following table summarizes certain selected consolidated financial
data, which should be read in conjunction with the Company's consolidated
financial statements and notes thereto and with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
herein. The selected consolidated financial data have been derived from the
audited consolidated financial statements of the Company and Bekins (the
"Company Predecessor").


                                      16
<PAGE>

<TABLE>
<CAPTION>

                                                                                   Period From     Period From        Company
                                                                                   May 2, 1996    April 1, 1996    Predecessor (1)
                                                 Year Ended December 31,               To              To            Year Ended
                                       ------------------------------------------ December 31,       May 1,         March 31,(2)
                                         1999(6)        1998(5)          1997(3)     1996(3)          1996(2)      1996       1995
                                       -----------    -----------     -----------  -----------    -------------    ------- ------
                                                                          (in thousands except for share data)
<S>                                    <C>            <C>            <C>            <C>            <C>         <C>        <C>

Statement of Operations Data:
  Revenues .........................   $ 1,558,204    $ 1,526,753    $   978,249    $   225,793    $ 17,458    $231,752   $242,966
  Net revenues .....................       362,894        372,220        219,200         44,585       3,824      52,141     51,688
  Selling, general and
    administrative expenses ........       378,048        366,268        204,733         37,554       3,309      42,810     43,008
  Restructuring and other
    non-recurring charges (7) ......        18,997             --             --             --          --          --         --
  Asset impairment charges (7) .....        11,888             --             --             --          --          --         --
  Depreciation and amortization ....        20,021         18,126         30,398         16,310         337       4,194      5,675
                                       -----------    -----------    -----------    -----------    --------    --------   --------
  Operating income (loss) ..........       (66,060)       (12,174)       (15,931)        (9,279)        178       5,137      3,005
  Gain on sale of business..........        68,920             --             --             --          --          --         --
  Income (loss) before minority
    interest and extraordinary
    loss ...........................       (48,233)       (37,101)       (16,298)        (8,247)        (27)      1,198        196
  Minority interest ................         1,478            932          1,067            --          --          --         --
  Extraordinary loss on early
    extinguishment of debt, net
    of tax benefit of $1,528
    and $664(4) ....................            --             --         (2,293)          (997)         --          --         --
                                       -----------    -----------    -----------    -----------    --------    --------   --------
    Net income (loss) ..............       (49,711)       (38,033)       (19,658)        (9,244)        (27)      1,198        196
Preferred stock dividend ...........         2,100            963             --             --          --          --         --
                                       -----------    -----------    -----------    -----------    --------    --------   --------
Loss applicable to common
  stock ............................   $   (51,811)   $   (38,996)   $   (19,658)   $    (9,244)   $    (27)   $  1,198   $    196
                                       ===========    ===========    ===========    ===========    ========    ========   ========
Per share information-
  Basic and diluted:
  Loss per share before
    extraordinary loss .............   $    (24.31)   $    (18.39)   $     (8.47)   $     (6.58)   $     --    $     --   $     --
  Extraordinary loss ...............            --             --          (1.12)          (.79)         --          --         --
  Net loss .........................   $    (24.31)   $    (18.39)   $     (9.59)   $     (7.37)   $     --    $     --   $     --
  Basic and diluted weighted
    average shares .................     2,131,393      2,120,365      2,049,800      1,254,200          --          --         --
Balance Sheet Data:
  Current assets ...................   $   295,027    $   321,198    $   319,732    $   135,036    $ 32,834    $ 33,313   $ 35,389
  Property and equipment, net ......        75,983         95,254         59,073         11,781       8,143       8,266     10,080
  Total assets .....................       447,656        549,178        485,766        236,684      63,845      64,476     71,276
  Current liabilities ..............       292,287        309,704        301,809        123,144      48,798      48,188     36,799
  Long-term debt (including
    current portion) ...............       165,137        195,726        121,228         66,314      15,634      11,915     21,049
  Other non-current liabilities
    and minority interest...........        48,834         54,781         48,248         11,117       6,567       7,768      7,423
  Stockholders' equity (deficit) ...   $   (46,380)   $     1,516    $    22,919    $    40,619    $  8,112    $  8,137   $  6,879

</TABLE>

 See accompanying Notes to Selected Consolidated Financial Data of the Company.


                                      17
<PAGE>

NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY:

     (1)  On May 2, 1996, the Company acquired all of the outstanding shares of
          The Bekins Company ("Company Predecessor, Bekins").

     (2)  Includes the operating results of Bekins Moving and Storage division
          ("BMS"). Upon acquisition of Bekins by the Company on May 2, 1996, BMS
          was treated as discontinued with the net assets of BMS recorded as a
          current asset. The following is selected financial information of BMS:

<TABLE>
<CAPTION>

                                                   YEAR ENDED
                                                    MARCH 31,
                                                    ---------
                                                1996         1995
                                               -------     -------
<S>                                            <C>         <C>

          STATEMENT OF OPERATIONS DATA:
             Revenues ....................     $47,264     $53,948
             Net revenues ................      17,855      19,564
             Depreciation and amortization       1,237       1,453
             Operating income ............         243         470

</TABLE>

     (3)  Includes the results of Americas and Canada since their acquisition on
          November 1, 1996, the results of Services since its acquisition on
          November 7, 1996 and the results of LIW since September 30, 1997.

     (4)  On October 31, 1996, the Company applied proceeds from a bank
          borrowing facility to repay certain indebtedness incurred to finance
          the acquisition of Bekins. In connection with such transaction, the
          Company recorded an extraordinary loss of $1,661 ($997 net of tax)
          related to the write-off of unamortized deferred financing costs.

          On October 29, 1997, the Company applied proceeds from the sale of the
          Senior Notes to repay the indebtedness outstanding under a bank
          borrowing facility. In connection with such transaction, the Company
          recorded an extraordinary loss of $3,821 ($2,293 net of taxes)
          related to the write-off of unamortized deferred financing costs.

     (5)  Includes the operations of GLAS from July 13, 1998 (date of
          acquisition).

     (6)  Includes the operations of GLAS through September 10, 1999 (date of
          disposition). See Management's Discussion and Analysis of Financial
          Condition and Results of Operations.

     (7)  See Management's Discussion and Analysis of Financial Condition and
          Results of Operations--Restructuring and Other Non-Recurring
          Charges/Asset Impairment Charges.

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

         THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION
WITH SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY, AND THE CONSOLIDATED
FINANCIAL STATEMENTS OF THE COMPANY INCLUDED ELSEWHERE IN THIS REPORT. THIS
ANNUAL REPORT ON FORM 10-K MAY CONTAIN "FORWARD-LOOKING STATEMENTS" WITHIN THE
MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION


                                      18
<PAGE>

21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. DISCUSSIONS CONTAINING
SUCH FORWARD-LOOKING STATEMENTS MAY BE FOUND IN THE MATERIAL SET FORTH HEREIN AS
WELL AS WITHIN THIS ANNUAL REPORT GENERALLY. ALSO, DOCUMENTS SUBSEQUENTLY FILED
BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION MAY CONTAIN
FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTIONS IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF THE CHALLENGES AND
UNCERTAINTIES INHERENT IN SUCCESSFULLY IMPLEMENTING ITS BRANDING, INFORMATION
TECHNOLOGY AND COST REDUCTION STRATEGIES AND THE OTHER RISK FACTORS AND MATTERS
IDENTIFIED HEREIN OR IN OTHER PUBLIC FILINGS BY THE COMPANY, INCLUDING BUT NOT
LIMITED TO, THE COMPANY'S REGISTRATION STATEMENT ON FORM S-4 (FILE NO.
333-42607) SUCH AS RISKS RELATING TO THE COMPANY'S LEVERAGE AND ABILITY TO
SERVICE ITS DEBT OBLIGATIONS, THE COMPANY'S ABILITY TO ACCESS ADDITIONAL CAPITAL
RESERVES, CHALLENGES PRESENTED BY INTEGRATION OF RECENT ACQUISITIONS AND IN THE
AMERICAS BUSINESS, RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS AND CURRENCY
FLUCTUATIONS AND RISKS RELATED TO INFORMATION TECHNOLOGY IMPLEMENTATION AND
INTEGRATION.

GENERAL

         The Company commenced operation on May 2, 1996 in connection with its
acquisition of Bekins. On October 31, 1996, the Company acquired Americas and
Canada and securities representing 33.3%, in the aggregate, of the common equity
of Europe and Asia. On November 7, 1996, the Company acquired Services. Between
September 30, 1997 and December 15, 1997, the Company completed the acquisition
of all of the remaining equity securities of the Europe and Asia business (the
"LIW Acquisition"). On July 13, 1998, the Company purchased substantially all of
the operating assets and assumed certain of the liabilities ("Air Services
Acquisition") of Caribbean Air Services, Inc. ("CAS"). The Company disposed
of such assets and other assets relating to its Puerto Rico services on
September 10, 1999. All acquisitions were accounted for by the purchase method
of accounting, and accordingly, the book values of the assets and liabilities
of the acquired companies were adjusted to reflect their fair values at the
dates of acquisition.

         The portion of the Company's business that is focused on traditional
transportation and logistics services normally experiences a higher percentage
of its revenues and operating income in the fourth calendar quarter as volumes
increase for the holiday season. Conversely, the Company's domestic household
goods relocation business experiences approximately half of its revenue between
June and September. In addition, Services has a significant project logistics
business which is cyclical due to its dependence upon the timing of shipment
volumes for large, one-time projects.

         The Company operates a global network that provides a broad range of
transportation and logistics services through points of service in both
industrialized and developing nations with a strong local presence in North
America, Europe and Asia Pacific. Because of its global position, broad service
offerings and technologically-advanced information systems, the Company believes
it is well-positioned to participate in the growing trend for large corporations
to outsource logistics and transportation distribution services. The Company's
future operating results will be dependent on the economic environments in which
it operates. Demand for the Company's services will also be affected by economic
conditions in the industries of the Company's customers. The Company's principal
businesses are directly impacted by the volume of domestic and international
trade between the United States and foreign nations and among foreign nations.


                                      19
<PAGE>

RESTRUCTURING AND OTHER NON-RECURRING CHARGES/ASSET IMPAIRMENT CHARGES

         On March 4, 1999, the Company announced the intended restructuring
of its GeoLogistics Americas ("Americas") business as a result of a difficult
domestic freight forwarding environment. Due to lower volumes in the European
region, the Company initiated a process to reevaluate the operations of its
other business units to determine what initiatives could be taken to reduce
costs and streamline administrative operations. As part of this restructuring
process, a new management team was put in place in an effort to improve
global operating results.

         In connection with these efforts, the Company (a) exited the
majority of its domestic freight forwarding portion of Americas business at
the end of the third quarter of 1999, (b) is rationalizing personnel such
that their numbers and skill sets are suited to the ongoing services and
volumes of the business, (c) closed, or will close, facilities in the United
States and Europe, (d) arranged for the settlement of remaining obligations
to the selling shareholders of the project forwarding and international
household goods relocation services business and integrated the project
forwarding business into the Americas business and the international
household goods relocation services into Bekins and (e) revalued assets to
reflect fair values. The aggregate charge for these actions is expected to be
approximately $34.6 million of which $30.9 million was recorded in 1999 and
the remaining balance of $3.7 million is expected to be recorded in the first
half of 2000. The restructuring and non-recurring charges include provisions
for the termination of 460 sales, administrative and warehouse employees
globally at a cost of approximately $16.6 million. Of this cost $13.9
million, representing the termination of 420 employees, was recorded in 1999
and $2.7 million which relates to the termination of the remaining 40
employees is expected to be recorded in the first half of 2000. The
restructuring and non-recurring charge is also comprised of $1.6 million
related to facility closure and lease terminations, $1.5 million additional
allowance for bad debts, $1.1 million for the termination of certain
agreements, and $0.9 million for other miscellaneous exit costs. Accrued
liabilities at December 31, 1999 included approximately $7.7 million of
future severance payments related to 176 employees terminated prior to
December 31, 1999; approximately $1.1 million related to facility closure and
exit costs; and $1.0 million was included in allowance for doubtful accounts.
The non-cash charges for asset impairment relate to the write-off of $3.5
million of goodwill as a result of exiting the domestic freight forwarding
portion of Americas' business, a $6.8 million reevaluation of capitalized
software costs and $1.6 million related to the pending sale of certain real
property. In addition to actions for which immediate financial recognition is
required, many additional actions have been taken including revised incentive
plans for the sales and management staffs (including the employees who will
continue to operate the international freight forwarding operations in the
United States), expansion of logistics facilities in Thailand and expansion
of facilities and logistics capabilities in China.

         The aforementioned restructuring and other non-recurring charges
along with the asset impairment charges are expected to provide savings of
approximately $17.0 million in selling, general and administrative expenses
and $1.5 million reduction in depreciation and amortization for the 2000
fiscal year.


                                      20
<PAGE>


SALE OF BUSINESS

         On September 10, 1999, the Company sold substantially all of the assets
of its GLAS business unit ("GLAS Assets") for aggregate cash consideration of
approximately $116 million. The $68.9 million gain on this sale has been
reflected in the consolidated statement of operations for the year ended
December 31, 1999 and the consolidated statement of cash flows for the year
ended December 31, 1999.

         The sale proceeds were applied by the Company to fund a $10 million
escrow account in connection with certain warranties to the purchaser, pay fees
and expenses associated with the transaction and reduce revolving debt that was
secured by the GLAS Assets. As of December 31, 1999, the Company has recorded a
$1.8 million allowance relating to the warranties and subsequent to December 31,
1999, the Company settled certain remaining obligations and warranties
associated with the escrow account and obtained the release of $8.2 million.

         For the year ended December 31, 1999, revenues and operating income
from the GLAS operations were approximately $66.8 million, and $10.5 million,
respectively.

         The following discussion and analysis relates to the results of
operations for the Company as reported for the years ended December 31, 1999,
1998 and 1997 and should be read in conjunction with the consolidated financial
statements of the Company included elsewhere in this Form 10-K.
<TABLE>
<CAPTION>

                                                               YEAR ENDED DECEMBER 31,
                                                      -------------------------------------------
                                                         1999             1998            1997
                                                      -----------     -----------     -----------
                                                                    (IN THOUSANDS)
<S>                                                   <C>             <C>             <C>

STATEMENT OF OPERATIONS DATA:
Revenues .........................................    $ 1,558,204     $ 1,526,753     $   978,249
Net revenues .....................................        362,894         372,220         219,200
Selling, general and administrative expenses .....        378,048         366,268         204,733
Restructuring and other non-recurring charges ....         18,997              --              --
Asset impairment charges .........................         11,888              --              --
Depreciation and amortization ....................         20,021          18,126          30,398
                                                      -----------     -----------     -----------
Operating loss ...................................        (66,060)        (12,174)        (15,931)
Interest expense, net ............................         23,086          16,984           8,576
Gain on sale of business .........................         68,920              --              --
Other expense ....................................            749             214             211
Income tax expense (benefit) .....................         27,258           7,729          (8,420)
Minority interests ...............................          1,478             932           1,067
                                                      -----------     -----------     -----------
Loss before extraordinary item ...................        (49,711)        (38,033)        (17,365)
Extraordinary loss on early extinguishment
  of debt net of tax
benefit of $1,528 ................................             --              --          (2,293)
                                                      -----------     -----------     -----------
Net loss .........................................    $   (49,711)    $   (38,033)    $   (19,658)
                                                      ===========     ===========     ===========
</TABLE>

                                      21
<PAGE>

YEAR ENDED DECEMBER 31, 1999 VERSUS YEAR ENDED DECEMBER 31, 1998

         REVENUES. The Company's revenues increased by approximately $31.4
million to $1,558.2 million for the year ended December 31, 1999 from
$1,526.8 million for the year ended December 31, 1998. Revenue comparisons
for each business unit are presented before intercompany eliminations.
Contributing additional revenue of $22.4 million in the period was GLAS. The
Asia Pacific region revenues increased $76.4 million, due primarily to
increased export volumes and new customers. This increase was offset by a
decline in the Americas business unit of $51.1 million, due to lower volumes
as a result of a difficult freight forwarding environment and the exit from
the domestic business at the end of the third quarter of 1999. BWS revenues
declined $10.3 million primarily due to lower volumes resulting from customer
industry consolidations. Europe's revenues declined $13.0 million primarily
as a result of market softness in the region. Services' revenues decreased
$9.5 million, on lower volume in both international relocation and project
cargo product lines as a result of declining international relocations and
continued delays in the commencement of several large overseas projects,
particularly by companies engaged in the oil and gas industry. Had foreign
exchange rates remained constant from 1998 to 1999, consolidated revenues
would have been $13.8 million more than the actual 1999 results.

         NET REVENUES. This represents revenues after direct transportation
and other costs. Net revenues decreased by approximately $9.3 million, to
$362.9 million for the year ended December 31, 1999 from $372.2 million for
the same period in 1998. Net revenues as a percentage of revenues decreased
to 23.3% in 1999 from 24.4% for the same period in 1998.

         GLAS contributed an increase of $7.4 million as a result of the
acquisition of Caribbean Air Services in July 1998. In addition, the Asia
Pacific region contributed an increase of $9.4 million to net revenues on the
strength of higher volumes. These increases were offset by declines in all
other business units of the Company except Canada which increased $1.3
million. Americas posted a decrease in net revenues of $13.3 million from the
previous year as a result of the competitive freight forwarding environment
in the United States which led to the exit from the domestic freight
forwarding market by the Company during the third quarter of 1999. The
softness in Europe's economy contributed $8.8 million to the decrease. BWS
and Services net revenues decreased $3.3 million and $1.8 million,
respectively, as a result of lower volumes as previously discussed, and
margin erosion.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by approximately $11.7 million, to $378.0
million for the year ended December 31, 1999 from $366.3 million for the year
ended December 31, 1998. These expenses as a percentage of net revenues
increased to 104.2% in 1999 from 98.4% for the same period in 1998. Selling,
general and administrative expenses increased over the prior year in most of
the Company's operating units. Asia Pacific expenses increased $6.8 million
due to higher warehousing and employee costs required to support the 26.0%
increase in revenues. Selling, general and administrative expenses in Europe
decreased $0.6 million compared to prior year. Selling, general and
administrative expenses in Canada increased $3.4 million due to additional
warehousing costs required to support new business. Expenses also include an
additional $3.6 million for eight and one half months of GLAS operations in
1999 versus five and one half months of operations in 1998 from the date of
Air Services Acquisition. Americas expenses decreased by $6.3 million as a
result of the exit from the domestic business and the implementation of cost
control initiatives.

         RESTRUCTURING, NON-RECURRING AND ASSET IMPAIRMENT CHARGES. As
previously discussed, the Company has implemented its restructuring and
reorganization

                                      22
<PAGE>

plans which resulted in $19.0 million of restructuring and non-recurring
charges related to the shut down of the domestic freight forwarding business
and the streamlining of other corporate and administrative functions. In
addition, the Company has recorded asset impairment charges of approximately
$11.9 million relating to goodwill, capitalized software and property as a
result of exiting the domestic freight forwarding portion of Americas
business, a reevaluation of capitalized software costs and the pending sale
of certain property of its Italian subsidiary. These charges have all been
reflected in the results of operations of the Company for the year ended
December 31, 1999. No such items were recorded during 1998.

         DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased $1.9 million for the year ended December 31, 1999 compared to 1998
primarily as the result of an increase in fixed assets related to information
technology.

         OPERATING LOSS. The Company recorded a $66.1 million operating loss
for the year ended December 31, 1999 compared to a $12.2 million operating
loss for the year ended December 31, 1998. Operating income (loss) before
depreciation and amortization; restructuring and other non-recurring charges,
and asset impairment charges was $(15.2) million for 1999 compared to $6.0
million for 1998. Increased profits in Asia Pacific, GLAS and Bekins HHG were
offset by restructuring charges and higher operating losses in all other
operating units.

         INTEREST EXPENSE, NET. Interest expense, net, increased by
approximately $6.1 million to $23.1 million for 1999 from $17.0 million for
the same period of 1998. The increase was associated with interest related to
borrowings incurred to finance the Air Services Acquisition in July 1998,
higher levels of working capital-related borrowings required as a result of
the losses incurred at BWS, Services, Europe and the Americas operating
units, and the write-off of $1.5 million of deferred financing fees related
to the revolving credit agreement which was amended in September 1999.

         INCOME TAXES. The income tax provision for the year ended December 31,
1999 increased $19.6 million to a $27.3 million provision versus a $7.7 million
tax provision for the same period of 1998. The increase for 1999 relates
primarily to gains associated with the sale of the GLAS assets. No income tax
benefit has been recorded for business units incurring operating losses in 1999.
Management believes that the realization of the entire net deferred tax asset is
uncertain and has established a valuation allowance due to such uncertainty.

         SALE OF BUSINESS. On September 10, 1999, the Company sold substantially
all of its GLAS business unit for aggregate cash consideration of approximately
$116 million. The GLAS sale resulted in a gain of approximately $68.9 million.

         MINORITY INTERESTS. Interests held by minority shareholders in the
earnings of certain foreign subsidiaries were $1.5 million and $0.9 million for
the years ended December 31, 1999 and 1998, respectively.

         NET LOSS. Net loss increased by $11.7 million to $49.7 million for
the year ended December 31, 1999 compared to $38.0 million for the same
period of 1998. This increase in loss was due primarily to operating losses
attributable to the Americas, BWS, Europe and Services, increased interest
expense, income taxes

                                      23
<PAGE>

and restructuring charges partly offset by the gain attributable to the sale
of the GLAS assets and improved operating results in Asia Pacific and Bekins
HHG.

YEAR ENDED DECEMBER 31, 1998 VERSUS YEAR ENDED DECEMBER 31, 1997

         REVENUES. The Company's revenues increased by approximately $548.6
million, to $1,526.8 million for the year ended December 31, 1998 from $978.2
million for the year ended December 31, 1997. Approximately $593.1 million of
the increase related to the LIW Acquisition, which was partially offset in
1998 by the temporary negative effect of strategically shifting to "owned"
operations from agent representation in India and South Africa. Also
contributing additional revenue of $23.6 million in the period was the Air
Services Acquisition. In addition, BWS revenues increased $20.0 million, or
21.7% due primarily to increased volume from new customers. Services business
unit revenues also increased $4.5 million, or 6.9% on higher volume in both
project cargo and international relocation product lines. Revenues at the
Americas business unit declined $103.8 million, or 27.8% due to lower
domestic and international forwarding volumes. Additionally, Americas
business between the United Sates and Puerto Rico was shifted to the
management of Air Services during the third quarter which accounted for $18.5
million of the decrease.

         NET REVENUES. Net revenues increased by approximately $153.0
million, to $372.2 million for the year ended December 31, 1998 from $219.2
million for the same period in 1997. Net revenues as a percentage of revenues
increased to 24.4% in 1998 from 22.4% for the same period in 1997 primarily
due to a shift in product offerings to higher margin value-added services
resulting from the acquisition of Europe and Asia. Net revenue increases are
primarily the result of additional revenue contributed as a result of the LIW
Acquisition ($152.2 million) and the Air Services Acquisition ($13.2 million)
partially offset by a reduction in Americas net revenues. In addition, BWS
net revenues increased $2.8 million, or 13.4%, due to higher volumes.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by approximately $161.6 million, to $366.3
million for the year ended December 31, 1998 from $204.7 million for the year
ended December 31, 1997. These expenses as a percentage of net revenues
increased to 98.4% in 1998 from 93.4% for the same period in 1997 due to the
higher expenses at the Americas business unit and for general corporate
purposes in addition to specific corporate initiatives relating to a new
branding strategy, a logistics consulting infrastructure team and expanded
strategic information technology projects. Selling, general and administrative
expenses relating to the LIW and Air Services Acquisitions amounted to $144.6
million of the increase from 1997.

         DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
decreased 40.4% to $18.1 million for the year ended December 31, 1998 compared
to $30.4 million for the year ended December 31, 1997 primarily as the result of
a $20.6 million decrease in amortization of intangible assets (acquired in the
1996 acquisitions) that was fully amortized by the end of 1997. The decrease was
partially offset by an additional $4.0 million of depreciation and amortization
resulting from the LIW and Air Services Acquisitions.

         OPERATING LOSS. The Company recorded a $12.2 million operating loss
for the year ended December 31, 1998 compared to a $15.9 million operating
loss for the year ended December 31, 1997. These improved results were due
primarily to the operating profits of Europe and Asia and Air Services ($19.9
million) and lower amortization expense ($12.3 million) offset by the
increased losses at the Americas business unit, higher corporate operating
expenses, costs associated with the strategic initiatives previously
discussed, and customer start-up costs.

         Operating profit, excluding depreciation and amortization, and
corporate expenses, decreased $6.8 million to $16.6 million for the year
ended December 31, 1998 compared to $23.4 million for the year ended December
31, 1997. Improvements due to the LIW and Air Services Acquisitions were
offset by higher operating losses at the Americas business unit.

         Operating loss for the year ended December 31, 1998 includes results
of the Air Services business unit since its acquisition on July 13, 1998
while operating profit for the year ended December 31, 1997 included the
results of Europe and Asia from September 30, 1997.


                                      24
<PAGE>

         INTEREST EXPENSE, NET. Interest expense, net, increased by
approximately $8.4 million, to $17.0 million for 1998 from $8.6 million for
the year ended December 31, 1997. The increase was associated with the
issuance of the Company's 9-3/4% Senior Notes ("Senior Notes") in October
1997, issuance of the $15 million debt to finance to the Air Services
Acquisition and higher levels of working capital-related borrowings.

         INCOME TAX PROVISION. The income tax provision for the year ended
December 31, 1998 increased $16.1 million to a $7.7 million provision versus a
$8.4 million tax benefit for the same period of 1997. The increase is due to
operating losses incurred during 1998 for which no anticipated future benefit
was recorded.

         MINORITY INTERESTS. Interests held by minority shareholders in the
earnings of certain foreign subsidiaries were $0.9 million and $1.1 million for
the year ended December 31, 1998 and 1997, respectively.

         NET LOSS. Net loss increased by $18.3 million to $38.0 million for the
year ended December 31, 1998 compared to $19.7 million for the same period of
1997. This increase is due primarily to an increase in losses attributable to
the Americas, interest expense and income taxes partially offset by a reduction
in the operating loss of other business units which was attributable to lower
depreciation and amortization and the operating profits generated by the LIW and
Air Services Acquisitions.

LIQUIDITY AND CAPITAL RESOURCES

         During the year ended December 31, 1999, net cash used by operating
activities was $79.5 million versus $43.9 million for the same period in
1998. The increase was primarily due to increased operating losses. During
1999, cash provided by investing activities was $95.9 million while cash used
in investing activities was $61.2 million in 1998. This increase is primarily
due to the sale of GLAS in 1999. Cash used in investing activities in 1998
included $26.3 million related to the purchase of Caribbean Air Services.
During 1999 capital expenditures were $7.2 million as compared to $34.0
million in the same period of 1998. For 2000, capital expenditures are
estimated to be $13.8 million, primarily related to information technology
and to support new business projects. Cash used in financing activities in
1999 was $34.5 million while cash provided from financing activities in 1998
was $84.1 million, primarily as a result of repayment of revolving debt with
the proceeds from the sale of GLAS.


                                      25
<PAGE>

         As a result of the disposition of GLAS (see Note 3 to consolidated
financial statements) the Company, together with its guarantor subsidiaries
entered into an amendment to the revolving credit agreement. Among other
changes, the amendment provides for (a) reductions in credit availability
from $100.0 million to $50.5 million in the aggregate with a sublimit of
$20.0 million in the United Kingdom, (b) reductions in the percentage of
eligible accounts receivable that qualify for the U.S. and United Kingdom
borrowing base which affect the Company's ability to incur debt under the
revolving credit facility, (c) the elimination of the interest coverage ratio
covenant, (d) the change in the maturity date to March 31, 2000, (e) the
reduction of the Supplemental Commitment from $30.0 million to $15.0 million
and (f) the amendment of the EBITDA and certain other covenants. Subsequent
to December 31, 1999, all borrowings related to the Supplemental Commitment
and revolving credit facility were repaid with borrowings under the New
Revolver described below.

         On March 31, 2000, the Company borrowed against a new credit
facility (the "New Revolver") with Congress Financial Corporation (Western),
a subsidiary of First Union Bank and its Canadian and United Kingdom
affiliates (the "Lenders"). The three-year New Revolver provides for maximum
borrowings of $90 million and is comprised of three separate agreements, one
in each of the United States, Canada and the United Kingdom. This New
Revolver replaces the credit facility in place at December 31, 1999 by and
among the Company and ING (U.S.) Capital Corporation and the lenders party
thereto. The Company believes that the New Revolver will provide a sufficient
level of flexibility and capacity to allow for the completion of the
aforementioned restructuring.

         The three agreements making up the New Revolver involve four
borrowers in the United States and the operating companies in the United
Kingdom and Canada. The four borrowers in the United States are comprised of
Bekins Worldwide Solutions, Bekins Van Lines, GeoLogistics Services and
GeoLogistics Americas. The Company has guaranteed each of the three separate
agreements constituting the New Revolver. The individual agreement credit
levels are $50 million in the United States, $15 million in Canada and $25
million in the United Kingdom. The United States and Canada agreements allow
for a maximum increase or decrease of $5 million in the United States
facility with a corresponding decrease or increase in the Canadian facility.
Such adjustments are limited to once per quarter. The New Revolver has a
letter of credit sub-limit of $30 million. The maximum amount that can be
borrowed is dependent upon the amount of accounts receivable of the borrowers
and letters of credit provided by certain stockholders and their affiliates.
The amount that may be borrowed will be equal to 85% of eligible billed
receivables plus 65% of eligible unbilled or accrued receivables as defined
in the agreement, plus 100% of the face amount of the letters of credit
provided by affiliates of stockholders.  As of March 31, 2000, the aggregate
of such letters of credit was $13 million, with additional commitments of up
to $6 million, which amount may be reduced under certain circumstances.

         Interest rate spreads are set according to levels of the Company's
EBITDA on a trailing twelve-month basis. These spreads will be set at 0.25%
over prime for such borrowings and 2.75% over LIBOR for eurodollar borrowings
until the first such test period which will be the twelve months ended
September 30, 2000 and quarterly thereafter. Applicable spreads can range
from 0% to 0.5% on prime borrowings and from 2.5% to 3.0% for eurodollar
borrowings.

                                      26
<PAGE>

         The six borrowers have provided their respective Lenders with liens
on all accounts and all other of their assets. The four borrowers under the
United States agreement have given the Canadian lender a guarantee secured by
all their assets; the three agreements are not otherwise
cross-collateralized. The Company has fully guaranteed each of the three
agreements, and its guarantee of the United States agreement is secured by
its assets (with certain exceptions). Finally, one other subsidiary of the
Company has given a lien on certain of its assets to the United States
lender.

         Each of the three agreements constituting the New Revolver contains
covenants restricting the activities of the respective borrowers. These
restrictions include, among others, limitations on indebtedness, liens, the
making of loans or investments, the making of acquisitions and the
disposition of assets. Dividends, including to the Company, are prohibited,
but the borrowers are permitted to lend money to the Company for the purpose
of paying interest on the Company's senior notes, taxes and certain other
expenses up to a specified amount. The borrowers are also permitted to lend
to other borrowers and, if certain financial tests are met, other
subsidiaries of the Company. These restrictions are not applicable to the
Company.

         Events of Default under the New Revolver include, among others, the
failure to pay, the failure to observe covenants, the failure to pay certain
third party debt or judgments, bankruptcy and other insolvency events, any
material adverse change, change of control with respect to the Company and
the failure of the Company to maintain a specified level of net worth or the
United States, Canadian and United Kingdom borrowers to maintain another
specified level of net worth. An Event of Default under any one of the three
agreements is automatically an Event of Default under the other two.

         Within North America, the Company has utilized borrowings under its
credit facilities to meet working capital requirements and to fund capital
expenditures principally related to information technology. At March 31,
2000, the Company had an eligible working capital borrowing base under its
New Revolver of $80.4 million. After the settlement of outstanding loans,
fees and letter of credit obligations with the previous lenders, the Company
had $11.2 million of additional borrowing capacity. The Company anticipates
that it will pay approximately $12.5 million in cash for restructuring
charges during the first half of 2000. The Company expects that it will
finance such cash payments with borrowings under its credit facility.

         The indenture relating to the Company's Senior Notes generally
provides that, subject to certain exceptions, the Company not incur
indebtedness unless on the date of such incurrence the consolidated coverage
ratio of the Company exceeds 2.25 to 1.0 and that the restricted subsidiaries
of the Company may not incur indebtedness unless on the date of such
incurrence the consolidated coverage ratio of the Company exceeds 2.5 to 1.0.
The indenture permits the Company to incur up to $115.0 million of total
indebtedness (consisting of $100.0 million of bank debt and $15.0 million of
other debt) notwithstanding the Company's inability to meet the consolidated
coverage ratio test. As of February 29, 2000, the Company had incurred $27.4
million of indebtedness under its United States and United Kingdom bank
credit facilities and, as of such date, the Company would have been able to
incur an additional $13.1 million of indebtedness pursuant to the terms of
such facilities. As of February 29, 2000, the Company had incurred $3.1
million of other debt and would have been able to incur an additional $11.9
million of other debt pursuant to the terms of the indenture. In addition,
the indenture permits the Company to incur up to $30.0 million under its
foreign credit facilities notwithstanding the Company's inability to meet the
consolidated coverage ratio test. As of February 29, 2000, the Company had
incurred $18.5 million of indebtedness under its foreign credit facilities
and as of such date, would have been able to incur an additional $11.5
million of indebtedness under such facilities in compliance with the terms of
the indenture.

         The Company has recently financed operations from borrowings under
its credit facilities. As of March 31, 2000, the Company had $11.2 million of
borrowing capacity under its New Revolver. The Company's ability to borrow
funds under the New Revolver is subject to fluctuations in its borrowing base
based on its accounts receivable and the Company's ability to borrow
additional funds other than under the New Revolver is significantly
restricted by the terms of the indenture and the New Revolver. If the Company
is unable to generate sufficient cash flow to finance its operations it could
be required to borrow under its existing credit facilities to fund such
operations. If the Company's credit facilities are not sufficient to fund
ongoing operations, the Company could be required to adopt one or more
alternatives, such as reducing or delaying planned expansion or capital
expenditures, selling or leasing assets, restructuring debt or obtaining
additional debt or equity capital. The Company will continue to investigate
strategic alternatives to improve its financial position, including the sale
of non-core assets. There can be no assurance that any of these alternatives
could be effected on satisfactory terms or at all.

         The Company believes that net cash provided by borrowings available
under the New Revolver will provide it with sufficient resources to meet
working capital requirements, debt service and other cash needs over the next
year.

                                      27
<PAGE>


YEAR 2000

         The Company, its key customers and suppliers and agents were not
materially impacted by the Year 2000 change.

         The Company completed a comprehensive project to upgrade its
information technology including hardware and software to properly recognize
the Year 2000 ("Year 2000 Plan"). As a provider of global logistics and
transportation services, the Company is reliant on its computer systems and
applications to conduct its business. In addition to these systems, the
Company is also reliant upon the system capabilities of its business partners.

         The Company also conducted a survey of its business partners to
certify Year 2000 compliance. The Company also worked with major customers to
gain Year 2000 certification with them in response to their inquiries and
surveys.

         The total costs of the compliance process were approximately $1.1
million. This does not include the costs associated with the Company's
strategic information plan much of which addressed the Year 2000 project as
well as strategic initiatives.

         The Company prepared manual operational procedures which were in
place should disruption from a Company system or third party system occur. In
addition, all system development was stopped and all technical resources made
available for any unexpected system problems during the first quarter of
2000. The Company has not nor does it expect to experience any significant
problems as a result of the year 2000.

CONVERSION TO THE EURO CURRENCY

         On January 1, 1999, certain member countries of the European Union
established fixed conversion rates between their existing currencies and the
European Union's single currency ("Euro"). The Company conducts business in
member countries that have and have not fixed conversion rates to their
national currencies. The transition period for the introduction of the Euro
is between January 1, 1999 and June 30, 2002. The Company is addressing the
issues involved with the introduction of the Euro. The more important issues
facing the Company include: converting information technology systems;
reassessing currency risk; negotiating and amending licensing agreements and
contracts; and processing tax and accounting records.

         Based upon progress to date, the Company believes that use of the
Euro will not have a significant impact on the manner in which it conducts
its business affairs and processes its business and accounting records.
Accordingly, conversion to the Euro is not expected to have a material effect
on the Company's financial condition or results of operations.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

         The Company is exposed to the impact of interest rate changes,
foreign currency fluctuations and changes in the market values of its
investments.

                                      28
<PAGE>

POLICIES AND PROCEDURES

         In the normal course of business, the Company employs established
policies and procedures to manage its exposure to changes in interest rates and
fluctuations in the value of foreign currencies using a variety of financial
instruments.

         In order to mitigate the impact of fluctuations in the general level of
interest rates, the Company generally maintains a large portion of its debt as
fixed rate in nature by borrowing on a long-term basis. At December 31, 1999,
67% of the total outstanding debt of the Company was at fixed rates. At
year-end, the fair value of the Company's long-term debt was estimated at $ 85.1
million versus a book value of $165.1 million. The impact of a hypothetical 10%
adverse change in interest rates would be approximately $0.8 million.

         The Company's objectives in managing the exposure to foreign
currency fluctuations is to reduce earnings and cash flow volatility
associated with foreign exchange rate changes and allow management to focus
its attention on its core business issues and challenges. Accordingly, the
Company enters into various contracts which change in value as foreign
exchange rates change to minimize the impact of currency movements on certain
existing commitments and anticipated foreign earnings. The Company may use a
combination of financial instruments to manage these risks, including forward
contracts or option related instruments. The principal currencies hedged are
the British pound, German mark, Canadian dollar and some Asian currencies
such as the Hong Kong dollar and Singapore dollar. By policy, the Company
maintains hedge coverage between minimum and maximum percentages of its
anticipated foreign exchange exposures for the next year. The gains and
losses on these contracts are offset by changes in the value of the related
exposures. At December 31, 1999, the Company had approximately $5.9 million
in notional amounts of forward contracts and options outstanding. The credit
and market risks under these agreements are not considered to be significant
since the counterparties have high credit ratings. In addition, the net
investment position in these forward contracts and options is not material.

         The Company's pretax loss from foreign subsidiaries and affiliates
translated into U.S. dollars using a weighted average exchange rate was $11.0
million for the year ending December 31, 1999. On that basis, the potential
loss in the value of the Company's pretax loss from foreign subsidiaries
resulting from a hypothetical 10% adverse change in quoted foreign currency
exchange rates would amount to $1.5 million.

         It is the Company's policy to enter into foreign currency transactions
only to the extent considered necessary to meet its objectives as stated above.
The Company does not enter into foreign currency transactions for speculative
purposes.

                                      29
<PAGE>

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>

                                                                 Page
                                                                 ----

<S>                                                              <C>
Reports of Independent Auditors                                   50
Consolidated Balance Sheets                                       53
Consolidated Statements of Operations                             55
Consolidated Statements of Cash Flows                             56
Consolidated Statements of Stockholders' Equity (Deficit)         57
Notes to Consolidated Financial Statements                        58
Schedule II Valuation and Qualifying Accounts and Reserves        83

</TABLE>


         All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission have been
omitted because they are not required, are inapplicable or the required
information has already been provided elsewhere in this Form 10-K.

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

         On November 16, 1998 (the "Effective Date of Termination"), the Company
agreed with Deloitte & Touche, LLP ("D&T") that D&T would not stand for
re-election as the Company's independent accountants.

         D&T's reports on the consolidated financial statements of GeoLogistics
Corporation for the year ended December 31, 1997 and the period from May 2, 1996
"Date of Operations Commenced" through December 31, 1996 did not contain an
adverse opinion, or disclaimer of opinion, nor were the reports qualified or
modified as to uncertainty, audit scope or accounting principles.

         During the period beginning on January 1, 1998 and ending on the
Effective Date of Termination, the year ended December 31, 1997, and the period
from May 2, 1996 through December 31, 1996 there have been no disagreements
between the Company and D&T on any matters of accounting principles or
practices, financial statement disclosure or auditing scope or procedure which
disagreements, if not resolved to the satisfaction of D&T, would have caused D&T
to make reference to the subject matter of the disagreements in connection with
its reports. In addition, there have been no events requiring disclosure under
Item 304(a)(1)(v) of Regulation S-K.

         D&T has furnished the Company with a letter addressed to the Securities
and Exchange Commission (the "Commission") stating that D&T agrees with the
statements made by the Company.

         Effective November 19, 1998 (the "Effective Date of Engagement"), the
Company engaged Ernst & Young LLP ("E&Y") as its independent auditors.

         The selection of E&Y was approved by the Audit Committee of the
Company's Board of Directors.


         Since the Effective Date of Engagement there have been no
disagreements between the Company and E&Y on any matters of accounting
principles or practices, financial statement disclosure of auditing scope or
procedure which disagreements, if not resolved to the satisfaction of E&Y,
would have caused E&Y to make reference to the subject matter of the
disagreements in connection with its reports.

         During the periods prior to the Effective Date of Engagement and all
subsequent interim periods preceding the date hereof, neither the Company nor


                                      30
<PAGE>

someone on its behalf had consulted E&Y regarding any matters or events as set
forth in Item 304 (a) (2) of Regulation S-K.


                                      31
<PAGE>

                                    PART III.

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The following table sets forth the directors, executive officers and
certain key management personnel of the Company and certain of its subsidiaries
as of March 28, 2000. Members of the Board of Directors are elected annually and
hold office from the time of their election and qualification until the annual
meeting of stockholders at which their term expires or their successor is
elected and qualified or until their earlier resignation or removal. Executive
officers are elected by and serve at the discretion of the Board of Directors
until their successors are duly chosen and qualified.

<TABLE>
<CAPTION>
NAME                              AGE                POSITION
----                              ---                --------

<S>                               <C>   <C>
Robert Arovas(1)..............    57    Chief Executive Officer and Director
Janet D. Helvey...............    47    Senior Vice President, Finance
Ronald Jackson................    47    Vice President, Secretary and General Counsel
Terry G. Clarke...............    44    Vice President-Treasurer
William E. Simon, Jr.(2)......    48    Chairman of the Board
Vincent J. Cebula(1)(2)(3)....    36    Director
Stephen A. Kaplan(2)..........    41    Director
Michael B. Lenard(1)(2).......    44    Director

</TABLE>

-----------

(1)  Member of Executive Committee of the Board of Directors.

(2)  Pursuant to a stockholders agreement, Logistical Simon L.L.C. ("Logistical
     Simon") has the right to designate two members to the Board of Directors,
     OCM Principal Opportunities Fund, L.P. (the "Opportunities Fund") has the
     right to designate one member of the Board of Directors and TCW Special
     Credits Fund V - The Principal Fund (the "Principal Fund") has the right to
     designate one member of the Board of Directors. Messrs. Simon and Lenard
     are designees of Logistical Simon, Mr. Cebula is the designee of the
     Opportunities Fund and Mr. Kaplan is the designee of the Principal Fund.

(3)  Member of Audit Committee and Executive Committee.

         ROBERT AROVAS has been a director of the Company since January, 2000
and the Chief Executive Officer since October, 1999. From June 1999 to
October 1999 Mr. Arovas was the Chief Operating Officer of the Company. Prior
to joining the Company, Mr. Arovas was Executive Vice President and Chief
Financial Officer of Fritz Companies, Inc. from January 1997 to May 1999.
Prior to January 1997, Mr. Arovas was Senior Vice President and Chief
Financial Officer of BAX Global, Inc. (formerly Burlington Air Express, Inc.)
for nine years and was previously a Vice President of the Pittston Company
(the parent company of Burlington Air Express, Inc.).

                                      32
<PAGE>

         JANET D. HELVEY has been Senior Vice President, Finance since
October, 1999. Prior to joining the Company, Ms. Helvey was Vice
President-Accounts Receivable of Fritz Companies, Inc. from March 1997 to
September 1999. Prior to March 1997, Ms. Helvey was Controller-Accounts
Receivable of BAX Global, Inc.

         RONALD JACKSON has been Vice President and General Counsel of the
Company since September 1997. Mr. Jackson was Legal Director and Secretary of
LIW from January 1996 to September 1997 and was Group Legal Advisor for LEP
Group plc from October 1989 to December 1995.

         TERRY G. CLARKE has been Vice President-Treasurer of the Company since
September 1997. From October 1995 to November 1996, Mr. Clarke was Assistant
Treasurer with the M.A. Hanna Company, a Cleveland based chemicals company.
Prior to that, Mr. Clarke served as Director of Planning and Control of B.F.
Goodrich's ("Goodrich") Water Systems Group, was Director, Finance and Banking
for Goodrich and held various other management positions in the United States
and Canada for Goodrich from 1988 to 1995.

         WILLIAM E. SIMON, JR. has been the Chairman of the Board of Directors
of the Company since May 1996. Mr. Simon has been the Executive Director of WESS
since 1988. In addition, Mr. Simon is a director of William E. Simon & Sons
(Asia), LDC, WESS's affiliate merchant bank based in Hong Kong. Mr. Simon also
serves on the boards of directors of Hanover Compressor Co. and various private
companies.

         VINCENT J. CEBULA has been a director of the Company since May 1996. He
is also a Managing Director of Oaktree, where he has worked since 1995. Pursuant
to a subadvisory agreement with TCW Asset Management Company ("TCW"), the
general partner of the Principal Fund, Oaktree provides investment management
services to the Principal Fund. Mr. Cebula was a Senior Vice President of Trust
Company of the West and TCW from 1994 to 1995. Mr. Cebula also serves on the
boards of directors of various private companies.

         STEPHEN A. KAPLAN has been a director of the Company since May 1996 and
is a Principal of Oaktree. Prior to joining Oaktree in June 1995, Mr. Kaplan was
a Managing Director of Trust Company of the West and TCW. Prior to joining TCW
in 1993, Mr. Kaplan was a partner in the law firm of Gibson, Dunn & Crutcher.
Mr. Kaplan serves on the boards of directors of Acorn Products, Inc., KinderCare
Learning Centers, Inc., Roller Bearing Holding Company, Inc., Biopure
Corporation and various private companies.

         MICHAEL B. LENARD has been a director of the Company since April 1996
and is a Managing Director and the Counsellor of WESS. In addition, Mr. Lenard
is a director of William E. Simon & Sons (Asia), LDC, WESS affiliate merchant
bank based in Hong Kong, and the President of WESSHIP, Inc., the general partner
of certain WESS affiliated limited partnerships that have invested in the
shipping

                                      33
<PAGE>

industry. Prior to joining WESS in early 1993, Mr. Lenard was a partner
in the international law firm of Latham & Watkins. Mr. Lenard is also a director
of various private companies.

ITEM 11.  EXECUTIVE COMPENSATION

 REPORT OF THE COMPENSATION COMMITTEE. The Compensation Committee of the Board
of Directors has furnished the following report on executive compensation for
fiscal 1999.

The Company's compensation program for executives consists of three key
elements:

-    Base salary,

-    Performance-based annual bonus,

-    Periodic grants of stock warrants.

     The Compensation Committee believes that this three-part approach best
serves the interests of the Company and its stockholders. It enables the
Company to meet the requirements of the highly competitive environment in
which the Company operates while ensuring that executive officers are
compensated in a way that advances both the short- and long-term interest of
stockholders. Under this approach, compensation for these officers involves a
high proportion of pay that is "at risk"--namely, the annual bonus and stock
warrants. The variable annual bonus permits individual performance to be
recognized on an annual basis, and is based, in significant part, on an
evaluation of the contribution made by the officer to Company performance.
Stock warrants relate a significant portion of long-term remuneration
directly to stock price appreciation realized by all of the Company's
stockholders.

 BASE SALARY. Base salaries for the Company's executive officers, as well as
changes in such salaries, are based upon recommendations by the Chief Executive
Officer, taking into account such factors as competitive industry salaries; a
subjective assessment of the nature of the position; the contribution and
experience of the officer, and the length of the officer's service. These
recommendations are reviewed with the Compensation Committee, which then
approves or disapproves such recommendations.

 ANNUAL BONUS. Annual bonuses for fiscal 1999 to executive officers of the
Company were granted under the Company's annual bonus performance plan for
Executive Officers. This plan is administered by the Executive Committee.

     Under the plan, the Committee establishes specific annual "performance
targets" for each covered executive officer. The performance targets may be
based on one or more of the following business criteria: earnings before
interest, taxes, depreciation and amortization (EBITDA), return on assets and
completion of personal business objectives, or on any combination thereof.
The maximum bonus for any fiscal year may not exceed 70% of base salary in
the case of the Chief Executive Officer and between 40% and 50% in the case
of all other executives.

 STOCK WARRANTS. Stock warrants may be made to executive officers upon initial
employment, upon promotion to a new, higher level position that entails


                                      34
<PAGE>

increased responsibility and accountability, in connection with the execution of
a new employment agreement, or at the discretion of the Compensation Committee.
Warrants are recommended by the Chief Executive Officer of the Company to the
Compensation Committee whose approval is required.

 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. None of the
members of the Board's Compensation Committee is or has been an officer of
employee of the Company.

 SUMMARY COMPENSATION TABLE. The Summary Compensation Table below sets forth
the annual base salary and other annual compensation earned in 1999, 1998 and
1997 by Mr. Arovas and the four other most highly-paid executive officers of
the Company whose cash salary and bonus compensation exceeded $100,000 in
1999 (the "Named Executive Officers").

<TABLE>
<CAPTION>

                                                                       LONG TERM
                                        ANNUAL COMPENSATION           COMPENSATION
                                        -------------------           ------------
                                                                      SECURITIES
                                                                       UNDERLYING     ALL OTHER
                                    FISCAL    SALARY        BONUS     OPTIONS/SARS   COMPENSATION
NAME AND PRINCIPAL POSITION          YEAR       $             $           #                $
---------------------------         ------   ----------    -------    ------------   ------------

<S>                                  <C>     <C>           <C>          <C>           <C>
Robert Arovas...................     1999    162,500 (1)         -            -       $8,292 (3)
  Director and Chief
   Executive Officer
Roger E. Payton.................     1999    342,747 (2)         -            -       17,930 (4)
  Former Director,                   1998    365,000             -            -       50,507 (4)
  President and                      1997    349,726       100,000            -       41,623 (4)
  Chief Executive
  Officer
Luis F. Solis...................     1999    250,008        50,000            -       16,084 (5)
  Former Executive                   1998    250,000             -        5,000       24,348 (5)
  Vice President of                  1997    208,340 (2)    62,500       37,500       22,159 (5)
  Strategic Marketing
Larry Tieman....................     1999    250,008             -            -       25,947 (6)
  Former Chief                       1998    250,000             -            -       24,390 (6)
  Information                        1997    208,340 (2)    62,500            -       16,839 (6)
  Officer
Gary S. Holter..................     1999    250,000             -            -                -
  Former Chief                       1998    250,000             -            -       24,615 (7)
  Financial Officer                  1997    212,500        62,500            -       21,818 (7)

Ronald Jackson..................     1999    170,016             -            -       22,732 (8)
  Vice President,                    1998    170,000             -            -       20,416 (8)
  Secretary and                      1997     42,500 (1)         -        8,000       14,309 (8)
  General Counsel

</TABLE>

----------

(1)  Mr. Arovas began his employment with the Company in June 1999. Mr. Jackson
     began his employment with the Company in October 1997.

(2)  Mr. Payton was President and Chief Executive Officer of the Company from
     May 1996 through September 1999. Mr. Solis was Executive Vice President of
     Strategic Marketing from March 1997 through June 1999. Mr. Tieman was Chief
     Information Officer of the Company from March 1997 through January 2000.


                                      35
<PAGE>

(3)  The Company provided Mr. Arovas with an automobile for his use at the cost
     of $6,042 in 1999. In 1999, the Company contributed $2,250 to an account
     established for Mr. Arovas' benefit pursuant to the Deferred Plan.

(4)  Mr. Payton received an automobile allowance of $3,000, $12,000 and $12,000
     in 1999, 1998 and 1997, respectively. Additionally, the Company paid
     $1,183, $23,316 and $23,198 in premiums for a life insurance policy for Mr.
     Payton in 1999, 1998 and 1997, respectively, and contributed $13,747,
     $15,191 and $6,425 in 1999, 1998 and 1997, respectively, as a matching
     payment to the account established for Mr. Payton's benefit pursuant to the
     Deferred Plan (as defined).

(5)  Mr. Solis received an automobile allowance of $12,000, $12,000 and $10,000
     in 1999, 1998 and 1997, respectively. Additionally, in 1999, 1998 and 1997
     the Company paid $1,010, $1,010 and $909, respectively in premiums for a
     life insurance policy for Mr. Solis and contributed $3,074, $11,338 and
     $11,250, respectively in 1999, 1998 and 1997 as matching payments to an
     account established for Mr. Solis' benefit pursuant to the Deferred Plan.

(6)  Mr. Tieman received an automobile allowance of $12,000, $12,000 and $10,000
     in 1999, 1998 and 1997, respectively. Additionally, in 1999, 1998 and 1997
     the Company paid $2,390, $2,390 and $2,151, respectively in premiums for a
     life insurance policy for Mr. Tieman and contributed $11,557, $10,000 and
     $4,688, respectively in 1999, 1998 and 1997 as matching payments to an
     account established for Mr. Tieman's benefit pursuant to the Deferred Plan.

(7)  Mr. Holter received an automobile allowance of $12,000 and $11,100 in
     1998 and 1997, respectively. Additionally, in 1998 and 1997 the Company
     paid $1,273 and $1,145, respectively, in premiums for a life insurance
     policy for Mr. Holter and contributed $11,342 and $9,573 in 1998 and 1997,
     respectively, as matching payments to accounts established for Mr. Holter's
     benefit pursuant to the Deferred Plan and the Company's 401(k) plan.

(8)  Mr. Jackson received an automobile allowance of $12,000, $12,000 and $3,000
     in 1999, 1998 and 1997, respectively. Additionally, in 1999, 1998 and 1997
     the Company paid $2,138, $1,924 and $1,116, respectively in premiums for a
     life insurance policy for Mr. Jackson, in 1997 reimbursed $10,193, of
     relocation expenses and in 1999 and 1998 contributed $8,594 and $6,492,
     respectively as matching payments to an account established for Mr.
     Jackson's benefit pursuant to the Deferred Plan.

COMPENSATION OF DIRECTORS

         Non-employee directors are not currently compensated for their
services, but receive reimbursement of reasonable out-of-pocket expenses
incurred in connection with board meetings or director-related activities. The
Stockholders Agreement does, however, provide that certain members of the Board
of Directors will be entitled to receive compensation if directors who are
employees of the Company or directors who were admitted after November 7, 1996
receive additional compensation in their capacity as directors.

 FISCAL YEAR END WARRANT VALUES. The following table sets forth information
concerning the fiscal year-end value of unexercised warrants held by the Named
Executive Officers.


                                      36
<PAGE>

<TABLE>
<CAPTION>

                                                NUMBER OF
                                    SECURITIES UNDERLYING UNEXERCISED      VALUE OF UNEXERCISED
                                                WARRANTS                   IN THE MONEY WARRANTS
                                               AT 12/31/99                      AT 12/31/99
             NAME                        EXERCISABLE/UNEXERCISABLE       EXERCISABLE/NONEXERCISABLE
             ----                   ---------------------------------    --------------------------

<S>                                           <C>                                   <C>
Larry Tieman (2).................             42,500/42,500                         (1)
Ronald Jackson...................              8,000/8,000                          (1)

</TABLE>

-----------

(1)  None are in-the-money.

(2)  Cancelled on February 1, 2000 for no value.

EMPLOYMENT AGREEMENTS

         Mr. Arovas entered into an agreement with the Company effective as of
June 15, 1999 which terminates June 15, 2002 (the "Arovas Agreement"). The
Arovas Agreement provides for a base salary of not less than $300,000, with
annual increases and bonuses based upon Mr. Arovas' satisfaction of certain
financial targets and other defined management objectives. The Arovas Agreement
also provides for (1) 25,000 shares of restricted Company stock, subject to the
terms and provisions of the GeoLogistics Corporation 1999 Long-Term Incentive
Plan and the Restricted Share Award Agreement; (2) an irrevocable bank letter of
credit in the amount of $500,000, subject to adjustment, payable in the event of
the Company's failure to pay Mr. Arovas amounts due and owing, or benefits due
as a result of the Company's bankruptcy or insolvency or any other reason; (3)
the use of a Company-paid automobile.

         The Arovas Agreement may be terminated by the Company for "cause" (as
defined in the Arovas Agreement) or upon the death or, under certain
circumstances, disability of Mr. Arovas. In the event that the Company
terminates the Arovas Agreement without cause, Mr. Arovas is entitled to receive
his salary for the greater of a period of one year from the date of termination
or the remaining term under the Arovas Agreement. During the term of the Arovas
Agreement and any period during which Mr. Arovas receives severance pay, Mr.
Arovas is prohibited from competing with the Company and is precluded from
engaging in any form of solicitation of the Company's customers or employees.

         Mr. Payton's employment agreement with the Company, which was
effective as of April 30, 1996 and was to terminate on April 30, 2000 (the
"Payton Agreement"), was terminated October 1, 1999. The Payton Agreement
provided for a base salary of not less than $315,000, with annual increases
and bonuses at the discretion of the Board of Directors. In November 1996,
Mr. Payton's base salary was increased to $365,000 per year. The Payton
Agreement also provided for the payment by the Company of the premium on one
of Mr. Payton's personal life insurance policies and an automobile allowance
in the amount of $12,000 per year. The Company did not make any severance
payments to Mr. Payton in connection with the termination of him employment
in October 1999, but as part of the settlement arrangements the
Company repurchased from Mr. Payton, 10,000 shares of restricted Company
stock for an average price of $27.124 per share and agreed to repurchase, in
installments between March 2000 and May 2001, the remaining 12,500 shares of
restricted Company stock, owned by Mr. Payton, for a price of $12.24 per
share. Following termination of the Payton Agreement on October 1, 1999. Mr.
Payton entered into an employment agreement with Bekins, which was effective
as of October 1, 1999 (the "October Agreement") and which terminated on
January 2, 2000. The October Agreement also provided for a salary of $20,000
per month. The October Agreement also provided for the payment by Bekins of
the premium on one of Mr. Payton's personal life insurance policies and an
automobile allowance in the amount of $1,000 per month. Bekins also entered
into a consultancy agreement with Mr. Payton, which came into effect on
January 3, 2000 (the "Consultancy Agreement"). The Consultancy Agreement
terminates on December 31, 2000 and provides that Mr. Payton will receive a
total of $125,000 in consultancy fees over the term of the Consultancy
Agreement.

         Mr. Solis' employment agreement with the Company, which was
effective as of March 3, 1997 and was to terminate on March 3, 2000 (the
"Solis Agreement"), was terminated July 31, 1999. The Solis Agreement
provided for a base salary of not less than $250,000 per year and provided
that Mr. Solis may receive performance-based cash bonus compensation and
performance-based equity compensation if certain financial and other defined
management objectives to be agreed upon annually between the executive and
the Company at the beginning of

                                      37
<PAGE>

each fiscal year are satisfied. Warrants to purchase common stock held by Mr.
Solis on his termination date were cancelled in accordance with the terms of the
warrant agreement.

         Mr. Tieman's employment agreement with the Company, which was
effective as of March 3, 1997 and was to terminate on March 3, 2000 (the
"Tieman Agreement"), was terminated January 31, 2000. The Tieman Agreement
provided for a base salary of not less than $250,000 per year and provided
that Mr. Tieman may receive performance-based cash bonus compensation and
performance-based equity compensation if certain financial and other defined
management objectives to be agreed upon annually between the executive and
the Company at the beginning of each fiscal year are satisfied. In connection
with Mr. Tieman's termination in January 2000, the Company repurchased all of
the shares of common stock and warrants to purchase common stock held by Mr.
Tieman for nominal consideration pursuant to the terms of the purchase and
subscription agreements related to such securities.

         Mr. Holter's employment agreement with the Company which was
effective as of March 1, 1997 and was to terminate on March 1, 2000 (the
"Holter Agreement") was terminated February 28, 1999. The Holter Agreement
provided for a base salary of not less than $200,000 per year and provided
that Mr. Holter would receive performance-based cash bonus compensation and
performance-based equity compensation if certain financial and other defined
management objectives to be agreed upon annually between the executive and
the Company at the beginning of each fiscal year were satisfied. In October
1997, Mr. Holter's base salary was increased to $250,000 per year. In
connection with the termination of Mr. Holter's employment agreement in
February 1999, the Company repurchased all of the shares of common stock and
warrants to purchase common stock held by Mr. Holter for nominal
consideration pursuant to the terms of the purchase and subscription
agreements related to such securities.

         Mr. Jackson entered into a five-year employment agreement with the
Company effective upon the occurrence of each of (i) the acquisition by the
Company of a majority of the outstanding ordinary shares of LIW stock (including
all interest exchangeable therefor or convertible thereto) and (ii) the delivery
to the Company of all warrants to purchase LIW ordinary shares and other equity
interests of LIW held by Mr. Jackson (the "Jackson Agreement"). The Jackson
Agreement provides for a base salary of not less than $170,000 per year and
provides that Mr. Jackson may receive performance-based cash compensation if
certain financial and other defined management objections to be agreed upon
annually between the executive and the Company at the beginning of each fiscal
year are achieved. The Jackson Agreement also provides for an automobile
allowance of $12,000 per year. The Jackson Agreement may be terminated by the
Company for "cause" (as defined in the Jackson Agreement) or upon the death or,
under certain circumstances, disability of Mr. Jackson. In the event that the
Company terminates the Jackson Agreement without cause, Mr. Jackson is entitled
to receive his salary for a period of one year from the termination date. During
the term of the Jackson Agreement and for one year thereafter, Mr. Jackson is
prohibited from competing with the Company and is precluded from engaging in any
form of solicitation of the Company's customers or employees.

INCENTIVE COMPENSATION PLANS

 EMPLOYEE STOCK PURCHASE PLAN. The Company's Employee Stock Purchase Plans (the
"Purchase Plans") provide certain employees of the Company with the right to
purchase any or all of such employee's allocated portion, as determined by the
Board of Directors of the Company, of an aggregate of 8,500 shares of common
stock of the Company at a purchase price of $20.00 per share and 150,000 shares
of common stock at a purchase price of $30.00 per share. The right to acquire
shares of common stock under the Purchase Plans has terminated. A total of 62
employees purchased on aggregate of 110,417 shares of common stock pursuant to
the Purchase Plans.

         The Purchase Plans provide that, if at any time prior to an initial
public offering, an employee who has purchased shares under the Purchase Plans
is terminated for any reason whatsoever, including without limitation, death,
disability, resignation, retirement or termination with or without cause, (i)


                                      38
<PAGE>

the Company has an option (a "call") to repurchase, in whole or in part, the
shares of Common Stock of the Company that are then owned by such employee or
any transferee which were acquired pursuant to the Purchase Plans and (ii) the
terminated employee has an option (a "put"), to sell to the Company, in whole or
in part, the shares of Common Stock then owned by such employee which were
acquired pursuant to the Purchase Plans. The purchase price for the exercise of
either the call or the put option is based on the Company's earnings for the
most recent fiscal quarter prior to termination and the number of shares of
Common Stock outstanding and subject to options and warrants to the extent such
options and warrants are in the money.

 DEFERRED COMPENSATION PLAN. Effective April 28, 1997, the Company adopted a
Deferred Compensation Plan (the "Deferred Plan") to acknowledge and reward
certain key employees of the Company. The Deferred Plan permits certain key
employees to elect to reduce their regular compensation and/or bonus
compensation on a pre-tax basis by a fixed percentage up to a maximum
specified amount. The Company may, in its sole discretion, make an allocation
on behalf of employees who meet certain requirements. Each participant in the
Deferred Plan may designate one or more of the funds specified in the
Deferred Plan for the purpose of attributing investment experience to his
accounts. Upon eligibility for retirement, death or disability, a
participant, or his beneficiary, will have a 100% vested interest in such
participant's accounts. Upon termination of employment for any other reason,
a participant will be vested with respect to (i) 100% of that portion of his
account attributable to his voluntary deferral allocations and any applicable
investment experience credited to such allocation and (ii) a percentage of
the portion of his account attributable to Company discretionary allocations
based on years of service. Notwithstanding the foregoing, the committee which
administers the Deferred Plan may, in its sole discretion, accelerate any
specified vesting period. The Company has established a trust with Key Trust
Company as trustee (the "Trustee") to hold and invest amounts contributed
pursuant to the Deferred Plan. The Company may from time to time, at its sole
discretion, direct the Trustee to purchase shares of the Company's common
stock (the "Plan Shares"). The Company may, by written action, designate
which employees are entitled to receive Plan Shares. If at any time prior to
an initial public offering, a participant's employment is terminated for any
reason whatsoever, the Company has the option to repurchase any Plan Shares
held in such participant's account. As of December 31, 1999, 680 Plan Shares
were held by the Trustee on behalf of participants under the Deferred Plan.

 EMPLOYEE STOCK OWNERSHIP. In addition to shares of Common Stock issued to
employees under the Purchase Plans and the Deferred Plan, certain shares of
Common Stock and warrants to purchase shares of Common Stock held by employees
are required to be repurchased by the Company under certain circumstances. An
aggregate of 46,712 shares of Common Stock and warrants to purchase 175,000
shares of Common Stock held by employees of the Company are subject to put and
call options on substantially the same terms as the shares of Common Stock
purchased pursuant to the Purchase Plans described above. Warrants to purchase
an additional 318,500 shares of Common Stock, or shares purchased upon exercise
thereof, held by employees of the Company are subject to repurchase by the
Company pursuant to the terms of such warrants upon the termination of
employment of any holder of such warrants prior to an initial public offering of
the Company's Common Stock. The repurchase price depends upon, among other
factors, the circumstances surrounding termination of employment, the fair


                                      39
<PAGE>

market value of the Common Stock on the date of termination and the purchase
price paid by the employee. As of December 31, 1999, the Company had
agreements to purchase an aggregate of 36,500 shares of common stock for
aggregate consideration of $2.0 million at various dates through May 1, 2001.
Moreover, the Company had agreements to acquire certain employee warrants and
subsequent to December 31, 1999, the Company paid $1.1 million for warrants
to purchase these 42,361 shares of common stock.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth as of March 28, 2000 certain information
regarding the shares of Common Stock beneficially owned by (i) each stockholder
who is known by the Company to beneficially own in excess of 5% of the
outstanding shares of Common Stock, (ii) each director and Named Executive
Officer and (iii) all executive officers and directors as a group. Unless
otherwise indicated, each of the stockholders shown in the table below has sole
voting and investment power with respect to the shares beneficially owned.

<TABLE>
<CAPTION>

                                                                  NUMBER OF  PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1)                           SHARES(2)    CLASS
---------------------------------------                           ---------    -----
                                                                  BENEFICIAL  OWNERSHIP
                                                                  ----------  ---------

<S>                                                               <C>          <C>
Oaktree Capital Management, LLC(3)...........................     1,295,575    60.8%
The TCW Group, Inc.(4).......................................       695,575     32.7
TCW Special Credits Fund V - The Principal Fund..............       695,575     32.7
OCM Principal Opportunities Fund, L.P........................       600,000     28.2
Logistical Simon, L.L.C.(5)..................................       569,532     26.7
Stephen A. Kaplan(6).........................................     1,295,575     60.8
Vincent J. Cebula(6).........................................     1,295,575     60.8
William E. Simon, Jr.(7).....................................       569,532     26.7
Michael B. Lenard(7).........................................       569,532     26.7
Robert Arovas................................................        25,000      1.2
Roger E. Payton..............................................        12,500        *
Luis F. Solis................................................         7,000        *

Executive Officers and Directors as a Group (12 persons)(8)..     1,909,607

</TABLE>

---------

*    Less than one percent

(1)  The address of The TCW Group, Inc. and the Principal Fund is 865 South
Figueroa Street, Los Angeles, California 90017. The address of Oaktree Capital
Management, LLC, the Opportunities Fund, Mr. Kaplan, and Mr. Cebula is 333 South
Grand Avenue, 28th Floor, Los Angeles, California 90071. The address of
Logistical Simon, L.L.C., Mr. Simon and Mr. Lenard is 10990 Wilshire Boulevard,
Suite 500, Los Angeles, California 90024.

(2)  As used in the table above, a beneficial owner of a security includes any
person who, directly or indirectly, through contract, arrangement,
understanding, relationship, or otherwise has or shares (i) the power to vote,
or direct the voting, of such security or (ii) investment power which includes
the power to dispose, or to direct the disposition of, such security. In


                                      40
<PAGE>

addition, a person is deemed to be the beneficial owner of a security if that
person has the right to acquire beneficial ownership of such security within 60
days.

(3)  All such shares are owned by the Principal Fund and the Opportunities Fund.
Pursuant to a subadvisory agreement with TCW Asset Management Company ("TAMCO"),
the general partner of the Principal Fund, Oaktree manages the investments and
assets of the Principal Fund. In such capacity, Oaktree shares voting and
dispositive power with TAMCO, a wholly-owned subsidiary of the TCW Group, Inc.,
as to shares owned by the Principal Fund. Oaktree also manages the investments
and assets of the Opportunities Fund.

(4)  All such shares are owned by the Principal Fund. TAMCO is the general
partner of the Principal Fund. TAMCO is a wholly-owned subsidiary of TCW Group,
Inc.

(5)  Includes 100,000 shares of Common Stock issuable upon exercise of warrants
which are currently exercisable.

(6)  All such shares are owned by the Principal Fund and the Opportunities Fund
and are also shown as beneficially owned by Oaktree. To the extent Mr. Kaplan,
or Mr. Cebula, on behalf of Oaktree, participates in the process to vote or
dispose of any such shares, they may be deemed under such circumstances for the
purpose of Section 13 of the Exchange Act to be the beneficial owner of such
shares. Each of Mr. Kaplan and Mr. Cebula disclaims beneficial ownership of such
shares.

(7)  All such shares are owned by Logistical Simon. To the extent Mr. Simon, or
Mr. Lenard, on behalf of Logistical Simon, participates in the process to vote
or dispose of any such shares, they may be deemed under such circumstances for
the purpose of Section 13 of the Exchange Act to be the beneficial owner of such
shares. Each of Mr. Simon and Mr. Lenard disclaims beneficial ownership of such
shares.

(8)  See notes (6)-(7).

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         In connection with the New Revolver, OCM Principal Opportunities
Fund L.P., and Alham, Inc. (an affiliate of Logistical Simon, L.L.C.),
collectively the "Investors", provided the Agent Bank of the New Revolver
with letters of credit of $19 million, which may be reduced upon certain
circumstances (the "Sponsor LC's").


                                      41
<PAGE>

                                    PART IV.

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

(a)  Exhibits and Financial Statements and Schedules

(1)  Financial Statements and Schedules

     See Index to Consolidated Financial Statements and Supplemental Data at
page 49.

(2)  Exhibits

The documents set forth below are filed herewith or incorporated herein by
reference to the location indicated.

<TABLE>
<CAPTION>

Exhibit No.    Description
-----------    -----------

<S>            <C>
2.1            Purchase agreement dated as of June 15, 1998 by and among the
               Company, Caribbean Air Services, Inc. and Amertranz Worldwide
               Holding Corp. (incorporated by reference from the GeoLogistics
               Corporation's Current Report on Form 8-K filed July 22, 1998).

3.1            Amended and Restated Certificate of Incorporation (incorporated
               by reference from the GeoLogistics Corporation's Current Report
               on Form 8-K filed July 22, 1998).

3.2            Certificate of Amendment of Amended and Restated Certificate of
               Incorporation (incorporated by reference from GeoLogistics
               Corporation's Registration Statement on Form S-4 effective April
               28, 1998).

3.3            Certificate of Designation of Series A Participating Preferred
               Stock (incorporated by reference from the GeoLogistics
               Corporation's Current Report on Form 8-K filed July 22, 1998).

3.4            Amended and Restated Bylaws of GeoLogistics Corporation.

4.1            Indenture dated as of October 19, 1997 between the Company and
               First Trust National Association, as Trustee (incorporated by
               reference from GeoLogistics Corporation's Registration Statement
               on Form S-4 effective April 28, 1998).

4.2            Form of New Note (included as Exhibit B to Exhibit 4.1)(
               incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

4.3            Form of Guarantee (included as Exhibit B to Exhibit 4.1)(
               incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

</TABLE>


                                      42
<PAGE>

<TABLE>
<CAPTION>

Exhibit No.    Description
-----------    -----------

<S>            <C>

4.4            First Supplemental Indenture dated as of July 13, 1998 by and
               among GeoLogistics Air Services Inc., a wholly owned subsidiary
               of GeoLogistics Corporation, and U.S. Bank Trust National
               Association, as trustee (incorporated by reference from the
               GeoLogistics Corporation's Current Report on Form 8-K filed July
               22, 1998).

4.5            Second Supplemental Indenture dated as of November 30, 1998 by
               and among GeoLogistics Network Solutions, Inc., Bekins Van Lines,
               LLC, each an indirect wholly owned subsidiary of GeoLogistics
               Corporation, and U.S. Bank Trust National Association, as
               trustee (incorporated by reference from the GeoLogistics
               Corporation's Annual Report on Form 10-K for the fiscal year
               ended December 31, 1998).

10.1           Fourth Amended and Restated Stockholders Agreement dated as of
               July 10, 1998 by and among the Company and the holders listed on
               Exhibit A attached thereto (incorporated by reference from the
               GeoLogistics Corporation's Current Report on Form 8-K filed July
               22, 1998).

10.2           Amended and Restated Loan Agreement dated as of October 28, 1997
               by and among the Company, The Bekins Company, Matrix
               International Logistics, Inc., ILLCAN, Inc., ILLSCOT, Inc., LEP
               Profit International, Inc. and LEP International Limited, as
               Borrowers and ING (US) Capital Corporation as administrative
               agents and the Lenders party thereto (incorporated by reference
               from GeoLogistics Corporation's Registration Statement on Form
               S-4 effective April 28, 1998).

10.3           Second Amended and Restated Registration Rights Agreement dated
               as of November 7, 1996 by and between the Company and each of the
               Holders listed on Exhibit A thereto (incorporated by reference
               from GeoLogistics Corporation's Registration Statement on Form
               S-4 effective April 28, 1998).

10.4           Executive Management Agreement dated as of October 31, 1996 by
               and between the Company and William E. Simon & Sons, L.L.C.
               (incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

10.5           Employment Agreement dated as of April 30, 1996 between the
               Company and Roger E. Payton (incorporated by reference from
               GeoLogistics Corporation's Registration Statement on Form S-4
               effective April 28, 1998).

10.6           Form of Employment Agreement between the Company and each of
               Messrs. Solis, Tieman and Jackson (incorporated by reference from
               GeoLogistics Corporation's Registration Statement on Form S-4
               effective April 28, 1998).

10.7           Promissory Note made by Mr. Payton in favor of the Company
               (incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

</TABLE>


                                      43
<PAGE>

<TABLE>
<CAPTION>

Exhibit No.    Description
-----------    -----------

<S>            <C>

10.8           Form of Pledge Agreement executed by Messrs. Payton and Solis
               (incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

10.9           Form of Warrant issued by the Company to Roger E. Payton
               (incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

10.10          Form of Subscription Agreement executed by Roger E. Payton and
               the Company (incorporated by reference from GeoLogistics
               Corporation's Registration Statement on Form S-4 effective April
               28, 1998).

10.11          Form of Warrant issued by the Company to Messrs. Tieman and Solis
               (incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

10.12          Form of Subscription Agreement executed by the Company and each
               of Messrs. Tieman and Solis (incorporated by reference from
               GeoLogistics Corporation's Registration Statement on Form S-4
               effective April 28, 1998).

10.13          Form of Indemnification Agreement (incorporated by reference from
               GeoLogistics Corporation's Registration Statement on Form S-4
               effective April 28, 1998).

10.14          Deferred Compensation Plan (incorporated by reference from
               GeoLogistics Corporation's Registration Statement on Form S-4
               effective April 28, 1998).

10.15          Employee Stock Purchase Plan dated March 3, 1997 (incorporated by
               reference from GeoLogistics Corporation's Registration Statement
               on Form S-4 effective April 28, 1998).

10.16          Executive Management Agreement dated as of November 1, 1997 by
               and between the Company, TCW Special Credits Fund V_The Principal
               Fund and Oaktree Capital Management, LLC (incorporated by
               reference from GeoLogistics Corporation's Registration Statement
               on Form S-4 effective April 28, 1998).

10.17          Form of Warrant Agreement between the Company and Mr. Myers
               (incorporated by reference from GeoLogistics Corporation's
               Registration Statement on Form S-4 effective April 28, 1998).

</TABLE>


                                      44
<PAGE>

<TABLE>
<CAPTION>

Exhibit No.    Description
-----------    -----------

<S>            <C>

10.18          Amendment No. 1 to Amended and Restated Loan Agreement
               (incorporated by reference from the GeoLogistics Corporation's
               Current Report on Form 8-K filed July 22, 1998).

10.19          Amendment No. 2 to Amended and Restated Loan Agreement
               (incorporated by reference from the GeoLogistics Corporation's
               Current Report on Form 8-K filed July 22, 1998).

10.20          Credit Agreement dated as of July 10, 1998 by and among the
               Company as borrower and ING (U.S.) Capital Corporation as
               administrative agent and the Lenders party thereto (incorporated
               by reference from the GeoLogistics Corporation's Current Report
               on Form 8-K filed July 22, 1998).

10.21          Registration Rights Agreement dated as of July 13, 1998 by and
               among the company and the holders listed on the signature pages
               thereof (incorporated by reference from the GeoLogistics
               Corporation's Current Report on Form 8-K filed July 22, 1998).

10.22          Amendment No. 3 to Amended and Restated Loan Agreement
               (Incorporated by reference from the GeoLogistics Corporation's
               Current Report on Form 8-K filed March 5, 1999).

10.23          Asset Purchase Agreement dated as of August 6, 1999 among
               GeoLogistics Air Services, Inc., GeoLogistics Americas, Inc., and
               GeoLogistics Corporation and FDX Logistics, Inc. (formerly FDX
               Global Logistics, Inc.) and FDX Corporation (incorporated by
               reference from the GeoLogistics Corporation's Current Report on
               Form 8-K filed September 17, 1999).

10.24          Amendment No. 4, dated as of September 10, 1999, to the Amended
               and Restated Loan Agreement dated as of October 28, 1997 (as
               previously amended by an Amendment No. 1 dated December 12, 1997,
               an Amendment No. 2 dated as of July 10, 1998, and an Amendment
               No. 3 dated as of February 26, 1999, the "Loan Agreement"), among
               GeoLogistics Corporation, GeoLogistics Services, Inc.,
               GeoLogistics Americas, Inc., The Bekins Company, ILLCAN, Inc.,
               ILLSCOT, Inc., GeoLogistics Limited, and ING (U.S.) Capital
               Corporation (now known as ING (U.S.) Capital LLC and referred to
               as "ING Capital"), and ING Bank, N.V. (London, England Branch)
               (incorporated by reference from the GeoLogistics Corporation's
               Current Report on Form 8-K filed September 17, 1999).

10.25          Restricted Share Award Agreement between GeoLogistics
               Corporation and Robert Arovas.

10.26          Joint Escrow Instruction and Release Agreement dated as of
               February 18, 2000 among FedEx Global Logistics, Inc. (formerly
               FDX Global Logistics, Inc. and FDX Logistics, Inc.), FedEx
               Corporation (formerly FDX Corporation), GeoLogistics
               Corporation and GeoLogistics AirServices Inc.

10.27          Sixth Amended and Restated Stockholders Agreement dated as of
               January 27, 2000 by and among the Company and the holders
               listed on Exhibit A attached thereto.

10.28          GeoLogistics Corporation's 1999 Long-Term Incentive Plan.

10.29          Loan Agreement by and between Congress Financial Corporation
               (Canada) as Lender and GeoLogistics Corporation as Borrower
               dated as of March 23, 2000.

10.30          Loan and Security Agreement by and between Congress Financial
               Corporation (Western) as Lender and Bekins Worldwide Solutions,
               Inc., Bekins Van Lines, LLC, GeoLogistics Services, Inc., and
               GeoLogistics Americas, Inc., collectively, as Borrowers dated as
               of March 23, 2000.

10.31          Facility Agreement by and between GeoLogistics Limited and
               Burdale Financial Limited dated March 31, 2000.

21.1           Subsidiaries of the Registrant.

27             Financial Data Schedule

</TABLE>


                                      45
<PAGE>

(b)  Reports on Form 8-K

     There were no reports filed on Form 8-K in the fourth quarter of 1999.


                                      46
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements Section 1300 15(d) of the Securities Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.


GeoLogistics Corporation
        (Registrant)

        /S/ ROBERT AROVAS                                   APRIL 4, 2000
-------------------------------------------------           --------------
Name:    Robert Arovas                                 Date
Title:   CHIEF EXECUTIVE OFFICER AND DIRECTOR

         Pursuant to the requirements of the Securities 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.


                                      47
<PAGE>

<TABLE>
<CAPTION>

          Signature                                  Title                           Date
----------------------------------      ----------------------------------      --------------

<S>                                     <C>                                     <C>

/s/ Robert Arovas                       Chief Executive Officer                 APRIL 4, 2000
----------------------------------        and Director (Principal
Robert Arovas                             Executive Officer)


/s/ Janet D. Helvey
----------------------------------      Senior Vice President, Finance          APRIL 4, 2000
Janet D. Helvey

/s/ Vincent J. Cebula
----------------------------------      Director                                APRIL 4, 2000
Vincent J. Cebula

/s/ Stephen A. Kaplan
----------------------------------      Director                                APRIL 4, 2000
Stephen A. Kaplan

/s/ Michael B. Lenard
----------------------------------      Director                                APRIL 4, 2000
Michael B. Lenard

/s/ William E. Simon, Jr.
----------------------------------      Director                                APRIL 4, 2000
William E. Simon, Jr.

</TABLE>


This Report on Form 10-K represents the Company's annual report for the fiscal
year ended December 31, 1999. No other annual report is available.


                                      48
<PAGE>

                            GEOLOGISTICS CORPORATION
            CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                                                       Page
                                                                       ----
<S>                                                                   <C>
   Reports of Independent Auditors..................................  50
   Consolidated Balance Sheets......................................  53
   Consolidated Statements of Operations............................  55
   Consolidated Statements of Cash Flows............................  56
   Consolidated Statements of Stockholders' Equity (Deficit)........  57
   Notes to Consolidated Financial Statements.......................  58
   Schedule II Valuation and Qualifying Accounts and Reserves.......  83
</TABLE>


                                      49
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of GeoLogistics Corporation

Santa Ana, California

         We have audited the accompanying consolidated balance sheets of
GeoLogistics Corporation and subsidiaries ("Company") as of December 31, 1999
and 1998 and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for the years ended December 31, 1999 and 1998.
Our audits also included the financial statement schedule listed in the Index at
Item 14(a)2. These financial statements and the schedule are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements and the schedule 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 provide a reasonable basis
for our opinion.

         In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of GeoLogistics Corporation and subsidiaries as of December 31, 1999
and 1998, and the consolidated results of their operations and their cash
flows for the years ended December 31, 1999 and 1998, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in
relation to the basic financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.

ERNST & YOUNG LLP

Chicago, Illinois
March 31, 2000


                                      50
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Board of Directors of GeoLogistics Corporation

Santa Ana, California

         We have audited the accompanying consolidated statements of operations,
stockholders' equity, and cash flows of GeoLogistics Corporation and
subsidiaries ("Company") for the year ended December 31, 1997. 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 audit.

         We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis for our opinion.

         In our opinion, such consolidated financial statements referred to
above present fairly, in all material respects, the results of operations and
cash flows of GeoLogistics Corporation and subsidiaries for the year ended
December 31, 1997, in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Chicago, Illinois
March 17, 1998


                                      51
<PAGE>

                 (This page has been left blank intentionally.)


                                      52
<PAGE>

                            GEOLOGISTICS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                        (IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                      DECEMBER 31,
                                                      ------------
                                                  1999           1998
                                                ---------     ---------
<S>                                             <C>           <C>

                     ASSETS

CURRENT ASSETS:
  Cash and cash equivalents ................    $   2,628     $  15,152
  Accounts receivable:
    Trade, net .............................      245,492       267,047
    Other ..................................       20,865        11,046
  Deferred income taxes ....................          361         7,245
  Prepaid expenses .........................       25,681        20,708
                                                ---------     ---------
         Total current assets ..............      295,027       321,198
PROPERTY AND EQUIPMENT:
   Land ....................................        2,352         4,884
   Buildings and leasehold improvements ....       41,998        49,963
   Operating equipment and other ...........       19,932        21,473
   Transportation equipment ................        7,960        10,663
   Capitalized software ....................       26,389        26,635
                                                ---------     ---------
                                                   98,631       113,618
   Less accumulated depreciation ...........      (22,648)      (18,364)
                                                ---------     ---------
      Property and equipment, net ..........       75,983        95,254
NOTES RECEIVABLE, less current portion .....        1,241         1,711
DEFERRED INCOME TAXES ......................          547        19,168
INTANGIBLE ASSETS, net .....................       55,285        91,274
OTHER ASSETS ...............................       19,573        20,573
                                                ---------     ---------
        TOTAL ASSETS .......................    $ 447,656     $ 549,178
                                                =========     =========

</TABLE>

                 See notes to consolidated financial statements.


                                      53
<PAGE>

                            GEOLOGISTICS CORPORATION

                           CONSOLIDATED BALANCE SHEETS

                        (IN THOUSANDS EXCEPT SHARE DATA)

                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>

                                                           December 31,
                                                        1999          1998
                                                      ---------     ---------
<S>                                                   <C>           <C>

CURRENT LIABILITIES:
  Accounts payable ...............................    $ 160,914     $ 139,696
  Accrued expenses ...............................      116,676       149,519
  Income taxes payable ...........................        2,475         7,940
  Current portion of long-term debt ..............       12,222        12,549
                                                      ---------     ---------
      Total current liabilities ..................      292,287       309,704
LONG-TERM DEBT, less current portion .............      152,915       183,177
OTHER NONCURRENT LIABILITIES .....................       46,747        52,400
MINORITY INTEREST ................................        2,087         2,381
                                                      ---------     ---------
      Total liabilities ..........................      494,036       547,662
STOCKHOLDERS' EQUITY (DEFICIT):
  Preferred stock, 15,000 shares authorized,
    issued and outstanding .......................       14,550        14,550
  Common stock ($.001 par value, 5,000,000
     shares authorized, 2,129,893 and 2,128,893
     shares issued and outstanding at December 31,
     1999 and 1998, respectively) ................            2             2
  Additional paid-in capital .....................       56,962        55,371
  Accumulated deficit ............................     (119,709)      (67,898)
  Notes receivable from stockholders .............           --          (191)
  Accumulated other comprehensive income (loss) ..        1,815          (318)
                                                      ---------     ---------
      Total stockholders' equity (deficit) .......      (46,380)        1,516
                                                      ---------     ---------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
        (DEFICIT) ................................    $ 447,656     $ 549,178
                                                      =========     =========

</TABLE>

                See notes to consolidated financial statements.


                                      54
<PAGE>

                            GEOLOGISTICS CORPORATION

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                        (IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                 Year Ended December 31,
                                                      -------------------------------------------
                                                         1999            1998            1997
                                                      -----------     -----------     -----------

<S>                                                   <C>             <C>             <C>
Revenues .........................................    $ 1,558,204     $ 1,526,753     $   978,249
Transportation and other direct costs ............      1,195,310       1,154,533         759,049
                                                      -----------     -----------     -----------
Net revenues .....................................        362,894         372,220         219,200
Selling, general and administrative expenses .....        378,048         366,268         204,733
Restructuring and other non-recurring charges ....         18,997              --              --
Asset impairment charges .........................         11,888              --              --
Depreciation and amortization ....................         20,021          18,126          30,398
                                                      -----------     -----------     -----------
Operating loss ...................................        (66,060)        (12,174)        (15,931)
Interest expense, net and amortization of
  debt issuance costs ............................         23,086          16,984           8,576
Gain on sale of business .........................         68,920              --              --
Other expense, net ...............................            749             214             211
                                                      -----------     -----------     -----------
Loss before income taxes, minority interests
  and extraordinary loss .........................        (20,975)        (29,372)        (24,718)
Income tax expense(benefit) ......................         27,258           7,729          (8,420)
                                                      -----------     -----------     -----------
Loss before minority interest and
  extraordinary loss .............................        (48,233)        (37,101)        (16,298)
Minority interests ...............................          1,478             932           1,067
                                                      -----------     -----------     -----------
Loss before extraordinary loss ...................        (49,711)        (38,033)        (17,365)
Extraordinary loss on early extinguishment
  of debt net of tax benefit of $1,528 ...........             --              --          (2,293)
                                                      -----------     -----------     -----------
Net loss .........................................        (49,711)        (38,033)        (19,658)
Preferred stock dividend .........................          2,100             963              --
                                                      -----------     -----------     -----------
Loss applicable to common stock ..................    $   (51,811)    $   (38,996)    $   (19,658)
                                                      ===========     ===========     ===========
PER COMMON SHARE - BASIC AND DILUTED:
   Loss before extraordinary loss ................    $    (24.31)    $    (18.39)    $     (8.47)
   Extraordinary loss ............................             --              --           (1.12)
                                                      -----------     -----------     -----------
   Net loss ......................................    $    (24.31)    $    (18.39)    $     (9.59)
                                                      ===========     ===========     ===========
Basic and diluted weighted average number of
  common shares outstanding ......................      2,131,393       2,120,365       2,049,800
                                                      ===========     ===========     ===========

</TABLE>

                See notes to consolidated financial statements.


                                      55
<PAGE>

                            GEOLOGISTICS CORPORATION

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                               Year Ended December 31,
                                                        -------------------------------------
                                                          1999          1998          1997
                                                        ---------     ---------     ---------
<S>                                                     <C>           <C>           <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ...........................................    $ (49,711)    $ (38,033)    $ (19,658)
Adjustments to reconcile net loss to net
  cash used in operating activities:
  Asset impairment charges .........................       11,888            --            --
  Gain on sale of business..........................      (68,920)           --            --
  (Gain) loss on sale of net assets                          (116)           --            60
  Depreciation and amortization ....................       20,021        18,126        30,398
  Amortization of deferred items ...................        3,343         1,217           861
  Deferred income taxes ............................       25,505           976       (10,070)
  Extraordinary item, net of tax ...................           --            --         2,293
Change in operating assets and liabilities:
  Accounts receivable-trade, net ...................        8,266        (9,823)       (2,129)
  Prepaid expenses and other current assets ........       (6,746)       (7,399)        1,945
  Accounts payable and accrued expenses ............      (13,618)       (1,673)       (5,795)
  Other ............................................       (9,386)       (7,321)       (5,654)
                                                        ---------     ---------     ---------
    Net cash used in operating activities ..........      (79,474)      (43,930)       (7,749)
                                                        ---------     ---------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Business acquisitions ............................           --       (27,133)      (14,470)
  Proceeds from sale of business ...................      102,704            --            --
  Purchases of property and equipment, net..........       (7,229)      (34,020)      (11,744)
  Proceeds from the sale of net assets .............          438            --         7,545
                                                        ---------     ---------     ---------
    Net cash provided by (used in) investing
      activities ...................................       95,913       (61,153)      (18,669)
                                                        ---------     ---------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds (repayments) from revolving line
    of credit, net .................................      (25,200)       49,100            --
  Proceeds from long-term debt .....................       17,812        25,344       110,000
  Payments on long-term debt .......................      (22,529)       (6,694)      (64,692)
  Debt issuance costs ..............................         (627)         (616)       (8,918)
  Issuance of common stock .........................           --         3,264         2,585
  Issuance of preferred stock ......................           --        14,550            --
  Repurchase of common stock .......................         (231)          (18)         (551)
  Dividend payments to minority interests ..........       (3,766)         (803)         (104)
                                                        ---------     ---------     ---------
    Net cash provided by (used in) financing
      activities ...................................      (34,541)       84,127        38,320
                                                        ---------     ---------     ---------
Effect of exchange rate changes on cash and
  cash equivalents .................................        5,578        (1,801)          395
                                                        ---------     ---------     ---------
Net increase (decrease) in cash and cash
  equivalents ......................................      (12,524)      (22,757)       12,297
Cash and cash equivalents of acquired companies ....           --            --        22,188
Cash and cash equivalents, beginning of period .....       15,152        37,909         3,424
                                                        =========     =========     =========
Cash and cash equivalents, end of period ...........    $   2,628     $  15,152     $  37,909
                                                        =========     =========     =========
SUPPLEMENTAL DISCLOSURES:
Interest paid ......................................    $  19,771     $  15,256     $   7,715
                                                        =========     =========     =========
Income taxes paid ..................................    $   6,698     $   2,402     $   2,021
                                                        =========     =========     =========

Noncash common stock transactions ..................    $   1,822     $   1,440     $     207
                                                        =========     =========     =========
New capital leases .................................    $     880     $   9,963     $   1,260
                                                        =========     =========     =========
Noncash proceeds from the sale of net assets .......    $      --            --     $   2,496
                                                        =========     =========     =========

</TABLE>

                See notes to consolidated financial statements.


                                      56
<PAGE>

                            GEOLOGISTICS CORPORATION
            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                       (IN THOUSANDS EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                         ADDITIONAL
                           PREFERRED STOCK       COMMON STOCK             PAID-IN              ACCUMULATED
                            SHARES  AMOUNT     SHARES        AMOUNT        CAPITAL               DEFICIT

<S>                        <C>    <C>         <C>           <C>           <C>              <C>
BALANCE,
January 1, 1997 .........      --  $   --      2,016,667     $    2        $50,050           $    (9,244)

Sale of stock ...........                         85,119                     2,792

Repurchase of
common stock ............                        (27,560)                     (551)

Net loss ................                                                                        (19,658)

Foreign currency
translation adjustment ..
                           ------ -------      ---------      ----         -------           -----------

BALANCE,
December 31, 1997 .......      --      --      2,074,226          2         52,291               (28,902)

Sale of stock ...........  15,000  14,550         55,267                     3,098

Repurchase of
common stock ............                           (600)                      (18)

Net loss ................                                                                        (38,033)

Preferred stock
dividends ...............                                                                           (963)

Foreign currency
translation adjustment ..
                           ------ -------      ---------      ----         -------           -----------

BALANCE,
December 31, 1998 .......  15,000  14,550      2,128,893          2         55,371               (67,898)

Repurchase of
common stock ............                        (24,000)                     (231)

Sale of stock ...........                                                    1,822

Restricted stock grant ..                         25,000

Net loss ................                                                                        (49,711)

Preferred stock dividends                                                                         (2,100)

Foreign currency
translation adjustment ..
                           ------ -------      ---------      ----         -------           -----------

BALANCE,
December 31, 1999 .......  15,000 $14,550      2,129,893      $  2         $56,962           $  (119,709)
                           ====== =======      =========      ====         =======           ===========
</TABLE>


<TABLE>
                           NOTES
                         RECEIVABLE  CUMULATIVE        TOTAL             OTHER
                            FROM     TRANSLATION    STOCKHOLDERS'     COMPREHENSIVE    COMPREHENSIVE
                        STOCKHOLDERS  ADJUSTMENT    EQUITY(DEFICIT)   INCOME (LOSS)         LOSS
<S>                       <C>        <C>         <C>                   <C>            <C>
BALANCE,
January 1, 1997 .......     $(150)    $  (39)     $    40,619

Sale of stock ........       (207)                      2,585

Repurchase of
common stock ............                                (551)

Net loss ................                             (19,658)              $ (76)         $(19,734)
                                                                         ========          ========
Foreign currency
translation adjustment ..                (76)             (76)
                           --------   -------     -----------


BALANCE,
December 31, 1997 .......   (357)       (115)          22,919

Sale of stock ...........    166                       17,814

Repurchase of
common stock ............                                 (18)

Net loss ................                             (38,033)              (203)          (38,236)
                                                                         ========          ========

Preferred stock
dividends ...............                                (963)

Foreign currency
translation adjustment ..               (203)            (203)
                           --------   -------     -----------


BALANCE,
December 31, 1998 .......   (191)       (318)           1,516

Repurchase of
common stock ............                                (231)

Sale of stock ...........    191                        2,013

Restricted stock grant ..                                  --

Net loss ................                             (49,711)            $ 2,133          $(47,578)
                                                                         ========          ========
Preferred stock dividends                              (2,100)

Foreign currency
translation adjustment ..              2,133            2,133
                           --------   -------     -----------


BALANCE,
December 31, 1999 .......  $  --     $ 1,815      $   (46,380)
                           ========  =======      ===========
</TABLE>


                See notes to consolidated financial statements.


                                      57
<PAGE>



                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1. GENERAL INFORMATION

         GeoLogistics Corporation ("GeoLogistics" or the "Company") was formed
and incorporated in Delaware in 1996 by entities managed by William E. Simon and
Sons, LLC ("WESS") and Oaktree Capital Management, LLC ("OCM"). GeoLogistics
made three acquisitions during the period ended December 31, 1996, and one
acquisition during each of the years ended December 31, 1997 and 1998.

         The Company is one of the largest non-asset based providers of
worldwide logistics and transportation services headquartered in the United
States. The Company's primary business operations involve obtaining shipment or
material orders from customers, creating and delivering a wide range of
logistics solutions to meet customers' specific requirements for transportation
and related services, and arranging and monitoring all aspects of material flow
activity utilizing advanced information technology systems.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         PRINCIPLES OF CONSOLIDATION. The accompanying consolidated financial
statements include the accounts of GeoLogistics and its majority owned
subsidiaries. The Company records its investment in each unconsolidated
affiliated company (20 to 50 percent ownership) at its related equity in the net
assets of such affiliate. Other investments (less than 20 percent ownership) are
recorded at cost. Intercompany accounts and transactions have been eliminated.
The financial statements reflect minority interests in foreign affiliates
acquired in connection with the acquisition of LEP International Worldwide
Limited ("LIW")(see Note 3).

         RECLASSIFICATIONS. Certain amounts for prior years have been
reclassified to conform with 1999 financial statement and footnote presentation.

         CASH AND CASH EQUIVALENTS. Cash and cash equivalents include cash on
hand, demand deposits, and short-term investments with original maturities of
three months or less when purchased.

         PROPERTY AND EQUIPMENT. Property and equipment are stated at cost, less
accumulated depreciation. Depreciation of owned assets and amortization of
capital lease assets is provided using the straight-line method over the
estimated useful lives of the related assets. Leasehold improvements are
amortized over the shorter of the life of the lease or the useful life of the
asset on a straight-line basis. Major repairs, refurbishments and improvements
that significantly extend the useful lives of the related assets are
capitalized.

Maintenance and repairs are expensed as incurred. Estimated useful lives are as
follows:

<TABLE>

<S>                                                                                              <C>
Transportation equipment................................................................            4-8 years
Operating equipment and other...........................................................            3-8 years
Buildings and leasehold improvements....................................................          25-40 years
Furniture and fixtures..................................................................           3-10 years
Capitalized software....................................................................            3-5 years
</TABLE>

         The Company capitalizes all external direct costs of materials and
services consumed in developing or obtaining internal-use computer software, and
payroll and payroll related costs for employees who are directly associated with
a project to develop computer software. Training costs and maintenance fees are
expensed as incurred or, if such costs are included in the price of the
software, allocated over the term of the service provided.


                                      58
<PAGE>


                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)



         INTANGIBLE ASSETS. Intangible assets include principally costs in
excess of net assets acquired in connection with the acquisitions described in
Note 3 which have been allocated among certain intangible items determined by
management to have value such as software, agent and customer contracts,
drivers' network and goodwill. Provision for amortization has been made on the
straight-line method based upon the estimated useful lives of the intangible
asset categories.

         The Company reviews long-lived assets for impairment whenever events or
changes in circumstances indicate the carrying amount of such assets may not be
recoverable. Recoverability of these assets is determined by comparing the
forecasted undiscounted net cash flows of the operation to which the assets
relate to the carrying amount. If undiscounted net cash flows are insufficient
to recover the carrying amount of its assets, then the assets are written down
to fair value. Fair value is determined based on discounted cash flows or
appraised values, depending upon the nature of the assets. Based on present
operations and strategic plans, the Company believes that no impairment exists
other than the impairment described in Note 4.

         OTHER ASSETS. Other assets as of December 31, 1999 and 1998 consist
primarily of pension assets of $15,195 and $14,088, respectively, investments in
an affiliate and deposits related to certain operating leases.

         FAIR VALUE OF FINANCIAL INSTRUMENTS. The carrying value of cash and
cash equivalents, accounts receivable, accounts payable and accrued expenses
approximates fair value at December 31, 1999 and 1998 due to their short-term
nature; the carrying value of the Company's revolving debt approximates fair
value due to its variable interest rates. Fair values of other debt instruments
were calculated based on broker quotes or quoted market prices or rates for the
same or similar investments. As of December 31, 1999 and 1998, the carrying
amount of other debt instruments subject to fair value disclosures was $110,000
with a fair value of $30,000 and $102,900, respectively. The fair value is not
indicative of the amounts the Company would pay to redeem the debt. See Note 7
for redemption rights and obligations.

         FOREIGN CURRENCY TRANSLATION. The financial statements of subsidiaries
outside the United States are generally measured using the local currency as the
functional currency. Assets, including intangible assets, and liabilities of
these subsidiaries are translated at the rate of exchange at the balance sheet
date. Translation adjustments are included in accumulated other comprehensive
loss in the accompanying consolidated balance sheets. Income and expenses are
translated at average monthly rates of exchange. Gains and losses from foreign
currency transactions are included in results of operations.

         FOREIGN CURRENCY RISK MANAGEMENT. The Company's objective in managing
the exposure to foreign currency fluctuations is to reduce earnings and cash
flow volatility associated with foreign exchange rate changes and allow
management to focus its attention on its core business issues and challenges.
Accordingly, the Company enters into various contracts which change in value as
foreign exchange rates change to protect certain of its existing foreign assets,
liabilities, commitments and anticipated foreign earnings. The Company may use a
combination of financial instruments to manage these risks, including forward
contracts or option related instruments. The principal currencies hedged are the
British Pound, German Mark, Canadian Dollar and some Asian currencies such as
the Hong Kong and Singapore dollar. By policy, the Company maintains hedge
coverage between minimum and maximum percentages of its anticipated foreign
exchange exposures for the next year. The gains and losses on these contracts
are


                                      59
<PAGE>


                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

offset by changes in the value of the related exposures. At December 31, 1999
and 1998, the notional amount of the Company's outstanding forward contracts
were approximately $5,872 and $44,500, respectively. The credit and market
risks under these agreements are not considered to be significant since the
counterparties have high credit ratings.

         It is the Company's policy to enter into foreign currency transactions
only to the extent considered necessary to meet its objective as stated above.
The Company does not enter into foreign currency or interest rate transactions
for speculative purposes. Transaction gains for the years ended December 31,
1999, 1998 and 1997 were $583, $2,715 and $1,155 respectively.

         In June 1998, the Financial Accounting Standards Board Issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities" ("SFAS No.133"), which was originally required to be adopted in
years beginning after June 15, 1999. This new accounting standard will
require that all derivatives be recorded on the balance sheet at fair value.
If the derivative is a hedge, depending on the nature of the hedge, changes
in fair value of the hedged assets, liabilities, or firm commitments are
recognized through earnings or recognized in other comprehensive income until
the hedged item is recognized in earnings. Management is currently assessing
the impact that the adoption of SFAS No. 133 will have on the Company's
financial position, results of operations, and cash flows.

         The FASB recently issued SFAS No. 137 which delays the effective
date of SFAS No. 133 until fiscal years beginning after June 15, 2000. In
addition, SFAS No. 137 requires that all derivatives that are expected to be
hedges must be designated as such on the first day of the period in which the
statement becomes effective. The Company, which utilizes fundamental
derivatives to hedge changes in interest rates and foreign currencies,
expects to adopt SFAS No. 133 effective January 1, 2001.

         REVENUE RECOGNITION. The Company's policy is to recognize revenue when
it has performed substantially all services required under the terms of its
contracts, generally on the date shipment is completed. Revenue from
export-forwarding services is recognized at the time the freight departs the
terminal of origin. Customs brokerage revenue is recognized upon completing the
documents necessary for customs clearance. Storage revenue is recognized as
services are performed. Transportation and other direct costs are recognized
concurrently with revenues. For both international and domestic revenues, the
above methods of revenue recognition approximate recognizing revenues and
expenses when a shipment is completed.

         ADVERTISING COSTS. The Company expenses all advertising costs in the
year incurred. Advertising expense was $3,039 in 1999, $3,892 in 1998 and $897
in 1997.

         CREDIT RISK CONSIDERATIONS. Concentration of credit risk with respect
to accounts receivable is limited due to the wide variety of customers and
markets into which services are sold, as well as their dispersion across many
different geographic areas. The Company has recorded an allowance for doubtful
accounts to estimate the difference between recorded receivables and ultimate
collections. The allowance and provision for bad debts are adjusted periodically
based upon the Company's evaluation of historical collection experience,
industry trends and other relevant factors. The allowance for doubtful accounts
was $21,032 and $21,862 at December 31, 1999 and 1998, respectively.

         INCOME TAXES. Deferred income taxes are provided for temporary
differences between the financial reporting basis and tax basis of assets and
liabilities at currently enacted tax rates. The deferred income tax provision or
benefit generally reflects the net change in


                                      60
<PAGE>

                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


deferred income tax assets and liabilities during the year. The current income
tax provision reflects the tax consequences of revenues and expenses currently
taxable or deductible in income tax returns for the year reported.

         EARNINGS PER SHARE. Basic earnings per common share is computed using
the weighted average number of shares outstanding. Diluted earnings per common
share is computed under the treasury stock method using the weighted average
number of shares outstanding adjusted for the incremental shares attributed to
outstanding warrants to purchase common stock. Incremental shares of zero, zero,
and .1 million in 1999, 1998, and 1997, respectively, were not used in the
calculation of diluted loss per common share due to their antidilutive effect.

         USE OF ESTIMATES. The financial statements have been prepared in
conformity with generally accepted accounting principles and, as such, include
amounts based on informed estimates and judgments of management. Actual results
could differ from those estimates. Accounts affected by significant estimates
include accounts receivable and accruals for transportation and other direct
costs, tax contingencies, insurance claims, cargo loss and damage claims.

         ACCUMULATED OTHER COMPREHENSIVE INCOME. Other comprehensive income
in the financial statements of the Company represents foreign currency
translation adjustments resulting from the conversion of the financial
statements of foreign subsidiaries from local currency to U.S. dollars.

3. ACQUISITIONS AND DIVESTITURE

On May 2, 1996, the Company acquired all of the outstanding shares of Bekins, a
major provider, through its Bekins Van Lines ("BVL") subsidiary, of interstate
transportation of household goods and logistic services for high-tech,
electronic, medical, and high-end consumer products, for $49,700 including
assumptions of debt and acquisition costs. The consideration was comprised of
$49,500 in cash and the exchange of 45,560 shares of Bekins stock valued at $200
for shares of GeoLogistics. The value assigned to the Company's stock issued in
the exchange was based on treatment required by Emerging Issues Task Force
("EITF") publication 88-16 BASIS IN LEVERAGED BUYOUT TRANSACTIONS, which states
that residual interest in the acquired company should be carried over at the
predecessor's basis. Therefore, the $200 of basis previously included in Bekins
was carried over to the shares of common stock of the Company. The excess of the
purchase price over the fair value of the net assets acquired of $17,900 has
been recorded as goodwill, and is being amortized on a straight-line basis over
40 years.

         The Company has pursued a strategy of converting company-owned Bekins
Moving and Storage ("BMS") service centers into independent moving and storage
agents, who will become part of the BVL agent network. Upon the acquisition of
Bekins by the Company on May 2, 1996, BMS was treated as discontinued and the
net remaining assets were classified as assets held for sale in the balance
sheet. During 1997 all remaining assets of BMS were sold. Losses from operations
since May 2, 1996 of $4,000, partially offset by the gain on sale of the assets
of $2,600, were considered in the allocation of the purchase price.

         On October 31, 1996, the Company acquired all of the outstanding shares
of Americas and Canada from LIW for $32,000 in cash including assumption of debt
and acquisition costs. Americas and Canada provide domestic and international
freight forwarding services, as well as value-added domestic logistic services.
In September, 1999, the Company exited the domestic freight forwarding business
and wrote off $3,500 of goodwill related to that business (see


                                      61
<PAGE>


                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


note 4). The remaining excess of the purchase price over the fair value of the
net assets acquired of $17,400 is being amortized on a straight-line basis over
40 years. In addition to the acquisition of Americas and Canada, the Company
acquired a 33.3% interest in the equity of LIW for the aggregate price of one
dollar.

         On November 7, 1996, the Company acquired all of the outstanding shares
of Services, an international project cargo freight forwarder that also
specializes in premium international household relocation services, for $30,000
including assumption of debt and acquisition costs. The consideration was
comprised of $27,000 in cash and $3,000 of the Company's common stock (valued at
$30 per share, the same price paid by shareholders for additional stock
purchases made on October 31, 1996). The excess of the purchase price over the
fair value of the net assets acquired of $18,900 has been recorded as goodwill
and is being amortized on a straight-line basis over 25 years.

         On September 30, 1997, the Company increased its holdings of LIW's
common stock, a United Kingdom based international freight forwarder with
operations primarily in Europe and Asia, from 33.3% to 75.2%. In December
1997, the Company acquired LIW's remaining outstanding common stock and
acquired and retired LIW's outstanding preferred stock. Consideration
included cash and warrants to purchase 19,045 shares of common stock of the
Company at an exercise price of $45 per share under terms similar to
previously issued warrants. The transaction has been accounted for under the
purchase method of accounting. The purchase price ($14,500, including
assumption of debt and acquisition costs) has been allocated to the assets
acquired and liabilities assumed based on their fair value at the date of
purchase. The operating results of each acquired company are included in the
results of the Company from the respective dates of acquisition.

         On July 13, 1998, the Company purchased substantially all of the
operating assets and assumed certain of the liabilities of Caribbean Air
Services, Inc. ("CAS"), for aggregate cash consideration of $27,000. CAS is a
provider of air logistics services between the United States, Puerto Rico, and
the Dominican Republic. Goodwill of approximately $27,200 was recorded and being
amortized over 25 years. On September 10, 1999, the Company sold substantially
all of the assets of its GLAS business unit which was comprised of CAS and
certain operations of another subsidiary ("GLAS Assets") for aggregate cash
consideration of approximately $116,000. The $68,920 gain on this sale has been
reflected in the consolidated financial statements for the year ended December
31, 1999.

         The sale proceeds were applied by the Company to fund a $10,000 escrow
account in connection with certain warranties to the purchaser, pay fees and
expenses associated with the transaction and reduce revolving debt that was
secured by the GLAS Assets. As of December 31, 1999, the Company has recorded a
$1,800 allowance relating to the warranties and subsequent to December 31, 1999,
the Company settled certain remaining obligations and warranties associated with
the escrow account and obtained the release of $8,200.

For the year ended December 31, 1999, revenues and operating income from the
GLAS operations were approximately $66,800 and $10,500, respectively.

4.        RESTRUCTURING AND OTHER NON-RECURRING CHARGES/ASSET IMPAIRMENT CHARGES

         On March 4, 1999, the Company announced the intended restructuring
of its GeoLogistics Americas ("Americas") business as a result of a difficult
domestic freight forwarding environment. Due to lower volumes in the European
region, the Company initiated a process to reevaluate the operations of its
other business units to determine what initiatives could be taken to reduce
costs and streamline administrative operations. As part of this restructuring
process a new management team was put in place in an effort to improve global
operating

                                      62
<PAGE>


                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


results.

         In connection with these efforts, the Company (a) exited the
majority of its domestic freight forwarding portion of Americas business at
the end of the third quarter of 1999, (b) is rationalizing personnel such
that their numbers and skill sets are suited to the ongoing services and
volumes of the business, (c) closed, or will close, facilities in the United
States and Europe, (d) arranged for the settlement of remaining obligations
to the selling shareholders of the project forwarding and international
household goods relocation services business and integrated the project
forwarding business into the Americas business and the international
household goods relocation services into Bekins and (e) revalued assets to
reflect fair values. The aggregate charge for these actions is expected to be
approximately $34,600 of which $30,885 was recorded in 1999 and the remaining
balance of $3,715 is expected to be recorded in the first half of 2000. The
restructuring and non-recurring charges include provisions for the
termination of 460 sales, administrative and warehouse employees globally at
a cost of approximately $16,600. Of this cost $13,900, representing the
termination of 420 employees, was recorded in 1999 and $2,700 which relates
to the termination of the remaining 40 employees is expected to be recorded
in the first half of 2000. The restructuring and non-recurring charge is also
comprised of $1,600 related to facility closure and lease terminations,
$1,500 additional allowance for bad debts, $1,100 for the termination of
certain agreements, and $900 for other miscellaneous exit costs. Accrued
liabilities at December 31, 1999 included approximately $7,700 of future
severance payments related to 176 employees terminated prior to December 31,
1999; approximately $1,100 related to facility closure and exit costs; and
$1,000 was included in allowance for doubtful accounts. The non-cash charges
for asset impairment relate to the write-off of $3,500 of goodwill as a
result of exiting the domestic freight forwarding portion of Americas'
business, a $6,800 reevaluation of capitalized software costs and $1,600
related to the pending sale of certain property of its Italian subsidiary. In
addition to actions for which immediate financial recognition is required,
many additional actions have been taken including revised incentive plans for
the sales and management staffs (including the employees who will continue to
operate the international freight forwarding operations in the United
States), expansion of logistics facilities in Thailand and expansion of
facilities and logistics capabilities in China.

5. INTANGIBLE ASSETS

         Intangible assets consist of the following:

<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    -------------------------               AMORTIZATION
                                                                     1999              1998                    PERIOD
                                                                   --------          --------                  ------

<S>                                                                <C>               <C>                   <C>
                  Goodwill...................................      $ 55,653           $ 83,902               25-40 years
                  Agent contracts............................         3,291              5,610                 2-5 years
                  Customer contracts.........................           486              2,045                   2 years
                  Debt issuance costs........................         9,327              9,404                5-10 years
                  Trademarks.................................         1,307                885                  10 years
                  Other......................................           249                853                   4 years
                                                                   --------           --------
                                                                     70,313            102,699
                  Less accumulated
                      amortization..............                    (15,028)           (11,425)
                                                                   --------           --------
                                                                   $ 55,285           $ 91,274
                                                                   ========           ========
</TABLE>


6. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER NONCURRENT LIABILITIES


                                      63
<PAGE>


         Accounts payable includes checks outstanding against the Company's
central disbursement accounts. Arrangements with the Company's banks do not call
for reimbursement until the checks are presented for payment. Such outstanding
checks totaled approximately $7,000 and $14,300 at December 31, 1999 and 1998,
respectively.

         Accrued expenses and other noncurrent liabilities consist of the
following:

<TABLE>
<CAPTION>

                                                                                          DECEMBER 31,
                                                                                 ----------------------------
                                                                                   1999                1998
                                                                                 --------            --------

<S>                                                                             <C>                  <C>
ACCRUED EXPENSES
Transportation............................................................       $ 42,998            $ 87,445
Employee related..........................................................         23,723              25,865
Restructuring reserve.....................................................          8,816                   -
Rents and utilities.......................................................            837                 889
Insurance and litigation..................................................          8,036               9,321
Acquisition related.......................................................          3,192               4,177
Customer programs.........................................................          2,638               2,124
Accrued interest..........................................................          2,950               2,914
VAT/Sales tax payables....................................................          2,196               3,097
Other.....................................................................         21,290              13,687
                                                                                 --------            --------
                                                                                 $116,676            $149,519
                                                                                 ========            ========

OTHER NONCURRENT LIABILITIES
<S>                                                                               <C>                <C>
Employee benefit programs.................................................       $ 25,765            $ 30,034
Insurance.................................................................          3,583               5,192
Acquisition related.......................................................          7,101               8,054
Preferred dividend payable................................................          3,083                 963
Other.....................................................................          7,215               8,157
                                                                                 --------            --------
                                                                                 $ 46,747            $ 52,400
                                                                                 ========            ========
</TABLE>


         INSURANCE CLAIMS. Certain of the Company's insurance programs,
primarily workers' compensation, public liability and property damage, and
cargo loss and damage, are subject to substantial deductibles or
retrospective adjustments. Accruals for insurance claims, except for cargo
claims, are estimated for the ultimate cost of unresolved and unreported
claims pursuant to actuarial determination. Cargo claims are accrued for
based on the Company's historical claims experience and management's judgment.

         ACQUISITION RESERVES. In conjunction with the Company's 1996
acquisitions, the Company recorded certain acquisition reserves related to the
closure of duplicate administrative and warehouse facilities, consolidation of
redundant business systems, and reduction of personnel performing duplicate
tasks. Estimated termination benefits include approximately $3,800 for
severance, wage continuation, medical and other benefits for approximately 200
employees. Facility closures and related costs include estimated net losses on
disposal of property, plant and equipment, lease payments and related costs of
$3,900. Approximately $1,600 was accrued for all other consolidation, relocation
and related activities. In 1997, the Company adjusted certain of these reserves
and recorded additional reserves in connection with the acquisition of LIW
relating to redundant office facilities ($1,300), terminations and relocations
of approximately 40 people ($2,600) and facility closures ($4,600). All costs
were accrued as part of the purchase accounting in accordance with approved
management plans. In 1998, the Company utilized $8,600 of reserves recorded in
the acquisitions previously discussed and recorded additional reserves of $300
for facility closures relating to the CAS acquisition and $600 for redundant
facilities relating to the LIW Acquisition. In 1999, the Company


                                      64
<PAGE>


                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

utilized $1,938 of the aforementioned reserves. As of December 31, 1999, the
remaining acquisition reserves of $10,293 relate primarily to lease
termination costs, litigation reserves, various tax liabilities and
employment termination liabilities.

7. LONG-TERM DEBT

         Long-term debt consists of the following:


<TABLE>
<CAPTION>
                                                                                             DECEMBER 31,
                                                                                        ----------------------
                                                                  INTEREST RATES         1999           1998
                                                                   --------------       --------      --------
<S>                                                               <C>                 <C>            <C>
Senior Notes..................................                               9.75%      $110,000      $110,000
Promissory Notes..............................                       8.25% - 9.50%             -        15,000
Revolving Credit Facility.....................                       8.50% - 9.97%        23,900        49,100
Supplemental Commitment.......................                               9.97%        15,000             -
Capital lease obligations, due in various installments
   through 2003...............................                      5.04% - 18.79%         6,268        10,548

Other.........................................                      4.07% - 14.14%         9,969        11,078
                                                                                        --------      --------
                                                                                         165,137       195,726
Less current portion..........................                                            12,222        12,549
                                                                                        --------      --------
                                                                                        $152,915      $183,177
                                                                                        --------      --------
                                                                                        --------      --------
</TABLE>

The assets under capital leases represent primarily computer equipment with a
net book value as follows:


<TABLE>
<CAPTION>

                                                                                                DECEMBER 31,
                                                                                           ------------------------
                                                                                            1999             1998
                                                                                           -------          -------
<S>                                                                                       <C>              <C>
                 Cost                                                                      $13,269          $11,354
                 Accumulated depreciation                                                   (7,078)          (3,050)
                                                                                           -------          -------

                 Net book value                                                            $ 6,191           $8,304
                                                                                           =======           ======
</TABLE>


         Future minimum payments of the Company's long-term debt (exclusive of
payments for maintenance, insurance, taxes, and other expenses related to
capital leases) as of December 31, 1999 are as follows:

<TABLE>
<CAPTION>

                                                            CAPITAL
                                                             LEASES          DEBT          TOTAL
                                                             ------          ----          -----

<S>                                                         <C>           <C>            <C>
2000..................................................       $4,004        $47,522        $51,526
2001..................................................        2,098            708          2,806
2002..................................................          746            639          1,385
2003..................................................          110              -            110
2004..................................................            -              -              -
Thereafter............................................            -        110,000        110,000
                                                             ------       --------       --------
                                                              6,958        158,869        165,827
Less amounts representing interest                              690              -            690
                                                             ------       --------       --------

                                                             $6,268       $158,869       $165,137
                                                             ======       ========       ========
</TABLE>


         SENIOR NOTES: In October 1997 the Company issued $110,000 in aggregate
principal amount of its 9 3/4 % Senior Notes (the "Notes") which are due October
15, 2007, and are general unsecured obligations of the Company. The Notes are
fully and unconditionally guaranteed on a


                                      65
<PAGE>


                            GEOLOGISTICS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


joint and several senior basis by all existing and future domestic Restricted
Subsidiaries (as defined in the indenture relating to the Notes). Three of the
Company's domestic subsidiaries hold as their sole assets all of the issued and
outstanding equity interests of the Company's non-guarantor foreign
subsidiaries. The Notes are subject to various covenants, including, limitations
on additional indebtedness, restricted payments, dividends and payment
restrictions on the ability of the Company's subsidiaries to pay dividends. The
Notes may not be redeemed at the option of the Company prior to October 15,
2002, except in connection with one or more public equity offerings by the
Company. Upon the occurrence of a Change of Control, the holders of the Notes
would have the right to require the Company to purchase their Notes at a price
equal to 101% of the then outstanding aggregate principal amount thereof, plus
accrued and unpaid interest to the date of purchase.

         The following is condensed combined financial information of guarantor
and non-guarantor subsidiaries for 1999, 1998 and 1997:



                                      66

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                                       BALANCE SHEET AS OF DECEMBER 31, 1999
------------------------------------------------------------------------------------------------------------------------------------
                                                  PARENT         GUARANTOR         NON-GUARANTOR
                                                  COMPANY       SUBSIDIARIES        SUBSIDIARIES        ELIMINATIONS      COMBINED

------------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>               <C>                   <C>               <C>             <C>
    Cash and cash equivalents................        $ 1,621           $(2,365)             $  3,372         $       -      $  2,628
------------------------------------------------------------------------------------------------------------------------------------
    Accounts receivable trade, net...........         (1,023)           79,275               209,285           (42,045)      245,492
------------------------------------------------------------------------------------------------------------------------------------
    Property, net............................          1,766             19,427               54,790                  -       75,983
------------------------------------------------------------------------------------------------------------------------------------
    Intangible assets, net...................          6,496             45,467                4,267              (945)       55,285
------------------------------------------------------------------------------------------------------------------------------------
    Other assets.............................        195,841              6,076              335,402          (469,051)       68,268
                                                     -------           --------             --------         ----------     --------
------------------------------------------------------------------------------------------------------------------------------------
      Total assets...........................       $204,701           $147,880             $607,116         $(512,041)     $447,656
                                                    ========           ========             ========         ==========     ========
------------------------------------------------------------------------------------------------------------------------------------
   Current liabilities.......................        $ 6,933           $ 91,447             $239,185         $ (45,278)     $292,287
------------------------------------------------------------------------------------------------------------------------------------
    Long-term debt...........................        149,154                867                2,894                  -      152,915
------------------------------------------------------------------------------------------------------------------------------------
    Other non-current liabilities............         17,125             81,777              126,956          (177,024)       48,834
------------------------------------------------------------------------------------------------------------------------------------
    Stockholders' equity (deficit)...........         31,489            (26,211)             238,081          (289,739)     (46,380)
                                                     -------           --------             --------         ----------     --------
------------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and

        Stockholders' equity (deficit).......       $204,701           $147,880             $607,116         $(512,041)     $447,656
                                                    ========           ========             ========         ==========    ========
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>

 -----------------------------------------------------------------------------------------------------------------------------------
                                                           STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999

 -----------------------------------------------------------------------------------------------------------------------------------
                                                  PARENT         GUARANTOR         NON-GUARANTOR
                                                  COMPANY       SUBSIDIARIES        SUBSIDIARIES       ELIMINATIONS       COMBINED
 -----------------------------------------------------------------------------------------------------------------------------------

 -----------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>           <C>               <C>                  <C>              <C>
     Revenues.................................       $  -           $596,031           $1,116,804         $(154,631)    $1,558,204
 -----------------------------------------------------------------------------------------------------------------------------------
     Transportation and other direct                    -            465,479              884,462          (154,631)     1,195,310
       costs..................................
 -----------------------------------------------------------------------------------------------------------------------------------
     Operating expenses.......................     13,188            156,666              228,215                -         398,069
 -----------------------------------------------------------------------------------------------------------------------------------
     Restructuring and other non-
     recurring charges                              2,213              9,872                6,912                -          18,997
 -----------------------------------------------------------------------------------------------------------------------------------
     Asset impairment charges.................      2,152              5,926                3,810                -          11,888
                                                ---------           ---------            --------        ----------      ---------
 -----------------------------------------------------------------------------------------------------------------------------------
    Operating loss............................   (17,553)            (41,912)              (6,595)               -         (66,060)
 -----------------------------------------------------------------------------------------------------------------------------------
     Gain on sale of business.................         -              68,920                    -                -          68,920
 -----------------------------------------------------------------------------------------------------------------------------------
     Interest and other, net..................    (4,092)            (15,371)              (4,372)               -         (23,835)
 -----------------------------------------------------------------------------------------------------------------------------------
     Income tax provision.....................     1,537              25,132                  589                -          27,258
 -----------------------------------------------------------------------------------------------------------------------------------
     Minority interests.......................         -                   -                1,478                -           1,478
                                                ---------           ---------            --------        ----------      ---------
 -----------------------------------------------------------------------------------------------------------------------------------
        Net (loss) income.....................  $(23,182)           $ (13,495)           $(13,034)       $       -       $ (49,711)
                                                =========           =========            ========        ==========      =========
 -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
 -----------------------------------------------------------------------------------------------------------------------------------

                                                             STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999

 -----------------------------------------------------------------------------------------------------------------------------------
 -----------------------------------------------------------------------------------------------------------------------------------
                                                  PARENT         GUARANTOR         NON-GUARANTOR
                                                  COMPANY       SUBSIDIARIES        SUBSIDIARIES       ELIMINATIONS      COMBINED
<S>                                              <C>            <C>                 <C>               <C>                <C>
 -----------------------------------------------------------------------------------------------------------------------------------
       Cash flows from:

    --------------------------------------------------------------------------------------------------------------------------------
          Operating activities.................  $ 21,741       $(99,028)           $ (2,187)         $          -        $(79,474)
    --------------------------------------------------------------------------------------------------------------------------------
          Investing activities:

    --------------------------------------------------------------------------------------------------------------------------------
         Purchases of property and
           equipment, net......................     6,928         (6,293)             (7,426)                    -          (6,791)

    --------------------------------------------------------------------------------------------------------------------------------
          Proceeds from sale of business.......         -        102,704                    -                    -         102,704
                                                  -------       --------              -------           ----------        --------
    --------------------------------------------------------------------------------------------------------------------------------
      Net investing ...........................     6,928         96,411              (7,426)                    -          95,913

    --------------------------------------------------------------------------------------------------------------------------------
        Financing activities:

    --------------------------------------------------------------------------------------------------------------------------------
        Debt transactions, net.................   (26,844)        (2,282)             (1,418)                    -         (30,544)

    --------------------------------------------------------------------------------------------------------------------------------
        Equity transactions, net...............      (231)             -                   -                     -            (231)

    --------------------------------------------------------------------------------------------------------------------------------
        Dividend payments to minority
          interests............................          -             -              (3,766)                    -          (3,766)
                                                   -------       -------              ------            ----------        --------
    --------------------------------------------------------------------------------------------------------------------------------
       Net financing...........................    (27,075)       (2,282)             (5,184)                    -         (34,541)
    --------------------------------------------------------------------------------------------------------------------------------
        Effect of exchange rate
         changes in cash and
         cash equivalents......................          -             -               5,578                     -           5,578
                                                   -------       -------              ------            ----------        --------
    --------------------------------------------------------------------------------------------------------------------------------
       Net increase (decrease) in cash
         and cash equivalents..................      1,594        (4,899)             (9,219)                    -         (12,524)
    --------------------------------------------------------------------------------------------------------------------------------
       Cash and cash equivalents,
        beginning of year......................         27         2,534              12,591                     -          15,152
                                                    -------      -------              ------            ----------        --------
    --------------------------------------------------------------------------------------------------------------------------------
       Cash and cash equivalents, end of year..     $1,621        $(2,365)            $3,372               $     -        $  2,628
                                                   =======        ========            ======            ==========        ========
    --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      67

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)



<TABLE>
<CAPTION>

------------------------------------------------------------------------------------------------------------------------------------
                                                                       BALANCE SHEET AS OF DECEMBER 31, 1998

------------------------------------------------------------------------------------------------------------------------------------
                                                  PARENT         GUARANTOR         NON-GUARANTOR
                                                  COMPANY       SUBSIDIARIES        SUBSIDIARIES        ELIMINATIONS      COMBINED

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

------------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>              <C>                <C>                    <C>           <C>
    Cash and cash equivalents................           $ 27             $2,534             $ 12,591         $       -     $ 15,152
------------------------------------------------------------------------------------------------------------------------------------
    Accounts receivable trade, net...........              -            102,545              197,814           (33,312)     267,047
------------------------------------------------------------------------------------------------------------------------------------
    Property, net............................         10,761             22,499               61,994                 -       95,254
------------------------------------------------------------------------------------------------------------------------------------
    Intangible assets, net...................          9,372             78,902                3,971              (971)      91,274
------------------------------------------------------------------------------------------------------------------------------------
    Other assets.............................        221,628             33,138              334,945          (509,260)      80,451
                                                    --------           --------             --------         ---------     --------
------------------------------------------------------------------------------------------------------------------------------------
      Total assets...........................       $241,788           $239,618             $611,315         $(543,543)    $549,178
                                                    ========           ========             ========         =========     =========
------------------------------------------------------------------------------------------------------------------------------------

    Current liabilities......................         $5,283           $116,010             $224,114         $ (35,703)    $309,704
------------------------------------------------------------------------------------------------------------------------------------
    Long-term debt...........................        175,361              2,809                5,007                 -      183,177
------------------------------------------------------------------------------------------------------------------------------------
    Other non-current liabilities............          6,156            137,932              125,134          (214,441)      54,781
------------------------------------------------------------------------------------------------------------------------------------
    Stockholders' equity (deficit)...........         54,988            (17,133)             257,060          (293,399)       1,516
                                                    --------           --------             --------         ---------     --------
------------------------------------------------------------------------------------------------------------------------------------
     Total liabilities and
        Stockholders' equity (deficit).......       $241,788           $239,618             $611,315         $(543,543)     $549,178
                                                    ========           ========             ========         ==========     ========
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
 -----------------------------------------------------------------------------------------------------------------------------------
                                                            STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1998

 -----------------------------------------------------------------------------------------------------------------------------------
 -----------------------------------------------------------------------------------------------------------------------------------
                                                    PARENT           GUARANTOR         NON-GUARANTOR
                                                    COMPANY         SUBSIDIARIES        SUBSIDIARIES       ELIMINATIONS     COMBINED
<S>                                                 <C>             <C>                <C>                 <C>            <C>
 -----------------------------------------------------------------------------------------------------------------------------------
     Revenues.................................          $ -           $635,209           $1,016,117         $(124,573)   $1,526,753
 -----------------------------------------------------------------------------------------------------------------------------------
     Transportation and other direct
       costs..................................            -            493,472              785,634          (124,573)    1,154,533
 -----------------------------------------------------------------------------------------------------------------------------------
    Operating expenses.......................        11,345            157,702              215,347                 -       384,394
                                                    --------           --------              -------        ---------      ---------
 -----------------------------------------------------------------------------------------------------------------------------------
    Operating profit (loss)...................      (11,345)           (15,965)              15,136                 -       (12,174)
 -----------------------------------------------------------------------------------------------------------------------------------
     Interest and other, net..................       (2,654)           (12,892)              (1,652)                -       (17,198)
 -----------------------------------------------------------------------------------------------------------------------------------
     Income tax benefit (provision)...........        4,899             (7,446)              (5,182)                -        (7,729)
 -----------------------------------------------------------------------------------------------------------------------------------
     Minority interests.......................            -                  -                 (932)                -          (932)
                                                    --------           --------              -------        ---------      ---------
 -----------------------------------------------------------------------------------------------------------------------------------
        Net (loss) income.....................      $(9,100)          $(36,303)             $ 7,370         $       -      $(38,033)
                                                    ========          =========             ========        =========      =========
 -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
 -----------------------------------------------------------------------------------------------------------------------------------
                                                              STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1998

 -----------------------------------------------------------------------------------------------------------------------------------
                                                    PARENT           GUARANTOR        NON-GUARANTOR
                                                    COMPANY        SUBSIDIARIES       SUBSIDIARIES       ELIMINATIONS    COMBINED

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

    --------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>           <C>                 <C>               <C>              <C>
       Cash flows from:

    -------------------------------------------------------------------------------------------------------------------------------
          Operating activities.................       $(20,353)      $(27,962)         $ 4,268              $117     $(43,930)
    --------------------------------------------------------------------------------------------------------------------------------
          Investing activities:

    --------------------------------------------------------------------------------------------------------------------------------
         Purchases of property and
           equipment, net......................         (5,728)       (19,136)          (9,156)                -      (34,020)
    -------------------------------------------------------------------------------------------------------------------------------
          Business acquisitions................               -       (27,133)               -                 -      (27,133)
                                                      ---------        -------         --------             ------   ----------
    --------------------------------------------------------------------------------------------------------------------------------
      Net investing                                     (5,728)       (46,269)          (9,156)                -      (61,153)
    --------------------------------------------------------------------------------------------------------------------------------
        Financing activities:
    --------------------------------------------------------------------------------------------------------------------------------
        Debt transactions, net.................         (1,504)        74,489           (5,734)             (117)      67,134
    --------------------------------------------------------------------------------------------------------------------------------
        Equity transactions, net...............          17,796             -                -                 -       17,796
    --------------------------------------------------------------------------------------------------------------------------------
        Dividend payments to minority
          interests............................               -             -             (803)                -         (803)
                                                      ---------        -------         --------             ------   ----------
    --------------------------------------------------------------------------------------------------------------------------------
       Net financing                                     16,292        74,489           (6,537)             (117)      84,127
                                                      ---------        -------         --------             ------   ----------
        Effect of exchange rate
         changes in cash and
         cash equivalents......................           2,238             -           (4,039)                -       (1,801)
                                                      ---------        -------         --------             ------   ----------
    --------------------------------------------------------------------------------------------------------------------------------
       Net increase (decrease) in cash and
         cash equivalents......................         (7,551)           258          (15,464)                -      (22,757)
    --------------------------------------------------------------------------------------------------------------------------------
       Cash and cash equivalents,
        beginning of year......................           7,578         2,276           28,055                 -       37,909
                                                      ---------        -------         --------             ------   ----------
    --------------------------------------------------------------------------------------------------------------------------------
       Cash and cash equivalents, end of  year

                                                           $ 27        $2,534          $12,591               $ -      $15,152
                                                      =========        =======         ========             =======  ==========
    --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      68
<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                              STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997

------------------------------------------------------------------------------------------------------------------------------------
                                                    PARENT         GUARANTOR         NON-GUARANTOR
                                                    COMPANY       SUBSIDIARIES        SUBSIDIARIES       ELIMINATIONS       COMBINED
<S>                                                <C>            <C>                  <C>               <C>              <C>
------------------------------------------------------------------------------------------------------------------------------------
     Revenues.................................       $     -           $661,201             $367,377          $(50,329)     $978,249
------------------------------------------------------------------------------------------------------------------------------------
     Transportation and other direct
       costs..................................             -            519,892              289,486           (50,329)      759,049
------------------------------------------------------------------------------------------------------------------------------------
     Operating expenses.......................         2,917            159,664               72,550                  -      235,131
                                                     -------            -------               ------          ---------      -------
------------------------------------------------------------------------------------------------------------------------------------
    Operating profit (loss)...................       (2,917)           (18,355)                5,341                  -     (15,931)
------------------------------------------------------------------------------------------------------------------------------------
     Interest and other, net..................         (735)            (7,016)              (1,036)                  -      (8,787)
------------------------------------------------------------------------------------------------------------------------------------
     Income tax benefit (provision)...........        1,410              8,612               (1,602)                  -        8,420
------------------------------------------------------------------------------------------------------------------------------------
     Minority interests.......................            -                  -               (1,067)                  -      (1,067)
------------------------------------------------------------------------------------------------------------------------------------
    Extraordinary loss........................       (1,666)              (420)                (207)                  -      (2,293)
                                                    --------          ---------              -------               ----    ---------
------------------------------------------------------------------------------------------------------------------------------------
        Net (loss) income.....................      $(3,908)          $(17,179)              $ 1,429               $  -    $(19,658)
                                                    ========          =========              =======               ====    =========
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
                                                              STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1997

------------------------------------------------------------------------------------------------------------------------------------
                                                      PARENT         GUARANTOR         NON-GUARANTOR
                                                      COMPANY       SUBSIDIARIES        SUBSIDIARIES       ELIMINATIONS    COMBINED
<S>                                                   <C>           <C>               <C>                 <C>             <C>
------------------------------------------------------------------------------------------------------------------------------------
       Cash flows from:
    --------------------------------------------------------------------------------------------------------------------------------
       Operating activities....................         $ 2,996          $ (8,116)            $ (2,568)         $(61)     $ (7,749)
    --------------------------------------------------------------------------------------------------------------------------------
       Investing activities:
    --------------------------------------------------------------------------------------------------------------------------------
         Business acquisitions - net:                  (14,470)                 -                    -             -       (14,470)
    --------------------------------------------------------------------------------------------------------------------------------
         Purchases of property and
           equipment, net......................         (4,715)             1,937              (1,421)             -       (4,199)
    --------------------------------------------------------------------------------------------------------------------------------
       Financing activities:
    --------------------------------------------------------------------------------------------------------------------------------
        Debt transactions, net.................          21,672             5,238                9,315             61        36,286
    --------------------------------------------------------------------------------------------------------------------------------
        Equity transactions, net...............           2,034                 -                    -              -         2,034
                                                      ---------            ------              --------           ---       --------
    --------------------------------------------------------------------------------------------------------------------------------
        Net financing..........................          23,706             5,238                 9,315            61        38,320
    --------------------------------------------------------------------------------------------------------------------------------
        Effect of exchange rate
         changes in cash and
         cash equivalents......................               -                  -                   395            -           395
                                                      ---------            ------              --------           ---       --------
    --------------------------------------------------------------------------------------------------------------------------------
       Net increase (decrease) in cash and
         cash equivalents......................           7,517              (941)                5,721             -        12,297
    --------------------------------------------------------------------------------------------------------------------------------
       Cash of acquired companies..............               -                 -                22,188             -        22,188
    --------------------------------------------------------------------------------------------------------------------------------
       Cash and cash equivalents,

        Beginning of year......................              61              3,217                  146             -         3,424
                                                      ---------            ------              --------           ---       --------
    --------------------------------------------------------------------------------------------------------------------------------
       Cash and cash equivalents, end of  year

                                                         $7,578            $ 2,276              $28,055           $  -      $ 37,909
                                                      =========            =======             ========           ====      ========
    --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      69
<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)





         The indenture relating to the Company's Senior Notes generally provides
that, subject to certain exceptions, the Company not incur indebtedness unless
on the date of such incurrence the consolidated coverage ratio of the Company
exceeds 2.25 to 1.0 and that the restricted subsidiaries of the Company may not
incur indebtedness unless on the date of such incurrence the consolidated
coverage ratio of the Company exceeds 2.5 to 1.0. The indenture permits the
Company to incur up to $115,000 of total indebtedness (consisting of $100,000 of
bank debt and $15,000 of other debt) notwithstanding the Company's inability to
meet the consolidated coverage ratio test. As of December 31, 1999, the Company
had incurred $3,300 of other debt and would have been able to incur an
additional $11,700 of other debt pursuant to the terms of the indenture. In
addition, the indenture permits the Company to incur up to $30,000 under its
foreign credit facilities notwithstanding the Company's inability to meet the
consolidated coverage ratio test. As of December 31, 1999, the Company had
incurred $12,900 of indebtedness under its foreign credit facilities and, as of
such date, would have been able to incur an additional $17,100 of indebtedness
under such facilities in compliance with the terms of the indenture.

         The Company's indenture related to the Senior Notes contain certain
restrictive covenants. These restrictive covenants include limitations related
to the maintenance of networth indebtedness, restricted payments, sales of
assets and subsidiary stock, transactions with affiliates, provisions relating
to changes of control, liens, sale or issuance of capital stock of restricted
subsidiaries, sale/leaseback transactions, and restrictions on mergers,
consolidation and sales of assets.

         PROMISSORY NOTES: In July, 1998 the Company borrowed $15,000 pursuant
to a term loan executed by and among the Company and ING (U.S.) Capital
Corporation. The loan was unsecured and was evidenced by promissory notes in
aggregate principal amount of $15,000 due March 31, 2000 (the "Promissory
Notes"). Borrowings under the facility were guaranteed by certain direct and
indirect subsidiaries of the Company, each of which was either a borrower or
guarantor under the Company's existing loan agreement or its 9 3/4% Senior Notes
due 2007. In February 1999, the Promissory Notes were repaid with borrowings
incurred by the Company pursuant to Amendment No. 3 to Amended and Restated Loan
Agreement discussed below.

         REVOLVING CREDIT FACILITY. At December 31, 1999, $23,900 was
outstanding under the Facility and the Company had an eligible borrowing base of
$50,500. Letters of credit of $9,800 were outstanding, leaving approximately
$16,800 of unused availability under the facility. Interest on the facility
accrues at either the prime rate or LIBOR plus an applicable interest margin. At
December 31, 1999, the floating margin rate was 2.00% for prime rate loans and
3.50% for LIBOR loans.

         The credit facility contains certain covenants and restrictions on
actions by the Company including, without limitation, restrictions on
indebtedness, liens, guarantee obligations, mergers, creation or dissolution of
subsidiaries, asset dispositions not in the ordinary course of business,
investments, acquisitions, loans, advances, dividends and other restricted
junior payments, transactions with affiliates, sale and leaseback transactions,
prepayment of or amendments to junior obligations, entering other lines of
business and amendments of other indebtedness.

         On February 26, 1999, the Company executed an amendment to its bank
credit facility (the "February Amendment"). The February Amendment, among other
things, (a) included covenants that were required due to pending results of the
Company, (b) provided for an additional $30,500 commitment ("Supplemental
Commitment") by one of the Company's existing lenders, (c) required the obligors
under the bank credit facility to grant a security interest in all of

                                      70

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)





their personal property, including all trademarks and other intangibles, to the
extent not already included in the collateral, and certain property to secure
the loans under the bank credit facility and (d) increased the margins
applicable to Eurodollar and base rate loans based on specified funded debt
ratios.

         As a result of the disposition of GLAS in September 1999 (see Note 3)
the Company, together with its guarantor subsidiaries entered into an amendment
to the revolving credit agreement ("the September Amendment"). Among other
changes, the September Amendment provided for (a) reductions in credit
availability from $100,000 to $50,500 in the aggregate (b) reductions in the
percentage of eligible accounts receivable that qualify for the U.S. and United
Kingdom borrowing base which affect the Company's ability to incur debt under
the revolving credit facility, (c) the change in the maturity date to March 31,
2000, (d) the reduction of the Supplemental Commitment from $30,000 to $15,000
and (e) the amendment of the EBITDA covenant and the elimination of the interest
coverage ratio covenant. Amounts outstanding related to the Supplemental
Commitment and Revolving Credit Facility were repaid subsequent to December 31,
1999 with borrowings incurred pursuant to the New Revolver.

         NEW REVOLVER. On March 31, 2000, the Company borrowed against a new
Loan and Security Agreement (the "New Revolver") with Congress Financial
Corporation (Western), a subsidiary of First Union Bank (the "Lender"). The
three-year New Revolver provides for maximum borrowings of $90,000 and is
comprised of three separate agreements, one in each of the United States,
Canada and the United Kingdom. This facility replaces the credit facility in
place at December 31, 1999 by and among the Company and ING (U.S.) Capital
Corporation and the lenders party thereto. The Company expects that the New
Revolver will provide a sufficient level of flexibility and capacity to allow
for the completion of the aforementioned restructuring. In addition, the
significant reduction in associated fees and borrowing costs in comparison to
the existing facility will assist the Company in achieving improved financial
performance.

         The three agreements making up the New Revolver involve four
borrowers in the United States and the operating companies in both the United
Kingdom and Canada. The four borrowers in the United States are comprised of
Bekins Worldwide Solutions, Bekins Van Lines, GeoLogistics Services and
GeoLogistics Americas. The individual agreement credit levels are $50,000 in
the United States, $15,000 in Canada and $25,000 in the United Kingdom. The
agreements allow for a maximum increase or decrease of $5,000 in the United
States facility with a corresponding decrease or increase in the Canadian
facility. Such adjustments are limited to once per quarter. The maximum
amount that can be borrowed is equal to 85% of eligible billed receivables
plus 65% of eligible unbilled or accrued receivables as defined in the
agreement plus 100% of the face amount of letters of credit provided by
affiliates of stockholders.

         Interest rate spreads are set according to levels of the Company's
EBITDA on a trailing twelve-month basis. These spreads are set at 0.25% over
prime for such borrowings and 2.75% over LIBOR for eurodollar borrowings until
the first such test period which will be the twelve months ended September 30,
2000 and quarterly thereafter. Applicable spreads can range from 0% to 0.5% on
prime borrowings and from 2.5% to 3.0% for eurodollar borrowings.

         Collateral liens on accounts receivable as well as general and specific
liens on other assets of the Company are provided to the Lender. Financial
covenant tests will be restricted to minimum net worth tests for GeoLogistics
Corporation and the Borrower group taken as a whole.

         The facility has a letter of credit sub-limit of $30,000 and places
certain restrictions on the Company and its borrower subsidiaries in the areas
of asset sales, additional liens, additional indebtedness, investments,
dividends and affiliate transactions. Management does not believe that these
restrictions will impair the Company's ability to perform or reach

                                      71

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)



performance goals.

Additional information on the Company's borrowings is as follows:


<TABLE>
<CAPTION>

                                                                                            YEAR ENDED DECEMBER 31,
                                                                                         ------------------------------
                                                                                          1999           1998
                                                                                         --------       --------
<S>                                                                                      <C>            <C>
Average balance outstanding............................                                  $206,446       $158,229
Maximum balance outstanding............................                                   245,518        185,178
Weighted average interest rate.........................                                     9.87%          9.42%
</TABLE>

8.  INCOME TAXES

The Company and its U.S. subsidiaries file their federal income tax return on a
consolidated basis. At December 31, 1999, the Company's U.S. net operating loss
("NOL") carryforwards available to offset future taxable income were
approximately $55,000, which expire in 2009 through 2019. The availability of
tax benefits of such NOL carryforwards to reduce the Company's federal income
tax liabilities is subject to various limitations under the Internal Revenue
Code of 1986, as amended (the "Code"). In addition, at December 31, 1999,
various foreign subsidiaries of the Company have aggregate NOL carryforwards for
foreign income tax purposes of approximately $150,000, which are subject to
significant restrictive provisions in certain countries. Approximately $18,000
of the foreign NOL's expire between 2000 and 2006 and $132,000 have an
indefinite life. Management believes that the realization of the entire net
deferred tax asset is uncertain and has established a valuation allowance due to
such uncertainty.

         No provision was made at December 31, 1999 for accumulated earnings of
certain overseas subsidiaries because it is expected that such earnings will be
reinvested overseas indefinitely.

         Domestic loss from operations before income taxes, minority
interests and extraordinary loss was approximately $12,800, $38,500 and
$27,700 for the years ended December 31, 1999, 1998, and 1997 respectively.
Foreign income (loss) before income taxes, minority interests and
extraordinary loss was $(8,200), $9,100 and $3,000 for the years ended
December 31, 1999, 1998, and 1997, respectively.

         The following summarizes the effect of deferred income tax items and
the impact of temporary differences between amounts of assets and liabilities
for financial reporting purposes and such amounts as measured by tax laws.
Temporary differences and loss carryforwards comprising the net deferred tax
asset are as follows:

<TABLE>
<CAPTION>

                                                                                                DECEMBER 31,
                                                                                         -----------------------
                                                                                             1999           1998
                                                                                         --------       --------
<S>                                                                                      <C>            <C>
Deferred tax assets:
   Net operating loss carry-forwards.............................................        $ 89,791       $ 85,362
   Insurance reserves............................................................           3,674          4,477
   Allowance for doubtful accounts...............................................           3,443          4,884
   Property and equipment........................................................           3,959          1,343
   Other assets..................................................................          12,953          8,598
                                                                                         --------       --------
Gross deferred tax assets........................................................         113,820        104,664
                                                                                         --------       --------
Deferred tax liabilities:
   Property and equipment........................................................           1,567            462
   Other intangible assets.......................................................           6,853            930
   Other liabilities.............................................................           1,752            764
                                                                                         --------       --------
Gross deferred tax liabilities...................................................          10,172          2,156
Valuation allowance..............................................................        (102,740)       (76,095)
                                                                                         --------       --------
Net deferred tax assets..........................................................        $    908       $ 26,413
                                                                                         ========       ========
</TABLE>

                                      72

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


         In determining the deferred tax valuation allowance at December 31,
1998, the Company has utilized certain tax planning strategies that it
considered to be prudent and feasible.

         Income tax expense (benefit), exclusive of the extraordinary losses,
was comprised of:

<TABLE>
<CAPTION>

                                                            YEAR ENDED DECEMBER 31,
                                                  --------------------------------------
                                                     1999           1998            1997
                                                  -------        -------        --------
<S>                                               <C>            <C>            <C>
Current

  Federal...........................              $  (339)        $    -        $      -
  State.............................                   60            343             559
  Foreign...........................                2,032          6,867           1,091
                                                  -------         ------        --------
     Total current tax expense                      1,753          7,210           1,650

Deferred

  Federal...........................               17,024              -          (8,403)
  State.............................                2,524              -          (2,039)
  Foreign...........................                5,957            519             372
                                                  -------         ------        --------
     Total deferred tax expense
       (benefit)....................               25,505            519         (10,070)
                                                  -------         ------        --------
  Total tax expense
   (benefit), net...................              $27,258         $7,729        $ (8,420)
                                                  =======         ======        ========
</TABLE>

Reconciliation of income tax expense (benefit), exclusive of the extraordinary
losses, to the statutory corporate Federal tax rate of 35% were as follows:

<TABLE>
<CAPTION>
                                                         YEAR ENDED DECEMBER 31,
                                                -----------------------------------------
                                                    1999            1998            1997
                                                --------        --------        ---------
<S>                                             <C>             <C>             <C>
Statutory tax benefit...............            $ (7,341)       $(10,281)       $ (9,026)
Effects of:
   Non-deductible expenses..........                 925             725             851
   Foreign income taxed at
   various rates....................               6,296             801            (370)
   State income taxes, net of
   Federal benefit..................                 (70)            223          (1,388)
   Increase in valuation allowance..              25,505          14,148               -
Other, net..........................               1,943           2,113           1,513
                                                --------        --------        --------
                                                $ 27,258        $  7,729        $ (8,420)
                                                ========        ========        ========
</TABLE>


9. COMMITMENTS AND CONTINGENCIES

         OPERATING LEASES. The Company leases facilities and equipment under
noncancelable operating leases which expire at various dates through 2017. Net
rental expense for the years ended December 31, 1999, 1998 and 1997 was
approximately $34,400, $33,900 and $18,400, respectively.

Future minimum rental payments due under non-cancelable operating leases at
December 31, 1999 were as follows:

                                      73

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)




<TABLE>
<CAPTION>
<S>                                                                          <C>
2000..................................................................       $ 31,515
2001..................................................................         21,251
2002..................................................................         14,189
2003..................................................................          9,568
2004..................................................................          8,191
Thereafter............................................................         30,488
                                                                             --------
           Total......................................................       $115,202
                                                                             ========
</TABLE>

         LITIGATION AND CONTINGENT LIABILITIES. At December 31, 1999, the
Company is contesting a claim made by Danish Customs and Excise for payment
of customs duties and excise taxes of approximately $5,500 related to alleged
irregularities in connection with a number of historical LIW shipments of
freight out of Denmark. The Company and certain of its subsidiaries are also
defendants in legal proceedings arising in the ordinary course of business
and are subject to unasserted claims.  The Company believes it has
established adequate reserves for the total alleged liabilities. Although the
outcome of these proceedings cannot be determined, it is the opinion of
management, based upon consultation with legal counsel, that the litigation
reserves recorded at December 31, 1999 and 1998 are sufficient to cover
losses which are probable to occur.

10. PENSION PLAN, POST RETIREMENT BENEFITS AND OTHER BENEFITS

         DEFINED BENEFIT PLANS. The Company has a number of defined benefit
pension plans that cover a substantial number of foreign employees. Retirement
benefits are provided based on compensation as defined in the plans. The
Company's policy is to fund these plans in accordance with local practice and
contributions are made in accordance with actuarial valuations.

A reconciliation of the benefit obligation of the foreign plans is as follows:

<TABLE>
<CAPTION>

                                                              December 31,
                                                      -------------------------
CHANGE IN BENEFIT OBLIGATION                             1999            1998
                                                      ---------       ---------
<S>                                                   <C>             <C>
Benefit obligation at beginning of year               $  97,290       $  91,385
Service cost                                              3,235           3,607
Interest cost                                             5,523           6,079
Participant contributions                                   202             202
Amendments                                                  502            --
Actuarial (gains) losses                                   (199)          2,200
Benefits paid                                            (8,109)         (4,555)
Foreign exchange                                         (5,413)         (1,628)
                                                      ---------       ---------
Benefit obligation at end of year                     $  93,031       $  97,290
                                                      =========       =========
</TABLE>

A reconciliation of the plan assets is as
follows:









<TABLE>
<CAPTION>

     CHANGE IN PLAN ASSETS
                                                             December 31,
                                                      ------------------------
                                                           1999           1998
                                                      ---------      ---------
<S>                                                   <C>            <C>
     Fair value of plan assets at beginning of year   $  95,734      $  82,935
     Actual return on plan assets                        13,439         13,002
     Company contributions                                2,827          2,911
     Benefits paid                                       (7,274)        (3,746)
     Foreign exchange                                    (3,021)           632
                                                      ---------      ---------
     Fair value of plan assets at end of year         $ 101,705      $  95,734
                                                      =========      =========
</TABLE>

                                      74

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>

<S>                                                   <C>          <C>

     Funded status of the plan                        $   8,674    $  (1,556)
     Unrecognized net actuarial gain                    (16,282)      (9,604)
     Unrecognized prior service cost                        516        1,178
     Unrecognized net transition obligation                 128         --
                                                      ---------    ---------
     Accrued benefit cost, net                        $  (6,964)   $  (9,982)
                                                      =========    =========
</TABLE>

The components of net periodic pension cost and the significant assumptions for
the foreign plans were as follows:

<TABLE>
<CAPTION>
                                           Year Ended December 31,
                                      -------------------------------
                                         1999        1998        1997
                                      -------     -------     -------
<S>                                   <C>         <C>         <C>
Service cost                          $ 3,235     $ 3,607     $   756
Interest cost                           5,523       6,079       1,443
Expected return on plan assets         (6,305)     (7,297)     (1,487)
Net amortization and deferral            (110)        460         323
                                      -------     -------     -------
Benefits cost                         $ 2,343     $ 2,849     $ 1,035
                                      =======     =======     =======

Weighted-average assumptions as of:             December 31,
                                      --------------------------------
                                         1999        1998        1997
                                         ----        ----        ----

Discount rate                            5.98%       6.96%       7.50%
Expected return on plan assets           6.95%       8.40%       7.50%
Rate of compensation increase            3.48%       4.29%       3.75%
</TABLE>

         One foreign pension plan is unfunded and benefits are paid as incurred.
The projected benefit obligation and accumulated benefit obligation for that
plan was $17,905 and $17,509, respectively as of December 31, 1999, and $18,671
and $18,182, respectively, as of December 31, 1998.

         Retirement savings plans are available to substantially all North
American salaried and nonunion hourly employees, which allow eligible employees
to contribute a portion of their annual salaries to the plans. Matching
contributions are made at the discretion of each subsidiary.

         Participants are immediately vested in their voluntary contributions
plus actual earnings thereon. Contributions are subject to various vesting
schedules, ranging from immediate to seven years. Matching contributions were
approximately $1,100, $1,200, and $700, respectively for the years ended
December 31, 1999, 1998 and 1997.

         DEFERRED COMPENSATION PLAN. On July 1, 1996, the Company initiated a
nonqualified deferred compensation plan (the "Plan") for certain key
employees to supplement the retirement savings plans. Under the Plan,
employees sign an irrevocable contribution commitment for a plan year based
on a percentage of their salary. The Company matches this contribution
subject to certain limitations, and agrees to distribute the deferred
compensation, plus investment income, in accordance with the distribution
method selected by the employee. Matching expense of the Company was
approximately $100, $200, and $100 in 1999, 1998 and 1997, respectively.
Employee deferrals and Company match funds have been deposited with a
trustee. The Company has established a trust to hold and invest amounts
contributed pursuant to the Plan. The Company may from time to time, at its
sole discretion, direct the trustee to purchase shares of the Company's common

                                      75
<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

stock (the "Plan Shares"). The Company may, by written action, designate which
employees are entitled to receive Plan Shares. If at any time prior to an
initial public offering, a participant's employment is terminated for any reason
whatsoever, the Company has the option to repurchase any Plan Shares held in
such participant's account. As of December 31, 1999 and 1998, 680 and 3,168 Plan
Shares were held by the Trustee on behalf of participants under the Plan.

         Participants are immediately vested in their voluntary contributions
plus actual earnings thereon. Company contributions are subject to various
vesting schedules, ranging from immediate to three years.

11.        STOCKHOLDERS' EQUITY

         PREFERRED STOCK. On July 13, 1998, the Company sold 11,000 and 4,000
shares of preferred stock to OCM Principal Opportunities Fund L.P., and
Logistical Simon, L.L.C., respectively (the "Investors"), for aggregate
consideration of $14,550. The preferred stock has a liquidation value of $1,000
per share and was sold to the Investors for $970 per share. The holders of the
preferred stock are entitled to payment of quarterly dividends when, as and if
declared by the board of directors of the Company in amounts ranging from $30.00
per share per quarter to $45.00 per share per quarter, which amount shall be
determined based upon the occurrence of certain events that are specified in the
Certificate of Designation relating to the preferred stock. Dividends on the
preferred stock will accrue and be fully cumulative (whether or not declared)
and will bear interest at rates ranging from 14% per annum to 18% per annum,
depending upon the occurrence of certain events that are specified in the
Certificate of Designation. Upon redemption of the preferred stock or
liquidation of the Company, the holders of preferred stock will be entitled to
receive the following for each share of the preferred stock held by such holder:
(i)(a) $1,000, representing the liquidation preference of the preferred stock
plus (b) all accrued and unpaid dividends, whether or not declared multiplied by
(c) the applicable liquidation or redemption premium, and (ii) either ten shares
of common stock of the Company or the amount of the fair market value of ten
shares of common stock of the Company. The preferred stock has no mandatory
redemption feature, and ranks senior to the common stock of the Company for
payment of dividends and upon liquidation, and generally does not have any
voting rights. At December 31, 1999 and 1998, accrued but unpaid dividends were
$3,063 and $963, respectively.

         WARRANTS During the year ended December 31, 1997, fixed price warrants
for the purchase of 333,500 shares of common stock were issued to certain
employees, at exercise prices ranging from $32 to $60 per share, and warrants to
purchase 19,045 shares of common stock were issued in connection with the
purchase of LIW at an exercise price of $45 per share. During the year ended
December 31, 1998, 15,000 warrants were issued to certain employees at an
exercise price of $45 per share. During 1999, 10,000 warrants were issued to one
employee at exercise prices ranging from $52 to $60 per share. All warrants
generally vest ratably over one to four years, although those issued to certain
non-employee entities in connection with the Company's 1996 financings and
acquisition-related activities vested immediately, and warrants issued prior to
January 1, 1997 fully vest upon a registered public offering. All warrants
expire in seven to ten years from the date of issuance.

         The following table presents the warrant activity for the three year
period ending December 31, 1999 in addition to exercisable warrants at December
31, 1999:

                                      76
<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                                 WEIGHTED
                                                                 AVERAGE
                                                   WARRANTS   EXERCISE PRICE
                                                   --------   --------------
<S>                                                <C>        <C>
     Outstanding at December 31, 1996 ....          403,889     $   26.25
     Granted in 1997 .....................          352,545         51.69
     Canceled/forfeited in 1997 ..........          (30,000)        55.67
                                                   --------
     Outstanding at December 31, 1997 ....          726,434     $   37.38
     Granted in 1998 .....................           15,000         45.00
     Canceled/forfeited in 1998 ..........          (45,000)        60.00
                                                   --------
     Outstanding at December 31, 1998 ....          696,434         36.98
     Granted in 1999 .....................           10,000         55.67
     Canceled/forfeited in 1999 ..........         (302,500)        39.67
                                                   --------
     Outstanding at December 31, 1999 ....          403,934     $   36.54
                                                   ========
     Exercisable at:

        December 31, 1999 ................          324,369     $   34.61
                                                   ========
</TABLE>


         The following table presents information relating to warrants
outstanding and exercisable at December 31, 1999, using various ranges of
exercise prices:

<TABLE>
<CAPTION>

        RANGE OF                                               WEIGHTED AVERAGE         WEIGHTED AVERAGE
    EXERCISE PRICES        OUTSTANDING       EXERCISABLE        EXERCISE PRICE          REMAINING YEARS
    ---------------        -----------       -----------        --------------          ---------------
    <S>                    <C>               <C>                <C>                     <C>
        $20-$33              208,206           183,206              $25.48                    3.7
        $37-$45              127,728           102,495              $43.82                    7.9
        $52-$60               68,000            38,668              $53.50                    7.4
</TABLE>

         ACCOUNTING FOR STOCK BASED COMPENSATION. The Company has adopted the
disclosure-only provisions of SFAS  No.123 "Accounting for Stock Based
Compensation", for purposes of warrants issued to employees. Accordingly, no
compensation expense has been recognized for the stock warrants. Had
compensation costs been determined based on the fair value at the grant date
consistent with the provisions of SFAS No.123, the Company's net loss would have
been increased to the pro forma amounts indicated below:

<TABLE>
<CAPTION>

                                                             1999        1998         1997
                                                           -------     -------      -------
<S>                                                        <C>         <C>          <C>
     Net Loss applicable to common stock-as reported....   $51,811     $38,996      $19,658
     Net Loss applicable to common stock-pro forma......    51,885      39,111       19,798
     Net Loss common per share-as reported..............     24.31       18.39         9.59
     Net Loss common per share-pro forma................     24.34       18.45         9.66
</TABLE>

         The fair value of each warrant was estimated on the date of grant using
the minimum value method as a result of the Company's non-public status, zero
volatility of its stock and using risk free interest rates of 5.75% to 6.45%,
expected life of four years and a dividend yield of zero. The proforma effects
presented above are not indicative of future amounts. The Company expects to
grant additional awards in future years.

         EMPLOYEE STOCK PURCHASE PLANS. The Company's Employee Stock Purchase
Plans (the "Purchase Plans") provide certain employees of the Company with the
right to purchase any or all of such employee's allocated portion, as determined
by the Board of Directors of the Company, of an aggregate of 158,500 shares of
common stock of the Company at purchase prices ranging from $20.00 per share to
$30.00 per share. The right to acquire shares of common stock under the Purchase
Plans has terminated. A total of 62 employees purchased an aggregate of 110,417
shares of common stock pursuant to the Purchase Plans.

                                      77
<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

         The Purchase Plans provide that, if at any time prior to an initial
public offering, an employee who has purchased shares under the Purchase
Plans is terminated for any reason whatsoever, including without limitation,
death, disability, resignation, retirement or termination with or without
cause, (i) the Company has an option (a "call") to repurchase, in whole or in
part, the shares of common stock of the Company that are then owned by such
employee or any transferee, which were acquired pursuant to the Purchase
Plans and (ii) the terminated employee has an option (a "put") to sell to the
Company, in whole or in part, the shares of common stock then owned by such
employee which were acquired pursuant to the Purchase Plans. The purchase
price for the exercise of either the call or the put option is based on the
Company's earnings as of the most recently completed fiscal quarter prior to
termination and the number of shares of common stock outstanding and subject
to warrants to the extent such warrants are in the money.

         LONG TERM INCENTIVE PLAN. During 1999, the Company granted 25,000
shares to an employee pursuant to the 1999 Long Term Incentive Plan. During
the term of the plan, grants of up to 100,000 shares can be made at the
discretion of the Board. Vesting periods for granted shares are based on
individual award agreements.

         NOTES RECEIVABLE FROM STOCKHOLDERS. During the period ended December
31, 1996, the Company sold 7,512 shares of common stock to an officer of the
Company in exchange for a note receivable of $150. During 1997, the Company
sold 7,000 shares of common stock to an officer of the Company in exchange
for cash of $52 and a note of $157 and 3,333 shares of common stock to a
management employee of the Company in exchange for $50 cash and a note
receivable of $50. The aforementioned notes were recorded as a reduction of
stockholders' equity and were secured by the issued common stock. As of
December 31, 1999, all notes were paid in full.

         EMPLOYEE STOCK OWNERSHIP. In addition to shares of common stock
issued to employees under the Purchase Plans and the Deferred Compensation
Plan, certain shares of common stock and warrants to purchase shares of
common stock held by employees are required to be repurchased by the Company
under certain circumstances. As of December 31, 1999, the Company had
agreements to purchase an aggregate of 36,500 shares of common stock for
aggregate consideration of $1,953 at various dates through May 1, 2001.
Moreover, the Company had agreements to acquire certain employee warrants and
subsequent to December 31, 1999, the Company paid $1,095 for warrants to
purchase these 42,361 shares of common stock.

12. SEGMENT INFORMATION

         The Company operates in a single business segment providing
worldwide logistics solutions to meet customer's specific requirements for
transportation and related services by arranging and monitoring all aspects
of material flow activities utilizing advanced information technology
systems. No customer accounted for ten percent or more of consolidated
revenue.

         The Company manages its business primarily on a geographic basis.
The Company's reportable geographic segments are comprised of North America,
Europe and Asia. Each geographic segment provides products and services
previously described.

         Accounting policies for each geographic segment are the same as
those described in Note 2, "Summary of Significant Accounting Policies". The
Company evaluates the performance of each geographic segment primarily based
on EBITDA. EBITDA represents earnings before interest, taxes, depreciation
and amortization, asset impairment charges and restructuring and other
non-recurring charges. Corporate expenses are excluded from geographic
segment EBITDA. Corporate expenses are comprised primarily of marketing
costs, incremental information technology costs and other general and
administrative expenses which are separately managed. Geographic segment
assets exclude corporate assets. Corporate assets

                                      78
<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


include cash and cash equivalents, capitalized software development costs and
intangible assets.

Summary information by geographic segment is as follows:

<TABLE>
<CAPTION>

                                              YEAR ENDED DECEMBER 31,
                                      -------------------------------------
                                         1999          1998          1997
                                      ---------     ---------     ---------
<S>                                   <C>           <C>           <C>
North America:
     Total revenues ..............    $ 698,021     $ 742,242     $ 755,116
     Transactions between regions        51,684        58,626        26,918
                                      ---------     ---------     ---------
     Revenues from customers .....      646,337       683,616       728,198
     Net revenues ................      148,095       157,991       157,160
     Restructuring and other non-
       recurring charges .........       12,086            --            --
     Asset impairment charges ....       10,280            --            --
     Depreciation and amortization       14,545        13,806        29,472
     Interest expense ............       22,445        16,543         8,458
     Operating loss ........ .....      (63,525)      (25,093)      (19,721)

Europe:
     Total revenue ...............    $ 721,919     $ 734,915     $ 267,883
     Transactions between regions        89,490       113,018        70,895
                                      ---------     ---------     ---------
     Revenues from customers .....      632,429       621,897       196,988
     Net revenues ................      149,091       157,901        46,051
     Restructuring and other non-
       recurring charges .........        6,911            --            --
     Asset impairment charges ....        1,608            --            --
     Depreciation and amortization        3,469         3,088           777
     Interest expense ............          420           481           118
     Operating income (loss) .....      (10,982)        6,287         1,798

Asia:
     Total revenue ...............    $ 369,572     $ 293,209     $  92,849
     Transactions between regions        90,134        71,969        39,786
                                      ---------     ---------     ---------
     Revenues from customers .....      279,438       221,240        53,063
     Net revenues ................       65,708        56,328        15,989
     Depreciation and amortization        2,007         1,232           149
     Interest expense (income) ...          221           (40)           --
     Operating income ............        8,447         6,632         1,992

</TABLE>

                                      79
<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


         A reconciliation of the Company's geographic segment revenues, net
revenues, EBITDA and assets to the corresponding consolidated amounts as of and
for the years ended December 31, is as follows:

<TABLE>
<CAPTION>
                                                Year Ended December 31,
                                     -------------------------------------------
                                        1999            1998             1997
                                     -----------     -----------     -----------
<S>                                  <C>             <C>             <C>
Revenues:
     North America ..............    $   698,021     $   742,242     $   755,116
     Europe .....................        721,919         734,915         267,883
     Asia .......................        369,572         293,209          92,849
     Eliminations ...............       (231,308)       (243,613)       (137,599)
                                     -----------     -----------     -----------
     Consolidated ...............    $ 1,558,204     $ 1,526,753     $   978,249
                                     ===========     ===========     ===========

Net revenues:

     North America ..............    $   148,095     $   157,991     $   157,160
     Europe .....................        149,091         157,901          46,051
     Asia .......................         65,708          56,328          15,989
                                     -----------     -----------     -----------
     Consolidated ...............    $   362,894     $   372,220     $   219,200
                                     ===========     ===========     ===========
EBITDA (before restructuring and
 other non-recurring charges and
 asset impairment charges for 1999):

     North America ..............    $   (26,614)    $   (11,287)    $     9,751
     Europe .....................          1,006           9,375           2,575
     Asia .......................         10,454           7,864           2,141
                                     -----------     -----------     -----------
     Consolidated ...............    $   (15,154)    $     5,952     $    14,467
                                     ===========     ===========     ===========

Long lived assets:

     North America ..............    $    23,528     $    27,358     $    14,538
     Europe .....................         42,255          48,628          33,349
     Asia .......................          6,908           6,244           6,407
     Corporate ..................          3,292          13,024           5,525
                                     -----------     -----------     -----------
     Consolidated ...............    $    75,983     $    95,254     $    59,819
                                     ===========     ===========     ===========

Assets:

     North America ..............    $   181,231     $   260,694     $   228,694
     Europe .....................        256,876         263,481         249,783
     Asia .......................        100,792          86,119         119,861
     Corporate ..................        423,434         482,429         470,638
     Eliminations ...............       (514,677)       (543,545)       (583,210)
                                     -----------     -----------     -----------
     Consolidated ...............    $   447,656     $   549,178     $   485,766
                                     ===========     ===========     ===========
</TABLE>

For the year ended December 31, 1999, 1998 and 1997, United States revenues
were $605,683, $651,624 and $661,219, respectively. For the year ended
December 31, 1999 and 1998, revenues from the United Kingdom were $225,919
and $223,111, respectively. Long-lived assets for the United States and
United Kingdom as of December 31, 1999 were $64,894 and $5,851, respectively.
Long lived assets for the United States and United Kingdom as of December 31,
1998 were $101,401 and $5,178, respectively. No other countries represented
more than 10% of consolidated revenues in each of 1999, 1998 and 1997.

13. RELATED PARTY TRANSACTIONS

         The Company has entered into agreements with affiliates of its largest
shareholders to

                                      80
<PAGE>

provide the Company with management and financial advisory services relating to
the structuring of the Company's debt agreements and various acquisitions made
by the Company during the past three years. In conjunction with these
activities, the Company paid WESS and OCM affiliates approximately $400 and $300
in 1999, $300 and $400 in 1998, and $1,600 and $1,300 in 1997, respectively.

14.  SUBSEQUENT EVENTS

         On March 31, 2000, the Company borrowed against a new Loan and
Security Agreement (the "New Revolver") with Congress Financial Corporation
(Western), a subsidiary of First Union Bank (the "Lender"). (See Note 7).

                                      81

<PAGE>

                            GEOLOGISTICS CORPORATION

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                     (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

15.  SUMMARY QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (IN THOUSANDS)

The following table summarizes the Company's quarterly financial information:

<TABLE>
<CAPTION>
                                                                        QUARTERS ENDED

                                         MARCH 31,                    JUNE 30,
                                    -----------------------      ---------------------
                                         1999          1998          1999         1998
                                    ---------     ---------      --------     --------
<S>                                <C>            <C>            <C>          <C>
Revenues                            $ 365,329     $ 365,664       395,770     $371,211
Net revenues                           92,036        89,038        94,766       93,357
Selling, general &
  administrative expense               94,708        87,905        95,569       86,725
Restructuring and other
  non-recurring
  charges (C)                               -             -           990            -
Asset impairment
  charges (C)                               -             -             -            -
Depreciation and
  amortization                          4,642         3,813         5,059        3,900
                                    ---------     ---------      --------     --------
Operating profit (loss)                (7,314)       (2,680)       (6,852)       2,732
Income (loss) before
  income taxes and
  minority interests                  (13,033)       (6,127)      (12,729)      (1,012)
Income tax provision
  (benefit)                             1,800        (1,957)         (769)        (279)
                                    ---------     ---------      --------     --------
Loss before minority
  interest                            (14,833)       (4,170)      (11,960)        (733)
Minority interest                        (155)         (158)         (432)        (215)
                                    ---------     ---------      --------     --------
Net loss                              (14,988)       (4,328)      (12,392)        (948)
Preferred stock
  dividend                                525             -           525            -
                                    ---------     ---------      --------     --------
Loss applicable to
  common stock                      $ (15,513)    $  (4,328)     $(12,917)    $   (948)
                                    =========     =========      ========     ========
Net loss per common
  share- basic and diluted          $   (7.30)    $   (2.06)     $  (6.10)    $   (.45)
                                    =========     =========      ========     ========


                                          SEPTEMBER 30,                DECEMBER 31,
                                    -----------------------     -----------------------
                                         1999(A)       1998          1999          1998(B)
                                     --------      --------     ---------     ---------
<S>                                  <C>           <C>          <C>           <C>
Revenues                             $400,020      $387,968     $ 397,085     $ 401,910
Net revenues                           93,875        95,113        82,217        94,712
  Selling, general &
  administrative expense               94,693        91,020        93,078       100,618
Restructuring and other
  non-recurring
  charges (C)                          10,144             -         7,863             -
Asset impairment
  charges (C)                          12,060             -          (172)            -
Depreciation and
  amortization                          5,128         3,847         5,192         6,566
                                     --------      --------     ---------     ---------
Operating profit (loss)               (28,150)          246       (23,744)      (12,472)
Income (loss) before
  income taxes and
  minority interests                   34,097        (4,547)      (29,310)      (17,686)
Income tax provision
  (benefit)                            34,230        (2,267)       (8,003)       12,232
                                     --------      --------     ---------     ---------
Loss before minority
  interest                               (133)       (2,280)      (21,307)      (29,918)
Minority interest                        (371)         (213)         (520)         (346)
                                     --------      --------     ---------     ---------
Net loss                                 (504)       (2,493)      (21,827)      (30,264)
Preferred stock
  dividend                                525           438           525           525
                                     --------      --------     ---------     ---------
Loss applicable to
  common stock                       $ (1,029)     $ (2,931)    $ (22,352)    $ (30,789)
                                     ========      ========     =========     =========
Net loss per common
  share- basic and diluted           $   (.49)     $  (1.38)    $  (10.42)    $  (14.51)
                                     ========      ========     =========     =========
</TABLE>


(A)  The third quarter of 1999 includes a gain on sale of GLAS Assets of
     $68,920.

(B)  The fourth quarter of 1998 includes approximately $11,400 of adjustments in
     Americas relating principally to cartage accruals, the write-off of
     uncollectible accounts receivable and changes in reserve estimates. In
     addition, the fourth quarter was affected by the reversal of tax benefits
     which had been recorded during the first three quarters of 1998 as a result
     of the Company's adjustment of the deferred tax asset valuation allowance.

(C)  The year ended December 31, 1999 included restructuring and other
     non-recurring charges and asset impairment charges of $18,997 and $11,888,
     respectively. No such charges were incurred in 1998. (See Note 4).

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<PAGE>

                            GEOLOGISTICS CORPORATION

          SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                  YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                 Additions
                                       Balance at      --------------------------------
DESCRIPTION                           Beginning of      Charged to                                     Balance at
                                         Year             Income        Acquisitions    Deductions    End of Year
<S>                                    <C>              <C>             <C>             <C>           <C>
Year ended December 31, 1999:
  Allowance for doubtful accounts           21,862          8,100              21         (8,951)        21,032
Year ended December 31, 1998:
  Allowance for doubtful   accounts         17,710         12,197               -         (8,045)        21,862
Year ended December 31, 1997
  Allowance for doubtful accounts            3,675          4,028          13,845         (3,838)        17,710
</TABLE>


                                      83