<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 SEPTEMBER 30, 2001

                                       or

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


                         COMMISSION FILE 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 [ ]

At November 1, 2001, the number of shares outstanding of the registrant's common
stock was 47,780,843 (net of 1,126,079 treasury shares).

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

<PAGE>


                                    EGL, INC.
                               INDEX TO FORM 10-Q


<Table>
<Caption>
                                                                              PAGE
                                                                              ----
<S>                                                                           <C>
PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         Condensed Consolidated Balance Sheet as of                            1
           September 30, 2001 and December 31, 2000

         Condensed Consolidated Statement of Operations for the Nine           2
           Months ended September 30, 2001 and 2000

         Condensed Consolidated Statement of Operations for the Three          3
           Months ended September 30, 2001 and 2000

         Condensed Consolidated Statement of Cash Flows for                    4
           the Nine Months ended September 30, 2001 and 2000

         Condensed Consolidated Statement of Stockholders'                     5
           Equity for the Nine Months ended September 30, 2001

         Notes to Condensed Consolidated Financial Statements                  6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS                                               14

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK           24

PART II.  OTHER INFORMATION                                                   24

SIGNATURES                                                                    28

INDEX TO EXHIBITS                                                             29
</Table>

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


                                    EGL, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)
                        (IN THOUSANDS, EXCEPT PAR VALUES)

<Table>
<Caption>
                                                                                   SEPTEMBER 30,     DECEMBER 31,
                                                ASSETS                                 2001             2000
                                                                                   -------------    -------------
<S>                                                                                <C>              <C>
Current assets:
    Cash and cash equivalents                                                      $      64,617    $      60,001
    Short-term investments                                                                   956           13,056
    Trade receivables, net of allowance of $11,600 and $14,115                           401,763          497,461
    Other receivables                                                                     10,206            7,498
    Deferred income taxes                                                                 38,652           17,167
    Income tax receivable                                                                 23,132            2,128
    Other current assets                                                                  32,282           10,996
                                                                                   -------------    -------------

        Total current assets                                                             571,608          608,307

Property and equipment, net                                                              183,804          153,345
Investments in unconsolidated affiliates                                                  46,600           52,717
Goodwill, net                                                                             80,399           76,254
Other assets, net                                                                          6,674            9,123
                                                                                   -------------    -------------

        Total assets                                                               $     889,085    $     899,746
                                                                                   =============    =============

                                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Notes payable                                                                  $     127,979    $       3,429
    Trade payables and accrued transportation costs                                      255,680          260,802
    Accrued salaries and related costs                                                    25,726           29,068
    Accrued merger and integration costs (Note 6)                                         12,763           24,976
    Other liabilities                                                                     57,912           54,027
                                                                                   -------------    -------------

        Total current liabilities                                                        480,060          372,302

Deferred income taxes                                                                     18,890           18,864
Long-term notes payable                                                                    3,680           91,051
Other noncurrent liabilities                                                              10,844            2,980
                                                                                   -------------    -------------
        Total liabilities                                                                513,474          485,197
                                                                                   -------------    -------------
Minority interests                                                                         7,797           10,782
                                                                                   -------------    -------------
Commitments and contingencies (Note 9)
Stockholders' equity:
    Preferred stock, $0.001 par value, 10,000 shares authorized, no shares issued
    Common stock, $0.001 par value, 200,000 shares authorized; 50,033
    and 49,803 shares issued; 48,907 and 48,411 shares outstanding                            49               48
    Additional paid-in capital                                                           156,346          150,131
    Retained earnings                                                                    263,891          304,889
    Accumulated other comprehensive loss                                                 (34,141)         (27,729)
    Unearned compensation                                                                   (798)          (1,300)
    Treasury stock, 1,126 and 1,392 shares held                                          (17,533)         (24,195)
    Obligation to deliver common stock                                                        --            1,923
                                                                                   -------------    -------------
        Total stockholders' equity                                                       367,814          403,767
                                                                                   -------------    -------------

        Total liabilities and stockholders' equity                                 $     889,085    $     899,746
                                                                                   =============    =============
</Table>


      See notes to unaudited condensed consolidated financial statements.





                                       1
<PAGE>
                                    EGL, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


<Table>
<Caption>
                                                                  NINE MONTHS ENDED
                                                                    SEPTEMBER 30,
                                                            --------------------------
                                                               2001           2000
                                                            -----------    -----------
<S>                                                         <C>            <C>
Revenue                                                     $ 1,246,512    $ 1,346,407
Cost of transportation                                          769,846        813,734
                                                            -----------    -----------
      Net revenues                                              476,666        532,673

Operating expenses:
      Personnel costs                                           289,550        281,866
      Other selling, general and administrative expenses        223,099        185,892
      EEOC legal settlement (Note 9)                             10,089
      Restructuring and integration costs (Note 6)               14,973
                                                            -----------    -----------
Operating income (loss)                                         (61,045)        64,915
Non-operating income (expense), net                              (5,618)         2,888
                                                            -----------    -----------
Income (loss) before provision (benefit) for income taxes       (66,663)        67,803
Provision (benefit)for income taxes                             (25,665)        26,053
                                                            -----------    -----------
Net income (loss)                                           $   (40,998)   $    41,750
                                                            ===========    ===========

Basic earnings (loss) per share                             $     (0.87)   $      0.90
Basic weighted-average common shares outstanding                 47,477         46,358

Diluted earnings (loss) per share                           $     (0.87)   $      0.88
Diluted weighted-average common equivalent
      shares outstanding                                         47,477         47,636
</Table>

       See notes to unaudited condensed consolidated financial statements.



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

<Table>
<Caption>
                                                              THREE MONTHS ENDED
                                                                SEPTEMBER 30,
                                                            ----------------------
                                                               2001         2000
                                                            ---------    ---------
<S>                                                         <C>          <C>
Revenue                                                     $ 414,992    $ 490,716
Cost of transportation                                        243,548      298,821
                                                            ---------    ---------
      Net revenues                                            171,444      191,895

Operating expenses:
      Personnel costs                                          94,328       97,798
      Other selling, general and administrative expenses       71,735       65,046
      EEOC legal settlement (Note 9)                           10,089           --
      Restructuring and integration costs (Note 6)              6,250           --
                                                            ---------    ---------
Operating income (loss)                                       (10,958)      29,051
Non-operating income (expense), net                            (3,062)         682
                                                            ---------    ---------
Income (loss) before provision (benefit) for income taxes     (14,020)      29,733
Provision (benefit)for income taxes                            (5,245)      11,422
                                                            ---------    ---------
Net income (loss)                                           $  (8,775)   $  18,311
                                                            =========    =========

Basic earnings (loss) per share                             $   (0.18)   $    0.39
Basic weighted-average common shares outstanding               47,679       46,446

Diluted earnings (loss) per share                           $   (0.18)   $    0.38
Diluted weighted-average common equivalent
      shares outstanding                                       47,679       47,866
</Table>

See notes to unaudited condensed consolidated financial statements.




                                       3

<PAGE>


                                    EGL, INC.
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)


<Table>
<Caption>
                                                                                 NINE MONTHS ENDED
                                                                                    SEPTEMBER 30,
                                                                             --------------------------
                                                                                2001           2000
                                                                             -----------    -----------
<S>                                                                          <C>            <C>
Cash flows from operating activities:
     Net income (loss)                                                       $   (40,998)   $    41,750
     Adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
        Depreciation and amortization                                             24,104         24,036
        Provision for doubtful accounts                                            8,342          8,014
        Amortization of unearned compensation                                        502            460
        Deferred income tax benefit                                              (21,434)           (58)
        Tax benefit of stock options exercised                                     2,577          2,735
        Equity in losses of affiliates, net of dividends received                  2,519            196
        Minority interests, net of dividends paid                                    741         (1,844)
        Other                                                                         --           (753)
        Net effect of changes in working capital                                  31,928        (43,214)
                                                                             -----------    -----------
Net cash provided by operating activities                                          8,281         31,322
                                                                             -----------    -----------

Cash flows from investing activities:
        Capital expenditures                                                     (51,907)       (48,780)
        Net proceeds from marketable securities and short-term investments         9,150         13,139
        Proceeds from sales of other assets                                           --          2,138
        Acquisitions of businesses, net of cash acquired                          (4,639)       (33,102)
        Cash from newly consolidated subsidiary                                       --          5,582
        Cash received from disposal of affiliates                                  2,959
        Other                                                                       (819)        (2,600)
                                                                             -----------    -----------
Net cash used in investing activities                                            (45,256)       (63,623)
                                                                             -----------    -----------

Cash flows from financing activities:
        Repayment of notes payable                                                (6,792)       (12,542)
        Increase in borrowings on notes payable                                   44,552         13,525
        Issuance of common stock, net of related costs                             1,237         10,918
        Proceeds from exercise of stock options                                    3,639          3,132
        Treasury stock purchases                                                      --        (10,478)
        Dividends paid                                                                --         (4,764)
                                                                             -----------    -----------
Net cash provided by (used in) financing activities                               42,636           (209)
                                                                             -----------    -----------

Effect of exchange rate changes on cash                                           (1,045)        (2,409)
                                                                             -----------    -----------

Increase (decrease) in cash and cash equivalents                                   4,616        (34,919)
Cash and cash equivalents, beginning of the period                                60,001         78,685
                                                                             -----------    -----------

Cash and cash equivalents, end of the period                                 $    64,617    $    43,766
                                                                             ===========    ===========
</Table>


      See notes to unaudited condensed consolidated finanacial statements.





                                       4
<PAGE>
                                    EGL, INC.
            CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                   (UNAUDITED)
                                 (IN THOUSANDS)



<Table>
<Caption>
                                                                  Additional             Compre-     Accumulated    Obligation to
                                                   Common stock    paid-in    Retained   hensive     other compre-  deliver common
                                                  Shares  Amount   capital    earnings     loss      hensive loss       stock
                                                  ------  ------  ----------  --------   -------     ------------   --------------
<S>                                               <C>     <C>      <C>        <C>        <C>         <C>            <C>
Balance at December 31, 2000                      48,411  $  48    $ 150,131  $ 304,889               $ (27,729)       $ 1,923

Comprehensive loss:
Net loss                                                                        (40,998)  $ (40,998)
Change in value of marketable securities, net                                                   (47)        (47)
Change in value of cash flow hedge                                                           (2,197)     (2,197)
Foreign currency translation adjustments                                                     (4,168)     (4,168)
                                                                                          ---------
Comprehensive loss                                                                        $ (47,410)
                                                                                          =========
Issuance of shares under stock purchase plan
Issuance of common stock for acquisition                                                                                (1,923)
Exercise of stock options, including tax benefit     496      1        6,215
Amortization of unearned compensation
                                                  ------  -----    ---------  ---------               ---------        -------

Balance at September 30, 2001                     48,907  $  49    $ 156,346  $ 263,891               $ (34,141)       $    --
                                                  ======  =====    =========  =========               =========        =======
<Caption>

                                                     Unearned    Treasury
                                                   compensation   stock      Total
                                                   ------------  --------   --------
<S>                                                <C>           <C>        <C>
Balance at December 31, 2000                       $ (1,300)    $(24,195)  $ 403,767

Comprehensive loss:
Net loss                                                                     (40,998)
Change in value of marketable securities, net                                    (47)
Change in value of cash flow hedge                                            (2,197)
Foreign currency translation adjustments                                      (4,168)

Comprehensive loss

Issuance of shares under stock purchase plan                       1,237       1,237
Issuance of common stock for acquisition                           5,425       3,502
Exercise of stock options, including tax benefit                               6,216
Amortization of unearned compensation                   502                      502
                                                   --------    ---------   -------==

Balance at September 30, 2001                      $   (798)   $ (17,533)  $ 367,814
                                                   ========    =========   =========
</Table>

Comprehensive loss for the three months ended September 30, 2001 was $(7,725).


      See notes to unaudited condensed consolidated financial statements.




                                       5
<PAGE>

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

         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 September 30, 2001 and
the results of its operations for the nine and three months ended September 30,
2001. Results of operations for the nine and three months ended September 30,
2001 are not necessarily indicative of the results that may be expected for
EGL's full fiscal year. The Company has reclassified certain prior period
amounts to conform to the current period presentation.

NOTE 1 - ORGANIZATION, OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES:

         EGL is an international transportation and logistics company. The
Company's principal lines of business are air freight forwarding, ocean freight
forwarding, customs brokerage and other value-added services such as
warehousing, distribution and insurance. The Company provides services through
offices around the world as well as through its worldwide network of exclusive
and nonexclusive agents. In October 2000, the Company acquired Circle
International Group, Inc. (Circle) in a merger transaction and expanded its
operations to over 100 countries on six continents (Note 5). The principal
markets for all lines of business are North America, Europe and Asia with
significant operations in the Middle East, South America and South Pacific (Note
10).

NOTE 2 - NEW ACCOUNTING PRONOUNCEMENTS:

         In July 2001, the Financial Accounting Standards Board issued SFAS No.
141, Business Combinations, and No. 142, Goodwill and Other Intangible Assets.
SFAS 141 supersedes Accounting Principles Board Opinion No. 16, Business
Combinations. SFAS 141 requires that the purchase method of accounting be used
for all business combinations initiated after June 30, 2001, establishes
specific criteria for the recognition of intangible assets separately from
goodwill and requires unallocated negative goodwill arising from new
transactions to be written off immediately as an extraordinary gain, and for
pre-existing transactions to be recognized as the cumulative effect of a change
in accounting principle.

         SFAS 142 supersedes Accounting Principles Board Opinion No. 17,
Intangible Assets. SFAS 142 primarily addresses the accounting for goodwill and
intangible assets subsequent to their acquisition. SFAS 142 requires that
goodwill and indefinite lived intangible assets will no longer be amortized;
goodwill will be tested for impairment at least annually at the reporting unit
level; intangible assets deemed to have an indefinite life will be tested for
impairment at least annually; and the amortization of intangible assets with
finite lives will no longer be limited to forty years. The provisions of SFAS
142 will be effective for fiscal years beginning after December 15, 2001. This
statement is required to be applied at the beginning of an entity's fiscal year
and to be applied to all goodwill and other intangible assets recognized in its
financial statements at that date. The Company will adopt SFAS 142 as of January
1, 2002 and is currently determining the impact it will have on its results of
operations and financial position.

         In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, Impairment or Disposal of Long-Lived Assets. SFAS 144 addresses
financial accounting and reporting for the impairment or disposal of long-lived
assets. SFAS 144 supersedes FASB Statement No. 121, Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, and the accounting and
reporting provisions of APB Opinion No. 30, Reporting the Results of Operations
- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. SFAS
144 requires that one accounting model be used for long-lived assets to be
disposed of by sale, whether previously held and used or newly acquired, and
broadens the presentation of discontinued operations to include more disposal
transactions. The provisions of SFAS 144 will be effective for fiscal years
beginning after December 15, 2001. The Company will adopt SFAS 144 as of January
1, 2002 and is currently determining the impact, if any, it will have on its
results of operations and financial position.



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


NOTE 3 - ACCOUNTING POLICY FOR DERIVATIVE INSTRUMENTS:

         Effective January 1, 2001, the Company adopted SFAS No. 133, Accounting
for Derivative Instruments and Hedging Activities, as amended by SFAS No. 137
and SFAS No. 138. These statements require the Company to recognize all
derivative instruments on the balance sheet at fair value. The accounting for
changes in the fair value of a derivative instrument depends on whether it has
been designated and qualifies as part of a hedging relationship, and further, on
the type of hedging relationship. For those derivative instruments that are
designated and qualify as hedging instruments, a company must designate the
hedging instrument, based upon the exposure being hedged, as either a fair value
hedge, cash flow hedge or a hedge of the foreign currency exposure of a net
investment in a foreign operation.

         For derivative instruments that are designated and qualify as a fair
value hedge, the gain or loss on the derivative instrument as well as the
offsetting gain or loss on the hedged item attributable to the hedged risk are
recognized in current earnings during the period of the change in fair values.
For derivative instruments that are designated and qualify as a cash flow hedge,
the effective portion of the gain or loss on the derivative instrument is
reported as a component of other comprehensive income and reclassified into
earnings in the same period or periods during which the hedged transaction
affects earnings. The remaining gain or loss on the derivative instrument in
excess of the cumulative change in the present value of future cash flows of the
hedged item, if any, is recognized in current earnings during the period of the
change. For derivative instruments that are designated and qualify as a hedge of
foreign currency exposure of a net investment in a foreign operation, the gain
or loss is reported in other comprehensive income as part of the cumulative
translation adjustment to the extent it is effective. For derivative instruments
not designated as hedging instruments, the gain or loss is recognized in current
earnings during the period of change.

         The Company uses derivative financial instruments to reduce its
exposure to fluctuations in interest rates. The Company formally designates and
documents the financial instrument as a hedge of a specific underlying exposure
when it is entered into, as well as the risk, management objectives and
strategies for undertaking the hedge transaction. Derivatives are recorded in
the balance sheet at fair value in either other assets or other liabilities. The
earnings impact resulting from the derivative instruments is recorded in the
same line item within the statement of earnings as the underlying exposure being
hedged. The Company also formally assesses, both at inception and at least
quarterly thereafter, whether the derivative instruments that are used in
hedging transactions are effective at offsetting changes in either the fair
value or cash flows of the related underlying exposures. The ineffective portion
of a derivative instrument's change in fair value is immediately recognized in
earnings as non-operating income (expense), net.

     Cash Flow Hedging Strategy

         In April 2001, the Company entered into an interest rate swap
agreement, which has been 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. Accordingly, the change in the fair value of the swap
agreement is recorded in other comprehensive income (loss).

NOTE 4 - EARNINGS (LOSS) PER SHARE:

         Basic earnings (loss) per share excludes dilution and is computed by
dividing income (loss) available to common stockholders by the weighted average
number of common shares outstanding for the period. Diluted earnings per share
includes potential dilution that could occur if securities to issue common stock
were exercised. Stock options are the only potentially dilutive share
equivalents the Company had outstanding for the periods presented. Incremental
shares of 1.3 million and 1.4 million were used in the calculation of diluted
earnings per share for the nine and three months ended September 30, 2000,
respectively. No shares related to options were included in diluted earnings per
share for the nine and three months ended September 30, 2001 because their
effect would have been antidilutive as the Company incurred a net loss during
those periods.



                                       7
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)

NOTE 5 - BUSINESS COMBINATIONS:

         On October 2, 2000, EGL completed its merger with Circle pursuant to
the terms and conditions of the Agreement and Plan of Merger dated as of July 2,
2000. EGL issued approximately 17.9 million shares of EGL common stock in
exchange for all issued and outstanding shares of Circle common stock and
assumed Circle options exercisable for approximately 1.1 million shares of EGL
common stock. The exchange ratio of one share of EGL common stock for each share
of Circle common stock was determined by arms-length negotiations between EGL
and Circle. The merger qualified as a tax-free reorganization for U.S. federal
income tax purposes and as a pooling of interests for accounting and financial
reporting purposes; as such, the Company's financial statements have been
restated to include the operations of Circle for all periods presented.

NOTE 6 - MERGER TRANSACTION, RESTRUCTURING AND INTEGRATION COSTS:

     Transaction and integration costs

         As a result of the merger with Circle, as discussed in Note 5, the
Company paid $2.0 million and $11.1 million of transaction and integration costs
during the three and nine months ended September 30, 2001, respectively, of
which $3.4 million was accrued as of December 31, 2000. Integration costs of
approximately $2.0 million and $7.7 million incurred and expensed during the
three and nine months ended September 30, 2001, respectively, included personnel
costs for redundant employees at the former Circle's headquarters, the costs of
legal registrations in various jurisdictions, changing signs and logos at major
facilities around the world, and other integration costs.

     Merger restructuring charges

         During the fourth quarter of 2000, the Company established a 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 involve 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 by the end of the third quarter of 2001.

         The charges incurred under the Plan for the nine months ended September
30, 2001 and the remaining portion of the unpaid accrued charges as of September
30, 2001 are as follows:

<Table>
<Caption>
                                                                     Additional income
                                                                 statement charge for the nine
                                                                months ended September 30, 2001
                                                                -------------------------------
                                                    Accrued                                                            Accrued
                                                   liability                       Revisions                          liability
                                                  December 31,       New              to             Payments/      September 30,
(in thousands)                                       2000           charges        estimates        reductions           2001
                                                 -------------   -------------    -------------    -------------    -------------
<S>                                              <C>             <C>              <C>              <C>              <C>
Severance costs                                  $       6,267   $       3,091    $        (398)   $      (7,801)   $       1,159
Future lease obligations, net of subleasing             10,063           1,917            3,282           (4,661)          10,601
Termination of joint venture/agency agreements           5,212              --           (3,000)          (1,209)           1,003
                                                 -------------   -------------    -------------    -------------    -------------
                                                 $      21,542   $       5,008    $        (116)   $     (13,671)   $      12,763
                                                 =============   =============    =============    =============    =============
</Table>

      Severance costs

         Severance costs have been recorded for certain employees at the former
Circle headquarters and former Circle management at certain international
locations who were terminated or notified of their termination under the Plan
prior to




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


December 31, 2000. At December 31, 2000, approximately 60 of the 150 employees
included in the Plan were no longer employed by the Company. The termination of
substantially all of the remaining 90 employees occurred in the first quarter of
2001, and severance costs of approximately $3.0 million were recorded.

         Also, during January 2001 the Company announced an additional reduction
in the Company's workforce of approximately 125 additional employees. The charge
for this workforce reduction is approximately $0.1 million and was recorded
during the first quarter of 2001.

     Future lease obligations

         Future lease obligations consist of the Company's remaining lease
obligations under noncancelable operating leases at domestic and international
locations that the Company is in the process of vacating and consolidating due
to excess capacity resulting from the Company having multiple facilities in
certain locations. Amounts recorded for future lease obligations under the Plan
are net of approximately $34.9 million in anticipated future recoveries from
actual or expected sublease agreements. Sublease income has been anticipated
under the Plan only in locations where sublease agreements have been executed or
are likely to be executed during the next year. During the three months ended
September 30, 2001, the Company recorded an additional charge of $3.2 million
based on revised estimates for future recoveries from actual or expected
sublease agreements that were or are expected to be less favorable than
anticipated due to the weakened U.S. economy.

           The provisions of the Plan include the consolidation of facilities at
approximately 80 of the Company's operating locations. As of September 30, 2001
consolidation of facilities has been completed at substantially all of these
locations with the remaining locations expected to be completed by the end of
the first quarter of 2002. During the second quarter of 2001, the Company
determined the estimated consolidation dates for several of the remaining
facilities and recorded an additional charge of $1.9 million. All lease costs
for facilities being consolidated are charged to operations until the date that
the Company vacates each facility. The charges recorded under the Plan include
provisions for closing Circle's logistics facility in Los Angeles, California.

     Termination of joint venture/agency agreements

         Costs to terminate joint venture/agency agreements represent
contractually obligated costs incurred to terminate selected joint
venture/agency agreements with certain of the Company's former business partners
along with assets that are not expected to be fully recoverable as a result of
the Company's decision to terminate these agreements. In conjunction with the
Company's Plan, the Company is currently terminating certain of its joint
venture/agency agreements. During the nine months ended September 30, 2001, the
Company completed the termination of joint venture agreements in South Africa
and Taiwan on more favorable terms than originally expected and revised its
estimate by $3.0 million.

     Other restructuring charges

         In mid-August 2001 the Company negotiated agreements to reduce its
exposure to future losses on leased aircraft. A lease for two of the aircraft
was terminated with no financial penalty. The Company subleased five aircraft to
a third party at rates below the Company's current contractual commitment and
recorded of a charge of approximately $2.4 million in the third quarter of 2001
for the excess of the Company's commitment over the sublease income through the
end of the lease term. The Company is currently operating six aircraft in its
domestic overnight air network. As of December 31, 2001, the Company only will
be obligated under one lease agreement for four aircraft. This agreement expires
during 2003.


NOTE 7 - REVOLVING CREDIT FACILITY:

         On January 5, 2001, the Company entered into an agreement (the Credit
Facility) with various financial institutions, with the Bank of America, N.A.
(the



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


Bank) serving as administrative agent, to replace its previous credit facility.
The Credit Facility (as amended on June 28, 2001) provided a $150 million
revolving line of credit and included a $30 million sublimit for the issuance of
letters of credit and a $15 million sublimit for a swing line loan. The Credit
Facility will mature on January 5, 2004.

         For each tranche of principal obtained under the Credit Agreement, the
Company elects an interest rate calculation on either LIBOR plus an applicable
margin based on a ratio of consolidated debt to consolidated EBITDA (a Libor
Tranche) or the greater of the prime rate announced by the Bank or the federal
funds rate plus 50 basis points (a Prime Rate Tranche). The interest for a
LIBOR Tranche is due at the earlier of three months from inception of the LIBOR
Tranche, as selected by the Company, or the expiration of the LIBOR Tranche,
whichever is earlier. The interest for a Prime Rate Tranche is due quarterly.

         The Company is subject to certain covenants under the terms of the
Credit Facility, including, but not limited to, maintenance at the end of any
fiscal quarter of (a) minimum specified consolidated net worth, (b) a ratio of
consolidated funded debt to total capitalization of no greater than 0.40 to
1.00, (c) a ratio of consolidated funded debt to consolidated EBITDA of no
greater than 3.00 to 1.00 (d) a consolidated fixed charge coverage ratio of no
less than 1.35 to 1.00 and (e) minimum consolidated domestic accounts
receivable coverage ratio not to be less than 1.25 to 1.00. The Credit Facility
also places restrictions on additional indebtedness, liens, investments, change
of control and other matters and is secured by an interest in substantially all
of the Company's assets.

         As of September 30, 2001, our results did not satisfy the requirements
of certain covenants. We received a waiver letter from the banks to waive the
event of default until November 9, 2001.

         The Company has reached an agreement with its banking group led by the
bank with respect to an amendment and restatement of its Credit Facility, to be
effective as of November 9, 2001, (Amended and Restated Credit Facility). The
Amended and Restated Credit Facility, which will mature on November 9, 2002,
provides a revolving line of credit of up to the lesser of (a) $150 million or
(b) an amount equal to (i) up to 85% of the net amount of billed and posted
eligible accounts receivable of the Company, its wholly owned domestic
subsidiaries, and its wholly-owned subsidiaries in Canada, the United Kingdom,
and the Netherlands (Eligible Foreign Subsidiaries) (provided that the eligible
accounts receivable of the Netherlands subsidiaries not exceed $10 million and
provided further that the amount of the borrowing base attributable to accounts
receivable of all Eligible Foreign Subsidiaries not exceed the lesser of $30
million or 20% of the aggregate amount of the borrowing base) plus (ii) up to
85% of the net amount of billed and unposted eligible accounts receivable of the
Company and 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 (iii) up to 50% of the net amount of unbilled (fully earned)
and unposted eligible accounts receivable of the Company and 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 (iv) 100%
of eligible standby letters of credit in favor of the Bank for the account of
the Company or any wholly owned subsidiary, plus (v) 100% of eligible cash
deposits or short-term investments of the Company or any wholly owned
subsidiary, minus (vi) reserves from time to time established by the Bank, in
its reasonable credit judgment (the aggregate of (i), (ii), (iii), (iv), (v) and
(vi) being referred to herein as the "Eligible Borrowing Base"). Such Amended
and Restated Credit Facility includes a $30 million letter of credit subfacility
and a $15 million sublimit for swing line loans.

         For each tranche of principal borrowed under the revolving line of
credit, the Company may elect an interest rate of either (a) LIBOR plus an
applicable margin of 4.00% from November 7 through December 21, 2001, 5.00% from
December 22, 2001 through March 14, 2002, 5.50% from March 15, 2002 through June
14, 2002, 6.00% from June 15, 2002 through September 14, 2002, and 6.50%
thereafter (a LIBOR Tranche) or (b) the Base Rate (the greater of (i) the prime
rate announced by the Bank or (ii) the federal funds rate plus 0.50%) plus an
applicable margin of 1.25% from November 7 through December 21, 2001, 2.00% from
December 22, 2001 through March 14, 2002, 2.50% from March 15, 2002 through June
14, 2002, 3.00% from June 15, 2002 through September 14, 2002, and 3.50%
thereafter (a Prime Rate Tranche). The interest on a LIBOR Tranche is payable at
the earlier of three months from the first day of the interest period for the
LIBOR Tranche, as selected by the Company, or the last day of the interest
period for such LIBOR Tranche, whichever is earlier. The interest on a Prime
Rate Tranche is payable quarterly.

         The Company will be 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 any fiscal quarter of (i) a minimum specified
consolidated net worth, (ii) a ratio of consolidated funded debt to total
capitalization of no greater than 0.40 to 1.00, (ii) a ratio of consolidated
funded debt to consolidated EBITDA for the four preceding fiscal quarters (on an
annualized basis from October 1, 2001 to the date of such measurement) of no
greater than 3.00 to 1.00 for the fiscal quarter ending December 31, 2001, 2.50
to 1.00 for the fiscal quarter ending March 31, 2002, 2.50 to 1.00 for the
fiscal quarter ending June 30, 2002, and 2.25 to 1.00 for the fiscal quarter
ending September 30, 2002, (iv) a consolidated fixed charge coverage ratio
(consolidated EBITDA minus taxes and maintenance capital expenditures to
consolidated interest expenses), commencing with the fiscal quarter ending
December 31, 2001, for the preceding four fiscal quarters (provided that for all
fiscal quarters prior to September 30, 2002, such determination shall be for the
period beginning October 1, 2001 and ending on such date of measurement) of no
less than 2.50 to 1.00, and (v) a consolidated fixed charge coverage ratio
(consolidated EBITDA minus taxes and total capital expenditures to consolidated
interest expenses), commencing with the fiscal quarter ending December 31, 2001,
for the preceding four fiscal quarters (provided that for all fiscal quarters
prior to September 30, 2002, such determination shall be for the period
beginning October 1, 2001 and ending on such date of measurement) of no less
than 1.00 to 1.00 and (b) maintenance as of the last day of each calendar month,
beginning October 31, 2001, of consolidated EBITDA of not less than $10 million
at October 31, 2001 through March 31, 2002, $12.5 million at April 30, 2002
through June 30, 2002, and $15 million at July 31, 2002 or thereafter. The
Amended and Restated Credit Facility will also place restrictions on additional
indebtedness, dividends, liens, investments, acquisitions, asset depositions,
change of control and other matters, will be secured by substantially all of the
Company's assets, and will be guaranteed by all domestic and Eligible Foreign
Subsidiaries.

         The Company and the Bank have also entered into a commitment letter,
dated October 22, 2001 (Commitment Letter), pursuant to which the Bank has
agreed to use its best efforts to arrange for the Company a secured credit
facility, with a term of three years, to replace the Amended and Restated Credit
Facility (Replacement Credit Facility), consisting of revolving loans of up to
the lesser of (a) $180 million or (b) the Eligible Borrowing Base. Such
Replacement Credit Facility, which includes a $50 million letter of credit
subfacility, would bear interest, at the election of the Company, at either (a)
the Bank's prime rate or (b) LIBOR plus an applicable margin of 2.5% (subject to
performance pricing adjustments providing for increases of up to 0.25% and
decreases of up to 0.50%), and would be subject to an unused line fee of 0.5%
(subject to performance pricing adjustments providing for decreases of up to
0.25%). A termination fee would be payable upon termination of the Replacement
Credit Facility during the first two years after the closing thereof, in the
amount of 0.75% if the termination occurs before the first anniversary of the
closing and 25% if the termination occurs after the first anniversary, but
before the second anniversary of such closing (unless terminated in connection
with a refinancing arranged or underwritten by the Bank or its affiliates). Such
Replacement Credit Facility would contain customary representations, warranties
and covenants (including, but not limited to, financial covenants requiring an
agreed (i) minimum tangible net worth, (ii) minimum EBITDA, subject to a $40
million minimum availability trigger, and (iii) maximum capital expenditures,
and other covenants placing restrictions on additional indebtedness, dividends,
liens, investments, acquisitions, transfers of assets and other matters). The
Commitment Letter will expire on December 20, 2001 unless a definitive
Replacement Credit Facility is executed on or prior to such date. There can be
no assurance that the Company will consummate a definitive Replacement Credit
Facility upon the terms described above or at all.



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


NOTE 8 - SHAREHOLDERS' RIGHTS PLAN:

         On May 23, 2001, the Company's Board of Directors declared a dividend
of one Right to purchase preferred stock ("Right") for each outstanding share of
Company common stock to shareholders of record at the close of business on June
4, 2001. Each right initially entitles the registered holder to purchase from
the Company a fractional share consisting of one one-thousandth of a share of
Series A Junior Participating Preferred Stock, par value $.001 per share, at a
purchase price of $120 per fractional share, subject to adjustment. The Rights
generally will not become exercisable until ten days after a public announcement
that a person or group has acquired 15% or more of Company common stock (thereby
becoming an "Acquiring Person") or the commencement of a tender or exchange
offer that would result in an Acquiring Person (the earlier of such dates being
called the "Distribution Date"). James R. Crane will not become an Acquiring
Person, unless and until he and his affiliates becomes the beneficial owner of
49% or more of the Common Stock. Rights will be issued with all shares of
Company common stock issued from the record date to the Distribution Date. Until
the Distribution Date, the Rights will be evidenced by the certificates
representing Company common stock and will be transferable only with our common
stock. Generally, if any person or group becomes an Acquiring Person, each
right, other than Rights beneficially owned by the Acquiring Person (which will
thereupon become void), will thereafter entitle its holder to purchase, at the
Rights' then current exercise price, shares of the Company's common stock having
a market value of two times the exercise price of the Right. If, after there is
an Acquiring Person, and the Company or a majority of its assets is acquired in
certain transactions, each Right not owned by an Acquiring Person will entitle
its holder to purchase, at a discount, shares of common stock of the acquiring
entity (or its parent) in the transaction. At any time until ten days after a
public announcement that the Rights have been triggered, the Company will
generally be entitled to redeem the Rights for $.01 and to amend the rights in
any manner other than to change the redemption price. Certain subsequent
amendments are also permitted. The Rights expire on June 4, 2011.

NOTE 9 - EEOC LEGAL SETTLEMENT:

         In December 1997, the U.S. Equal Employment Opportunity Commission
(EEOC) issued a Commissioner's Charge pursuant to Sections 706 and 707 of Title
VII of the Civil Rights Act of 1964, as amended (Title VII). In the
Commissioner's Charge, the EEOC charged the Company and certain of its
subsidiaries with violations of Section 703 of Title VII, as amended, the Age
Discrimination in Employment Act of 1967, and the Equal Pay Act of 1963,
resulting from (i) engaging in unlawful discriminatory hiring, recruiting and
promotion practices and maintaining a hostile work environment, based on one or
more of race, national origin, age and gender, (ii) failures to investigate,
(iii) failures to maintain proper records and (iv) failures to file accurate
reports. The Commissioner's Charge states that the persons aggrieved include all
Blacks, Hispanics, Asians and females who are, have been or might be affected by
the alleged unlawful practices.

         On May 12, 2000, four individuals filed suit against EGL alleging
gender, race and national origin discrimination, as well as sexual harassment.
This lawsuit was filed in the United States District Court for the Eastern
District of Pennsylvania in Philadelphia, Pennsylvania. The EEOC was not
initially a party to the Philadelphia litigation. In July 2000, four additional
individual plaintiffs were allowed to join the Philadelphia litigation. The
Company filed an Answer in the Philadelphia case and extensive discovery was
conducted. The individual plaintiffs sought to certify a class of approximately
1,000 current and former EGL employees and applicants. The plaintiff's initial
motion for class certification was denied in November 2000.

         On December 29, 2000, the EEOC filed a Motion to Intervene in the
Philadelphia litigation, which was granted by the Court in Philadelphia on
January 31, 2001. In addition, the Philadelphia Court also granted EGL's motion
that the case be transferred to the United States District Court for the
Southern District of Texas -- Houston Division where EGL had previously
initiated litigation against the EEOC due to what EGL believes to have been
inappropriate practices by the EEOC in the issuance of the Commissioner's Charge
and in the subsequent investigation. Subsequent to the settlement of the EEOC
action described below, the claims of one of the eight named plaintiffs were
ordered to binding arbitration at EGL's request. The Company recognized a charge
of $7.5 million in the fourth quarter of 2000 for its estimated cost of
defending and settling the asserted claims.

         On October 2, 2001, 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 mentioned above. Under the
Consent Decree, EGL has agreed to pay $8.5 million into a fund that will
compensate individuals who claim




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


to have experienced discrimination. In addition, EGL will contribute $500,000 to
establish a Leadership Development Program. This Program will provide training
and educational opportunities for women and minorities already employed at EGL
and will also establish scholarships and work study opportunities at educational
institutions. In entering the Consent Decree, EGL has not made any admission of
liability or wrongdoing. The Consent Decree was approved by the District Court
in Houston on October 1, 2001. It will become effective following the exhaustion
of any objections or appeals by any individual plaintiffs or potential
claimants. 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 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.

         It is unclear whether some or all of the seven remaining individual
plaintiffs will attempt to participate under the Consent Decree or whether they
will elect to continue to pursue their claims on their own. 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 the amount of time it will take to resolve the
objections or appeal relating to the settlement of the Commissioner's Charge
and 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. See "Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" and "Part II, Item 1. Legal Proceedings."


NOTE 10 - BUSINESS SEGMENT INFORMATION:

         EGL's reportable segments are geographic segments that offer similar
products and services. They are managed separately because each segment requires
close customer contact and each segment is affected by similar economic
conditions. Certain information regarding EGL's operations by region is
summarized below.

<Table>
<Caption>
(in thousands)                                                         Europe &        Asia &
                                           North         South          Middle         South
                                          America       America          East         Pacific     Eliminations    Consolidated
                                         ---------      --------      ---------      ---------    ------------    ------------
<S>                                      <C>            <C>           <C>            <C>           <C>             <C>
Nine months ended September 30, 2001:
     Total revenue                       $ 795,699      $ 43,230      $ 183,548      $ 262,414     $ (38,379)      $ 1,246,512
     Transfers between regions             (12,071)       (4,504)       (12,059)        (9,745)       38,379                 -
                                         ---------      --------      ---------      ---------     ---------       -----------
     Revenues from customers             $ 783,628      $ 38,726      $ 171,489      $ 252,669     $      --       $ 1,246,512
                                         =========      ========      =========      =========     =========       ===========

     Net revenue                         $ 317,724      $ 10,375      $  83,362      $  65,205                     $   476,666
                                         =========      ========      =========      =========                     ===========

     Income (loss) from operations       $ (85,086)     $   (750)     $   8,102      $  16,689                     $   (61,045)
                                         =========      ========      =========      =========                     ===========

Nine months ended September 30, 2000:
     Total revenue                       $ 878,318      $ 35,778      $ 164,859      $ 294,227     $ (26,775)      $ 1,346,407
     Transfers between regions              (7,071)       (3,664)        (7,406)        (8,634)       26,775                --
                                         ---------      --------      ---------      ---------     ---------       -----------
     Revenues from customers             $ 871,247      $ 32,114      $ 157,453      $ 285,593     $      --       $ 1,346,407
                                         =========      ========      =========      =========     =========       ===========

     Net revenue                         $ 384,049      $ 12,306      $  72,996      $  63,322                     $   532,673
                                         =========      ========      =========      =========                     ===========

     Income (loss) from operations        $ 40,320      $   (783)     $  13,391      $  11,987                     $    64,915
                                         =========      ========      =========      =========                     ===========
</Table>





                                       12
<PAGE>
                                    EGL, INC.
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


<Table>
<Caption>
(in thousands)
                                                                          Europe &         Asia &
                                            North          South           Middle          South
                                           America        America           East           Pacific      Eliminations    Consolidated
                                         -----------    ------------    ------------    ------------    ------------    ------------
<S>                                      <C>            <C>             <C>             <C>             <C>             <C>
Three months ended September 30, 2001:
    Total revenue                        $   264,191    $     14,176    $     65,105    $     87,324    $    (15,804)   $    414,992
    Transfers between regions                 (4,836)         (1,614)         (4,887)         (4,467)         15,804              --
                                         -----------    ------------    ------------    ------------    ------------    ------------
    Revenues from customers              $   259,355    $     12,562    $     60,218    $     82,857    $         --    $    414,992
                                         ===========    ============    ============    ============    ============    ============

    Net revenue                          $   117,284    $      3,464    $     28,940    $     21,756                    $    171,444
                                         ===========    ============    ============    ============                    ============

    Income (loss) from operations        $   (18,785)   $        555    $      2,301    $      4,971                    $   (10,958)
                                         ===========    ============    ============    ============                    ============

Three months ended September 30, 2000:
    Total revenue                        $   318,946    $     13,440    $     56,162    $    111,619    $     (9,451)   $    490,716
    Transfers between regions                 (2,650)         (1,300)         (2,511)         (2,990)          9,451              --
                                         -----------    ------------    ------------    ------------    ------------    ------------
    Revenues from customers              $   316,296    $     12,140    $     53,651    $    108,629    $         --    $    490,716
                                         ===========    ============    ============    ============    ============    ============

    Net revenue                          $   139,899    $      4,401    $     24,677    $     22,918                    $    191,895
                                         ===========    ============    ============    ============                    ============

    Income (loss) from operations        $    18,466    $      (278)    $      4,891    $      5,972                    $     29,051
                                         ===========    ============    ============    ============                    ============
</Table>


Revenue from transfers between regions represents approximate amounts that would
be charged if an unaffiliated company provided the services. Total regional
revenue is reconciled with total consolidated revenue by eliminating
inter-regional revenue.



                                       13
<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, 2000 (File No. 0-27288).

RESULTS OF OPERATIONS

         EGL's principal services are international air freight forwarding,
ocean freight forwarding, and customs brokerage and other value-added logistics
services. The following table provides the revenue and net revenue attributable
to EGL's principal services during the periods indicated. Revenue for air
freight and ocean freight consolidations (indirect shipments) includes the cost
of transporting such freight, whereas net revenue does not. Revenue for air
freight and ocean freight agency or direct shipments, customs brokerage and
import services, includes only the fees or commissions for these services. A
comparison of net revenue best measures the relative importance of EGL's
principal services.

         The following table presents certain statement of operations data for
the periods indicated.

<Table>
<Caption>
                                                  Nine Months Ended September 30,
                                     -------------------------------------------------------
                                                2001                         2000
                                     --------------------------    -------------------------
                                                      % of                         % of
                                        Amount       Revenues        Amount       Revenues
                                     -----------    -----------    -----------   -----------
                                               (in thousands, except percentages)
<S>                                  <C>            <C>            <C>           <C>
Revenues:
    Air freight forwarding           $   964,981           77.4    $ 1,054,177          78.3
    Ocean freight forwarding             130,783           10.5        138,158          10.3
    Customs brokerage and other          150,748           12.1        154,072          11.4
                                     -----------    -----------    -----------   -----------
Revenues                             $ 1,246,512          100.0    $ 1,346,407         100.0
                                     ===========    ===========    ===========   ===========
<Caption>
                                                      % of Net                    % of Net
                                       Amount         Revenues        Amount      Revenues
                                     -----------    -----------    -----------   -----------
<S>                                  <C>            <C>            <C>           <C>
Net revenues:
    Air freight forwarding           $   288,263           60.5    $   351,517          66.0
    Ocean freight forwarding              37,655            7.9         39,659           7.4
    Customs brokerage and other          150,748           31.6        141,497          26.6
                                     -----------    -----------    -----------   -----------
Net revenues                         $   476,666          100.0    $   532,673         100.0
                                     ===========    ===========    ===========   ===========

Operating expenses:
    Personnel costs                      289,550           60.8        281,866          52.9
    Other selling, general and
      administrative expenses            223,099           46.8        185,892          34.9
    EEOC legal settlement                 10,089            2.1             --            --
    Restructuring and integration
      costs                               14,973            3.1             --            --
                                     -----------    -----------    -----------   -----------

Operating income (loss)                  (61,045)         (12.8)        64,915          12.2
Non-operating income (expense), net       (5,618)          (1.2)         2,888           0.5
Net income (loss)                    $   (40,998)          (8.6)   $    41,750           7.8
                                     ===========    ===========    ===========   ===========
</Table>




                                       14
<PAGE>
                                    EGL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS - - (CONTINUED)


NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000.
         Revenue. Revenue decreased $99.9 million, or 7.4%, to $1,246.5 million
in the nine months ended September 30, 2001 compared to $1,346.4 million in the
nine months ended September 30, 2000 primarily due to decreases in air freight
forwarding revenue. Net revenue, which represents revenue less freight
transportation costs, decreased $56.0 million, or 10.5%, to $476.7 million in
the nine months ended September 30, 2001 compared to $532.7 million in the nine
months ended September 30, 2000 due to a decrease in air freight forwarding net
revenue.

         Air freight forwarding revenue. Air freight forwarding revenue
decreased $89.2 million, or 8.5%, to $965.0 million in the nine months ended
September 30, 2001 compared to $1,054.2 million in the nine months ended
September 30, 2000 primarily as a result of volume decreases in North America
offset by volume increases in Europe and South America. The volume decreases in
North America were primarily attributable to the weakened U.S. economy.

         Air freight forwarding net revenue decreased $63.2 million, or 18.0%,
to $288.3 million in the nine months ended September 30, 2001 compared to $351.5
million in the nine months ended September 30, 2000. The air freight forwarding
margin declined to 29.9% for the nine months ended September 30, 2001 compared
to 33.3% for the nine months ended September 30, 2000 due to a softening of the
U.S. economy, primarily in the technology, telecommunications and automotive
industries, and the resulting shift from air expedited shipments to economy
ground deferred shipments which generate lower revenue at lower margins. The
Company's air freight forwarding margin was also adversely impacted in 2001 by
the fixed costs of transportation related to 14 charter jet leases which were
carrying less freight than targeted operating levels as a result of the factors
discussed in the previous sentence. In June 2001, the Company paid $2.0 million
to terminate one of its air charter lease agreements. In mid-August 2001 the
Company negotiated agreements to reduce its exposure to future losses on leased
aircraft. A lease for two of the aircraft was terminated with no financial
penalty, and the Company has agreed to sublease five aircraft on another lease
to a third party at rates below the Company's current contractual commitment,
which resulted in a charge in the third quarter of 2001 of approximately $2.4
million. The Company is currently operating six aircraft in its domestic
overnight air network. As of December 31, 2001, the Company will be obligated
under one lease agreement for four aircraft that expires during 2003.

         Ocean freight forwarding revenue. Ocean freight forwarding revenue
decreased $7.4 million, or 5.4%, to $130.8 million in the nine months ended
September 30, 2001 compared to $138.2 million in the nine months ended September
30, 2000, while ocean freight forwarding net revenue decreased $2.0 million, or
5.0%, to $37.7 million in the nine months ended September 30, 2001 compared to
$39.7 million in the nine months ended September 30, 2000. The decreases were
principally due to volume decreases in North America and Asia. The ocean freight
forwarding margin increased to 28.8% in the nine months ended September 30, 2001
compared to 28.7% in the nine months ended September 30, 2000 primarily due to
better buying opportunities of purchased transportation mainly in Europe.

         Customs brokerage and other revenue. Customs brokerage and other
revenue, which includes warehousing, distribution and other logistics services,
decreased $3.4 million, or 2.2%, to $150.7 million in the nine months ended
September 30, 2001 compared to $154.1 million in the nine months ended September
30, 2000. Net customs brokerage and other revenue increased $9.2 million, or
6.5%, to $150.7 million in the nine months ended September 30, 2001 compared to
$141.5 million in the nine months ended September 30, 2000 mainly due to an
increase in logistics services provided to customers in North America and Europe
offset by a decline in services in Asia and South America.

         Operating expenses. Personnel costs include all compensation expenses,
including those relating to sales commissions and salaries and to headquarters
employees and executive officers. Personnel costs increased $7.7 million, or
2.7%, to $289.6 million in the nine months ended September 30, 2001 compared to
$281.9 million in the nine months ended September 30, 2000. As a percentage of
net revenue, personnel costs were 60.8% in the nine months ended September 30,
2001 compared to 52.9% in the nine months ended September 30, 2000.

         Our history of rapid revenue growth has historically required us to
increase our headcount at a fast pace to prepare for increased levels of
activity to maintain our high level of customer service. As a result, employee
headcount




                                       15
<PAGE>
                                    EGL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS - - (CONTINUED)


increased throughout 2000. When freight shipments began to slow during the first
quarter of 2001, we attempted to alleviate the impact of the slowdown by
implementing a furlough program in March 2001. With no strong signs of a
near-term economic rebound, we reduced our headcount during the first nine
months of 2001 to bring it in line with current activity levels. During the nine
months ended September 30, 2001, over 700 regular full-time and contract
employees were released, including the former Circle headquarters employees. The
majority of these reductions were in the United States and, in total,
represented approximately 13% of EGL's U.S. workforce.

         Other selling, general and administrative expenses, excluding
transaction, restructuring and integration costs, increased $37.2 million, or
20.0%, to $223.1 million in the nine months ended September 30, 2001 compared to
$185.9 million in the nine months ended September 30, 2000. As a percentage of
net revenue, other selling, general and administrative expenses, excluding
transaction, restructuring and integration costs, were 46.8% in the nine months
ended September 30, 2001 compared to 34.9% in the nine months ended September
30, 2000. This increase is due to an overall increase in the level of our
activities during 2000 and the nine months ended September 30, 2001 without the
corresponding net revenue growth in the nine months ended September 30, 2001 due
to the reduced shipping volumes and the shift from air expedited shipments to
economy ground deferred shipments which generate lower revenue at lower margins,
but with a similar cost structure.

         EEOC legal settlement. In October 2001, the Company settled its claim
with the EEOC and recorded a charge of $10.1 million during the third quarter of
2001, which includes $8.5 million placed into a settlement fund, $500,000 to
establish a leadership development program, legal fees, administrative costs and
other costs associated with the litigation and settlement.

         Transaction, restructuring and integration costs. During the nine
months ended September 30, 2001, the Company recorded $7.3 million of
restructuring costs. This amount includes a $5.2 million increase to future
lease obligations, net of expected sublease income, a net additional charge of
$2.7 million in severance costs, a $2.4 million charge for an impaired charter
aircraft lease and a $3.0 million downward revision in a reserve related to the
termination of joint ventures in South Africa and Taiwan on more favorable terms
than originally expected. Integration costs of $7.7 million were incurred during
the nine months ended September 30, 2001 and included personnel costs for
redundant employees at the former Circle headquarters, the costs of legal
registrations in various jurisdictions, changing signs and logos at major
facilities around the world and other integration costs.

         Non-operating income (expense), net. For the nine months ended
September 30, 2001, the Company had non-operating expense, net, of $5.6 million
compared to non-operating income, net, of $2.9 million for the nine months ended
September 30, 2000. The $8.5 million change is due to a lower level of interest
income resulting from reduced short-term investments that were liquidated to
fund expansion activity, higher interest expense from increased borrowings and
an increase in losses from unconsolidated affiliates partially offset by a gain
recognized on recording the market value of an investment held by the Company
that became marketable during the second quarter of 2001.

         Effective tax rate. The effective income tax rate for the nine months
ended September 30, 2001 was 38.5% compared to 38.4% for the nine months ended
September 30, 2000. Our effective tax rate fluctuates primarily due to changes
in the level of pre-tax income in foreign countries that have different tax
rates.



                                       16
<PAGE>
                                    EGL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS - - (CONTINUED)

<Table>
<Caption>
                                                      Three Months Ended September 30,
                                             -----------------------------------------------
                                                      2001                      2000
                                             ----------------------    ---------------------
                                                            % of                     % of
                                              Amount      Revenues       Amount    Revenues
                                             ---------    ---------    ---------   ---------
                                                   (in thousands, except percentages)
<S>                                          <C>          <C>          <C>         <C>
Revenues:
    Air freight forwarding                   $ 321,841         77.6    $ 386,077        78.7
    Ocean freight forwarding                    42,872         10.3       51,469        10.5
    Customs brokerage and other                 50,279         12.1       53,170        10.8
                                             ---------    ---------    ---------   ---------
Revenues                                     $ 414,992        100.0    $ 490,716       100.0
                                             =========    =========    =========   =========

<Caption>
                                                          % of Net                 % of Net
                                              Amount      Revenues       Amount    Revenues
                                             ---------    ---------    ---------   ---------
<S>                                          <C>          <C>          <C>         <C>
Net revenues:
    Air freight forwarding                   $ 110,836         64.7    $ 128,965        67.2
    Ocean freight forwarding                    10,329          6.0       14,150         7.4
    Customs brokerage and other                 50,279         29.3       48,780        25.4
                                             ---------    ---------    ---------   ---------
Net revenues                                 $ 171,444        100.0    $ 191,895       100.0
                                             =========    =========    =========   =========

Operating expenses:
    Personnel costs                             94,328         55.0       97,798        51.0
    Other selling, general and
     administrative expenses                    71,735         41.8       65,046        33.9
    EEOC legal settlement                       10,089          5.9           --          --
    Restructuring and integration
     costs                                       6,250          3.7           --          --
                                             ---------    ---------    ---------   ---------

Operating income (loss)                        (10,958)        (6.4)      29,051        15.1
Non-operating income (expense), net             (3,062)        (1.8)         682         0.4
Net income (loss)                            $  (8,775)        (5.1)   $  18,311         9.5
                                             =========    =========    =========   =========
</Table>


THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2000

         Revenue. Revenue decreased $75.7 million, or 15.4%, to $415.0 million
in the three months ended September 30, 2001 compared to $490.7 million in the
three months ended September 30, 2000 primarily due to decreases in air freight
forwarding revenue. Net revenue, which represents revenue less freight
transportation costs, decreased $20.5 million, or 10.7%, to $171.4 million in
the three months ended September 30, 2001 compared to $191.9 million in the
three months ended September 30, 2000 due to a decrease in air freight
forwarding net revenue.

                  Air freight forwarding revenue. Air freight forwarding revenue
decreased $64.3 million, or 16.7%, to $321.8 million in the three months ended
September 30, 2001 compared to $386.1 million in the three months ended
September 30, 2000 primarily as a result of volume decreases in North America
and Asia Pacific. The volume decrease in North America is primarily due to
weakening in the U.S. economy. The Company has also experienced lower volumes in
the third quarter of 2001 due to the events of September 11 which resulted in
the temporary closing of U.S. airspace.

         Air freight forwarding net revenue decreased $18.2 million, or 14.1%,
to $110.8 million in the three months ended September 30, 2001 compared to
$129.0 million in the three months ended September 30, 2000. The air freight
forwarding margin increased to 34.4% for the three months ended September 30,
2001 compared to 33.4% for the three months ended September 30, 2000 reflecting
the actions taken during the second quarter of 2001 to reduce the dependence on
the U.S. dedicated charter network and better yield management internationally.



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


         Ocean freight forwarding revenue. Ocean freight forwarding revenue
decreased $8.6 million, or 16.7%, to $42.9 million in the three months ended
September 30, 2001 compared to $51.5 million in the three months ended September
30, 2000, while ocean freight forwarding net revenue decreased $3.9 million, or
27.5%, to $10.3 million in the three months ended September 30, 2001 compared
to $14.2 million in the three months ended September 30, 2000. The decrease in
revenues was principally due to volume decreases in North America and Asia. The
ocean freight forwarding margin decreased to 24.1% in the three months ended
September 30, 2001 compared to 27.5% in the three months ended September 30,
2000 primarily due to higher cost of purchased transportation mainly in North
America.

         Customs brokerage and other revenue. Customs brokerage and other
revenue, which includes warehousing, distribution and other logistics services,
decreased $2.9 million, or 5.5%, to $50.3 million in the three months ended
September 30, 2001 compared to $53.2 million in the three months ended September
30, 2000. Net customs brokerage and other revenue increased $1.5 million, or
3.1%, to $50.3 million in the three months ended September 30, 2001 compared to
$48.8 million in the three months ended September 30, 2000 mainly due to an
increase in logistics services provided to customers in North America and Europe
offset by a decline in services in Asia.

         Operating expenses. Personnel costs include all compensation expenses,
including those relating to sales commissions and salaries and to headquarters
employees and executive officers. Personnel costs decreased $3.5 million, or
3.6%, to $94.3 million in the three months ended September 30, 2001 compared to
$97.8 million in the three months ended September 30, 2000. As a percentage of
net revenue, personnel costs were 55.0% in the three months ended September 30,
2001 compared to 51.0% in the three months ended September 30, 2000.

         Our history of rapid revenue growth has historically required us to
increase our headcount at a fast pace to prepare for increased levels of
activity to maintain our high level of customer service. As a result, employee
headcount increased throughout 2000. When freight shipments began to slow during
the first quarter of 2001, we attempted to alleviate the impact of the slowdown
by implementing a furlough program in March 2001. With no strong signs of a
near-term economic rebound, we reduced our headcount during the first nine
months of 2001 to bring it in line with current activity levels. During the nine
months ended September 30, 2001, over 700 regular full-time and contract
employees were released, including the former Circle headquarters employees. The
majority of these reductions were in the United States and, in total,
represented approximately 13% of EGL's U.S. workforce. The decrease in personnel
costs in the third quarter of 2001 is reflective of these actions.

         Other selling, general and administrative expenses, excluding
transaction, restructuring and integration costs, increased $6.7 million, or
10.3%, to $71.7 million in the three months ended September 30, 2001 compared to
$65.0 million in the three months ended September 30, 2000. As a percentage of
net revenue, other selling, general and administrative expenses, excluding
transaction, restructuring and integration costs, were 41.8% in the three months
ended September 30, 2001 compared to 33.9% in the three months ended September
30, 2000. This increase is due to an overall increase in the level of our
activities during 2000 and the first quarter of 2001 without the corresponding
net revenue growth in the first quarter of 2001 due to reduced shipping volumes
and the shift from air expedited shipments to economy ground deferred shipments
which generate lower revenue at lower margins, but with a similar cost
structure.

         EEOC legal settlement. In October 2001, the Company settled its claim
with the EEOC and recorded a charge of $10.1 million in the third quarter of
2001, which includes $8.5 million to be placed into a settlement fund, $500,000
to establish a leadership development program, legal fees, administrative costs
and other costs associated with the litigation and settlement.

         Transaction, restructuring and integration costs. During the three
months ended September 30, 2001, the Company recorded $4.3 million in
restructuring costs. This amount included an additional $3.2 million related to
future lease obligations, net of expected sublease income, a $2.4 million charge
for an impaired charter aircraft lease, a $1.0 million reduction in a reserve
related to the termination of a joint venture in Taiwan on more favorable terms
than originally expected and a $0.3 million reduction in a severance reserve.
Integration costs of $2.0 million were incurred during the three months ended
September 30, 2001 and included personnel costs for redundant employees at the




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


former Circle headquarters, the costs of legal registrations in various
jurisdictions, changing signs and logos at major facilities around the world and
other integration costs.

         Non-operating income (expense), net. For the three months ended
September 30, 2001, the Company had non-operating expense, net, of $3.1 million
compared to non-operating income, net of $0.7 million for the three months ended
September 30, 2000. The $3.8 million change is due to a lower level of interest
income resulting from reduced short-term investments that were liquidated to
fund expansion activity, higher interest expense from increased borrowings and
an increase in losses from unconsolidated affiliates.

         Effective tax rate. The effective income tax rate for the three months
ended September 30, 2001 was 37.4% compared to 38.4% for the three months ended
September 30, 2000. Our effective tax rate fluctuates primarily due to changes
in the level of pre-tax income in foreign countries that have different rates.

LIQUIDITY AND CAPITAL RESOURCES

  General

         The Company's ability to satisfy its debt obligations, fund working
capital and make capital expenditures depends upon the Company's future
performance, which is subject to general economic conditions and other factors,
some of which are beyond the control of the Company. The Company has
substantially reduced operating costs between the second and third quarter of
2001 and has worked to diversify its customer base. Additionally, the Company
has made significant efforts to collect outstanding customer accounts receivable
amounts and was able to use the cash from these collections to avoid additional
net borrowings on its line of credit during the third quarter of 2001. Should
the Company achieve significant near-term revenue growth, the Company may
experience a need for increased working capital financing as a result of the
difference between its collection cycles and the timing of its payments to
vendors. The Company is currently pursuing means of cash injections such as the
sale of the Circle headquarters building, filing for a tax refund of previously
paid U.S. income taxes, assessing available alternatives related to the
sale-lease-back of selected properties in the United States and pursuing a $180
million secured credit facility. However, there can be no assurance that
acceptable additional financing would be available if needed.

         The Company makes significant disbursements and in turn bills its
customers for customs duties and other expenses. Due to the timing of the
billings to customers for these disbursements, which are reflected in our trade
receivables and trade payables, any 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 provided by operating activities. Net cash provided by operating
activities was $8.3 million in the nine months ended September 30, 2001 compared
to cash provided by operating activities of $31.3 million in the nine months
ended September 30, 2000. The decrease in the nine months ended September 30,
2001 was primarily due to the loss incurred in the nine months ended September
30, 2001 and transaction, integration and restructuring costs paid during the
nine months ended September 30, 2001 as compared to income and corresponding
cash flows that were produced in 2000.

         Cash used in investing activities. Cash used in investing activities in
the nine months ended September 30, 2001 was $45.3 million compared to $63.6
million in the nine months ended September 30, 2000. The Company incurred an
increase in capital expenditures of $3.1 million during the nine months ended
September 30, 2001 as compared to the 2000 period. These expenditures were
mainly due to information technology initiatives and general facilities
expansion in North America and the buyout of certain joint venture agreements in
foreign locations.

         Cash provided by financing activities. Cash provided by financing
activities in the nine months ended September 30, 2001 was $42.6 million
compared to $0.2 million used in financing activities in the nine months ended
September 30, 2000. Notes payable increased $37.8 million due primarily to a
$45.0 million increase in the revolving line of credit, which had a balance of
$126.0 million at September 30, 2001 compared to $81.0 million at December 31,
2000. Proceeds from the exercise of stock options were $3.6 million in the nine
months ended September 30, 2001 compared to $3.1 million in the nine months
ended September 30, 2000. The Company expended $10.5 million to purchase
treasury stock in the nine months ended September 30, 2000. The Company did not
purchase any treasury stock in the nine months ended September 30, 2001.


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


Other factors affecting our liquidity and capital resources

         The Company's primary sources of liquidity have been the Company's
public offerings, cash generated from operations, bank borrowings and lease or
purchase arrangements. The Company does not anticipate paying any cash dividends
on its Common Stock in the foreseeable future. The Company's bank agreements
restrict its ability to pay such dividends.

         Credit agreements. On January 5, 2001, the Company entered into an
agreement (the Credit Facility) with various financial institutions, with the
Bank of America, N.A. (the Bank) serving as administrative agent, to replace its
previous credit facility. The Credit Facility (as amended on June 28, 2001)
provided a $150 million revolving line of credit and included a $30 million
sublimit for the issuance of letters of credit and a $15 million sublimit for a
swing line loan. The Credit Facility will mature on January 5, 2004.

         For each tranche of principal obtained under the Credit Agreement, the
Company elects an interest rate calculation on either LIBOR plus an applicable
margin based on a ratio of consolidated debt to consolidated EBITDA (a Libor
Tranche) or the greater of the prime rate announced by the Bank or the federal
funds rate plus 50 basis points (a Prime Rate Tranche). The interest for a
LIBOR Tranche is due at the earlier of three months from inception of the LIBOR
Tranche, as selected by the Company, or the expiration of the LIBOR Tranche,
whichever is earlier. The interest for a Prime Rate Tranche is due quarterly.

         The Company is subject to certain covenants under the terms of the
Credit Facility, including, but not limited to, maintenance at the end of any
fiscal quarter of (a) minimum specified consolidated net worth, (b) a ratio of
consolidated funded debt to total capitalization of no greater than 0.40 to
1.00, (c) a ratio of consolidated funded debt to consolidated EBITDA of no
greater than 3.00 to 1.00 (d) a consolidated fixed charge coverage ratio of no
less than 1.35 to 1.00 and (e) minimum consolidated domestic accounts
receivable coverage ratio not to be less than 1.25 to 1.00. The Credit Facility
also places restrictions on additional indebtedness, liens, investments, change
of control and other matters and is secured by an interest in substantially all
of the Company's assets.

         As of September 30, 2001, our results did not satisfy the requirements
of certain covenants. We received a waiver letter from the banks to waive the
event of default until November 9, 2001.

         The Company has reached an agreement with its banking group, led by the
Bank, with respect to an amendment and restatement of its Credit Facility,
to be effective as of November 9, 2001, (Amended and Restated Credit Facility).
The Amended and Restated Credit Facility, which will mature November 9, 2002,
provides a revolving line of credit of up to the lesser of (a) $150 million or
(b) an amount equal to (i) up to 85% of the net amount of billed and posted
eligible accounts receivable of the Company, its wholly owned domestic
subsidiaries, and its wholly-owned subsidiaries in Canada, the United Kingdom,
and the Netherlands (Eligible Foreign Subsidiaries) (provided that the eligible
accounts receivable of the Netherlands subsidiaries not exceed $10 million and
provided further that the amount of the borrowing base attributable to accounts
receivable of all Eligible Foreign Subsidiaries not exceed the lesser of $30
million or 20% of the aggregate amount of the borrowing base) plus (ii) up to
85% of the net amount of billed and unposted eligible accounts receivable of the
Company and 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 (iii) up to 50% of the net amount of unbilled (fully earned)
and unposted eligible accounts receivable of the Company and 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 (iv) 100%
of eligible standby letters of credit in favor of the Bank for the account of
the Company or any wholly owned subsidiary, plus (v) 100% of eligible cash
deposits or short-term investments of the Company or any wholly owned
subsidiary, minus (vi) reserves from time to time established by the Bank, in
its reasonable credit judgment (the aggregate of (i), (ii), (iii), (iv), (v) and
(vi) being referred to herein as the "Eligible Borrowing Base"). Such Amended
and Restated Credit Facility includes a $30 million letter of credit subfacility
and a $15 million sublimit for swing line loans.

         For each tranche of principal borrowed under the revolving line of
credit, the Company may elect an interest rate of either (a) LIBOR plus an
applicable margin of 4.00% from November 7 through December 21, 2001, 5.00% from
December 22, 2001 through March 14, 2002, 5.50% from March 15, 2002 through June
14, 2002, 6.00% from June 15, 2002 through September 14, 2002, and 6.50%
thereafter (a LIBOR Tranche) or (b) the Base Rate (the greater of (i) the prime
rate announced by the Bank or (ii) the federal funds rate plus 0.50%) plus an
applicable margin of 1.25% from November 7 through December 21, 2001, 2.00% from
December 22, 2001 through March 14, 2002, 2.50% from March 15, 2002 through June
14, 2002, 3.00% from June 15, 2002 through September 14, 2002, and 3.50%
thereafter (a Prime Rate Tranche). The interest on a LIBOR Tranche is payable at
the earlier of three months from the first day of the interest period for the
LIBOR Tranche, as selected by the Company, or the last day of the interest
period for such LIBOR Tranche, whichever is earlier. The interest on a Prime
Rate Tranche is payable quarterly.

         The Company will be 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 any fiscal quarter of (i) a minimum specified
consolidated net worth, (ii) a ratio of consolidated funded debt to total
capitalization of no greater than 0.40 to 1.00, (ii) a ratio of consolidated
funded debt to consolidated EBITDA for the four preceding fiscal quarters (on an
annualized basis from October 1, 2001 to the date of such measurement) of no
greater than 3.00 to 1.00 for the fiscal quarter ending December 31, 2001, 2.50
to 1.00 for the fiscal quarter ending March 31, 2002, 2.50 to 1.00 for the
fiscal quarter ending June 30, 2002, and 2.25 to 1.00 for the fiscal quarter
ending September 30, 2002, (iv) a consolidated fixed charge coverage ratio
(consolidated EBITDA minus taxes and maintenance capital expenditures to
consolidated interest expenses), commencing with the fiscal quarter ending
December 31, 2001, for the preceding four fiscal quarters (provided that for all
fiscal quarters prior to September 30, 2002, such determination shall be for the
period beginning October 1, 2001 and ending on such date of measurement) of no
less than 2.50 to 1.00, and (v) a consolidated fixed charge coverage ratio
(consolidated EBITDA minus taxes and total capital expenditures to consolidated
interest expenses), commencing with the fiscal quarter ending December 31, 2001,
for the preceding four fiscal quarters (provided that for all fiscal quarters
prior to September 30, 2002, such determination shall be for the period
beginning October 1, 2001 and ending on such date of measurement) of no less
than 1.00 to 1.00 and (b) maintenance as of the last day of each calendar month,
beginning October 31, 2001, of consolidated EBITDA of not less than $10 million
at October 31, 2001 through March 31, 2002, $12.5 million at April 30, 2002
through June 30, 2002, and $15 million at July 31, 2002 or thereafter. The
Amended and Restated Credit Facility will also place restrictions on additional
indebtedness, dividends, liens, investments, acquisitions, asset depositions,
change of control and other matters, will be secured by substantially all of the
Company's assets, and will be guaranteed by all domestic and Eligible Foreign
Subsidiaries.

         The terms of the Amended and Restated Credit Facility would permit
borrowings thereunder to be used to finance future acquisitions, joint venture
operations or capital expenditures or for other corporate purposes. We believe
that operating cash flows, our financial structure and borrowing capacity under
our Amended and Restated Credit Facility will be adequate to fund our operations
and finance capital expenditures and acquisitions over the coming year.

         The Company and the Bank have also entered into a commitment letter,
dated October 22, 2001 (Commitment Letter), pursuant to which the Bank has
agreed to use its best efforts to arrange for the Company a secured credit
facility, with a term of three years, to replace the Amended and Restated Credit
Facility (Replacement Credit Facility), consisting of revolving loans of up to
the lesser of (a) $180 million or (b) the Eligible Borrowing Base. Such
Replacement Credit Facility, which includes a $50 million letter of credit
subfacility, would bear interest, at the election of the Company, at either (a)
the Bank's prime rate or (b) LIBOR plus an applicable margin of 2.5% (subject to
performance pricing adjustments providing for increases of up to 0.25% and
decreases of up to 0.50%), and would be subject to an unused line fee of 0.5%
(subject to performance pricing adjustments providing for decreases of up to
0.25%). A termination fee would be payable upon termination of the Replacement
Credit Facility during the first two years after the closing thereof, in the
amount of 0.75% if the termination occurs before the first anniversary of the
closing and 25% if the termination occurs after the first anniversary, but
before the second anniversary of such closing (unless terminated in connection
with a refinancing arranged or underwritten by the Bank or its affiliates). Such
Replacement Credit Facility would contain customary representations, warranties
and covenants (including, but not limited to, financial covenants requiring an
agreed (i) minimum tangible net worth, (ii) minimum EBITDA, subject to a $40
million minimum availability trigger, and (iii) maximum capital expenditures,
and other covenants placing restrictions on additional indebtedness, dividends,
liens, investments, acquisitions, transfers of assets and other matters). The
Commitment Letter will expire on December 20, 2001 unless a definitive
Replacement Credit Facility is executed on or prior to such date. There can be
no assurance that the Company will consummate a definitive Replacement Credit
Facility upon the terms described above or at all.


                                       20
<PAGE>
                                    EGL, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS - - (CONTINUED)

         Bank lines of credit and letters of credit. We maintain a $10 million
bank line of credit, in addition to the $30 million sublimit under our Credit
Facility, to secure customs bonds and bank letters of credit to guarantee
certain transportation expenses in foreign locations. At September 30, 2001, we
were contingently liable for approximately $7.2 million, under outstanding
letters of credit and guarantees related to our $10 million line of credit
obligations. Our ability to borrow under bank lines of credit and to maintain
bank letters of credit is subject to the limitations on additional indebtedness
contained in our Credit Facility discussed above.

         Agreement with charter airlines. We currently have two lease agreements
with certain charter airlines for cargo aircraft for utilization in our domestic
heavy-cargo overnight air network. These agreements contain guaranteed monthly
minimum use requirements of the aircraft by us. Certain of these agreements
contain provisions, which allow for early termination or modification of the
agreements to provide for an increase in or reduction of the amount of aircraft
available for our use at our discretion. One of these charter agreements is for
four aircraft with Miami Air International, Inc., a related party. Based upon
the current charter agreements presently in place and aircraft presently being
used, we expect to incur average minimum guaranteed cash costs of approximately
$4.3 million per month (or $2.9 million per month after subleasing receipts)
through December 31, 2001 and $1.5 million per month during the years ended
December 31, 2002 and 2003, respectively, before subleasing receipts. The two
lease agreements are generally cancelable with a minimum notice period. Due to
softening domestic overnight airfreight market, in mid-August 2001 the Company
negotiated agreements to reduce its exposure to future losses on charter
aircraft leases. A lease for two of the aircraft was terminated with no
financial penalty, and the Company has completed an agreement to sublease five
of the leased aircraft to a third party at rates below the Company's current
contractual commitment, which resulted in the recognition of a charge of
approximately $2.4 million in the third quarter of 2001. The Company is
currently operating six leased aircraft in its domestic overnight air network.
As of December 31, 2001, the Company will be obligated under one lease agreement
for four aircraft. This agreement expires during 2003.

         Operating lease agreements. On January 10, 1997, we entered into a
five-year operating lease agreement with two unrelated parties for financing the
construction of our Houston terminal, warehouse and headquarters facility (the
"Houston facility"). The cost of the Houston facility was approximately $8.5
million. Under the terms of the lease agreement, average monthly lease payments
are approximately $59,000, which includes monthly interest costs based upon
LIBOR plus 145 basis points beginning on July 1, 1998 through January 2, 2002. A
balloon payment equal to the outstanding lease balance, which was initially
equal to the cost of the facility, is due on January 2, 2002. As of September
30, 2001, the lease balance was approximately $8.1 million.



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


         On April 3, 1998, we entered into a five-year $20 million master
operating lease agreement with two unrelated parties for financing the
construction of terminal and warehouse facilities throughout the United States
designated by us. Under the terms of the master operating lease agreement,
average monthly lease payments, including monthly interest costs based upon
LIBOR plus 145 basis points, begin upon the completion of the construction of
each financed facility. The monthly lease obligations continue for a term of 52
months and currently approximate $150,000 per month. A balloon payment equal to
the outstanding lease balances, which were initially equal to the cost of the
facility, is due at the end of each lease term. Construction began during 1999
on five terminal facilities. As of September 30, 2001, the aggregate lease
balance was approximately $15.0 million under the master operating lease
agreement.

         The operating lease agreements contain restrictive financial covenants
requiring the maintenance of a fixed charge coverage ratio of at least 1.5 to
1.0 and specified amounts of consolidated net worth and consolidated tangible
net worth. In addition, the master operating lease agreement as amended on
October 20, 2000 restricts us from incurring debt in an amount greater than $30
million, except pursuant to a single credit facility involving a commitment of
not more than $150 million. The Company expects to seek an increase in this
limit in connection with its plans to enter into the proposed $180 million
secured facility.

         We have an option, exercisable at anytime during the lease term, and
under particular circumstances may be obligated, to acquire the Houston terminal
and each of our other financed facilities for an amount equal to the outstanding
lease balance. If we do not exercise the purchase option, and do not otherwise
meet our obligations, we are subject to a deficiency payment computed as the
amount equal to the outstanding lease balance minus the then current fair market
value of each financed facility within limits. We expect that the amount of any
deficiency payment would be expensed.

         Information Systems. A primary component of the Company's business
strategy is the continued development of advanced information systems. The
Company has invested substantial management and financial resources in the
development of its information systems in an effort to provide accurate and
timely information to management and customers. The Company believes that its
systems have been instrumental in the productivity of its personnel and the
quality of its operations and service and have resulted in reductions in
paperwork and expedited the entry, processing, retrieval and internal
dissemination of critical information. These systems also enable the Company to
provide customers with accurate and up-to-date information on the status of
their shipments, through whatever medium they request, which has become
increasingly important.

         The Company will continue to develop and upgrade its information
systems, including Worldport (the Company's integrated domestic information
system) and Talon (the Company's international operating system). Due to the
continued weakness in the U.S. economy, the Company has decided to slow the
enhancements to its Talon system and, for the foreseeable future, the Company
will continue to use the international operating systems that Circle was using
prior to the merger.

         Stock options. As of September 30, 2001, we had outstanding
non-qualified stock options to purchase an aggregate of 5.3 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 $0.83 to $33.82). 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 nine months ended September
30, 2001, of non-qualified stock options to purchase an aggregate of 0.5 million
shares of common stock, we are entitled to a federal income tax deduction of
approximately $2.6 million. 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



                                       22
<PAGE>

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


prices below the then fair market value of 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.

COMMISSIONER'S CHARGE

         As discussed in "Part II, Item 1. Legal Proceedings", the Company has
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 becomes
effective following exhaustion of certain objectives and appeals. During the
third quarter of 2001, the Company recorded a $10.1 million charge related to
the settlement.

RELATED PARTY TRANSACTIONS

         In connection with the Miami Air investment, we entered into an
aircraft charter agreement with Miami Air. Under this agreement 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. We issued a $7.0 million
standby letter of credit in favor of certain creditors of Miami Air to enhance
Miami Air's borrowing capacity to assist in this aircraft conversion. Miami Air
has 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 owed by us in respect of
the letter of credit.

         Additionally, during the three and nine months ended September 30,
2001, we paid Miami Air $4.7 million and $10.6 million, respectively, under the
aircraft charter agreement. There were no unpaid balances related to this
agreement as of September 30, 2001. Additionally, Miami Air, each of the private
investors and the continuing Miami Air stockholders also entered into a
stockholders agreement under which Mr. Crane (Chairman, President and CEO) and
Mr. Hevrdejs (a director of the Company) are obligated to purchase up to
approximately $1.7 million and $.5 million, respectively, worth of Miami Air's
Series A preferred stock upon demand by the board of directors of Miami Air. The
Company 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. The Series A preferred
stock, if issued, will not be convertible, will have a 15.0% annual dividend
rate and will be mandatorily redeemable in July 2006 or upon the prior
occurrence of specified events.

         In conjunction with our business activities, we periodically utilize
aircraft owned by entities controlled by Mr. Crane. On October 30, 2000, our
Board of Directors approved a change in this arrangement whereby we would
reimburse Mr. Crane for the $112,000 monthly lease obligation and other related
costs on this aircraft and we would bill Mr. Crane for any use of this aircraft
unrelated to company business on an hourly basis. In August 2001, Mr. Crane and
the Company revised their agreement whereby the Company is now charged for its
actual usage on an hourly basis and is billed on a periodic basis. For the three
and nine months ended September 30, 2001, we reimbursed Mr. Crane for $0.1
million and $0.8 million, respectively, in monthly lease payments and related
costs on the aircraft.

         The Company subleases a portion of its warehouse space in Houston,
Texas and London, England to a customer pursuant to a five-year sublease. The
customer is partially owned by Mr. Crane. Rental income was approximately
$31,500 and $131,000 for the three and nine months ended September 30, 2001,
respectively. In addition the Company billed this customer approximately $63,000
and $500,000 for freight forwarding services for the three and nine months ended
September 30, 2001, respectively.

NEW ACCOUNTING PRONOUNCEMENTS

         See Notes 2 and 3 of the notes to condensed consolidated financial
statements and management's discussion and analysis of new accounting
pronouncements for a description.


                                       23
<PAGE>
                                    EGL, INC.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         There have been no material changes in exposure to market risk from
that discussed in EGL's Annual Report on Form 10-K for the year ended December
31, 2000 other than the cash flow hedge entered into by the Company in April
2001. See Note 4 of the notes to condensed consolidated financial statements.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

         In December 1997, the U.S. Equal Employment Opportunity Commission
("EEOC") issued a Commissioner's Charge against us and some of our subsidiaries
(the "Commissioner's Charge") pursuant to Sections 706 and 707 of Title



                                       24
<PAGE>
                                    EGL, INC.


VII of the Civil Rights Act of 1964, as amended (Title VII). In the
Commissioner's Charge, the EEOC charged us and some of our subsidiaries with
violations of Section 703 of Title VII, as amended, the Age Discrimination in
Employment Act of 1967, and the Equal Pay Act of 1963, resulting from (1)
engaging in unlawful discriminatory hiring, recruiting and promotion practices
and maintaining a hostile work environment, based on one or more of race,
national origin, age and gender, (2) failures to investigate, (3) failures to
maintain proper records and (4) failures to file accurate reports. The
Commissioner's Charge states that the persons aggrieved include all Blacks,
Hispanics, Asians and females who are, have been or might be affected by the
alleged unlawful practices.

         In May 2000, the Houston District Office of the EEOC provided us with
its "Letter of Determination and Conciliation Proposal" with respect to the
investigation pertaining to the Commissioner's Charge and made a final
determination that there is a sufficient evidentiary basis to sustain all
allegations in the Commissioner's Charge, except as to certain charges relating
to Asian Americans.

         The Conciliation Proposal "invited [EGL] to actively engage in
conciliation to resolve this matter," and proposed certain monetary and
non-monetary remedies to "serve to facilitate confidential discussions which,
hopefully, will eventuate in an appropriate settlement." The Conciliation
Proposal stated that "the EEOC agreed that its claim [for monetary relief] could
be resolved for $20,000,000." The EEOC also sought non-monetary relief,
including hiring 244 minority employees, certain upward adjustments to salaries,
reinstatement of up to 15 employees and required promotion of 30 employees. The
Conciliation Proposal also sought other non-monetary relief, including (1)
reformation of our policies and practices with respect to record keeping,
recruiting, hiring and placement, reinstatement, promotion and transfer, and
corporate governance, (2) revision of certain job descriptions, (3) institution
of employee and supervisory training, and (4) the institution of specified
procedures and steps with respect to such matters.

         Certain individual employees have brought charges alleging
discrimination against us in the ordinary course of business. Additionally,
following the issuance of the EEOC's Determination in May 2000, a lawsuit was
filed on May 12, 2000 in the U.S. District Court for the Eastern District of
Pennsylvania (Civil Action No. 00-CV-2461) by Augustine Dube, Noelle Davis,
Kshanti Morris and Ruben Capaletti, who are former employees or individuals who
had unsuccessfully applied for a position with us. Four additional plaintiffs
joined the suit in late July 2000. The lawsuit alleges discrimination and adopts
the EEOC's conclusions in their entirety. Although the named plaintiffs on this
lawsuit seek to represent a class of individuals, no class action has yet been
approved by the court, and the plaintiff's request for class certification has
been preliminarily denied. In January 2001, the EEOC was allowed to intervene in
the case. At that time, the court in Philadelphia also granted our request that
the case be transferred to the U.S. District Court for the Southern District of
Texas in Houston.

         On October 2, 2001, 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 mentioned above. Under the
Consent Decree, EGL has agreed to pay $8.5 million into a fund that will
compensate individuals who claim to have experienced discrimination. In
addition, EGL will contribute $500,000 to establish a Leadership Development
Program. This Program will provide training and educational opportunities for
women and minorities already employed at EGL and will also establish
scholarships and work study opportunities at educational institutions. In
entering the Consent Decree, EGL has not made any admission of liability or
wrongdoing. The Consent Decree was approved by the District Court in Houston on
October 1, 2001. It will become effective following the exhaustion of any
objections or appeals by any individual plaintiffs or potential claimants.
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 fund
and $500,000 to establish a leadership development program described above,
legal fees, administrative costs and other costs associated with the EEOC
litigation and settlement.

         The seven individual plaintiffs in the lawsuit and other persons who
might be covered by the settlement may seek to participate in the Consent Decree
settlement or they may elect to opt out of the settlement and continue to pursue
their own claims individually. Should these individuals continue to pursue their
claims against us, the Company plans to continue to vigorously defend itself
against these claims. There can be no assurance as to what will be the amount of
time it will take to resolve any appeals or objections by individual plaintiffs
or others relating to the settlement or to resolve the other lawsuits and
related issues or the degree of any adverse effect these matters may have on us
and our



                                       25
<PAGE>
                                    EGL, INC.


financial condition and results of operation. A substantial settlement payment
or judgment could result in a significant decrease in working capital and
liquidity. See Item 2. "Management's Discussion and Analysis of Financial
Condition and Results of Operations " and Note 9 of the notes to condensed
consolidated financial statements for a discussion of commitments and
contingencies.

         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

         On May 23, 2001, the Company's Board of Directors declared a dividend
of one right (Right) for each outstanding share of the Company's Common Stock,
par value $.001 per share, to shareholders of record at the close of business on
June 4, 2001. The Rights will have certain anti-takeover effects. The Rights
will cause substantial dilution to any person or group that attempts to acquire
the Company without the approval of the Company's Board of Directors. As a
result, the overall effect of the Rights may be to render more difficult or
discourage any attempt to acquire the Company even if such acquisition may be
favorable to the interests of the Company's shareholders. Because the Company's
Board of Directors can redeem the Rights or approve a permitted offer under the
plan, the Rights should not interfere with a merger or other business
combination approved by the Board of Directors of the Company. The Rights are
described in Note 8 of the notes to condensed consolidated financial statements
and in our Form 8-K filed on May 24, 2001. A conformed corrected copy of the
Rights Agreement dated as of May 23, 2001 between the Company and Computershare
Investor Services, L.L.C., as rights agent, is included as Exhibit 4.1 to this
Quarterly Report on Form 10-Q.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         NONE

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

         NONE

ITEM 5. OTHER INFORMATION

         FORWARDING 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. Such forward-looking statements include, but
are not limited to, those relating to the following: the effect and benefits of
the Circle merger; the restructured and asset based credit facilities;
expectations or arrangements for the Company's leased planes and the effects
thereof; the expected completion and/or effects of the Reorganization Plan; 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); past and planned
headcount reductions (including the scope, timing, impact and effects thereof);
potential annualized cost savings; changes in the Company's dedicated charter
fleet strategy (including the scope, timing, impact and effects thereof); the
Company's plans to outsource leased planes, 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 efforts;
expected growth; construction of new facilities; the results, timing, outcome or
effect of matters relating to the Commissioner's Charge (including the
settlement thereof) or other litigation and our intentions or expectations of
prevailing with respect thereto; future operating expenses; future margins; use
of credit facility proceeds; fluctuations in currency valuations; fluctuations
in interest rates; future acquisitions and any effects, benefits, results, terms
or other aspects of such acquisitions; ability to continue growth and implement
growth and business strategy; 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 the Circle merger, including the integration of its
systems, operations and other businesses; termination of joint ventures, charter
aircraft arrangements (including expected losses, increased utilization and
other



                                       26
<PAGE>
                                    EGL, INC.

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 finalization 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 litigation;
the Company's vulnerability to general economic conditions and dependence on its
principal customers; the timing, success and effects of the Company's
restructuring and other changes to its leased aircraft arrangements, whether the
Company enters into arrangements with third parties relating to such leased
aircraft and the terms of such arrangements, the results of the new air network,
whether the Company enters into definitive agreements for either new lift
capacity or for an amended and restated asset based on new credit facilities and
the terms of any of such agreements, the ability of the Company's lead bank to
syndicate such facilities and the market for such syndications, responses of
customers to the Company's actions by the Company's principal shareholder; the
Company's potential exposure to claims involving its local pickup and delivery
operations; risk of international operations; risks relating to acquisitions;
the Company's future financial and operating results, cash needs and demand for
its services; 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, 2000. 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.

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

(a)      EXHIBITS.

        *3(i)     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).

        *3(ii)    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).

        *3(iii)   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).

         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.

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

* Incororated by reference as indicated.


(b)      REPORTS ON FORM 8-K.

              NONE


                                       27
<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:   November 14, 2001                  BY:   /s/ James R. Crane
           -----------------                     ------------------------------
                                                        James R. Crane
                                                 Chairman, President and Chief
                                                       Executive Officer


   Date:  November 14, 2001                   BY:  /s/ Elijio V. Serrano
           -----------------                     ------------------------------
                                                       Elijio V. Serrano
                                                    Chief Financial Officer



                                       28
<PAGE>

                                    EGL, INC.

                                INDEX TO EXHIBITS

<Table>
<Caption>
EXHIBITS                   DESCRIPTION
--------                   -----------
<S>       <C>

*3(i)     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).

*3(ii)    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).

*3(iii)   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).

 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.
</Table>

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

* Incorporated by reference as indicated.


                                       29