##### Table of Contents



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:      0-22276                                                                                                        |  | 

ALLIED HOLDINGS, INC.

---

(Exact name of registrant as specified in its charter)


|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|GEORGIA                                                        |  | 58-0360550                             
|                                                               |  |                                        
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification Number)

Suite 200, 160 Clairemont Avenue, Decatur, Georgia 30030

---

(Address of principal executive offices)


(404) 373-4285

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(Registrants telephone number, including area code)




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(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.                [X] Yes     [ ]  No

Outstanding common stock, No par value at October 29, 2001                      8,285,015

TOTAL NUMBER OF PAGES INCLUDED IN
THIS REPORT: 26

1



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TABLE OF CONTENTS



|                                                                                              |                                                        |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------ |  |  |  |  |  |  | 
|PART 1 -  FINANCIAL INFORMATION                                                              
|ITEM 1 - FINANCIAL STATEMENTS                                                                
|                                                                                              | CONSOLIDATED BALANCE SHEETS                           
|                                                                                              | CONSOLIDATED STATEMENTS OF OPERATIONS                 
|                                                                                              | CONSOLIDATED STATEMENTS OF CASH FLOWS                 
|                                                                                              | Notes to Consolidated Financial Statements (Unaudited)
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|PART II.                                                                                     
|OTHER INFORMATION                                                                            
|Item 1. Legal Proceedings.                                                                   
|Item 5. Other Information.                                                                   
|Item 6. Exhibits and Reports on Form 8-K.                                                    
|SIGNATURES                                                                                   
|Agreement between Allied Automotive Group                                                    
|Agreement between Allied Automotive Group, Inc.                                              



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##### Table of Contents



INDEX

PART I

FINANCIAL INFORMATION

|                  |  |                                                                                                              |  |     
|----------------- |  | ------------------------------------------------------------------------------------------------------------ |  | ----
|                  |  |                                                                                                              |  | PAGE
|                  |  |                                                                                                              |  |     
|ITEM 1:           |  | FINANCIAL STATEMENTS                                                                                         |  |     
|                 
|                 
|                 
|                 
|                  |  | Consolidated Balance Sheets as of September 30, 2001 and
December 31, 2000                                   |  | 3   
|                 
|                 
|                 
|                 
|                  |  | Consolidated Statements of Operations for the Three and Nine
Month Periods Ended September 30, 2001 and 2000 |  | 4   
|                 
|                 
|                 
|                 
|                  |  | Consolidated Statements of Cash Flows for the Nine
Month Periods Ended September 30, 2001 and 2000           |  | 5   
|                 
|                 
|                 
|                 
|                  |  | Notes to Consolidated Financial Statements                                                                   |  | 6   
|                 
|                 
|                 
|                 
|ITEM 2            |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations                        |  | 19  
|                 
|                 
|PART II          
|                 
|OTHER INFORMATION
|                 
|                 
|                 
|                 
|ITEM 1            |  |                                                                                                              |  |     
|                 
|                 
|                 
|                 
|                  |  | Legal Proceedings                                                                                            |  | 25  
|                 
|                 
|                 
|                 
|ITEM 5            |  |                                                                                                              |  |     
|                 
|                 
|                 
|                 
|                  |  | Other Information                                                                                            |  | 25  
|                 
|                 
|                 
|                 
|ITEM 6            |  |                                                                                                              |  |     
|                 
|                 
|                 
|                 
|                  |  | Exhibits and Reports on Form 8-K                                                                             |  | 25  
|                 
|                 
|                 
|                 
|                  |  | Signature Page                                                                                               |  | 26  

2



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##### Table of Contents






PART 1  FINANCIAL INFORMATION




ITEM 1  FINANCIAL
STATEMENTS


ALLIED HOLDINGS, INC. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS

(In Thousands)


|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |             |   |         |  | 
|------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------------ | ------- | - | ------------ | ------- | ----------- | - | ------- |  | 
|                                            |                                                                                                                                                    |                                      |                                            |         |   | September 30 |         | December 31
|                                            |                                                                                                                                                    |                                      |                                            |         |   | 2001         |         | 2000       
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    |                                      |                                            |         |   | (Unaudited)  |         |             |   |        
|ASSETS                                      |                                                                                                                                                    |                                      |                                            |         |   |              |        
|                                           
|                                           
|                                           
|                                           
|CURRENT ASSETS:                             |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                           
|                                           
|                                           
|                                           
|                                            | Cash and cash equivalents                                                                                                                          |                                      | $                                          | 12,249  |   |              | $       | 2,373       |  
|                                           
|                                           
|                                           
|                                           
|                                            | Short-term investments                                                                                                                             |                                      |                                            | 64,756  |   |              |         | 59,892      |  
|                                           
|                                           
|                                           
|                                           
|                                            | Receivables, net of allowance for doubtful accounts                                                                                                |                                      |                                            | 94,789  |   |              |         | 114,266     |  
|                                           
|                                           
|                                           
|                                           
|                                            | Inventories                                                                                                                                        |                                      |                                            | 6,610   |   |              |         | 7,415       |  
|                                           
|                                           
|                                           
|                                           
|                                            | Deferred tax assets                                                                                                                                |                                      |                                            | 11,968  |   |              |         | 10,191      |  
|                                           
|                                           
|                                           
|                                           
|                                            | Prepayments and other current assets                                                                                                               |                                      |                                            | 20,036  |   |              |         | 19,355      |  
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    |                                      | Total current assets                       |         |   | 210,408      |         |             |   | 213,492 | 
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|PROPERTY AND EQUIPMENT, NET                 |                                                                                                                                                    |                                      | 231,073                                    |         |   |              | 259,362 |            
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|OTHER ASSETS:                               |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                           
|                                           
|                                           
|                                           
|                                            | Goodwill, net                                                                                                                                      |                                      |                                            | 91,303  |   |              |         | 95,159      |  
|                                           
|                                           
|                                           
|                                           
|                                            | Other                                                                                                                                              |                                      |                                            | 43,387  |   |              |         | 42,526      |  
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    |                                      | Total other assets                         |         |   | 134,690      |         |             |   | 137,685 | 
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    |                                      | Total assets                               |         | $ | 576,171      |         |             | $ | 610,539 | 
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    | LIABILITIES AND STOCKHOLDERS EQUITY |                                            |         |   |              |         |             |   |        
|                                           
|                                           
|                                           
|                                           
|CURRENT LIABILITIES:                        |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                           
|                                           
|                                           
|                                           
|                                            | Current maturities of long-term debt                                                                                                               |                                      | $                                          | 158,462 |   |              | $       | 109         |  
|                                           
|                                           
|                                           
|                                           
|                                            | Trade accounts payable                                                                                                                             |                                      |                                            | 38,658  |   |              |         | 45,975      |  
|                                           
|                                           
|                                           
|                                           
|                                            | Accrued liabilities                                                                                                                                |                                      |                                            | 81,969  |   |              |         | 79,487      |  
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    |                                      | Total current liabilities                  |         |   | 279,089      |         |             |   | 125,571 | 
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|LONG-TERM DEBT, less current maturities     |                                                                                                                                                    |                                      | 190,003                                    |         |   |              | 324,876 |            
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|POSTRETIREMENT BENEFITS OTHER THAN PENSIONS |                                                                                                                                                    |                                      | 9,565                                      |         |   |              | 9,943   |            
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|DEFERRED INCOME TAXES                       |                                                                                                                                                    |                                      | 3,125                                      |         |   |              | 21,414  |            
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|OTHER LONG-TERM LIABILITIES                 |                                                                                                                                                    |                                      | 73,215                                     |         |   |              | 69,594  |            
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|STOCKHOLDERS EQUITY:                       |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                           
|                                           
|                                           
|                                           
|                                            | Common stock, no par value; 20,000 shares authorized, 8,240
and 8,187 shares outstanding at September 30,
2001 and December 31, 2000, respectively |                                      |                                            |        |   |              |         |            |  
|                                           
|                                           
|                                           
|                                           
|                                            | Additional paid-in capital                                                                                                                         |                                      |                                            | 46,500  |   |              |         | 45,990      |  
|                                           
|                                           
|                                           
|                                           
|                                            | Retained (deficit) earnings                                                                                                                        |                                      |                                            | (16,622 | ) |              |         | 20,602      |  
|                                           
|                                           
|                                           
|                                           
|                                            | Cumulative other comprehensive loss, net of tax                                                                                                    |                                      |                                            | (7,997  | ) |              |         | (6,744      | )
|                                           
|                                           
|                                           
|                                           
|                                            | Common stock in treasury, at cost, 139 shares at September 30,
2001 and December 31, 2000                                                          |                                      |                                            | (707    | ) |              |         | (707        | )
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    |                                      | Total stockholders equity                 |         |   | 21,174       |         |             |   | 59,141  | 
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            
|                                            |                                                                                                                                                    |                                      | Total liabilities and stockholders equity |         | $ | 576,171      |         |             | $ | 610,539 | 
|                                            |                                                                                                                                                    |                                      |                                            |         |   |              |         |            

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

3



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##### Table of Contents



ALLIED HOLDINGS, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Data)
(Unaudited)


|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |         |         | 
|--------------------------------------------- | ------------------------------------------------ | ------------------------ | ------- | -------------------------- | ------- | ------------------------- | ------- | ------- | ------- | ---- | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                              |                                                  |                          |         | For the Three Months Ended |         | For the Nine Months Ended
|                                              |                                                  |                          |         | September 30               |         | September 30             
|                                              |                                                  |                          |         |                            |         |                          
|                                              |                                                  |                          |         | 2001                       |         | 2000                      |         | 2001    |         | 2000
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |     
|REVENUES                                      |                                                  | $                        | 204,010 |                            |         | $                         | 236,347 |         |         | $    | 672,384 |         |         | $ | 815,128 |        
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|OPERATING EXPENSES:                           |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|                                             
|                                             
|                                             
|                                             
|                                              | Salaries, wages and fringe benefits              |                          |         | 118,700                    |         |                           |         | 132,704 |         |      |         | 391,006 |         |   |         | 441,817 |        
|                                             
|                                             
|                                             
|                                             
|                                              | Operating supplies and expenses                  |                          |         | 33,810                     |         |                           |         | 40,953  |         |      |         | 115,147 |         |   |         | 140,837 |        
|                                             
|                                             
|                                             
|                                             
|                                              | Purchased transportation                         |                          |         | 23,228                     |         |                           |         | 23,513  |         |      |         | 75,190  |         |   |         | 79,967  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Insurance and claims                             |                          |         | 10,531                     |         |                           |         | 11,226  |         |      |         | 37,588  |         |   |         | 36,369  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Operating taxes and licenses                     |                          |         | 7,857                      |         |                           |         | 9,650   |         |      |         | 24,990  |         |   |         | 31,491  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Depreciation and amortization                    |                          |         | 15,145                     |         |                           |         | 15,051  |         |      |         | 45,450  |         |   |         | 45,686  |        
|                                             
|                                             
|                                             
|                                             
|                                              | Rents                                            |                          |         | 1,691                      |         |                           |         | 2,114   |         |      |         | 5,353   |         |   |         | 6,613   |        
|                                             
|                                             
|                                             
|                                             
|                                              | Communications and utilities                     |                          |         | 1,300                      |         |                           |         | 1,335   |         |      |         | 5,252   |         |   |         | 5,550   |        
|                                             
|                                             
|                                             
|                                             
|                                              | Other operating expenses                         |                          |         | 3,295                      |         |                           |         | 2,701   |         |      |         | 10,908  |         |   |         | 8,437   |        
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|                                              |                                                  | Total operating expenses |         |                            | 215,557 |                           |         |         | 239,247 |      |         |         | 710,884 |   |         |         | 796,767 | 
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|                                              |                                                  | Operating (loss) income  |         |                            | (11,547 | )                         |         |         | (2,900  | )    |         |         | (38,500 | ) |         |         | 18,361  | 
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|OTHER INCOME (EXPENSE):                       |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|                                             
|                                             
|                                             
|                                             
|                                              | Equity in earnings of joint ventures, net of tax |                          |         | 1,054                      |         |                           |         | 1,502   |         |      |         | 3,593   |         |   |         | 4,201   |        
|                                             
|                                             
|                                             
|                                             
|                                              | (Loss) gain on sale of assets                    |                          |         | (24                        | )       |                           |         | (84     | )       |      |         | 2,719   |         |   |         | (97     | )      
|                                             
|                                             
|                                             
|                                             
|                                              | Interest expense                                 |                          |         | (9,141                     | )       |                           |         | (8,321  | )       |      |         | (26,994 | )       |   |         | (25,070 | )      
|                                             
|                                             
|                                             
|                                             
|                                              | Interest income                                  |                          |         | 424                        |         |                           |         | 1,644   |         |      |         | 2,014   |         |   |         | 3,653   |        
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|                                              |                                                  |                          | (7,687  | )                          |         |                           | (5,259  | )       |         |      | (18,668 | )       |         |   | (17,313 | )      
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|(LOSS) INCOME BEFORE INCOME TAXES             |                                                  |                          | (19,234 | )                          |         |                           | (8,159  | )       |         |      | (57,168 | )       |         |   | 1,048   |        
|                                             
|                                             
|                                             
|                                             
|INCOME TAX BENEFIT                            |                                                  |                          | 6,588   |                            |         |                           | 3,549   |         |         |      | 19,944  |         |         |   | 196     |        
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|NET (LOSS) INCOME                             |                                                  | $                        | (12,646 | )                          |         | $                         | (4,610  | )       |         | $    | (37,224 | )       |         | $ | 1,244   |        
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|PER COMMON SHARE  BASIC AND DILUTED          |                                                  | $                        | (1.56   | )                          |         | $                         | (0.58   | )       |         | $    | (4.60   | )       |         | $ | 0.16    |        
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        
|COMMON SHARES OUTSTANDING  BASIC AND DILUTED |                                                  |                          | 8,114   |                            |         |                           | 7,961   |         |         |      | 8,096   |         |         |   | 7,924   |        
|                                              |                                                  |                          |         |                            |         |                           |         |         |         |      |         |         |         |   |         |        

4



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##### Table of Contents



ALLIED HOLDINGS, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)


|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |        |        |         |  
|------------------------------------------------------------ | ------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | --------------------------------------------------- | ----------------------------------------- | ------- | ------------------------- | ------- | ----------- | ------ | ------ | ------- | -
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         | For the Nine Months Ended
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         | September 30             
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                          
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         | 2001                      |         | 2000       
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |            
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         | (Unaudited)               |         | (Unaudited)
|CASH FLOWS FROM OPERATING ACTIVITIES:                        |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Net (loss) income                                                               |                                                                                     |                                                     | ($37,224                                  | )       |                           | $       | 1,244       |       
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |            
|                                                             | Adjustments to reconcile net loss to net
cash provided by operating activities: |                                                                                     |                                                     |                                           |         |                           |         |             |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 | Depreciation and amortization                                                       |                                                     |                                           | 45,450  |                           |         |             | 45,686 |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 | (Gain) loss on sale of property and equipment                                       |                                                     |                                           | (2,719  | )                         |         |             | 97     |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 | Deferred income taxes                                                               |                                                     |                                           | (19,377 | )                         |         |             | 104    |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 | Compensation expense related to stock options and grants                            |                                                     |                                           | 207     |                           |         |             | 452    |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 | Equity in earnings of joint ventures                                                |                                                     |                                           | (3,593  | )                         |         |             | (4,201 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 | Amortization of Teamsters Union signing bonus                                       |                                                     |                                           | 1,802   |                           |         |             | 1,850  |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 | Change in operating assets and liabilities excluding
effect of businesses acquired: |                                                     |                                           |         |                           |         |             |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 |                                                                                     | Receivables, net of allowance for doubtful accounts |                                           |         | 18,190                    |         |             |        | (2,366 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 |                                                                                     | Inventories                                         |                                           |         | 720                       |         |             |        | (7     | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 |                                                                                     | Prepayments and other current assets                |                                           |         | (822                      | )       |             |        | (1,717 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 |                                                                                     | Trade accounts payable                              |                                           |         | (7,021                    | )       |             |        | (6,587 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                 |                                                                                     | Accrued liabilities                                 |                                           |         | 6,028                     |         |             |        | (8,633 | )      
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|                                                             |                                                                                 |                                                                                     |                                                     | Total adjustments                         |         |                           | 38,865  |             |        |        | 24,678  |  
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|                                                             |                                                                                 |                                                                                     |                                                     | Net cash provided by operating activities |         |                           | 1,641   |             |        |        | 25,922  |  
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                        |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Purchases of property and equipment                                             |                                                                                     |                                                     | (18,274                                   | )       |                           |         | (15,972     | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from sale of property and equipment                                    |                                                                                     |                                                     | 4,832                                     |         |                           |         | 799         |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Purchase of business, net of cash acquired                                      |                                                                                     |                                                     |                                          |         |                           |         | (8,185      | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Investment in joint ventures                                                    |                                                                                     |                                                     | (464                                      | )       |                           |         |            |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Cash received from joint ventures                                               |                                                                                     |                                                     | 3,578                                     |         |                           |         |            |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Increase in short-term investments                                              |                                                                                     |                                                     | (4,864                                    | )       |                           |         | (14,044     | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Increase in the cash surrender value of life insurance                          |                                                                                     |                                                     | (360                                      | )       |                           |         | (128        | )     
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|                                                             |                                                                                 |                                                                                     |                                                     | Net cash used in investing activities     |         |                           | (15,552 | )           |        |        | (37,530 | )
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                        |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |            
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from issuance of long-term debt, net                                   |                                                                                     |                                                     | 23,480                                    |         |                           |         | 771         |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from issuance of common stock                                          |                                                                                     |                                                     | 303                                       |         |                           |         | 626         |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Repurchase of common stock                                                      |                                                                                     |                                                     |                                          |         |                           |         | (282        | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Other, net                                                                      |                                                                                     |                                                     | (64                                       | )       |                           |         | 1,894       |       
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|                                                             |                                                                                 |                                                                                     |                                                     | Net cash provided by financing activities |         |                           | 23,719  |             |        |        | 3,009   |  
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS |                                                                                 |                                                                                     | 68                                                  |                                           |         |                           | (781    | )          
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         |                                                                                 |                                                                                     | 9,876                                               |                                           |         |                           | (9,380  | )          
|                                                            
|                                                            
|                                                            
|                                                            
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR               |                                                                                 |                                                                                     | 2,373                                               |                                           |         |                           | 13,984  |            
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                   |                                                                                 | $                                                                                   | 12,249                                              |                                           |         | $                         | 4,604   |            
|                                                             |                                                                                 |                                                                                     |                                                     |                                           |         |                           |         |             |       

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

5



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##### Table of Contents



Allied Holdings, Inc. and Subsidiaries




Notes to Consolidated Financial Statements (Unaudited)


Note 1. Basis of Presentation



| |  |  | The unaudited consolidated financial statements included herein have
been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by accounting principles generally
accepted in the United States for complete financial statements. The
statements contained herein reflect all adjustments, all of which are of
a normal, recurring nature, which are, in the opinion of management,
necessary to present fairly the financial condition, results of
operations and cash flows for the periods presented. Operating results
for the three and nine month periods ended September 30, 2001 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 2001. The interim financial statements should be read
in conjunction with the financial statements and notes thereto of Allied
Holdings, Inc. and Subsidiaries (the Company) included in the
Companys 2000 Annual Report on Form 10-K.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 2. Long-Term Debt and Supplemental Guarantor Information



| |  |  | On September 30, 1997, the Company issued $150 million of 8 5/8 % senior
notes (the Notes) through a private placement. Subsequently, the
senior notes were registered with the Securities and Exchange
Commission. The net proceeds from the Notes were used to fund the
acquisition of Ryder Automotive Carrier Services, Inc. and RC Management
Corp., pay related fees and expenses, and reduce outstanding
indebtedness. The Companys obligations under the Notes are guaranteed
by substantially all of the subsidiaries of the Company (the Guarantor
Subsidiaries). Haul Insurance Ltd., Arrendadora de Equipo Para el
Transporte de Automoviles, S. de R.L. de C.V., Axis Logistica, S. de
R.L. de C.V. and Axis Netherlands C.V. do not guarantee the Companys
obligations under the Notes (the Nonguarantor Subsidiaries). The
following condensed consolidating balance sheets, statements of
operations and statements of cash flows present the financial statements
of the parent company and the combined financial statements of the
Guarantor Subsidiaries and Nonguarantor Subsidiaries. The Guarantors are
jointly and severally liable for the Companys obligations under the
Notes and there are no restrictions on the ability of the Guarantors to
make distributions to the Company.
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

6



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##### Table of Contents



SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2001
(In Thousands)
(Unaudited)

|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |        |         |         | 
|------------------------------------------- | --------------------------------------------------- | -------------------------- | ------------------------- | -------------------- | ------ | -------- | ------- | ------------ | ------ | ------------ | ------- | ------------ | ------ | ------------ | -------- | -------- | ------- | -------- | -------- | ------- | ------ | ------- | ------- | 
|                                            |                                                     |                            |                           |                      |        | ALLIED   |         | GUARANTOR    |        | NONGUARANTOR |         |              |        |              |          |          |         |         
|                                            |                                                     |                            |                           |                      |        | HOLDINGS |         | SUBSIDIARIES |        | SUBSIDIARIES |         | ELIMINATIONS |        | CONSOLIDATED
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |             
|CURRENT ASSETS:                             |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |        
|                                           
|                                           
|                                           
|                                           
|                                            | Cash and cash equivalents                           |                            | $                         | (142                 | )      |          | $       | 2,399        |        |              | $       | 9,992        |        |              |          |         |         |          | $        | 12,249  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Short-term investments                              |                            |                           |                     |        |          |         |             |        |              |         | 64,756       |        |              |          |         |         |          |          | 64,756  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Receivables, net of allowance for
doubtful accounts |                            |                           | 23                   |        |          |         | 91,487       |        |              |         | 3,279        |        |              |          |         |         |          |          | 94,789  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Inventories                                         |                            |                           |                     |        |          |         | 6,600        |        |              |         | 10           |        |              |          |         |         |          |          | 6,610   |       
|                                           
|                                           
|                                           
|                                           
|                                            | Deferred tax assets                                 |                            |                           | 10,109               |        |          |         | 1,608        |        |              |         | 251          |        |              |          |         |         |          |          | 11,968  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Prepayments and other current assets                |                            |                           | 1,762                |        |          |         | 18,081       |        |              |         | 193          |        |              |          |         |         |          |          | 20,036  |       
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|                                            |                                                     |                            |                           | Total current assets |        |          | 11,752  |              |        |              | 120,175 |              |        |              | 78,481   |          |         |          |         |         |        |         | 210,408 | 
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|PROPERTY AND EQUIPMENT, NET                 |                                                     |                            | 12,521                    |                      |        |          | 214,952 |              |        |              | 3,600   |              |        |              |         |          |         |          | 231,073  |        
|                                           
|                                           
|                                           
|                                           
|OTHER ASSETS:                               |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |        
|                                           
|                                           
|                                           
|                                           
|                                            | Goodwill, net                                       |                            |                           | 1,544                |        |          |         | 89,759       |        |              |         |             |        |              |          |         |         |          |          | 91,303  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Other                                               |                            |                           | 16,216               |        |          |         | 16,574       |        |              |         | 10,597       |        |              |          |         |         |          |          | 43,387  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Deferred tax asset  noncurrent                     |                            |                           | 35,943               |        |          |         |             |        |              |         |             |        |              |          | (35,943  | )       |          |          |        |       
|                                           
|                                           
|                                           
|                                           
|                                            | Intercompany receivables                            |                            |                           | 274,460              |        |          |         |             |        |              |         |             |        |              |          | (274,460 | )       |          |          |        |       
|                                           
|                                           
|                                           
|                                           
|                                            | Investment in subsidiaries                          |                            |                           | 33,662               |        |          |         | 15,019       |        |              |         |             |        |              |          | (48,681  | )       |          |          |        |       
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|                                            |                                                     |                            |                           | Total other assets   |        |          | 361,825 |              |        |              | 121,352 |              |        |              | 10,597   |          |         |          | (359,084 | )       |        |         | 134,690 | 
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|                                            |                                                     |                            |                           | Total assets         |        | $        | 386,098 |              |        | $            | 456,479 |              |        | $            | 92,678   |          |         | $        | (359,084 | )       |        | $       | 576,171 | 
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|CURRENT LIABILITIES:                        |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |        
|                                           
|                                           
|                                           
|                                           
|                                            | Current maturities of long-term debt                |                            | $                         | 156,167              |        |          | $       | 2,295        |        |              | $       |             |        |              | $        |         |         |          | $        | 158,462 |       
|                                           
|                                           
|                                           
|                                           
|                                            | Trade accounts payable                              |                            |                           | 2,881                |        |          |         | 35,229       |        |              |         | 548          |        |              |          |         |         |          |          | 38,658  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Intercompany payables                               |                            |                           |                     |        |          |         | 272,146      |        |              |         | 2,314        |        |              |          | (274,460 | )       |          |          |        |       
|                                           
|                                           
|                                           
|                                           
|                                            | Accrued liabilities                                 |                            |                           | 15,876               |        |          |         | 52,126       |        |              |         | 13,967       |        |              |          |         |         |          |          | 81,969  |       
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|                                            |                                                     |                            | Total current liabilities |                      |        | 174,924  |         |              |        | 361,796      |         |              |        | 16,829       |          |          |         | (274,460 | )        |         |        | 279,089 |        
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|LONG-TERM DEBT, less current maturities     |                                                     |                            | 190,000                   |                      |        |          | 3       |              |        |              |        |              |        |              |         |          |         |          | 190,003  |        
|                                           
|                                           
|                                           
|                                           
|POSTRETIREMENT BENEFITS OTHER THAN PENSIONS |                                                     |                            |                          |                      |        |          | 9,565   |              |        |              |        |              |        |              |         |          |         |          | 9,565    |        
|                                           
|                                           
|                                           
|                                           
|DEFERRED INCOME TAXES                       |                                                     |                            |                          |                      |        |          | 39,068  |              |        |              |        |              |        |              | (35,943  | )        |         |          | 3,125    |        
|                                           
|                                           
|                                           
|                                           
|OTHER LONG-TERM LIABILITIES                 |                                                     |                            |                          |                      |        |          | 31,701  |              |        |              | 41,514  |              |        |              |         |          |         |          | 73,215   |        
|                                           
|                                           
|                                           
|                                           
|STOCKHOLDERS EQUITY:                       |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |        
|                                           
|                                           
|                                           
|                                           
|                                            | Common stock, no par value                          |                            |                           |                     |        |          |         |             |        |              |         |             |        |              |          |         |         |          |          |        |       
|                                           
|                                           
|                                           
|                                           
|                                            | Additional paid-in capital                          |                            |                           | 46,500               |        |          |         | 90,733       |        |              |         | 13,279       |        |              |          | (104,012 | )       |          |          | 46,500  |       
|                                           
|                                           
|                                           
|                                           
|                                            | Retained deficit (earnings)                         |                            |                           | (16,622              | )      |          |         | (65,771      | )      |              |         | 23,294       |        |              |          | 42,477   |         |          |          | (16,622 | )     
|                                           
|                                           
|                                           
|                                           
|                                            | Cumulative other comprehensive
income, net of tax   |                            |                           | (7,997               | )      |          |         | (10,616      | )      |              |         | (2,238       | )      |              |          | 12,854   |         |          |          | (7,997  | )     
|                                           
|                                           
|                                           
|                                           
|                                            | Treasury stock                                      |                            |                           | (707                 | )      |          |         |             |        |              |         |             |        |              |          |         |         |          |          | (707    | )     
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|                                            |                                                     | Total stockholders equity |                           |                      | 21,174 |          |         |              | 14,346 |              |         |              | 34,335 |              |          |          | (48,681 | )        |          |         | 21,174 |        
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       
|Total liabilities and stockholders equity  |                                                     | $                          | 386,098                   |                      |        | $        | 456,479 |              |        | $            | 92,678  |              |        | $            | (359,084 | )        |         | $        | 576,171  |        
|                                            |                                                     |                            |                           |                      |        |          |         |              |        |              |         |              |        |              |          |          |         |          |          |         |       

7



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##### Table of Contents



SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2000
(In Thousands)

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

8



---



##### Table of Contents



SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2001
(In Thousands)
(Unaudited)

|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |         |         |  
|--------------------------------- | ------------------------------------------------ | ------------------------ | ------- | -------- | ------- | ------------ | ------- | ------------ | ------- | ------------ | ------ | ------------ | ------ | - | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                  |                                                  |                          |         | ALLIED   |         | GUARANTOR    |         | NONGUARANTOR |         |              |        |              |        |   |         |        
|                                  |                                                  |                          |         | HOLDINGS |         | SUBSIDIARIES |         | SUBSIDIARIES |         | ELIMINATIONS |        | CONSOLIDATED
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |             
|REVENUES                          |                                                  | $                        | 7,425   |          |         | $            | 671,111 |              |         | $            | 28,550 |              |        | $ | (34,702 | )       |         | $ | 672,384 |        
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|OPERATING EXPENSES:               |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Salaries, wages and fringe benefits              |                          |         | 7,791    |         |              |         | 383,215      |         |              |        |             |        |   |         |        |         |   |         | 391,006 |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating supplies and expenses                  |                          |         | 1,316    |         |              |         | 113,746      |         |              |        | 85           |        |   |         |        |         |   |         | 115,147 |        
|                                 
|                                 
|                                 
|                                 
|                                  | Purchased transportation                         |                          |         |         |         |              |         | 75,190       |         |              |        |             |        |   |         |        |         |   |         | 75,190  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Insurance and claims                             |                          |         |         |         |              |         | 38,382       |         |              |        | 26,483       |        |   |         | (27,277 | )       |   |         | 37,588  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating taxes and licenses                     |                          |         | 94       |         |              |         | 24,896       |         |              |        |             |        |   |         |        |         |   |         | 24,990  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Depreciation and amortization                    |                          |         | 2,550    |         |              |         | 42,361       |         |              |        | 539          |        |   |         |        |         |   |         | 45,450  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Rents                                            |                          |         | 1,585    |         |              |         | 3,764        |         |              |        | 4            |        |   |         |        |         |   |         | 5,353   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Communications and utilities                     |                          |         | 218      |         |              |         | 5,026        |         |              |        | 8            |        |   |         |        |         |   |         | 5,252   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Other operating expenses                         |                          |         | 5,218    |         |              |         | 12,943       |         |              |        | 172          |        |   |         | (7,425  | )       |   |         | 10,908  |        
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                  |                                                  | Total operating expenses |         |          | 18,772  |              |         |              | 699,523 |              |        |              | 27,291 |   |         |         | (34,702 | ) |         |         | 710,884 |  
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                  |                                                  | Operating (loss) income  |         |          | (11,347 | )            |         |              | (28,412 | )            |        |              | 1,259  |   |         |         |        |   |         |         | (38,500 | )
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|OTHER INCOME (EXPENSE):           |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in earnings of joint ventures, net of tax |                          |         |         |         |              |         | 3,299        |         |              |        | 294          |        |   |         |        |         |   |         | 3,593   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Gain on sale of assets                           |                          |         |          |         |              |         | 2,719        |         |              |        |             |        |   |         |        |         |   |         | 2,719   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Interest expense                                 |                          |         | (25,511  | )       |              |         | (24,336      | )       |              |        | (157         | )      |   |         | 23,010  |         |   |         | (26,994 | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest income                                  |                          |         | 23,031   |         |              |         | 155          |         |              |        | 1,838        |        |   |         | (23,010 | )       |   |         | 2,014   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Intercompany dividends                           |                          |         | 1,980    |         |              |         | (1,980       | )       |              |        |             |        |   |         |        |         |   |         |        |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in losses of subsidiaries                 |                          |         | (45,483  | )       |              |         |             |         |              |        |             |        |   |         | 45,483  |         |   |         |        |        
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                  |                                                  |                          | (45,983 | )        |         |              | (20,143 | )            |         |              | 1,975  |              |        |   | 45,483  |         |         |   | (18,668 | )      
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|(LOSS) INCOME BEFORE INCOME TAXES |                                                  |                          | (57,330 | )        |         |              | (48,555 | )            |         |              | 3,234  |              |        |   | 45,483  |         |         |   | (57,168 | )      
|                                 
|                                 
|                                 
|                                 
|INCOME TAX BENEFIT (PROVISION)    |                                                  |                          | 20,106  |          |         |              | 827     |              |         |              | (989   | )            |        |   |        |         |         |   | 19,944  |        
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|NET (LOSS) INCOME                 |                                                  | $                        | (37,224 | )        |         | $            | (47,728 | )            |         | $            | 2,245  |              |        | $ | 45,483  |         |         | $ | (37,224 | )      
|                                  |                                                  |                          |         |          |         |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2000
(In Thousands)
(Unaudited)

|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |         |         | 
|--------------------------------- | ------------------------------------------------------- | ------------------------ | ----- | -------- | ------ | ------------ | ------- | ------------ | ------- | ------------ | ------ | ------------ | ------ | - | ------- | ------- | ------- | - | ------- | ------- | ------- | 
|                                  |                                                         |                          |       | ALLIED   |        | GUARANTOR    |         | NONGUARANTOR |         |              |        |              |        |   |         |        
|                                  |                                                         |                          |       | HOLDINGS |        | SUBSIDIARIES |         | SUBSIDIARIES |         | ELIMINATIONS |        | CONSOLIDATED
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |             
|REVENUES                          |                                                         | $                        | 3,728 |          |        | $            | 813,804 |              |         | $            | 25,574 |              |        | $ | (27,978 | )       |         | $ | 815,128 |        
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|OPERATING EXPENSES:               |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Salaries, wages and fringe benefits                     |                          |       | 3,609    |        |              |         | 438,208      |         |              |        |             |        |   |         |        |         |   |         | 441,817 |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating supplies and expenses                         |                          |       | 856      |        |              |         | 139,953      |         |              |        | 28           |        |   |         |        |         |   |         | 140,837 |        
|                                 
|                                 
|                                 
|                                 
|                                  | Purchased transportation                                |                          |       |         |        |              |         | 79,967       |         |              |        |             |        |   |         |        |         |   |         | 79,967  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Insurance and claims                                    |                          |       |         |        |              |         | 36,042       |         |              |        | 24,577       |        |   |         | (24,250 | )       |   |         | 36,369  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating taxes and licenses                            |                          |       | 8        |        |              |         | 31,483       |         |              |        |             |        |   |         |        |         |   |         | 31,491  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Depreciation and amortization                           |                          |       | 321      |        |              |         | 45,085       |         |              |        | 280          |        |   |         |        |         |   |         | 45,686  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Rents                                                   |                          |       | 57       |        |              |         | 6,556        |         |              |        |             |        |   |         |        |         |   |         | 6,613   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Communications and utilities                            |                          |       | 12       |        |              |         | 5,538        |         |              |        |             |        |   |         |        |         |   |         | 5,550   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Other operating expenses                                |                          |       | 1,549    |        |              |         | 10,465       |         |              |        | 151          |        |   |         | (3,728  | )       |   |         | 8,437   |        
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                  |                                                         | Total operating expenses |       |          | 6,412  |              |         |              | 793,297 |              |        |              | 25,036 |   |         |         | (27,978 | ) |         |         | 796,767 | 
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                  |                                                         | Operating (loss) income  |       |          | (2,684 | )            |         |              | 20,507  |              |        |              | 538    |   |         |         |        |   |         |         | 18,361  | 
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|OTHER INCOME (EXPENSE):           |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in earnings (loss) of joint
ventures, net of tax |                          |       |         |        |              |         | 4,359        |         |              |        | (158         | )      |   |         |        |         |   |         | 4,201   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Loss on sale of assets                                  |                          |       |         |        |              |         | (97          | )       |              |        |             |        |   |         |        |         |   |         | (97     | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest expense                                        |                          |       | (22,111  | )      |              |         | (25,591      | )       |              |        | (372         | )      |   |         | 23,004  |         |   |         | (25,070 | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest income                                         |                          |       | 22,977   |        |              |         | 294          |         |              |        | 3,386        |        |   |         | (23,004 | )       |   |         | 3,653   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in net income of subsidiaries                    |                          |       | 2,079    |        |              |         |             |         |              |        |             |        |   |         | (2,079  | )       |   |         |        |        
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|                                  |                                                         |                          | 2,945 |          |        |              | (21,035 | )            |         |              | 2,856  |              |        |   | (2,079  | )       |         |   | (17,313 | )      
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|INCOME (LOSS) BEFORE INCOME TAXES |                                                         |                          | 261   |          |        |              | (528    | )            |         |              | 3,394  |              |        |   | (2,079  | )       |         |   | 1,048   |        
|                                 
|                                 
|                                 
|                                 
|INCOME TAX BENEFIT (PROVISION)    |                                                         |                          | 983   |          |        |              | (124    | )            |         |              | (663   | )            |        |   |        |         |         |   | 196     |        
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        
|NET INCOME (LOSS)                 |                                                         | $                        | 1,244 |          |        | $            | (652    | )            |         | $            | 2,731  |              |        | $ | (2,079  | )       |         | $ | 1,244   |        
|                                  |                                                         |                          |       |          |        |              |         |              |         |              |        |              |        |   |         |         |         |   |         |        

9



---



##### Table of Contents



SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2001
(In Thousands)
(Unaudited)

|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |         |         |  
|--------------------------------- | ------------------------------------------------ | ------------------------ | ------- | -------- | ------ | ------------ | ------- | ------------ | ------- | ------------ | ----- | ------------ | ----- | - | ------- | ------ | ------- | - | ------- | ------- | ------- | -
|                                  |                                                  |                          |         | ALLIED   |        | GUARANTOR    |         | NONGUARANTOR |         |              |       |              |       |   |         |       
|                                  |                                                  |                          |         | HOLDINGS |        | SUBSIDIARIES |         | SUBSIDIARIES |         | ELIMINATIONS |       | CONSOLIDATED
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |             
|REVENUES                          |                                                  | $                        | 2,475   |          |        | $            | 203,586 |              |         | $            | 9,517 |              |       | $ | (11,568 | )      |         | $ | 204,010 |        
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|OPERATING EXPENSES:               |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Salaries, wages and fringe benefits              |                          |         | 345      |        |              |         | 118,355      |         |              |       |             |       |   |         |       |         |   |         | 118,700 |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating supplies and expenses                  |                          |         | 341      |        |              |         | 33,437       |         |              |       | 32           |       |   |         |       |         |   |         | 33,810  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Purchased transportation                         |                          |         |         |        |              |         | 23,228       |         |              |       |             |       |   |         |       |         |   |         | 23,228  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Insurance and claims                             |                          |         |         |        |              |         | 10,680       |         |              |       | 8,944        |       |   |         | (9,093 | )       |   |         | 10,531  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating taxes and licenses                     |                          |         | 1        |        |              |         | 7,856        |         |              |       |             |       |   |         |       |         |   |         | 7,857   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Depreciation and amortization                    |                          |         | 825      |        |              |         | 14,137       |         |              |       | 183          |       |   |         |       |         |   |         | 15,145  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Rents                                            |                          |         | 544      |        |              |         | 1,146        |         |              |       | 1            |       |   |         |       |         |   |         | 1,691   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Communications and utilities                     |                          |         | 106      |        |              |         | 1,192        |         |              |       | 2            |       |   |         |       |         |   |         | 1,300   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Other operating expenses                         |                          |         | 1,612    |        |              |         | 4,120        |         |              |       | 38           |       |   |         | (2,475 | )       |   |         | 3,295   |        
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|                                  |                                                  | Total operating expenses |         |          | 3,774  |              |         |              | 214,151 |              |       |              | 9,200 |   |         |        | (11,568 | ) |         |         | 215,557 |  
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|                                  |                                                  | Operating (loss) income  |         |          | (1,299 | )            |         |              | (10,565 | )            |       |              | 317   |   |         |        |        |   |         |         | (11,547 | )
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|OTHER INCOME (EXPENSE):           |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in earnings of joint ventures, net of tax |                          |         |         |        |              |         | 862          |         |              |       | 192          |       |   |         |       |         |   |         | 1,054   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Loss on sale of assets                           |                          |         |         |        |              |         | (24          | )       |              |       |             |       |   |         |       |         |   |         | (24     | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest expense                                 |                          |         | (8,442   | )      |              |         | (8,204       | )       |              |       | (61          | )     |   |         | 7,566  |         |   |         | (9,141  | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest income                                  |                          |         | 7,536    |        |              |         | 43           |         |              |       | 411          |       |   |         | (7,566 | )       |   |         | 424     |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in losses of subsidiaries                 |                          |         | (17,366  | )      |              |         |             |         |              |       |             |       |   |         | 17,366 |         |   |         |        |        
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|                                  |                                                  |                          | (18,272 | )        |        |              | (7,323  | )            |         |              | 542   |              |       |   | 17,366  |        |         |   | (7,687  | )      
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|(LOSS) INCOME BEFORE INCOME TAXES |                                                  |                          | (19,571 | )        |        |              | (17,888 | )            |         |              | 859   |              |       |   | 17,366  |        |         |   | (19,234 | )      
|                                 
|                                 
|                                 
|                                 
|INCOME TAX BENEFIT (PROVISION)    |                                                  |                          | 6,925   |          |        |              | (85     | )            |         |              | (252  | )            |       |   |        |        |         |   | 6,588   |        
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        
|NET (LOSS) INCOME                 |                                                  | $                        | (12,646 | )        |        | $            | (17,973 | )            |         | $            | 607   |              |       | $ | 17,366  |        |         | $ | (12,646 | )      
|                                  |                                                  |                          |         |          |        |              |         |              |         |              |       |              |       |   |         |        |         |   |         |        

SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000
(In Thousands)
(Unaudited)

|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |         |         |  
|--------------------------------- | ------------------------------------------------------- | ------------------------ | ------ | -------- | ------ | ------------ | ------- | ------------ | ------- | ------------ | ----- | ------------ | ----- | - | ------ | ------ | ------ | - | ------- | ------- | ------- | -
|                                  |                                                         |                          |        | ALLIED   |        | GUARANTOR    |         | NONGUARANTOR |         |              |       |              |       |   |        |       
|                                  |                                                         |                          |        | HOLDINGS |        | SUBSIDIARIES |         | SUBSIDIARIES |         | ELIMINATIONS |       | CONSOLIDATED
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |             
|REVENUES                          |                                                         | $                        | 1,243  |          |        | $            | 235,973 |              |         | $            | 8,392 |              |       | $ | (9,261 | )      |        | $ | 236,347 |        
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|OPERATING EXPENSES:               |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Salaries, wages and fringe benefits                     |                          |        | 1,833    |        |              |         | 130,871      |         |              |       |             |       |   |        |       |        |   |         | 132,704 |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating supplies and expenses                         |                          |        | 56       |        |              |         | 40,885       |         |              |       | 12           |       |   |        |       |        |   |         | 40,953  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Purchased transportation                                |                          |        |         |        |              |         | 23,513       |         |              |       |             |       |   |        |       |        |   |         | 23,513  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Insurance and claims                                    |                          |        |         |        |              |         | 10,813       |         |              |       | 8,431        |       |   |        | (8,018 | )      |   |         | 11,226  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Operating taxes and licenses                            |                          |        | 2        |        |              |         | 9,648        |         |              |       |             |       |   |        |       |        |   |         | 9,650   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Depreciation and amortization                           |                          |        | 262      |        |              |         | 14,693       |         |              |       | 96           |       |   |        |       |        |   |         | 15,051  |        
|                                 
|                                 
|                                 
|                                 
|                                  | Rents                                                   |                          |        | 19       |        |              |         | 2,095        |         |              |       |             |       |   |        |       |        |   |         | 2,114   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Communications and utilities                            |                          |        | 4        |        |              |         | 1,331        |         |              |       |             |       |   |        |       |        |   |         | 1,335   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Other operating expenses                                |                          |        | 273      |        |              |         | 3,671        |         |              |       |              |       |   |        | (1,243 | )      |   |         | 2,701   |        
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|                                  |                                                         | Total operating expenses |        |          | 2,449  |              |         |              | 237,520 |              |       |              | 8,539 |   |        |        | (9,261 | ) |         |         | 239,247 |  
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|                                  |                                                         | Operating loss           |        |          | (1,206 | )            |         |              | (1,547  | )            |       |              | (147  | ) |        |        |       |   |         |         | (2,900  | )
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|OTHER INCOME (EXPENSE):           |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in earnings (loss) of joint ventures, net of tax |                          |        |         |        |              |         | 1,557        |         |              |       | (55          | )     |   |        |       |        |   |         | 1,502   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Loss on sale of assets                                  |                          |        |         |        |              |         | (84          | )       |              |       |             |       |   |        |       |        |   |         | (84     | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest expense                                        |                          |        | (7,216   | )      |              |         | (8,569       | )       |              |       | (133         | )     |   |        | 7,597  |        |   |         | (8,321  | )      
|                                 
|                                 
|                                 
|                                 
|                                  | Interest income                                         |                          |        | 7,595    |        |              |         | 94           |         |              |       | 1,552        |       |   |        | (7,597 | )      |   |         | 1,644   |        
|                                 
|                                 
|                                 
|                                 
|                                  | Equity in net losses of subsidiaries                    |                          |        | (7,400   | )      |              |         |             |         |              |       |             |       |   |        | 7,400  |        |   |         |        |        
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|                                  |                                                         |                          | (7,021 | )        |        |              | (7,002  | )            |         |              | 1,364 |              |       |   | 7,400  |        |        |   | (5,259  | )      
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|(LOSS) INCOME BEFORE INCOME TAXES |                                                         |                          | (8,227 | )        |        |              | (8,549  | )            |         |              | 1,217 |              |       |   | 7,400  |        |        |   | (8,159  | )      
|                                 
|                                 
|                                 
|                                 
|INCOME TAX BENEFIT (PROVISION)    |                                                         |                          | 3,617  |          |        |              | (40     | )            |         |              | (28   | )            |       |   |       |        |        |   | 3,549   |        
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        
|NET (LOSS) INCOME                 |                                                         | $                        | (4,610 | )        |        | $            | (8,589  | )            |         | $            | 1,189 |              |       | $ | 7,400  |        |        | $ | (4,610  | )      
|                                  |                                                         |                          |        |          |        |              |         |              |         |              |       |              |       |   |        |        |        |   |         |        

10



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##### Table of Contents



SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2001
(In Thousands)
(Unaudited)

|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |         |         |        |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------- | ------- | -------- | ------- | ------------ | ------ | ------------ | ------- | ------------ | ---- | ------------ | ------ | ------ | ------- | - | ------- | ------- | ------- | ------ | ------- | -
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         | ALLIED   |         | GUARANTOR    |        | NONGUARANTOR |         |              |      |              |        |        |         |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         | HOLDINGS |         | SUBSIDIARIES |        | SUBSIDIARIES |         | ELIMINATIONS |      | CONSOLIDATED
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |             
|CASH FLOWS FROM OPERATING ACTIVITIES:                        |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Net (loss) income                                                                                  |                                                          | $                                                   | (37,224                                             | )       |          | $       | (47,728      | )      |              | $       | 2,245        |      |              | $      | 45,483 |         |   | $       | (37,224 | )      
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                             | Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities: |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Depreciation and amortization                            |                                                     |                                                     | 2,550   |          |         |              | 42,361 |              |         |              | 539  |              |        |        |        |   |         |         | 45,450  |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Gain on sale of property and equipment                   |                                                     |                                                     |        |          |         |              | (2,719 | )            |         |              |     |              |        |        |        |   |         |         | (2,719  | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Deferred income taxes                                    |                                                     |                                                     | (19,657 | )        |         |              | (51    | )            |         |              | 331  |              |        |        |        |   |         |         | (19,377 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Compensation expense related to stock options and grants |                                                     |                                                     | 207     |          |         |              |       |              |         |              |     |              |        |        |        |   |         |         | 207     |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Equity in earnings of joint ventures                     |                                                     |                                                     |        |          |         |              | (3,299 | )            |         |              | (294 | )            |        |        |        |   |         |         | (3,593  | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Equity in losses of subsidiaries                         |                                                     |                                                     | 45,483  |          |         |              |       |              |         |              |     |              |        |        | (45,483 | ) |         |         |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Amortization of Teamsters Union signing bonus            |                                                     |                                                     |        |          |         |              | 1,802  |              |         |              |     |              |        |        |        |   |         |         | 1,802   |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Change in operating assets and liabilities:              |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |         |         |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Receivables, net of allowance for doubtful accounts |                                                     |         | 782      |         |              |        | 20,102       |         |              |      | (2,694       | )      |        |         |  |         |         |         | 18,190 |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Inventories                                         |                                                     |         |         |         |              |        | 730          |         |              |      | (10          | )      |        |         |  |         |         |         | 720    |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Prepayments and other current assets                |                                                     |         | 212      |         |              |        | (3,215       | )       |              |      | 2,181        |        |        |         |  |         |         |         | (822   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Trade accounts payable                              |                                                     |         | 1,291    |         |              |        | (7,950       | )       |              |      | (362         | )      |        |         |  |         |         |         | (7,021 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          |                                                     | Intercompany payables                               |         |          | (13,610 | )            |        |              | 12,878  |              |      |              | 732    |        |         |   |        |         |         |        |        |  
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Accrued liabilities                                 |                                                     |         | (716     | )       |              |        | (4,592       | )       |              |      | 11,336       |        |        |         |  |         |         |         | 6,028  |        
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                             |                                                                                                    |                                                          |                                                     | Total adjustments                                   |         |          | 16,542  |              |        |              | 56,047  |              |      |              | 11,759 |        |         |   | (45,483 | )       |         |        | 38,865  |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                             |                                                                                                    |                                                          |                                                     | Net cash (used in) provided by operating activities |         |          | (20,682 | )            |        |              | 8,319   |              |      |              | 14,004 |        |         |   |        |         |         |        | 1,641   |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                        |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Purchases of property and equipment                                                                |                                                          |                                                     | (67                                                 | )       |          |         | (17,552      | )      |              |         | (655         | )    |              |        |       |         |   |         | (18,274 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Intercompany sale of property and equipment                                                        |                                                          |                                                     | 1,403                                               |         |          |         | (1,403       | )      |              |         |             |      |              |        |       |         |   |         |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from sale of property and equipment                                                       |                                                          |                                                     |                                                    |         |          |         | 4,832        |        |              |         |             |      |              |        |       |         |   |         | 4,832   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Investment in joint venture                                                                        |                                                          |                                                     |                                                    |         |          |         |             |        |              |         | (464         | )    |              |        |       |         |   |         | (464    | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Cash received from joint ventures                                                                  |                                                          |                                                     |                                                    |         |          |         | 3,578        |        |              |         |             |      |              |        |       |         |   |         | 3,578   |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Intercompany dividend received (paid)                                                              |                                                          |                                                     | 1,980                                               |         |          |         | (1,980       | )      |              |         |             |      |              |        |       |         |   |         |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Increase in short-term investments                                                                 |                                                          |                                                     |                                                    |         |          |         |             |        |              |         | (4,864       | )    |              |        |       |         |   |         | (4,864  | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Increase in cash surrender value of life insurance                                                 |                                                          |                                                     | (360                                                | )       |          |         |             |        |              |         |             |      |              |        |       |         |   |         | (360    | )      
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                             |                                                                                                    |                                                          |                                                     | Net cash provided by (used in) investing activities |         |          | 2,956   |              |        |              | (12,525 | )            |      |              | (5,983 | )      |         |   |        |         |         |        | (15,552 | )
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                        |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from issuance of long-term debt, net                                                      |                                                          |                                                     | 21,739                                              |         |          |         | 1,741        |        |              |         |             |      |              |        |       |         |   |         | 23,480  |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from issuance of common stock                                                             |                                                          |                                                     | 303                                                 |         |          |         |             |        |              |         |             |      |              |        |       |         |   |         | 303     |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Other, net                                                                                         |                                                          |                                                     | (3,245                                              | )       |          |         | 2,498        |        |              |         | 683          |      |              |        |       |         |   |         | (64     | )      
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|                                                             |                                                                                                    |                                                          |                                                     | Net cash provided by financing activities           |         |          | 18,797  |              |        |              | 4,239   |              |      |              | 683    |        |         |   |        |         |         |        | 23,719  |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS |                                                                                                    |                                                          |                                                    |                                                     |         |          | 303     |              |        |              | (235    | )            |      |              |       |        |         |   | 68      |        
|                                                            
|                                                            
|                                                            
|                                                            
|NET INCREASE IN CASH AND CASH EQUIVALENTS                    |                                                                                                    |                                                          | 1,071                                               |                                                     |         |          | 336     |              |        |              | 8,469   |              |      |              |       |        |         |   | 9,876   |        
|                                                            
|                                                            
|                                                            
|                                                            
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR               |                                                                                                    |                                                          | (1,213                                              | )                                                   |         |          | 2,063   |              |        |              | 1,523   |              |      |              |       |        |         |   | 2,373   |        
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                   |                                                                                                    | $                                                        | (142                                                | )                                                   |         | $        | 2,399   |              |        | $            | 9,992   |              |      | $            |       |        |         | $ | 12,249  |        
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |         |          |         |              |        |              |         |              |      |              |        |        |         |   |         |        

11



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##### Table of Contents



SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2000
(In Thousands)
(Unaudited)

|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |         |        |        |         |  
|------------------------------------------------------------ | -------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------- | ------ | -------- | ------- | ------------ | ------ | ------------ | ------- | ------------ | ---- | ------------ | ------- | ------ | ----- | - | ------ | ------- | ------ | ------ | ------- | -
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        | ALLIED   |         | GUARANTOR    |        | NONGUARANTOR |         |              |      |              |         |        |       |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        | HOLDINGS |         | SUBSIDIARIES |        | SUBSIDIARIES |         | ELIMINATIONS |      | CONSOLIDATED
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |             
|CASH FLOWS FROM OPERATING ACTIVITIES:                        |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Net income (loss)                                                                                  |                                                          | $                                                   | 1,244                                               |        |          | $       | (652         | )      |              | $       | 2,731        |      |              | $       | (2,079 | )     |   | $      | 1,244   |       
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                             | Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities: |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |         |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Depreciation and amortization                            |                                                     |                                                     | 321    |          |         |              | 45,085 |              |         |              | 280  |              |         |        |      |   |        |         | 45,686 |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Loss on sale of property and equipment                   |                                                     |                                                     |       |          |         |              | 97     |              |         |              |     |              |         |        |      |   |        |         | 97     |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Deferred income taxes                                    |                                                     |                                                     | 567    |          |         |              | 119    |              |         |              | (582 | )            |         |        |      |   |        |         | 104    |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Compensation expense related to stock options and grants |                                                     |                                                     | 452    |          |         |              |       |              |         |              |     |              |         |        |      |   |        |         | 452    |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Equity in (earnings) loss of joint ventures              |                                                     |                                                     |       |          |         |              | (4,359 | )            |         |              | 158  |              |         |        |      |   |        |         | (4,201 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Equity in net income of subsidiaries                     |                                                     |                                                     | (2,079 | )        |         |              |       |              |         |              |     |              |         |        | 2,079 |   |        |         |       |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Amortization of Teamsters Union signing bonus            |                                                     |                                                     |       |          |         |              | 1,850  |              |         |              |     |              |         |        |      |   |        |         | 1,850  |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    | Change in operating assets and liabilities:              |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |         |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Receivables, net of allowance for doubtful accounts |                                                     |        | (80      | )       |              |        | (2,144       | )       |              |      | (142         | )       |        |       |  |        |         |        | (2,366 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Inventories                                         |                                                     |        |         |         |              |        | (7           | )       |              |      |             |         |        |       |  |        |         |        | (7     | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Prepayments and other current assets                |                                                     |        | (127     | )       |              |        | (1,623       | )       |              |      | 33           |         |        |       |  |        |         |        | (1,717 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Intercompany receivables and payables               |                                                     |        | (12,049  | )       |              |        | 12,695       |         |              |      | (646         | )       |        |       |  |        |         |        |       |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Trade accounts payable                              |                                                     |        | 124      |         |              |        | (6,416       | )       |              |      | (295         | )       |        |       |  |        |         |        | (6,587 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             |                                                                                                    |                                                          | Accrued liabilities                                 |                                                     |        | 843      |         |              |        | (15,233      | )       |              |      | 5,757        |         |        |       |  |        |         |        | (8,633 | )      
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                             |                                                                                                    |                                                          |                                                     | Total adjustments                                   |        |          | (12,028 | )            |        |              | 30,064  |              |      |              | 4,563   |        |       |   | 2,079  |         |        |        | 24,678  |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                             |                                                                                                    |                                                          |                                                     | Net cash (used in) provided by operating activities |        |          | (10,784 | )            |        |              | 29,412  |              |      |              | 7,294   |        |       |   |       |         |        |        | 25,922  |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|CASH FLOWS FROM INVESTING ACTIVITIES:                        |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Purchases of property and equipment                                                                |                                                          |                                                     | (141                                                | )      |          |         | (14,955      | )      |              |         | (876         | )    |              |         |       |       |   |        | (15,972 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Intercompany sale of property and equipment                                                        |                                                          |                                                     | (8,716                                              | )      |          |         | 8,716        |        |              |         |             |      |              |         |       |       |   |        |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from sale of property and equipment                                                       |                                                          |                                                     |                                                    |        |          |         | 799          |        |              |         |             |      |              |         |       |       |   |        | 799     |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Purchase of business, net of cash acquired                                                         |                                                          |                                                     |                                                    |        |          |         | (8,185       | )      |              |         |             |      |              |         |       |       |   |        | (8,185  | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Return of capital                                                                                  |                                                          |                                                     | 11,999                                              |        |          |         | (11,999      | )      |              |         |             |      |              |         |       |       |   |        |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Intercompany dividend received (paid)                                                              |                                                          |                                                     | 4,349                                               |        |          |         | (4,349       | )      |              |         |             |      |              |         |       |       |   |        |        |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Increase in short-term investments                                                                 |                                                          |                                                     |                                                    |        |          |         |             |        |              |         | (14,044      | )    |              |         |       |       |   |        | (14,044 | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Increase in cash surrender value of life insurance                                                 |                                                          |                                                     |                                                    |        |          |         | (128         | )      |              |         |             |      |              |         |       |       |   |        | (128    | )     
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                             |                                                                                                    |                                                          |                                                     | Net cash provided by (used in) investing activities |        |          | 7,491   |              |        |              | (30,101 | )            |      |              | (14,920 | )      |       |   |       |         |        |        | (37,530 | )
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|CASH FLOWS FROM FINANCING ACTIVITIES:                        |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from issuance of long-term debt, net                                                      |                                                          |                                                     | 690                                                 |        |          |         | 81           |        |              |         |             |      |              |         |       |       |   |        | 771     |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Proceeds from issuance of common stock                                                             |                                                          |                                                     | 626                                                 |        |          |         |             |        |              |         |             |      |              |         |       |       |   |        | 626     |       
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Repurchase of common stock                                                                         |                                                          |                                                     | (282                                                | )      |          |         |             |        |              |         |             |      |              |         |       |       |   |        | (282    | )     
|                                                            
|                                                            
|                                                            
|                                                            
|                                                             | Other, net                                                                                         |                                                          |                                                     | 787                                                 |        |          |         | 313          |        |              |         | 794          |      |              |         |       |       |   |        | 1,894   |       
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|                                                             |                                                                                                    |                                                          |                                                     | Net cash provided by financing activities           |        |          | 1,821   |              |        |              | 394     |              |      |              | 794     |        |       |   |       |         |        |        | 3,009   |  
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS |                                                                                                    |                                                          |                                                    |                                                     |        |          | 315     |              |        |              | (1,096  | )            |      |              |        |        |       |   | (781   | )      
|                                                            
|                                                            
|                                                            
|                                                            
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS         |                                                                                                    |                                                          | (1,472                                              | )                                                   |        |          | 20      |              |        |              | (7,928  | )            |      |              |        |        |       |   | (9,380 | )      
|                                                            
|                                                            
|                                                            
|                                                            
|CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR               |                                                                                                    |                                                          | 1,852                                               |                                                     |        |          | 3,179   |              |        |              | 8,953   |              |      |              |        |        |       |   | 13,984 |        
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                   |                                                                                                    | $                                                        | 380                                                 |                                                     |        | $        | 3,199   |              |        | $            | 1,025   |              |      | $            |        |        |       | $ | 4,604  |        
|                                                             |                                                                                                    |                                                          |                                                     |                                                     |        |          |         |              |        |              |         |              |      |              |         |        |       |   |        |        

12



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##### Table of Contents



Note 3. Comprehensive Loss



| |  |  | Comprehensive income was a loss of $11.9 million for the third
quarter of 2001 versus a loss of $5.6 million for the third quarter of
2000, and a loss of $38.5 million for the first nine months of 2001
versus a loss of $1.7 million for the first nine months of 2000. The
difference between comprehensive income and net income is the change in
the foreign currency translation adjustment, net of income taxes.
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 4. Accounting for Derivative Instruments and Hedging Activities



| |  |  | The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended. The statement
establishes accounting and reporting standards requiring that every
derivative instrument (including certain derivative instruments embedded
in other contracts) be recorded in the balance sheet as either an asset
or liability measured at its fair value. SFAS No. 133 requires that
changes in the derivatives fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special
accounting for qualifying hedges allows a derivatives gains and losses
to offset related results on the hedged item in the income statement,
and requires that a company must formally document, designate, and
assess the effectiveness of transactions that receive hedge accounting.
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | From time to time, the Company enters into futures contracts to manage
the risk associated with changes in fuel prices. Gains and losses from
fuel hedging contracts are recognized as part of fuel expense when the
Company uses the underlying fuel being hedged. The Company does not
enter into fuel hedging contracts for speculative purposes. At September
30, 2001, the Company did not have any outstanding fuel hedging
contracts or other derivative instruments that fall under the provisions
of SFAS No. 133.                                                                                                                                                                                                                                                                                                                                                                                                  

Note 5. Recent Accounting Pronouncements



| |  |  | In June 2001, the Financial Accounting Standards Board approved
Statement of SFAS No. 141, Business Combinations, and SFAS No. 142,
Goodwill and Other Intangible Assets. SFAS No. 141 prospectively
prohibits the pooling of interest method of accounting for business
combinations initiated after June 30, 2001. SFAS No. 142 requires
companies to cease amortizing goodwill that existed at June 30, 2001.
The amortization of existing goodwill will cease on December 31, 2001.
Any goodwill resulting from acquisitions completed after June 30, 2001
will not be amortized. SFAS No. 142 also establishes a new method of
testing goodwill for impairment on an annual basis or on an interim
basis if an event occurs or circumstances change that would reduce the
fair value of a reporting unit below its carrying value. The adoption of
SFAS No. 142 will result in the Companys discontinuation of
amortization of its goodwill; however, the Company will be required to
test its goodwill for impairment under the new standard beginning in the
first quarter of 2002, which could have an adverse effect on the
Companys future results of operations if an impairment occurs.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13



---



##### Table of Contents





| |  |  | In June 2001, the Financial Accounting Standards Board issued Statement
No. 143, Accounting for Asset Retirement Obligations"' which addresses
accounting and reporting for asset retirement costs of long lived assets
resulting from legal obligations associated with acquisition,
construction or development transactions. The Company plans to adopt
Statement No. 143 in the first quarter of fiscal 2003. Management has
determined the adoption of this statement will not have a material
effect on the Consolidated Financial Statements of the Company. 
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | In August 2001, The Financial Accounting Standards Board issued
Statement No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets which clarifies accounting and reporting for assets
held for sale, scheduled for abandonment or other disposal, and
recognition of impairment loss related to the carrying value of
long-lived assets. The Company plans to adopt Statement No. 144 in the
first quarter of fiscal 2003. Management is currently evaluating the
effect of this statement on the Consolidated
Financial Statements of the Company.

Note 6. Workforce Reduction Accrual



| |  |  | The Company has implemented a program to achieve a significant reduction
in corporate overhead expenses. Targeted in the plan are workforce
reductions and additional efforts to decrease discretionary spending and
eliminate fixed costs. The components of the workforce reduction
accrual are as follows (Dollars in millions):
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                              |  |              |      |               |  |          |      |               |  |   |      |   |  |   |      |  
|--------------------------------------------- |  | ------------ | ---- | ------------- |  | -------- | ---- | ------------- |  | - | ---- | - |  | - | ---- | -
|                                              |  | Year Ended   |      | Quarter Ended
|                                              |  |              |      |              
|                                              |  | December 31, |      | March 31,     |  | June 30, |      | September 30,
|                                              |  | 2000         |      | 2001          |  | 2001     |      | 2001         
|                                              |  |              |      |               |  |          |      |              
|Beginning Balance                             |  | $            | 0.0  |               |  | $        | 1.6  |               |  | $ | 4.7  |   |  | $ | 4.0  |  
|                                             
|                                             
|                                             
|                                             
|Expense                                       |  |              | 2.5  |               |  |          | 5.0  |               |  |   | 0.6  |   |  |   | 1.6  |  
|                                             
|                                             
|                                             
|                                             
|Payments                                      |  |              | (0.9 | )             |  |          | (1.9 | )             |  |   | (1.3 | ) |  |   | (2.6 | )
|                                              |  |              |      |               |  |          |      |               |  |   |      |   |  |   |      |  
|Ending Balance                                |  |              | 1.6  |               |  |          | 4.7  |               |  |   | 4.0  |   |  |   | 3.0  |  
|                                              |  |              |      |               |  |          |      |               |  |   |      |   |  |   |      |  
|Number of
terminated
employees during
quarter |  |              | 100  |               |  |          | 65   |               |  |   | 20   |   |  |   | 63   |  

Note 7. Segment Reporting



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

14



---



##### Table of Contents



|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|---------------------------------- |  | ------------------ | ------- | ----------------- |  | ---- | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                   |  | Three Months Ended |         | Nine Months Ended
|                                   |  | September 30,      |         | September 30,    
|                                   |  |                    |         |                  
|                                   |  | 2001               |         | 2000              |  | 2001 |         | 2000
|                                   |  |                    |         |                   |  |      |         |     
|Revenues  unaffiliated customers: |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                  
|                                  
|                                  
|                                  
|Allied Automotive Group            |  | $                  | 197,168 |                   |  | $    | 230,192 |      |  | $ | 651,982 |   |  | $ | 793,560 |  
|                                  
|                                  
|                                  
|                                  
|Axis Group                         |  |                    | 6,842   |                   |  |      | 6,146   |      |  |   | 20,402  |   |  |   | 21,497  |  
|                                  
|                                  
|                                  
|                                  
|Corporate/other                    |  |                    |        |                   |  |      | 9       |      |  |   |        |   |  |   | 71      |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                   |  | $                  | 204,010 |                   |  | $    | 236,347 |      |  | $ | 672,384 |   |  | $ | 815,128 |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|Depreciation and amortization:     |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                  
|                                  
|                                  
|                                  
|Allied Automotive Group            |  | $                  | 13,343  |                   |  | $    | 12,880  |      |  | $ | 40,132  |   |  | $ | 39,200  |  
|                                  
|                                  
|                                  
|                                  
|Axis Group                         |  |                    | 977     |                   |  |      | 806     |      |  |   | 2,768   |   |  |   | 2,247   |  
|                                  
|                                  
|                                  
|                                  
|Corporate/other                    |  |                    | 825     |                   |  |      | 1,365   |      |  |   | 2,550   |   |  |   | 4,239   |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                   |  | $                  | 15,145  |                   |  | $    | 15,051  |      |  | $ | 45,450  |   |  | $ | 45,686  |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|Operating (loss) profit:           |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                  
|                                  
|                                  
|                                  
|Allied Automotive Group            |  | $                  | (10,483 | )                 |  | $    | (1,475  | )    |  | $ | (27,701 | ) |  | $ | 24,138  |  
|                                  
|                                  
|                                  
|                                  
|Axis Group                         |  |                    | 502     |                   |  |      | 84      |      |  |   | 900     |   |  |   | 222     |  
|                                  
|                                  
|                                  
|                                  
|Corporate/other                    |  |                    | (1,566  | )                 |  |      | (1,509  | )    |  |   | (11,699 | ) |  |   | (5,999  | )
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                   |  |                    | (11,547 | )                 |  |      | (2,900  | )    |  |   | (38,500 | ) |  |   | 18,361  |  
|                                  
|                                  
|                                  
|                                  
|Reconciling items:                 |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                  
|                                  
|                                  
|                                  
|Equity income in joint ventures    |  |                    | 1,054   |                   |  |      | 1,502   |      |  |   | 3,593   |   |  |   | 4,201   |  
|                                  
|                                  
|                                  
|                                  
|Gain (loss) on sale of assets      |  |                    | (24     | )                 |  |      | (84     | )    |  |   | 2,719   |   |  |   | (97     | )
|                                  
|                                  
|                                  
|                                  
|Interest expense                   |  |                    | (9,141  | )                 |  |      | (8,321  | )    |  |   | (26,994 | ) |  |   | (25,070 | )
|                                  
|                                  
|                                  
|                                  
|Interest income                    |  |                    | 424     |                   |  |      | 1,644   |      |  |   | 2,014   |   |  |   | 3,653   |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|(Loss) income before income taxes  |  | $                  | (19,234 | )                 |  | $    | (8,159  | )    |  | $ | (57,168 | ) |  | $ | 1,048   |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|Capital expenditures:              |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                  
|                                  
|                                  
|                                  
|Allied Automotive Group            |  | $                  | 1,321   |                   |  | $    | 4,763   |      |  | $ | 16,381  |   |  | $ | 9,780   |  
|                                  
|                                  
|                                  
|                                  
|Axis Group                         |  |                    | 11      |                   |  |      | 856     |      |  |   | 1,826   |   |  |   | 1,780   |  
|                                  
|                                  
|                                  
|                                  
|Corporate/other                    |  |                    |        |                   |  |      | 1,275   |      |  |   | 67      |   |  |   | 4,412   |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  
|                                   |  | $                  | 1,332   |                   |  | $    | 6,894   |      |  | $ | 18,274  |   |  | $ | 15,972  |  
|                                   |  |                    |         |                   |  |      |         |      |  |   |         |   |  |   |         |  

|                        |  |               |         |              |  |   |         | 
|----------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                        |  | September 30, |         | December 31,
|                        |  | 2001          |         | 2000        
|                        |  |               |         |             
|Total assets:           |  |               |         |              |  |   |         | 
|                       
|                       
|                       
|                       
|Allied Automotive Group |  | $             | 387,017 |              |  | $ | 437,945 | 
|                       
|                       
|                       
|                       
|Axis Group              |  |               | 67,641  |              |  |   | 64,869  | 
|                       
|                       
|                       
|                       
|Corporate/other         |  |               | 121,513 |              |  |   | 107,725 | 
|                        |  |               |         |              |  |   |         | 
|                        |  | $             | 576,171 |              |  | $ | 610,539 | 
|                        |  |               |         |              |  |   |         | 

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##### Table of Contents



Geographic financial information for 2001 and 2000 is as follows (in
thousands):

|              |  |                    |         |                   |  |      |         |      |  |   |         |  |  |   |         | 
|------------- |  | ------------------ | ------- | ----------------- |  | ---- | ------- | ---- |  | - | ------- |  |  | - | ------- | 
|              |  | Three Months Ended |         | Nine Months Ended
|              |  | September 30,      |         | September 30,    
|              |  |                    |         |                  
|              |  | 2001               |         | 2000              |  | 2001 |         | 2000
|              |  |                    |         |                   |  |      |         |     
|Revenues:     |  |                    |         |                   |  |      |         |      |  |   |         |  |  |   |         | 
|             
|             
|             
|             
|United States |  | $                  | 170,222 |                   |  | $    | 195,219 |      |  | $ | 555,489 |  |  | $ | 672,397 | 
|             
|             
|             
|             
|Canada        |  |                    | 33,788  |                   |  |      | 41,128  |      |  |   | 116,895 |  |  |   | 142,731 | 
|              |  |                    |         |                   |  |      |         |      |  |   |         |  |  |   |         | 
|              |  | $                  | 204,010 |                   |  | $    | 236,347 |      |  | $ | 672,384 |  |  | $ | 815,128 | 
|              |  |                    |         |                   |  |      |         |      |  |   |         |  |  |   |         | 

Note 8. Equity Investments



| |  |  | Axis Group has entered into three joint ventures for the purpose
of managing the distribution of vehicles in the United Kingdom and
Brazil. The Company is accounting for the investments under the
equity method of accounting with its share of the ventures
earnings or loss reflected as equity in earnings (loss) of joint
ventures in the consolidated statements of operations. The related
equity investments are included in other assets in the
accompanying consolidated balance sheets.                                                  
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Equity in earnings for these joint ventures is recorded net of income
taxes in the consolidated statements of operations by the Company.
Income taxes related to the joint ventures were $.6 million and $1.7
million for the three and nine months ended September 30, 2001 and $2,000
and $1.2 million for the three and nine months ended September 30, 2000.
Included in the 2001 results are $1.7 million in fees related to
management services provided to the joint venture and $1.5 million for
similar fees is included in the 2000 results.
|
| |  |  | The majority of the Companys equity in earnings of joint ventures in
2001 was derived from its joint venture in the United Kingdom, Ansa
Logistics Limited. Summarized unaudited financial information of Ansa
Logistics Limited for the periods ended September 30, 2001 and 2000, is
as follows (in thousands):                                                                                                                                                                                                                                    

|                    |              |   |               |        |              |   |        |        | 
|------------------- | ------------ | - | ------------- | ------ | ------------ | - | ------ | ------ | 
|                    |              |   | September 30, |        | December 31,
|                    |              |   | 2001          |        | 2000        
|                    |              |   |               |        |             
|Current assets      |              | $ | 30,738        |        |              | $ | 34,799 |       
|                   
|                   
|                   
|                   
|Other assets        |              |   | 4,015         |        |              |   | 5,019  |       
|                    |              |   |               |        |              |   |        |       
|                    | Total assets |   | $             | 34,753 |              |   | $      | 39,818 | 
|                    |              |   |               |        |              |   |        |       
|Current liabilities |              | $ | 18,413        |        |              | $ | 32,194 |       
|                    |              |   |               |        |              |   |        |       

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##### Table of Contents



|                                  |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 
|--------------------------------- |  | ------------------ | ------ | ----------------- |  | ---- | ------ | ---- |  | - | ------ |  |  | - | ------ | 
|                                  |  | Three Months Ended |        | Nine Months Ended
|                                  |  | September 30,      |        | September 30     
|                                  |  |                    |        |                  
|                                  |  | 2001               |        | 2000              |  | 2001 |        | 2000
|                                  |  |                    |        |                   |  |      |        |     
|Revenues                          |  | $                  | 28,965 |                   |  | $    | 24,125 |      |  | $ | 85,066 |  |  | $ | 79,890 | 
|                                  |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 
|Operating income                  |  | $                  | 2,963  |                   |  | $    | 2,505  |      |  | $ | 7,840  |  |  | $ | 7,789  | 
|                                  |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 
|Income from
continuing
operations |  | $                  | 3,178  |                   |  | $    | 2,620  |      |  | $ | 8,218  |  |  | $ | 7,903  | 
|                                  |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 
|Net income                        |  | $                  | 1,971  |                   |  | $    | 1,624  |      |  | $ | 5,095  |  |  | $ | 4,900  | 
|                                  |  |                    |        |                   |  |      |        |      |  |   |        |  |  |   |        | 

Note 9. Litigation



| |  |  | The Company is routinely a party to litigation incidental to its
business, primarily involving claims for personal injury and property
damage incurred in the transportation of vehicles. The Company does not
believe that any of such pending litigation, if adversely determined,
would have a material adverse effect on the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The Company is defending two pieces of related litigation in the Supreme
Court of Erie County, New York: Gateway Development & Manufacturing,
Inc. v. Commercial Carriers, Inc., et al., Index No. 1997/8920 (the
Gateway Case), and Commercial Carriers, Inc., v. Gateway Development &
Manufacturing, Inc., et al. (the CCI Case), Index No. I2000/8184. The
claims at issue in both the Gateway Case and the CCI Case center around
the contention that the Company breached legal duties with respect to a
failed business transaction involving Gateway Development &
Manufacturing, Inc., Ryder Truck Rental, Inc., and Ryder System, Inc. In
the Gateway Case, the Company has sought and received summary judgment in
its favor on the sole claim (for tortious interference with contract)
asserted against it by Gateway Development & Manufacturing, Inc., but the
court has permitted the filing and service of cross-claims against the
Company by the other defendants in that action. In the CCI Case, the
Company has accepted service of a separate complaint asserting claims
against the Company that are virtually identical to the cross-claims
asserted against the Company by the other defendants in the Gateway Case.
It is anticipated that the claims asserted in both the Gateway Case and
the CCI Case will be resolved in a unified proceeding. With respect to
the entirety of this litigation, the Company intends to continue its
vigorous defense against the claims asserted it, as management believes
all of those claims are without merit. While the ultimate results of
this litigation cannot be predicted, if this litigation is resolved in a
manner that is adverse to the Company, it could have a material adverse
effect on the Companys consolidated financial position or results of
operations.
|
| |  |  | The Company is defending a third piece of related litigation in the
United States District Court for the Southern District of Florida, Ryder
Systems, Inc. v. Allied Holdings, Inc., AH Acquisition Corp. and Allied
Automotive Group, Inc., Case No. 01-3553-CIV-HUCK. The claims at issue
in this case center around the Allied parties September 1997 stock
acquisition of certain corporations wholly-owned by Ryder. Through that
acquisition, Allied parties agreed to assume financial responsibility for
certain third-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

17



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| |  |  | party injury claims arising on or before the September 1997 closing date.
Ryders four-count complaint alleges in count one that the Allied parties
have breached their agreement with Ryder by failing to undertake certain
logistical actions to actually substitute Allied parties for Ryder under
an insurance policy covering these third-party claims and with various
states agencies who regulate matters such as self-insured workers
compensation. In counts two through four, the complaint alleges that, if
the contract does not create these obligations, the legal doctrines of
promissory estoppel, good faith and fair dealing, and negligent
misrepresentation, create them. The Allied parties have moved to dismiss
all counts of the complaint or, alternatively, to transfer the case to
the Northern District of Georgia. With respect to the entirety of this
litigation, the Company intends to continue its vigorous defense against
the claims asserted, as management believes all of those claims are
without merit. While the ultimate results of this litigation cannot be
predicted, management does not expect that the resolution of these
proceedings will have a material adverse effect on the Companys
consolidated financial position or results of operations.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Note 10. Reclassifications



| |  |  | Certain amounts in the prior year financial statements have been
reclassified to conform to the current year presentation.
| |  |  | --------------------------------------------------------------------------------------------------------------------------

18



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##### Table of Contents






Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations



| |  |  | Revenues were $204.0 million for the third quarter of 2001 versus
revenues of $236.3 million for the third quarter of 2000, a decrease of
13.7%. For the nine-month period ended September 30, 2001 revenues were
$672.4 million, versus revenues of $815.1 million for the nine-month
period ended September 30, 2000, a decrease of 17.5%.                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Allied has initiated an
aggressive plan to revitalize the Company. The key elements of the
turnaround plan include:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  |  |  Focus on Execution                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |  |  De-leverage the
Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |  |  Eliminate
Non-contributory Expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |  |  Eliminate
Non-performing Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |  |  |  Better Management
of Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  |  |  Price Adjustments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |  |  Optimize Invested
Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |  |  Implement
Strategic Growth Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  |  | Unanticipated adjustments in new vehicle production by the auto
manufacturers led to lower vehicle delivery volumes and a decline in
revenues and earnings during the third quarter. The events of September
11, 2001 caused a significant drop in new vehicle productions during the
balance of the month. The Company estimates its vehicle deliveries were
reduced by approximately 85,000 units during September 2001 following the
terrorist acts, which reduced net earnings by approximately $2 million
for the month.                                                                                                                                                                                                                                                  
|
| |  |  | As part of the initiative to
adjust pricing, effective on or about September 6, 2001, the Company implemented an
administrative processing fee for vehicles transported on behalf of its
clients in the United States and Canada. Allied has implemented the new
processing fee with clients representing approximately 85% of its annual
revenues. The remaining portion of Allieds business is under a contract
which prohibits the implementation of the fee at the present time. The
administrative processing fee is approximately an 8.5% price increase
over the Companys previous rates.                                                                                                                                                                             
|
| |  |  | The Company experienced a net loss of $12.6 million for the third quarter
of 2001 versus a net loss of $4.6 million for the third quarter of 2000.
Basic and diluted loss per share for the third quarter of 2001 was $1.56
versus basic and diluted loss per share of $0.58 for the third quarter of
2000. For the nine-month period ended September 30, 2001, the net loss
was $37.2 million, versus net income of $1.2 million for the nine-month
period ended September 30, 2000. Basic and diluted loss per share for
the nine-month period ended September 30, 2001 were $4.60 versus basic
and diluted earnings per share of $0.16 for the nine-month period ended
September 30, 2000.                                                                                  
|
| |  |  | As part of the initiative to
eliminate non-performing assets, Allied announced that it will close certain non-performing
and non-core terminal locations within the U.S. and Canada. Allied
closed its Doremus, NJ facility on July 1, 2001. In the first nine
months of 2001, the operations of Allied at Doremus, NJ generated
approximately $4.8 million in revenues and posted an operating loss of
approximately $1.4 million. Allied intends to close its Houston, TX,
Selkirk, NY and Edison, NJ terminal facilities during the fourth quarter
of 2001. In the first nine months of 2001, the operations of the
automotive group at Houston, Selkirk and Edison generated approximately
$23 million in revenues and posted operating losses of approximately $4
million.
|
| |  |  | The following is a discussion of the changes in the Companys major
expense categories:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

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| |  |  | Salaries, wages and fringe benefits increased from 56.2% of revenues for
the third quarter of 2000 to 58.2% of revenues for the third quarter of
2001, and increased from 54.2% of revenues for the first nine months of
2000 to 58.2% of revenues for the first nine months of 2001. The increase
was due in part to severance charged to expense of $4.9 million in the
first six months of 2001 and $1.6 million in the third quarter of 2001
included in the Companys workforce and overhead reduction program, as
well as annual wage increases for remaining employees. In addition, the
significant drop in vehicle deliveries caused operating inefficiencies
that increased salaries, wages, and fringe benefits as a percentage of
revenues.
| |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Operating supplies and expenses decreased from 17.3% of revenues for the
third quarter of 2000 to 16.6% of revenues for the third quarter of 2001,
and also decreased from 17.3% of revenues for the first nine months of
2000 to 17.1% of revenues for the first nine months of 2001. The decrease
was due primarily to an increase in the percentage of units hauled by
owner operators versus company drivers. Owner operators are responsible
for related operating expenses. In addition, operating supplies and
expenses declined due to a decrease in parts and maintenance expense
related to vigorous expense reduction programs and decreasing volumes,
combined with lower fuel costs.                                                      
|
| |  |  | Purchased transportation increased from 10.0% of revenues in the third
quarter of 2000 to 11.4% of revenues in the third quarter of 2001, and
increased from 9.8% of revenues for the first nine months of 2000 to
11.2% of revenues for the first nine months of 2001. As volumes decline,
units are hauled by drivers with the highest seniority and owner
operators generally have more seniority than company drivers in the
current workforce. The number of owner operators stayed relatively
constant from year to year while the number of company drivers decreased,
resulting in higher purchased transportation for 2001 compared to 2000.                                                                                                  
|
| |  |  | Insurance and claims expense increased from 4.8% of revenues for the
third quarter of 2000 to 5.2% of revenues for the third quarter of 2001,
and increased from 4.5% of revenues for the first nine months of 2000 to
5.6% of revenues for the first nine months of 2001. The increase was a
result of an increase in cargo claims expense and costs related to higher
auto, general liability and property insurance premiums that were
unaffected by the decline in vehicles delivered.                                                                                                                                                                                                                                                             
|
| |  |  | Depreciation and amortization expense increased from 6.4% of revenues in
the third quarter of 2000 to 7.4% of revenues in the third quarter of
2001, and increased from 5.6% of revenues for the first nine months of
2000 to 6.8% of revenues for the first nine months of 2001. The increase
as a percentage of revenues was due primarily to a sharp decline in
vehicles delivered which reduced revenues. Depreciation and amortization
expense stayed relatively constant in 2001 versus 2000; depreciation and
amortization expense was $15.1 million in the third quarter of 2001
versus $15.0 million in the third quarter of 2000, and $45.4 million for
the first nine months of 2001 versus $45.7 million for the first nine
months of 2000.
|
| |  |  | Loss/gain on sale of assets increased from a loss of $97,000 for the
first nine months of 2000 to a gain of $2,719,000 for the first nine
months of 2001. The Company disposed of excess real estate and other
assets in Canada during the second quarter of 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

20



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| |  |  | Interest expense as a percentage of revenues increased from 3.5% of
revenues for the third quarter of 2000 to 4.5% of revenues for the third
quarter of 2001, and increased from 3.1% of revenues for the first nine
months of 2000 to 4.1% for the first nine months of 2001. The increase
was due to higher interest rates charged under the Companys revolving
credit facility and senior subordinated notes as a result of the
amendments in the second quarter of 2001, as well as higher long-term
debt levels and additional costs related to the amendments.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Financial Condition, Liquidity and Capital Resources



| |  |  | Net cash provided by operating activities totaled $1.6 million for the
nine-month period ended September 30, 2001 versus net cash provided by
operating activities of $25.9 million for the nine-month period ended
September 30, 2000. The decline in cash provided by operating activities
was due primarily to reduced earnings during the first nine months of
2001 versus 2000, offset with a favorable change in operating assets and
liabilities as the Company has implemented measures to improve asset
utilization.                                                                                                                
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Net cash used in investing activities totaled $15.6 million for the
nine-month period ended September 30, 2001 versus $37.5 million for the
nine-month period ended September 30, 2000. The decrease was due
primarily to the purchase of CT Group, a logistics service group, in 2000
for $8.2 million, combined with a change in the investment portfolio mix
of the Companys captive insurance company which increased short-term
investments by $14.0 million and reduced cash and cash equivalents by a
like amount in 2000.                                                                                                           
|
| |  |  | Net cash provided by financing activities totaled $23.7 million for the
nine-month period ended September 30, 2001 versus $3.0 million for the
nine-month period ended September 30, 2000. The increase was due to an
increase in borrowings during 2001 as a result of lower operating cash
flow.                                                                                                                                                                                                                                                                                                                                           
|
| |  |  | In April 2001 the Company amended its revolving credit facility and its
senior subordinated notes to avoid defaults relating to its financial
covenants. The maturity date of the amended revolving credit facility
has been accelerated from September 30, 2002 to January 31, 2002.                                                                                                                                                                                                                                                                                                                                                        
|
| |  |  | The Companys future cash flow would be insufficient to meet its debt
payment obligations if it is required to repay the outstanding balance of
the Credit Facility at its currently scheduled maturity in January 2002.
The Companys ability to meet its principal payment obligations at the
January 2002 maturity will depend on whether it can arrange a
refinancing, restructuring or extension of such facility on satisfactory
terms within that time frame. The Company is engaged in discussions with
a number of lenders to replace its revolving credit facility, and
completion of the financing is anticipated by January 2002.
|
| |  |  | If the Company is unable to refinance, restructure or extend its Credit
Facility, the Company may be required to sell additional assets, reduce
or delay capital investments or seek to raise additional capital, among
other things. The Company cannot give any                                                                                                                                                                                                                                                                                                                                                                            

21



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| |  |  | assurance that any refinancing, restructuring or extension of the current
Credit Facility would be possible, that any assets could be sold, or, if
sold, of the timing of the sales and the amount of proceeds realized from
those sales, or that additional capital could be obtained on acceptable
terms, if at all. The Companys inability to refinance, restructure or
extend its indebtedness on commercially reasonable terms would have a
material adverse effect on its business, financial condition, and results
of operations. Additionally, the Company has been advised by its
independent public accountants that if the Company is unable to
refinance, restructure or extend its indebtedness, the auditors report
on the consolidated financial statements for the year ended December 31,
2001 may contain a paragraph regarding uncertainties as to the Companys
ability to continue as a going concern. The debt under the Companys
Credit Facility is secured by liens on all of its assets, and the
Companys failure to pay these obligations when due would permit the
lenders to pursue their remedies under the Credit Facility.
| |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | The Companys ability to obtain sufficient cash to make scheduled
payments on its debt obligations as they become due until the January
2002 maturity will depend on future cash flow from operations, sales of
assets and the Companys financial performance, which will be affected by
a range of economic, competitive and business factors. The Company cannot
control many of these factors, such as general economic and financial
conditions in the automotive industry and the economy at large.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  |  | Allied is continuing its efforts in regard to the potential sale of its
Axis Group, Inc. subsidiary. Allied is currently engaged in discussions
with prospective buyers of Axis and expects to complete a transaction
regarding Axis by January 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Disclosures About Market Risks



| |  |  | The market risk inherent in the Companys market risk sensitive
instruments and positions is the potential loss arising from adverse
changes in short-term investment prices, interest rates, fuel prices, and
foreign currency exchange rates.                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Short-term Investments The Company does not use derivative financial
instruments in its investment portfolio. The Company places its
investments in instruments that meet high credit quality standards, as
specified in the Companys investment policy guidelines. The policy also
limits the amount of credit exposure to any one issue, issuer, and type
of instrument. Short-term investments at September 30, 2001, which are
recorded at a fair value of $64.8 million, have exposure to price risk.
This risk is estimated as the potential loss in fair value resulting from
a hypothetical 10% adverse change in quoted prices and amounts to $6.5
million.
|
| |  |  | Interest Rates The Company primarily issues long-term debt obligations
to support general corporate purposes including capital expenditures and
working capital needs. The majority of the Companys long-term debt
obligations bear a fixed rate of interest. A one-percentage point
increase in interest rates affecting the Companys floating rate
long-term debt would reduce pre-tax income by $1.6 million over the next
fiscal year. A one-percentage point change in interest rates would not
have a material effect on the fair value of the Companys fixed rate
long-term debt.                                                                          

22



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| |  |  | Fuel Prices The Company is dependent on diesel fuel to operate its
fleet of rigs. Diesel fuel prices are subject to fluctuations due to
unpredictable factors such as weather, government policies, changes in
global demand, and global production. To reduce price risk caused by
market fluctuations, the Company periodically follows a policy of hedging
a portion of its anticipated diesel fuel consumption. The instruments
used are principally readily marketable exchange traded futures contracts
that are designated as hedges. The changes in market value of such
contracts have a high correlation to the price changes of diesel fuel.
Gains and losses resulting from fuel hedging transactions are recognized
when the underlying fuel being hedged is used. In addition, the Company
has contractual agreements with certain customers that provide for fuel
surcharges that mitigate the exposure to risk associated with fuel price
increases. A 10% increase in diesel fuel prices would reduce pre-tax
income by $4.7 million over the next fiscal year.
| |  |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Foreign Currency Exchange Rates Although the majority of the Companys
operations are in the United States, the Company does have foreign
subsidiaries (primarily Canada). The net investments in foreign
subsidiaries translated into dollars using exchange rates at September
30, 2001, are $97.3 million. The potential loss in fair value impacting
other comprehensive income resulting from a hypothetical 10% change in
quoted foreign currency exchange rates amounts to $9.7 million. The
Company does not use derivative financial instruments to hedge its
exposure to changes in foreign currency exchange rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  |  | Seasonality and Inflation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |  | The Companys revenues are seasonal, with the second and fourth quarters
generally experiencing higher revenues than the first and third quarters.
The volume of vehicles shipped during the second and fourth quarters is
generally higher due to the introduction of new models which are shipped
to dealers during those periods and the higher spring and early summer
sales of automobiles and light trucks. During the first and third
quarters, vehicle shipments typically decline due to lower sales volume
during those periods and scheduled plant shut downs. Inflation has not
significantly affected the Companys results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  |  | Cautionary Notice Regarding Forward-Looking Statements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  |  | Statements in this quarterly report on Form 10-Q contains forward-looking
statements, including statements regarding, among other items, (i) the
Companys plans, intentions or expectations, (ii) general industry
trends, competitive conditions and customer preferences, (iii) the
Companys efforts to reduce costs, (iv) the adequacy of the Companys
sources of cash to finance its current and future operations and (v)
resolution of litigation without material adverse effect on the Company.
This notice is intended to take advantage of the safe harbor provided
by the Private Securities Litigation Reform Act of 1995 with respect to
such forward-looking statements. These forward-looking statements
involve a number of risks and uncertainties. Among others, factors that
could cause actual results to differ materially are the following:
economic recessions or downturns in new vehicle production or sales; the
highly competitive nature of the automotive distribution industry;
dependence on the automotive industry; loss or               

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| |  |  | reduction of revenues generated by the Companys major customers; the
variability of quarterly results and seasonality of the automotive
distribution industry; labor disputes involving the Company or its
significant customers; the dependence on key personnel who have been
hired or retained by the Company; the availability of strategic
acquisitions or joint venture partners; changes in regulatory
requirements which are applicable to the Companys business; changes in
vehicle sizes and weights which may adversely impact vehicle deliveries
per load; the ability to maintain the rates charged to customers; risks
associated with doing business in foreign countries; problems related to
information technology systems and computations that must be made by the
Company or its customers and vendors in 2001 or beyond; and the risk
factors listed herein from time to time in the Companys Securities and
Exchange Commission reports, including but not limited to, its Annual
Reports on Form 10-K or 10 Q.
| |  |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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PART II.




OTHER INFORMATION




Item 1. Legal Proceedings.

Refer to Note 9 on Page 16 of this Report on Form 10-Q for information on
legal proceedings.




Item 5. Other Information.

On July 13, 2001, the Company announced that it had been advised by the New
York Stock Exchange (NYSE) that the Company had fallen below the continued
listing standard requiring stockholders equity of not less than $50 million
and total market capitalization of not less than $50 million. Allied submitted
a detailed plan to the Listing and Compliance Committee of the NYSE
demonstrating how the Company plans to be in compliance with the continued
listing standard on or before November 29, 2002, the deadline set by the NYSE.
The Committee has accepted the plan and the Company is currently subject to
quarterly monitoring for compliance with the plan.

In connection with the implementation of the administrative processing fee,
effective September 7, 2001 Allied Automotive Group, Inc. entered into an
amendment to its contract with UPS Autogistics, Inc. regarding the distribution
of vehicles for Ford Motor Company extending the term of the agreement for 12
months as to ramp locations and 15 months as to plant locations. The amended
agreement provides that the contract may be terminated on 75 days notice by
either party. Allied Automotive Group also entered into an amendment to its
contract with General Motors effective September 6, 2001, in order to provide
for the payment of the administrative processing fee. The amended agreement is
for a term of 30 months expiring March 6, 2004.




Item 6. Exhibits and Reports on Form 8-K.

|    |  |          |  |                                                                                                         
|--- |  | -------- |  | --------------------------------------------------------------------------------------------------------
|(a) |  | Exhibits |  | Description                                                                                             
|    |  |          |  |                                                                                                         
|    |  | (10.1)*  |  | Agreement between Allied Automotive Group, Inc. and UPS
Autogistics, Inc. dated September 30, 2001.     
|   
|   
|   
|   
|    |  | (10.2)*  |  | Agreement between Allied Automotive Group, Inc., and
General Motors Corporation dated September 6, 2001.



|* |  | Portions of the agreement are omitted pursuant to a request for
confidential treatment filed with the SEC on November 13, 2001.
|- |  | -------------------------------------------------------------------------------------------------------------------------------

(b) Reports on Form 8-K: None

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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.

|                  |  |                                | 
|----------------- |  | ------------------------------ | 
|                  |  | Allied Holdings, Inc.         
|                 
|                 
|                 
|                 
|                 
|                 
|                 
|                 
|November 13, 2001 |  | /s/Hugh E. Sawyer             
|                  |  |                               
|(Date)            |  | Hugh E. Sawyer                
|                  |  | on behalf of Registrant as    
|                  |  | President and                 
|                  |  | Chief Executive Officer       
|                 
|                 
|                 
|                 
|                 
|                 
|November 13, 2001 |  | /s/Daniel H. Popky            
|                  |  |                               
|(Date)            |  | Daniel H. Popky               
|                  |  | on behalf of Registrant as    
|                  |  | Senior Vice President, Finance
|                  |  | and Chief Financial Officer   

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