<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

[MARK ONE]

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

                For the quarterly period ended SEPTEMBER 30, 2001

                                       OR

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

                 For the transition period from ______ to______

                           Commission File No. 0-22195

                               AHL SERVICES, INC.
             (Exact name of registrant as specified in its charter)

            GEORGIA                                    58-2277249
------------------------------                     -------------------
(State or other jurisdiction of                     (I.R.S. Employer
Incorporation or organization)                     Identification No.)

3353 Peachtree Road, NE, Atlanta, GA                      30326
------------------------------------                   ----------
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code   (404) 684-3000
                                                     ---------------

                                 Not Applicable
--------------------------------------------------------------------------------
    Former name, former address and former fiscal year, if changed since last
                                     report.

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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 17,427,392 shares on November
12, 2001.


<PAGE>



                               AHL SERVICES, INC.
                                    FORM 10-Q

                                      INDEX
<TABLE>
<CAPTION>
                                                                                                            Page No.
                                                                                                            --------
<S>                                                                                                         <C>
PART I                FINANCIAL INFORMATION

ITEM 1.               Financial Statements

                      Condensed Consolidated Balance Sheets (Unaudited)                                         1
                         September 30, 2001 and December 31, 2000

                      Condensed Consolidated Statements of Operations (Unaudited)                               2
                         Three Months Ended September 30, 2001 and 2000

                      Condensed Consolidated Statements of Operations (Unaudited)                               3
                         Nine Months Ended September 30, 2001 and 2000

                      Condensed Consolidated Statements of Cash Flows (Unaudited)                               4
                         Nine Months Ended September 30, 2001 and 2000

                      Notes to Condensed Consolidated Financial Statements (Unaudited)                          5

ITEM 2.               Management's Discussion and Analysis of Financial                                         9
                         Condition and Results of Operations

ITEM 3.               Quantitative and Qualitative Disclosures                                                 17
                         About Market Risk

PART II               OTHER INFORMATION AND SIGNATURE                                                          18

ITEM 5.               Other Information                                                                        18

ITEM 6.               Exhibits and Reports on Form 8-K                                                         19

SIGNATURE                                                                                                      19
</TABLE>



<PAGE>

PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS

                               AHL SERVICES, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>


                                                                            SEPTEMBER 30,           DECEMBER 31,
                                                                                2001                   2000
                                                                            -------------           ------------
<S>                                                                         <C>                     <C>
                                  ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                                   $     3,852             $   19,926
Accounts receivable, less allowance for doubtful accounts
 of $5,663 and $1,798 in 2001 and 2000, respectively                             17,076                 27,628
Reimbursable customer expenses                                                    9,544                 10,777
Work-in-process                                                                   4,599                  3,457
Notes receivable, current portion                                                    --                  2,000
Prepaid expenses and other                                                        3,869                  3,299
Income taxes receivable                                                           7,757                  3,269
Deferred income taxes                                                             4,521                  1,170
Net assets of discontinued operations -
  European specialized staffing business                                         92,000                113,824
                                                                            -----------             ----------
         Total current assets                                                   143,218                185,350
Property and equipment, net                                                      21,354                 22,706
Intangible assets, net                                                          104,816                107,965
Notes receivable, less current portion                                            5,000                  7,500
Other assets                                                                        800                  1,125
                                                                            -----------             ----------
                                                                            $   275,188             $  324,646
                                                                            ===========             ==========
                   LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                                                            $     3,624             $    1,759
Accrued payroll and other current liabilities                                    28,185                 23,360
Current portion of self-insurance reserves                                        1,385                    406
Current portion of deferred purchase price                                       10,000                     --
Current portion of long-term debt                                                98,312                    160
Contingent consideration payable                                                     --                 12,901
                                                                            -----------             ----------
         Total current liabilities                                              141,506                 38,586
                                                                            -----------             ----------
Long-term debt, less current portion                                                 --                 68,016
                                                                            -----------             ----------
Self-insurance reserves, less current portion                                     1,968                  1,624
                                                                            -----------             ----------
Other non-current liabilities                                                       720                    680
                                                                            -----------             ----------
Deferred purchase price, less current portion                                        --                 10,000
                                                                            -----------             ----------

SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; 50,000,000 shares
  authorized, 17,427,392 and 17,409,892 shares issued
  and outstanding, respectively                                                     175                    175
Preferred stock, no par value; 5,000,000 shares
  authorized, no shares outstanding                                                  --                     --
Shares held in treasury (2,180,600 shares in 2001 and
  1,920,600 shares in 2000)                                                     (20,000)               (17,665)
Paid-in capital                                                                 177,011                176,836
Retained earnings (accumulated deficit)                                         (24,238)                48,648
Foreign currency translation adjustment                                          (1,954)                (2,254)
                                                                            -----------             ----------
         Total shareholders' equity                                             130,994                205,740
                                                                            -----------             ----------
                                                                            $   275,188             $  324,646
                                                                            ===========             ==========
</TABLE>

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

                                       1
<PAGE>



                               AHL SERVICES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



<TABLE>
<CAPTION>

                                                                                             THREE MONTHS ENDED
                                                                                                SEPTEMBER 30,
                                                                                          ----------------------
                                                                                             2001         2000
                                                                                          ---------    ---------
<S>                                                                                       <C>          <C>
Revenues                                                                                  $  32,791    $  48,249
Cost of services                                                                             14,704       23,430
                                                                                          ---------    ---------
Gross margin                                                                                 18,087       24,819
Operating expenses:
   Field operating                                                                           31,460       17,353
   Corporate, general and administrative                                                      9,155        1,953
   Depreciation and amortization                                                              9,667        2,527
                                                                                          ---------    ---------
Operating income (loss)                                                                     (32,195)       2,986
   Interest expense                                                                           1,101          833
                                                                                          ---------    ---------
Income (loss) from continuing operations before income taxes                                (33,296)       2,153
   Income tax provision (benefit)                                                            (3,489)         861
                                                                                          ----------   ---------
Income (loss) from continuing operations                                                    (29,807)       1,292
                                                                                          ----------   ---------
Discontinued operations:
   Income (loss) from operations, net of taxes:
     U.S. and European aviation and facility services businesses                                 --        1,240
     U.S. and European specialized staffing services businesses                              (7,483)       4,077
   Loss on sale of  businesses, net of taxes:
     U.S. and European aviation and facility services businesses                             (8,326)          --
     European specialized staffing services businesses                                      (25,001)          --
                                                                                          ---------    ---------
                                                                                            (40,810)       5,317
                                                                                          ---------    ---------
Net income (loss)                                                                         $ (70,617)   $   6,609
                                                                                          =========    =========


Earnings per share:
Income (loss) from continuing operations
      Basic                                                                               $   (1.95)   $    0.08
                                                                                          ==========   =========
      Diluted                                                                             $   (1.95)   $    0.08
                                                                                          ==========   =========
Income (loss) from discontinued operations, net of taxes
      Basic                                                                               $   (2.68)   $    0.34
                                                                                          =========    =========
      Diluted                                                                             $   (2.68)   $    0.34
                                                                                          =========    =========
Net income (loss)
      Basic                                                                               $   (4.63)   $    0.42
                                                                                          =========    =========
      Diluted                                                                             $   (4.63)   $    0.42
                                                                                          =========    =========
Weighted average common and common equivalent shares:
      Basic                                                                                  15,247       15,800
                                                                                          =========    =========
      Diluted                                                                                15,247       15,861
                                                                                          =========    =========
</TABLE>

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


                                       2
<PAGE>
                               AHL SERVICES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)



<TABLE>
<CAPTION>
                                                                                             NINE MONTHS ENDED
                                                                                              SEPTEMBER  30,
                                                                                       ---------------------------
                                                                                         2001              2000
                                                                                       ---------         ---------
<S>                                                                                    <C>               <C>
Revenues                                                                               $ 106,045         $ 146,724
Cost of services                                                                          47,902            69,718
                                                                                       ---------         ---------
Gross margin                                                                              58,143            77,006
Operating expenses:
   Field operating                                                                        64,060            56,933
   Corporate, general and administrative                                                  11,677             4,628
   Depreciation and amortization                                                          14,042             7,487
   PIMMS severance costs                                                                   2,523                 -
                                                                                       ---------         ---------
Operating income (loss)                                                                  (34,159)            7,958
   Interest expense, net of interest income of $300 in 2001                                2,877             2,544
                                                                                       ---------         ---------
Income (loss) from continuing operations before income taxes                             (37,036)            5,414
   Income tax provision (benefit)                                                         (4,985)            2,165
                                                                                       ---------         ---------
Income (loss) from continuing operations                                                 (32,051)            3,249
                                                                                       ---------         ---------
Discontinued operations:
   Income (loss) from operations, net of taxes:
     U.S. and European aviation and facility services businesses                              --                38
     U.S. and European specialized staffing services businesses                           (7,508)            8,027
   Loss on sale of businesses, net of taxes:
     U.S. and European aviation and facility services businesses                          (8,326)               --
     European specialized staffing services businesses                                   (25,001)               --
                                                                                       ----------        ---------
                                                                                         (40,835)            8,065
                                                                                       ----------        ---------
Net income (loss)                                                                      $ (72,886)        $  11,314
                                                                                       =========         =========


Earnings per share:
Income (loss) from continuing operations
      Basic                                                                            $   (2.09)        $    0.20
                                                                                       =========         =========
      Diluted                                                                          $   (2.09)        $    0.20
                                                                                       =========         =========
Income (loss) from discontinued operations, net of taxes
      Basic                                                                          $     (2.67)        $    0.49
                                                                                       ==========        =========
      Diluted                                                                        $     (2.67)        $    0.49
                                                                                       ==========        =========
Net income (loss)
      Basic                                                                            $   (4.76)        $    0.69
                                                                                       =========         =========
      Diluted                                                                          $   (4.76)        $    0.69
                                                                                       =========         =========
Weighted average common and common equivalent shares:
      Basic                                                                               15,295            16,412
                                                                                       =========         =========
      Diluted                                                                             15,295            16,488
                                                                                       =========         =========
</TABLE>

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


                                       3
<PAGE>



                               AHL SERVICES, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>
                                                                                              NINE MONTHS ENDED
                                                                                               SEPTEMBER  30,
                                                                                        --------------------------
                                                                                            2001           2000
                                                                                        ----------     -----------
<S>                                                                                     <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)                                                                      $  (72,886)    $   11,314
 Adjustments to reconcile net income (loss) to net cash provided by
    (used in) operating activities:
       Depreciation and amortization                                                        17,993         16,662
       Accrued loss on disposition of European specialized staffing services
           Business                                                                         25,001              -
       Non-cash special charges                                                             11,200              -
       Changes in current assets and liabilities, net of assets of
           Acquired/divested businesses                                                      7,385        (14,893)
                                                                                        ----------     -----------
       Net cash provided by (used in) operating activities                                 (11,307)        13,083
                                                                                        ----------     ----------


CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition consideration paid                                                             (13,844)       (15,622)
Purchases of property and equipment                                                        (11,458)       (15,016)
Transaction expenses paid on the sale of the U.S. and European aviation
  and facility services businesses                                                          (9,495)            --
                                                                                        ----------     ----------
       Net cash used in investing activities                                               (34,797)       (30,638)
                                                                                        ----------     ----------


CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under credit facility                                                        31,882         36,532
Treasury stock purchases                                                                    (2,335)       (17,496)
                                                                                        ----------     ----------
       Net cash provided by financing activities                                            29,547         19,036


Effect of exchange rates on cash and cash equivalents                                          483         (1,284)
                                                                                        ----------     ----------

Net increase (decrease) in cash and cash equivalents                                       (16,074)           197
Cash and cash equivalents at beginning of period                                            19,926          9,527
                                                                                        ----------     ----------
Cash and cash equivalents at end of period                                              $    3,852     $    9,724
                                                                                        ==========     ==========


CASH PAID DURING THE PERIOD FOR:
Interest                                                                                $    5,528     $   13,450
                                                                                        ==========     ==========
Income taxes                                                                            $    2,107     $    4,458
                                                                                        ==========     ==========
</TABLE>

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


                                       4
<PAGE>



                               AHL SERVICES, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2001
                                   (UNAUDITED)

1. SUMMARY OF PRESENTATION - The condensed consolidated financial statements
   included herein have been prepared by AHL Services, Inc. ("AHL" or the
   "Company"), without audit, pursuant to the rules and regulations of the
   Securities and Exchange Commission. Certain information and footnote
   disclosures normally included in financial statements prepared in accordance
   with generally accepted accounting principles have been condensed or omitted
   pursuant to such rules and regulations, although the Company believes that
   the disclosures are adequate to make the information not misleading. In the
   opinion of management, the condensed consolidated financial statements
   contain all adjustments necessary to present fairly the financial position of
   the Company as of September 30, 2001 and the results of its operations for
   the three months and nine months ended September 30, 2001 and 2000 and its
   cash flows for the nine months ended September 30, 2001 and 2000. All such
   adjustments are of a normal recurring nature. The results of operations for
   the three months and nine months ended September 30, 2001 are not necessarily
   indicative of the results to be expected for the year ending December 31,
   2001. For further information, refer to the consolidated financial statements
   and footnotes thereto for the year ended December 31, 2000 included in the
   Company's Annual Report on Form 10-K for such period.

2. DIVESTITURES AND ABANDONMENTS - On July 20, 2001, AHL announced, as part of
   the strategic transformation of the business, its intention to divest the
   European specialized staffing services business. Deutsche Bank has been
   retained to advise the Company and discussions are underway with potential
   acquirers. The results of operations for the specialized staffing services
   segment, which is wholly comprised of AHL's European specialized staffing
   business in 2001, have been treated as a discontinued operation in the
   Company's accompanying condensed consolidated statements of operations and
   balance sheets. After a comprehensive review of the business by Deutsche
   Bank, and due to current economic and capital market conditions, the Company
   adjusted the net basis of the European specialized staffing services business
   in the third quarter of 2001 to approximately $92.0 million, taking a charge
   of $25.0 million. It is the intention of the Company to complete this
   divestiture during the first half of 2002. Net proceeds from the divestiture
   will be used to repay outstanding debt.

   On December 29, 2000, AHL sold the Company's U.S. and European aviation and
   facility services businesses for $185.0 million in cash to Securicor plc, a
   business services company headquartered in the United Kingdom. The final
   purchase price is subject to adjustment within a range of $175.0 to $210.0
   million based on 2001 actual performance of the U.S. aviation and facility
   services business. The potential repayment of $10.0 million, recorded as
   deferred purchase price in the condensed consolidated balance sheets, is
   recorded as a current liability at September 30, 2001 because the obligation,
   if payable, will be due in the second quarter of 2002, in addition to a
   potential final adjustment based on closing date working capital. In the
   third quarter of 2001, the Company recorded an additional reserve of $5.0
   million and accrued $4.3 million for various potential transaction related
   costs.


                                       5
<PAGE>

    On October 13, 2000, AHL sold the assets of its U.S. industrial staffing
    business to an investor group led by the president of AHL's Baltimore
    staffing operation for $22.5 million, including three notes receivable
    totaling $9.5 million. Due to the current economic downturn affecting the
    U.S. industrial staffing industry, in the second quarter of 2001 the term of
    the $2.0 million note receivable due in October 2001 was extended and
    therefore has been reclassified as a non-current note receivable. Beginning
    in May 2001, interest payments on the notes receivable have not been
    received and thus the Company has ceased accruing interest income.
    Management believes the notes receivable, as well as interest thereon, will
    ultimately be collected, however, such collection could be dependent upon
    the economic conditions impacting the U.S. industrial staffing industry and
    the borrower's ability to obtain additional capital. As a result, in the
    third quarter of 2001, the Company adjusted the net carrying value of the
    notes receivable balance to $5.0 million, taking an additional charge of
    $3.7 million recorded in corporate, general and administrative expenses in
    the accompanying condensed consolidated statements of operations.

    In accordance with the provisions of Accounting Principles Board Opinion No.
    30, the Company has reflected the results of its aviation and facility
    services businesses and specialized staffing businesses as discontinued
    operations in the condensed consolidated statements of operations. This
    presentation reflects the net earnings of these businesses as single line
    items segregated from the results of continuing operations for all periods
    presented. It is the Company's policy to allocate interest expense to
    discontinued operations in accordance with EITF 87-24, which generally
    requires an allocation based on the net assets of the discontinued
    operations relative to the total net assets plus debt of the consolidated
    company, or based on debt that can be identified as being directly
    attributable to the discontinued operations. Interest allocated to
    discontinued operations was $865,000 and $4.1 million for the three months
    ended September 30, 2001 and 2000, respectively, and $2.5 million and $11.1
    million for the nine months ended September 30, 2001 and 2000, respectively.

    Revenues of discontinued operations, which had not yet been disposed of as
    of the relevant period end, were $62.7 million and $191.0 million in the
    third quarter of 2001 and 2000, and $168.1 million and $533.2 million in the
    nine months ended September 30, 2001 and 2000. Results of discontinued
    operations are net of income taxes of $725,000 and $3.9 million in the third
    quarter of 2001 and 2000, respectively, and $578,000 and $6.0 million in the
    nine months ended September 30, 2001 and 2000, respectively.

    On December 28, 2000, AHL made the decision to abandon operations of its
    store set-up business unit, formerly called PIMMS. A comprehensive strategic
    review of the unprofitable store set-up business indicated AHL had more
    attractive options and that the store set-up business did not meet criteria
    for continued investment. As a result of this decision, the Company recorded
    $66.7 million in impairment and other related costs in December 2000. The
    Company finalized the closure of the PIMMS business unit on March 16, 2001,
    and recorded a charge for the related severance expense of $2.5 million in
    the first quarter of 2001.



                                       6
<PAGE>
3.   COMPREHENSIVE INCOME - Other comprehensive income includes only foreign
     currency translation adjustments. The calculation of other comprehensive
     income (loss) is as follows (in thousands):

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED                      NINE MONTHS ENDED
                                                          SEPTEMBER 30,                          SEPTEMBER 30,
                                            ----------------------------------------------------------------------
                                                   2001               2000                2001              2000
                                            ------------------ ------------------  ----------------     ------------
    <S>                                     <C>                <C>                 <C>                  <C>
    Net income (loss)                            $ (70,617)         $   6,609           $ (72,886)       $  11,314
    Other comprehensive income (loss)                4,371             (2,532)                300           (3,583)
                                                 ---------          ---------           ---------        ---------
    Comprehensive income (loss)                  $ (66,246)         $   4,077           $ (72,586)       $   7,731
                                                 =========          =========           =========        =========
</TABLE>

4.   LONG-TERM DEBT - On August 6, 2001, the Company amended its credit facility
     to reduce the aggregate commitment from its lenders to $125.0 million (from
     $201.3 million) and to adjust certain financial covenants and interest rate
     margins. Amounts outstanding under the credit facility are due upon the
     expiration of the amended agreement on April 15, 2002.

     As of September 30, 2001, the Company was not in compliance with certain of
     these financial covenants and, as a result of the changes in the
     composition of the board of directors, was not in compliance with the
     change of control covenant. This could result in the credit facility being
     called prior to April 15, 2002. The Company is seeking a waiver from its
     bank group with respect to the non-compliance with these covenants and is
     in discussions with bank representatives participating in its credit
     facility to restructure these covenants.

     Management's plans with regard to the repayment of the credit facility are
     as follows:

     -    The Company expects to use the net proceeds from the projected sale of
          the European specialized staffing business to reduce the outstanding
          balance of the credit facility.
     -    The Company is considering issuing redeemable preferred stock to
          strategic investors in order to raise $25 to $35 million in cash,
          which would be used to reduce the outstanding balance of the credit
          facility.

     If these actions are not completed by April 15, 2002, or do not fully repay
     the outstanding balance of the credit facility, the Company will either
     attempt to extend the current credit facility or renegotiate a new
     agreement with a syndicate of lenders. There can be no assurance that such
     new financing will be available on terms the Company finds acceptable or at
     all, or that management will be able to restructure the credit facility. In
     the event that the Company is unable to sell the European specialized
     staffing businesses, obtain such additional financing, restructure the
     credit facility, or be successful at raising additional capital, the
     Company may be required to resort to selling additional assets. If the
     Company cannot restructure the credit facility, there will be a material
     adverse effect on the financial condition of the Company, to the extent
     that a restructuring, sale or liquidation of the Company will be required
     in whole or in part. The accompanying consolidated financial statements do
     not include any adjustments relating to the recoverability and
     classification of asset carrying amounts or the amount and classification
     of liabilities that might be necessary should these actions be required.

5.   NEW ACCOUNTING PRONOUNCEMENTS - The Securities and Exchange Commission
     ("SEC") staff issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue
     Recognition in Financial Statements," that was applicable to AHL in its
     fourth quarter of fiscal year 2000. SAB



                                       7
<PAGE>

    No. 101 reflects the basic principles of revenue recognition in existing
    accounting principles generally accepted in the United States and does not
    supersede any existing authoritative literature. SAB No. 101 represents the
    interpretations and practices of the SEC in administering the disclosure
    requirements of the United States securities laws. Some of the topics
    addressed by SAB No. 101 include persuasive evidence of an arrangement,
    delivery or performance, customer acceptance and a fixed or determinable
    price. These guidelines did not have a material impact on AHL's revenue
    recognition practices.

    Statement of Financial Accounting Standards No. 133, "Accounting for
    Derivative Instruments and Hedging Activities" ("SFAS No. 133"), establishes
    accounting and reporting standards for derivative instruments, including
    certain derivative instruments embedded in other contracts and for hedging
    activities. It requires recognition of all derivatives as either assets or
    liabilities in the statement of financial position at their fair value. SFAS
    No. 133 was subsequently amended by SFAS No. 137 and SFAS No. 138 to, among
    other things, defer the effective date of SFAS No. 133. AHL adopted SFAS No.
    133 on January 1, 2001. The new standard did not have a material impact on
    the Company's financial position or results of operations.

    In July 2001, Statement of Financial Accounting Standards No. 141, "Business
    Combinations" ("SFAS No. 141") was issued. SFAS No. 141 prospectively
    eliminates the pooling-of-interests method of accounting for business
    combinations and further clarifies the criteria to recognize intangible
    assets separately from goodwill. SFAS No. 141 is effective for any business
    combination completed after June 30, 2001. The adoption of SFAS No. 141 did
    not have an effect on the Company's financial position or results of
    operations.

    In July 2001, Statement of Financial Accounting Standards No. 142, "Goodwill
    and Other Intangible Assets" ("SFAS No. 142") was issued. Under SFAS No.
    142, goodwill and indefinite lived intangible assets are no longer amortized
    but are reviewed annually for impairment. Separable intangible assets that
    are not deemed to have indefinite life will continue to be amortized over
    their useful lives. The amortization provisions of SFAS No. 142 apply to
    goodwill and intangible assets acquired after June 30, 2001. For goodwill
    and intangible assets acquired prior to July 1, 2001, SFAS No. 142 must be
    adopted as of January 1, 2002. The impact on the Company's consolidated
    financial statements, as a result of the adoption of SFAS No. 142, has not
    yet been determined.

    In August 2001, Statement of Financial Accounting Standards No. 143,
    "Accounting for Asset Retirement Obligations" ("SFAS No. 143") (effective
    for AHL January 1, 2003) and Statement of Financial Accounting Standards No.
    144, "Accounting for Impairment or Disposal of Long-Lived Assets" ("SFAS No.
    144") (effective for AHL January 1, 2002) were issued. SFAS No. 143 requires
    that entities recognize the fair value of a liability for an asset
    retirement obligation in the period in which it is incurred if a reasonable
    estimate of fair value can be made. SFAS No. 144 addresses financial
    accounting and reporting for the impairment of long-lived assets and for
    long-lived assets to be disposed of. The statement supersedes Statement of
    Financial Accounting Standards No. 121, "Accounting for the Impairment of
    Long-Lived Assets and for Long-Lived Assets to be Disposed of ("SFAS No.
    121") and among other factors, establishes criteria beyond that previously
    specified in SFAS No. 121 to determine when a long-lived asset is to be
    considered as held for sale. The adoption of SFAS No. 143 and SFAS No. 144
    is not expected to have a significant impact on the Company's financial
    position or results of operations.


                                       8
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

Reported continuing operating results for 2001 include the marketing services
businesses, AHL's sole remaining business segment. Discontinued operations
include the results of three previous segments, the aviation services segment
and the facility services segment, both of which were sold at the end of 2000,
as well as the specialized staffing services segment which is comprised of AHL's
European specialized staffing businesses and the divested U.S. industrial
staffing business. Reported continuing operating results for 2000 include the
marketing services businesses, as well as the abandoned PIMMS store set-up
business.

Revenues decreased $15.4 million, or 32%, to $32.8 million for the third quarter
of 2001 from $48.3 million for the third quarter of 2000. Revenues for the third
quarter of 2000 included $10.1 million for the abandoned PIMMS operation.
Excluding PIMMS, revenues for the third quarter of 2001 decreased $5.4 million,
or 14%, due to the effect of the slow-down in the economy on the Company's
customers, which has resulted in lower revenues with existing customers and a
longer selling cycle, and the reduction in merchandise services outsourced by a
major retailer to the Company's ServiceAdvantage merchandising services
division.

Cost of services represents the direct costs attributable to a specific
contract, predominantly wages and related benefits, as well as certain related
expenses such as workers' compensation and other direct labor-related expenses.
Cost of services decreased $8.7 million, or 37%, to $14.7 million for the third
quarter of 2001 from $23.4 million for the third quarter of 2000. Cost of
services for the third quarter of 2000 included $6.5 million for the abandoned
PIMMS operation. Excluding PIMMS, costs of services decreased $2.2 million, or
13%, and as a percentage of revenues, cost of services increased slightly to
44.8% for the third quarter of 2001 from 44.3% for the third quarter of 2000,
due primarily to changes in business mix between the periods.

Gross margin decreased $6.7 million, or 27%, to $18.1 million for the third
quarter of 2001 from $24.8 million for the third quarter of 2000. Gross margin
for the third quarter of 2000 included $3.6 million for the abandoned PIMMS
operation. Excluding PIMMS, gross margin decreased $3.2 million, or 15%, and as
a percentage of revenues, gross margin decreased to 55.2% for the third quarter
of 2001 from 55.7% for the third quarter of 2000, due to the reasons discussed
above.

Field operating expenses represent primarily fixed expenses which directly
support field and facility operations, such as field management, facility
expenses (such as rent, utilities and communication costs), equipment leasing,
maintenance and local sales and marketing activities. These expenses increased
$14.1 million, or 81%, to $31.5 million for the third quarter of 2001 from $17.4
million for the third quarter of 2000. Due to the difficult economic
environment, which worsened during the third quarter of 2001, the Company
performed a strategic review of operations and recorded special charges to field
operating expenses of $15.3 million consisting of $4.4 million for potential
uncollectible accounts receivable, $3.8 million the potential costs of buying
out unattractive or redundant leases, $2.9 million for workers' compensation
claims, legal and other expenses related to the abandoned PIMMS operation, and
$4.2 million for other related items. Field operating expenses for the third
quarter of 2000 included $3.3 million for the abandoned PIMMS operation.
Excluding the special charges and


                                       9
<PAGE>

PIMMS, field operating expenses increased $2.0 million and, as a percentage of
revenues, increased to 49.2% for the third quarter of 2001 as compared to 37.0%
for the third quarter of 2000, due to the decrease in revenue for 2001 and an
investment in replacing small aging facilities with new state of the art
facilities, the expansion of the Company's teleservices operations, the
expansion of the Company's merchandising services national merchandiser
infrastructure and the establishment of a vertical channel sales organization
during 2001.

Corporate, general and administrative expenses, which include the cost of
services the Company provides to support and manage its field operations and
facilities, increased $7.2 million, or 369%, to $9.2 million for the third
quarter of 2001 from $2.0 million for the third quarter of 2000. As part of the
strategic review of operations during the third quarter of 2001, the Company
recorded special charges to corporate, general and administrative expenses of
$8.0 million consisting of $3.7 million to adjust the note receivable balance
due from the sale of the Company's U.S. industrial staffing businesses to its
estimated net realizable value, a charge of $3.5 million to expense various
business development costs incurred which, based on the current economic
environment, will not be realized and $800,000 for the buyout of redundant
leases related to the Company's corporate offices. As a percentage of revenues,
excluding the special charges and the abandoned PIMMS operation, these expenses
decreased to 3.6% for the third quarter of 2001 as compared to 5.1% for the
third quarter of 2000 due to cost reduction initiatives begun during 2001.

Depreciation and amortization increased $7.2 million, or 283%, to $9.7 million
for the third quarter of 2001 from $2.5 million for the third quarter of 2000.
As part of the strategic review of operations during the third quarter of 2001,
the Company recorded special charges to depreciation and amortization expense of
$7.3 million consisting of $3.8 million for various equipment and leasehold
improvements at the facilities replaced during the third quarter of 2001 and
$3.5 million for internally developed software which was replaced during the
third quarter of 2001. Depreciation and amortization for the third quarter of
2000 included $612,000 for the abandoned PIMMS operation. Excluding the special
charges and the abandoned PIMMS operation, depreciation and amortization
increased $414,000, or 22%, and as a percentage of revenues, depreciation and
amortization was 7.1% for the third quarter of 2001 compared to 5.0% for the
third quarter of 2000 primarily due to the additional amortization in 2001
related to the ServiceAdvantage acquisition earn-out of $12.9 million paid on
January 2, 2001.

Operating income (loss) decreased $35.2 million to ($32.2) million for the third
quarter of 2001 from $3.0 million for the third quarter of 2000. The operating
loss for 2001 included $30.6 million in special charges discussed above. The
operating income for the third quarter of 2000 included a loss of $283,000 for
the abandoned PIMMS operation. Excluding the special charges and the abandoned
PIMMS operation, operating income (loss) decreased $4.8 million, or 147%, and as
a percentage of revenues, operating income (loss) was (4.7%) for the third
quarter of 2001 as compared to 8.6% for the third quarter of 2000 primarily as a
result of the decrease in gross margin and investment in operating facilities
discussed above.

Interest expense, net, represents the interest on the outstanding debt of the
Company allocated to the continuing operations. Interest expense, net, increased
$268,000, or 32%, to $1.1 million for the third quarter of 2001 from $833,000
for the third quarter of 2000, primarily due to the interest related to the debt
incurred to pay for the ServiceAdvantage acquisition earn-out and the Company's
stock repurchase program. As a percentage of revenues, interest expense, net,
was 3.4% for the third quarter of 2001 as compared to 1.7% for the third quarter
of 2000.


                                       10
<PAGE>

Income tax provision (benefit) decreased $4.4 million to ($3.5) million for the
third quarter of 2001 from $861,000 for the third quarter of 2000. The Company
provided for an income tax benefit at a rate of 40.0% for the third quarter of
2001, reduced by a valuation allowance for all tax benefits in excess of net
operating loss carry-backs available from tax years 1999 and 2000. The Company
provided for income taxes at a rate of 40.0% for the third quarter of 2000.

On December 29, 2000, AHL sold its U.S. and European aviation and facility
services businesses. Revenues from these segments were $113.7 million for the
third quarter of 2000. The income from discontinued operations of $1.2 million
for the third quarter of 2000 includes the results of operations for these
segments of $4.9 million, net of the applicable interest expense of $2.8 million
and income taxes of $893,000.

On July 20, 2001, AHL announced its intention to divest the European specialized
staffing business. On October 13, 2000, AHL sold the assets of its U.S.
industrial staffing business. Revenues from this segment were $62.7 million and
$63.4 million for the third quarter of 2001 and 2000, respectively, for the
European specialized staffing businesses and $13.9 million for the third quarter
of 2000 for the U.S. industrial staffing business. The income (loss) from
discontinued operations of ($7.5) million and $4.1 million for the third quarter
of 2001 and 2000, respectively, include the results of operations for this
segment of income (loss) of ($5.9) million and $6.4 million, respectively, for
the European specialized staffing businesses and operating income of $1.9
million for the third quarter of 2000 for the U.S. industrial staffing business,
net of the applicable interest expense of $866,000 and $1.2 million,
respectively, and income tax provision of $725,000 and $3.0 million,
respectively. The loss from discontinued operations in the third quarter of 2001
includes $6.4 million in special charges for potential uncollectible accounts
receivable and to expense various transaction costs which, based on the current
economic environment, will not be realized.

During the third quarter of 2001, the Company recorded a special charge of $9.3
million to establish an additional reserve of $5.0 million and accrued $4.3
million for various potential transaction costs with respect to the Company's
previous sale of the U.S. and European aviation and facility services
businesses. The Company recorded a related tax benefit of $1.0 million.

Based on the difficult economic environment in Europe, the Company estimated the
net realizable value from the sale of the European specialized staffing
businesses at September 30, 2001, to be approximately $92.0 million. As such,
the Company recorded, as a loss on the sale of the European specialized staffing
businesses, a charge of $25.0 million during the third quarter of 2001. The
Company recorded a tax valuation allowance equal to the full amount of the tax
benefit of this charge as the ultimate realization of these net operating loss
carry-forwards is not assured.

Net income (loss) decreased $77.2 million to ($70.6) million for the third
quarter of 2001 from $6.6 million for the third quarter of 2000, due to the
reasons discussed above.

RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000

Reported continuing operating results for 2001 include the marketing services
businesses, as well as the PIMMS store set-up business which closing was
finalized during the first quarter of 2001. Discontinued operations for 2001
include the European specialized staffing business. Reported continuing
operating results for 2000 include the marketing services businesses, as well as
the


                                       11
<PAGE>

abandoned PIMMS store set-up business. Discontinued operations for 2000 include
the divested aviation and facility services segments and the specialized
staffing services segment.

Revenues decreased $40.7 million, or 28%, to $106.0 million for the nine months
ended September 30, 2001 from $146.7 million for the nine months ended September
30, 2000. Revenues for the nine months ended September 30, 2001 included
$918,000 for the abandoned PIMMS operation. Revenues for the nine months ended
September 30, 2000 included $28.8 million for the abandoned PIMMS operation.
Excluding PIMMS, revenues for the nine months ended September 30, 2001 decreased
$12.8 million, or 11%. Revenues for the nine months ended September 30, 2001
were negatively impacted, as compared to the revenues for the nine months ended
September 30, 2000, due to the three large one-time marketing promotion projects
for three consumer products customers in 2000 which were completed in May 2000,
the decline in e-business, and the effect of the slow-down in the economy on the
Company's customers, which has resulted in lower revenues with existing
customers and a longer selling cycle, and the reduction in merchandise services
outsourced by a major retailer to the Company's ServiceAdvantage merchandising
services division.

Cost of services decreased $21.8 million, or 31%, to $47.9 million for the nine
months ended September 30, 2001 from $69.7 million for the nine months ended
September 30, 2000. Cost of services for the nine months ended September 30,
2001 included $389,000 for the abandoned PIMMS operation. Cost of services for
the nine months ended September 30, 2000 included $18.9 million for the
abandoned PIMMS operation. Excluding PIMMS, costs of services decreased $3.3
million, or 6%. As a percentage of revenues, excluding PIMMS, cost of services
increased to 45.2% for the nine months ended September 30, 2001 from 43.1% for
the nine months ended September 30, 2000. This increase was due primarily to
changes in business mix between the periods.

Gross margin decreased $18.9 million, or 25%, to $58.1 million for the nine
months ended September 30, 2001 from $77.0 million for the nine months ended
September 30, 2000. Gross margin for the nine months ended September 30, 2001
included $529,000 for the abandoned PIMMS operation. Gross margin for the nine
months ended September 30, 2000 included $9.9 million for the abandoned PIMMS
operation. Excluding PIMMS, gross margin decreased $9.5 million, or 14%, and as
a percentage of revenues, gross margin decreased to 54.8% for the nine months
ended September 30, 2001 from 56.9% for the nine months ended September 30,
2000, due to the reasons discussed above.

Field operating expenses increased $7.2 million, or 13%, to $64.1 million for
the nine months ended September 30, 2001 from $56.9 million for the nine months
ended September 30, 2000. Field operating expenses for the nine months ended
September 30, 2001 included special charges of $15.3 million expensed during the
third quarter of 2001 (see discussion under the related income statement caption
under managements' discussion and analysis of the results of operations for the
three months ended September 30, 2001) and $529,000 for the abandoned PIMMS
operation during the first quarter of 2001. Field operating expenses for the
nine months ended September 30, 2000 included $9.8 million for the abandoned
PIMMS operation. Excluding the special charges and PIMMS, field operating
expenses increased $1.1 million, or 2%, and as a percentage of revenues, field
operating expenses increased to 45.8% for the nine months ended September 30,
2001 as compared to 39.9% for the nine months ended September 30, 2000, due to
the decrease in revenue for 2001 and an investment in replacing small aging
facilities with new state of the art facilities, the expansion of the Company's
teleservices operations, the expansion of the Company's merchandising services
national


                                       12
<PAGE>
merchandiser infrastructure and the establishment of a vertical channel sales
organization during 2001.

Corporate, general and administrative expenses increased $7.1 million, or 152%,
to $11.7 million for the nine months ended September 30, 2001 from $4.6 million
for the nine months ended September 30, 2000. Corporate, general and
administrative expenses for the nine months ended September 30, 2001 included
special charges of $8.0 million expensed during the third quarter of 2001 (see
discussion under the related income statement caption under managements'
discussion and analysis of the results of operations for the three months ended
September 30, 2001). As a percentage of revenues, excluding the special charges
and the abandoned PIMMS operation, these expenses decreased to 3.5% for the nine
months ended September 30, 2001 as compared to 3.9% for the nine months ended
September 30, 2000, due to cost reductions taken during 2001.

Depreciation and amortization increased $6.5 million, or 87%, to $14.0 million
for the nine months ended September 30, 2001 from $7.5 million for the nine
months ended September 30, 2000. Depreciation and amortization for the nine
months ended September 30, 2001 included special charges of $7.3 million
expensed during the third quarter of 2001 (see discussion under the related
income statement caption under managements' discussion and analysis of the
results of operations for the three months ended September 30, 2001).
Depreciation and amortization for the nine months ended September 30, 2000
included $1.8 million for the abandoned PIMMS operation. Excluding the special
charges and the abandoned PIMMS operation, depreciation and amortization
increased $1.1 million, or 19%, and as a percentage of revenues, depreciation
and amortization was 6.4% for the nine months ended September 30, 2001 and 4.8%
for the nine months ended September 30, 2000, primarily due to the additional
amortization in 2001 related to the ServiceAdvantage acquisition earn-out of
$12.9 million paid on January 2, 2001.

PIMMS severance costs represent severance costs related to the abandonment of
the PIMMS operation. In December 2000, AHL committed to discontinue operations
of its store set-up business unit, formerly called PIMMS. The Company completed
the closing of the PIMMS operation on March 16, 2001. The Company took a charge
for the related severance expense of $2.5 million for the first quarter of 2001.

Operating income (loss) decreased $42.2 million to $(34.2) million for the nine
months ended September 30, 2001 from $8.0 million for the nine months ended
September 30, 2000. The operating loss for the nine months ended September 30,
2001 included special charges of $30.6 million expensed during the third quarter
of 2001 (see discussion under the related income statement caption under
managements' discussion and analysis of the results of operations for the three
months ended September 30, 2001) and a $2.5 million charge for the abandoned
PIMMS operation in the first quarter of 2001. The operating income for the nine
months ended September 30, 2000 included a loss of $1.8 million for the
abandoned PIMMS operation. Excluding the special charges and the abandoned PIMMS
operation, operating income decreased $10.8 million, or 110%, and as a
percentage of revenues, operating income (loss) was (0.9%) for the nine months
ended September 30, 2001 as compared to 8.3% for the nine months ended September
30, 2000, primarily as a result of the decrease in gross margin and investment
in operating facilities discussed above.

Interest expense, net, increased $333,000, or 13%, to $2.9 million for the nine
months ended September 30, 2001 from $2.5 million for the nine months ended
September 30, 2000 primarily due to the interest related to the debt incurred
for the payment of the ServiceAdvantage acquisition earn-


                                       13
<PAGE>
out and the Company's stock repurchase program. Interest income on the notes
receivable from the October 2000 U.S. industrial staffing divestiture was
$300,000 for the nine months ended September 30, 2001. As a percentage of
revenues, excluding the abandoned PIMMS operation, interest expense, net, was
2.7% for the nine months ended September 30, 2001 as compared to 1.7% for the
nine months ended September 30, 2000.

Income tax provision (benefit) decreased $7.2 million to ($5.0) million for the
nine months ended September 30, 2001 from $2.2 million for the nine months ended
September 30, 2000. The Company provided for income taxes at an annual rate of
40.0% in 2001 reduced by a valuation allowance for all tax benefits in excess of
net operating loss carry-backs available from tax years 1999 and 2000. The
Company provided for income taxes at a rate of 40.0% in 2000.

On December 29, 2000, AHL sold its U.S. and European aviation and facility
services businesses. Revenues from these segments were $334.0 million for the
nine months ended September 30, 2000. The income from discontinued operations of
$38,000 for the nine months ended September 30, 2000 includes the results of
operations of $7.7 million for these segments, net of the applicable interest
expense of $7.7 million and income taxes of $6,000.

On July 20, 2001, AHL announced its intention to divest the European specialized
staffing business. On October 13, 2000, AHL sold the assets of its U.S.
industrial staffing business. Revenues from this segment were $168.1 million and
$160.2 million for the nine months ended September 30, 2001 and 2000,
respectively, for the European specialized staffing businesses and $39.0 million
for the nine months ended September 30, 2000 for the U.S. industrial staffing
business. The income (loss) from discontinued operations of income (loss) of
($7.5) million and $8.0 million for the nine months ended September 30, 2001 and
2000, respectively, include the results of operations of ($4.5) million and
$12.9 million, respectively, for the European specialized staffing businesses
and operating income of $4.5 million for the nine months ended September 30,
2000 for the U.S. industrial staffing business, net of the applicable interest
expense of $2.5 million and $3.4 million, respectively, and income tax provision
of $578,000 and $6.0 million, respectively. The loss from discontinued
operations for the nine months ended September 30, 2001 was due to the
structuring costs associated with positioning the European specialized staffing
business for sale, the strength of the U.S. dollar, investment in new branch
openings, and the special charges recorded in the third quarter of 2001.

During the third quarter of 2001, the Company recorded a special charge of $9.3
million to establish an additional reserve of $5.0 million and accrued $4.3
million for various potential transaction costs with respect to the Company's
previous sale of the U.S. and European aviation and facility services
businesses. The Company recorded a related tax benefit of $1.0 million.

Based on the difficult economic environment in Europe, the Company estimated the
net realizable value from the sale of the European specialized staffing
businesses at September 30, 2001, was approximately $92.0 million. As such, the
Company recorded a charge of $25.0 million during the third quarter of 2001. The
Company recorded a tax valuation allowance equal to the full amount of the tax
benefit of this charge as the ultimate realization of these net operating loss
carry-forwards is not assured.


                                       14
<PAGE>

Net income (loss) decreased $84.2 million to $(72.9) million for the nine months
ended September 30, 2001 as compared to $11.3 million for the nine months ended
September 30, 2000 due to the reasons discussed above.

LIQUIDITY AND CAPITAL RESOURCES

Cash provided by (used in) operating activities was ($11.3) million for the nine
months ended September 30, 2001 compared to $13.1 million for the nine months
ended September 30, 2000. This net decrease in cash provided by operating
activities was the result of a positive change of $22.3 million in working
capital due to the marketing services businesses having stronger cash flow from
operations than the U.S. and European aviation and facility services businesses,
which were sold at the end of 2000, offset by $46.7 million decrease in net
income before depreciation and amortization and non-cash special charges as a
result of the divestiture and abandonment of several business units. Cash used
in investing activities for the nine months ended September 30, 2001 was $34.8
million compared to $30.6 million for the nine months ended September 30, 2000.
The cash used in investing activities for the nine months ended September 30,
2001 was primarily due to the acquisition consideration paid for the
ServiceAdvantage earn-out of $12.9 million and a German staffing acquisition of
$943,000, the payment of $9.5 million in transaction expenses on the sale of the
U.S. and European aviation and facility services businesses, and additions to
property and equipment of $11.5 million. The use of cash for investing
activities for the nine months ended September 30, 2000 was principally a result
of acquisition consideration paid for a UK staffing business and additions to
property and equipment. Cash provided by financing activities for the nine
months ended September 30, 2001 was $29.5 million compared to $19.0 million for
the nine months ended September 30, 2000. During these periods, net borrowings
under the credit facility were offset by the Company's share repurchase program.
The Company repurchased 260,000 shares of its common stock in the nine months
ended September 30, 2001 for $2.3 million. The Company repurchased 1,898,100
shares of its common stock in the nine months ended September 30, 2000 for $17.5
million.

Capital expenditures were $11.5 million and $15.0 million for the nine months
ended September 30, 2001 and 2000, respectively. Historically, capital
expenditures have been, and future expenditures are anticipated to be, primarily
to support expansion of AHL's marketing services business' facilities and
computer systems. AHL's capital expenditures for 2002 are expected to be
approximately $6 million.

The Company's credit facility allowed the Company to repurchase up to $20.0
million of its common stock. During the nine months ended September 30, 2001,
the Company repurchased 260,000 shares for $2.3 million and completed the $20.0
million share repurchase program. On August 6, 2001, the Company amended its
credit facility to reduce the aggregate commitment from its lenders to $125.0
million (from $201.3 million) and to adjust certain financial covenants and
interest rate margins. Amounts outstanding under the credit facility are due
upon the expiration of the amended agreement on April 15, 2002.

As of September 30, 2001, the Company was not in compliance with certain of
these financial covenants and, as a result of the changes in the composition of
the board of directors, was not in compliance with the change of control
covenant. This could result in the credit facility being called prior to April
15, 2002. The Company is seeking a waiver from its bank group with respect to
the


                                       15
<PAGE>
non-compliance with these covenants and is in discussions with bank
representatives participating in its credit facility to restructure these
covenants.

Management's plans with regard to the repayment of the credit facility are as
follows:

    -   The Company expects to use the net proceeds from the projected sale of
        the European specialized staffing business to reduce the outstanding
        balance of the credit facility.

    -   The Company is considering issuing redeemable preferred stock to
        strategic investors in order to raise $25 to $35 million in cash, which
        would be used to reduce the outstanding balance of the credit facility.

If these actions are not completed by April 15, 2002, or do not fully repay the
outstanding balance of the credit facility, the Company will either attempt to
extend the current credit facility or renegotiate a new agreement with a
syndicate of lenders. There can be no assurance that such new financing will be
available on terms the Company finds acceptable or at all, or that management
will be able to restructure the credit facility. In the event that the Company
is unable to sell the European specialized staffing businesses, obtain such
additional financing, restructure the credit facility, or be successful at
raising additional capital, the Company may be required to resort to selling
additional assets. If the Company cannot restructure the credit facility, there
will be a material adverse effect on the financial condition of the Company, to
the extent that a restructuring, sale or liquidation of the Company will be
required in whole or in part. The accompanying consolidated financial statements
do not include any adjustments relating to the recoverability and classification
of asset carrying amounts or the amount and classification of liabilities that
might be necessary should these actions be required.


FORWARD-LOOKING STATEMENTS

Certain statements made in this report, and other written or oral statements
made by or on behalf of AHL, may constitute "forward-looking statements" within
the meaning of the federal securities laws. When used in this report, the words
"believes," "expects," "estimates" and similar expressions are intended to
identify forward-looking statements. Statements regarding future events and
developments and AHL's future performance, as well as its expectations, beliefs,
plans, estimates or projections relating to the future, are forward-looking
statements within the meaning of these laws. All forward-looking statements are
subject to certain risks and uncertainties that could cause actual events to
differ materially from those projected. Management believes that these
forward-looking statements are reasonable; however, you should not place undue
reliance on such statements. These statements are based on current expectations
and speak only as of the date of such statements. AHL undertakes no obligation
to publicly update or revise any forward-looking statement, whether as a result
of future events, new information or otherwise, other than as required by law.

Among the important factors that could cause actual results to differ materially
from those indicated by our forward-looking statements are: general economic
conditions; pricing actions taken by competitors; labor relations; regulatory
changes; integration of acquisitions; our ability to identify a buyer for, and
to successfully negotiate and close the sale of, our specialized staffing
services business that we operate in Germany and the United Kingdom; changes in
international trade and other laws which impact the way in which AHL conducts
its business; the ability of AHL to extend


                                       16
<PAGE>

the credit facility or renegotiate it on terms not substantially different from
those now in effect; and other risk factors detailed in our filings with the
Securities and Exchange Commission. You should not place undue reliance on any
forward-looking statements, since those statements speak only as of the date
they are made.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FOREIGN CURRENCY RISK

AHL's discontinued European specialized staffing operation's revenues are
received, and operating costs are incurred, in foreign currencies (primarily the
British pound and the Euro/German mark), with a significant amount of operating
income being derived from operations in the United Kingdom and Germany. For the
nine months ended September 30, 2001 and 2000, these foreign operations, which
have been classified as discontinued operations, generated ($30.8) million and
$11.7 million of operating income (loss) as compared to operating income (loss)
of ($41.2) million and $8.3 million being generated by AHL's U.S. based
continuing operations, respectively. The denomination of foreign subsidiaries'
account balances in their local currency exposes AHL to certain foreign exchange
rate risks. AHL addresses the exposure by financing most working capital needs
in the applicable foreign currencies. AHL has not engaged in hedging
transactions to reduce exposure to fluctuations in foreign currency exchange
rates. Foreign currency transaction exposure is insignificant as most
transactions of AHL's foreign subsidiaries are functional currency denominated.

INTEREST RATE RISK

The Company maintains a credit facility and an interest rate swap agreement
which subjects the Company to the risk of loss associated with movements in
market interest rates. The Company's credit facility had a balance outstanding
at September 30, 2001, of $98.3 million, which was at a variable rate of
interest. In order to hedge against increasing European interest rates,
effective October 6, 1998, the Company entered into a four-year interest rate
swap agreement in the notional amount of $30.0 million to offset a portion of
the floating interest rate risk. On May 14, 1999, this swap agreement was
replaced with a three-year interest rate swap agreement with a notional amount
of approximately $45.0 million. On January 31, 2000, the Company entered into an
additional interest rate swap agreement in the notional amount of approximately
$15.0 million. On November 1, 2000, these interest rate swap agreements were
replaced with a one-year agreement in the notional amount of Euro 61.6 million
at a fixed rate of 4.63% plus the applicable margin. The fair value of the
interest rate swap agreement at September 30, 2001, was not material. A change
in the prevailing interest rates of 10% would result in a change in the total
fair value of long-term debt of approximately $544,000. Fair values were
determined from discounted cash flows.



                                       17
<PAGE>
PART II - OTHER INFORMATION AND SIGNATURE

ITEM 5. - OTHER INFORMATION

REALIGNMENT OF BOARD AND EXECUTIVE MANAGEMENT TEAM.

In order to better position its core marketing support services businesses for
growth, and to ensure that its leadership is in line with its financial and
operational goals, on October 1, 2001, AHL appointed A. Clayton Perfall as chief
executive officer. Mr. Perfall succeeded Edwin R. Mellett. Prior to his
appointment, Mr. Perfall spent four years as the chief financial officer and a
director of Snyder Communications, Inc., an international marketing company and
one of the world's largest providers of marketing services to Fortune 500
companies. While there, he led all capital markets activities of the company,
including the execution of the company's acquisition strategy. During his
tenure, Snyder Communications grew revenues from $83 million to almost $1
billion; completed more than 50 strategic acquisitions; and created
industry-leading agencies in direct marketing, sales promotion, pharmaceutical
sales and traditional advertising. Snyder Communications was sold to Havas
Advertising for $2.2 billion in September of 2000. The Board of Directors also
announced that Frank A. Argenbright, the founder of the Company, was appointed
Chairman of the Board and that Mr. Perfall would also join the Board of
Directors.

On November 1, 2001, the Company announced the initiation of a search for
independent directors and a new chief financial officer after accepting the
resignations of four directors: former chief executive officer Edwin R. Mellett,
president and chief operating officer of marketing services Thomas J. Marano,
chief financial officer Ronald J. Domanico and independent director Robert F.
McCullough. Furthermore, the Company and Mr. Marano have agreed to allow Mr.
Marano's contract with the Company to expire on December 31, 2001. Mr. Domanico
has committed to working with Mr. Perfall and the Board through the end of
January 2002.

On November 8, 2001, the Company announced the appointment of Wyck A. Knox and
Bill W. Shoptaw to its Board of Directors. Mr. Knox, 61, is a partner and
chairman of the executive committee of Kilpatrick Stockton LLP, a full service
corporate law firm. He currently serves as a director for such companies as AGL
Resources, Inc. and Thompson Oak Flooring Co. Mr. Shoptaw, 54, is the founder
and Chief Executive Officer of The Shoptaw Group, LLC, a real estate investment
management company specializing in the ownership and management of properties
throughout the Southeastern and Midwestern United States.

As of November 13, 2001, the directors of AHL were Frank A. Argenbright, Jr., A.
Clayton Perfall, Edwin C. "Skip" Gage, Wyck A. Knox, Bill W. Shoptaw and John W.
Ward. The Company is seeking one additional independent, outside director to
restore the board to a total of seven members.



                                       18
<PAGE>
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits:

<TABLE>
<CAPTION>
                           Exhibit
                           Number                    Description
                           ------                    -----------
                           <S>        <C>
                           10.1       Employment Agreement between AHL
                                      Services, Inc. and A. Clayton Perfall
                                      dated as of October 1, 2001

                           10.2       Severance Agreement between AHL
                                      Services  and  Edwin  R.  Mellett   dated
                                      October 31, 2001.

                           10.3       Settlement Agreement between AHL
                                      Services, Inc. and Frank A. Argenbright,
                                      Jr., dated September 30, 2001.

                            10.4      Severance and Separation letter between
                                      AHL Services, Inc. and Ronald J.
                                      Domanico dated October 30, 2001.

                            10.5      Separation    Agreement    between    AHL
                                      Services and Thomas J. Marano dated
                                      November 2, 2001.

                             11       Computation of Earnings Per Share
</TABLE>

    (b) Reports on Form 8-K:

    No reports on Form 8-K were filed during the quarter ended September 30,
2001.

SIGNATURE

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

                                      AHL SERVICES, INC. (REGISTRANT)


Date: November 14, 2001               By: /s/ Ronald J. Domanico
                                          -------------------------------------
                                           Ronald J. Domanico
                                           Executive Vice President and
                                           Chief Financial Officer
                                           (Principal financial and accounting
                                           officer)



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