<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


[X]      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the quarterly period ended JUNE 30, 2003

                                       or

[ ]      Transition report pursuant to Section 13 or 15(d)  of the Securities
         Exchange Act of 1934 for the transition period from ________ to _______


                         COMMISSION FILE NUMBER 0-27288

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

           TEXAS                                          76-0094895
-------------------------------                ---------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
Incorporation or Organization)


                    15350 VICKERY DRIVE, HOUSTON, TEXAS 77032
                                 (281) 618-3100
--------------------------------------------------------------------------------
    (Address of Principal Executive Offices, Including Registrant's Zip Code,
                   and Telephone Number, Including Area Code)

                                       N/A
               ---------------------------------------------------
               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 by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).
Yes [X]    No [ ]

At August 1, 2003 the number of shares outstanding of the registrant's common
stock was 47,206,071 (net of 1,014,949 treasury shares).


<PAGE>
                                    EGL, INC.

                               INDEX TO FORM 10-Q

<Table>
<S>                                                                                                                        <C>
                  PART I.  FINANCIAL INFORMATION

                  ITEM 1.  FINANCIAL STATEMENTS

                  Condensed Consolidated Balance Sheets as of                                                              1
                    June 30, 2003 and December 31, 2002

                  Condensed Consolidated Statements of Operations for the                                                  2
                    Six Months ended June 30, 2003 and 2002

                  Condensed Consolidated Statements of Operations for the                                                  3
                    Three Months ended June 30, 2003 and 2002

                  Condensed Consolidated Statements of Cash Flows for the                                                  4
                    Six Months ended June 30, 2003 and 2002

                  Condensed Consolidated Statement of Stockholders' Equity for the                                         5
                    Six Months ended June 30, 2003

                  Notes to Condensed Consolidated Financial Statements                                                     6

                  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                           RESULTS OF OPERATIONS                                                                          17

                  ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                     27

                  ITEM 4.  CONTROLS AND PROCEDURES                                                                        27

                  PART II.  OTHER INFORMATION                                                                             28

                  ITEM 1.  LEGAL PROCEEDINGS                                                                              28

                  ITEM 2.  CHANGE IN SECURITIES AND USE OF PROCEEDS                                                       28

                  ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                                                28

                  ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                            29

                  ITEM 5.  OTHER INFORMATION                                                                              29

                  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                                               31

                  SIGNATURES                                                                                              32

</Table>



<PAGE>
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                                    EGL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                        (in thousands, except par values)

<Table>
<Caption>
                                                                                   JUNE 30,      DECEMBER 31,
                                                                                    2003             2002
                                                                                  ---------      ------------
<S>                                                                               <C>             <C>
                                     ASSETS
Current assets:
     Cash and cash equivalents                                                    $  82,484       $ 111,477
     Restricted cash                                                                 11,148           7,806
     Trade receivables, net of allowance of $13,297 and $13,717                     397,481         371,024
     Other receivables                                                               13,036          13,213
     Deferred income taxes                                                           12,328           6,228
     Income taxes receivable                                                          1,555           1,019
     Other current assets                                                            26,420          32,964
                                                                                  ---------       ---------
             Total current assets                                                   544,452         543,731
Property and equipment, net                                                         155,014         157,403
Assets held for sale                                                                    539             644
Investments in unconsolidated affiliates                                             40,147          40,042
Goodwill                                                                             93,790          81,881
Deferred income taxes                                                                 6,257           5,327
Other assets, net                                                                    27,799          13,087
                                                                                  ---------       ---------
             Total assets                                                         $ 867,998       $ 842,115
                                                                                  =========       =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Trade payables and accrued transportation costs                              $ 216,955       $ 224,132
     Accrued salaries and related costs                                              41,087          31,218
     Accrued merger restructuring costs                                               6,391           8,227
     Current portion of long-term notes payable                                      10,637           5,639
     Income taxes payable                                                               473           2,595
     Other liabilities                                                               65,038          70,409
                                                                                  ---------       ---------
             Total current liabilities                                              340,581         342,220
Long-term notes payable                                                             109,667         103,993
Deferred income taxes                                                                13,562           3,720
Other noncurrent liabilities                                                          5,835           6,789
                                                                                  ---------       ---------
             Total liabilities                                                      469,645         456,722
                                                                                  ---------       ---------
Minority interests                                                                    5,935           8,852
                                                                                  ---------       ---------
Commitments and contingencies (Notes 10 and 11)
Stockholders' equity:
     Common stock, $0.001 par value, 200,000 shares authorized; 48,215
           and 48,091 shares issued; 47,200 and 47,054 shares outstanding                48              48
     Additional paid-in capital                                                     150,018         148,682
     Retained earnings                                                              283,408         274,146
     Treasury stock, 1,015 and 1,037 shares held                                    (17,386)        (17,769)
     Accumulated other comprehensive loss                                           (23,670)        (28,566)
                                                                                  ---------       ---------
             Total stockholders' equity                                             392,418         376,541
                                                                                  ---------       ---------
             Total liabilities and stockholders' equity                           $ 867,998       $ 842,115
                                                                                  =========       =========
</Table>

       See notes to unaudited condensed consolidated financial statements.



                                       1
<PAGE>

                                    EGL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (in thousands, except per share amounts)

<Table>
<Caption>
                                                                                   SIX MONTHS ENDED
                                                                                       JUNE 30,
                                                                             -----------------------------
                                                                                2003               2002
                                                                             -----------       -----------
<S>                                                                          <C>               <C>
Revenues                                                                     $ 1,010,513       $   872,028
Cost of transportation                                                           657,417           554,753
                                                                             -----------       -----------
Net revenues                                                                     353,096           317,275

Operating expenses:
   Personnel costs                                                               201,573           175,537
   Other selling, general and administrative expenses                            134,674           135,477
                                                                             -----------       -----------
Operating income                                                                  16,849             6,261
Nonoperating expense, net                                                         (1,951)          (11,494)
                                                                             -----------       -----------
Income (loss) before provision (benefit) for income taxes                         14,898            (5,233)
Provision (benefit) for income taxes                                               5,636            (2,041)
                                                                             -----------       -----------
Income (loss) before cumulative effect of change in accounting for
   negative goodwill                                                               9,262            (3,192)
Cumulative effect of change in accounting for negative
   goodwill                                                                           --               213
                                                                             -----------       -----------
Net income (loss)                                                            $     9,262       $    (2,979)
                                                                             ===========       ===========

Basic earnings (loss) per share before cumulative effect of change
   in accounting for negative goodwill                                       $      0.20       $     (0.07)
Cumulative effect of change in accounting for negative goodwill                       --              0.01
                                                                             -----------       -----------
Basic earnings (loss) per share                                              $      0.20       $     (0.06)
                                                                             ===========       ===========

Basic weighted-average common shares outstanding                                  47,110            47,901

Diluted earnings (loss) per share before cumulative effect of change in
   accounting for negative goodwill                                          $      0.20       $     (0.07)
Cumulative effect of change in accounting for negative goodwill                       --              0.01
                                                                             -----------       -----------
Diluted earnings (loss) per share                                            $      0.20       $     (0.06)
                                                                             ===========       ===========

Diluted weighted-average common shares outstanding                                47,355            47,901

</Table>

       See notes to unaudited condensed consolidated financial statements.



                                       2
<PAGE>
                                    EGL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                    (in thousands, except per share amounts)

<Table>
<Caption>
                                                                    THREE MONTHS ENDED
                                                                         JUNE 30,
                                                                -------------------------
                                                                   2003            2002
                                                                ---------       ---------
<S>                                                             <C>             <C>
Revenues                                                        $ 526,863       $ 454,919
Cost of transportation                                            341,333         291,764
                                                                ---------       ---------
Net revenues                                                      185,530         163,155

Operating expenses:
        Personnel costs                                           104,758          90,177
        Other selling, general and administrative expenses         68,561          68,253
                                                                ---------       ---------
Operating income                                                   12,211           4,725
Nonoperating expense, net                                          (1,809)         (3,188)
                                                                ---------       ---------
Income before provision for income taxes                           10,402           1,537
Provision for income taxes                                          3,935             599
                                                                ---------       ---------

Net income                                                      $   6,467       $     938
                                                                =========       =========

Basic earnings per share                                        $    0.14       $    0.02
Basic weighted-average common shares outstanding                   47,154          47,895

Diluted earnings per share                                      $    0.14       $    0.02
Diluted weighted-average common shares outstanding                 47,424          48,152
</Table>

       See notes to unaudited condensed consolidated financial statements.



                                       3
<PAGE>

                                    EGL, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (in thousands)

<Table>
<Caption>
                                                                                   SIX MONTHS ENDED
                                                                                       JUNE 30,
                                                                               -------------------------
                                                                                 2003            2002
                                                                               ---------       ---------
<S>                                                                            <C>             <C>
Cash flows from operating activities:
   Net income (loss)                                                           $   9,262       $  (2,979)
   Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
         Depreciation and amortization                                            15,377          14,869
         Bad debt expense                                                          4,457           4,821
         Amortization of unearned compensation                                        --             317
         Deferred income tax expense (benefit)                                     2,808         (10,715)
         Tax benefit of stock options exercised                                      200             134
         Equity in earnings of affiliates, net of dividends received                (105)           (848)
         Minority interests, net of dividends paid                                   636             606
         Transfer to restricted cash                                              (3,286)         (1,185)
         Cumulative effect of change in accounting for negative
            goodwill                                                                  --            (213)
         Impairment of investment in an unconsolidated affiliate                      --           6,653
         Other                                                                      (114)            766
         Net effect of changes in working capital, net of assets acquired        (28,573)         34,537
                                                                               ---------       ---------
Net cash provided by operating activities                                            662          46,763
                                                                               ---------       ---------
Cash flows from investing activities:
   Capital expenditures                                                          (10,832)         (9,813)
   Proceeds from sales of other assets                                               540           7,350
   Proceeds from sale-lease back transactions                                      1,158           2,462
   Acquisitions of businesses, net of cash acquired                              (21,084)             --
   Dividend paid to minority interest partner                                        (93)             --
                                                                               ---------       ---------
Net cash used in investing activities                                            (30,311)             (1)
                                                                               ---------       ---------
Cash flows from financing activities:
   Issuance (repayment) of notes payable                                              31          (1,528)
   Issuance of common stock for employee stock purchase plan                         272             779
   Proceeds from exercise of stock options                                         1,247             330
                                                                               ---------       ---------
Net cash provided by (used in) financing activities                                1,550            (419)
                                                                               ---------       ---------

Effect of exchange rate changes on cash                                             (894)            970
                                                                               ---------       ---------
Increase (decrease) in cash and cash equivalents                                 (28,993)         47,313
Cash and cash equivalents, beginning of the period                               111,477          77,440
                                                                               ---------       ---------
Cash and cash equivalents, end of the period                                   $  82,484       $ 124,753
                                                                               =========       =========
</Table>

       See notes to unaudited condensed consolidated financial statements.



                                       4
<PAGE>
                                    EGL, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
                                 (in thousands)

<Table>
<Caption>
                                                                                                            Accumulated
                                                           Additional                                         other
                                         Common stock       paid-in      Retained      Treasury stock      comprehensive
                                       Shares    Amount     capital      earnings    Shares      Amount        loss        Total
                                       ------    ------    ----------    --------    ------     --------   -------------  --------
<S>                                    <C>       <C>       <C>           <C>         <C>        <C>        <C>            <C>
Balance at December 31, 2002           48,091    $   48    $ 148,682     $274,146     1,037     $(17,769)    $(28,566)    $376,541
Net income                                 --        --           --        9,262        --           --           --        9,262
Recognition in earnings of net
    deferred loss on swaps                 --        --           --           --        --           --          114          114
Foreign currency translation
    adjustments                            --        --           --           --        --           --        4,782        4,782
Issuance of shares under
    employee stock purchase plan           --        --         (111)          --       (22)         383           --          272
Exercise of stock options,
     including tax benefit                124        --        1,447           --        --           --           --        1,447
                                       ------    ------    ---------     --------     -----     --------     --------     --------
Balance at June 30, 2003               48,215    $   48    $ 150,018     $283,408     1,015     $(17,386)    $(23,670)    $392,418
                                       ======    ======    =========     ========     =====     ========     ========     ========
</Table>

       See notes to unaudited condensed consolidated financial statements.



                                       5
<PAGE>
                                    EGL, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         The accompanying unaudited condensed consolidated financial statements
have been prepared by EGL, Inc. (EGL or the Company) in accordance with the
rules and regulations of the Securities and Exchange Commission (the SEC) for
interim financial statements and, accordingly, do not include all information
and footnotes required under generally accepted accounting principles for
complete financial statements. The financial statements have been prepared in
conformity with the accounting principles and practices disclosed in, and should
be read in conjunction with, the annual financial statements of the Company
included in the Company's Annual Report on Form 10-K (File No. 0-27288). In the
opinion of management, these interim financial statements contain all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the Company's financial position at June 30, 2003 and the
results of its operations for the three and six months ended June 30, 2003 and
its cash flows for the six months ended June 30, 2003. Results of operations for
the three and six months ended June 30, 2003 are not necessarily indicative of
the results that may be expected for EGL's full fiscal year.

NOTE 1 - ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         EGL is a leading global transportation, supply chain management and
information services company operating in one business segment and dedicated to
providing flexible logistics solutions on a price competitive basis. The
Company's services include air and ocean freight forwarding, customs brokerage,
local pick up and delivery service, materials management, warehousing, trade
facilitation and procurement and integrated logistics and supply chain
management services. The Company provides services in over 100 countries on six
continents through offices around the world as well as through its worldwide
network of exclusive and nonexclusive agents. The principal markets for all
lines of business are North America, Europe and Asia with significant operations
in the Middle East, India, South America and South Pacific (see Note 12).

BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

         The accompanying condensed consolidated financial statements include
EGL and all of its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation. Investments in
50% or less owned affiliates, over which the Company has significant influence,
are accounted for by the equity method. The Company has reclassified certain
prior period amounts to conform with the current period presentation.

USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates that affect the amounts reported in the financial
statements and accompanying notes. Management considers many factors in
selecting appropriate operational and financial accounting policies and
controls, and in developing the assumptions that are used in the preparation of
these financial statements. Management must apply significant judgment in this
process. Among the factors, but not fully inclusive of all factors that may be
considered by management in these processes are: the range of accounting
policies permitted by accounting principles generally accepted in the United
States of America; management's understanding of the Company's business - both
historical results and expected future results; the extent to which operational
controls exist that provide high degrees of assurance that all desired
information to assist in the estimation is available and reliable or whether
there is greater uncertainty in the information that is available upon which to
base the estimate; expectations of the future performance of the economy, both
domestically, and globally, within various areas that serve the Company's
principal customers and suppliers of goods and services; expected rates of
change, sensitivity and volatility associated with the assumptions used in
developing estimates; and whether historical trends are expected to be
representative of future trends. The estimation process often times may yield a
range of potentially reasonable estimates of the ultimate future outcomes and
management must select an amount that lies within that range of reasonable
estimates - which may result in the selection of estimates which could be viewed
as conservative or aggressive by others - based upon the quantity, quality and
risks associated with the variability that might be expected from the future
outcome and the factors considered in developing the estimate. Management uses
its business and financial accounting judgment in selecting the most appropriate
estimates. The Company believes that the estimates utilized in the preparation
of the condensed consolidated financial statements are prudent and reasonable;
however, actual amounts could and will differ from those estimates.



                                       6
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



COMPREHENSIVE INCOME

         Components of comprehensive income for the three and six months ended
June 30, 2003 and 2002 are as follows (in thousands):

<Table>
<Caption>
                                      SIX MONTHS ENDED JUNE 30,    THREE MONTHS ENDED JUNE 30,
                                      -------------------------    ---------------------------
                                          2003        2002              2003        2002
                                        -------     -------            -------     -------
<S>                                     <C>         <C>                <C>         <C>
Net income (loss)                       $ 9,262     $(2,979)           $ 6,467     $   938
Change in value of marketable
       securities, net                       --         (14)                --         (17)
Recognition in earnings of net
      deferred loss on swaps                114         761                112         382
Foreign currency translation
       adjustments                        4,782       4,032              4,821       6,218
                                        -------     -------            -------     -------
Comprehensive income                    $14,158     $ 1,800            $11,400     $ 7,521
                                        =======     =======            =======     =======
</Table>

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS

         In June 2001, the Financial Accounting Standards Board issued SFAS No.
143 (SFAS 143), "Accounting for Asset Retirement Obligations." SFAS 143
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and the associated asset retirement
costs. This statement requires that the fair value of a liability for an asset
retirement obligation be recognized in the period in which it is incurred and
that the associated long-lived asset retirement costs are capitalized. This
statement is effective for fiscal years beginning after June 15, 2002. The
Company adopted SFAS 143, beginning January 1, 2003, with no material impact on
its results of operations, financial position or cash flows.

         In June 2002, the Financial Accounting Standards Board issued SFAS No.
146 (SFAS 146), "Accounting for Costs Associated with Exit or Disposal
Activities." SFAS 146 supersedes EITF Issue No. 94-3 "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." SFAS 146 requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred and establishes fair value as the objective for
initial measurement of a liability. SFAS 146 states that an entity's commitment
to a plan does not create a present obligation to others that meets the
definition of a liability. Generally, SFAS 146 was effective for exit or
disposal activities initiated after December 31, 2002. The Company adopted SFAS
146 as of January 1, 2003 with no material impact on its results of operations,
financial position or cash flows.

         In November 2002, the Financial Accounting Standards Board issued FASB
Interpretation No. 45 (FIN 45), "Guarantor's Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others." FIN 45 expands on the accounting guidance of SFAS 5, 57 and 107 and
incorporates without change the provisions of FIN 34, which is being superseded.
FIN 45 elaborates on the existing disclosure requirements for most guarantees
and clarifies that at the time a company issues a guarantee, the company must
recognize an initial liability for the fair value, or market value, of the
obligations it assumes under that guarantee and must disclose that information
in its interim and annual financial statements. The initial recognition and
initial measurement provisions apply on a prospective basis to guarantees issued
or modified after December 31, 2002. The disclosure requirements in FIN 45 are
effective for financial statements of interim or annual periods ending after
December 15, 2002. The Company adopted the disclosure provisions of FIN 45
effective December 31, 2002 and the remainder of this pronouncement effective
January 1, 2003 with no material impact on its results of operations, financial
position or cash flows.



                                       7
<PAGE>

                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



         In January 2003, the Financial Accounting Standards Board issued FIN
No. 46 (FIN 46), "Consolidation of Variable Interest Entities, an interpretation
of ARB 51." The primary objectives of FIN 46 are to provide guidance on the
identification of entities for which control is achieved through means other
than through voting rights ("variable interest entities" or "VIEs") and how to
determine when and which business enterprise should consolidate the VIE (the
"primary beneficiary"). This new model for consolidation applies to an entity in
which either (1) the equity investors (if any) do not have a controlling
financial interest or (2) the equity investment at risk is insufficient to
finance that entity's activities without receiving additional subordinated
financial support from other parties. In addition, FIN 46 requires that both the
primary beneficiary and all other enterprises with a significant variable
interest in a VIE make additional disclosures. The provisions of FIN 46 are
effective for the Company as of July 1, 2003. Adoption of FIN 46 may change the
accounting treatment for an affiliate of the Company, Ashton Leasing, Ltd.
(Ashton). The Company and certain independent owner-operators lease vehicles
from Ashton. The Company owns 70% of and is a limited partner of Ashton. Prior
to the adoption of FIN 46, due to its limited voting rights, the Company used
the equity method to account for its investment in Ashton. Upon adoption of FIN
46, the Company may consolidate Ashton, which is not expected to have a
material impact on the Company's results of operations, financial position or
cash flows.

         In March 2003, the Emerging Issues Task Force released EITF Issue No.
00-21 "Revenue Arrangements with Multiple Deliverables" (EITF 00-21). This issue
addresses certain aspects of the accounting by a vendor for arrangements under
which it will perform multiple revenue-generating activities. This issue is
effective for revenue arrangements entered into in fiscal periods beginning
after June 15, 2003. Adoption of EITF 00-21 is not expected to have a
significant impact on the Company's results of operations, financial position or
cash flows.

         In April 2003, the Financial Accounting Standards Board issued SFAS No.
149 (SFAS 149), "Amendment of Statement 133 on Derivative Instruments and
Hedging Activities." SFAS 149 amends FASB Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities" and, generally, improves
financial reporting by requiring that contracts with comparable characteristics
be accounted for similarly and clarifies when a derivative contains a financing
component that warrants special reporting in the statement of cash flows. SFAS
149 is effective (1) for contracts entered into or modified after June 30, 2003,
with certain exceptions, and (2) for hedging relationships designated after June
30, 2003. Adoption of SFAS 149 is not expected to have a material impact on the
Company's results of operations, financial position or cash flows.

NOTE 3 - BUSINESS COMBINATIONS

         During the first quarter of 2003, the Company acquired Transimpex, SA,
an international freight forwarder and customs broker based in France, for
approximately $1.1 million, net of cash acquired and made an earnout payment of
$600,000 related to an acquisition completed in a prior year.

         On April 1, 2003, the Company acquired substantially all of the
operating assets of Miami International Forwarders (MIF), a privately held
international freight forwarder and customs broker based in Miami, Florida.
Aggregate consideration for the acquisition totaled $23.7 million, comprised of
$13.7 million in cash and future payments of $10.0 million in the aggregate,
which are payable in two equal payments of $5.0 million in April 2004 and 2005.
The purchase agreement for the acquisition provided for additional contingent
two-year earnout payments of up to $8.0 million in the aggregate if certain
post-acquisition performance criteria are achieved. The acquisition added to the
Company's condensed consolidated balance sheet approximately $12.4 million in
intangible assets, $11.0 million in goodwill and $288,000 in net tangible
assets. The Company recorded the acquisition using the purchase method of
accounting, with the related results of operations being included in the
Company's condensed consolidated financial statements from the date of
acquisition forward. All contingent payments for the acquisition will be
accounted for as adjustments to goodwill and will be recorded at the time that
the amounts of the payments are determinable by the Company. The pro forma
effect on revenues and net income of the Company assuming this acquisition was
consummated at January 1, 2002 would have been immaterial.

         In April 2003, the Company purchased from one of its joint venture
partners a 26% interest in the Company's operating subsidiary in Singapore.
Prior to the acquisition, the Company owned 74% of this entity and consolidated
it for financial reporting purposes. The purchase consideration for the interest
the Company did not previously own



                                       8
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)



consisted of approximately $5.7 million in cash, which included $3.7 million for
the minority interest liability at the acquisition date. The acquisition added
to the Company's condensed consolidated balance sheet approximately $891,000 of
intangible assets and $1.1 million of other long-term assets.

NOTE 4 - DERIVATIVE INSTRUMENTS

         In April 2001, the Company entered into a two year interest rate swap
agreement, which was designated as a cash flow hedge, to reduce its exposure to
fluctuations in interest rates on $70 million of its LIBOR based revolving
credit facility or any substitute debt agreements the Company enters into.
Accordingly, the change in the fair value of the swap agreement was initially
recorded in other comprehensive income. In December 2001, the Company issued
$100 million of 5% convertible subordinated notes due December 15, 2006. The
proceeds from these notes substantially retired the LIBOR based debt outstanding
under the then-existing revolving credit agreement. The interest rate on the
convertible notes is fixed; therefore, the variability of the future interest
payments has been eliminated. The swap agreement no longer qualified for cash
flow hedge accounting and was undesignated as of December 7, 2001. The net loss
on the swap agreement included in other comprehensive income as of December 7,
2001 was $2.0 million and is being amortized to interest expense over the
remaining life of the swap agreement. Subsequent changes in the fair value of
the swap agreement are recorded in interest expense. During the three and six
months ended June 30, 2003, the Company recorded $127,000 and $506,000,
respectively, of realized and unrealized losses on the interest rate swap
agreement. The interest rate swap agreement expired in April 2003.

         In conjunction with its aircraft charter agreements, the Company is
obligated to pay current market prices for jet fuel. During November 2002, the
Company entered into a jet fuel swap agreement. The purpose of this agreement is
to hedge the Company's exposure to volatility in market prices for jet fuel. The
swap agreement has a term of one year and expires in December 2003. On a monthly
basis, the Company pays a fixed rate of approximately $0.68 per gallon for
400,000 gallons of jet fuel and receives a payment equal to the monthly average
commodity price for the same amount of jet fuel. The Company originally
designated this swap as a cash flow hedge under the provisions of SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities." Due to changes
in the market prices of jet fuel and the associated volatility during the first
quarter of 2003, the swap agreement was ineffective both for the three months
ended March 31, 2003 and on a prospective basis, and no longer qualifies for
cash flow hedge accounting. Changes in the fair value of the swap agreement
after March 2003 are recognized in earnings. During the three and six months
ended June 30, 2003, the Company recorded approximately $67,000 and $631,000,
respectively, in nonoperating income for associated realized and unrealized
gains. The fair value of this swap agreement at June 30, 2003 was an asset of
approximately $223,000.

NOTE 5 - STOCK-BASED COMPENSATION

         At June 30, 2003, the Company has six stock-based employee compensation
plans under which stock-based awards have been granted. The Company accounts for
stock-based awards to employees and non-employee directors using the intrinsic
value method prescribed in Accounting Principles Board No. 25, "Accounting for
Stock Issued to Employees," and related interpretations. The intrinsic value
method used by the Company generally results in no compensation expense being
recorded for stock option grants made by the Company because those grants are
typically made with option exercise prices substantially equal to fair market
value at the date of option grant. The application of the alternative fair value
method under SFAS No. 123 (SFAS 123), "Accounting for Stock-Based Compensation,"
which estimates the fair value of the option awarded to the employee, would
result in compensation expense being recognized over the period of time that the
employee's rights in the options vest. The following table illustrates the pro
forma effect on net income (loss) and earnings (loss) per share if the Company
had applied the fair value recognition provisions of SFAS 123 to stock-based
employee compensation (in thousands, except per share amounts).



                                       9
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


<Table>
<Caption>
                                                    SIX MONTHS ENDED             THREE MONTHS ENDED
                                                         JUNE 30,                      JUNE 30,
                                                  -----------------------      -----------------------
                                                     2003          2002           2003          2002
                                                  ---------     ---------      ---------     ---------
<S>                                               <C>           <C>            <C>           <C>
Net income (loss) as reported                     $   9,262     $  (2,979)     $   6,467     $     938
Deduct:  Total stock-based employee
       compensation expense determined
       under the fair value based method for
       all awards, net of related tax effects         2,337         2,720            927         1,447
                                                  ---------     ---------      ---------     ---------
Pro forma net income (loss)                       $   6,925     $  (5,699)     $   5,540     $    (509)
                                                  =========     =========      =========     =========

Earnings (loss) per share:
       Basic-as reported                          $    0.20     $   (0.06)     $    0.14     $    0.02
       Basic-pro forma                                 0.15         (0.12)          0.12         (0.01)
       Diluted-as reported                             0.20         (0.06)          0.14          0.02
       Diluted-pro forma                               0.15         (0.12)          0.12         (0.01)
</Table>

NOTE 6 - EARNINGS (LOSS) PER SHARE

         Basic earnings (loss) per common share excludes dilution and is
computed by dividing income (loss) available to common shareholders by the
weighted average number of shares outstanding for the period. Diluted earnings
(loss) per common share includes potential dilution that could occur if options
to issue common stock were exercised. Stock options and shares issuable upon
conversion of the convertible notes issued in December 2001 are the only
potentially dilutive share equivalents the Company has outstanding for the
periods presented.

         The table below indicates the potential common shares issuable which
were included in computing the dilutive potential common shares used in diluted
earnings (loss) per common share (in thousands):

<Table>
<Caption>
                                                                            SIX MONTHS ENDED       THREE MONTHS ENDED
                                                                                JUNE 30,                JUNE 30,
                                                                           ------------------      ------------------
                                                                            2003        2002        2003        2002
                                                                           ------      ------      ------      ------
<S>                                                                        <C>         <C>         <C>         <C>
Weighted average common shares outstanding--used in basic earnings
   (loss) per common share ............................................    47,110      47,901      47,154      47,895
Net dilutive potential common shares issuable:
      On exercise of options ..........................................       245          --         270         257
      On conversion of convertible senior notes .......................        --          --          --          --
                                                                           ------      ------      ------      ------
Weighted average common shares and dilutive potential common shares--
   used in diluted earnings (loss) per common share ...................    47,355      47,901      47,424      48,152
                                                                           ======      ======      ======      ======
</Table>

         The table below indicates the potential common shares issuable which
were excluded from diluted potential common shares as their effect would be
anti-dilutive (in thousands):

<Table>
<Caption>
                                                                           SIX MONTHS ENDED    THREE MONTHS ENDED
                                                                               JUNE 30,              JUNE 30,
                                                                           -----------------    ------------------
                                                                           2003       2002       2003       2002
                                                                           -----      -----      -----      -----
<S>                                                                         <C>        <C>        <C>        <C>
Net dilutive potential common shares issuable:
      On exercise of options - exercise price greater than average
         market value during period .....................................   4,302      4,439      4,179      4,414
      On exercise of options - antidilutive due to net loss during
         period .........................................................      --        226         --         --
      On conversion of convertible senior notes .........................   5,736      5,736      5,736      5,736
</Table>



                                       10
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


NOTE 7 - IMPAIRMENT OF INVESTMENT IN AN UNCONSOLIDATED AFFILIATE

         In the first quarter of 2002, the Company recognized an other than
temporary impairment of the entire $6.7 million carrying value of its common
stock investment in Miami Air, which included a $509,000 increase in value
attributable to the Company's 24.5% share of Miami Air's first quarter 2002
results of operations. In addition, the Company recorded an accrual of $1.3
million for its estimated exposure on the outstanding funded debt and letters of
credit supported by the standby letter of credit issued by the Company in favor
of certain creditors for Miami Air. During the third quarter of 2002, Miami Air
informed the Company that certain of its creditors had made certain concessions.
The Company has not adjusted its accrual. Furthermore, there can be no assurance
that the ultimate loss, if any, will not exceed such accrual. As of June 30,
2003, the standby letter of credit was $3.0 million and Miami Air had no funded
debt outstanding under the line of credit that is supported by the standby
letter of credit.

NOTE 8 - MERGER TRANSACTION, RESTRUCTURING AND INTEGRATION COSTS

         The Company maintains an accrual for charges established under its
fourth quarter 2000 plan (the Plan) to integrate the former EGL and Circle
operations and to eliminate duplicate facilities resulting from the merger. The
principal components of the Plan involved the termination of certain employees
at the former Circle's headquarters and various international locations,
elimination of duplicate facilities in the United States and certain
international locations, and the termination of selected joint venture and
agency agreements at certain of the Company's international locations. With the
exception of payments to be made for remaining future lease obligations, the
terms of the Plan were substantially completed in 2001. There were no charges
incurred under the Plan in the six months ended June 30, 2003 and 2002. The
changes in the accrual during the six months ended June 30, 2003 and the
remaining unpaid accrued charges as of December 31, 2002 and June 30, 2003 are
as follows (in thousands):

<Table>
<Caption>
                                                      Accrued liability                   Accrued liability
                                                        December 31,         Payments/        June 30,
                                                            2002            Reductions          2003
                                                      -----------------     ----------    -----------------
<S>                                                   <C>                   <C>           <C>
Severance costs                                           $    787           $    336         $    451
Future lease obligations, net of subleasing                  7,215              1,483            5,732
Termination of joint venture/agency agreements                 225                 17              208
                                                          --------           --------         --------
                                                          $  8,227           $  1,836         $  6,391
                                                          ========           ========         ========
</Table>

         Future lease obligations consist of the Company's remaining lease
obligations under noncancelable operating leases at domestic and international
locations that the Company has vacated and consolidated due to excess capacity
resulting from the Company having multiple facilities in certain locations. All
lease costs for facilities being consolidated were charged to operations until
the date that the Company vacated each facility.

         Amounts recorded for future lease obligations under the Plan are net of
approximately $15.9 million in anticipated future recoveries from actual
sublease agreements and $12.0 million from expected sublease agreements as of
June 30, 2003. Sublease income has been anticipated under the Plan only in
locations where sublease agreements have been executed as of June 30, 2003 or
are deemed probable of execution during 2003. There is a risk that subleasing
transactions will not occur within the same timing or pricing assumptions made
by the Company, or at all, which could result in future revisions to these
estimates.



                                       11
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


NOTE 9 - NOTES PAYABLE

CONVERTIBLE SUBORDINATED NOTES

         In December 2001, the Company issued $100 million aggregate principal
amount of 5% convertible subordinated notes. The notes bear interest at an
annual rate of 5%. Interest is payable on June 15 and December 15 of each year.
The notes mature on December 15, 2006. Deferred financing fees incurred in
connection with the transaction totaled $3.2 million and are being amortized
over five years as a component of interest expense.

         The notes are convertible at any time up to four trading days prior to
maturity into shares of common stock at a conversion price of approximately
$17.4335 per share, subject to certain adjustments, which was a premium of 20.6%
of the stock price at the issuance date. This is equivalent to a conversion rate
of 57.3608 shares per $1,000 principal amount of notes. Upon conversion, a
noteholder will not receive any cash representing accrued interest, other than
in the case of a conversion in connection with an optional redemption. The
shares that are potentially issuable may impact the Company's diluted earnings
per share calculation in future periods by approximately 5.7 million shares. As
of June 30, 2003, the estimated fair value of these notes was $114.1 million.

         The Company may redeem the notes on or after December 20, 2004 at
specified redemption prices, plus accrued and unpaid interest to, but excluding,
the redemption date. Upon a change in control (as defined in the indenture for
the notes), a noteholder may require the Company to purchase its notes at 100%
of the principal amount of the notes, plus accrued and unpaid interest to, but
excluding, the purchase date.

         The notes are general unsecured obligations of the Company. The notes
are subordinated in right of payment to all of the Company's existing and future
senior indebtedness as defined in the indenture. The Company and its
subsidiaries are not prohibited from incurring senior indebtedness or other debt
under the indenture for the notes. The notes impose some restrictions on mergers
and sales of substantially all of the Company's assets.

CREDIT AGREEMENTS

         Effective December 20, 2001, the Company amended and restated its
credit facility originally entered into on January 5, 2001. The amended and
restated credit facility (Restated Credit Facility), which was last amended
effective as of March 31, 2003, is with a syndicate of three financial
institutions, with Bank of America, N.A. (the Bank) as collateral and
administrative agent for the lenders, and matures on December 20, 2004. The
Restated Credit Facility provides a revolving line of credit of up to the lesser
of:

o        $75 million, which will be increased to $100 million if an additional
         $25 million of the revolving line of credit commitment is syndicated to
         other financial institutions, or

o        an amount equal to:

         o        up to 85% of the net amount of the Company's billed and posted
                  eligible accounts receivable and the billed and posted
                  eligible accounts receivable of its wholly owned domestic
                  subsidiaries and its operating subsidiary in Canada, subject
                  to some exceptions and limitations, plus

         o        up to 85% of the net amount of the Company's billed and
                  unposted eligible accounts receivable and billed and unposted
                  eligible accounts receivable of its wholly owned domestic
                  subsidiaries owing by account debtors located in the United
                  States, subject to a maximum aggregate availability cap of $10
                  million, plus

         o        up to 50% of the net amount of the Company's unbilled, fully
                  earned and unposted eligible accounts receivable and unbilled,
                  fully earned and unposted eligible accounts receivable of its
                  wholly owned domestic subsidiaries owing by account debtors
                  located in the United States, subject to a maximum aggregate
                  availability cap of $10 million, minus



                                       12
<PAGE>

                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


         o        reserves from time to time established by the Bank in its
                  reasonable credit judgment.

         The aggregate of the last four sub-bullet points above is referred to
as the Company's eligible borrowing base.

         The maximum amount that the Company can borrow at any particular time
may be less than the amount of its revolving credit line because the Company is
required to maintain a specified amount of borrowing availability under the
Restated Credit Facility based on the Company's eligible borrowing base. As of
June 30, 2003, the required amount of borrowing availability is $25 million. The
amount of borrowing availability is determined by subtracting the following from
the Company's eligible borrowing base: (a) the Company's borrowings under the
Restated Credit Facility; and (b) the Company's accounts payable and the
accounts payable of all of its domestic subsidiaries and its Canadian operating
subsidiary that remain unpaid more than the longer of (i) sixty days from their
respective invoice dates or (ii) thirty days from their respective due dates.

         The Restated Credit Facility includes a $50 million letter of credit
subfacility. The Company had $31.5 million in standby letters of credit
outstanding as of June 30, 2003 under this facility. The collateral value
associated with the revolving line of credit at June 30, 2003 was $176.8
million, which exceeds the maximum revolving credit line of $75.0 million. No
amounts were outstanding under the revolving line of credit as of June 30, 2003.
Therefore, the Company had available, unused borrowing capacity of $43.5 million
as of June 30, 2003.

         For each tranche of principal borrowed under the revolving line of
credit, the Company may elect an interest rate of either LIBOR plus an
applicable margin of 2.00% to 2.75% that varies based upon availability under
the line, or the prime rate announced by the Bank, plus, if the borrowing
availability is less than $25 million, an applicable margin of 0.25%.

         The Company refers to borrowings bearing interest based on LIBOR as a
LIBOR tranche and to other borrowings as a prime rate tranche. The interest on a
LIBOR tranche is payable on the last day of the interest period (one, two or
three months, as selected by the Company) for such LIBOR tranche. The interest
on a prime rate tranche is payable monthly.

         A termination fee of 0.25% of the total revolving commitment would be
payable upon termination of the Restated Credit Facility if the termination
occurs before December 20, 2003 (unless terminated in connection with a
refinancing arranged or underwritten by the Bank or its affiliates).

         The Company is subject to certain covenants under the terms of the
Restated Credit Facility, including, but not limited to, (a) maintenance at the
end of each fiscal quarter of a minimum specified adjusted tangible net worth
and (b) limitations on capital expenditures of $12 million per quarter or $48
million cumulative per year.

         The Restated Credit Facility also places restrictions on additional
indebtedness, dividends, liens, investments, acquisitions, asset dispositions,
change of control and other matters, is secured by substantially all of the
Company's assets, and is guaranteed by all domestic subsidiaries and the
Company's Canadian operating subsidiary. In addition, the Company will be
subject to additional restrictions, including restrictions with respect to
distributions and asset dispositions if the Company's eligible borrowing base
falls below $40 million. Events of default under the Restated Credit Facility
include, but are not limited to, the occurrence of a material adverse change in
the Company's operations, assets or financial condition or its ability to
perform under the Restated Credit Facility or that of any of the Company's
domestic subsidiaries or its Canadian operating subsidiary. The Amendment to the
Credit Agreement dated March 31, 2003 consented to the Company's acquisition of
substantially all the business operations and assets of MIF (see Note 3).

NOTE 10 - GUARANTEES

         At June 30, 2003, the Company had guaranteed certain financial
liabilities, the majority of which relate to the Company's freight forwarding
operations. The Company, in the normal course of business, is required to
guarantee certain amounts related to customs bonds and services received from
airlines. These types of guarantees are usual and customary in the freight
forwarding industry and include IATA (International Air Transport Association)
guarantees



                                       13
<PAGE>

                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


together with customs bonds. The Company operates as a customs broker
and prepares and files all formal documentation required for clearance through
customs agencies, obtains customs bonds, in many cases facilitates the payment
of import duties on behalf of the importer, arranges for payment of collect
freight charges and assists the importer in obtaining the most advantageous
commodity classifications and in qualifying for duty drawback refunds. The
Company also arranges for surety bonds for importers as part of its customs
brokerage activities.

         The Company secures guarantees primarily by three methods: a $50
million standby letter of credit subfacility discussed in Note 9, surety bonds
and security time deposits which are restricted as to withdrawal for a specified
timeframe and are classified on the Company's balance sheet as restricted cash.

         The Company issues IATA related guarantees, customs bonds and other
working capital credit line guarantees in the normal course of business. IATA
related guarantees and customs bonds are issued to facilitate the movement and
clearance of freight. Working capital credit line guarantees include, but are
not limited to, guarantees associated with insurance requirements and certain
potential tax obligations. Generally, guarantees have one-year or two-year
terms and are renewed upon expiration. As of June 30, 2003, total IATA related
guarantees, customs bonds and other working capital credit line guarantees were
approximately $81.8 million. Approximately $54.5 million in liabilities related
to these guarantees are reflected in the Company's condensed consolidated
financial statements.

         Additionally, at June 30, 2003, the Company had guaranteed certain
other financial liabilities related to unconsolidated affiliates, joint venture
investments and business acquisitions as detailed below.

         In connection with its equity investment in Miami Air, the Company
caused a standby letter of credit to be issued in favor of certain creditors for
Miami Air to assist Miami Air in financing the conversion of its aircraft. Miami
Air agreed to pay the Company an annual fee equal to 3.0% of the face amount of
the letter of credit and to reimburse the Company for any payments made by the
Company in respect to the letter of credit. As of June 30, 2003, Miami Air had
no funded debt under the line of credit that is supported by the standby letter
of credit. Additionally, as of June 30, 2003, Miami Air had outstanding $2.9
million in letters of credit and surety bonds that were supported by the standby
letter of credit. Payment by the Company would be required upon default by Miami
Air. The maximum potential amount of future payments which the Company could be
required to make under this guarantee at June 30, 2003 is $3.0 million. The
Company has an accrual of $1.3 million as of June 30, 2003 for its estimated
exposure on this standby letter of credit.

         The Company is a guarantor on a revolving line of credit with respect
to another of the Company's unconsolidated affiliates. The outstanding balance
owed by the unconsolidated affiliate was $60,000 as of June 30, 2003 and the
maximum exposure to the Company under this guarantee is $300,000.

         In connection with two of the Company's 51% owned subsidiaries, the
Company has guaranteed 100% of the working capital line of credit and other
various operational guarantees of each of these joint ventures. As of June 30,
2003, the maximum amount of these guarantees was $3.0 million with $2.1 million
drawn against these obligations.

         The Company is a guarantor for 40% of outstanding amounts on a $5.0
million revolving line of credit for one of the Company's unconsolidated
affiliates. The unconsolidated affiliate's outstanding balance was approximately
$3.9 million at June 30, 2003; therefore, the amount of the Company's guarantee
was approximately $1.6 million. The future maximum exposure to the Company under
this guarantee is $2.0 million.

         In connection with its acquisition of MIF in April 2003, the Company is
contingently liable for a two-year earnout payment of up to $8.0 million in cash
if certain post-acquisition performance criteria are achieved. Contingent
payments will be recorded at the time that the amounts of the payments are
determinable by the Company.

         In addition, the Company has entered into indemnification agreements
with certain officers and directors of the Company.



                                       14
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


NOTE 11 - LEGAL MATTERS

EEOC LEGAL SETTLEMENT

         On October 2, 2001, the U.S. Equal Employment Opportunity Commission
(the EEOC) and EGL announced the filing of a Consent Decree settlement. This
settlement resolves all claims of discrimination and/or harassment raised by the
EEOC's Commissioner's Charge. The EEOC's Commissioner's Charge was issued in
December 1997 and subsequent events were most recently disclosed in our Form
10-K for the year ended December 31, 2002. Under the Consent Decree, the Company
agreed to pay $8.5 million into a fund (the Class Fund) that will compensate
individuals who claim to have experienced discrimination. The settlement covers
(1) claims by applicants arising between December 1, 1995 and December 31, 2000;
(2) disparate pay claims arising between January 1, 1995 and April 30, 2000; (3)
promotion claims arising between December 1, 1995 and December 31, 1998; and (4)
all other adverse treatment claims arising between December 31, 1995 and
December 31, 2000. In addition, the Company agreed to contribute $500,000 to
establish a Leadership Development Program (the Leadership Development Fund).
This Program will provide training and educational opportunities for women and
minorities already employed by the Company and will also establish scholarships
and work study opportunities at educational institutions. In entering the
Consent Decree, the Company has not made any admission of liability or
wrongdoing. The Consent Decree was approved by the District Court in Houston on
October 1, 2001. The Consent Decree became effective on October 3, 2002
following the dismissal of all appeals related to the Decree. During the quarter
ended September 30, 2001, the Company accrued $10.1 million related to the
settlement, which includes the $8.5 million payment into the Class Fund and
$500,000 into the Leadership Development Fund described above, administrative
costs, legal fees and other costs associated with the EEOC litigation and
settlement.

         The Consent Decree settlement provides that the Company establish and
maintain segregated accounts for the Class Fund and Leadership Development Fund.
The Company made an initial deposit of $2.5 million to the Class Fund within 30
days after the Consent Decree was approved and is required to fund the remaining
$6.0 million of the Class Fund in equal installments of $2.0 million each on or
before the fifth day of the first month of the calendar quarter (January 5th,
April 5th and October 5th) immediately after the effective date of the Consent
Decree. The Leadership Development Fund was funded fully at the time of the
first quarterly payment as discussed above. As of June 30, 2003, the Company had
funded $6.5 million into the Class Fund and $500,000 into the Leadership
Development Fund. This amount is included as restricted cash in the accompanying
condensed consolidated balance sheet. Total related accrued liabilities included
in the accompanying condensed consolidated balance sheet at June 30, 2003 were
$12.0 million.

         Of the eight named plaintiffs who filed suit against the Company in
2000 alleging gender, race and national origin discrimination, as well as sexual
harassment, one has accepted a settlement of her claims against the Company. The
claims of one of the named plaintiffs have been dismissed by the court. The
remaining six individuals who were named Plaintiffs in the underlying action
have submitted claims to be considered for settlement compensation under the
Consent Decree. The claims administration process is currently underway;
however, it could be several months before it is completed and Claimants are
notified of whether they qualify for settlement compensation and, if so, the
amount for which they qualify. Once Claimants are notified of their eligibility
status by the Claims Administrator, they have an option to reject the settlement
compensation and pursue litigation on their own behalf and without the aid of
the EEOC. To the extent any of the individual plaintiffs or any other persons
who might otherwise be covered by the settlement opt out of the settlement, the
Company intends to continue to vigorously defend itself against their
allegations. The Company currently expects to prevail in its defense of any
remaining individual claims. There can be no assurance as to what amount of time
it will take to resolve the other lawsuits and related issues or the degree of
any adverse effect these matters may have on our financial condition and results
of operations. A substantial settlement payment or judgment could result in a
significant decrease in our working capital and liquidity and recognition of a
loss in our consolidated statement of operations.

OTHER LEGAL MATTERS

         An employee was injured while on property owned by an executive officer
of the Company. No claim has been asserted against the Company at this time, but
the Company believes that any asserted claim would be covered by



                                       15
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


insurance and defended by the Company's insurance carriers. In addition, the
Company is party to routine litigation incidental to its business, which
primarily involve other employment matters or claims for goods lost or damaged
in transit or improperly shipped. Many of the other lawsuits to which the
Company is a party are covered by insurance and are being defended by the
Company's insurance carriers. The Company has established accruals for these
other matters and it is management's opinion that the resolution of such
litigation will not have a material adverse effect on the Company's consolidated
financial position, results of operations or cash flows.

NOTE 12 - GEOGRAPHIC AND SERVICES INFORMATION

         The Company operates in one segment and is organized functionally in
geographic divisions. Accordingly, management focuses its attention on revenues,
net revenues and income from operations associated with each of these geographic
divisions when evaluating the effectiveness of geographic management. Certain
information regarding the Company's operations by geographic division is
summarized below (in thousands):

<Table>
<Caption>
                                                                      Europe, Middle
                                            North          South       East, India      Asia & South
                                           America        America        & Africa         Pacific       Eliminations    Consolidated
                                          ---------       --------    --------------    ------------    ------------    ------------
<S>                                       <C>             <C>         <C>               <C>             <C>             <C>
Six months ended June 30, 2003:
       Total revenues                     $ 533,445       $ 46,655       $ 215,788       $ 238,451       $ (23,826)      $1,010,513
       Transfers between divisions           (8,135)        (3,009)         (6,844)         (5,838)         23,826               --
                                          ---------       --------       ---------       ---------       ---------       ----------
       Revenues from customers            $ 525,310       $ 43,646       $ 208,944       $ 232,613       $      --       $1,010,513
                                          =========       ========       =========       =========       =========       ==========
       Net revenues                       $ 225,975       $  8,067       $  74,026       $  45,028                       $  353,096
                                          =========       ========       =========       =========                       ==========
       Income from operations             $   5,634       $  1,402       $     604       $   9,209                       $   16,849
                                          =========       ========       =========       =========                       ==========
Six months ended June 30, 2002:
       Total revenues                     $ 505,880       $ 36,388       $ 172,315       $ 181,339       $ (23,894)      $  872,028
       Transfers between divisions           (6,797)        (2,495)         (7,132)         (7,470)         23,894               --
                                          ---------       --------       ---------       ---------       ---------       ----------
       Revenues from customers            $ 499,083       $ 33,893       $ 165,183       $ 173,869       $      --       $  872,028
                                          =========       ========       =========       =========       =========       ==========
       Net revenues                       $ 210,138       $  7,727       $  58,994       $  40,416                       $  317,275
                                          =========       ========       =========       =========                       ==========
       Income (loss) from operations      $  (7,819)      $    487       $   4,812       $   8,781                       $    6,261
                                          =========       ========       =========       =========                       ==========
</Table>

<TABLE>
<CAPTION>
                                                                      Europe, Middle
                                            North          South       East, India      Asia & South
                                           America        America        & Africa         Pacific       Eliminations    Consolidated
                                          ---------       --------    --------------    ------------    ------------    ------------
<S>                                       <C>             <C>         <C>               <C>             <C>             <C>
Three months ended June 30, 2003:
       Total revenues                     $ 277,169       $  22,858      $ 111,311       $ 126,988       $ (11,463)      $ 526,863
       Transfers between divisions           (4,022)         (1,599)        (3,226)         (2,616)         11,463              --
                                          ---------       ---------      ---------       ---------       ---------       ---------
       Revenues from customers            $ 273,147       $  21,259      $ 108,085       $ 124,372       $      --       $ 526,863
                                          =========       =========      =========       =========       =========       =========
       Net revenues                       $ 119,361       $   4,181      $  38,396       $  23,592                       $ 185,530
                                          =========       =========      =========       =========                       =========
       Income from operations             $   5,308       $     611      $   1,170       $   5,122                       $  12,211
                                          =========       =========      =========       =========                       =========
Three months ended June 30, 2002:
       Total revenues                     $ 259,930       $  18,663      $  91,640       $  96,935       $ (12,249)      $ 454,919
       Transfers between divisions           (3,296)         (1,290)        (3,635)         (4,028)         12,249              --
                                          ---------       ---------      ---------       ---------       ---------       ---------
       Revenues from customers            $ 256,634       $  17,373      $  88,005       $  92,907       $      --       $ 454,919
                                          =========       =========      =========       =========       =========       =========
       Net revenues                       $ 107,138       $   3,923      $  30,805       $  21,289                       $ 163,155
                                          =========       =========      =========       =========                       =========
       Income (loss) from operations      $  (2,542)      $     155      $   2,776       $   4,336                       $   4,725
                                          =========       =========      =========       =========                       =========
</TABLE>

         Revenues from transfers between divisions represent approximate amounts
that would be charged if an unaffiliated company provided the services. Total
divisional revenues are reconciled with total consolidated revenues by
eliminating inter-divisional revenues.


                                       16
<PAGE>

                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

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

         The following is management's discussion and analysis of certain
significant factors, which have affected certain aspects of the Company's
financial position, and operating results during the periods included in the
accompanying unaudited condensed consolidated financial statements. This
discussion should be read in conjunction with the discussion under "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
the annual financial statements included in the Company's Annual Report on Form
10-K for the year ended December 31, 2002 (File No. 0-27288).

<Table>
<Caption>
                                                                    Six Months Ended June 30,
                                               -----------------------------------------------------------------
                                                            2003                               2002
                                               -----------------------------       -----------------------------
                                                                    % of                                 % of
                                                 Amount           Revenues           Amount            Revenues
                                               -----------       -----------       -----------       -----------
                                                              (in thousands, except percentages)
<S>                                            <C>               <C>               <C>               <C>
Revenues:
       Air freight forwarding                  $   674,859              66.8       $   587,275              67.3
       Ocean freight forwarding                    134,862              13.3           100,633              11.6
       Customs brokerage and other                 200,792              19.9           184,120              21.1
                                               -----------       -----------       -----------       -----------
Revenues                                       $ 1,010,513             100.0       $   872,028             100.0
                                               ===========       ===========       ===========       ===========
</Table>

<Table>
<Caption>
                                                                  % of Net                            % of Net
                                                 Amount           Revenues           Amount           Revenues
                                               -----------       -----------       -----------       -----------
<S>                                            <C>               <C>               <C>               <C>
Net revenues:
       Air freight forwarding                  $   205,472              58.2       $   189,224              59.7
       Ocean freight forwarding                     30,262               8.6            28,597               9.0
       Customs brokerage and other                 117,362              33.2            99,454              31.3
                                               -----------       -----------       -----------       -----------
Net revenues                                   $   353,096             100.0       $   317,275             100.0
                                               ===========       ===========       ===========       ===========

Operating expenses:
       Personnel costs                             201,573              57.1           175,537              55.3
       Other selling, general and
           administrative expenses                 134,674              38.1           135,477              42.7
                                               -----------       -----------       -----------       -----------

Operating income                                    16,849               4.8             6,261               2.0
Nonoperating expense, net                           (1,951)             (0.6)          (11,494)             (3.6)
                                               -----------       -----------       -----------       -----------

Income (loss) before provision (benefit)            14,898               4.2            (5,233)             (1.6)
       for income taxes
Provision (benefit) for income taxes                 5,636               1.6            (2,041)             (0.6)
                                               -----------       -----------       -----------       -----------

Income (loss) before cumulative effect of
       change in accounting for negative
       goodwill                                      9,262               2.6            (3,192)             (1.0)
Cumulative effect of change in
       accounting for negative
       goodwill                                         --                --               213               0.1
                                               -----------       -----------       -----------       -----------

Net income (loss)                              $     9,262               2.6       $    (2,979)             (0.9)
                                               ===========       ===========       ===========       ===========
</Table>



                                       17
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)


SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO SIX MONTHS ENDED JUNE 30, 2002

         Revenues. Revenues increased $138.5 million, or 15.9%, to $1,010.5
million in the six months ended June 30, 2003 compared to $872.0 million in the
six months ended June 30, 2002 due to increases in revenues across all product
lines and within each geographic division. On April 1, 2003, we completed the
acquisition of Miami International Forwarders (MIF), a privately held
international freight forwarder and customs broker in Miami, Florida, which
contributed to the increase in revenues within each product line in North
America. Revenues also increased in Asia Pacific, Europe and Canada due to the
strength of foreign currencies against the U.S. dollar in 2003. Net revenues,
which represent revenues less freight transportation costs, increased $35.8
million, or 11.3%, to $353.1 million in the six months ended June 30, 2003
compared to $317.3 million in the six months ended June 30, 2002 due to
increases in net revenues from air freight forwarding and customs brokerage and
other net revenues.

         Air freight forwarding revenues. Air freight forwarding revenues
increased $87.6 million, or 14.9%, to $674.9 million in the six months ended
June 30, 2003 compared to $587.3 million in the six months ended June 30, 2002
as a result of volume increases primarily in Asia Pacific, followed by
Europe/Middle East and North America. Volume increases were primarily due to new
large customer contracts and gains in market share.

         Air freight forwarding net revenues increased $16.3 million, or 8.6%,
to $205.5 million in the six months ended June 30, 2003, as compared to $189.2
million in the six months ended June 30, 2002. The air freight forwarding margin
decreased to 30.4% for the six months ended June 30, 2003, compared to 32.2% for
the six months ended June 30, 2002 as a result of declines in Asia Pacific and
Europe/Middle East offset by margin improvements in North America. The margin
declines are due to pricing pressures resulting from our customers' focus on
costs, higher fuel and security surcharges levied by airlines and higher air
cargo costs in Asia due to the Severe Acute Respiratory Syndrome (SARS) crisis.
Improved margins in North America are the result of reduced reliance on
dedicated charters and better utilization of our air and ground network.

         Ocean freight forwarding revenues. Ocean freight forwarding revenues
increased $34.3 million, or 34.1%, to $134.9 million in the six months ended
June 30, 2003 compared to $100.6 million in the six months ended June 30, 2002.
The increase was principally due to volume increases across all geographic
divisions, but most significantly in Asia Pacific and South America. Ocean
freight forwarding net revenues increased $1.7 million or 5.9%, to $30.3 for the
six months ended June 30, 2003 compared to $28.6 million for the six months
ended June 30, 2002. The ocean freight forwarding margin, however, decreased to
22.5% for the six months ended June 30, 2003 compared to 28.4% in the six months
ended June 30, 2002 due to a combination of declines in yields on consolidated
traffic and a change in the mix from direct to consolidated activity.

         Customs brokerage and other revenues. Customs brokerage and other
revenues, which includes warehousing, distribution and other logistics services,
increased $16.7 million, or 9.1%, to $200.8 million in the six months ended June
30, 2003 compared to $184.1 million in the six months ended June 30, 2002. The
increase was principally due to new logistics projects in North America and
Europe. Customs brokerage and other net revenues increased by $17.9 million, or
18.0% to $117.4 million in the six months ended June 30, 2003 compared to $99.5
million in the six months ended June 30, 2002. The customs brokerage and other
margin increased to 58.5% for the six months ended June 30, 2003 compared to
54.0% for the six months ended June 30, 2002, primarily due to new logistics
projects in North America and Europe.

         Personnel costs. Personnel costs include all compensation expenses,
including those relating to sales commissions and salaries and to headquarters
employees and executive officers. Personnel costs increased $26.1 million, or
14.9%, to $201.6 million in the six months ended June 30, 2003 compared to
$175.5 million in the six months ended June 30, 2002. As a percentage of net
revenues, personnel costs were 57.1% in the six months ended June 30, 2003,
compared to 55.3% in the six months ended June 30, 2002. The increase in
personnel costs is a result of additional



                                       18
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)


headcount in Europe and North America due to increased volumes and new logistics
projects as well as a temporary salary reduction for five pay periods
implemented in the U.S. during the first quarter of 2002.

         Other selling, general and administrative expenses. Other selling,
general and administrative expenses remained stable at $134.7 million for the
six months ended June 30, 2003 compared to $135.5 million in the six months
ended June 30, 2002. As a percentage of net revenues, other selling, general and
administrative expenses were 38.1% in the six months ended June 30, 2003
compared to 42.7% in the six months ended June 30, 2002. The decrease in other
selling, general and administrative expenses is primarily due to management
initiatives on cost savings. Lower expenses were offset by increases primarily
in facilities costs of $5.7 million, or 16.1%, as a result of expansion of
facilities for new logistics projects in Europe, expansion of several stations
in the U.S. and the acquisition of MIF in April 2003.

         Nonoperating income (expense), net. For the six months ended June 30,
2003, nonoperating expenses were $2.0 million compared to $11.5 million for the
six months ended June 30, 2002. The decrease is primarily due to charges
recorded in the first quarter of 2002 of approximately $6.7 million and $1.3
million, respectively, for the impairment of our investment in Miami Air and for
our exposure on Miami Air's outstanding letters of credit. See Notes 7 and 10 of
the notes to the condensed consolidated financial statements. Other nonoperating
expense, net also decreased due to lower interest expense from our interest rate
swap, which expired in April 2003, and higher income from our jet fuel swap.

         Effective tax rate. The effective income tax rate for the six months
ended June 30, 2003 was 37.8% compared to 39.0% for the six months ended June
30, 2002. Our effective tax rate fluctuates primarily due to changes in the
level of pre-tax income in foreign countries that have different rates and
certain income and/or expenses that are permanently non-taxable or
non-deductible in certain jurisdictions.



                                       19
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)



<Table>
<Caption>
                                                        Three Months Ended June 30,
                                         ------------------------------------------------------------
                                                   2003                             2002
                                         --------------------------       ---------------------------
                                                            % of                              % of
                                          Amount          Revenues          Amount          Revenues
                                         ---------       ----------       ----------       ----------
                                                    (in thousands, except percentages)
<S>                                      <C>             <C>              <C>              <C>
Revenues:
       Air freight forwarding            $ 349,223             66.3       $  305,434             67.1
       Ocean freight forwarding             71,505             13.6           52,606             11.6
       Customs brokerage and other         106,135             20.1           96,879             21.3
                                         ---------       ----------       ----------       ----------
Revenues                                 $ 526,863            100.0       $  454,919            100.0
                                         =========       ==========       ==========       ==========
</Table>


<Table>
<Caption>

                                                          % of Net                          % of Net
                                          Amount          Revenues          Amount          Revenues
                                         ---------       ----------       ----------       ----------
<S>                                      <C>             <C>              <C>              <C>
Net revenues:
       Air freight forwarding            $ 107,657             58.0       $   97,441             59.7
       Ocean freight forwarding             15,845              8.5           14,620              9.0
       Customs brokerage and other          62,028             33.5           51,094             31.3
                                         ---------       ----------       ----------       ----------
Net revenues                             $ 185,530            100.0       $  163,155            100.0
                                         =========       ==========       ==========       ==========

Operating expenses:
       Personnel costs                     104,758             56.4           90,177             55.3
       Other selling, general and
            administrative expenses         68,561             37.0           68,253             41.8
                                         ---------       ----------       ----------       ----------

Operating income                            12,211              6.6            4,725              2.9
Nonoperating expense, net                   (1,809)            (1.0)          (3,188)            (2.0)
                                         ---------       ----------       ----------       ----------

Income before provision
       for income taxes                     10,402              5.6            1,537              0.9
Provision for income taxes                   3,935              2.1              599              0.3
                                         ---------       ----------       ----------       ----------

Net income                               $   6,467              3.5       $      938              0.6
                                         =========       ==========       ==========       ==========
</Table>

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002

         Revenues. Revenues increased $72.0 million, or 15.8%, to $526.9 million
in the three months ended June 30, 2003 compared to $454.9 million in the three
months ended June 30, 2002 due to increases in revenues across all product lines
and within each geographic division. Revenues in North America increased due to
the acquisition of MIF in April 2003. Revenues also increased in Asia Pacific
and Europe due to the strength of foreign currencies against the U.S. dollar in
2003. Net revenues, which represents revenues less freight transportation costs,
increased $22.3 million, or 13.7%, to $185.5 million in the three months ended
June 30, 2003 compared to $163.2 million in the three months ended June 30, 2002
primarily due to increases in both air freight forwarding and customs brokerage
and other net revenues.

         Air freight forwarding revenues. Air freight forwarding revenues
increased $43.8 million, or 14.3%, to $349.2 million in the three months ended
June 30, 2003 compared to $305.4 million in the three months ended June 30, 2002
as a result of volume increases primarily in Asia Pacific, followed by
Europe/Middle East and North America. The volume increases are primarily due to
new large customer contracts and gains in market share.



                                       20
<PAGE>

                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)


         Air freight forwarding net revenues increased $10.3 million, or 10.6%,
to $107.7 million in the three months ended June 30, 2003 compared to $97.4
million in the three months ended June 30, 2002. The air freight forwarding
margin decreased to 30.8% for the three months ended June 30, 2003 compared to
31.9% for the three months ended June 30, 2002 as a result of declines in Asia
Pacific and Europe/Middle East, offset by margin improvements in North America.
The margin declines are due to pricing pressures resulting from our customers'
focus on costs, higher fuel and security surcharges levied by airlines and
higher air cargo costs in Asia due to the SARS crisis. Improved margins in North
America are the result of reduced reliance on dedicated charters and better
utilization of our air and ground network.

         Ocean freight forwarding revenues. Ocean freight forwarding revenues
increased $18.9 million, or 35.9%, to $71.5 million in the three months ended
June 30, 2003 compared to $52.6 million in the three months ended June 30, 2002.
The increase in revenues was principally due to volume increases across all
geographic divisions, but most significantly in Asia Pacific and South America.
Ocean freight forwarding net revenues increased $1.2 million, or 8.2%, to $15.8
million in the three months ended June 30, 2003 compared to $14.6 million in the
three months ended June 30, 2002. The ocean forwarding margin, however,
decreased to 22.1% in the three months ended June 30, 2003 compared to 27.8% in
the three months ended June 30, 2002 due to a combination of declines in yields
on consolidated traffic and a change in the mix from direct to consolidated
activity.

         Customs brokerage and other revenues. Customs brokerage and other
revenues increased $9.2 million, or 9.5%, to $106.1 million in the three months
ended June 30, 2003 compared to $96.9 million in the three months ended June 30,
2002. The increase was principally due to new logistics projects in North
America and Europe. Customs brokerage and other net revenues increased by $10.9
million, or 21.3%, to $62.0 million in the three months ended June 30, 2003
compared to $51.1 million in the three months ended June 30, 2002. The customs
brokerage and other margin increased to 58.4% for the three months ended June
30, 2003 compared to 52.7% for the three months ended June 30, 2002 primarily
due to the new logistics projects in Europe and North America.

         Personnel costs. Personnel costs increased $14.6 million, or 16.2%, to
$104.8 million in the three months ended June 30, 2003 compared to $90.2 million
in the three months ended June 30, 2002. As a percentage of net revenues,
personnel costs were 56.4% in the three months ended June 30, 2003 compared to
55.3% in the three months ended June 30, 2002. The increase in personnel costs
is a result of additional headcount in Europe and North America due to increased
volumes and new logistics projects.

         Other selling, general and administrative expenses. Other selling,
general and administrative expenses remained stable at $68.6 million in the
three months ended June 30, 2003 compared to $68.3 million in the three months
ended June 30, 2002. As a percentage of net revenues, other selling, general and
administrative expenses were 37.0% in the three months ended June 30, 2003
compared to 41.8% in the three months ended June 30, 2002. The decrease is
primarily due to management initiatives on cost savings. The lower expenses are
offset by increases primarily in facilities costs of $3.2 million, or 18.1%, as
a result of expansion of facilities for new logistics projects in Europe and
North America and the acquisition of MIF.

         Nonoperating expense, net. For the three months ended June 30, 2003,
nonoperating expense, net, decreased to $1.8 million compared to nonoperating
expense, net, of $3.2 million for the three months ended June 30, 2002 due to
lower interest expense from our interest rate swap, which expired in April 2003.

         Effective tax rate. The effective income tax rate for the three months
ended June 30, 2003 was 37.8% compared to 39.0% for the three months ended June
30, 2002. Our effective tax rate fluctuates primarily due to changes in the
level of pre-tax income in foreign countries that have different rates and
certain income and/or expenses that are permanently non-taxable or
non-deductible in certain jurisdictions.



                                       21
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)


LIQUIDITY AND CAPITAL RESOURCES

         General

         Our ability to satisfy our debt obligations, fund working capital and
make capital expenditures depends upon our future performance, which is subject
to general economic conditions and other factors, some of which are beyond our
control. In 2002, we substantially reduced operating costs and worked to
diversify our customer base. Additionally in 2002, we made significant efforts
to collect outstanding customer accounts receivable amounts and were able to use
the cash from these collections to avoid additional new borrowings on our line
of credit. If we achieve significant near-term revenue growth, we may experience
a need for increased working capital financing as a result of the difference
between our collection cycles and the timing of our payments to vendors.

         Based on current plans, we believe that our existing capital resources
will be sufficient to meet working capital requirements through June 30, 2004.
However, we cannot provide assurance that there will be no change that would
consume available resources significantly before that time. For example, the
effect of the war in Iraq and other tensions in the Middle East, concerns about
possible acts of terrorism directed against the United States and its interests,
the effect of SARS or other military, trade or travel disruptions impacting our
ability to sell and market our services in the United States and internationally
may negatively impact our results of operations. Additionally, funds may not be
available when needed and even if available, additional funds may be raised
through financing arrangements and/or the issuance of preferred or common stock
or convertible securities on terms and prices significantly more favorable than
those of the currently outstanding common stock, which could have the effect of
diluting or adversely affecting the holdings or rights of our existing
stockholders. If adequate funds are unavailable, we may be required to delay,
scale back or eliminate some of our operating activities, including, without
limitation, the timing and extent of our marketing programs and the extent and
timing of hiring additional personnel. We cannot provide assurance that
additional financing will be available to us on acceptable terms, or at all.

         We make significant disbursements on behalf of our customers for
transportation costs (primarily ocean) and customs duties for which the customer
is the primary obligor. The billings to customers for these disbursements, which
are several times the amount of revenues and fees derived from these
transactions, are not recorded as revenues and expenses on our statement of
operations; rather, they are reflected in our trade receivables and trade
payables. Growth in the level of this activity or lengthening of the period of
time between incurring these costs and being reimbursed by our customers for
these costs may negatively affect our liquidity.

         Cash flows from operating activities. Net cash provided by operating
activities was $662,000 in the six months ended June 30, 2003 compared to $46.8
million in the six months ended June 30, 2002. The decrease in the six months
ended June 30, 2003 was primarily due to a $28.6 million net decrease in cash
from changes in working capital for the six months ended June 30, 2003 compared
to a $34.5 million net increase in cash from changes in working capital for the
six months ended June 30, 2002. The positive working capital cash flow during
the six months ended June 30, 2002 was related to our efforts to collect
significantly aged customer accounts receivable amounts outstanding as of
December 31, 2001. The negative working capital cash flow in the six months
ended June 30, 2003 was due to the timing of payments for accounts payable and
accrued transportation, an increase in current accounts receivable balances
related to our increase in revenues and a net increase in other assets and
liabilities. Additionally during the six months ended June 30, 2003, we
transferred $3.3 million to restricted cash, which consisted of $4.0 million for
funding requirements related to the EEOC Consent Decree settlement (see Note 11
of the notes to the condensed consolidated financial statements), partially
offset by lower funding requirements for international revolving credit
facilities.

         Cash flows from investing activities. Net cash used in investing
activities in the six months ended June 30, 2003 was $30.3 million compared to
$1,000 in the six months ended June 30, 2002. We incurred capital expenditures
of $10.8 million during the six months ended June 30, 2003 compared to $9.8
million during the six months ended June 30, 2002. During the six months ended
June 30, 2003, we completed several acquisitions with aggregate cash
consideration of $21.1 million. In April 2003, we acquired MIF for $13.7 million
in cash. Also in April 2003, we purchased from one of our joint venture partners
a 26% interest in our operating subsidiary in Singapore for approximately $5.7
million in cash.



                                       22
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)



We also completed an acquisition of an international freight forwarder and
customs broker in France for approximately $1.1 million, net of cash acquired
and made a $600,000 earnout payment related to an acquisition completed in a
prior year. During the six months ended June 30, 2003 and June 30, 2002,
respectively, we received proceeds of approximately $1.7 million and $9.8
million from sales of other assets and sale-leaseback transactions.

         Cash flows from financing activities. Net cash provided by financing
activities in the six months ended June 30, 2003 was $1.6 million compared to
net cash used in financing activities of $419,000 in the six months ended June
30, 2002. Net borrowings on notes payable was $31,000 for the six months ended
June 30, 2003 compared to net repayments of $1.5 million in the six months ended
June 30, 2002. Proceeds from the exercise of stock options were $1.2 million in
the six months ended June 30, 2003 compared to $330,000 in the six months ended
June 30, 2002. Proceeds from the issuance of common stock for our employee stock
purchase plan were $272,000 for the six months ended June 30, 2003 compared to
$779,000 for the six months ended June 30, 2002.

         Acquisitions

         During the first quarter of 2003, we acquired Transimpex, SA, an
international freight forwarder and customs broker based in France, for
approximately $1.1 million, net of cash acquired, and made an earnout payment of
$600,000 related to an acquisition completed in a prior year.

         On April 1, 2003, we acquired substantially all of the operating assets
of MIF, a privately held international freight forwarder and customs broker
based in Miami, Florida. Aggregate consideration for the acquisition totaled
$23.7 million, comprised of $13.7 million in cash and future payments of $10.0
million in the aggregate, which are payable in two equal payments of $5.0
million in April 2004 and 2005. The purchase agreement for the acquisition
provided for additional contingent two-year earnout payments of up to $8.0
million in the aggregate if certain post-acquisition performance criteria are
achieved. The acquisition added to our condensed consolidated balance sheet
approximately $12.4 million in intangible assets, $11.0 million in goodwill and
$288,000 in net tangible assets.

         In April 2003, we purchased from one of our joint venture partners a
26% interest in our operating subsidiary in Singapore. Prior to the acquisition,
we owned 74% of this entity and consolidated it for financial reporting
purposes. The purchase consideration for the interest we did not previously own
consisted of approximately $5.7 million in cash, which included $3.7 million for
the minority interest liability at the acquisition date. The acquisition added
to our condensed consolidated balance sheet approximately $891,000 of intangible
assets and $1.1 million of other long-term assets.

         Convertible subordinated notes

         In December 2001, we issued $100 million aggregate principal amount of
5% convertible subordinated notes. The notes bear interest at an annual rate of
5%. Interest is payable on June 15 and December 15 of each year, beginning June
15, 2002. The notes mature on December 15, 2006. Deferred financing fees
incurred in connection with the transaction totaled $3.2 million and are being
amortized over five years as a component of interest expense.

         The notes are convertible at any time four trading days prior to
maturity into shares of EGL common stock at a conversion price of approximately
$17.4335 per share, subject to certain adjustments, which was a premium of 20.6%
of the stock price at the issuance date. This is equivalent to a conversion rate
of 57.3608 shares per $1,000 principal amount of notes. Upon conversion, a
noteholder will not receive any cash representing accrued interest, other than
in the case of a conversion in connection with an optional redemption. The
shares that are potentially issuable may impact our diluted earnings per share
calculation in future periods by approximately 5.7 million shares. As of June
30, 2003, the fair value of the notes was $114.1 million.

         We may redeem the notes on or after December 20, 2004 at specified
redemption prices, plus accrued and unpaid interest to, but excluding, the
redemption date. Upon a change in control as defined in the indenture agreement,
a noteholder may require us to purchase its notes at 100% of the principal
amount of the notes, plus accrued and unpaid interest to, but excluding, the
purchase date.



                                       23
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)


         The notes are general unsecured obligations of EGL. The notes are
subordinated in right of payment to all of our existing and future senior
indebtedness as defined in the indenture agreement. We and our subsidiaries are
not prohibited from incurring senior indebtedness or other debt under the
indenture agreement. The notes impose some restrictions on mergers and sales of
substantially all of our assets.

         Credit agreement

         Effective December 20, 2001, we amended and restated our existing
credit agreement. The amended and restated credit facility, which was last
amended effective as of March 31, 2003, is with a syndicate of three financial
institutions, with Bank of America, N.A. as collateral and administrative agent
for the lenders, and matures on December 20, 2004. The amended and restated
credit facility provides a revolving line of credit of up to the lesser of:

         o        $75 million, which will be increased to $100 million if an
                  additional $25 million of the revolving line of credit
                  commitment is syndicated to other financial institutions, or

         o        an amount equal to:

                  o        up to 85% of the net amount of our billed and posted
                           eligible accounts receivable and the billed and
                           posted eligible accounts receivable of our wholly
                           owned domestic subsidiaries and our operating
                           subsidiary in Canada, subject to some exceptions and
                           limitations, plus

                  o        up to 85% of the net amount of our billed and
                           unposted eligible accounts receivable and billed and
                           unposted eligible accounts receivable of our wholly
                           owned domestic subsidiaries owing by account debtors
                           located in the United States, subject to a maximum
                           aggregate availability cap of $10 million, plus

                  o        up to 50% of the net amount of our unbilled, fully
                           earned and unposted eligible accounts receivable and
                           unbilled, fully earned and unposted eligible accounts
                           receivable of our wholly owned domestic subsidiaries
                           owing by account debtors located in the United
                           States, subject to a maximum aggregate availability
                           cap of $10 million, minus

                  o        reserves from time to time established by Bank of
                           America in its reasonable credit judgment.

         The aggregate of the last four sub-bullet points above is referred to
as our eligible borrowing base.

         The maximum amount that we can borrow at any particular time may be
less than the amount of our revolving credit line because we are required to
maintain a specified amount of borrowing availability under the amended and
restated credit facility based on our eligible borrowing base. As of June 30,
2003, the required amount of borrowing availability is $25 million. The amount
of borrowing availability is determined by subtracting the following from our
eligible borrowing base: (a) our borrowings under the amended and restated
credit facility; and (b) our accounts payable and the accounts payable of all of
our domestic subsidiaries and our Canadian operating subsidiary that remain
unpaid more than the longer of (i) sixty days from their respective invoice
dates or (ii) thirty days from their respective due dates.

         The amended and restated credit facility includes a $50 million letter
of credit subfacility. We had $31.5 million in standby letters of credit
outstanding as of June 30, 2003 under this facility. The collateral value
associated with the revolving line of credit at June 30, 2003 was $176.8
million, which exceeds the maximum revolving credit line of $75.0 million. No
amounts were outstanding under the revolving line of credit as of June 30, 2003.
Therefore, our available, unused borrowing capacity was $43.5 million as of June
30, 2003.



                                       24
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)


         For each tranche of principal borrowed under the revolving line of
credit, we may elect an interest rate of either LIBOR plus an applicable margin
of 2.00% to 2.75% that varies based upon availability under the line, or the
prime rate announced by Bank of America, plus, if the borrowing availability is
less than $25 million, an applicable margin of 0.25%.

         We refer to borrowings bearing interest based on LIBOR as a LIBOR
tranche and to other borrowings as a prime rate tranche. The interest on a LIBOR
tranche is payable on the last day of the interest period (one, two or three
months, as selected by us) for such LIBOR tranche. The interest on a prime rate
tranche is payable monthly.

         A termination fee of 0.25% of the total revolving commitment would be
payable upon termination of the amended and restated credit facility if the
termination occurs before December 20, 2003 (unless terminated in connection
with a refinancing arranged or underwritten by Bank of America or its
affiliates).

         We are subject to certain covenants under the terms of the amended and
restated credit facility, including, but not limited to, (a) maintenance at the
end of each fiscal quarter of a minimum specified adjusted tangible net worth
and (b) limitations on capital expenditures of $12 million per quarter or $48
million cumulative per year.

         The amended and restated credit facility also places restrictions on
additional indebtedness, dividends, liens, investments, acquisitions, asset
dispositions, change of control and other matters, is secured by substantially
all of our assets, and is guaranteed by all domestic subsidiaries and our
Canadian operating subsidiary. In addition, we will be subject to additional
restrictions, including restrictions with respect to distributions and asset
dispositions if our eligible borrowing base falls below $40 million. Events of
default under the amended and restated credit facility include, but are not
limited to, the occurrence of a material adverse change in our operations,
assets or financial condition or our ability to perform under the amended and
restated credit facility or that of any of our domestic subsidiaries or our
Canadian operating subsidiary. The Amendment to the Credit Agreement dated March
31, 2003 consented to our acquisition of substantially all the business
operations and assets of MIF. See Note 3 of the notes to the condensed
consolidated financial statements.

         Litigation

         As discussed in "Part II, Item 1. Legal Proceedings", we have reached a
Consent Decree settlement with the EEOC which resolves the EEOC's allegations
contained in the Commissioners Charge. This Consent Decree was approved by the
District Court on October 1, 2001. The Consent Decree became effective on
October 3, 2002 following the dismissal of all appeals related to the Decree.

         In addition to the EEOC matter, we are party to routine litigation
incidental to our business, which primarily involve other employment matters or
claims for goods lost or damaged in transit or improperly shipped. Many of the
other lawsuits to which we are a party are covered by insurance and are being
defended by our insurance carriers. We have established accruals for these other
matters and it is management's opinion that the resolution of such litigation
will not have a material adverse effect on our consolidated financial position,
results of operations or cash flows.

         Stock options

         As of June 30, 2003, we had outstanding non-qualified stock options to
purchase an aggregate of $5.4 million shares of common stock at exercise prices
equal to the fair market value of the underlying common stock on the dates of
grant (prices ranging from $8.09 to $33.81). At the time a non-qualified stock
option is exercised, we will generally be entitled to a deduction for federal
and state income tax purposes equal to the difference between the fair market
value of the common stock on the date of exercise and the option price. As a
result of exercises for the six months ended June 30, 2003 of non-qualified
stock options to purchase an aggregate of 124,000 shares of common stock, we
were entitled to a federal income tax deduction of approximately $200,000.
Accordingly, we recorded an increase to additional paid-in capital and a
reduction to current taxes payable pursuant to the provisions of SFAS No. 109,
"Accounting for Income Taxes." Any exercises of non-qualified stock options in
the future at exercise prices below the then fair market value of



                                       25
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)



the common stock may also result in tax deductions equal to the difference
between those amounts. There is uncertainty as to whether the exercises will
occur, the amount of any deductions, and our ability to fully utilize any tax
deductions.

RELATED PARTY TRANSACTIONS

         Investment in Miami Air International, Inc.

         In connection with the Miami Air investment, Miami Air and EGL entered
into an aircraft charter agreement whereby Miami Air agreed to convert certain
of its passenger aircraft to cargo aircraft and to provide aircraft charter
services to us for a three-year term. In addition, we caused a standby letter of
credit to be issued in favor of certain creditors for Miami Air to assist Miami
Air in financing the conversion of its aircraft. Miami Air agreed to pay us an
annual fee equal to 3.0% of the face amount of the letter of credit and to
reimburse us for any payments made by us in respect to the letter of credit. As
of June 30, 2003, Miami Air had no funded debt under the line of credit that is
supported by the standby letter of credit. As of June 30, 2003, Miami Air had
outstanding $2.9 million in letters of credit and surety bonds that were
supported by the standby letter of credit.

         During the first four months of 2002, there were three aircraft subject
to the aircraft charter agreement and we paid approximately $6.1 million related
to this agreement. In May 2002, EGL and Miami Air mutually agreed to cancel the
aircraft charter agreement for the three planes as of May 9, 2002 and we agreed
to pay $450,000 for services rendered in May 2002 and aircraft repositioning
costs.

         The weak economy and events of September 11, 2001 significantly reduced
the demand for cargo plane services, particularly 727 cargo planes. As a result,
the market value of these planes declined dramatically. Miami Air made the
Company aware that the amounts due Miami Air's bank (which are secured by seven
727 planes) were significantly higher than the market value of those planes. In
addition, Miami Air had outstanding operating leases for 727 and 737 airplanes
at above current market rates, including two planes that were expected to be
delivered in 2002. Throughout the fourth quarter of 2001 and the first quarter
of 2002, Miami Air was in discussions with its bank to obtain debt concessions
on the seven 727 planes, to buy out the lease on a 727 cargo plane and to reduce
the rates on the 737 passenger planes. Miami Air had informed us that its
creditors had indicated a willingness to make concessions. In May 2002, we were
informed that Miami Air's creditors were no longer willing to make concessions
and that negotiations with its creditors had reached an impasse and no agreement
appeared feasible. As such, in the first quarter of 2002, we recognized an other
than temporary impairment of the entire carrying value of our $6.7 million
investment in Miami Air, which included a $509,000 increase in value
attributable to our 24.5% share of Miami Air's first quarter 2002 results of
operations. In addition, we recorded an accrual of $1.3 million for our
estimated exposure on the outstanding funded debt and letters of credit
supported by the standby letter of credit. During the third quarter of 2002,
Miami Air informed us that certain of its creditors had made certain
concessions. As of June 30, 2003, we had not adjusted our accrual. Furthermore,
there can be no assurance that the ultimate loss, if any, will not exceed such
accrual requiring an additional charge.

         Miami Air, each of the private investors and the continuing Miami Air
stockholders also entered into a stockholders agreement under which Mr. Crane
(Chairman and CEO of EGL) and Mr. Hevrdejs (a director of EGL) were obligated to
purchase up to approximately $1.7 million and $500,000, respectively, worth of
Miami Air's Series A preferred stock upon demand by the board of directors of
Miami Air. EGL and Mr. Crane both have the right to appoint one member of Miami
Air's board of directors. Additionally, the other private investors in the stock
purchase transaction, including Mr. Hevrdejs, collectively have the right to
appoint one member of Miami Air's board of directors. As of March 31, 2003,
directors appointed to Miami Air's board include a designee of Mr. Crane, Mr.
Elijio Serrano (EGL's Chief Financial Officer) and two others. The Series A
preferred stock was issued in December 2002, when all investors were called upon
by the board of directors of Miami Air to purchase their preferred shares. The
Series A preferred stock (1) is not convertible, (2) has a 15.0% annual dividend
rate and (3) is subject to mandatory redemption in July 2006 or upon the prior
occurrence of specified events. The original charter transactions between Miami
Air and us were negotiated with Miami Air's management at arms length at the
time of our original investment in Miami Air. Miami Air's pre-transaction Chief
Executive Officer has remained in that position and as a director following the



                                       26
<PAGE>
                                    EGL, INC.
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                       RESULTS OF OPERATIONS - (CONTINUED)


transaction and together with other original Miami Air investors, remained
as substantial shareholders of Miami Air. Other private investors in Miami Air
have participated with our directors in other business transactions unrelated to
Miami Air.

         Aircraft usage payments

         In conjunction with our business activities, we periodically utilize
aircraft owned by entities controlled by Mr. Crane. We are charged for actual
usage of the plane on an hourly basis and billed on a periodic basis. During the
six months ended June 30, 2003 and 2002, respectively, we reimbursed the
entities controlled by Mr. Crane $186,000 and $755,000 for hourly usage of the
plane. During the three months ended June 30, 2003 and 2002, respectively, we
reimbursed the entities controlled by Mr. Crane $59,000 and $409,000 for hourly
usage of the plane.

         Source One Spares

         We subleased a portion of our warehouse space in Houston, Texas to a
customer pursuant to a five-year sublease, which was terminated in early 2002
and became a month-to-month sublease agreement. The customer is partially owned
by Mr. Crane. Rental income was approximately $95,000 and $21,000 for the six
months ended June 30, 2003 and 2002, respectively. Rental income was
approximately $41,000 for the three months ended June 30, 2003. In addition, we
billed this customer approximately $7,000 and $55,000 for freight forwarding
services for the six months ended June 30, 2003 and 2002, respectively and
$20,000 for the three months ended June 30, 2002. There was no rental income for
the three months ended June 30, 2002 and no freight forwarding income for the
three months ended June 30, 2003 with this customer.

NEW ACCOUNTING PRONOUNCEMENTS AND CRITICAL ACCOUNTING POLICIES

         See Note 2 of the notes to the condensed consolidated financial
statements for new accounting pronouncements. See Note 1 of the notes to the
consolidated financial statements in the Company's Annual Report on Form 10-K
for the year ended December 31, 2002 for critical accounting policies.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         There have been no material changes in exposure to market risk from
that discussed in the Company's Annual Report on Form 10-K for the year ended
December 31, 2002. See Notes 4 and 9 of the notes to the condensed consolidated
financial statements and Part II Item 7A of the Company's Annual Report on Form
10-K for the year ended December 31, 2002.

ITEM 4.  CONTROLS AND PROCEDURES

         (a) Evaluation of Disclosure Controls and Procedures

         The Company's management, with the participation of its Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) as of the end of the period covered by this quarterly report. Based on
this evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures are effective to
ensure that the information required to be disclosed by the Company in the
reports filed or submitted by it under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission.

         (b) Changes in Internal Control over Financial Reporting

         There was no change in the Company's internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
that occurred during the three months ended June 30, 2003 that has materially
affected, or is reasonably likely to materially affect, its internal control
over financial reporting.



                                       27
<PAGE>

                                    EGL, INC.


PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On October 2, 2001, we and the U.S. Equal Employment Opportunity
Commission (the EEOC) announced the filing of a Consent Decree settlement. This
settlement resolves all claims of discrimination and/or harassment raised by the
EEOC's Commissioner's Charge. The EEOC's Commissioner's Charge was issued in
December 1997 and subsequent events were most recently disclosed in our Form
10-K for the year ended December 31, 2002. Under the Consent Decree, we agreed
to pay $8.5 million into a fund (the Class Fund) that will compensate
individuals who claim to have experienced discrimination. The settlement covers
(1) claims by applicants arising between December 1, 1995 and December 31, 2000;
(2) disparate pay claims arising between January 1, 1995 and April 30, 2000; (3)
promotion claims arising between December 1, 1995 and December 31, 1998; and (4)
all other adverse treatment claims arising between December 31, 1995 and
December 31, 2000. In addition, we agreed to contribute $500,000 to establish a
Leadership Development Program (the Leadership Development Fund). The Program
will provide training and educational opportunities for women and minorities
already employed by us and will also establish scholarships and work study
opportunities at educational institutions. In entering the Consent Decree, we
have not made any admission of liability or wrongdoing. The Consent Decree was
approved by the District Court in Houston on October 1, 2001. The Consent Decree
became effective on October 3, 2002 following the dismissal of all appeals
related to the Decree. During the quarter ended September 30, 2001, we accrued
$10.1 million related to the settlement, which includes the $8.5 million payment
into the fund and $500,000 to the Leadership Development Program described
above, administrative costs, legal fees and other costs associated with the EEOC
litigation and settlement.

         Of the eight named plaintiffs who filed suit against us in 2000
alleging gender, race and national origin discrimination, as well as sexual
harassment, one has accepted a settlement of her claims against us. The claims
of one of the named plaintiffs has been dismissed by the court. The remaining
six individuals who were named Plaintiffs in the underlying action have
submitted claims to be considered for settlement compensation under the Consent
Decree. The claims administration process is currently underway; however, it
could be several months before it is completed and Claimants are notified of
whether they qualify for settlement compensation and, if so, the amount for
which they qualify. Once Claimants are notified of their eligibility status by
the Claims Administrator, they have an option to reject the settlement
compensation and pursue litigation on their own behalf and without the aid of
the EEOC. To the extent any of the individual plaintiffs or any other persons
who might otherwise be covered by the settlement opt out of the settlement, we
intend to continue to vigorously defend against their allegations. We currently
expect to prevail in our defense of any remaining individual claims. There can
be no assurance as to what amount of time it will take to resolve the other
lawsuits and related issues or the degree of any adverse effect these matters
may have on our financial condition and results of operations. A substantial
settlement payment or judgment could result in a significant decrease in our
working capital and liquidity and recognition of a loss in our consolidated
statement of operations. The Consent Decree settlement provides that we
establish and maintain segregated accounts for the Class Fund and Leadership
Development Fund. As of June 30, 2003, we have deposited $6.5 million of the
required $8.5 million into the Class Fund and $500,000 into the Leadership
Development Fund. See Note 11 of the notes to our condensed consolidated
financial statements.

         From time to time we are a party to various legal proceedings arising
in the ordinary course of business. Except as described above, we are not
currently a party to any material litigation and are not aware of any litigation
threatened against us, which we believe would have a material adverse effect on
our business.

ITEM 2.  CHANGE IN SECURITIES AND USE OF PROCEEDS

         NONE

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         NONE



                                       28
<PAGE>
                                    EGL, INC.


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

         Our annual meeting of stockholders was held in Houston, Texas on May
12, 2003 for the purpose of voting on the proposals described below. Proxies for
the meeting were solicited pursuant to Section 14(a) of the Securities Exchange
Act of 1934 and there was no solicitation in opposition to management's
solicitation.

Stockholders approved the election of nine directors, each to serve for a
one-year term, by the following votes:

<Table>
<Caption>
                  DIRECTOR               FOR            WITHHELD
<S>                                   <C>              <C>
             James R. Crane           44,231,683         306,724
             Frank J. Hevrdejs        44,231,571         306,836
             Paul William Hobby       43,190,777       1,347,630
             Michael K. Jhin          44,231,571         306,836
             Milton Carroll           44,229,879         308,528
             Neil E. Kelley           44,231,683         306,724
             Rebecca A. McDonald      44,231,682         306,725
             James C. Flagg           44,231,682         306,725
             Elijio V. Serrano        44,231,571         306,836
</Table>

Stockholders approved the amendment to the non-employee director stock option
plan by the following vote:

<Table>
<S>                                                    <C>
             For....................................   25,970,865
             Against................................   16,698,972
             Abstain................................    1,868,570
</Table>

Stockholders ratified the appointment of PricewaterhouseCoopers LLP as our
independent accountants for 2003 by the following vote:

<Table>
<S>                                                    <C>
             For....................................   43,397,274
             Against................................    1,111,772
             Abstain................................       29,361
</Table>

ITEM 5.  OTHER INFORMATION

         FORWARD-LOOKING STATEMENTS

         The statements contained in all parts of this document that are not
historical facts are, or may be deemed to be, forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements
include, but are not limited to, those relating to the following: the effect and
benefits of the Circle merger and the MIF acquisition; the Restated Credit
Facility; effects of and exposure relating to Miami Air; the termination of
joint venture/agency agreements and the Company's ability to recover assets in
connection therewith; the Company's plan to reduce costs (including the scope,
timing, impact and effects thereof); financing transactions; the Company's
ability to improve its cost structure; consolidation of field offices (including
the scope, timing and effects thereof); the Company's ability to restructure the
debt covenants in its credit facility, if at all; anticipated future recoveries
from actual or expected sublease agreements; the sensitivity of demand for the
Company's services to domestic and global economic conditions; cost management



                                       29
<PAGE>
                                    EGL, INC.


efforts; expected growth; construction of new facilities; the results, timing,
outcome or effect of pending or potential litigation and our intentions or
expectations of prevailing with respect thereto and the availability of
insurance coverage in connection therewith; future operating expenses; future
margins; use of credit facility proceeds; the effectiveness of the Company's
disclosure controls and procedures; the expected impact of changes in accounting
policies on the Company's results of operations, financial condition or cash
flows; the effect of swaps and other derivative instruments; the "fair value" of
the Company's reporting units; fluctuations in currency valuations; fluctuations
in interest rates; future acquisitions or dispositions and any effects,
benefits, results, terms or other aspects of such acquisitions or dispositions;
the impact of the war in Iraq and other tensions in the Middle East, concerns of
possible terrorism directed against the United States and its interests, the
impact of SARS, or other military or trade or travel disruptions that could
impact our ability to do business; ability to continue growth and implement
growth and business strategies; the ability of expected sources of liquidity to
support working capital and capital expenditure requirements; the tax benefit of
any stock option exercises; future expectations and outlook and any other
statements regarding future growth, cash needs, terminals, operations, business
plans and financial results and any other statements which are not historical
facts. When used in this document, the words "anticipate," "estimate," "expect,"
"may," "plans," "project," and similar expressions are intended to be among the
statements that identify forward-looking statements.

         The Company's results may differ significantly from the results
discussed in the forward-looking statements. Such statements involve risks and
uncertainties, including, but not limited to, those relating to costs, delays
and difficulties related to acquisitions or mergers, including the integration
of systems, operations and other businesses; termination of joint ventures,
charter aircraft arrangements (including expected losses, increased utilization
and other effects); the Company's dependence on its ability to attract and
retain skilled managers and other personnel; the intense competition within the
freight industry; the uncertainty of the Company's ability to manage and
continue its growth and implement its business strategy; the Company's
dependence on the availability of cargo space to serve its customers; the
potential for liabilities if certain independent owner/operators that serve the
Company are determined to be employees; effects of regulation; the results of
the EEOC settlement (including the timing and terms thereof and the results of
any appeals or challenges thereto) and the results of related or other pending
or potential litigation; the Company's vulnerability to general economic
conditions and dependence on its principal customers; the Company's
vulnerability to risks inherent in operating in international markets, including
without limitation, general political and economic instability in international
markets as a result of, among other things, the war in Iraq and other tensions
in the Middle East, concerns of possible terrorism directed against the United
States and its interests, the impact of SARS, or other military or trade or
travel disruptions; the timing, success and effects of the Company's
restructuring; whether the Company enters into arrangements with third parties
relating to leased aircraft and the terms of such arrangements; the results of
the new air network; responses of customers to the Company's actions by the
Company's principal shareholder; actions by Miami Air and its creditors; the
lack of effectiveness of the Company's disclosure controls and procedures; the
likelihood and/or result of any audit or review of the Company's Department of
Transportation grant application; accuracy of accounting and other estimates;
the Company's potential exposure to claims involving its local pickup and
delivery operations; the Company's future financial and operating results, cash
needs and demand for its services; changes in accounting policies; and the
Company's ability to maintain and comply with permits and licenses; as well as
other factors detailed in the Company's filings with the Securities and Exchange
Commission including those detailed in the subsection entitled "Factors That May
Affect Future Results and Financial Condition" in the Company's Form 10-K for
the year ended December 31, 2002. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual outcomes may vary materially from those indicated. The Company undertakes
no responsibility to update for changes related to these or any other factors
that may occur subsequent to this filing.



                                       30
<PAGE>
                                    EGL, INC.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K:

       (a) EXHIBITS.

         *3.1     Second Amended and Restated Articles of Incorporation of the
                  Company, as amended. (Filed as Exhibit 3 (i) to the Company's
                  Form 8-A/A filed with the Securities and Exchange Commission
                  on September 29, 2000 and incorporated herein by reference.)

         *3.2     Statement of Resolutions Establishing the Series A Junior
                  Participating Preferred Stock of the Company (Filed as Exhibit
                  3 (ii) to the Company's Form 10-Q for the fiscal quarter ended
                  June 30, 2001 and incorporated herein by reference.)

         *3.3     Amended and Restated Bylaws of the Company, as amended. (Filed
                  as Exhibit 3 (ii) to the Company's Form 10-Q for the fiscal
                  quarter ended June 30, 2000 and incorporated herein by
                  reference.)

         *4.1     Rights Agreement dated as of May 23, 2001 between EGL, Inc.
                  and Computershare Investor Services, L.L.C., as Rights Agent,
                  which includes as Exhibit B the form of Rights Certificate and
                  as Exhibit C the Summary of Rights to Purchase Common Stock.
                  (Filed as Exhibit 4.1 to the Company's Form 10-Q for the
                  fiscal quarter ended September 30, 2001 and incorporated
                  herein by reference.)

         31.1     Certification of Chief Executive Officer pursuant to Rule
                  13a-14(a).

         31.2     Certification of Chief Financial Officer pursuant to Rule
                  13a-14(a).

       **32       Certifications pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         *  Incorporated by reference as indicated.

         ** Indicates that the exhibit accompanies this report and is not filed
            as a part of it.

       (b) REPORTS ON FORM 8-K.

         In a Current Report on Form 8-K filed on April 16, 2003, we furnished
under Item 9 information confirming earnings guidance and announced the webcast
of our first quarter 2003 institutional investors meeting.

         In a Current Report on Form 8-K filed on May 13, 2003, we furnished
under Item 9 (pursuant to Item 12) information regarding our financial results
for the quarter ended March 31, 2003.



                                       31
<PAGE>
                                    EGL, INC.

                                   SIGNATURES

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



                                                             EGL, INC.
                                                       -----------------------
                                                           (Registrant)



   Date:  August 14, 2003                              By: /s/ James R. Crane
          ---------------                             -------------------------
                                                          James R. Crane
                                                      Chairman, President and
                                                           Chief Executive
                                                              Officer


   Date:  August 14, 2003                             By: /s/ Elijio V. Serrano
          ---------------                             -------------------------
                                                         Elijio V. Serrano
                                                      Chief Financial Officer



                                       32
<PAGE>
                                    EGL, INC.

                                INDEX TO EXHIBITS

<Table>
<S>               <C>
         *3.1     Second Amended and Restated Articles of Incorporation of the
                  Company, as amended. (Filed as Exhibit 3 (i) to the Company's
                  Form 8-A/A filed with the Securities and Exchange Commission
                  on September 29, 2000 and incorporated herein by reference.)

         *3.2     Statement of Resolutions Establishing the Series A Junior
                  Participating Preferred Stock of the Company (Filed as Exhibit
                  3 (ii) to the Company's Form 10-Q for the fiscal quarter ended
                  June 30, 2001 and incorporated herein by reference.)

         *3.3     Amended and Restated Bylaws of the Company, as amended. (Filed
                  as Exhibit 3 (ii) to the Company's Form 10-Q for the fiscal
                  quarter ended June 30, 2000 and incorporated herein by
                  reference.)

         *4.1     Rights Agreement dated as of May 23, 2001 between EGL, Inc.
                  and Computershare Investor Services, L.L.C., as Rights Agent,
                  which includes as Exhibit B the form of Rights Certificate and
                  as Exhibit C the Summary of Rights to Purchase Common Stock.
                  (Filed as Exhibit 4.1 to the Company's Form 10-Q for the
                  fiscal quarter ended September 30, 2001 and incorporated
                  herein by reference.)

         31.1     Certification of Chief Executive Officer pursuant to Rule
                  13a-14(a).

         31.2     Certification of Chief Financial Officer pursuant to Rule
                  13a-14(a).

       **32       Certifications pursuant to 18 U.S.C. Section 1350, as adopted
                  pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</Table>


          *  Incorporated by reference as indicated.

          ** Indicates that the exhibit accompanies this report and is not filed
             as a part of it.