UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 - - - - - - - - - - - - - - - - - FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Fiscal Year Ended March 31, 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 333-64513 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. (Exact name of registrant as specified in its charter) DELAWARE 65-0822351 (State or other jurisdiction of (I.R.S. Employer incorporation organization) Identification Number) 1815 GRIFFIN ROAD, SUITE #300, DANIA, FL 33004-2252 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (954) 926-2000 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) AND 12(g) OF THE ACT: NONE TITLE OF CLASS NAME OF EXCHANGE ON WHICH REGISTERED N/A N/A Indicate by check mark whether each 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 report(s), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the last practicable date. Common Stock, par value $0.01 per share: 100 shares outstanding at June 29, 2001.

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. FORM 10-K TABLE OF CONTENTS Page PART I ITEM 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 ITEM 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ITEM 3 Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 ITEM 4 Submission of Matters to a Vote of Security Holders. . 9. . . . . . . . . . . . . . . 8 PART II ITEM 5 Market for the Company's Equity and Related Security Holder Matters. . . . . . . . . 9 ITEM 6 Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operation 10 ITEM 7 A Quantitative and Qualitative Disclosure about Market Risk. 18. . . . . . . . . . . . . 19 ITEM 8 Financial Statements and Supplementary Data. 18. . . . . . . . . . . . . . . . . . . . 19 ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 1819 PART III ITEM 10 Directors and Executive Officers of the Company. . . . . . . . . . . . . . . . . . . 19 ITEM 11 Executive Compensation 21. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 ITEM 12 Security Ownership of Certain Beneficial Owners and Management 26. . . . . . . . . . . 27 ITEM 13 Certain Relationships and Related Transactions 28. . . . . . . . . . . . . . . . . . . 29 PART IV ITEM 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K. . 33. ~~Signatures~~. . . . . . . . 35 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

1 PART I Aircraft Service International Group, Inc. (the "Company") was organized in March 1998 for the purpose of acquiring beneficial ownership and control of all the outstanding capital stock or other equity interests in Aircraft Services International, Inc., ASIG Miami, Inc. (previously known as Dispatch Service, Inc.), ASIG Fueling Miami, Inc. (previously known as Florida Aviation Fueling Co.), Bahamas Airport Service, Ltd., Freeport Flight Services, Ltd., ASIG Ltd. (previously known as Aircraft Service, Ltd.), ASIG Germany GmbH (previously known as ASII Holding, GmbH), and ASII Aircraft Service Canada, Ltd. (collectively the "ASIG business" or "Predecessor") from Viad Corp ("Viad") and Viad Service Companies, Ltd. as of April 1, 1998 pursuant to a share purchase agreement (the "Acquisition"). Prior to the Acquisition by the Company, the ASIG business was operated under the divisional name of Aircraft Service International Group. The Company is 100% owned by Ranger Aerospace Corporation. The Predecessor's fiscal year ended on December 31. The Company's fiscal year ends March 31. References herein to fiscal 2001, 2000 and 1999 refer to the Company's fiscal year ended March 31, 2001, 2000 and 1999 and references to the calendar year 1997 refer to the Predecessor's fiscal year ended December 31, 1997. Item 1. Business The Company is one of the largest independent providers of aviation fueling and aircraft ground services in the United States and believes it is the largest independent fueler in Europe. The Company has provided service to its customers for 54 years and has a presence in 50 airports in the United States, Europe and the Caribbean. In fiscal 2001, the Company provided service to over 2.8 million commercial flights for over 200 customers, including most of the major domestic and international airlines such as American Airlines, Inc. ("American"), British Airways ("BA"), Continental Airlines, Inc. ("Continental"), Delta Air Lines, Inc. ("Delta"), Northwest Airlines Corporation ("Northwest"), United Airlines, Inc. ("United") and US Airways, Inc. ("US Airways"), as well as regional air carriers, airport authorities and oil companies such as Esso U.K. ("Esso") and Shell U.K. ("Shell"). The Company also operates fuel storage and delivery systems for airline consortia and airport authorities at 22 airports, including Los Angeles International Airport's LAXFUEL, which the Company believes is the largest airport fuel consortium in the world. For the fiscal years ended March 31, 2001, March 31, 2000 and March 31, 1999, the Company generated revenues of $162.0 million, $141.0 million and $123.4 million, respectively, net income (loss) of $(7.8) million, $(9.3) million and $(4.8) million (after an extraordinary charge of $0.2 million relating to the write-off of certain finance costs), respectively, and EBITDA of $14.7 million, $11.4 million and $15.5 million, respectively. The Company's business includes aviation fueling services (62.9% of 2001 revenues), aircraft ground services (33.8%) and other aviation services (3.3%). Aviation fueling services are comprised primarily of into-plane fueling, maintenance and operation of fuel storage and delivery systems and the retail sale of fuel products. Generally, the Company has custody over, but not ownership of, the fuel it manages and delivers. Aircraft ground services consist primarily of ground handling, aircraft interior grooming, cargo handling, passenger and traffic services and fixed base operations ("FBOs"). FBOs generally include the provision of terminal services, pilot facilities, maintenance, weather service, flight planning and hangar space to private, executive and corporate aircraft. The Company provides its services to customers pursuant to contractual agreements and currently has approximately 850 such contracts. In addition, the Company has won approximately 55%, 57% and 68% of the new contracts on which it placed competitive bids in fiscal 2001, fiscal 2000 and fiscal 1999, respectively. The Company believes it has a significant market share of into-plane fueling services (based on gallons pumped) at many of its locations, handling an estimated 50% or more of the outsourced commercial fueling requirements at 27 of the 36 locations where it provides such services. The Company handled approximately 9.5 billion gallons of aviation fuel through all of its combined business units during fiscal 2001. 2 In April 1999, the Company was named "Best Aviation Fueler in the World" by an international survey of 41 major airlines, independently conducted by the "World Jet Fuel Report", an industry publication. In October 1999, AVITAS, an aviation consulting firm, performed an independent survey of the Company and its principal competitors, through a blind assessment among 700 senior executives in the airlines industry. ASIG was ranked Number 1 in quality in that survey. In 2000, the Company was named "Best Airport Customer Service Cabin Services and Underwing Supplier" and "Best Full Service Station" (Ft. Lauderdale Airport) by Delta Airlines. The Company was also awarded the "Platinum Supplier Award" from American Airlines. In 2001, the Company was named by American Airlines for the second year in a row a "Supplier Excellence 2000(R) Platinum Supplier" and also a "Best in Class" supplier for the third year in a row. ASIG was named "Fuel Supplier of the Year" by Delta Airlines for the second consecutive year. Company History Prior to April 1, 1998, the Company had no operations. The ASIG business has a long history of providing service in the independent aviation services market with its two main predecessor companies, ASIG Miami Inc. ("Miami"), which was formerly known as Dispatch Services, Inc. and Aircraft Service International, Inc. ("ASII") operating since 1947 and 1952, respectively. Most of the companies comprising the ASIG business were acquired by the Greyhound Corporation (Viad's predecessor) in the late 1960s. On May 20, 1999, ASIG Ground Services, Inc. (formerly Elsinore Acquisition Corporation), a wholly-owned subsidiary of the Company, acquired substantially all the assets of Elsinore, L.P., including Elsinore's 23 operating units in 10 states, the U.S. Virgin Islands and Puerto Rico, which provide a variety of aircraft fueling, ground handling, aircraft cleaning and other aviation services to major commercial airlines. On March 1, 2000, ASIG UK purchased 75% of the stock of Aviation Consultancy Services, a baggage tracing provider. The Company also received an option to purchase the remaining 25% of the stock which the Company exercised on June 12, 2000. The following chart lists the 48 airports in the United States, Europe and the Caribbean where the Company currently provides services:

OPERATING OPERATING LOCATION SINCE LOCATION SINCE ------------------------ --------- ----------------------- ----- Miami, FL 1947 ~~Colorado Springs~~Denver, CO ~~1995~~1993 Tampa, FL 1957 ~~London~~Philadelphia, ~~England-Gatwick~~PA ~~1997~~1993 Ft. Lauderdale, FL 1958 ~~Munich~~Atlanta, ~~Germany~~GA ~~1997~~1994 Los Angeles, CA 1961 ~~Austin~~London, TXEngland-Gatwick ~~1999~~1997 Orlando, FL 1961 ~~Washington~~Munich, DCGermany ~~1999~~1997 San Francisco, CA 1961 ~~Aberdeen~~Austin, ~~Scotland~~TX 1999 West Palm Beach, FL 1962 ~~Manchester~~Washington, ~~England~~DC 1999 Melbourne, FL 1963 ~~Birmingham~~Aberdeen, ~~England~~Scotland 1999 Memphis, TN 1963 ~~Luton~~Manchester, England 1999 Freeport, Bahamas 1969 ~~Billings~~Birmingham, MTEngland 1999 Cincinnati, OH 1969 ~~Boise~~Luton, IDEngland 1999 Nashville, TN 1969 ~~Bozeman~~Billings, MT 1999 New Orleans, LA 1971 ~~Kalispell~~Bozeman, MT 1999 Sarasota, FL 1973 ~~Great Falls~~Kalispell, MT 1999 Pittsburgh, PA 1983 ~~Helena~~Great Falls, MT 1999 Fairbanks, AK 1985 ~~Jackson~~Helena, MSMT 1999 Albuquerque, NM 1987 Lincoln, NE 1999 Burbank, CA 1987 ~~Montgomery~~Missoula, ALMT 1999 Portland, OR 1987 ~~Missoula~~Sacramento, MTCA 1999 ~~Rochester, NY 1987 Oklahoma City, OK 1999~~ Seattle, WA 1987 ~~Shreveport~~Tucson, LAAZ 1999 San Diego, CA 1988 ~~San~~St. ~~Jose~~Thomas, CAVI 1999 3 OPERATING OPERATING LOCATION SINCE LOCATION SINCE ------------------------ --------- ----------------------- ----- London, England-Heathrow 1990 ~~Sacramento~~San Juan, CAPR 1999 Costa Mesa/Santa Ana, CA 1991 ~~Tucson~~Nassau, AZBahamas 1999 Cleveland, OH 1992 ~~St. Thomas~~Detroit, VIMI ~~1999 Denver, CO 1993 San Juan, PR 1999 Philadelphia, PA 1993 Nassau, Bahamas 1999 Atlanta, GA 1994 Dallas, TX~~ 2000 ~~Salt Lake City, UT 2000~~

Industry Overview Independent aviation services include the aviation fueling and aircraft ground services provided by the Company as well as other aviation services, including food service, aircraft maintenance and avionics supplies. The demand for independent aviation services depends on both the amount of airline traffic and the extent to which airlines outsource the provision of these services. Based on airport traffic figures, its own market experience and estimates of revenue received for services rendered per plane, the Company believes that approximately 90% of the total commercial aviation fueling market and approximately 30% of the total commercial ground services market are outsourced by airlines to independent providers such as the Company and that, as a result, the aggregate independent markets for fueling services and ground services at the top 100 North American airports are approximately $300 million and $1.9 billion, respectively. The independent aviation services industry is highly fragmented in both the United States and Europe and is characterized by many operators that provide services at a single or small number of locations. Small operators are likely to face significant competitive pressures as large airlines increasingly deal with fewer and larger suppliers providing a broader range of services at multiple locations. This trend should encourage the consolidation of the industry and enable suppliers to capitalize on economies of scale. For these reasons, the Company believes that industry consolidation will provide opportunities for growth in addition to the growth resulting from increases in airline traffic and outsourcing. Operations Aviation Fueling Services The Company provides fueling services at 18 of the top 50 North American airports (as ranked by Airports Council International in terms of total aircraft movements), including Atlanta, Los Angeles, Miami, Denver, Philadelphia, Pittsburgh and San Francisco. Generally, the Company has custody over, but not ownership of, the fuel it manages and delivers, and thus has limited direct exposure to fluctuations in fuel prices. In fiscal 2001, the Company's aviation fueling services accounted for 62.9% of its revenue. Into-Plane Fueling Services: Into-plane fueling services provided $77.4 ------------------------------ million, $71.7 million and $60.7 million of the Company's revenue in fiscal 2001, 2000 and 1999, respectively. The Company provides into-plane fueling at 36 locations, including major hub airports as well as smaller sites, and in fiscal 2001 delivered fuel to more than 2.5 million flights. Major hub airports where the Company operates include Atlanta, Cincinnati, London (Heathrow and Gatwick), Los Angeles, Memphis, Miami, Munich, Orlando, Philadelphia, Pittsburgh, San Francisco, Salt Lake City, Dallas-Fort Worth and Seattle. At Atlanta Hartsfield International Airport, the Company operates what it believes is the single largest into-plane fueling contract in the world. At Pittsburgh International Airport, the Company provides into-plane fueling for all US Airways flights daily. In 1990, the Company won the into-plane fueling contract for British Airways at the London-Heathrow airport through a competitive bid process and currently supplies fuel to all British Airways flights daily. In May 1997, a subsidiary of the Company, won the contract to maintain and operate the Munich airport owned fuel systems as well as one of two into-plane fuel service licenses. In June 1997, pursuant to an agreement with Esso, the Company began providing into-plane fueling to British Airways and other airlines at the London-Gatwick airport. Fuel System Maintenance and Operations: Fuel system maintenance and ------------------------------------------ operations generated revenue of $14.0 million, $11.4 million and $9.8 million in fiscal 2001, 2000 and 1999, respectively. 4 The Company maintains and operates fuel storage and delivery systems for airline consortia, oil company consortia, individual airlines or local airport authorities in 23 locations, including Los Angeles, Cincinnati, Denver, Ft. Lauderdale, Memphis, Miami, Philadelphia, Pittsburgh and Tampa. In addition, the Company owns and operates six fuel storage and delivery systems in Albuquerque, Melbourne, New Orleans, Orlando, Sarasota and West Palm Beach. The Company's largest fuel system is LAXFUEL in Los Angeles, which the Company believes is the largest airport fuel consortium in the world. Currently comprised of 58 domestic and international airlines, LAXFUEL is operated on a 24-hour basis, receiving fuel from more than 17 suppliers and processing approximately 1,000 fuel accounting transactions each day. In fiscal 2001, the Company managed monthly volume at LAXFUEL of approximately 150 million gallons. The Company first won this contract in 1986 and recently managed a $85 million upgrade of the fuel system. Since the original contract award, the Company has won two additional contracts from LAXFUEL. Other Aviation Services: In addition to the other services discussed the ------------------------- Company sells aviation fuel to retail customers. Aircraft Ground Services In fiscal 2001, the Company's aircraft ground services accounted for 33.8% of revenue. Ground Handling: Ground handling services generated revenue of $38.3 ---------------- million, $34.9 million and $18.8 million in fiscal 2001, 2000 and 1999, respectively. The Company provides ground handling services to over 100 domestic and international airlines at 27 locations and is capable of servicing any size aircraft, from commuter planes to wide-body Boeing 747s. The Company's largest ground handling operation is at Miami International Airport where the Company and its predecessors have been providing ground handling services since 1947. The Company has over 600 employees servicing 86 airlines and approximately 2,500 flights per month at Miami International Airport. The Company also operates and maintains the computerized baggage system for the entire "B" and "F" concourses and handles the Federal Inspection Service baggage distribution for all international carriers at the airport. Aircraft Interior Grooming: Aircraft interior grooming generated revenue --------------------------- of $1.2 million, $4.0 million and $15.4 million in fiscal 2001, 2000 and 1999, respectively. The Company provides aircraft interior grooming services at 34 locations and has the capability to expand these services throughout the Company's entire network. This decrease in fiscal 2001 is due to the loss of the Company's contract with Delta Airlines at several ASIG Ground Services, Inc, locations. The decrease in fiscal 2000 is due to the loss of the Company's contract with British Airways' for grooming at Heathrow. This contract generated $9.8 million in revenues and $2.2 million in EBITDA in fiscal 1999. Cargo Handling: The Company provides cargo-handling services primarily in --------------- conjunction with its ground handling operations. The Company handles both domestic and international cargo as well as specialized cargo and hazardous shipments. Other Ground Services: The Company also provides certain airline customers --------------------- at its Ft. Lauderdale, Miami, Orlando and Tampa locations with passenger handling services, and from time to time provides such services to charter airline customers in Albuquerque and Pittsburgh. The Company often fulfills its customers' particular needs by providing specialized staff who may be multilingual or trained for specific tasks. In addition, the Company provides certain airline customers in Miami and Orlando with flight operations and load control, including communications, flight dispatch, weight and balance information, flight planning, weather service and diplomatic clearances. The Company operates limited FBOs in Albuquerque, Freeport, Bahamas and Orlando, where it provides terminal services, pilot facilities, line maintenance, worldwide weather service, flight planning and hanger space for private, executive and corporate aircraft. The Company also operates United's VIP lounge at the London-Heathrow airport. 5 Customers The Company's customer base is comprised of airlines, airport authorities and oil companies. The Company currently has customer relationships with most of the major domestic and international airlines, including American, British Airways, Continental, Delta, Northwest, United and US Airways, as well as many regional and smaller carriers. The Company also has customer relationships with many leading airport authorities and oil companies. In fiscal 2001, the Company's two largest customers, Delta and Northwest, accounted for approximately 18.7% and 6.7% of revenue, respectively, and the Company's top ten customers accounted for approximately 49.1% of revenue. Sales and Marketing The Company's sales and marketing staff is comprised of five professionals who average over 10 years of experience with the Company. All sales personnel are compensated through salary plus an incentive bonus based on the Company's overall performance. The Company markets its services through a combination of customer visits, membership in trade organizations, participation in International Air Transportation Association and National Air Transportation Association trade shows and seminars, and sponsorship of events at annual meetings of consortia that own major fuel storage and delivery systems. Informational marketing also takes place on a daily basis through interaction with the Company's customers at all levels of their respective organizations. The Company wins the majority of its new business through the competitive bid process. The Company has won approximately 55%, 57% and 68% of the new contracts on which it placed competitive bids in fiscal 2001, 2000 and 1999, respectively. The Company currently has approximately 850 contracts. In fiscal 2001, the Company's largest contract accounted for 5.1% of revenue, and no other contract accounted for more than 2.5% of revenue. The majority of the Company's contracts have an industry standard initial term of one year, although the Company's larger contracts generally run for initial terms of three to five years. The Company also pursues periodic efforts to acquire other companies and establish or expand joint ventures as part of its business development effort. The acquisition of ASIG Ground Services, Inc. (formerly Elsinore) and the ESSO joint venture are examples of these activities. Competition The aircraft services industry is highly fragmented, consisting of a limited number of well-capitalized companies, which offer a broad range of services, a large number of smaller, specialized companies and subsidiaries established by major airlines to provide certain services. The Company's major competitors include Airport Group International Inc., World Wide Flight Services, DynAir, Hudson General Corporation, Mercury Air Group, Inc., Ogden Aviation Services Inc. and Signature Flight Support Corp. The Company believes that the principal competitive factors in the aviation services industry are quality, safety, turnaround time, overall customer service, technical capabilities of personnel and price. Environmental The Company is subject to compliance obligations and liabilities imposed pursuant to federal, state, local and foreign environmental and workplace health and safety requirements, including The Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"). In particular, the Company's aircraft fuel handling operations are subject to liabilities and obligations relating to the aboveground and underground storage of, and the release and cleanup of, petroleum products. The Company monitors its environmental responsibilities. Despite such efforts, the possibility exists that noncompliance could occur or be identified in the future, the penalties or corrective action costs associated with such could be material. In addition, 6 requirements are complex, change frequently, and tend to become more stringent over time. There can be no assurance that these requirements will not change in the future in a manner that could materially and adversely affect the Company. The Company is currently conducting or funding, or expects to conduct or fund, environmental investigations, monitoring and cleanups at certain of its previously or currently operated facilities. At certain facilities at which the Company provides into-plane fueling services or maintains and operates a fuel storage and delivery system, environmental remedial costs have been borne by the owners of airport fueling systems rather than the Company. In addition, the Company has in place other legal arrangements (e.g., contractual indemnities, insurance policies, allocation agreements and state funding mechanisms for cleanup of pollution from storage tanks) which it believes significantly mitigate the foregoing liabilities. However, the Company cannot guarantee that the state programs will continue to have funds available for the cleanup of tank sites. In the event that these or other legal arrangements fail, the Company could bear direct liability for the foregoing or any future matters and such liability could be material. In addition, there can be no assurance that future environmental investigations by the Company will not identify other environmental conditions requiring material expenditures of funds. From time to time, the Company receives notices of potential liability, pursuant to CERCLA or analogous state laws, for cleanup costs associated with offsite waste recycling or disposal facilities at which wastes associated with its operations have allegedly come to be located. Liability under CERCLA is strict, retroactive, and joint and several, although such liability is often allocated among multiple responsible parties. In the past several years, such notices have been received for the Peak Oil site in Tampa, Florida; the South Eighth Street Landfill site in West Memphis, Arkansas; the Wingate Road site in Ft. Lauderdale, Florida; and the Petroleum Products Corporation site in Pembroke Pines, Florida. With respect to all such sites, the Company either has settled its liability (Peak Oil), expects its liability to be de minimis and fully indemnified by Viad (South Eighth Street), or has denied liability altogether (Wingate Road and Petroleum Products). The possibility exists that the Company will receive additional notices of CERCLA-type liability in the future. In light of the relatively small volume of waste typically contributed by the Company, the applicability of the CERCLA "petroleum exemption" to certain of its wastes, the large numbers of parties typically involved in such sites, and the availability of contractual indemnifications, although there can be no assurance in this regard, the Company currently expects that its future liabilities for cleanup of offsite disposal facilities will not be material. Subject to certain time and dollar limitations, Viad has agreed to indemnify the Company with respect to certain pre-Acquisition environmental liabilities, including all known and unknown onsite and offsite contamination matters. Based upon its environmental due diligence investigation, the Company believes that such indemnification, coupled with the legal arrangements set forth above, provide sufficient protection with respect to environmental liabilities. In the event that Viad fails to honor this indemnification, the Company could bear direct liability for such matters and such liability could be material. Employees As of March 31, 2001, the Company employed 3,777 people. Approximately 61.0% of the Company's employees are represented by labor unions. There are currently approximately 34 collective bargaining contracts (among 7 separate union entities) in place, almost all of which have terms of three years. Contract expirations are staggered with approximately one-third coming up for renewal each year. The Company believes that it has had good relations with the several unions representing its employees. Information about geographic revenues, operating profits and identifiable assets attributable to each of the Company's geographic areas is reported in the footnotes to the financial statements. See Note 15 in the Notes to Consolidated Financial Statements. 7 Item 2. Properties The Company's principal corporate offices are located adjacent to the Fort Lauderdale International Airport in Broward County, Florida. The Company's operating facilities are in: Albuquerque, NM Melbourne, FL Aberdeen, Scotland Memphis, TN Atlanta, GA Miami, FL Austin, TX Missoula, MT Belgrade, MT Munich, Germany Billings, MT Nashville, TN Birmingham, England Nassau, Bahamas Burbank, CA New Orleans, LA Cincinnati, OH Orlando, FL Cleveland, OH Philadelphia, PA Costa Mesa/Santa Ana, CA Pittsburgh, PA Denver, CO Portland, OR Detroit, MI San Diego, CA Fairbanks, AK San Francisco, CA Freeport, Bahamas San Juan, PR Ft. Lauderdale, FL Sarasota, FL Gatwick - London, England Seattle, WA Great Falls, MT San Jose, CA Heathhrow - London, England St. Thomas, VI Helena, MT Tampa, FL Kalispell, MT Tucson, AZ Lincoln, NE Washington, DC Los Angeles, CA West Palm Beach, FL Luton, England Manchester, England The Company generally considers the facilities it leases adequate and suitable for the requirements of each of its operations. Adequate space is available at the corporate offices to accommodate expansion needs. Item 3. Legal Proceedings The Company and certain of its subsidiaries and affiliates are plaintiffs or defendants in various actions, proceedings and claims, including environmental claims. Some of the foregoing involve or may involve compensatory or other damages. Litigation is subject to many uncertainties and although liability, if any, is not ascertainable, the Company believes that any resulting liability will not materially affect the Company's financial position or the results of its operations. Item 4. Submission of Matters to a Vote of Security Holders Not applicable. 8 PART II Item 5. Market for the Company's Common Equity and Related Security Holder Matters The Company is 100% owned by Ranger Aerospace Corporation and accordingly, there is no established public trading market for the Company's common stock. See "Item 11 - Executive Compensation - Sale of Equity" for a discussion of sale of securities in fiscal 2001 by Ranger Aerospace Corporation. Item 6. Selected Financial Data The selected financial data set forth below should be read in conjunction with the financial statements of the Company and its Predecessor and related notes thereto included elsewhere in this Form 10-K and with "Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operation" included herein.

(Dollars in thousands, except per share data) SUCCESSOR PREDECESSOR (CONSOLIDATED) (COMBINED) -------------- --------- THREE MONTHS YEAR ENDED ~~YEAR~~ ENDED ~~ENDED~~ MARCH 31, MARCH 31, ~~MARCH 31,~~ YEAR ENDED DECEMBER 31, 2001 2000 1999 1998 1997 1996 ~~1995~~ --------- --------- --------- --------- --------- --------- STATEMENT OF OPERATIONS DATA: Revenues. .$161,983 ~~. . . . . . . . . . . . . . . . . . . .~~ $141,044 $123,441 $30,156 $119,325 $121,574 ~~$111,658~~ Costs and Expenses: Operating ~~Expenses~~expenses .136,664 ~~. . . . . . . . . . . . . . .~~ 116,409 99.,035 25,986 97,116 101,903 ~~92,893~~ Selling, general and administrative. .10,648 ~~. . . . . .~~ 13,266 8,865 1,818 7,581 8,291 ~~7,114~~ Depreciation and amortization. .11,620 ~~. . . . . . . . .~~ 10,235 8,721 1,119 4,604 4,420 ~~4,340~~ --------- --------- --------- --------- --------- --------- Total costs and expenses .158,932 ~~. . . . . . . . . . . .~~ 139,910 116,621 28,923 109,301 114,614 ~~104,347~~ Operating income. .3,051 ~~. . . . . . . . . . . . . . . .~~ 1,134 6,820 1,233 10,024 6,960 ~~7,311~~ Other income (expense), net .88 ~~. . . . . . . . . . .~~ 24 (253) (57) (71) (45) 47 Interest income .40 ~~. . . . . . . . . . . . . . . . .~~ 100 207 73 350 343 ~~842~~ Interest and other financial expense. .(10,939) ~~. . . . . .~~ (10,583) (11,281) (170) (669) (606) ~~(620)~~ --------- --------- --------- --------- --------- --------- Income (loss) before income taxes .(7,760) ~~. . . . . . . .~~ (9,325) (4,507) 1,079 9,634 6,652 ~~7,580~~ Income taxes. .46 ~~. . . . . . . . . . . . . . . . . .~~ -- 50 347 3,602 2,433 ~~2,563~~ --------- --------- --------- --------- --------- --------- Net income (loss) before extraordinary item .(7,806) ~~. . .~~ (9,325) (4,557) 732 6,032 4,219 ~~5,017~~ Extraordinary loss on early extinguishment of debt. -- -- (213) -- -- -- -- --------- --------- --------- --------- --------- --------- Net income (loss) .$ .(7,806) ~~. . . . . . . . . . . . . . .~~ $ (9,325) $ (4,770) $ 732 $ 6,032 $ 4,219 ~~$ 5,017~~ ========= ========= ========= ========= ========= =========

(Dollars in thousands, except per share data) SUCCESSOR PREDECESSOR (CONSOLIDATED) (COMBINED) -------------- --------- THREE ~~YEAR~~MONTHS YEAR ~~MONTHS~~ ENDED ENDED YEAR ENDED MARCH 31, MARCH 31, ~~MARCH 31, YEAR ENDED~~ DECEMBER 31, 2001 2000 1999 1998 1997 1996 ~~1995~~ --------- ---------- -------- -- -------- --------- -------- STATEMENT OF CASH ~~FLOW~~FLOWS DATA: Net cash (used in) provided by operating activities. $ 6,056 $ (778) $ 6,645 $ 4,995 $ 17,139 $ 7,161 ~~$ 5,060~~ Net cash used in investing activities .(3,831) ~~. . . . . . .~~ (13,859) (102,556) (2,666) (4,300) (9,061) ~~(4,402)~~ Net cash provided by (used in) financing activities .(2,012) 11,747 99,222 (2,329) (13,030) 2,091 ~~(806)~~ OTHER DATA: EBITDA(a) .$14,671 .$ .11,369 .$ .15,541 .$ .2,352 .$ .14,628 .$11,380 .Capital .expenditures .3,839 .8,027 .13,431 .2,666 .3,947 .9,061 .BALANCE .SHEET .DATA .(AT END OF PERIOD): SUCCESSOR PREDECESSOR ------------------------------- ----------------------------- Cash $ ~~11,369~~634 $ ~~15,541~~421 $ 23,~~352~~311 $ ~~14,628~~0.1 $~~11,380~~ - $~~11,651~~ ~~Capital~~191 ~~expenditures.~~Total .assets .125,982 .132,332 .123,754 .- .41,930 .38,602 .Total .debt .88,909 .91,114 .82,927 .- .91 .173 .Total 8stockholder's equity 5,~~027~~666 13,~~431~~686 219,~~666~~350 ~~3,947~~0.1 914,~~061~~557 415,~~402~~433

(a) EBITDA is defined herein as net income (loss) before interest, income taxes, depreciation, amortization and other income (expense). Although EBITDA is not a measure of performance calculated in accordance with generally accepted accounting principles, the Company has included information concerning EBITDA in this annual report because it is commonly used by certain investors and analysts as a measure of a company's ability to service its debt obligations. The Company's calculation of EBITDA may not be comparable to similarly titled measures reported by other companies since all companies do not calculate this non-GAAP measure in the same manner. The Company's EBITDA calculation is not intended to represent cash used in operating activities, since it does not include interest and taxes and changes in operating assets and liabilities, nor is it intended to represent the net increase or decrease in cash, since it does not include cash provided by (used in) investing and financing activities. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion of the Company's consolidated historical results of operations and financial condition should be read in conjunction with the financial statements and the Notes thereto which appear in Part II, Item 8 of this 10-K. Overview The Company's business includes aviation fueling services (62.9% of fiscal 2001 revenues), aircraft ground services (33.8%) and other aviation services (3.3%). Aviation fueling services are comprised primarily of into-plane fueling, maintenance and operation of fuel storage and delivery systems and the retail sale of fuel products. Generally, the Company has custody over, but not ownership of, the fuel it manages and delivers. Aircraft ground services consist primarily of ground handling, aircraft interior grooming, cargo handling, passenger and traffic services and FBO's. 10 On April 1, 1998, an investor group capitalized Ranger Aerospace Corporation (the 100% owner of the Company) with an aggregate investment of $24.1 million, all of which was contributed as equity to the Company in return for all of its outstanding common stock. The net proceeds from the equity investment and the Company's issuance of $75 million of Senior Increasing Rate Notes were used to consummate the acquisition of the ASIG business from Viad for $95 million (subject to final adjustments). Concurrent with the acquisition of the ASIG business (the "Acquisition"), the Company entered into a $10 million senior credit facility which was subsequently amended in May 1999 and increased to $15 million to consummate the purchase of Elsinore, L.P. Additional equity of $3.7 million was contributed to the Company in August 1999. Revenues Into-plane fueling service consists of providing airplanes with specified amounts of fuel from fuel storage facilities located at or near the airport. The Company generally records revenue from its into-plane fueling contracts based on a fee per gallon of fuel delivered. Fuel system maintenance and operation consists of the maintenance and operation of the fuel storage and delivery systems at an airport. These systems are typically composed of storage tanks, pumps, pipes and filter/separators. The Company generally records revenue from its maintenance and operation contracts based on reimbursement of costs, plus an additional monthly fee. In addition, the Company sells aviation fuel to private aircraft at retail prices at locations where it has FBOs. Ground handling services consist of the provision of ground handling crews and all necessary ground support equipment to process airline flights through the full range of on-the-ground services. Aircraft interior grooming consists of the cleaning of aircraft cabins between flights and cargo handling consists of the loading, warehousing and documentation of cargo. Passenger and traffic services include passenger ticketing, check-in and boarding, security clearance, special assistance and skycap services. FBOs generally include the provision of terminal services, pilot facilities, maintenance, weather service, flight planning and hangar space to private, executive and corporate aircraft. For each of these aircraft ground services, other than FBOs, the Company is generally compensated by a fixed fee for each aircraft serviced, based on the size of the aircraft. For FBOs, the Company is generally compensated by a fixed fee for specific services rendered. The Company provides its services to its customers pursuant to contractual agreements and currently has approximately 850 such contracts. In fiscal 2001, the Company's largest contract accounted for 5.1% of revenue, and no other contract accounted for more than 2.5% of revenue. The majority of the Company's contracts have an industry standard initial term of one year, although the Company's larger contracts generally run for initial terms of three to five years. Costs and Expenses The Company's principal operating expenses are labor costs and direct supervision at its stations along with related benefits and payroll taxes, cost of fuel sold, workers' compensation, property and liability insurance, rent expense, repairs and maintenance expenses and miscellaneous other direct station-related expenses. Certain of these expenses are relatively fixed, regardless of the extent of operations at a particular station, including the cost of the facility, station management and related administrative expenses. Selling, general and administrative expenses include the costs of marketing the Company's services, general supervision provided to the stations, acquisition-related expenses and accounting, finance and personnel related expenses. These costs are generally comprised of labor costs and related benefits and payroll taxes, legal and other professional fees and miscellaneous expenses. 11 Results of Operations The following table summarizes the Company's results of operations for the periods indicated (dollars in millions):

~~BALANCE~~Year ~~SHEET~~ended ~~DATA~~March ~~(AT~~31, ~~END~~2001 OF2000 ~~PERIOD):~~1999 ~~SUCCESSOR~~------------------- ~~PREDECESSOR~~ ------------------- -------------- ~~Cash~~Revenues $ 162.0 100.0% $ 141.0 100.0% $123.4 100.0% Costs and expenses: Operating expenses 136.7 84.4% 116.4 82.6% 99.0 $80.2% ~~421~~Selling, $general ~~3,311~~and $administrative 010.16 $6.5% -13.2 $9.4% ~~191~~8.9 $7.2% -Depreciation ~~Total~~and ~~assets~~amortization 11.6 7.2% 10.2 7.2% 8.7 7.1% .------------------- ~~132,332~~------------------- ~~123,754~~ -------------- ~~41,930~~Operating ~~38,602~~Income ~~43,160~~$ ~~Total~~3.1 ~~debt~~1.9% $ 1.2 .8% $ 6.8 5.5% =================== =================== ============== Net income (loss) $ (7.8) (4.8)% $ (9.3) (6.6)% ~~90,075~~$ ~~82,927~~(4.8) -(3.9%) 91=================== ~~173~~=================== ~~247~~============== ~~Total~~EBITDA ~~stockholder's~~$ ~~equity~~14.7 ~~13,686~~9.2% ~~19,350~~$ 011.4 8.1% ~~14,557~~$ 15~~,433~~.5 ~~17,692~~12.6% =================== =================== ==============

Company's Fiscal Year Ended March 31, 2001 Compared to March 31, 2000 Revenues increased $21.0 million or 14.9%, from $141.0 million to $162.0 million in fiscal 2001. The increase was attributable to, among other things, new business and increased activity on existing contracts. The largest impact on the increase in revenue was caused by new contracts at our Miami and Detroit locations which accounted for $5.6 million of the revenue increase from fiscal 2000 to fiscal 2001. Operating expenses increased $20.3 million or 17.4%, from $116.4 million to $136.7 million in fiscal 2001 as compared to fiscal 2000. The increase was attributable to, among other things, new business and increased activity on existing contracts. In addition, during fiscal 2001 the company experienced rising labor and insurance costs mainly related to a tight labor pool, impact of new operating leases (which the Company first began in January 2000) and a tougher insurance market. Selling, general and administrative expenses decreased $2.6 million or 19.7%, from $13.2 million to $10.6 million in fiscal 2001 as compared to fiscal 2000. The decrease is primarily attributable to, among other things, one time write-offs of failed acquisition costs and Viad collection costs taken in fiscal 2000 which totaled $3.5 million. Depreciation and amortization expense increased $1.4 million or 13.7%. This increase is primarily attributable to the depreciation on new equipment purchases. As a result of the above factors, operating income increased $1.9 million or 158%, from $1.2 million in fiscal 2000 to $3.1 million in fiscal 2001. The increase was primarily attributable to, among other things, new business and increased activity on existing contracts along with one time write-offs from fiscal 2000 offset partially by increased operating costs most notably labor and insurance. Interest and other financial expenses increased $0.3 million or 3.2%, from $10.6 million in fiscal 2000 to $10.9 million in fiscal 2001. Income taxes increased $.05 million for fiscal 2001. Net loss decreased $1.5 million or 16.1%, from $(9.3) million in fiscal 2000 to $(7.8) million in fiscal 2001. The decrease was primarily attributable to the factors described above. For the year ended March 31, 2001, EBITDA increased by $3.3 million or 28.9%, from $11.4 million in fiscal 2000 to $14.7 million in fiscal 2001. The increase was primarily attributable to the factors described above. 12 Company's Fiscal Year Ended March 31, 2000 Compared to March 31, 1999 Revenues increased $17.6 million or 14.3%, from $123.4 million to $141.0 million in fiscal 2000. The increase was attributable to, among other things, new business, increased activity on existing contracts and acquisitions of Elsinore L.P. and GAH offsetting the loss of the British Airways Grooming contract. The acquisitions of Elsinore L.P. and GAH generated revenues of $12.8 million in fiscal 2000. The British Airways grooming contract generated $9.8 million of revenue in fiscal 1999. Hurricane Floyd caused severe damage to the Freeport operation, which resulted in a revenue loss of $0.3 million. Thus, for the year ended March 31, 2000, core business (business excluding the British Airways grooming contract, the acquisition of Elsinore, L.P. and GAH and the loss due to Hurricane Floyd), revenue increased $14.9 million or 13.1%. Operating expenses increased $17.4 million or 17.1%, from $99.0 million to $116.4 million. The increase was attributable to, among other things, increase in operating expenses related to the acquisitions of Elsinore LP and GAH of $11.3 million, and a decrease in operating expenses due to the loss of the British Airways grooming contract of $7.6 million. For the year ended March 31, 2000, operating expenses included a $0.2 million loss on retirement of fixed assets and $0.3 million of costs associated with start-up costs. Thus, for the year ended March 31, 2000, core business (business excluding the British Airways grooming contract, the acquisition of Elsinore, L.P. and GAH, loss on retirement of fixed assets and start-up costs and including the impact of Hurricane Floyd), operating expenses increased $13.8 million or 15.8%. Core business operating expenses as a percentage of core revenues increased 1.4% from 80.5% to 81.9%. The increase in core operating expenses as a percentage of core revenue was mainly due to increases in operating expenses at three stations. Two of the stations had significant reductions in flights from South America as a result of the weakened South America economy. Operating expenses as a percentage of revenue at the third station increased due to inefficiencies associated with the set up and implementation of fixed fueling carts. Selling, general and administrative expenses increased $4.3 million or 48.3% from $8.9 million to $13.2 million. The increase is primarily attributable, among other things, to a write-off of $2.8 million of acquisition expenses related to the pursuit of failed acquisitions and a write-off of $0.7 million mainly related to costs incurred in the pursuit of the collection of the receivable due from Viad. Of the remaining increase of $0.9 million, $0.7 million is attributable to a restructuring in the finance department, which is not expected to reoccur. Depreciation and amortization increased $1.5 million or 17.2%. The acquisitions accounted for $0.3 million of the increase. The remaining increase of $1.2 million is primarily attributable to the depreciation on new equipment purchases. As a result of the above factors, operating income decreased $5.6 million or 82.4% from $6.8 million to $1.2 million. This decrease was primarily attributable to the write-offs taken in 2000 related to the failed acquisition costs of $2.8 million, Viad collection costs of $0.7 million, an increase in depreciation and amortization of $1.5 million, and the loss of the British Airways grooming contract which generated $2.2 million of operating income in 1999. Interest and other financial expense decreased $0.7 million or 6.2% from $11.3 million to $10.6 million. This decrease is mainly attributable to financing costs incurred in 1999 related to the issuance of the $75 million Senior Increasing Rate Notes which were written off in 1999 upon the issuance of the $80 million Senior Notes due 2005. Income Taxes remained constant at $0.1 million for both fiscal years. Accordingly, net loss increased $4.5 million or 93.8% from $(4.8) million to $(9.3) million. 13 For the year ended March 31, 2000, EBITDA decreased by $4.1 million or 26.5% from $15.5 million to $11.4 million. EBITDA for the year ended March 31, 2000 included several one-time expenses (write off of failed acquisition expenses ($2.8 million), the Viad collection costs ($0.7 million), the additional costs associated with the restructuring of the finance department ($0.7 million), the adverse effect of Hurricane Floyd ($0.2 million), start up costs ($0.3 million) and the loss on retirement of fixed assets ($0.2 million). EBITDA for March 31, 2000 associated with the acquisitions of Elsinore and GAH was $1.5 million. Thus, core EBITDA increased $1.5 million or 11.3% from $13.3 million to $14.8 million. (EBITDA for March 31, 1999 associated with the lost British Airways Grooming contract was $2.2 million.) Furthermore, the adjusted EBITDA for the year ended March 31, 2000 of $16.3 million (core EBITDA of $14.8 million plus $1.5 million of Elsinore and GAH EBITDA) compares with $13.3 million of adjusted EBITDA (excluding the lost British Airways Grooming contract) for the year ended March 31, 1999. Liquidity and Capital Resources Net cash provided by (used in) operating activities was $6.1 million for fiscal 2001, as compared to $(0.8) million for fiscal 2000. Net cash provided by operating activities increased primarily due to a decrease in the net loss of $1.6 million from a loss of ($9.3) million in 2000 to a loss of ($7.7) million in 2001. Net cash provided by (used in) operating activities was $(0.8) million for fiscal 2000, as compared to $6.6 million for fiscal 1999. Net cash used in operating activities increased primarily due to an increase in the net loss of $4.5 million from a loss of ($4.8) million in 1999 to a loss of ($9.3) million in 2000. Cash used for working capital requirements increased $1.9 million from $(2.3) in 2000 to $(0.4) million in 1999. Net cash used in investing activities was $3.8 million for fiscal 2001, as compared to $13.9 million for fiscal 2000. The decrease was primarily attributable to the decrease in capital spending by leasing new equipment. Net cash used in investing activities was $13.9 million for fiscal 2000 as compared to $102.6 million for fiscal 1999. The decrease was primarily attributable to the decrease in acquisition expenses of $83.1 million and a decrease in capital spending of $5.4 million. Net cash provided by (used in) financing activities was $(2.0) million for fiscal 2001, as compared to $11.7 million for fiscal 2000. This decrease is due to an increase in borrowings of $2.6 million, a repayment on a note of $0.5 million and a decrease in equity infusion of $3.7 million. Net cash provided by financing activities was $11.7 million for fiscal 2000 and $99.2 million for fiscal 1999. This decrease is primarily due to a decrease in the issuance of common stock of $20.4 million and a decrease in borrowings of $67.1 million after finance costs and an infusion of $3.7 million in 2000. As of March 31, 2001, the Company had long-term indebtedness of $80.0 million in the form of its Series B 11% Senior Notes due 2005 and $4.0 million of under its Senior Credit Facility. The Company's primary sources of liquidity are from cash flow provided by operations, borrowings under its Senior Credit Facility and cash infusion from the Parent. In July 2000, the Company amended its Senior Credit Facility to increase the amount available under the Facility to $15,000,000. Based upon the successful implementation of management's business and operating strategy, the Company believes that these funds will provide it with sufficient liquidity and capital resources to meet current and future financial obligations, including the payment of principal and interest on the 11% Senior Notes, as well as to provide funds for the Company's working capital, capital investments and other needs for the next twelve months. However, recently the workers compensation insurance market and the bond surety market have tightened up significantly requiring much stronger collateralization to secure the workers compensation insurance policy and the various performance bonds which are required under several of the Company's operating agreements at some of the airports that the Company serves. If these markets do not relax their collateral requirements by April 1, 2002 when the Company's workers compensation policy and several of the performance bonds are scheduled to be renewed, the Company may have to restructure its Senior Credit Facility or seek additional capital to cover the increased collateral requirements. The Company's future operating performance and ability to service or refinance the 11% Senior Notes and to repay, extend or refinance its Senior Credit Facility will be subject to future economic conditions and to financial, business and other factors, many of which are beyond the Company's control. There can be no assurance that such sources of 14 funds will be adequate and that the Company will not require additional capital from borrowings or securities offerings to satisfy such requirements. In addition, there can be no assurance that the Company will have sufficient available capital resources to realize its acquisition strategy. Such future acquisitions, depending on their size and the form of consideration, may require the Company to seek additional debt or equity financing. Recent Developments DEFINITIVE AGREEMENT FOR MERGER On November 15, 2000, Ranger, the Company, and Signature Flight Support Corporation ("Buyer"), a wholly-owned subsidiary of BBA Group, plc ("BBA") announced that they entered into a definitive agreement (the "Merger Agreement") under which Signature will acquire Ranger stock for a total consideration of approximately $152 million, in addition to the assumption of the Senior Notes and the repayment of the Company's debt (the "Merger"). Closing of the Merger is subject to the satisfaction or waiver of the following conditions: - any waiting period applicable to the consummation of the Merger under the Hart Scott Rodino Act shall have expired or been terminated and the Company and Buyer shall have received the required consent and approval of the German Merger Control Authority; - no Governmental Entity or federal or state court of competent jurisdiction shall have enacted, issued or enforced any statute, regulation, decree, injunction or other order which has become final and nonappealable and which prohibits the consummation of the Merger; - the Company shall have obtained any necessary consent or approval required by the Gatwick Airport Authority; - all outstanding warrants and options issued by the Company shall, by the terms of any agreement or plan pursuant to which they were issued, entitle the holders thereof to receive only the consideration set forth in the Merger Agreement; and - the Company's shareholders shall have approved the Merger. The Merger is also subject to the following additional conditions: - The representations and warranties of the Company contained in the Merger Agreement (disregarding any qualifications as to materiality or Company Material Adverse Effect or similar qualifications contained therein) shall be true and correct in all respects as of the date the Merger Agreement was executed and as of the closing of the Merger as though made on and as of the date of the closing of the Merger, except for those failures of such representations and warranties to be true and correct which individually or in the aggregate would not be reasonably likely to have a Company Material Adverse Effect. For this purpose, Company Material Adverse Effect is defined as, "any change or effect that is or would be materially adverse to the assets, business, prospects, results of operations or financial condition of the Company and the Company subsidiaries, taken as a whole (other than changes or effects that are the result of economic factors affecting the economy or financial markets as a whole or generally affecting the aviation services markets or that arise out of or result from actions contemplated by the parties in connection with this Agreement or the announcement or performance of this Agreement or the transactions contemplated by this Agreement)." - The Company and the Shareholders shall have performed and complied with all of their respective covenants hereunder in all material respects through the closing. - The Company shall have delivered to the Buyer and Merger Subsidiary a certificate signed by an executive officer of the Company to the effect that each of the conditions noted above are satisfied in all respects. 15 - The representations and warranties of the Buyer contained in the Merger agreement shall be true and correct in all material respects. - The Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the closing. - The Buyer shall have delivered to the Company a certificate signed by an executive officer of the Buyer to the effect that each of the conditions noted above are satisfied in all material respects. The consummation of the Merger will trigger Change of Control provisions under ASIG's $80,000,000 Senior Notes, thus requiring the Buyer to tender for the bonds at a purchase price equal to 101% of the principal amount. On January 4, 2001, the Buyer commenced a tender offer for all of the outstanding 11% Senior Notes due 2005 of the Company. In connection with the tender offer, the Buyer sought consents to certain proposed amendments to the Indenture under which Senior Notes were issued. The purpose of the proposed amendments is to eliminate certain restrictive covenants contained in the Indenture, thereby affording the Company additional financial and operational flexibility. The purchase price under the tender offer was $1,181.89 per $1,000 principal amount of Senior Notes tendered (of which $20 constitutes a consent payment), plus accrued but unpaid interest to (but excluding) the date of payment of such purchase price. The tender offer is conditioned upon, among other things, the receipt of the requisite consents to adopt the proposed amendments and the completion of the Merger. The offer was made only by an Offer to Purchase and Consent Solicitation Statement dated January 4, 2001 and the Related Letter of Transmittal and Consent. On February 14, 2001, counsel for the Buyer informed the Company that the Buyer believed the first additional closing condition listed above has not been satisfied. The Company informed the Buyer that it believed all closing conditions other than the expiration or termination of the waiting period under the Hart Scott Rodino Act have been satisfied. On May 22, 2001, the Company and the Buyer agreed to amend and restate the original Merger Agreement between them, dated as of November 14, 2000 to resolve a dispute over whether the variance between Ranger's actual and budgeted results of operations and certain other changes constituted a material adverse change under the terms of the original Merger Agreement. The aggregate consideration to be paid by the Buyer to the holders of Ranger common stock had been reduced to $136.5 million under the amended and restated Merger Agreement. In connection with the Merger, on Friday, May 25, 2001, the Buyer amended its tender offer and consent solicitation for 100% of the 11% Senior Notes due 2005 of ASIG (the "Securities"). Pursuant to this revised tender offer and consent solicitation, the Buyer offered to purchase all of the outstanding Securities at a price equal to 100% of the principal amount of the Securities plus all accrued but unpaid interest thereon. As of the expiration of the tender offer less than 100% of the Senior Notes had been validly tendered. On June 22, 2001, the Company and the Buyer agreed to amend the amended and restated Merger Agreement to further reduce the aggregate consideration paid by the Buyer in the Merger. This reduction in consideration was agreed to by the Company and Buyer because less than 100% of the Senior Notes had been tendered to the Buyer under its May 25, 2001 offer to purchase the Senior Notes at a price equal to 100% of the principal amount thereof, plus all accrued but unpaid interest thereon. Under this amendment to the amended and restated Merger Agreement, the Buyer agreed to revise its tender offer to purchase 100% of the Senior Notes at a price equal to 104% of the principal amount thereof, plus all accrued but unpaid interest thereon. 16 In connection with the Merger on June 22, 2001, the Buyer amended its tender offer and consent solicitation for 100% of the Securities. Pursuant to the revised tender offer and consent solicitation, Signature will offer to purchase all of the outstanding Securities at a price equal to 104% of the principal amount of the Securities plus all accrued but unpaid interest thereon. The amended offer will expire at 10:00 a.m., New York City time, on July 10, 2001, unless extended. There is no assurance that the Merger will occur. Environmental Matters The Company is subject to compliance obligations and liabilities imposed pursuant to federal, state, local and foreign environmental and workplace health and safety requirements, including CERCLA. In particular, the Company's aviation fueling services are subject to liabilities and obligations relating to the above ground and underground storage of, and the release and cleanup of, petroleum products. Although the Company believes it is in material compliance with environmental, health and safety requirements, the possibility exists that noncompliance could occur or be identified in the future, and the penalties or costs of corrective action associated therewith could have a material adverse effect on the Company's business, operating results and financial condition. In addition, requirements are complex, change frequently and have tended to become more stringent over time, and there can be no assurance that these requirements will not change in the future in a manner that could materially and adversely affect the Company. The Company is currently conducting or funding, or expects to conduct or fund, environmental investigations, monitoring and cleanups at certain of its previously or currently operated facilities. Also, from time to time, the Company receives notices of potential liability for cleanup costs associated with offsite waste recycling or disposal facilities at which wastes associated with its operations allegedly have come to be located. In addition, airport authorities are coming under increasing pressure to clean up previous contamination at their facilities and are seeking financial contribution from airport tenants and companies which operate at their airports. Although the Company has taken steps to mitigate or remove the foregoing liabilities, the Company could bear direct liability for the foregoing matters and such liability could have a material adverse effect on the Company's business, operating results and financial condition. Euro Conversion Issue On January 1, 1999, certain member countries of the European Union established fixed conversion rates between their existing currencies and the European Union's common currency ("Euro") and adopted the Euro as their common legal currency. The transition period for the introduction of the Euro will be between January 1, 1999 and January 1, 2002. The Company is currently evaluating the effects of the Euro conversion as it relates to the conversion of information technology systems, recalculating currency risk, strategies concerning continuity of contracts and the impact on its operations and financial condition, particularly as the Euro conversion relates to the Company's European operations. Based on its work to date, the Company believes the Euro conversion will not have a material adverse impact on the Company's consolidated financial statements. Recent Accounting Pronouncements In fiscal 1999, the Company adopted Statement of Financial Accounting Standards No. 132, "Employers' Disclosures about Pensions and Other Postretirement Benefits-an amendment of FASB Statements No. 87, 88, and 106" (SFAS No. 132). SFAS No. 132 revises employers' disclosures about pension and other postretirement benefit plans. It does not change the measurement or recognition of those plans; therefore, the adoption of SFAS No. 132 affected the Company's disclosure information only. In fiscal year 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133), which is effective for fiscal quarters of fiscal years beginning after June 15, 1999. This statement 17 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. It requires that an entity recognized all derivatives as either assets or liabilities in the statement of financial position and measures those instruments at fair value. The Company plans to adopt SFAS No. 133 in the year 2000 and is currently assessing the impact this statement will have on its consolidated financial statements. In fiscal year 2000, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133" (SFAS No. 137), which delayed the effective date of SFAS No. 133. The effective date for SFAS 133, after issuance of SFAS No. 137, is for all fiscal quarters of all fiscal years beginning after June 15, 2000. The Company plans to adopt SFAS No. 133 in fiscal year 2001. The adoption of SFAS No. 133 is not expected to impact the Company significantly. Impact of Inflation Although the Company cannot accurately determine the precise effect of inflation on its operations, it does not believe that inflation has had a material effect on its revenue or results of operations for the periods presented herein. However, substantial increases in the Company's costs, particularly labor or employee benefits costs would be likely to adversely affect the Company's revenues and operating results. In addition, because inflation would likely materially and adversely affect the airline industry as a whole, and the Company's business depends to a large extent on the economic health of the airline industry, an increase in inflation would likely have a material adverse effect on the Company's revenue and operating results. Forward-Looking Statements Certain statements contained with this report may be deemed "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this report other than statements of historical fact are forward-looking statements that are subject to known and unknown risks, uncertainties and other factors, which could cause actual results and performance of the Company to differ materially from such statements. The words "believe," "expect," "anticipate," "intend," "will," "plans", and similar expressions identify forward-looking statements. In addition, forward-looking statements contained herein relate to, among other things, (i) anticipated financial performance, (ii) ability to comply with the Company's general working capital requirements, and (iii) ability to generate sufficient cash flow from operations to fund all costs of operations. While the Company believes the expectations reflected in such forward-looking statements are reasonable, it can give no assurance such expectations will prove to have been correct. There are a variety of factors which would cause future outcomes to differ materially from those described in this report, including, but not limited to, (i) general economic conditions, (ii) material reduction in revenues, (iii) inability to collect in a timely manner a material amount of receivables, (iv) increased competitive pressures, (v) inability to obtain required permits and approvals to conduct operations, (vi) changes in federal, state and local laws and regulations, especially aircraft regulations, or interpretation of such, (vii) potential increases in equipment, maintenance, operating or labor costs, (viii) management retention and development, (ix) the requirement to use internally generated funds for purposes not presently anticipated, (x) the computer systems of the Company's key suppliers, customers, creditors and financial service organizations, (xi) any sudden or substantial change in senior management, which could adversely affect major customer relationships, (xii) the adverse affect on the Company's customers resulting from the increase in the price or the decrease in the availability of aviation fuel, (xiii) risks associated with doing business in foreign countries and with foreign customers and (xiv) the loss of one or more of the Company's significant customers. The Company undertakes no obligations to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. 18 Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risk from changes in interest rates and currency exchange rates, which may adversely affect our results of operations and financial condition. We seek to minimize the risks from these interest rate and currency exchange rate fluctuations through our regular operating and financing activities. Management believes that such risks are not material to the results of operations and the financial condition of the Company. Item 8. Financial Statements and Supplementary Data The financial statements required pursuant to this item are included in Part IV, Item 14 of this Form 10-K and are presented beginning on Page F-1. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None PART III Item 10. Directors and Executive Officers of the Company The following table sets forth certain information (ages as of March 31, 2001) with respect to the persons who are members of the Board of Directors (the "Board"), executive officers or key employees of the Company. John Hancock Mutual Life Insurance Company ("Hancock") and affiliates of Canadian Imperial Bank of Commerce ("CIBC") together have the ability to appoint a majority of the members of the Board of both Ranger and the Company pursuant to the Securityholders Agreement. See "Item 13- Certain Relationships and Related Transactions--Securityholders Agreement."

~~SUCCESSOR~~NAME ~~PREDECESSOR~~AGE ~~---------~~POSITION AND OFFICES ----------- ~~Year ended Year ended Three months ended March 31, Year ended December 31, March 31, 2000 March 31, 1999 1998 1997 1997~~ ---------- --- ------------------------ ---------------- ------------ ---~~--------~~ ~~Revenues.~~Stephen D. .Townes .48 .President, .Chief .Executive .Officer .and .Director .George B. .Schwartz .47 .Chairman $of ~~141.0~~the ~~100.0%~~Board, $Director ~~123.4~~and ~~100.0%~~Assistant $Secretary ~~30.2~~George ~~100~~W.0% $Watts ~~29.8~~48 ~~100.0%~~Executive ~~$119.3~~Vice ~~100.0%~~President ~~Costs~~ and ~~expenses:~~Secretary ~~Operating~~John ~~expenses~~ W. .Gassett .54 .Senior .Vice .President-ASIG .North .America .Jeffrey ~~116~~P.4 ~~82.6%~~Hartman ~~99.0~~38 ~~80.2%~~Senior ~~26.0~~Vice ~~86.1%~~President ~~23.7 79.5% 97.1 81.4% Selling, general~~ and ~~administrative.~~Chief ~~13.2~~Financial ~~9.4%~~Officer ~~8.9~~Paul ~~7.2%~~Jefferson ~~1.8~~45 ~~6.0%~~Senior ~~2.3~~Vice ~~7.7%~~President ~~7.6 6.4% Depreciation~~ and ~~amortization.~~Managing .Director-ASIG .Europe .William ~~10.2~~McLendon ~~7.2%~~42 ~~8.7~~Vice ~~7.1%~~President-Eastern ~~1.1~~Operations ~~3.6%~~Ronald 1F.2 ~~4.0%~~Pattie ~~4.6~~53 ~~3.9%~~Vice President-~~---------------~~Technical ~~---------------~~Services ~~--------------~~James ~~--------------- -------------- Operating Income~~P. .Ferrara .47 .Vice .President-Quality .and .Engineering .& .CIO .Wesley .Vedo $62 ~~1.2~~Vice ~~.8%~~President-National $Programs ~~6.8~~Kurt 5A.5% $Granger ~~1.2~~43 ~~4.0%~~Vice $President-Customer ~~2.6~~Service ~~8.7%~~Robert ~~$ 10~~D.0 ~~8.4%~~Sellas, ~~================ =============== ============== =============== ============== Net income (loss)~~ Jr. .37 .Vice .President-Marketing .Silvio .Tano .46 .Vice .President-Ground .Services $Terry ~~(9.3)~~Rinehart ~~(6.6)%~~55 $Vice ~~(4.8)~~President-Human ~~(3.9%)~~Resources ~~$.0.7~~& ~~2.3%~~Industrial $Relations ~~1.6~~Jay 5R.4% $Levine ~~6.0~~44 ~~5.0%~~Director ~~================~~Edward ~~===============~~Levy ~~==============~~36 ~~===============~~Director ~~============== EBITDA~~S. .Mark .Ray .48 ~~. . . . . . . . . . . . $ 11.4 8.1% $ 15.5 12.6% $ 2.3 7.6% $ 3.8 12.8% $ 14.6 12.2% ================ =============== ============== =============== ==============~~Director

Stephen D. Townes founded Ranger and the Company and became President, Chief Executive Officer and Director upon the consummation of the Acquisition. Prior to joining Ranger and the Company, Mr. Townes had been the Vice Chairman and a Director of Sabreliner Corporation's commercial aircraft services division since November 1995. From July 1994 to November 1995, Mr. Townes was President and Partner of Intertrade Ltd., and prior to joining Intertrade, Mr. Townes was the Executive Vice President & Technical Operations Officer of Stevens Aviation. 19 Prior to joining Stevens Aviation in March 1990, Mr. Townes held management positions with the Dee Howard Company and LTV Aerospace & Defense (now Vought Aircraft). Mr. Townes received an engineering degree from West Point, an MBA from Long Island University and completed the PMD Program at Harvard Business School. George B. Schwartz co-founded Ranger and the Company and became Chairman of the Board upon the consummation of the Acquisition. Mr. Schwartz is currently the President of Tioga Capital Corporation, a position he has held since 1991. From 1987 to 1990, Mr. Schwartz was a Partner of The Airline Group, L.P., an investment fund, the general partner of which was an affiliate of Bass Brothers Enterprises. Prior to joining Airline, Mr. Schwartz was employed as a Senior Vice President of Drexel Burnham Lambert, Inc. Mr. Schwartz also serves as a director of Thompson Hospitality Corporation and as Chairman of the Board of Engineered Fibres, Inc. Mr. Schwartz received his MBA from the Amos Tuck School at Dartmouth College and a bachelors degree from Vanderbilt University. Dr. George W. Watts joined Ranger and the Company as Executive Vice President and Secretary upon the consummation of the Acquisition. Prior to joining Ranger and the Company, Dr. Watts had been the President of Executive Vision, a management consulting firm specializing in executive and organizational development from 1985 to 1994 and 1997 to 1998. From 1994 to 1996, Dr. Watts was the Executive Vice President of PM Realty Group. Dr. Watts has authored several books regarding corporate change management and executive development and has consulted with numerous venture capital companies and major corporations in the areas of executive assessment, management training, business process re-engineering, corporate restructuring, marketing program development, post-merger integration and accelerated growth management. Dr. Watts received bachelors, master's and Ph.D. degrees in psychology and education from The College of William and Mary. John W. Gassett joined the Company in 1967 and until 1980, served as Station Manager of the West Palm Beach, Miami and Fort Lauderdale facilities. In 1980, Mr. Gassett was appointed a Director of Sales, in 1988 was named Vice President--Marketing and Sales and, effective July 1998, was promoted to his current position. Mr. Gassett attended the University of North Florida and Pensacola Junior College. Paul Jefferson joined the Company in 1996 as Vice President--Europe and, effective July 1998, was promoted to his current position. Mr. Jefferson is responsible for all aspects of the Company's business in the United Kingdom and continental Europe. Mr. Jefferson is also a director of Skytanking GmbH, the Company's joint venture in Germany. From 1992 to 1996, Mr. Jefferson held the position of Retail Services Manager in France with Eurotunnel and prior to that Mr. Jefferson was employed with Esso U.K. for 14 years. Mr. Jefferson received a BS degree (with Honours) in Business Studies from Queens University--Belfast. Jeffrey P. Hartman joined the Company as its Senior Vice President and Chief Financial Officer on August 3, 1999. Mr. Hartman came to the Company from Signature Flight Support Corporation where he served as the Vice President of Finance. Prior to 1993, Mr. Hartman was an Audit Manager with KPMG, LLP. Mr. Hartman is a Certified Public Accountant who received both a Masters Degree in Accounting and a Masters of Business Administration from Northeastern University in Boston, Massachusetts. William McLendon joined the Company in July 1998 as Vice President--Eastern Operations. Mr. McLendon is responsible for all aspects of the Company's business in the eastern U.S. Prior to joining the Company, Mr. McLendon was a General Manager with Stevens Aviation from 1994 to 1996, and from 1991 to 1994, was employed by ATS Aerospace, Inc., most recently as Vice President, Operations. From 1981 to 1991 Mr. McLendon served in the United States Air Force. Mr. McLendon received an engineering degree from the United States Air Force Academy and bachelors and master's degrees from Oxford University where he was a Rhodes Scholar. Ronald F. Pattie joined the Company in 1969 as a field operations officer, has since served as Director of Maintenance, was appointed as Director of Technical Services and Quality Assurance in 1983 and, effective July 1998, was promoted to his current position. Mr. Pattie received a bachelor's degree in Business Administration and Accounting from the University of South Florida. 20 Peter J. Ferrara joined the Company in 1999 as the Company's Vice President Quality and Engineering and Chief Information Officer. Mr. Ferrara's primary responsibilities are quality control programs, ISO-9000 certification efforts, internal operations auditing, the Company's MIS departments and systems, and technical interface with engineering and quality management at airlines and airport authorities. Prior to joining the Company, Mr. Ferrara was a senior manager and engineering veteran of Lockheed Martin and GE-Aerospace, with extensive experience in quality systems and aerospace technologies. Mr. Ferrara is also a licensed professional engineer and commercial airplane pilot. Mr. Ferrara graduated from the U.S. Military Academy at West Point, New York in 1975 with honors. Wesley R. Vedo joined the Company, in 1959 as a Ramp Agent and was promoted to his current position in June of 1998. Mr. Vedo assists the Senior Vice President-North America with operations and the design and implementation of new system and initiatives. Prior to serving as Vice President-National Programs, Mr. Vedo served as Regional Vice President of Sales and Service from November of 1991 to June of 1998. Kurtis A. Granger joined the Company in 1976 and was promoted to his current position in July of 1998. Mr. Granger is primarily responsible for managing customer relationship with major airlines. Prior to Mr. Granger's promotion to his current position, he served as the Company's Director of Sales and Customer Service from October 1994 to July of 1998 and as Manager of Sales and Service from August 1991 to October 1994. Robert D. Sellas, Jr. joined the Company in 1986 and was promoted to his current position in 1998. Mr. Sellas is responsible for business development, branding, promotions, and marketing initiatives. Prior to Mr. Sellas' promotion to Vice President-Marketing, he served as the Company's Director of Marketing and Sales from 1994 to 1998 and as a Station Manager from 1990 to 1994. Silvio Tano joined the Company in 1974 and was promoted to Vice President, Ground Services for ASIG in June 1999. Mr. Tano is primarily responsible for integration of ASIG's recent acquisition, Elsinore LP, plus other pending growth pursuits in ground services. Terry Rinehart joined the Company in 1972 and was promoted to Vice President Human Resources and Industrial Relations in June 2000. Mr. Rinehart is primarily responsible for Human Resources and Labor relations. Jay R. Levine became a Director of Ranger and the Company upon the consummation of the Acquisition. Since 1997, Mr. Levine has served as a Managing Director of CIBC. From 1996 to 1997, Mr. Levine was President of PPMJ, Inc., a private consulting firm that advised its clients on private equity investments. From 1990 to 1996, Mr. Levine was a senior executive in the Morningside and Springfield Group, a private investment company. Mr. Levine is a director of Consolidated Advisors Limited, L.L.C., Heating Oil Partners, L.P. and Evercom, Inc. Mr. Levine received a bachelors degree from Syracuse University, a JD degree from Tulane University and an LLM in taxation from New York University. Edward Levy became a Director of Ranger and the Company upon the consummation of the Acquisition. Mr. Levy has been a Managing Director of an affiliate of CIBC since 1995. Between 1991 and 1995, Mr. Levy held various positions at The Argosy Group, L.P., culminating in the position of Managing Director. Mr. Levy has also held positions in the Mergers and Acquisitions Group of Drexel Burnham Lambert Incorporated and the Corporate Finance Department of Kidder, Peabody & Co., Incorporated. Mr. Levy is also a director of Heating Oil Partners, L.P., Norcross Safety Products, L.L.C., DSMax International, Inc. and High Voltage Engineering Corporation. Mr. Levy is a graduate of Connecticut College. S. Mark Ray became a Director of Ranger and the Company upon the consummation of the Acquisition. Mr. Ray is Managing Director at John Hancock Mutual Life Insurance Company, where he manages a $2.0 billion transportation portfolio for the Bond and Corporate Finance Group. Before joining John Hancock Mutual Life Insurance Company in 1978, Mr. Ray was a United States Air Force pilot candidate, as well as a civilian aviator. Leaving active duty in 1977, but 21 continuing service with the Air Force Reserves, he worked on the marketing and operations staff of the Kansas City Southern Railway Company for a year in Dallas. As an inactive ready-reservist, Mr. Ray achieved the rank of Captain and in 1987, after completing his service commitment, he received his Honorable Discharge. Mr. Ray received a bachelor's degree from Texas Tech University in 1975. Item 11. Executive Compensation The following table sets forth information regarding the compensation paid or accrued by the Company to the Chief Executive Officer and each of the five other most highly compensated executive officers of the Company in fiscal 2001, 2000 and 1999 (collectively, the "Named Executive Officers") for services rendered to the Company in all capacities during fiscal years 2001, 2000 and 1999.

SUMMARY COMPENSATION TABLE ANNUAL COMPENSATION LONG-TERM COMPENSATION -------------------------------------- ---------------------------------- AWARDS PAYOUTS ------------------------ -------- SECURITIES OTHER RESTRICTED UNDERLYING NAME ~~AGE~~AND ANNUAL STOCK OPTIONS/ LTIP ALL OTHER PRINCIPAL SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS COMPENSATION POSITION ~~AND~~YEAR ~~OFFICES~~($) ($) ($) ($) ($) ($) ($) ------------------------------- ---- -------- ------- ------------- ----------- ----------- -------- ------------- 2001 295,288 -- -- 29,800 (2) Stephen D. Townes 47(1) ~~President~~2000 283,373 10,000 5,515 30,749 (3) Chief Executive Officer ~~and~~1999 ~~Director~~275,000 -- -- 12,375 (4) Dr. George BW. ~~Schwartz~~Watts 46(5) ~~Chairman~~2001 of250,200 ~~the~~- ~~Board~~-- 27,374 ~~Director~~(6) ~~and~~Executive ~~Assistant~~Vice President 2000 232,461 8,000 2,546 26,257 (7) And Secretary ~~George~~1999 W212,000 -- -- 11,670 (8) Jeffrey P. ~~Watts~~Hartman 47(9) ~~Executive~~2001 179,813 -- -- 46,618 (10) Senior Vice President and ~~Secretary~~2000 105,208 5,500 636 18,412 (11) Chief Financial Officer John W. Gassett 532001 194,547 -- -- 23,672 (12) Senior Vice President- ASIG ~~North~~2000 ~~America~~169,167 ~~Jeffrey~~8,000 P.-- ~~Hartman~~4,065 37(13) ~~Senior~~North ~~Vice~~America ~~President~~1999 ~~and~~140,000 ~~Chief~~9,500 ~~Financial~~415 ~~Officer~~6,462 (14) Paul Jefferson 44 Senior Vice President and 2001 141,225 7,769 -- 33,490 (15) Managing Director- ASIG 2000 143,929 7,000 -- 28,604 (16) Europe ~~William~~1999 ~~McLendon~~137,648 417,300 385 20,373 (17) Jim Ferrara (18) 2001 206,050 -- -- 5,234 (19) Vice President of Quality and 2000 152,799 6,000 -~~Eastern~~- ~~Operations~~7,747 ~~Ronald~~(20) FEngineering and CIO 1999 20,307 -- 356 -- (1) Mr. ~~Pattie~~Townes 52became ~~Vice~~Chief ~~President~~Executive Officer of the Company effective March 31, 1998. (2) Reflects $6,911 for Company 401(k) matching contributions, $4,800 for disability premiums, $1,140 for group term life insurance and $17,036 of Board-~~Technical~~approved ~~Services~~unused ~~James~~vacation Ppay. ~~Ferrara~~(3) 47Reflects ~~Vice~~$10,000 ~~President~~Company 401(k) matching contributions, $1,140 for group term life insurance, and $19,609 of Board-~~Quality~~approved unused vacation pay. (4) Reflects $10,000 Company 401(k) matching contributions and ~~Engineering~~$2,375 &for ~~CIO~~group ~~Wesley~~term ~~Vedo~~life 61insurance. (5) Dr. Watts became an Executive Vice President of the Company effective April 2, 1998. (6) Reflects $7,147 for Company 401(k) matching contributions, $4,653 for disability premiums, $1,140 for group term life insurance, and $14,435 of Board-~~National~~approved ~~Programs~~unused ~~Kurt~~vacation Apay. ~~Granger~~22 42(7) ~~Vice~~Reflects ~~President~~$10,000 Company 401(k) matching contributions, $1,140 for group term life insurance, and $15,117 of Board-~~Customer~~approved ~~Service~~unused ~~Robert~~vacation Dpay. ~~Sellas~~(8) Reflects $10,000 JrCompany 401(k) matching contributions and $1,670 for group term life insurance. 36(9) ~~Vice~~Mr. ~~President-Marketing~~Hartman ~~Silvio~~became ~~Tano~~Chief 45Financial Officer of the Company effective August 3, 1999. (10) Reflects $5,447 for Company 401(k) matching contributions, $899 for group term life, $11,786 of Board approved unused vacation pay, and $28,487 for relocation reimbursement. (11) Reflects $6,000 signing bonus, $629 for group term life insurance, and $11,783 in relocation reimbursement. (12) Reflects $7,448 for Company 401(k) matching contributions, $1,098 for group term life, and $15,125 for auto allowance. (13) Reflects $1,969 Company 401(k) matching contributions, $1,257 for group term life insurance and $840 for auto allowance. (14) Reflects $4,500 Company 401 (k) matching contributions and $1,962 for group term life insurance. (15) Reflects $14,122 of Company Pension (UK) contributions and $19,368 for automotive reimbursement. (16) Reflects $14,366 of Company Pension (U.K.) contributions and $6,608 for the use of a Company automobile. (17) Reflects $13,765 of Company Pension (U.K.) contributions and $6,608 for the use of a Company automobile. (18) Mr. Ferrara became Vice President~~-Ground~~ ~~Services~~of D.Quality ~~Dana~~and ~~Donovan~~Engineering 43and ~~Director~~CIO ~~Jay~~effective RJanuary 15, 1999. ~~Levine~~(19) 43Reflects ~~Director~~$4,673 ~~Edward~~for ~~Levy~~Company 35401(k) ~~Director~~matching Scontributions and $560 for group term life insurance. ~~Mark~~(20) ~~Ray~~Reflects 47$7,622 ~~Director~~for Company 401(k) matching contributions and $126 for group term life insurance.

Options Grants and Exercises The following tables set forth, for the Named Executive Officers, information regarding stock options granted or exercised during, or held at the end of fiscal 2001. These options are options to purchase Class B Common Stock of Ranger, the Company's parent.

~~SUMMARY~~OPTION/SAR ~~COMPENSATION~~GRANTS ~~TABLE~~IN LAST FISCAL YEAR POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL ~~COMPENSATION~~RATES ~~LONG-TERM~~OF ~~COMPENSATION~~STOCK PRICE INDIVIDUAL GRANTS APPRECIATION FOR OPTION TERM ------------------- ----------------- ----- ~~AWARDS PAYOUTS~~ ------------------------ -----~~---~~ ~~OTHER~~NUMBER ~~RESTRICTED~~OF ~~UNDERLYING~~% ~~NAME~~OF ~~AND~~TOTAL ~~ANNUAL~~SECURITIES ~~STOCK~~ OPTIONS ~~LTIP~~UNDERLYING ~~ALL~~GRANTED ~~OTHER~~TO ~~PRINCIPAL~~OPTIONS/SARS ~~SALARY~~EMPLOYEES ~~BONUS~~EXERCISE ~~COMPENSATION~~GRANTED ~~AWARDS~~IN ~~SARS~~FISCAL ~~PAYOUTS~~PRICE ~~COMPENSATION~~EXPIRATION ~~POSITION~~NAME ~~YEAR~~ ($#) ($1) YEAR ($/SH) DATE 5% ($) ($2) 10% ($) ($2) ---- -------------~~--------------~~ ------ ----~~-------~~ --------- ---------- ---------- -------- --~~-------~~ ~~---~~N/A ~~Stephen D. Townes~~ (1)) .In .order .to .prevent ~~2000~~dilution ~~283,373~~or ~~10,000~~enlargement ~~5,515~~of ~~30,749~~rights ~~(2)~~under ~~Chief~~the ~~Executive Officer . . . . 1999 275~~options,~~000~~ --in --the ~~12,375~~event ~~(3)~~of ~~Dr.~~a ~~George W. Watts (4) Executive Vice President. . . . 2000 232~~reorganization,~~461~~ 8recapitalization,~~000~~ ~~2,546~~stock 26split,~~257~~ ~~(5)~~stock ~~and Secretary . . . . . . . . . 1999 212~~dividend,~~000~~ --or --combination ~~11,670~~or ~~(6)~~other ~~Jeffrey~~change P.in Hartman (7) Senior Vice President and 2000 105,208 5,500 636 18,412 (8) Chief Financial Officer John W. Gassett Senior Vice President ASIG. . . 2000 169,167 8,000 -- 4,065 (9) North America . . . . . . . . . 1999 140,000 9,500 415 6,462 (10) Paul Jefferson Senior Vice President and Managing Director ASIG. . . . . 2000 143,929 7,000 -- 28,604 (11) Europe. . . . . . . . . . . . . 1999 137,648 7,300 385 20,373 (12) Andy Mitchell (13). . . . . . . 2000 -- -- -- 198,765 (14) Former Chief Financial Officer. 1999 204,027 28,867 (14) (1) Mr. Townes became Chief Executive Officer of the ~~Company~~Class ~~effective~~B ~~March~~Common ~~31,1998.~~Stock ~~(2) Reflects $10,000 Company 401(k) matching contributions, $1,140 for group term life insurance, and $19,609~~ of ~~Board-approved unused vacation pay. (3) Reflects $10~~Ranger,~~000~~ ~~Company 401(k) matching contributions and $2,3375 for group term life insurance. (4) Dr. Watts became an Executive Vice President of~~ the ~~Company~~type ~~effective April 2, 1998. (5) Reflects $10,000 Company 401(k) matching contributions, $1,140 for group term life insurance,~~ and ~~$15,117~~number of ~~Board-approved~~shares ~~unused~~available ~~vacation~~upon ~~pay.~~exercise ~~(6) Reflects $10,000 Company 401 (k) matching contributions~~ and ~~$1,670 for group term life insurance. (7) Mr. Hartman became Chief Financial Officer of~~ the ~~Company~~exercise ~~effective~~price ~~August~~may 3,be ~~1999.~~adjusted ~~(8) Reflects $6,000 signing bonus, $629 for group term life insurance, and $11,783 in relocation reimbursement~~accordingly. (92) ~~Reflects~~Amounts ~~$1,969~~reflect ~~Company~~assumed ~~401~~rates (k) matching contributions, $1,257 for group term life insurance and $840 for auto allowance. (10) Reflects $4,500 Company 401(k) matching contributions and $1,962 for group term life insurance. (11) The amount shown includes $14,366 of ~~Company~~appreciation ~~Pension~~from ~~(U.K.) contributions and $6,608 for~~ the ~~use~~fair ofmarket avalue ~~Company~~on ~~automobile. (12) The amount shown includes $13,765 of Company Pension (U.K.) contributions and $6.608 for~~ the ~~use~~date of agrants ~~Company~~as ~~automobile.~~set ~~(13)~~forth ~~Mr.~~in ~~Mitchell became Chief Financial Officer of~~ the ~~Company~~SEC's ~~effective~~executive ~~April~~compensation 2,disclosure ~~1998 and left the Company effective December 31, 1998~~rules. ~~(14)~~Actual ~~Reflects $197~~gains,~~725~~ ~~and~~if ~~$17~~any,~~975~~ ~~for~~on ~~fiscal~~stock ~~2000~~option ~~and~~exercises ~~1999,~~depend ~~respectively,~~on ~~from~~future aappreciation ~~consulting~~of ~~agreement entered into by~~ the ~~Company~~Class ~~and~~B ~~Mr.~~Common ~~Mitchell~~Stock ~~when~~of heRanger ~~left~~Aerospace ~~the~~Corporation. ~~Company;~~No ~~2000~~assurance ~~also~~can ~~includes~~be ~~$1,040~~made ~~for~~that ~~group~~the ~~term~~amounts ~~life~~reflected ~~insurance; 1999 also includes $10,000~~ in ~~Company~~these ~~401(k)~~columns ~~matching~~will ~~contributions~~be ~~and $892 for group term life insurance~~achieved.

AGGREGATED OPTION/SAR ~~GRANTS~~EXERCISES IN LAST FISCAL YEAR ~~POTENTIAL~~AND ~~REALIZABLE~~FISCAL ~~VALUE~~YEAR-END ATOPTION/SAR ~~ASSUMED~~VALUES ~~ANNUAL~~NUMBER ~~RATES~~ OF ~~STOCK~~SECURITIES ~~PRICE~~VALUE ~~INDIVIDUAL~~OF ~~GRANTS~~UNEXERCISED ~~APPRECIATION~~UNDERLYING ~~FOR~~UNEXERCISED ~~OPTION TERM~~ IN-THE-~~-----------------------------------------------~~MONEY ~~-------------------------------------~~SHARES ~~NUMBER~~VALUE ~~OF % OF TOTAL SECURITIES~~ OPTIONS/SARS ~~UNDERLYING~~AT ~~GRANTED TO~~ OPTIONS/SARS ~~EMPLOYEES~~AT ~~EXERCISE~~FISCAL ~~GRANTED~~ACQUIRED INON REALIZED FISCAL; ~~PRICE~~YEAR ~~EXPIRATION~~END ~~NAME~~ (#)~~(1)~~ YEAR END ($~~/SH~~) ~~DATE~~NAME 5% EXERCISE($1) (~~2) 10% (~~$)(21) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE ----------------------------- ------------ --------- -------- ------ ------------ ---------- ----------------- Stephen D. Townes ~~5,515~~Chief ~~(3)~~Executive ~~40%~~Officer $- ~~100~~- 32,596/~~31/08 346~~2,~~834 878,~~919 ~~Chief~~$ ~~Executive~~0/$0 ~~Officer~~ George W. Watts ~~2,546 (3) 18% $ 100 3/31/08 160,116 405,753~~ Executive Vice President and Secretary ~~Jeffrey~~- P.- ~~Hartman~~848/1,698 ~~636 (3) 10%~~ $ ~~100 3~~0/~~31/08~~$0 ~~39,998~~Jeffrey ~~101,358~~P. ~~Senior~~Hartman Executive Vice President and Chief Financial Officer ~~John~~- W.- ~~Gassett~~212/424 ~~415 3%~~ $ ~~100 3~~0/~~31/08~~$0 ~~26,099~~John 66W.~~139~~ Gassett Senior Vice President-ASIG North America - - 194/325 $ 0/$0 Paul Jefferson Senior Vice President and Managing Director-ASIG Europe. .- .- .180/301 ~~. . 385 3%~~ $ ~~100 3~~0/~~31/08~~$0 ~~24,213~~Jim ~~61,357~~Ferrara ~~_____________.~~Vice .President ~~. . . . . . . . . . . . (1) In order to prevent dilution or enlargement~~ of ~~rights~~Quality ~~under the options, in the event of a reorganization, recapitalization, stock split, stock dividend, or combination or other change in the Class B Common Stock of Ranger, the type~~ and ~~number~~Engineering ~~of shares available upon exercise~~ and ~~the~~CIO ~~exercise~~________________________ ~~price~~- ~~may~~- be166/261 ~~adjusted~~$ ~~accordingly.~~0/$0 (21) ~~Amounts~~As ~~reflect assumed rates~~ of ~~appreciation from~~ the ~~fair~~end ~~market value on the date~~ of ~~grants as set forth in~~ the ~~SEC's~~fiscal ~~executive compensation disclosure rules. Actual gains~~year, ifnone ~~any, on stock option exercises depend on future appreciation~~ of the ~~Class B Common Stock of Ranger Aerospace Corporation. No assurance can be made that the amounts reflected in these columns will be achieved. (3) Twenty-nine percent (29%)of the~~ options ~~granted~~held toby ~~Stephen Townes and fifty percent (50%) of~~ the ~~options~~Named ~~granted~~Executive toOfficers ~~George~~had ~~Watts~~been ~~and Jeffrey Hartman will vest if the Company satisfies certain market value and liquidity requirements in connection with a sale of the business of Ranger or the Company~~exercised.

Compensation of Directors Generally, the Directors of the Company will not be paid for their services on the Board. Directors are reimbursed for out-of-pocket expenses incurred in connection with attending Board meetings. The Company has entered into an agreement with Tioga Capital Corporation ("Tioga") pursuant to which Tioga will receive a fee during the period which Mr. Schwartz serves as Chairman of the Board. Mr. Schwartz is the President of Tioga. See "Item 13. Certain Relationships and Related Transactions -- Chairman Agreement." Compensation Committee Interlocks and Insider Participation The Company currently does not have a compensation committee. The compensation of the executive officers of the Company is determined by the Board. Employment Agreements Messrs. Townes and Watts have each entered into an employment agreement with the Company, which was amended effective as of March 7, 2000 and again effective as of August 31, 2000, and Mr. Hartman entered into an employment agreement with the Company on August 31, 2000 (each, an "Employment Agreement"). The Employment Agreements provide for the employment, unless terminated earlier as provided in the respective Employment Agreement, of (i) Mr. Townes as the President and Chief Executive Officer until March 31, 2003, and (ii) Mr. Watts as Executive Vice President until March 31, 2003, and (iii) Mr. Hartman as Senior Vice President and Chief Financial Officer until August 1, 2002. The Employment Agreement of Mr. Townes provides for an annual base salary of 24 $275,000, the Employment Agreement of Mr. Watts provides for an annual base salary of $212,000, and the Employment Agreement of Mr. Hartman provides for an annual base salary of $150,000. In addition, each Employment Agreement provides: (i) for the base salary to increase based on the Consumer Price Index; (ii) an annual bonus to be determined by the Board of Directors of the Company; and (iii) health benefits, life and disability insurance, participation in the Company's retirement plan(s) and customary fringe benefits and vacation periods. Each Employment Agreement may be terminated by the Company at any time with or without Cause. Each Employment Agreement defines "Cause" to mean any of the following acts: (i) theft or embezzlement, or attempted theft or embezzlement, of money or property of the Company or any of its subsidiaries, perpetration or attempted perpetration of fraud, or participation in a fraud or attempted fraud, on the Company or any of its subsidiaries or unauthorized appropriation of, or attempt to misappropriate, any substantial tangible or intangible assets or property of the Company or any of its subsidiaries, (ii) conviction of any criminal felony involving the Company or any of its subsidiaries, or (iii) willful failure to substantially follow any reasonable instructions of the Board and/or other policies of the Company, which failure is not corrected within 15 business days after receipt of notice from the Board describing such failure. Messrs. Townes, Watts and Hartman may also choose to terminate employment with the Company by reason of a Constructive Termination. "Constructive Termination" means (i) a reduction of base salary, (ii) the assigning of any duties inconsistent with duties first described in the respective Employment Agreement, or (iii) a substantial breach by the Company of any term of (w) their Employment Agreement (x) agreements pertaining to their acquisition stock of the Company, (y) their Non-Qualified Stock Option Agreement, (z) the Securityholders Agreement or any amendment or successor to any of the foregoing agreements, which breach has a material adverse effect on the executive and which is not cured within 15 days of receipt of notice to the Company of such breach. With respect to Messrs. Townes and Watts, "Constructive Termination" also includes the event that the executive is required by the Company to permanently relocate his primary residence and decides to move his family to such new residence. If the employment of either Mr. Townes or Mr. Watts is terminated for any reason other than (i) a termination by the Company for Cause or (ii) a termination by Mr. Townes that is not a Constructive Termination, Mr. Townes will receive severance compensation equal to 24 months base salary and current health benefit coverage paid in monthly installments. If the employment of Mr. Hartman is terminated for any reason other than (i) a termination by the Company for Cause or (ii) a termination by Mr. Hartman that is not a Constructive Termination, Mr. Hartman will receive 12 months salary and current health benefit coverage paid in monthly installments. The Employment Agreements of Mr. Townes and Mr. Watts provide that if the Company requires either of them to relocate their permanent residence, the Company will pay any relocation expenses, will grant an increase in annual salary ($75,000 for Mr. Townes and $56,250 for Mr. Watts), and will grant additional options to them for common stock representing 3/8% of the then outstanding common stock of the Company with an exercise price of $100 per share. Mr. Townes' and Mr. Watts' Employment Agreements provide that if either of them elects to terminate his employment for any reason within twelve months of a Change-in-Control and he is not entitled to severance compensation as described in the preceding paragraph, he will receive severance compensation equal to 12 months base salary and current health benefit coverage paid in monthly installments. Mr. Hartman's Employment Agreement provides that if he elects to terminate his employment for any reason within twelve months of a Change-in-Control and he is not entitled to severance compensation as described in the preceding paragraph, he will receive severance compensation equal to 9 months base salary and current health benefit coverage paid in monthly installments. In all three cases, this severance compensation is subject to mitigation in the event the executive obtains employment during the period in which such compensation would be paid. "Change in Control" means the occurrence of any one or more of the following events: (i) any person other than certain permitted holders becomes the beneficial owner of 50% or more of the total voting or economic power of the Company's or Ranger's common stock, (ii) any person other than certain permitted holders becomes the beneficial owner of more than 33-1/3% of the voting power of common stock of the Company or Ranger and the permitted holders beneficially own a lesser percentage and do not have the right to designate a majority of the board of directors of the Company or 25 Ranger, as applicable, (iii) a merger or consolidation of the Company or Ranger in which the Company or Ranger is not the survivor and the holders of the Company's or Ranger's common stock prior to such merger or consolidation do not own a majority of the common stock of the survivor, (iv) a sale of substantially all of the assets or the Company or Ranger, or (v) during any two year period the members of the board of directors of the Company or Ranger at the beginning of such period or their chosen successors are no longer a majority of such board at the end of such period. Mr. Townes' and Mr. Watts' Employment Agreements provide that in the event of certain private placements of Ranger securities, the employee may purchase securities in such private placements to prevent dilution which purchases may be financed with loans from Ranger of up to approximately $369,000 with respect to Mr. Townes and $99,000 with respect to Mr. Watts. The Employment Agreements of Messrs. Townes, Watts and Hartman contain non-competition, non-solicitation and no-hire provisions that prohibit them from competing with the Company during the period of their employment and for set periods thereafter and from interfering with the customer relationships and hiring the employees of the Company for set periods after the termination of their employment. These provisions apply to Messrs. Townes and Watts for a period of 18 months after the termination of their employment. These provisions apply to Mr. Hartman for so long after his employment terminates and he is receiving severance pay from the Company (which can be for as long as 12 months). 1999 Stock Option Plan The Board of Directors of Ranger has approved the Ranger Aerospace Corporation 1999 Stock Option Plan ("1999 Option Plan"), which authorizes the granting of stock options to acquire shares of Ranger's Class B Common Stock to current or future executive officers and key employees of Ranger or its subsidiaries. The 1999 Option Plan authorizes the granting of stock options up to an aggregate of 1,000,000 shares of Ranger's Class B Common Stock, subject to adjustment upon the occurrence of certain events to prevent any dilution or expansion of the rights of participants that might otherwise result from the occurrence of such events. Options to purchase an aggregate of 1,564, 636 and 13,601 shares of Ranger's Class B Common Stock were granted (461, 380 and 85, respectively have been cancelled) during fiscal 2001, 2000 and 1999. An aggregated 3,213 of these granted options are vestable to Messrs. Townes, Watts and Hartman if certain market value and liquidity requirements are satisfied in connection with a sale of Ranger or the Company. Other than these 3,213 options, one-third of the shares subject to such options are subject to time vesting beginning on March 31, 1999 and ending on March 31, 2003. Two-thirds of the shares subject to such options are subject to performance vesting beginning on March 31, 1999 and ending on March 31, 2003. With respect to Mr. Townes' options, if he is terminated by the Company without cause or if he quits for good reason, then fifty percent (50%) of his unvested time and performance vesting options will vest if the Company has met certain performance qualifications. Otherwise, unvested options will terminate in the event that the optionee ceases to be employed with the Company, and vested but unexercised options will terminate immediately if the optionee is terminated for cause. With respect to all optionees except for Messrs. Townes, Watts and Hartman, the vested but unexercised options expire after 60 days if the optionee ceases to be employed by the Company by reason of death, disability or retirement or after 30 days if the employee is terminated other than for cause. With respect to Messrs. Townes, Watts and Hartman, if such person is terminated for cause, Ranger and certain of its significant stockholders have the right to repurchase any shares issued under such person's option agreement for a per share price equal to the per share exercise price of the option. With respect to other employees whose employment by the Company ceases, Ranger and certain of its significant stockholders have the right to repurchase any shares issued or issuable under the employee's option agreement. Unvested options will immediately vest upon a sale of Ranger meeting certain value thresholds. All of the options granted have an exercise price of $100 per share, which the Company believes approximates the fair market value of the Class B Common Stock on the date of grant. With respect to each of Messrs. Townes, Watts and Hartman, "cause" and "good reason" for purposes of his option agreement have similar definitions to "Cause" and "Good Reason" in his Employment Agreement except that "good reason" under his option agreement includes an election by the employee to terminate his employment in connection with a "Change-in-Control" as defined in his Employment Agreement. 26 All unvested options granted under the plan will automatically vest on January 28, 2007. Effective March 7, 2000, Ranger issued a warrant to purchase up to 1,474 shares of its Class B Common Stock to Tioga Capital Corporation ("Tioga"), an affiliate of Mr. Schwartz. The warrant has an exercise price of $100 per share, which the Company believes approximates the fair market value of the Class B Common Stock on the date of grant. The warrant is vestable to Tioga if certain market value and liquidity requirements are satisfied in connection with a sale of Ranger or the Company. If Mr. Schwartz is terminated by Ranger for cause, the warrant, to the extent not previously exercised, shall expire whether vested and exercisable or not. If Mr. Schwartz is terminated for cause, Ranger and certain of its significant stockholders have the right to repurchase any shares issued under Tioga's warrant for a per share price equal to the per share exercise price of the warrant. Sale of Equity In fiscal 2001, Ranger sold an aggregate of 2,028 shares of its Class B Common Stock at a price of $100 per share and 306 shares of its Preferred Stock at a price of $1,000 per share to Messrs. Townes, Watts, Hartman and Kraig Danielson and to the Danielle Schwartz Trust, an affiliate of Mr. Schwartz. All such shares were purchased with notes payable to Ranger secured by a pledge of the stock purchased. Also in fiscal 2001, Ranger entered into amendments to stock purchase agreements dated March 7, 2000 with Messrs. Townes and Watts covering purchases of an aggregate of 1,520 shares of Ranger's Class B Common Stock and 228 shares of Ranger's Preferred Stock providing that payment for the stock purchased would be paid with a note payable to Ranger secured by the pledge of the stock purchased instead of being paid in cash. In fiscal 2000, Ranger sold 4,944 shares of its Class A Common Stock at a price of $100 per share, 11,376 shares of its Class B Common Stock at a price of $100 per share and 2,448 shares of its Preferred Stock at a price of $1,000 per share to Ranger's original investors and Messrs. Townes and Watts. In fiscal 1999, Ranger sold 844 shares of its Class B Common Stock at a price of $100 per share and 123 shares of its Preferred Stock at a price of $1,000 per share to a number of its key employees. Each purchaser of these shares entered into an executive stock agreement with Ranger which, among other things, restricts the transfer of such securities, grants Ranger and certain significant stockholders the right to repurchase such shares upon the employee's termination and requires the employee to consent to a sale of Ranger approved by its Board and the holders of a majority of its common stock. 401(k) Profit Sharing Plan The Company has a 401(k) plan for the benefit of substantially all of its non-union employees, which is qualified for tax exempt status by the Internal Revenue Service. Employees can make contributions to the plan up to the maximum amount allowed by federal tax code regulations. Item 12. Security Ownership of Certain Beneficial Owners and Management All of the equity of the Company is owned by Ranger. The following table sets forth certain information regarding the beneficial ownership of the equity securities of Ranger by: (i) each of the Directors of Ranger and the Named Executive Officers; (ii) all Directors and executive officers as a group; and (iii) each owner of more than 5% of any class of equity securities of Ranger ("5% Owners"). Ranger currently has 42,433 shares of Class A Common, 89,578 shares of Class B Common (including 6,404 shares subject to currently exercisable options) and 17,341.9 shares of Preferred Stock issued and outstanding. Unless otherwise noted, the address for each Director and executive officer is c/o Ranger Aerospace Corporation, 7600 Pelham Centre, Greenville, South Carolina 29615-3170. 27

~~Aggregated~~CLASS ~~Option/SAR~~A ~~Exercises~~COMMON inCLASS ~~Last~~B ~~Fiscal~~COMMON ~~Year~~PREFERRED ~~and Fiscal Year~~-~~End Option/SAR Values NUMBER OF SECURITIES VALUE OF UNEXERCISED UNDERLYING UNEXERCISED IN~~-~~THE~~-~~MONEY SHARES VALUE OPTIONS/SARS AT OPTIONS/SARS AT FISCAL ACQUIRED ON REALIZED FISCAL; YEAR END (#) YEAR END ($) NAME EXERCISE(1) ($)(1) ERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE~~ -------------~~---------------~~ ------------ -----~~----~~ -----------------~~---------~~ ~~---------------------------~~STOCK Name and Address of Beneficial Owner Number Percent Number Percent Number Percent Directors and Named Executive Officers: George B. Schwartz (a) 5,964.8 14.06% 1,022 1.15% 154 0.89% Stephen D. Townes --(b) -- 2,~~336/~~663.0 6.28% 3,~~179~~831 $(c) ~~0/$0~~4.30% ~~Chief~~185 ~~Executive~~1.07% ~~Officer~~ George W. Watts ~~Executive~~-- ~~Vice~~0.00% ~~President~~1,684 ~~and~~(d) ~~Secretary~~1.89% --126 0.73% Jeffrey P. Hartman -- ~~764/1,782~~0.00% $412 (e) 0/$.46% 30 0.17% ~~Jeffrey~~John PW. ~~Hartman~~Gassett ~~Senior~~-- ~~Vice~~0.00% ~~President~~294 ~~and~~(f) ~~Chief~~0.33% ~~Financial~~15 ~~Officer~~0.09% Paul Jefferson -- 0.00% 280 (g) 0.31% 15 0.09% Jim Ferrara -- ~~191/445~~0.00% $266 (h) 0/$.30% 15 0.09% ~~John~~Edward WLevy (i) 22,048.4 ~~Gassett~~51.96% ~~Senior~~13,430 ~~Vice~~15.07% ~~President-ASIG~~5,321.8 ~~North~~30.76% ~~America~~S. --Mark Ray (j -- ~~166/249~~0.00% $65,456 ~~0/$0~~73.47% ~~Paul~~9,818.4 ~~Jefferson~~56.75% ~~Senior~~Jay ~~Vice~~R. ~~President~~Levine (i) 22,048.4 51.96% 13,430 15.07% 5,321.8 30.76% All Directors and ~~Managing~~Executive ~~Director~~Officers as a Group (19 persons) 42,433.0 72.29% 87,813 98.56% 15,750.7 91.04% 5% OWNERS: John Hancock Mutual Life Insurance Company (k) -~~ASIG~~- ~~Europe~~0.00% ~~________________________~~65,456 73.47% 9,818.4 56.75% Canadian Imperial Bank of Commerce (l) 22,048.4 51.96% 13,430 15.07% 5,321.8 30.76% Randolph Street Partners II (m) 5,678.0 13.38% -- 0.00% 865.2 5.05% Gregg L. Engles (n) 4,497.6 10.60% -- ~~144~~0.00% 674.6 3.93% Danielle Schwartz Trust , UAD 10/~~241~~1/93 $(o) 5,964.8 14.06% 1,022 1.15% 154.0/$ 0.89% ___________________________________________ (1a) AsIncludes 5,694.8 shares of ~~the~~Class ~~end~~A Common, 1,022 shares of Class B Common and 154 shares of Preferred Stock owned by the ~~fiscal~~Danielle ~~year~~Schwartz Trust, ~~none~~UAD 10/1/93. Mr. Schwartz does not have beneficial ownership in, or control over, the Danielle Schwartz Trust. (b) Includes 2,663 shares of Class A Common currently being transferred from Mr. Townes to the Townes Family Trust. Mr. Townes does not have beneficial ownership in, or control over, the Townes Family Trust. (c) Includes 2,596 shares that may be acquired through stock options ~~held~~exercisable within 60 days of March 31, 2001. (d) Includes 848 shares that may be acquired through stock options exercisable within 60 days of March 31, 2001. (e) Includes 212 shares that may be acquired through stock options exercisable within 60 days of March 31, 2001. (f) Includes 194 shares that may be acquired through stock options exercisable within 60 days of March 31, 2001. (g) Includes 180 shares that may be acquired through stock options exercisable within 60 days of March 31, 2001. (h) Includes 166 shares that may be acquired through stock options exercisable within 60 days of March 31, 2001. (i) Includes 22,048 shares of Class A Common, 13,430 shares of Class B Common and 5,322 shares of Preferred Stock beneficially owned by ~~the~~CIBC. ~~Named~~Such ~~Executive~~person ~~Officers~~disclaims ~~had~~beneficial ~~been~~ownership ~~exercised~~of all such shares. Such person's address is c/o CIBC, 425 Lexington Avenue, New York, New York 10017. 28 (j) Includes 65,456 shares of Class B Common and 9,818 shares of Preferred Stock beneficially owned by John Hancock Mutual Life Insurance Company. Such person disclaims beneficial ownership of all such shares. Such person's address is c/o John Hancock Mutual Life Insurance Company, John Hancock Place, Box 111, Boston, Massachusetts 02117. (k) Such person's address is John Hancock Place, Box 111, Boston, Massachusetts 02117. (l) Such person's address is 161 Bay Street, 8th Floor, BCE Place; PP Box 500 MSJ 258, Toronto, Canada. Each of Messrs. Jay Bloom, Andrew Heyer and Dean Kehler (each of who are employees of an affiliate of CIBC) may be viewed as sharing beneficial ownership of such shares. (m) Such person's address is 200 East Randolph Drive, Suite 5400, Chicago, Illinois 60601. (n) Such person's address is 3811 Turtle Creek Road, Dallas, Texas 75219 (o) Such person's address is c/o Ranger Aerospace Corporation, 7600 Pelham Centre, Greenville, South Carolina 29615-3170.

Item 13. Certain Relationships and Related Transactions Securityholders Agreement Ranger, John Hancock Mutual Life Insurance Company ("Hancock") and its affiliates, affiliates of CIBC, the Danielle Schwartz Trust, Mr. Townes, Dr. Watts, Randolph Street Partners II and Gregg L. Engles have entered into a Securityholders Agreement dated April 1, 1998 and amended effective March 7, 2000 (the "Securityholders Agreement"). The Securityholders Agreement requires that each of the parties thereto vote all of his or its Ranger voting securities and take all other necessary or desirable actions to cause the size of the Board of Ranger to be established at six members and to cause the election to the Board of Ranger of two representatives designated by Hancock and its affiliates (the "Hancock Designees"), two representatives designated by such affiliates of CIBC (the "CIBC Designees") and two executive officers jointly designated by such affiliates of CIBC and Hancock and its affiliates (the "Executive Directors"). Mr. Schwartz and Mr. Townes will each serve as an Executive Director, so long as such person is an officer of the Company and Ranger until their earlier resignation or removal. Any representative on the Board of Ranger may be removed from the Board of Ranger only at the request of the party that designated such representative. The Board of the Company is established by the Board of Ranger, provided that Mr. Schwartz will serve as a Director of the Company. The right of Hancock and its affiliates and such affiliates of CIBC to designate representatives to the Board of Ranger will terminate at such time as such party owns less than 50% of the common stock, Preferred Stock and/or PIK Notes held by such party as of the Acquisition closing date. The right of Mr. Townes to be elected as a member of the Board of Ranger will terminate at such time as he owns less than 50% of the shares of common stock purchased under the Executive Stock Agreement (as defined herein), or earlier in the event he ceases to be an officer of the Company and Ranger. The right of Mr. Schwartz to be elected as a member of the Board of Ranger will terminate at such time as the Danielle Schwartz Trust owns less than 50% of the shares of common stock it purchased under the Investor Stock Agreement (as defined herein), or earlier in the event Mr. Schwartz ceases to be Chairman of the Company and Ranger pursuant to the Chairman Agreement (as defined herein). The provisions of the Securityholders Agreement relating to the composition of the Board of Ranger will terminate on the earlier to occur of (i) the tenth anniversary of the Acquisition unless extended by holders of 75% of the voting securities subject to the Securityholders Agreement or (ii) upon a Qualified Public Offering (as defined herein). In addition to the foregoing, the Securityholders Agreement (i) requires the holders of securities of Ranger to obtain the prior written consent of Ranger in some circumstances prior to transferring any securities of Ranger; (ii) grants in connection with the sale of securities of Ranger certain preemptive rights with respect to such sale, first to other holders of securities of Ranger, then to Ranger; (iii) grants the holders of securities of Ranger certain participation rights in connection with certain transfers made by other holders of securities of Ranger; and (iv) requires all holders of Ranger securities who are parties to the Securityholders Agreement to consent to and participate in a sale of the business of Ranger to an independent third party (whether by way of a sale of stock, sale of assets, merger, recapitalization or otherwise) if such sale is approved by such affiliates of CIBC and Hancock and its affiliates (provided that such affiliates of CIBC and Hancock and its affiliates each hold not less than 50% of the Ranger securities held by such party as of the Acquisition closing date) and the Board of Ranger. The agreements set forth in (i) to (iii) above terminate with respect to each security of Ranger upon the earlier of the date on which such security has been transferred in a public sale or the consummation of a public offering of $35 29 million or more of Ranger's equity securities in which the per share price of the common stock of Ranger is no less than four times its price as of the date of the Acquisition (a "Qualified Public Offering"). The agreement set forth in (iv) above terminates with respect to each interest in Ranger upon the consummation of a Qualified Public Offering. The Securityholders Agreement also provides that the Preferred Stock and PIK Notes (as defined herein) issued under the Securities Purchase Agreement will rank pari passu in the event of any liquidation, dissolution or winding-up of Ranger, and that holders of PIK Notes will use their reasonable efforts to provide the holders of Preferred Stock representation on any creditors' committee established for the benefit of the holders of PIK Notes. A similar provision is contained in the Share Purchase Agreement (as defined herein). In addition, without the consent of both the CIBC Designees and the Hancock Designees, Ranger may not: (i) issue or authorize the issuance of any equity securities or any securities convertible into equity securities in excess of 2,500 shares of Ranger common stock; (ii) consolidate or merge with, or sell all of substantially all of its assets to, any other person; (iii) permit any of its subsidiaries to issue any equity securities to any person other than Ranger or one of Ranger's direct or indirect wholly-owned subsidiaries; (iv) acquire any interest in any business for an aggregate consideration in excess of $1.0 million; or (v) amend any provision of Ranger's certificate of incorporation. Rights Agreement Ranger, Hancock and its affiliates, affiliates of CIBC, Randolph Street Partners II, Gregg L. Engles and the Danielle Schwartz Trust have entered into a Rights Agreement (the "Rights Agreement"). Under the Rights Agreement, the holders of shares of Ranger common stock originally issued to Hancock and to affiliates of CIBC have the right at any time, subject to certain conditions, to require Ranger to register any or all of their common stock in Ranger under the Securities Act on Form S-1 or Form S-2 (a "Long-Form Registration") on two occasions and on Form S-3 (a "Short-Form Registration") on unlimited occasions, and all holders of registrable securities of Ranger have the right to request that such securities be included in any such Long-Form or Short-Form Registration, subject to pro rata reductions if required by the managing underwriter. In addition, all holders of registrable securities of Ranger are entitled to request the inclusion of such securities in any registration statement at Ranger's expense whenever Ranger proposes to register any of its securities under the Securities Act (a "Piggyback Registration"). Ranger shall pay all registration expenses in connection with each Long-Form, Short-Form and Piggyback Registration. Holders of registrable securities of Ranger are prohibited from effecting a public sale of such securities seven days prior to and 90 days after the effective date of any Long-Form, Short-Form or underwritten Piggyback Registration. Ranger is prohibited from effecting a public sale of its equity securities on its own behalf during the seven days prior to and 120 days after the effective date of any Long-Form, Short-Form or underwritten Piggyback Registration. In connection with such registrations, Ranger has agreed to indemnify all holders of registrable securities against certain liabilities, including liabilities under the Securities Act. Executive Stock Agreements Messrs. Townes, Watts and Hartman have each entered into Executive Stock Agreements with Ranger (each an "Executive Stock Agreement"). Pursuant to the first Executive Stock Agreement for Mr. Townes (which was amended effective as of March 7, 2000), Mr. Townes purchased 2,663 shares of Class A Common at a price of $100 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of shares of Class A Common Stock purchased by Mr. Townes under the Executive Stock Agreement and is recourse to Mr. Townes for 25% of the original principal amount of and accrued interest under the promissory note. All of the stock purchased by Mr. Townes was originally subject to vesting but is now fully vested as of March 7, 2000. Mr. Townes entered into a Second Executive Stock Agreement dated March 7, 2000, as amended by an amendment dated August 31, 2000, pursuant to which he purchased 800 shares of the Company's Class B Common Stock for $100 per share and 120 shares of Preferred Stock for $1,000 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of shares of Class B Common Stock and Preferred Stock purchased by Mr. Townes under the Second Executive Stock Agreement and is recourse to Mr. Townes for 25% of the 30 original principal amount of and accrued interest under the promissory note. Mr. Townes entered into a Third Executive Stock Agreement dated August 31, 2000, pursuant to which he purchased 435 shares of the Company's Class B Common Stock for $100 per share and 65 shares of Preferred Stock for $1,000 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of shares of Class B Common Stock and Preferred Stock purchased by Mr. Townes under the Third Executive Stock Agreement and is recourse to Mr. Townes for 25% of the original principal amount of and 100% of the accrued interest under the promissory note. Pursuant to the first Executive Stock Agreement for Dr. Watts dated March 7, 2000 and amended by an amendment dated August 31, 2000, Dr. Watts purchased 720 shares of the Company's Class B Common Stock and 108 shares of Preferred Stock for $1,000 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of the shares of Class B Common Stock and Preferred Stock purchased by Dr. Watts under his first Executive Stock Agreement and is recourse to Dr. Watts for twenty-five percent (25%) of the original principal amount of and accrued interest under the promissory note. Dr. Watts entered into a Second Executive Stock Agreement dated August 31, 2000, pursuant to which he purchased 116 shares of the Company's Class B Common Stock for $100 per share and 18 shares of Preferred Stock for $1,000 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of shares of Class B Common Stock and Preferred Stock purchased by Dr. Watts under the Second Executive Stock Agreement and is recourse to Dr. Watts for 25% of the original principal amount of and 100% of the accrued interest under the promissory note. Pursuant to Mr. Hartman's Executive Stock Agreement, dated August 31, 2000, Mr. Hartman purchased 200 shares of the Company's Class B Common Stock and 30 shares of Preferred Stock for $1,000 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of the shares of Class B Common and Preferred purchased by Mr. Hartman under his Executive Stock Agreement and is recourse to Mr. Hartman for 25% of the original principal amount of and 100% of the accrued interest under the promissory note pursuant to his Executive Stock Agreement. In the event of a termination of Mr. Townes' employment for any reason, a portion of the stock in Ranger held by Mr. Townes or his successors and assigns shall be subject to repurchase by Ranger. In the event of the termination of Mr. Townes' employment for a reason other than: (i) death or disability; (ii) a termination by the Company for "Cause"; or (iii) a termination by Mr. Townes that is not a "Constructive Termination," Mr. Townes may require Ranger to repurchase a portion of the interests Mr. Townes holds therein. In addition, none of Messrs. Townes, Watts or Hartman may transfer the stock purchased under his Executive Stock Agreement(s) except in certain limited circumstances as provided in his Executive Stock Agreement(s), or in the case of Messrs. Townes and Watts, pursuant to the Securityholders Agreement. See "--Securityholders Agreement." Investors Stock Agreement The Danielle Schwartz Trust has entered into an Investor Stock Agreement dated April 2, 1998, amended by an amendment dated March 7, 2000 (the "First Investor Stock Agreement") with Ranger pursuant to which it purchased 5,964.8 shares of Class A Common at a price of $100 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of the shares of Class A Common Stock purchased under the First Investor Stock Agreement and is recourse to the Danielle Schwartz Trust for 25% of the original principal amount of and accrued interest under the promissory note. Under the First Investor Stock Agreement, in the event that Mr. Schwartz is terminated for "Cause" as Chairman (as such terms are defined in the Chairman Agreement), Ranger shall have the option to repurchase all of the interests in Ranger held by the Danielle Schwartz Trust. In addition, the Danielle Schwartz Trust may not transfer the interests it holds in Ranger without the consent of the Board of Ranger or pursuant to the Securityholders Agreement. See "--Securityholders Agreement." The First Investor Stock Agreement provides that in the event of certain private placements of Ranger securities, the Danielle Schwartz Trust may purchase securities in such private placements to prevent dilution which purchases may be financed with loans from Ranger of up to approximately $826,000. 31 The Danielle Schwartz Trust entered into a Second Investor Stock Agreement with Ranger, dated August 31, 2000 (the "Second Investor Stock Agreement") pursuant to which it purchased 1,022 shares of Class B Common Stock for $100 per share and 154 shares of Preferred Stock for $1,000 per share and such stock was paid for with a promissory note. This promissory note is secured by a pledge of all of the shares of Class B Common Stock and Preferred Stock purchased under the Second Investor Stock Agreement and is recourse to the Danielle Schwartz Trust for 25% of the original principal amount of and 100% of the accrued interest under the promissory note. The Danielle Schwartz Trust may not transfer the stock purchased under the Second Investor Stock Agreement except in certain limited circumstances as provided in the Second Investor Stock Agreement or the Securityholders Agreement. See "-Securityholders Agreement." Chairman Agreement Tioga, Ranger, the Company and Mr. Schwartz have entered into a Chairman Agreement (the "Chairman Agreement") pursuant to which Mr. Schwartz will serve as the Chairman of Ranger and the Company until April 2, 2001 (such period will be automatically extended for additional terms of one year unless the Board of Ranger takes action to terminate such extension), unless terminated earlier as provided in the Chairman Agreement. Such period has been automatically extended to April 2, 2002. The Chairman Agreement provides that Tioga will receive a $150,000 annual base fee (subject to annual increases based on the consumer price index) and that Mr. Schwartz will receive health benefits and life and disability insurance. In addition, Tioga will receive a bonus of $1,350,000 if the Company satisfies certain market value and liquidity requirements in connection with a sale of the business of Ranger or the Company or a public offering of equity securities of Ranger. The Company believes that the terms of the Chairman Agreement are at least as favorable to the Company as those which could be obtained from an unrelated party. Non-competition provisions of the Chairman Agreement prevent Mr. Schwartz from engaging in any business in competition with the Company for a period of 18 months after any termination or for 12 months after termination as director without Cause in countries where the Company conducts business as of the date of such termination. Mr. Schwartz may be terminated as the Chairman at any time with or without Cause. The Chairman Agreement defines "Cause" to mean any of the following acts: (i) the commission of a felony or a crime involving moral turpitude (as determined by the Board of the Company in its good faith judgment) or any indictment for a felony or crime involving moral turpitude; (ii) the commission of any other act or omission involving dishonesty, disloyalty or fraud with respect to Ranger or any of its subsidiaries or any of their customers or suppliers; (iii) conduct tending to bring Ranger or any of its subsidiaries into substantial public disgrace or disrepute; (iv) failure to perform duties as reasonably directed by the Board of Ranger which failure is not cured within 15 days after written notice thereof; (v) gross negligence or willful misconduct with respect to Ranger or any of its subsidiaries; or (vi) any other material breach of the Chairman Agreement which is not cured within 15 days after written notice thereof. If Mr. Schwartz is terminated as the Chairman for any reason other than for Cause, Tioga will receive the base fee for one year thereafter. Fee Letter In connection with the Acquisition, the Company paid Tioga the sum of $850,000 pursuant to a certain fee letter in consideration for services rendered by Tioga to the Company and Ranger. Mr. Schwartz is the president of Tioga. In consideration for such payment, the Company and Ranger on one hand, and Tioga and Mr. Schwartz on the other, along with certain other parties, agreed to release each other from any claims, liabilities or obligations not arising from gross negligence or willful misconduct with respect to the consummation of the Acquisition. Share Purchase Agreement Pursuant to a Share Purchase Agreement (the "Share Purchase Agreement"), Viad and Viad Service Companies, Limited, a United Kingdom limited liability company (together with Viad, the "Sellers") agreed to sell all of the issued and outstanding shares of capital stock or other equity interests of the entities 32 which comprised the ASIG business to Ranger. On April 1, 1998, the Company completed the Acquisition for a purchase price of approximately $95 million in cash; plus fees and expenses of approximately $4.1 million. The original purchase price was subject to a purchase price adjustment in favor of the Company for any shortfall in the net asset value, net working capital or required cash (as such terms are defined in the purchase agreement) of the ASIG business from the levels represented at the closing of the Acquisition. The purchase price was also subject to adjustment in favor of Viad in an amount equal to the amount of cash in the ASIG business at the closing of the Acquisition in excess of the required cash. As a result of the purchase price adjustments, the Company is due a purchase price settlement of $2.125 million from Viad, which is shown in the Company's March 31, 2000 consolidated balance sheet as a receivable. The Company and Viad disputed the amount of the purchase price settlement. Both Viad and the Company submitted claims to an independent arbitrator. In early August 2000, the Company learned that it had prevailed in a neutral auditor/arbitration process with respect to its claim for a purchase price adjustment from Viad. As a result of this favorable ruling, the Company received payment of $2,014,000 from Viad on August 28, 2000. The Company also had additional indemnification claims against Viad. On August 28, 2000, the Company settled and received $400,000 in payment for the additional indemnification claims. Prior to the closing of the Acquisition, the Share Purchase Agreement was amended by the Sellers and Ranger (the "Amendment"). In addition to certain other matters addressed in the Amendment, Ranger assigned all of its rights and obligations under the Share Purchase Agreement to the Company, with the exception of its rights to acquire Aircraft Service, Ltd., a United Kingdom limited liability company, which it assigned to ASIG Europe Ltd., a United Kingdom limited liability company. Noncompetition Agreement The Sellers, Greyhound Dobbs Incorporated, a Delaware corporation ("Dobbs"), Ranger and the Company entered a non-competition agreement (the "Non-competition Agreement"). Under the Non-competition Agreement, each of the Sellers and Dobbs covenanted and agreed that it would not, in any geographical location anywhere in the world, engage directly or indirectly, in any activity which is competitive with the Company's business as of the date of the Acquisition. In addition, each of Ranger and the Company covenanted and agreed that it would not, in any geographical location anywhere in the world, engage directly or indirectly, in the business of preparing and providing food and beverage services for airline passengers, airline crews, support personnel and airport personnel. The non-competition restrictions above terminate upon the earlier of: (i) the date three years following the date of the Acquisition and (ii) for restrictions that apply to Dobbs, Ranger and the Company, upon (a) the Sellers' sale of any of the capital shares of Dobbs resulting in a divestiture of control, (b) the sale of Ranger, (c) the sale by Ranger of any of the capital shares of the entities comprising the ASIG business resulting in a divestiture of control, or (d) the sale by Ranger or Dobbs of capital shares or substantially all of the assets of any subsidiary, in which event such restrictions shall terminate only with respect to the subsidiary being sold. Securities Purchase Agreement Pursuant to the Securities Purchase Agreement, Ranger authorized the issuance and sale of the following securities: (i) $8,460,000 in aggregate principal amount of 10.5% payment-in-kind notes (the "PIK Notes"); (ii) 6,000 shares of Preferred Stock; (iii) 29,862 shares of Class A Common; and (iv) 66,718 shares of Class B Common. Subject to the terms of the Securities Purchase Agreement, Ranger agreed to sell, and Hancock, affiliates of CIBC, Randolph Street Partners II and Gregg L. Engles (collectively, the "Purchasers") agreed to purchase, the Securities. The Securities Purchase Agreement contained customary provisions for such agreements, including representations and warranties and affirmative covenants. The Securities Purchase Agreement also granted the Purchasers the right to purchase their pro rata share of any future issuances of Ranger common equity or convertible securities other than in connection with certain public offerings. The Securities Purchase Agreement also provided that the PIK Notes would have a 33 scheduled repayment date of March 31, 2010, and that Ranger may optionally repay the PIK Notes before this date provided that Ranger also redeems the Preferred Stock. Relationship With Viad In fiscal 1997, the Company transferred approximately $12.8 million of accounts receivable to Viad and was charged a financing charge by Viad of approximately $0.6 million in 1997 for the transferred receivables. In addition, prior to the Acquisition, Viad allocated certain income and expenses to the Company. On April 1, 1998, the Company completed the Acquisition for a purchase price of approximately $95 million in cash plus fees and direct acquisition costs of approximately $4.1 million. The original purchase price was subject to a purchase price adjustment in favor of the Company for any shortfall in the net asset value, net working capital or required cash (as such terms are defined in the purchase agreement) of the ASIG business from the levels represented at the closing of the Acquisition. The purchase price was also subject to adjustment in favor of Viad in an amount equal to the amount of cash in the ASIG business at the closing of the Acquisition in excess of the required cash. As a result of the purchase price adjustments, the Company was due a purchase price settlement of $2.125 million from Viad, which is shown in the accompanying fiscal 2000 consolidated balance sheet as a receivable. The Company and Viad disputed the amount of the purchase price settlement. Both Viad and the Company submitted claims to an independent arbitrator. In early August 2000, the Company learned that it had prevailed in a neutral auditor/arbitration process with respect to its claim for a purchase price adjustment from Viad. As a result of this favorable ruling, the Company received payment of $2,014,000 from Viad on August 28, 2000. The Company also had additional indemnification claims against Viad. On August 28, 2000, the Company settled and received $400,000 in payment for the additional indemnification claims. Relationship with Kirkland and Ellis One of the Company's investors is Randolph Street Partners, which is affiliated with the Law Firm of Kirkland and Ellis, which provide legal services for the Company. Legal expenses incurred in connection with services performed by Kirkland and Ellis included in selling, general and administrative in the accompanying statements of operations, were approximately $482,000 for the year ended March 31, 1999, $779,000 for the year ended March 31, 2000 and $224,000 for the year ended March 31, 2001. Legal expenses of approximately $720,000 for the year ended March 31, 1999 were incurred in connection with the VIAD acquisition. Relationship with CIBC Oppenheimer Corporation One of Ranger's investors, CIBC, performed certain services for the Company in the fiscal year ended March 31, 1999. CIBC provided the Company with short-term financing between April 1, 1998 and August 18, 1998. Interest payments made to CIBC for the short-term loan was approximately $2.4 million. Furthermore, transaction fees incurred in connection with the short-term financing and subsequent exchange of the Old Notes for the Senior Notes were approximately $2,401,000. In addition, transaction fees incurred in connection with the VIAD acquisition paid to CIBC were approximately $2,250,000 for the year ended March 31, 1999. 34 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) (1) Index to Financial Statements See Page F-1 (a) (2) Index to Financial Statement Schedules Schedule II - Valuation and Qualifying Accounts See Page S-1 All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions, are inapplicable or the information called for thereby is otherwise included in the financial statements and therefore have been omitted. (a) (3) Index to Exhibits The following exhibits are filed as part of, or incorporated by reference into, this report: Exhibit No. Exhibit Description 2.1 Asset Purchase Agreement dated May 20, 1999, by and among Elsinore Acquisition Corporation and Elsinore, L.P., and with respect to Article VIII and Section 9.8 only, Ranger Aerospace Corporation, Aircraft Service International Group, Inc., Air/Lyon, Inc., Air/Lyon Associates, LP, Elsinore Aerospace Services, LP and Elsinore Services Corporation, and with respect to Section 9.8 only, General William Lyon: Incorporated by reference to Exhibit 2.1 to the Company's Current Report on 8-K dated May 20, 1999* 2.2 Amended and Restated Agreement and Plan of Merger, dated as of May 22, 2001, effective as of November 14, 2000, by and among Ranger, SFSC Acquisition Corporation, Signature Flight Support Corporation, CIBC WG Argosy Merchant Fund I, L.P. and Certain Shareholders Named Therein* 3.1 Certificate of Incorporation of the Company(1) 3.2 Bylaws of the Company(1) 4.1 Securities Purchase Agreement dated as of August 13, 1998, by and among the Company, the Guarantors and CIBC Oppenheimer Corp.(1) 4.2 Indenture dated as of August 18, 1998, among the Company and State Street Bank and Trust Company, as Trustee with respect to the 11% Senior Notes due 2005 (including the form of Series B 11% Senior Notes and Guarantees)(1) 4.3 Registration Rights Agreement dated as of August 18, 1998, among the Company, the Guarantors and CIBC Oppenheimer Corp. and State Street Bank and Trust with respect to the 11% Senior Notes due 2005(1) 10.1 Share Purchase Agreement dated as of March 14, 1998, between Viad Corp. and Viad Service Companies Limited and Ranger, as amended on March 31, 1998(1)* 35 10.2 Securities Purchase Agreement dated as of April 1, 1998, by and among Ranger, John Hancock Mutual Life Insurance Company, CIBC Wood Gundy Ventures, Randolph Street Partners and Gregg L. Engles(1) 10.3 Securityholders Agreement, dated April 1, 1998 by and among Ranger, John Hancock Mutual Life Insurance Company, CIBC Wood Gundy Ventures, Randolph Street Partners II and Gregg L. Engles (1) 10.3.1 Amendment to the Ranger Aerospace Corporation Security Holders Agreement dated April 1, 1998, between John Hancock Mutual Life Insurance Company, CIBC Wood Gundy Ventures, Inc., Gene Z. Salkind, M.D., trustee of the Danielle Schwartz Trust UAD 10/1/93 and Investors on the Schedule of Security holders and George W. Watts dated March 7, 2000: Incorporated by reference to Exhibit 10.12 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.4 Registration Rights Agreement, dated April 1, 1998 by and among Ranger, CIBC Wood Gundy Ventures, Randolph Street Partners II and Gregg L. Engles (1) 10.5 Amended and Restated Executive Stock Agreement, dated March 7, 2000 between Ranger and Stephen D. Townes: Incorporated by reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.5.1 Amendment to Promissory Note & Executive Stock Pledge Agreement, dated March 7, 2000 between Ranger and Stephen D. Townes: Incorporated by reference to Exhibit 10.14 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.5.1 Amended and Restated Second Executive Stock Agreement between Ranger Aerospace Corporation and Stephen D. Townes dated August 31, 2000 (with promissory note and stock pledge agreement): Incorporated by reference to Exhibit 10.13 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.5.2 Third Executive Stock Agreement, dated August 31, 2000 between Ranger and Stephen D. Townes (with promissory note and stock pledge agreement): Incorporated by reference to Exhibit 10.23 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.6 Amended and Restated Employment Agreement, dated March 7, 2000, between the Company and Stephen D. Townes: Incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.6.1 Amendment No. 1 dated August 31, 2000 to Amended and Restated Employment Agreement, dated March 7, 2000, between the Company and Stephen D. Townes: Incorporated by reference to Exhibit 10.6.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.7 Non-qualified Stock Option Agreement between Ranger and Stephen D. Townes dated March 7, 2000: Incorporated by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.7.1 Amendment No. 1 dated August 31, 2000 to Non-qualified Stock Option Agreement between Ranger and Stephen D. Townes dated March 7, 2000: Incorporated by reference to Exhibit 10.15 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.8 Liquidity Agreement/Right to Put Certain Shares of Executive Stock dated March 7, 2000 between Ranger and Stephen D. Townes: Incorporated by reference to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.8.1 Updated Liquidity Agreement/Right to Put Certain Shares of Executive Stock dated August 31, 2000 between Ranger and Stephen D. Townes: Incorporated by reference to Exhibit 10.18 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 36 10.8.2 Liquidity Agreement/Right to Put Certain Shares of Executive Stock dated August 31, 2000 between Ranger and Stephen D. Townes: Incorporated by reference to Exhibit 10.26 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.9 Amended & Restated Executive Stock Agreement dated August 31, 2000 between Ranger and George W. Watts (including promissory note and stock pledge agreement): Incorporated by reference to Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.9.1 Second Executive Stock Agreement dated August 31, 2000 between Ranger and George W. Watts (including promissory note and stock pledge agreement): Incorporated by reference to Exhibit 10.24 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.10 Amended and Restated Employment Agreement, dated March 7, 2000, between the Company and George W. Watts: Incorporated by reference to Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.10.1 Amendment No. 1 dated August 31, 2000 to Amended and Restated Employment Agreement, dated March 7, 2000, between the Company and George W. Watts: Incorporated by reference to Exhibit 10.9.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.11 Non-qualified Stock Option Agreement between Ranger and George W. Watts dated March 7, 2000: Incorporated by reference to Exhibit 10.16 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.11.1 Amendment No. 1 dated August 31, 2000 to Non-qualified Stock Option Agreement between Ranger and George W. Watts dated March 7, 2000: Incorporated by reference to Exhibit 10.16 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.12 Liquidity Agreement/Right to Put Certain Shares of Executive Stock dated March 7, 2000 between Ranger and George W. Watts: Incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.12.1 Updated Liquidity Agreement/Right to Put Certain Shares of Executive Stock dated August 31, 2000 between Ranger and George W. Watts: Incorporated by reference to Exhibit 10.19 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.12.2 Liquidity Agreement/Right to Put Certain Shares of Executive Stock dated August 31, 2000 between Ranger and George W. Watts: Incorporated by reference to Exhibit 10.27 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.13 Investor Stock Agreement, dated April 2, 1998 between Ranger and The Danielle Schwartz Trust: Incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-4 (Registration No. 333-64513) 10.13.1 Amendment No.1 dated March 7, 2000 to Investor Stock Agreement between Ranger and The Danielle Schwartz Trust 10.13.2 Second Investor Stock Agreement, dated August 31, 2000 between Ranger and The Danielle Schwartz Trust (including promissory note and stock pledge agreement): Incorporated by reference to Exhibit 10.25 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.14 Chairman Agreement, dated April 2, 1998, between Ranger, the Company, Tioga Capital Corporation and George B. Schwartz: Incorporated by reference to Exhibit 10.10 to the Company's Registration Statement on Form S-4 (Registration No. 333-64513) 10.14.1 Amendment No. 1, dated August 31, 2000 to Chairman Agreement, dated April 2, 1998, between Ranger, the Company, Tioga Capital Corporation and George B. Schwartz: Incorporated by reference to Exhibit 10.10 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.15 Warrant Agreement dated March 7, 2000 between Ranger and Tioga Capital Corporation: Incorporated by reference to Exhibit 10.28 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 37 10.16 Executive Stock Agreement, dated August 31, 2000 between Ranger and Jeffrey P. Hartman (including promissory note and stock pledge agreement) : Incorporated by reference to Exhibit 10.21 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.17 Employment Agreement, dated August 31, 2000 between Ranger and Jeffrey P. Hartman: Incorporated by reference to Exhibit 10.20 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.18 Non-qualified Stock Option Agreement between Ranger and Jeffrey P. Hartman dated March 7, 2000: Incorporated by reference to Exhibit 10.22 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000. 10.19 Ranger Aerospace Corporation 1999 Stock Option Plan 10.20 Senior Credit Facility dated April 2, 1998, between the Company and Key Corporate Capital, Inc., including the amendment thereto dated May 20, 1999: Incorporated by reference to Exhibit 10.11 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000. 10.20.1 Second Amendment to Senior Credit Facility dated July 2000. 10.20.2 Third Amendment to Senior Credit Facility dated May 2001. 21.1 Subsidiaries of the Company _____________ * The Company agrees to furnish supplementally to the Commission a copy of any omitted schedule or exhibit to such agreement upon request by the Commission. (1) Incorporated by reference to the same numbered exhibit to the Company's Registration Statement on Form S-4 (Registration No. 333-64513). (b) Reports on Form 8-K None 38 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. By: /s/ Stephen D. Townes ------------------------------------- Stephen D. Townes President and Chief Executive Officer * * * Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed on June 29, 2000 by the following persons on behalf of the Registrant and in the capacities indicated. SIGNATURE TITLE --------- ----- /s/ Stephen D. Townes President and Chief Executive Officer and ---------------------- Director (Principal Executive Officer) Stephen D. Townes /s/ Jeffrey P. Hartman Senior Vice President and Chief Financial ---------------------- Officer (Principal Accounting and Financial Officer) Jeffrey P. Hartman /s/ George B. Schwartz Chairman of the Board, Director and Assistant ---------------------- Secretary George B. Schwartz /s/Jay R. Levine Director ---------------------- Jay R. Levine /s/ Edward Levy Director ---------------------- Edward Levy /s/ S. Mark Ray Director ---------------------- S. Mark Ray 39 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. INDEX TO FINANCIAL STATEMENTS Report of Independent Certified Public Accountants F-2 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Changes in Stockholder's Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 F-1 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Stockholder Aircraft Service International Group, Inc. We have audited the accompanying consolidated balance sheets of Aircraft Service International Group, Inc. and subsidiaries as of March 31, 2001 and 2000, and the related consolidated statements of operations, changes in stockholder's equity and cash flows for each of the three years in the period ended March 31, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Aircraft Service International Group, Inc. and subsidiaries at March 31, 2001 and 2000, and the consolidated results of their operations and their cash flows for each of the three years in the period ended March 31, 2001, in conformity with accounting principles generally accepted in the United States. /s/ ERNST & YOUNG LLP Miami, Florida June 22, 2001 F-2

~~CLASS~~AIRCRAFT ASERVICE ~~COMMON~~INTERNATIONAL ~~CLASS~~GROUP, BINC. ~~COMMON~~CONSOLIDATED ~~PREFERRED~~BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) MARCH 31, MARCH 31, 2001 2000 -----------~~---~~ -----------~~---~~ ~~---------~~ASSETS ~~STOCK~~Current ~~Name~~assets: Cash and ~~Address~~cash ofequivalents ~~Beneficial~~$ ~~Owner~~634 ~~Number~~$ ~~Percent~~421 ~~Number~~Accounts ~~Percent~~receivable, ~~Number~~net ~~Percent~~of ~~Directors~~allowance ~~and~~of ~~Named~~$548 ~~Executive~~and ~~Officers:~~$645 ~~George~~at B.March ~~Schwartz (a) 5~~31,~~964.8~~ ~~14.06%~~2001 --and ~~0.00%~~2000, --respectively ~~0.00% Stephen D. Townes (b) 2~~28,~~663.0~~029 ~~6.28% 3~~24,~~136~~028 ~~(c)~~Prepaid ~~3.62%~~expenses ~~120 0.70% George W. Watts -- 0.00%~~ 1,~~484~~183 ~~(d)~~ 1~~.71%~~,694 ~~108~~Spare ~~0.63%~~parts ~~Jeffrey~~and P.supplies ~~Hartman~~2,761 2,428 -- ~~0.00% 191 (e) 0.22%~~ -- ~~0.00% John W. Gassett~~ -- ~~0.00% 266 (f) 0.31% 15 0.09% Paul Jefferson~~ -- ~~0.00% 254 (g) 0.29% 15 0.09% Edward Levy (h) 22,048.4 51.96% 13,430 15.51% 5,321.8 31.25% D. Dana Donovan (i)~~ --- ~~0.00% 65,456 75.60% 9,818.4 57.66% S. Mark Ray (I)~~ ----------- ~~0.00%~~Total ~~65,456~~current ~~75.60%~~assets 932,~~818.4~~607 ~~57.66% Jay R. Levine (h) 22~~28,~~048.4~~571 ~~51.96% 13~~Property,~~430~~ ~~15.51%~~plant ~~5,321.8 31.25% All Directors~~ and ~~Executive Officers as a Group (16 persons) 30~~equipment,~~676.2~~ ~~72.29%~~net ~~85,307~~of ~~98.52%~~accumulated ~~15,468.7~~depreciation ~~90.84% 5% OWNERS: John Hancock Mutual Life Insurance Company (j) -- 0.00% 65,456 75.60% 9,818.4 57.66% Canadian Imperial Bank~~ of ~~Commerce (k)~~ $22,~~048.4~~157 ~~51.96%~~and $13,~~430~~526 ~~15.51%~~at ~~5,321.8~~March 31~~.25% Randolph Street Partners II (l) 5~~,~~678.0~~ ~~13.59%~~2001 --and ~~0.00% 865.2 5.08% Gregg L. Engles (m) 4~~2000,~~497.6~~ ~~10.60%~~respectively ~~-- 0.00% 674.6 3.96% Danielle Schwartz Trust~~ 43,008 ~~UAD 10/1/93 (n) 5~~48,~~694.8~~162 ~~13.42% -- 0.00% -- 0.00% (a) Includes 5~~Goodwill,~~964.8~~ ~~shares~~net of ~~Class~~accumulated Aamortization ~~Common~~of ~~owned by the Danielle Schwartz Trust~~$8,003 ~~UAD~~and ~~10/1/93. Mr. Schwartz does not have beneficial ownership in~~$5,262 orat ~~control~~March ~~over~~31, ~~the~~2001 ~~Danielle~~and ~~Schwartz Trust. (b) Includes 2~~2000,~~663~~ ~~shares~~respectively ~~of Class A Common currently being transferred from Mr. Townes to the Townes Family Trust. Mr. Townes does not have beneficial ownership in~~46,871 ~~or control over~~49,571 ~~the~~Deferred ~~Townes~~financing ~~Family Trust. (c) Includes 2~~costs,~~336~~ ~~shares~~net ~~that~~of ~~may~~accumulated beamortization ~~acquired through stock options exercisable within 60 days~~ of ~~March 31~~$1,420 ~~2000.~~and ~~(d)~~$889 ~~Includes~~at ~~764 shares that may be acquired through stock options exercisable within 60 days of~~ March 31, ~~2000.~~2001 ~~(e)~~and ~~Includes~~2000, ~~191~~respectively ~~shares~~2,204 ~~that~~2,736 ~~may~~Receivable befrom ~~acquired~~Viad ~~through~~- ~~stock options exercisable within 60 days of March 31~~2,125 ~~2000.~~Investments ~~(f)~~in ~~Includes~~and ~~166~~advances ~~shares~~to ~~that~~joint ~~may~~venture be495 ~~acquired~~359 ~~through~~Other ~~stock~~assets ~~options~~797 ~~exercisable~~808 ~~within~~----------- 60----------- ~~days~~Total ofassets ~~March~~$ 31125,982 ~~2000.~~$ ~~(g)~~132,332 ~~Includes~~=========== ~~154~~=========== ~~shares~~LIABILITIES ~~that~~AND ~~may~~STOCKHOLDER'S beEQUITY ~~acquired~~Current ~~through~~liabilities: ~~stock~~Accounts ~~options~~payable ~~exercisable~~$ ~~within 60 days of March 31~~3,897 ~~2000.~~$ ~~(h) Includes 22~~6,~~048~~387 ~~shares~~Accrued ofexpenses ~~Class A Common~~23,527 1317,~~430~~500 ~~shares~~Customer ofdeposits ~~Class~~3,983 ~~B Common and 5~~3,~~322~~645 ~~shares~~Current ofportion ~~Preferred Stock beneficially owned by CIBC. Such person disclaims beneficial ownership~~ of ~~all~~Term ~~such~~Loan ~~shares.~~and ~~Such~~other ~~person's~~731 ~~address~~1,039 is----------- ~~c/o~~----------- ~~CIBC,~~Total ~~425~~current ~~Lexington~~liabilities ~~Avenue~~32,138 ~~New York~~28,571 ~~New~~Senior ~~York~~Credit ~~10017.~~Facility ~~(i)~~4,740 ~~Includes 65~~5,~~456~~930 ~~shares~~Term ofLoan ~~Class B Common and 1~~3,~~358~~438 share of Preferred Stock beneficially owned by John Hancock Mutual Life Insurance Company. Such person disclaims beneficial ownership of all such shares. Such person's address is c/o John Hancock Mutual Life Insurance Company4,145 ~~John~~Senior ~~Hancock~~Notes ~~Place~~80,000 ~~Box 111~~80,000 ~~Boston,~~Commitments ~~Massachusetts~~and ~~02117.~~contingencies ~~(j) Such person~~Stockholder's ~~address~~equity: isCommon ~~John Hancock Place~~stock, ~~Box 111, Boston, Massachusetts 02117~~$0.01 ~~(k)~~par ~~Such~~value; ~~person's address is 161 Bay Street~~1,000 ~~8th~~shares ~~Floor, BCE Place~~authorized; PP100 ~~Box~~shares ~~500~~issued ~~MSJ~~and ~~258,~~outstanding ~~Toronto,~~-- ~~Canada.~~-- ~~Each~~Paid-in ofcapital ~~Messrs.~~27,993 ~~Jay Bloom~~27,800 ~~Andrew~~Accumulated ~~Heyer~~deficit ~~and Dean Kehler~~ (~~each~~21,901) ~~of who are employees of an affiliate of CIBC~~(14,095) ~~may~~Accumulated beother ~~viewed~~comprehensive asloss ~~sharing beneficial ownership of such shares.~~ (l426) ~~Such~~( ~~person's~~19) ~~address~~----------- is----------- ~~200~~Total ~~East Randolph Drive, Suite 5400, Chicago, Illinois 60601. (m) Such person~~stockholder's ~~address~~equity ~~is 3811 Turtle Creek Road~~5,666 ~~Dallas~~13,686 ~~Texas~~----------- ~~75219~~----------- ~~(n)~~Total ~~Such~~liabilities ~~person~~and stockholders's ~~address~~equity is$ ~~c/o Ranger Aerospace Corporation~~125,982 ~~7600~~$ ~~Pelham Centre~~132,332 ~~Greenville,~~=========== ~~South~~=========== ~~Carolina~~See ~~29615-3170.~~accompanying notes

F-3

~~SIGNATURE~~AIRCRAFT ~~TITLE~~SERVICE ~~--------------------------------------------------------~~INTERNATIONAL ~~--------------------------------------------------~~GROUP, ~~/s/ Stephen D~~INC. ~~Townes.~~CONSOLIDATED .STATEMENTS .OF .OPERATIONS .(DOLLARS .IN .THOUSANDS, .EXCEPT .PER .SHARE .DATA) .Year .Ended ~~. . . . . President and Chief Executive Officer and~~ ------------------------------- ~~Director~~March ~~(Principal~~31, ~~Executive~~March ~~Officer)~~31, ~~Stephen~~March D.31, ~~Townes~~2001 ~~/s/~~2000 ~~Jeffrey~~1999 ~~P. Hartman . . . . . . . . . . . . . . . . . Senior Vice President and Chief Financial~~ --------- --------- ---------- ~~Officer~~Revenues ~~(Principal~~$161,983 ~~Accounting~~$141,044 ~~and~~$123,441 ~~Financial~~Costs ~~Officer)~~and ~~Jeffrey~~expenses: P.Operating ~~Hartman~~expenses ~~/s/~~136,664 ~~George~~116,409 B.99,035 ~~Schwartz~~Selling, .general .and .administrative .10,648 .13,266 .8,865 .Amortization .of .intangibles .2,753 .2,727 .2,545 .Depreciation .8,867 .7,508 ~~. . Chairman of the Board~~6,176 ~~Director and Assistant~~ --------- --------- ---------- ~~Secretary~~Total ~~George~~costs B.and ~~Schwartz~~expenses ~~/s/~~158,932 D.139,910 ~~Dana~~116,621 ~~Donovan. . . . . . . . . . . . . . . . . . . Director~~ --------- --------- ---------- D.Operating ~~Dana~~income ~~Donovan~~3,051 ~~/s/~~1,134 ~~Jay~~6,820 R.Other ~~Levine~~income .(expense), .net .88 .24 .(253) .Interest .income .40 .100 .207 .Interest .and .other .financial .expense .(10,939) .(10,583) .(11,281) ~~. . Director~~ --------- --------- ---------- ~~Jay~~Loss R.before ~~Levine~~income ~~/s/~~taxes ~~Edward~~and ~~Levy.~~extraordinary .item .(7,760) .(9,325) .(4,507) .(Benefit) .provision .for .income .taxes .46 .-- .50 ~~. . . . . . . . Director~~ --------- --------- ---------- ~~Edward~~Loss ~~Levy~~before ~~/s/~~extraordinary S.item ~~Mark~~(7,806) ~~Ray.~~(9,325) .(4,557) .Extraordinary .loss .on .early .extinguishment .of .debt .-- .-- .(213) ~~. . . . . . . . . Director~~ --------- --------- ---------- S.Net ~~Mark~~loss ~~Ray~~$ (7,806) $ (9,325) $ (4,770) ========= ========= ========= See accompanying notes

F-4

~~Reports~~AIRCRAFT ofSERVICE ~~Independent~~INTERNATIONAL ~~Certified~~GROUP, ~~Public~~INC. ~~Accountants~~(U.S. FDOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY ACCUMULATED COMMON OTHER TOTAL STOCK COMMON PAID-2IN ~~Consolidated~~ACCUMULATED ~~Balance~~COMPREHENSIVE ~~Sheets~~STOCKHOLDER'S FOUTSTANDING STOCK CAPITAL DEFICIT LOSS EQUITY -5---------------------------- ~~Statements~~----------- of------- ~~Operations~~-------- F-6------------ ~~Combined~~--------------- ~~Statements~~--------------- ofBALANCE ~~Changes~~AT inMARCH ~~Combined~~31, ~~Equity~~1998 ~~and~~100 ~~Consolidated~~$ ~~Statements~~-- of$ ~~Changes~~-- in$ ~~Stockholder's~~-- ~~Equity~~$ F-- $ -- Capital contribution -- -- 24,100 -- -- 24,100 Comprehensive loss: Net loss -- -- -- (4,770) -- (4,770) Foreign currency translation adjustment -- -- -- -- 20 20 --------------- Total comprehensive loss (4,750) BALANCE AT MARCH 31, 1999 100 -- 24,100 (4,770) 20 19,350 ----------------------------- ----------- ------- -------- ------------- --------------- --------------- Capital contribution -- -- 3,700 -- -- 3,700 Comprehensive loss: Net loss -- -- -- (9,325) -- (9,325) Foreign currency translation adjustment -- -- -- -- (39) (39) --------------- Total comprehensive loss (9,364) BALANCE AT MARCH 31, 2000 100 -- 27,800 (14,095) (19) 13,686 ----------------------------- ----------- ------- -------- ------------- --------------- --------------- Capital contribution -- -- 193 -- -- 193 Comprehensive loss: Net loss -- -- -- (7,806) ~~Statements~~-- of(7,806) ~~Cash~~Foreign ~~Flows~~currency Ftranslation adjustment -- -- -- -- (407) (407) --------------- Total comprehensive loss (8,213) ~~Notes~~----------------------------- to----------- ~~Financial~~------- ~~Statements~~-------- F-9------------ --------------- --------------- BALANCE AT MARCH 31, 2001 100 $ -- $ 27,993 (21,901) (426) $ 5,666 ============================= =========== ======= ======== ============= =============== ===============

See accompanying notes F-5

~~MARCH~~AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (U.S. DOLLARS IN THOUSANDS) Year ended, ------------------------------- March 31, ~~MARCH~~March 31, March 31, 2001 2000 1999 -------- --- ------ ---------- ~~ASSETS~~OPERATING ~~Current~~ACTIVITIES ~~assets:~~Net ~~Cash~~loss ~~and~~$(7,806) ~~cash equivalents~~ $ ~~421~~(9,325) $ 3(4,~~311~~770) ~~Accounts~~Adjustments ~~receivable,~~to reconcile net ofloss ~~allowance~~to ofnet ~~$645~~cash ~~and~~provided ~~$567~~by at(used ~~March~~in) ~~31,~~operating ~~2000~~activities: ~~and~~Amortization ~~1999,~~of ~~respectively~~intangible 24assets 2,~~028~~753 162,~~421~~727 ~~Prepaid~~2,545 ~~expenses~~Depreciation 18,~~694~~867 ~~650~~7,508 ~~Spare~~6,176 ~~parts~~Amortization ~~and~~of ~~supplies~~deferred ~~2,428~~financing costs 532 552 2,~~095~~888 Deferred income taxes -- -- 41 Provision for bad debts --~~-----~~ --~~---------~~ ~~Total~~36 ~~current~~Equity ~~assets~~in ~~28,571~~(income) ~~22,477~~loss ~~Property,~~of ~~plant~~joint ~~and~~venture ~~equipment,~~(197) ~~net~~(135) of157 ~~accumulated~~Loss ~~depreciation~~on sale of ~~$13,526~~fixed ~~and~~assets ~~$6,176~~126 at196 ~~March~~-- ~~31,~~Changes ~~2000~~in ~~and~~operating ~~1999,~~assets ~~respectively~~and 48liabilities,~~162~~ ~~46,889 Goodwill,~~ net of ~~accumulated~~effects ~~amortization~~ of ~~$5,262~~acquisitions: ~~and~~Accounts $receivable (2,~~545~~283) ~~at March 31~~(5,811) ~~2000 and 1999~~(1,069) ~~respectively~~Prepaid ~~49,571~~expenses ~~48,668~~511 ~~Deferred financing costs~~(1,024) ~~net~~(523) ofSpare ~~accumulated~~parts ~~amortization~~and ofsupplies ~~$889~~(333) ~~and~~(333) $(337) atOther ~~March~~assets ~~31,~~11 ~~2000~~(512) ~~and~~278 ~~1999,~~Accounts ~~respectively~~payable (2,~~736~~490) 31,~~205~~152 ~~Receivable~~462 ~~from~~Accrued ~~Viad~~expenses 26,~~125~~027 24,~~125~~070 ~~Investments~~(294) inCustomer ~~and~~deposits ~~advances~~338 to157 ~~joint~~1,055 ~~venture 359 224 Other assets 808 166~~ -------- --- ------ ---------- ~~Total~~Net ~~assets~~cash $provided ~~132,332~~by $(used ~~123,754~~in) ~~===========~~operating ~~===========~~activities ~~LIABILITIES~~6,056 ~~AND~~(778) ~~STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $~~ 6,~~387~~645 $INVESTING ~~5,082~~ACTIVITIES ~~Accrued~~Purchases ~~expenses~~of 17property,~~500~~ ~~12,850~~plant ~~Customer~~and ~~deposits~~equipment (3,~~645~~839) 3(8,~~488~~027) ~~Current~~(13,431) ~~portion~~Purchase of ~~term~~ASIG ~~loan~~business, ~~and~~less ~~other~~cash ~~1,039~~acquired 57of $6,513 -- -- (88,487) Purchase of ACS --~~-----~~ (160) --~~---------~~ ~~Total~~Purchase ~~current~~of ~~liabilities~~Elsinore 28business,~~571~~ ~~21,477~~less ~~Senior~~cash ~~credit~~acquired ~~facility~~of $8 -- (5,~~930~~672) ~~2,927~~-- ~~Term~~Purchase ~~loan~~of ~~4,145~~GAH business -- ~~Senior~~-- ~~Notes~~(438) ~~80,000~~Advances ~~80,000~~to joint venture 8 -- (200) --------- --------- ---------- ~~Total~~Net ~~liabilities~~cash ~~118~~used in investing activities (3,~~646~~831) ~~104~~(13,~~404~~859) ~~Commitments~~(102,556) ~~and~~FINANCING ~~contingencies~~ACTIVITIES ~~Stockholder's~~Capital ~~equity:~~contribution ~~Common~~193 ~~stock~~3,700 ~~$0.01~~24,100 ~~par~~Borrowings ~~value;~~(repayments), net under Senior Credit Facility (1,~~000~~690) ~~shares~~8,130 ~~authorized;~~80,630 ~~100~~Payments ~~shares~~of ~~issued~~deferred ~~and~~financing ~~outstanding~~costs -- --(83) ~~Paid-in~~(5,508) ~~capital~~Principal ~~27,800~~payments ~~24,100~~on ~~Accumulated~~notes ~~deficit~~payable (~~14,095~~515) ~~(4,770)~~-- ~~Accumulated~~-- ~~other~~-------- ~~comprehensive~~--------- ---------- Net cash (~~loss~~used in) ~~income~~provided (by 19financing activities (2,012) 2011,747 99,222 -------- --- ------ ---------- ~~Total~~Net ~~stockholder's~~increase ~~equity~~(decrease) 13in cash and cash equivalents 213 (2,~~686~~890) 193,~~350~~311 Cash and cash equivalents at beginning of year 421 3,311 -- --------- --------- ---------- ~~Total~~Cash ~~liabilities~~ and ~~stockholders'~~cash ~~equity~~equivalents at end of year $ ~~132~~634 $ 421 $ 3,~~332~~311 ======== ========= ========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid $10,135 ~~123~~$ 9,~~754~~888 $ 4,392 ======== ========= ========== Taxes paid $ 90 $ 515 $ 401 ======== ========= ========== Receipt of fixed assets in satisfaction of a receivable $ -- $ -- $ 1,414 ======== ========= ========== SEE ACCOMPANYING NOTES.

F-6 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1. BASIS OF PRESENTATION AND NATURE OF BUSINESS BASIS OF PRESENTATION Aircraft Service International Group, Inc. (the "Company" or "Successor") was organized in March 1998 for the purpose of acquiring beneficial ownership and control of all the outstanding capital stock or other equity interests in Aircraft Service International, Inc., ASIG Miami, Inc. (previously known as Dispatch Services, Inc.), ASIG Fueling Miami, Inc. (previously known as Florida Aviation Fueling Co.), Bahamas Airport Service, Ltd., Freeport Flight Services, Ltd., ASIG, Ltd. (previously known as Aircraft Service, Ltd.), ASIG Germany GmbH (previously known as ASII Holding GmbH), and ASII Aircraft Service Canada Ltd. (collectively the "ASIG business" or "Predecessor") from Viad Corp ("Viad") and Viad Service Companies, Limited as of April 1, 1998 pursuant to a share purchase agreement (the "Acquisition"). Prior to the Acquisition by the Company, the ASIG business was operated by Viad under the divisional name of Aircraft Services International Group. The ASIG business had a December 31 year-end under Viad's ownership. The Company's fiscal year end is March 31. The Company's accompanying balance sheets as of March 31, 2001 and 2000 and the related statements of operations, changes in stockholder's equity and cash flows for the years ended March 31, 2001, 2000 and 1999 are presented on a consolidated basis. The Company is 100% owned by Ranger Aerospace Corporation ("Ranger"). Prior to April 1, 1998, the Company had no operations. On April 1, 1998, the Company completed the Acquisition for a purchase price of approximately $95 million in cash plus fees and direct acquisition costs of approximately $4.1 million. The original purchase price was subject to a purchase price adjustment in favor of the Company for any shortfall in the net asset value, net working capital or required cash (as such terms are defined in the purchase agreement) of the ASIG business from the levels represented at the closing of the Acquisition. The purchase price was also subject to adjustment in favor of Viad in an amount equal to the amount of cash in the ASIG business at the closing of the Acquisition in excess of the required cash. As a result of the purchase price adjustments, the Company is due a purchase price settlement of $2.125 million from Viad, which is shown in the accompanying consolidated balance sheet as a receivable. Currently, the Company and Viad have disputed the amount of the purchase price settlement. Both Viad and the Company have submitted claims to an independent arbitrator. In early August 2000, the Company learned that it had prevailed in a neutral auditor/arbitration process with respect to its claim for a purchase price adjustment from Viad. As a result of this favorable ruling, the Company received payment of $2,014 from Viad on August 28, 2000. The Company also had additional indemnification claims against Viad. On August 28, 2000, the Company settled and received $400 in payment for the additional indemnification claims. F-7 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1. BASIS OF PRESENTATION AND NATURE OF BUSINESS (CONTINUED) The Acquisition was accounted for as a purchase and, accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on appraisals and other estimates of their underlying fair values. The excess of the purchase price over the fair value of net assets acquired of approximately $50.8 million is classified as goodwill and is being amortized over 20 years. The following is a summary of the purchase price allocation: Net working capital, including cash of $6,513 $ 4,783 Property, plant and equipment 38,149 Other assets 3,268 Goodwill 50,775 -------- $96,975 ======== The purchase price was funded as follows: Sale of 100 shares of common stock, $0.01 par value, to Ranger Aerospace Corporation $24,100 Borrowings under Senior Increasing Rate Notes (see Note 8) 75,000 Purchase price adjustment - receivable from Viad at March 31, 1999 (2,125) -------- $96,975 ======== The following unaudited pro forma data presents a summary of consolidated results of operation of the Company for the year ended March 31, 1998 as if the Acquisition had occurred on April 1, 1997: Revenues $119,700 Net loss (4,010) The unaudited pro forma results have been prepared for comparison purposes only and include certain adjustments, such as additional depreciation and amortization expense due to the revaluation of assets acquired and the goodwill related to the Acquisition, additional interest expense associated with the debt related to the acquisition, and certain reductions in expense associated with the restructuring of certain Company functions after the Acquisition. The unaudited pro forma results do not purport to be indicative of the results of operation which actually would have resulted had the Acquisition occurred on April 1, 1997, or of future results of operation of the Company. On May 20, 1999, Elsinore Acquisition Corporation ("EAC"), a newly-created, wholly-owned subsidiary of the Company, acquired substantially all of the assets of Elsinore, L.P., ("Elsinore"), which includes 23 operating units in 10 states, the U.S. Virgin Islands and Puerto Rico. Elsinore provides a variety of ground handling, fueling, aircraft cleaning and other aviation services to major commercial airlines. EAC will primarily continue the same business as previously conducted by Elsinore. The Company and its sole shareholder, Ranger Aerospace, are guarantors of EAC's obligations under the agreement governing the asset purchase. The total consideration paid by EAC was approximately $5.9 million (subject to post-closing adjustments), which consists of $5 million in cash and a promissory note of approximately $0.9 million. The promissory note has a maturity of one year from the date of purchase, and is subject to post-closing adjustments. The Company borrowed the cash portion of the purchase price from Key Corporate Capital, Inc. ("Key") pursuant F-8 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 1. BASIS OF PRESENTATION AND NATURE OF BUSINESS (CONTINUED) to the terms of an amendment to the Company's existing senior credit facility, which the Company recorded on the books of EAC. The Elsinore acquisition was accounted for as a purchase and accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on appraisals and other estimates of their underlying fair values. The excess of the purchase price over the fair value of net assets acquired of approximately $3.7 million is classified as goodwill and is being amortized over 20 years. The following is a summary of the purchase price allocation: Net working capital, including cash of $9 $1,110 Property, plant and equipment 799 Other assets 130 Goodwill 3,453 ------ $5,492 ====== The purchase price was funded as follows: Senior credit facility (see Note 7) $5,000 Promissory note (see Note 7) 492 ------ $5,492 ====== The following unaudited pro forma data presents a summary of consolidated results of operation of the Company for the twelve months ended March 31, 2000 and 1999 as if the Elsinore acquisition had occurred on April 1, 1998: Year Ended March 31, 2000 1999 --------- --------- Revenue $142,796 $137,319 Net loss (9,408) (6,025) The unaudited pro forma results have been prepared for comparison purposes only and include certain adjustments, such as additional amortization expense due to the goodwill related to the Elsinore acquisition and additional interest expense associated with the debt related to the Elsinore acquisition. The unaudited pro forma results do not purport to be indicative of the results of operation which actually would have resulted had the Elsinore acquisition occurred on April 1, 1998, or of future results of operation of the Company. In March 2000, a working capital adjustment of approximately $407,000 to reduce the note payable was made pursuant to an agreement with General William Lyon, which reduced goodwill. No further adjustments are anticipated. NATURE OF BUSINESS The Company and its subsidiaries provide aviation fueling services, aircraft ground services and other aviation services at various airports in the United States, Europe and the Caribbean. F-9 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION AND COMBINATION The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly owned or controlled. All significant intercompany balances and transactions have been eliminated. SPARE PARTS AND SUPPLIES Spare parts and supplies are valued at the lower of cost or market. Cost is computed using the first-in, first-out cost method. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are stated at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets, which range from 4 to 20 years for operating equipment, 20 to 30 years for buildings, and 3 to 10 years for office furniture and equipment. Leasehold improvements are amortized over the life of the lease or the related asset, whichever is shorter. Maintenance and repairs are charged to expense when incurred. Significant expenditures, which extend the useful lives of assets, are capitalized. FOREIGN CURRENCY TRANSLATION For the Company's operations where the functional currency is other than the U.S. Dollar, balance sheet amounts are translated using the exchange rate in effect at the balance sheet date. Income statement amounts are translated at the average exchange rates during the year or period. Translation adjustments resulting from the changes in exchange rates from year to year are recorded as accumulated other comprehensive loss. INVESTMENTS IN AND ADVANCES TO JOINT VENTURE The Company accounts for its investment in a 50% owned joint venture under the equity method of accounting. The joint venture, Skytanking GmbH, located in Munich, Germany, provides aviation fueling and aircraft ground services at Munich International Airport. IMPAIRMENT OF LONG-LIVED ASSETS The Company accounts for the impairment of long-lived assets under Statement of Financial Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS No. 121). SFAS No. 121 requires impairment losses to be recorded on long-lived assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The Company believes no impairment indicators existed at March 31, 2001. IMPAIRMENT OF GOODWILL The carrying value of cost in excess of net assets acquired is reviewed for impairment whenever events or changes in circumstances indicate that it may not be recoverable. If such an event occurred, the Company would prepare projections of future results of operations for the remaining amortization period. If such projections indicated that the cost in excess of net assets acquired would not be recoverable, the Company's carrying value of such asset would be reduced by the estimated excess of such value over projected income. F-10 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) REVENUE RECOGNITION The Company recognizes revenue when services are performed and collectibility is reasonably assured. INCOME TAXES The Company and the Predecessor account for income taxes under FASB Statement No. 109, "Accounting for Income Taxes" (SFAS No. 109). Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. COMPREHENSIVE INCOME Comprehensive income (loss) includes net income (loss) and other comprehensive income, which includes, but is not, limited to, unrealized gains for marketable securities and future contracts, foreign currency translation adjustments and minimum pension liability adjustments. The accompanying financial statements for the Company reflect other comprehensive loss consisting of net loss and foreign currency translation adjustments. NEW ACCOUNTING PRONOUNCEMENTS In fiscal year 1999, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133), This statement establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts and for hedging activities. It requires that an entity recognized all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value. In fiscal year 2000, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities -- Deferral of the Effective Date of FASB Statement No. 133" (SFAS No. 137), which delayed the effective date of SFAS No. 133. The effective date for SFAS 133, after issuance of SFAS No. 137, is for all fiscal quarters of all fiscal years beginning after June 15, 2000. The Company adopted SFAS No. 133 in fiscal year 2001. The adoption of SFAS No. 133 did not have a material impact on the Company's financial statements. In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in Financial Statements". The SEC staff subsequently amended SAB 101 to provide registrants with additional time to implement SAB 101. The Company adopted SAB 101 in by the fourth quarter of fiscal 2001. The adoption of SAB 101 did not have a material effect on its consolidated financial position, results of operations or cash flows. CONCENTRATION OF CREDIT RISK The Company provides services to domestic and foreign airlines and continually monitors its exposure for credit losses. The Company limits its exposure by requiring prepayments or deposits from certain customers. F-11 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. BUSINESS SEGMENTS Pursuant to SFAS No. 131, "Disclosure About Segments of a Business Enterprise and Related Information," the Company is required to report segment information. As the Company only operates in one business segment, no additional reporting is required, except for the geographic financial information provided in Note 15. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of cash, accounts receivable, accounts payable and accrued expenses in the accompanying consolidated financial statements approximate their fair value because of their short-term maturities. At March 31, 2001 and 2000, the fair value of the long-term debt, based on quoted market prices, was approximately $90.1 million and $69.4 million, respectively. 3. RELATED-PARTY TRANSACTIONS The Company's parent, Ranger, has no independent operations. Expenses incurred by Ranger related to the Aircraft Service International Group business have been pushed down to the Company. These expenses totaled $1,539, $1,089 and $1,715 in fiscal 2001, 2000 and 1999, respectively. The Company's Chairman is the President of a company which received $162 for a retainer in fiscal 2001, a $150 annual fee in fiscal 2000 and 1999 and an $850 payment from the Company for acquisition related services in connection with the Acquisition. In addition, the same company will receive a bonus of $1,350 if the Company satisfies certain market value and liquidity requirements in connection with a sale of the business of Ranger or the Company or a public offering of equity securities of Ranger. One of the Company's investors is Randolph Street Partners, which is affiliated with the law firm of Kirkland and Ellis, which provide legal services for the Company. Legal expenses incurred in connection with services performed by Kirkland and Ellis, included in selling, general and administrative in the accompanying statements of operations, were approximately $224 for the year ended March 31, 2001, $779 for the year ended March 31, 2000 and $482 for the year ended March 31, 1999. Legal expenses of approximately $720 for the year ended March 31, 1999 were incurred in connection with the VIAD acquisition. One of Ranger's investors, CIBC, performed certain services for the Company in the fiscal year ended March 31, 1999. CIBC provided the Company with short-term financing between April 1, 1998 and August 18, 1998. Interest payments made to CIBC for the short-term loan was approximately $2.4 million. Furthermore, transaction fees incurred in connection with the short-term financing and subsequent exchange of the Old Notes for the Senior Notes (see Note 8) were approximately $2,401. In addition, transaction fees incurred in connection with the VIAD acquisition paid to CIBC were approximately $2,250 for the year ended March 31, 1999. F-12 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 4. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following at March 31:

~~SUCCESSOR~~2001 ~~PREDECESSOR (CONSOLIDATED) (COMBINED) -------------- ---------- Three Months Year Ended Year Ended ended Year Ended March 31, March 31, March 31, December 31,~~ 2000 ~~1999 1998 1997~~ --------- --------- ~~--------~~Operating ~~---------~~equipment ~~Revenues~~ $~~141,044~~ ~~$123~~53,~~441~~311 $~~30,156~~ ~~$119~~50,~~325~~953 ~~Costs~~Buildings and ~~expenses:~~leasehold ~~Operating~~improvements ~~expenses 116~~7,~~409~~523 997,~~035~~282 ~~25,986~~Office ~~97,116~~furniture ~~Selling, general~~ and ~~administrative~~equipment 133,~~266~~287 83,~~865~~123 ~~1,818~~Construction ~~7,581~~in ~~Amortization~~progress ~~of intangibles 2,727 2,545 22 103 Depreciation 7,508 6,176~~ 1,~~097~~044 ~~4,501~~330 --------- --------- ~~--------~~65,165 ~~---------~~61,688 ~~Total~~Accumulated ~~costs~~depreciation and ~~expenses~~amortization ~~139~~(22,~~910~~157) ~~116~~(13,~~621~~526) ~~28,923 109,301~~ --------- --------- ~~--------~~$ ~~--------- Operating income 1~~43,~~134~~008 ~~6,820~~$ 148,~~233~~162 ~~10,024~~========= ~~Other~~========= ~~income~~5. ~~(expense),~~ACCRUED ~~net~~EXPENSES 24Accrued ~~(253)~~expenses ~~(57)~~consisted ~~(71)~~of ~~Interest~~the ~~income~~following ~~100~~at ~~207~~March 7331: ~~350~~2001 ~~Interest~~2000 ~~and other financial expense (10,583) (11,281) (170) (669)~~ --------- --------- ~~--------~~Salaries ~~--------- (Loss) income before income taxes~~ and ~~extraordinary~~wages ~~item~~$ (94,~~325)~~503 ($ 4,~~507)~~044 Damage claims 1,~~079~~862 91,~~634~~170 ~~Income~~Pension ~~taxes~~liability --327 50206 ~~347~~Accrued 3interest 1,~~602~~214 ~~---------~~1,249 ~~---------~~Consortium ~~--------~~funds ~~---------~~16,398 ~~(Loss)~~7,635 ~~income~~Consortium ~~before~~- ~~extraordinary~~restricted ~~item~~cash (95,~~325~~682) (43,~~557~~014) ~~732~~Other 4,905 6,~~032~~210 ~~Extraordinary loss on early extinguishment of debt~~ -- ~~(213)~~ -- -- ---~~------~~ --------- ~~-------- --------- Net (loss) income~~ $ (923,~~325)~~527 $ (417,~~770)~~500 ~~$ 732 $ 6,032~~ ========= ========= ~~======== ========= See accompanying notes.~~

6. INCOME TAXES The (loss) income before income taxes consisted of the following:

~~ACCUMULATED~~Year ~~OTHER~~ended ~~TOTAL~~March ~~COMMON~~31, ~~PAID-IN~~2001 ~~RETAINED~~2000 ~~COMPREHENSIVE~~1999 ~~COMBINED PREDECESSOR STOCK CAPITAL EARNINGS INCOME (LOSS) EQUITY~~ --------~~--------------------------------~~ --------~~----~~ -------- ~~----------~~United ~~---------------~~States ~~---------- BALANCE AT DECEMBER 31, 1996~~ $ ~~907 $ 1~~(8,~~585~~191) $ ~~12,919 $ 22 $ 15,433 Dividends -- --~~ (68,~~881~~292) -- $(64,~~881~~823) ~~Comprehensive income: Net income~~ Non--U.S. --281 ~~6,032 -- 6,032 Foreign currency translation adjustment -- -- --~~ (27940) (316 ~~27)~~ ---------- ~~TOTAL COMPREHENSIVE INCOME 6,005~~ --------~~--------------------------------~~ --------~~----~~ ~~BALANCE AT DECEMBER 31, 1997 907 1,585 12,070~~ $( ~~5) 14~~7,~~557 Dividends -- -- (13~~910) -- $(139,232) Comprehensive income: Net income -- -- 732 -- 732 Foreign currency translation adjustment -- -- -- (13) (13) ---------- TOTAL COMPREHENSIVE INCOME 719 ---------------------------------------- BALANCE AT MARCH 31, 1998 $ ~~907 $ 1,585 $ 12,789 $~~ (184,507) ~~$ 15,263~~ ========~~================================~~ ========~~====~~ ======== ~~========== =============== ==========~~

F-13 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 6. INCOME TAXES (CONTINUED) The provision (benefit) for income taxes is summarized as follows:

~~ACCUMULATED~~Year ~~COMMON~~ended ~~OTHER~~March ~~TOTAL~~31, ~~STOCK COMMON PAID~~-~~IN ACCUMULATED COMPREHENSIVE STOCKHOLDER'S SUCCESSOR: OUTSTANDING STOCK CAPITAL DEFICIT INCOME EQUITY~~ ------------------~~-----------~~ ~~------------~~2001 ~~-------~~2000 ~~--------~~1999 -----~~--------~~ -----~~----------~~ -----~~----------~~ ~~BALANCE~~Current: ATU.S. ~~MARCH~~Federal ~~31, 1998 100~~ $ -- $ -- $ -- $State --25 $ -- ~~Capital contribution~~ -- Non--U.S. ~~24,100~~21 -- --9 ~~24,100 Comprehensive loss: Net loss~~ -- -- -- ~~(4,770)~~ -- ~~(4,770) Foreign currency translation adjustment~~ -- -- -- --- 2046 20 --~~-------------~~ ~~TOTAL~~9 ~~COMPREHENSIVE~~Deferred: ~~LOSS~~U.S. ~~(4,750)~~Federal -- --~~-------------------------~~ --~~----------~~ ~~BALANCE~~State ~~AT MARCH 31, 1999 100~~ -- ~~24,100 (4,770) 20 19,350 Capital contribution~~ -- -- ~~3,700~~Non-U.S. -- -- ~~3,700~~41 ~~Comprehensive loss: Net loss~~ -- --- -- ~~(9,325)~~ --- ~~(9,325) Foreign currency translation adjustment~~ -- --- -- -- ~~(39)~~41 ~~(39)~~ ----- ----- ----- ~~TOTAL~~$ ~~COMPREHENSIVE~~46 ~~LOSS (9,364) Balance at March 31, 2000 100~~ $ -- $ ~~27,800~~50 ~~$ (14,095) $ (19) $ 13,686~~ =====~~========================~~ =====~~=======~~ =====~~== ======== ============= =============== ===============~~

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred income taxes are as follows:

~~SUCCESSOR PREDECESSOR (CONSOLIDATED) (COMBINED) -------------- ---------- Year Year Three months ended ended ended Year ended~~ March 31, ~~March~~2001 ~~31,~~ March 31, ~~December 31,~~ 2000 ~~1999 1998 1997~~ --------- -------~~---~~ -------- --------- ~~OPERATING~~Deferred ~~ACTIVITIES~~tax ~~Net~~assets: ~~(loss)~~Allowance ~~income~~for $doubtful ~~(9,325)~~accounts $ ~~(4,770)~~23 $ ~~732~~41 $Accrued ~~6,032~~vacation ~~Adjustments~~and tobonuses ~~reconcile~~335 ~~net~~142 ~~(loss)~~Accrued ~~income~~as related to ~~Net~~economic ~~cash~~performance ~~provided~~61 by228 ~~operating~~Damage ~~activities:~~claims ~~Amortization~~and ofother ~~intangible~~insurance ~~assets~~liabilities ~~2,727~~-- ~~2,545~~16 ~~22 103 Depreciation 7,508 6,176 1,097 4,501~~ Amortization of deferred ~~financing~~finance costs ~~552 2,888~~ -- --107 ~~Deferred~~Other ~~income~~26 ~~taxes~~3 --Net 41operating ~~(245) (136) Provision for bad debts -- 36 -- 245 Equity in (income)~~ loss ~~of joint venture (135) 157 54 133 Loss on sale of fixed assets 196~~ carry--forwards ~~-- -- Changes in operating assets and liabilities~~10,838 ~~net of effects of acquisitions: Accounts receivable (5~~6,~~811)~~727 (1,069) 2,650 1,822 Prepaid expenses (1,024) (523) 295 161 Spare parts and supplies (333) (337) (18) (71) Other assets (512) 278 (200) 63 Accounts payable 1,152 462 411 1,387 Accrued expenses 4,070 (294) 1,136 2,438 Customer deposits 157 1,055 (939) 461 --------- -------~~---~~ -------- --------- ~~Net~~Deferred ~~cash~~tax ~~(used~~assets ~~in) provided by operating activities (778) 6~~11,~~645~~283 47,~~995~~264 ~~17,139~~Less: ~~INVESTING~~valuation ~~ACTIVITIES~~allowance ~~Purchases of property, plant and equipment~~ (8,~~027~~111) (~~13,431) (2,666) (3,947) Purchase of ASIG business, less cash acquired of $6,513 -- (88,487) -- -- Purchase of ACS (160) -- -- -- Purchase of Elsinore business, less cash acquired of $8 (~~5,~~672~~021) -- -- -- ~~Purchase of GAH business~~ -- ~~(438)~~ -- -- ~~Advances to joint venture~~ -- ~~(200)~~ -- ~~(353)~~ --------- -------~~---~~ ~~--------~~Total ~~---------~~deferred ~~Net~~tax ~~cash used in investing activities (13~~assets,~~859)~~ ~~(102,556)~~net ~~(2,666) (4,300) FINANCING ACTIVITIES Issuance of common stock~~ 3,~~700~~172 242,~~100~~243 --Deferred --tax ~~Borrowings,~~liabilities: ~~net~~Tax ~~8,130~~depreciation ~~80,630~~in --excess ~~-- Payments~~ of ~~deferred~~book ~~financing~~depreciation ~~costs~~ (832,682) (51,~~508~~826) --Tax --goodwill ~~Principal~~amortization ~~payments~~in onexcess ~~notes~~of ~~payable~~book --goodwill --amortization --(241) (82414) ~~Advances~~State ~~from~~taxes (to46) ~~Parent, net~~ -- --Damage ~~(2,316)~~claims insurance (~~6,067~~189) ~~Dividends~~ -- --Other (1314) (~~6,881~~3) --------- -------~~---~~ -------- --------- ~~Net~~Total ~~cash~~deferred ~~provided~~tax byliabilities (~~used in) financing activities 11~~3,~~747 99,222 (2,329~~172) (~~13,030) --------- ---------- -------- --------- Net (decrease) increase in cash and cash equivalents (~~2,~~890~~243) ~~3,311~~ -- ~~(191) Cash and cash equivalents at beginning of period 3,311~~ -- -- ~~191~~ --------- -~~---------~~ -------- --------- ~~Cash~~Total ~~and~~net ~~cash~~deferred ~~equivalents~~taxes ~~at end of period~~ $ ~~421 $ 3,311 $~~ -- $ -- ========= =======~~===~~ ======== ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid $ 9,888 $ 4,392 $ -- $ -- ========= ========== ======== ========= Taxes paid $ 515 $ 401 $ -- $ 766 ========= ========== ======== ========= SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Receipt of fixed assets in satisfaction of a receivable $ -- $ 1,414 $ -- $ -- ========= ========== ======== =========

F-14 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 6. INCOME TAXES (CONTINUED) SFAS No. 109 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all evidence, both positive and negative, management has determined that a valuation allowance of $8,111 and $5,021 at March 31, 2001 and 2000, respectively is necessary to reduce the deferred tax assets to the amount that will more likely than not be realized. At March 31, 2001, the Company has available U.S. net operating loss carry-forwards of $28,049, which expire beginning in 2019. A reconciliation of (benefit) provision for income taxes to the U.S. statutory rate of 34% is as follows:

~~The~~Year ~~following~~ended isMarch ~~a summary of the purchase price allocation: Net working capital~~31, ~~including~~2001 ~~cash~~2000 of1999 ~~$6,513~~------------ .-------- .-------- .Income .taxes .(benefit) .at U. S. .statutory .rate . $ 4(2,~~783~~785) ~~Property~~$(3,139) ~~plant~~$(1,607) ~~and~~State ~~equipment~~income .taxes .(255) .(344) .(113) .Permanent .items .150 .139 .34 .Change .in .valuation .allowance ~~. . . . . . 38~~3,~~149~~090 ~~Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . .~~ 3,~~268~~235 ~~Goodwill.~~1,786 .Effect .of non-U. S. .operations .(154) .109 ~~. . . . . . . . . . . . . . . . . . . . . .~~ (50~~,775~~) ------------ $96,975 ======== The purchase price was funded as follows: Sale of 100 shares of common stock, $0.01 par value, to Ranger Aerospace Corporation . . . . . . . . . . . . . . . . . . . $24,100 Borrowings under Senior Increasing Rate Notes (see Note 8). . . . . 75,000 Purchase price adjustment -------- ~~receivable from Viad at March 31, 1999. (2,125)~~ -------- $~~96,975~~ 46 $ -- $ 50 ============ ======== ========

7. NOTES PAYABLE SENIOR CREDIT FACILITY ------------------------ On April 2, 1998, the Company entered into a revolving credit facility with Key Corporate Capital (the "Senior Credit Facility"). The Senior Credit Facility allows for borrowings in the aggregate of up to the lesser of $10 million or a borrowing base, equal to 85% of eligible accounts receivable, as defined. The revolving loans under the Senior Credit Facility mature on August 31, 2002 or sooner as provided in the Senior Credit Facility. In July 2000, the Company amended its Senior Credit Facility to increase the amount available under the facility to $15 million. Indebtedness of the Company under the Senior Credit Facility is guaranteed by each of the Company's domestic subsidiaries and is generally be secured by: (i) all of the Company's cash equivalents, accounts receivable, contract rights, general intangibles, instruments and chattel paper relating thereto; (ii) all of the Company's inventory; (iii) amounts (if any) held in a commercial deposit account with the lending bank, (iv) certain cash and cash equivalents related to the foregoing, and (v) all proceeds from (i) to (iv) inclusive. The Company's borrowings under the Senior Credit Facility bear interest at a floating rate and may be maintained as Prime Rate Loans or LIBOR loans. Borrowings made pursuant to the Prime Rate Loans bear interest rates equal to the prime rate plus the Applicable Margin (as defined in the Senior Credit Facility) and borrowings made pursuant to the LIBOR Loans bear interest rates equal to the LIBOR rate plus the Applicable Margin. The Applicable Margin for Prime Rate Loans will range from 0% to 0.50% based on the Company's Leverage Ratio (as defined in the Senior Credit Facility). The Applicable Margin for LIBOR Loans will range from 1.25% to 2.25% based on the Company's Leverage Ratio. The Senior Credit Facility requires the Company to meet certain financial tests, including, a minimum yearly earning before interest, taxes, depreciation and amortization "EBITDA", as defined test and maximum leverage F-15 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 7. NOTES PAYABLE (CONTINUED) ratios. The Senior Credit Facility also contains certain covenants, which among other things, will limit the incurrence of additional indebtedness, the making of loans or investments, the declaration of dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, the incurrence of liens and encumbrances and other matters customarily restricted in such agreements. There was $4,740 outstanding under the Senior Credit Facility as of March 31, 2001. The amounts outstanding under the Senior Credit Facility bear interest at 8.0%. As of March 31, 2001, there was $10,020 of available credit under the Senior Credit Facility. TERM LOAN ---------- On May 20, 1999, the Senior Credit Facility was amended to add a $5 million Term Loan (the "Term Loan"). The proceeds of the Term Loan were used as part of the purchase price for the assets of Elsinore, L.P. (See Note 1). The Term Loan is payable in quarterly installments in arrears at varying amounts over its five-year life. The Company's borrowings under the Term Loan will bear interest in a manner identical to the Senior Credit Facility except that the Applicable Margin for Prime Rate Loans will range from 0% to 1.25% based on the Company's Leverage Ratio and the Applicable Margin for LIBOR Loans will range from 2% to 3% based on the Company's Leverage Ratio. Furthermore, the requirement to meet a minimum interest coverage test is no longer applicable as of April 1, 1999. Rather, the Company must meet a minimum EBITDA test. The Term Loan is secured by all of the Company's (i) equipment, (ii) amounts, (if any) held in a commercial deposit account with the lending bank, (iii) certain cash and cash equivalents related to the forgoing and (iv) all proceeds from (i) to (iii) inclusive. As of March 31, 2001, $4,125 was outstanding under the Term Loan. Maturities on the Term Loan and other during the next five years are: 2001 731 2002 750 2003 1,012 2004 1,325 2005 350 ------ Total $4,168 ====== Included in Term Loan and Other are other notes payable totaling $43 in fiscal 2001 and $559 in fiscal 2000, which includes the amount due under the note payable issued in connection with the Elsinore acquisition As of March 31, 2001 and 2000, the Company had $240 and $265 letters of credit outstanding, respectively. 8. SENIOR NOTES On April 2, 1998, the Company issued $75 million of notes (the "Senior Increasing Rate Notes"). The proceeds from the Senior Increasing Rate Notes were used to consummate the Acquisition. On August 18, 1998, the Company issued $80 million of notes (the "Old Notes"). The proceeds from the Old Notes were used to repay the Senior Increasing Rate Notes. On February 12, 1999, the Company exchanged the Old Notes for substantially identical Series B 11% Senior Notes (the "Notes"). The Notes mature in August 2005, and bear interest at 11%, payable semiannually on each February 15 and August 15, commencing February 15, 1999. The Notes are redeemable at the option of the Company, at any time on or after August 15, 2003, at a premium of 105.5% in 2003 and at 100% of the principal amount in 2004 and thereafter. In addition, the Company may redeem at its option up to 33 1/3% of the original principal amount of the Notes at any time on or prior to August 15, 2001, at a redemption price equal to 111% of the principal amount being redeemed, with the net proceeds of one or more public offerings, provided that at least $53.3 million aggregate principal amount of the Notes remain outstanding after any such redemption and that any such redemption occurs within 90 days following F-16 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 8. SENIOR NOTES (CONTINUED) the closing of such public offering. Upon the occurrence of a Change in Control (as defined in the Indenture covering the Notes), each holder of the Notes is entitled to require the Company to repurchase such Notes at a premium of 101%. The Notes are fully and unconditionally guaranteed, on an unsecured basis, by the Company's domestic subsidiaries (see Notes 12 and 17). The Notes contain certain covenants, which among other things limit the ability of the Company to incur additional indebtedness, issue common and preferred stock of its subsidiaries, pay dividends, transfer and sell assets and enter into transactions with affiliates. In fiscal 1999, the Company wrote-off $213 of unamortized deferred financing costs previously incurred in connection with the Senior Increasing Rate Notes that were repaid with the net proceeds of the issuance of the Old Notes. This write-off was accounted for as an extraordinary loss on the early extinguishment of debt. 9. STOCK OPTIONS During 1999, Ranger adopted the 1999 Stock Option Plan (the "Plan") which provides for the granting of stock options to purchase shares of Ranger's common stock to executives and other key employees of the Company. At March 31, 1999, Ranger reserved 1,000,000 shares of its common stock for issuance under the Plan. The vesting period and the terms of the stock options granted are established by a committee appointed by Ranger's Board of Directors (the "Committee"). The stock options expire no later than ten years from the date of grant. Ranger has granted options to Company employees to purchase 15,995 shares of Ranger's Class B common stock. Of the 15,995 options granted, 4,052 vest ratably over time and 8,104 vest upon the attainment of certain performance goals as determined by the Committee. The remaining 3,839 vest upon the Company satisfying certain market value and liquidity requirements in connection with a sale of Ranger or the Company. All unvested options granted under the plan will automatically vest on January 28, 2007. The exercise price of these stock options varies between $100 and $341 per share, which was determined by the Committee to be the fair value of Ranger's common stock at the date of grant. As a result, no compensation cost has been recognized under the provisions of APB Opinion No. 25. All of the options issued by Ranger were issued to employees of the Company and accordingly such options are reflected below. Changes to the Plan for the years ending March 31, 2001, 2000 and 1999 are as follows:

~~Revenues~~Weighted .Weighted .Number .of .Average .Options .Average .Options .Exercise .Price .Exercisable .Exercise .Price .Ranger .Shares ~~$119,700~~Per ~~Net~~Share ~~loss~~Ranger .Shares .Per .Share .-------------- .--------------- .------------- .--------------- .Outstanding .at .March .31, .1998 .-- .-- (4Granted 13,~~010~~795 $ 100 Exercised -- Cancelled (85) ~~Net~~$ ~~loss~~100 ~~per~~-------------- ~~share~~Outstanding .at .March .31, .1999 .13,710 .$ .100 .1,130 .$ 100 Granted 636 $ 100 Exercised Cancelled (40574) $ 100 -------------- Outstanding at March 31, 2000 13,772 $ 100 5,342 $ 100 Granted 1,564 $ 254 Exercised Cancelled (461) $ 236 -------------- Outstanding at March 31, 2001 14,875 $ 112 6,404 $ 112 ==============

F-17 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 9. STOCK OPTIONS (CONTINUED) The following table summarizes information about the stock options outstanding at March 31, 2001:

~~Net~~Options ~~working~~Outstanding ~~capital,~~Options ~~including~~Exercisable ~~cash~~------------------------------------------------- of----------------------------- $9Weighted ~~$1,110~~Weighted ~~Property,~~Average ~~plant~~Average ~~and~~Number ~~equipment~~Remaining ~~799~~Number ~~Other~~Exercise ~~assets~~Exercise ~~130~~Price ~~Goodwill~~Outstanding ~~3,453~~at Contractual Life Exercisable Price Per Share --------------- ~~$5,492~~-------------- ~~======~~---------------- ~~The~~----------- ~~purchase~~---------------- ~~price~~100 ~~was~~14,135 ~~funded~~7 as6,078 ~~follows:~~$ ~~Senior~~100 ~~credit~~341 ~~facility~~740 ~~(see Note~~ 7) 326 $~~5,000~~ ~~Promissory~~341 ~~note~~-------------- ~~(see~~---------------- ~~Note~~----------- ~~7) 492~~ ---------------- $514,~~492~~875 ~~======~~7 6,404 $ 112

The weighted average per share fair value of options granted under Ranger's stock option plan during 2001, 2000 and 1999 based on the Black-Scholes option valuation model, was $0.00, $42.88 and $41.72 per share under option, respectively. For purposes of pro forma disclosures required by SFAS No. 123, the estimated fair value of the options is amortized over the options' vesting period. Had compensation cost for the Company's stock option plan been determined based on the fair value at the grant dates for grants under the stock option plan consistent with the method for SFAS No. 123, the Company's net loss would have been increased to the pro forma amounts indicated below:

Year ~~Ended~~ended March 31, 2001 March 31, 2000 March 31, 1999 ---------------- ---------------- ~~Revenue~~---------------- Net loss $~~142~~ (7,~~796~~702) $~~137,319~~ ~~Net loss~~ (9,~~408~~451) $ (64,~~025~~952) ================ ================ ================

The following weighted average assumptions were used as of March 31, 2001, 2000 and 1999:

4.March ~~PROPERTY~~31, ~~PLANT~~2001 ~~AND EQUIPMENT Property, plant and equipment consisted of the following:~~ March 31, 2000 March 31, 1999 --------------- -------------- Operating equipment . . . . . . . . . . . . . . . . . . $ 50,953 $41,379 Buildings and leasehold improvements. . . . . . . . . . 7,282 3,545 Office furniture and equipment. . . . . . . . . . . . . 3,123 1,472 Construction in progress. . . . . . . . . . . . . . . . 330 6,669 --~~--------------~~ -------- ~~61,688 53,065 (13,526) (6,176)~~ ------~~----------~~ ~~--------~~Expected ~~Accumulated~~life ~~depreciation~~7 ~~and~~years ~~amortization~~8 .years .9 .years .Interest .rate 6.00% 7.00% ~~$ 48,162 $46,889 ================ ======== 5~~6.00% ~~ACCRUED~~Volatility ~~EXPENSES Accrued expenses consisted of the following: March 31, 2000. . March 31, 1999~~ -- --~~----------~~ --~~------------~~ ~~Salaries~~Dividend ~~and~~yield wages. . . . . . . . . . . . . . . . . . . $ 4,044 $ 4,161 Damage claims . . . . . . . . . . . . . . . . . . . . . 1,170 1,502 Pension liability . . . . . . . . . . . . . . . . . . . 206 151 Accrued interest. . . . . . . . . . . . . . . . . . . . 1,249 1,122 Consortium Funds 4,621 3,380 Other . . . . . . . . . . . . . . . . . . . . . . . . . 6,210 2,534 -- --~~------------~~ --~~------ $ 17,500 $12,850 ================ ========~~

The Black-Scholes options valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because Ranger's stock options have characteristics significantly different from traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, the existing models, in management's opinion, do not necessarily provide a reliable single measure of the fair value of Ranger's stock options. F-18 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 10. COMMITMENTS The Company leases operating facilities and office space pursuant to various operating leases. The aggregate minimal rental payments under all operating leases with initial terms of one year or more at March 31, 2001 are as follows: 2002 $ 4,497 2003 4,183 2004 3,961 2005 3,848 2006 3,444 Thereafter 9,015 ------- $28,948 ======= Total rent expense for all operating leases amounted to $5,302, $3,981 and $2,947 for the years ended March 31, 2001, 2000 and 1999, respectively. 11. EMPLOYEE BENEFIT PLANS The Company sponsors a non-contributory defined benefit pension plan, which covers certain union employees at its Miami station. The plan provides benefits based on the employees' years of service and qualifying final average compensation. The Company's funding policy is to contribute amounts sufficient to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974, as amended, or such additional amounts as determined appropriate to assure that assets of the plan would be adequate to provide benefits. The assumptions used in the calculation of the actuarial present value of the projected benefit obligation and expected long-term return on plan assets for the Company's defined benefit pension plan consisted of the following: March 31, 2001 March 31, 2000 ------------------------------- Weighted average discount rate 7.75% 8.00% Rate of increase in compensation levels 5.00% 5.00% Expected long-term return on assets 9.50% 9.50% F-19 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 11. EMPLOYEE BENEFIT PLANS (CONTINUED) The following table sets forth a reconciliation of benefit obligations, plan assets and funded status for the Company's defined benefit pension plan as of and for the years ended March 31, 2001 and 2000.

~~SUCCESSOR~~March ~~PREDECESSOR~~31, 2001 March 31, 2000 ---------------- ---------------- ~~Year~~CHANGES ~~ended~~IN ~~Year~~BENEFIT ~~ended~~OBLIGATION: ~~Three~~Benefit ~~months~~obligation ~~ended~~at ~~Year~~the ~~ended~~beginning ~~March~~of ~~31,~~the ~~March~~period 31$ 1,365 ~~March~~$ 311,337 ~~December~~Service ~~31,~~cost ~~2000~~145 ~~1999~~114 ~~1998~~Interest ~~1997~~cost 109 90 Actuarial gain (loss) 7 (176) -------- -------- ------ ---------- ~~United~~Benefit ~~States~~obligation at end of period $(8 1,~~292)~~626 $(4 1,~~823)~~365 ================ ================ CHANGES IN PLAN ASSETS: Fair value of plan assets at beginning of period $ ~~504~~1,293 $7 1,~~910~~153 ~~Non-U.S.~~Actual return (~~940~~loss) ~~316~~on ~~575~~plan ~~1,724~~assets (79) 83 Employer contribution 13 57 -------- -------- ------ ---------- ~~$(9,232)~~Fair ~~$(4,507)~~value of plan assets at end of period $ 1,~~079~~227 $9 1,~~634~~293 ================ ================ RECONCILIATION: Funded status $ 399 $ 71 Unrecognized net (loss) gain (67) 130 ---------------- ---------------- Accrued benefit cost $ 332 $ 201 ================ ================

The following table sets forth the net periodic pension costs of the defined benefit pension plans:

~~SUCCESSOR PREDECESSOR --------- -----------~~ Year ended ~~Year ended Three months ended Year ended~~ March 31, 2001 March 31, 2000 March 31, ~~December 31, 2000~~ 1999 ~~1998 1997~~ ----- ------ ------ ------- ~~Current: U.S. Federal $~~ -- $ -- ~~$ 298 $2,737 State~~ -- -- ~~57 478 Non~~-~~U.S.~~ -- ~~9 152 523~~ ------ ------ --~~-----~~ ~~------~~Service cost--benefits 9earned ~~507~~during ~~3,738~~the ~~Deferred:~~period ~~U.S.~~$ ~~Federal~~145 --$ --114 ~~(126)~~$ 82 Interest cost on projected benefit obligation 109 90 83 Loss /(~~120~~return) ~~State~~on --assets --35 (15127) (14140) ~~Non-U.S.~~Net --amortization 41and ~~(19)~~deferral (2145) 31 58 ----- ------ ------ ------- -- ~~41 (160) (136)~~ ----- -- ---- ------ ------- $Net --periodic pension expense $ 50144 $ ~~347~~108 $~~3,602~~ 83 ===== =========== ================ ================

The Company also sponsors a defined contribution plan pursuant to Section 401(K) of the Internal Revenue Code. Subject to certain dollar limits, employees may contribute a percentage of their salaries to the plan and the Company will match a portion of each employee's contribution. This plan is in effect for U.S. based employees only. The expense pertaining to this plan was approximately $991, $715 and $638 for the years ended March 31, 2001, 2000 and 1999. F-20 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 12. DEFINITIVE AGREEMENT FOR MERGER On November 15, 2000, Ranger, the Company, and Signature Flight Support Corporation ("Buyer"), a wholly-owned subsidiary of BBA Group, plc ("BBA") announced that they entered into a definitive agreement under which Signature will acquire Ranger stock for a total consideration of approximately $152 million, in addition to the assumption of the Senior Notes and the repayment of the Company's debt (the "Merger"). Closing of the Merger is subject to the satisfaction or waiver of the following conditions: - any waiting period applicable to the consummation of the Merger under the Hart Scott Rodino Act shall have expired or been terminated and the Company and Buyer shall have received the required consent and approval of the German Merger Control Authority; - no Governmental Entity or federal or state court of competent jurisdiction shall have enacted, issued or enforced any statute, regulation, decree, injunction or other order which has become final and nonappealable and which prohibits the consummation of the Merger; - the Company shall have obtained any necessary consent or approval required by the Gatwick Airport Authority; - all outstanding warrants and options issued by the Company shall, by the terms of any agreement or plan pursuant to which they were issued, entitle the holders thereof to receive only the consideration set forth in the Merger agreement; and - the Company's shareholders shall have approved the Merger. The Merger is also subject to the following additional conditions: - The representations and warranties of the Company contained in the Merger agreement (disregarding any qualifications as to materiality or Company Material Adverse Effect or similar qualifications contained therein) shall be true and correct in all respects as of the date the Merger Agreement was executed and as of the closing of the Merger as though made on and as of the date of the closing of the Merger, except for those failures of such representations and warranties to be true and correct which individually or in the aggregate would not be reasonably likely to have a Company Material Adverse Effect. For this purpose, Company Material Adverse Effect is defined as, "any change or effect that is or would be materially adverse to the assets, business, prospects, results of operations or financial condition of the Company and the Company subsidiaries, taken as whole (other than changes or effects that are the result of economic factors affecting the economy or financial markets as a whole or generally affecting the aviation services markets or that arise out of or result from actions contemplated by the parties in connection with this Agreement or the announcement or performance of this Agreement or the transactions contemplated by this Agreement)." - The Company and the Shareholders shall have performed and complied with all of their respective covenants hereunder in all material respects through the closing. - The Company shall have delivered to the Buyer and Merger Subsidiary a certificate signed by an executive officer of the Company to the effect that each of the conditions noted above are satisfied in all respects. - The representations and warranties of the Buyer contained in the Merger agreement shall be true and correct in all material respects. - The Buyer shall have performed and complied with all of its covenants hereunder in all material respects through the closing. F-21 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 12. DEFINITIVE AGREEMENT FOR MERGER (CONTINUED) - The Buyer shall have delivered to the Buyer and Merger Subsidiary a certificate signed by an executive officer of the Company to the effect that each of the conditions noted above are satisfied in all material respects. The consummation of the Merger will trigger Change of Control provisions in ASIG's $80,000,000 Senior Notes, thus requiring the Buyer to tender for the bonds at a purchase price equal to 101% (see below) of the principal amount. On January 4, 2001, the Buyer commenced a tender offer for all of the outstanding 11% Senior Notes due 2005 of the Company. In connection with the tender offer, the Buyer is also seeking consents to certain proposed amendments to the Indenture under which Senior Notes were issued. The purpose of the proposed amendments is to eliminate certain restrictive covenants contained in the Indenture, thereby affording the Company additional financial and operational flexibility. The purchase price under the tender offer is $1,181.89 per $1,000 principal amount of Senior Notes tendered (of which $20 constitutes a consent payment), plus accrued but unpaid interest to (but excluding) the date of payment of such purchase price. The tender offer is conditioned upon, among other things, the receipt of the requisite consents to adopt the proposed amendments and the completion of the Merger. The offer is made only by an Offer to Purchase and Consent Solicitation Statement date January 4, 2001 and the Related Letter of Transmittal and Consent. On February 14, 2001, counsel for the Buyer informed the Company that the Buyer believes the first additional closing condition listed above has not been satisfied. The Company informed the Buyer that it believes all closing conditions other than the expiration or termination of the waiting period under the Hart Scott Rodino Act have been satisfied. The Company expects to discuss with the Buyer the basis for the Buyer's view of the matter. On May 22, 2001, Ranger and Signature agreed to amend and restate the original Merger Agreement between them, dated as of November 14, 2000 to resolve a dispute over whether the variance between Ranger's actual and budgeted results of operations and certain other changes constituted a material adverse change under the terms of the original Merger Agreement. The aggregate consideration to be paid by Signature to the holders of Ranger common stock has been reduced under the amended and restated Merger Agreement. In connection with the Merger, Signature has indicated that on or about Friday, May 25, 2001 it will amend its tender offer and consent solicitation for 100% of the 11% Senior Notes due 2005 of ASIG (the ``Securities''). Pursuant to the revised tender offer and consent solicitation, Signature will offer to purchase all of the outstanding Securities at a price equal to 100% of the principal amount of the Securities plus all accrued but unpaid interest thereon. On June 22, 2001, the Company and the Buyer agreed to amend the amended and restated Merger Agreement to further reduce the aggregate consideration paid by the Buyer in the Merger. This reduction in consideration was agreed to by the Company and Buyer because less than 100% of the Senior Notes had been tendered to the Buyer under its May 25, 2001 offer to purchase the Senior Notes at a price equal to 100% of the principal amount thereof, plus all accrued but unpaid interest thereon. Under this amendment to the amended and restated Merger Agreement, the Buyer agreed to revise its tender offer to purchase 100% of the Senior Notes at a price equal to 104% of the principal amount thereof, plus all accrued but unpaid interest thereon. In connection with the Merger on June 22, 2001, the Buyer amended its tender offer and consent solicitation for 100% of the Securities. Pursuant to the revised tender offer and consent solicitation, Signature will offer to purchase all of the outstanding Securities at a price equal to 104% of the principal amount of the Securities F-22 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 12. DEFINITIVE AGREEMENT FOR MERGER (CONTINUED) plus all accrued but unpaid interest thereon. The amended offer will expire at 10:00 a.m., New York City time, on July 10, 2001, unless extended. There is no assurance that the Merger will occur. 13. CONTINGENCIES The Company is engaged in litigation arising in the normal course of business. Management believes that the outcome of such litigation will not have a material adverse effect on the Company's financial position or its results of operations. The Company is subject to compliance obligations and liabilities imposed pursuant to federal, state, local and foreign environmental and workplace health and safety requirements, including CERCLA. In particular, the Company's aviation fueling services are subject to liabilities and obligations relating to the above ground and underground storage of, and the release and cleanup of, petroleum products. Although the Company believes it is in material compliance with environmental, health and safety requirements, the possibility exists that noncompliance could occur or be identified in the future, and the penalties or costs of corrective action associated therewith could have a material adverse effect on the Company's business, operating results and financial condition. In addition, requirements are complex, change frequently and have tended to become more stringent over time, and there can be no assurance that these requirements will not change in the future in a manner that could materially and adversely affect the Company. The Company is currently conducting or funding, or expects to conduct or fund, environmental investigations, monitoring and cleanups at certain of its previously or currently operated facilities. Also, from time to time, the Company receives notices of potential liability for cleanup costs associated with offsite waste recycling or disposal facilities at which wastes associated with its operations allegedly have come to be located. In addition, airport authorities are coming under increasing pressure to clean up previous contamination at their facilities and are seeking financial contribution from airport tenants and companies which operate at their airports. Although the Company has taken steps to mitigate or remove the foregoing liabilities, the Company could bear direct liability for the foregoing matters and such liability could have a material adverse effect on the Company's business, operating results and financial condition. From time to time, the Company receives notices of potential liability, pursuant to CERCLA or analogous state laws, for cleanup costs associated with offsite waste recycling or disposal facilities at which wastes associated with its operations have allegedly come to be located. Liability under CERCLA is strict, retroactive, and joint and several, although such liability is often allocated among multiple responsible parties. In the past several years, such notices have been received for the Peak Oil site in Tampa, Florida; the South Eighth Street Landfill site in West Memphis, Arkansas; the Wingate Road site in Ft. Lauderdale, Florida; and the Petroleum Products Corporation site in Pembroke Pines, Florida. With respect to all such sites, the Company either has settled its liability (Peak Oil), expects its liability to be de minimis and fully indemnified by Viad (South Eighth Street), or has denied liability altogether (Wingate Road and Petroleum Products). The possibility exists that the Company will receive additional notices of CERCLA-type liability in the future. In light of the relatively small volume of waste typically contributed by the Company, the applicability of the CERCLA "petroleum exemption" to certain of its wastes, the large numbers of parties typically involved in such sites, and the availability of contractual indemnifications, although there can be no assurance in this regard, the Company currently expects that its future liabilities for cleanup of offsite disposal facilities will not be material. F-23 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) Subject to certain time and dollar limitations, Viad has agreed to indemnify the Company with respect to certain pre-Acquisition environmental liabilities, including all known and unknown onsite and offsite contamination matters. Based upon its environmental due diligence investigation, the Company believes that such indemnification, coupled with the legal arrangements set forth above, provide sufficient protection with respect to environmental liabilities. In the event that Viad fails to honor this indemnification, the Company could bear direct liability for such matters and such liability could be material. Approximately 61.0% of the Company's employees are represented by labor unions. There are currently approximately 34 collective bargaining contracts (among 7 separate union entities) in place, almost all of which have terms of three years. Contract expirations are staggered with approximately one-third coming up for renewal each year. The Company believes that it has had good relations with the several unions representing its employees. Tioga, an investor in Ranger, will receive a bonus of $1,350 if the Company satisfies certain market value and liquidity requirements in connection with a sale of the business of Ranger or the Company or a public offering of equity securities of Ranger. 14. SIGNIFICANT CUSTOMERS AND SERVICES One of the Company's customers accounted for 18.7% of the Company's overall revenues for the year ended March 31, 2001. This customer also accounted for 20.3% and 15.0% of revenues for the year ended March 31, 2000 and 1999, respectively. Another customer accounted for 6.7% of the Company's revenue for the year ended March 31, 2001. This customer also accounted for 4.9% and 13.0% of the Company's revenue for the year ended March 31, 2000 and 1999, respectively. The Company operates two primary lines of business -- Fueling and Ground Handling. Revenue for the Fueling line of business was responsible for 62.9%, 64.0% and 60.7% of the Company's total revenue for fiscal 2001, 2000 and fiscal 1999, respectively. Revenue for the Ground Handling line of business was responsible for 33.8%, 32.8% and 15.3% of the Company's total revenue for fiscal 2001, 2000 and fiscal 1999, respectively. 15. GEOGRAPHIC AREA INFORMATION The following table includes selected financial information pertaining to the Company's and Predecessor's geographic operations:

Year ended March 31, ~~2000~~March 31, March 31, 2001 2000 1999 ---------- ------ ----- ----------- ~~Deferred tax assets~~Revenues: ~~Allowance~~United ~~for~~States ~~doubtful~~$ ~~accounts~~143, 963 $ 41126,279 $ 10102,883 ~~Accrued~~Europe ~~vacation~~13,999 ~~and bonuses 142 65 Accrued as related to economic performance 228 -- Damage claims and other insurance liabilities 16 55 Amortization of deferred finance costs 107 34 Other 3~~ 11 ~~Net operating loss carry-forwards 6~~,~~727~~789 217,~~056~~835 ~~----------------~~Bahamas ~~---------------- Deferred tax assets 7~~4,~~264~~021 2,~~231~~976 ~~Less: valuation allowance (5~~2,~~021)~~723 ~~(1,786)~~ ---------- ------ ----- ----------- ~~Total~~$ ~~deferred~~161,983 ~~tax~~$ ~~assets~~141,044 ~~net~~$ 2123,~~243~~441 ~~445~~========== ~~Deferred~~=========== ~~tax~~========== ~~liabilities:~~Operating ~~Tax~~income ~~depreciation~~(loss): inUnited ~~excess~~States of$ ~~book~~2,271 ~~depreciation~~$ (1,~~826)~~150 ~~(123)~~$ ~~Tax~~5,205 ~~goodwill~~Europe ~~amortization~~279 ~~in excess of book goodwill amortization~~ (~~414~~347) ~~(285)~~1,132 ~~Other~~Bahamas ~~(3)~~501 ~~(37)~~331 ~~----------------~~483 ----------~~------~~ ~~Total deferred tax liabilities (2,243) (445)~~ -----------~~-----~~ ----------~~------~~ ~~Total~~$ ~~net~~3,051 ~~deferred taxes~~ $ --1,134 $ --6,820 ========== ====== ===== ===========

F-24 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS - (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 15. GEOGRAPHIC AREA INFORMATION (CONTINUED)

~~SUCCESSOR~~MARCH ~~PREDECESSOR -------------- ------------- Three months Year ended Year ended ended Year ended March~~ 31, ~~March~~MARCH 31, ~~March~~2001 ~~31, December 31,~~ 2000 ~~1999~~Identifiable ~~1998~~assets: ~~1997~~United ~~--------------~~States ~~------------- ----------- -------------- Income taxes (benefit) at U.S. Statutory rate~~ $ (3118,~~139)~~069 $ (1125,~~607)~~116 $Europe ~~367~~5,750 ~~$ 3~~5,~~276~~697 ~~State~~Bahamas ~~income taxes (344) (113) 50 306 Permanent items 139 34 14 43 Change in valuation allowance 3~~2,~~235~~163 1,~~786~~519 -- -- ~~Effect of non~~-~~U.S. operations 109 (50) (84) (23)~~ ----~~----------~~ ---------~~----~~ ~~----------- --------------~~ $ --125,982 $ ~~50 $ 347 $ 3~~132,~~602~~332 =========~~=====~~ =========~~==== =========== ==============~~

16. ABANDONED ACQUISITION COSTS AND SPECIAL MANAGEMENT BONUS During the fourth quarter of fiscal 2001 the Board of Directors granted an off-plan special bonus pool of $132 to a number of managers for individual accomplishments. During the fourth quarter of fiscal 2000, there were two notable costs that decreased earnings. First, the Board of Directors granted an off-plan special bonus pool of $312 to a number of managers for individual accomplishments. Second, the Company pursued several acquisitions of airline service companies that were not consummated and incurred costs related to the collection of the Viad Receivable, which resulted in $3,449 of costs charged against earnings. These two charges aggregated $3,761, and are included in selling, general and administrative on the statement of operations for the year ended March 31, 2000. 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING/COMBINING FINANCIAL STATEMENTS In connection with the acquisition as discussed in Notes 1 and 8, the Company offered $80 million in aggregate principal amount of Series B 11% Senior Notes due 2005 (the "Notes"). The Notes are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by the Company's domestic subsidiaries (the "Guarantors"). The Guarantors include Aircraft Services International, Inc., ASIG Miami Inc. (formerly known as Dispatch Services, Inc.), ASIG Fueling Miami, Inc. (formerly known as Florida Aviation Fueling Co.), and ASIG Ground Services, Inc. (formerly known as Elsinore Acquisition Corporation). The condensed consolidating/combining financial statements of the Guarantors should be read in connection with the consolidated/combined financial statements of the Company. Separate financial statements of the Guarantors are not presented because the Company believes such information is not material and that the condensed consolidating/combining financial statements presented are more meaningful in understanding the financial position and results of operations of the Guarantors. Those supplemental guarantor condensed combining financial statements that do not contain a column for elimination entries and/or a column for ASIG, Inc. (or the Predecessor) do so because all amounts that would appear in the column are zero. F-25 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

~~2000~~CONDENSED $CONSOLIDATING ~~500~~BALANCE SHEET MARCH 31, 2001 ~~688~~NON- ~~2002~~GUARANTOR ~~750~~GUARANTOR ~~2003~~CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- -------------- -------------- ASSETS Current assets: Cash and equivalents $ 37 $ (383 ) $ 980 $ 634 Accounts receivable, net - 25,347 2,682 28,029 Prepaid expenses 16 1,~~012~~082 ~~2004~~85 1,~~325~~183 ~~Thereafter~~Spare parts and supplies - 2,555 206 2,761 ------------ -------------- -------------- -------------- Total current assets 53 28,601 3,953 32,607 Property, plant and equipment, net 59 39,983 2,966 43,008 Goodwill, net 46,287 584 46,871 Deferred financing costs, net 2,204 2,204 Investments in and advances in joint venture 495 495 Other assets 4 878 (85) 797 ------------ -------------- -------------- -------------- Total assets $ 2,320 $ 115,749 $ 7,913 $ 125,982 ============ ============== ============== ============== LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $ - $ 3,676 $ 221 $ 3,897 Due to (from) affiliates (86,439) 79,424 7,015 - Accrued expenses 1,250 21,092 1,185 23,527 Customer deposits - 3,845 138 3,983 Current portion of notes payable and Term Loan and other 688 - 43 731 ------------ -------------- -------------- -------------- Total current liabilities (84,501) 108,037 8,602 32,138 Notes payable 8,178 - - 8,178 Senior Notes 80,000 - - 80,000 Stockholder's equity (deficit): Common stock - - - - Paid-in capital 27,993 - - 27,993 Retained earnings (accumulated deficit) (29,350) 7,712 (263) (21,901) Accumulated other comprehensive loss -- -- (426) (426) ------------ -------------- -------------- -------------- Total stockholder's equity (deficit) (1,357) 7,712 (689) 5,666 ------------ -------------- -------------- -------------- Total liabilities and stockholder's equity $4 2,~~625~~320 $ 115,749 $ 7,913 $ 125,982 ============ ============== ============== ==============

F-26 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

~~Year~~CONDENSED ~~Ended~~CONSOLIDATING ~~March~~BALANCE SHEET MARCH 31, ~~Year~~2000 ~~Ended~~NON- ~~March~~GUARANTOR 31GUARANTOR CONSOLIDATED ASIG, ~~2000~~INC. ~~1999~~SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- ~~Weighted~~-------------- ~~Weighted~~-------------- ~~Average~~ASSETS ~~Average~~Current ~~Exercise~~assets: ~~Price~~Cash ~~Exercise~~and ~~Price~~equivalents ~~Ranger~~$ ~~Shares~~111 ~~Per~~$ ~~Share~~(14) ~~Ranger~~$ ~~Shares~~324 ~~Per~~$ ~~Share~~421 Accounts receivable, net -- 21,953 2,075 24,028 Prepaid expenses 27 1,159 508 1,694 Spare parts and supplies -- 2,394 34 2,428 ------------ -------------- -------------- -------------- ~~Outstanding~~Total atcurrent ~~beginning~~assets of138 ~~year~~25,492 132,~~710~~941 28,571 Property, plant and equipment, net 77 45,176 2,909 48,162 Due from affiliates 112 (112) -- -- Goodwill, net -- 49,006 565 49,571 Deferred financing costs, net 2,736 -- -- 2,736 Investments in and advances in joint venture -- 1 358 359 Receivable from VIAD 2,125 -- - 2,125 Other assets 4 798 6 808 ------------ -------------- -------------- -------------- Total assets $ ~~100~~5,192 $ 120,361 $ 6,779 $ 132,332 ============ ============== ============== ============== LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable $ -- $ 6,049 $ 338 $ 6,387 Due to (from) affiliates (82,754) 89,102 (6,348) -- ~~Granted.~~Notes .payable .to .affiliates .(12,193) .-- .12,193 .-- .Accrued .expenses .1,271 .15,134 .1,095 ~~636~~17,500 ~~100~~Customer 13deposits -- 3,~~795~~519 ~~100~~126 ~~Exercised.~~3,645 .Current .portion .of .notes .payable .and .Term .Loan .and .other .500 491 48 1,039 ------------ -------------- ~~Cancelled.~~-------------- .-------------- .Total .current .liabilities .(93,176) .114,295 .7,452 .28,571 .Notes .payable .10,055 -- 20 10,075 Senior Notes 80,000 -- -- 80,000 Stockholder's equity (~~574~~deficit): ~~100~~Common stock -- -- -- -- Paid-in capital 27,800 -- -- 27,800 Retained earnings (85accumulated deficit) ~~100~~(19,487) 6,066 (674) (14,095) Accumulated other comprehensive loss -- -- (19) (19) ------------ -------------- ~~Outstanding~~-------------- at-------------- ~~end~~Total ofstockholder's ~~the~~equity ~~year~~(deficit) .8,313 6,066 (693) 13,~~772~~686 ------------ -------------- -------------- -------------- Total liabilities and stockholder's equity $ ~~100~~5,192 13$ 120,~~710~~361 $ ~~100~~6,779 $ 132,332 ============ ============== ============== ==============

F-27 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

~~Options~~CONDENSED ~~Outstanding~~CONSOLIDATING ~~Options~~STATEMENT ~~Exercisable~~OF OPERATIONS YEAR ENDED MARCH 31, 2001 ------------------------------------------------------------ NON- GUARANTOR GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- ~~Weighted~~-------------- ~~Weighted~~-------------- ~~Number~~Revenues ~~Average~~$ ~~Remaining~~-- ~~Number~~$ ~~Average~~143,963 ~~Exercise~~$ ~~Exercise~~18,020 ~~Price~~$ ~~Outstanding~~161,983 atCosts ~~Contractual~~and ~~Life~~expenses: ~~Exercisable~~Operating ~~Price~~expenses ~~Per~~43 ~~Share~~121,372 15,249 136,664 Selling, general and administrative 28 9,323 1,297 10,648 Amortization of intangibles - 2,731 22 2,753 Depreciation 18 8,177 672 8,867 ------------ -- ------------ ----- --------- -------------- Total cost and expenses 89 141,603 17,240 158,932 ------------ -------------- -------------- -------------- ~~March~~Operating ~~31,~~income ~~2000~~(loss) $(89) ~~100~~2,360 13780 3,~~772~~051 8Other 5income (expense),~~342~~ $net ~~100~~- ~~March~~(111) 31199 88 Interest income 3 34 3 40 Interest and other financial expense (9,833) ~~1999~~(556) $(550) ~~100~~(10,939) 13------------ -------------- -------------- -------------- Income (loss) before income taxes (9,~~710~~919) 1,727 432 (7,760) Provision (benefit) for income taxes - 25 21 46 ------------ -------------- -------------- -------------- Net income (loss) $ (9,919) $ 1,~~130~~702 $ ~~100~~411 $ (7,806) ============ ============== ============== ============== F-28

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

~~Year~~CONDENSED ~~ended~~CONSOLIDATING ~~Year~~STATEMENT ~~ended~~OF ~~March~~OPERATIONS YEAR ENDED MARCH 31, 2000 ~~March~~------------------------------------------------------------ 31NON- GUARANTOR GUARANTOR CONSOLIDATED ASIG, ~~1999~~INC. SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- -------------- -------------- Revenues $ -- $ 126,280 $ 14,764 $ 141,044 Costs and expenses: Operating expenses 16 103,727 12,666 116,409 Selling, general and administrative 10 11,755 1,501 13,266 Amortization of intangibles 18 6,899 591 7,508 Depreciation -- 2,706 21 2,727 ------------ -------------- -------------- -------------- Total cost and expenses 44 125,087 14,779 139,910 ------------ -------------- -------------- -------------- Operating income (loss) (44) 1,193 (15) 1,134 Other income (expense), net -- (144) 168 24 Interest income 7 84 9 100 Interest and other financial expense (9,163) (318) (1,102) (10,583) ------------ -------------- -------------- -------------- Income (loss) before income taxes (9,200) 815 (940) (9,325) Provision (benefit) for income taxes -- -- -- -- ------------ -------------- -------------- -------------- Net income (loss) $ (9,~~451~~200) $ 815 $ (4940) $ (9,~~952~~325) ============~~====~~ ================ ~~Net loss per share $ (94,510) $ (49,520)~~ ================ ================

F-29 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

~~March~~CONDENSED ~~31,~~CONSOLIDATING ~~2000~~STATEMENT ~~March~~OF OPERATIONS YEAR ENDED MARCH 31, 1999 ------------------------------------------------------- NON GUARANTOR -GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- ~~Expected~~-------------- ~~life~~--------- Revenues $ - $ 102,883 $ 20,558 $123,441 Cost and expenses: Operating expenses - 81,878 17,157 99,035 Selling, general and administrative - 7,657 1,208 8,865 ~~years~~Amortization 9of ~~years~~intangibles ~~Interest~~- ~~rate~~2,545 - 2,545 Depreciation 9 5,589 578 6~~.00%~~,176 ------------ -------------- -------------- --------- Total cost and expenses 9 97,669 18,943 116,621 ------------ -------------- -------------- --------- Operating income (loss) (9) 5,214 1,615 6~~.00%~~,820 ~~Volatility~~Other income (expense), net (5) 15 (263) (253) Interest income 21 129 57 207 Interest and other financial expense (10,102) (86) (1,093) (11,281) ------------ -------------- ~~Dividend~~-------------- ~~yield~~--------- Income (loss) before income taxes (10,095) 5,272 316 (4,507) Provision (benefit) for income taxes - - 50 50 ------------ -------------- -------------- --------- Net income (loss) before extraordinary item (10,095) 5,272 266 (4,557) ------------ -------------- -------------- --------- Extraordinary loss on early extinguishment of debt (213) - - (213) ------------ -------------- -------------- --------- Net income (loss) $ (10,308) $ 5,272 $ 266 $ (4,770) ============ ============== ============== =========

F-30 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS YEAR ENDED MARCH 31, 2001 ------------------------------------------------------------- GUARANTOR NON-GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- --------------- -------------- OPERATING ACTIVITIES Net Income (loss) $ (9,919) $ 1,702 $ 411 $ (7,806) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Amortization of intangible assets - 2,~~174~~731 ~~2002~~22 2,~~156~~753 ~~2003~~Depreciation 18 8,177 672 8,867 Amortization of deferred financing costs 532 - - 532 Deferred taxes - (2) 2 - (Gain)/Loss on sale of fixed assets - 115 11 126 Equity loss in joint venture - - (197) (197) Changes in operating assets and liabilities, net of acquisition: Accounts receivable 2,181 (3,449) (1,~~991~~015) ~~2004~~(2,283) Due from (to) affiliates 112 (1,~~868~~235) ~~2005~~1,123 - Prepaid expenses 11 442 58 511 Spare parts and supplies - (161) (172) (333) Other assets - (217) 228 11 Accounts payable - (2,373) (117) (2,490) Accrued expenses 8,487 (2,472) 12 6,027 Customer deposits -- 325 13 338 ------------ -------------- --------------- -------------- Net cash provided by operating activities 1,~~781~~422 ~~Thereafter~~3,583 1,051 6,056 INVESTING ACTIVITIES Purchases of property, plant and equipment - (3,~~706~~464) (375) (3,839) Investment in ACS 210 (202) 8 Advances to joint venture -- (83) 83 - ------------ 13-------------- --------------- -------------- Net cash used in investing activities -- (3,~~676~~337) (494) (3,831) FINANCING ACTIVITIES Capital contribution 193 -- - 193 Borrowings, net (1,689) (539) 23 (2,205) ------------ -------------- --------------- -------------- Net cash used in financing activities (1,496) (539) 23 (2,012) ------------ -------------- --------------- -------------- Net increase (decrease) in cash (74) (293) 580 213 Cash at the beginning of the year 111 (90) 400 421 ------------ -------------- --------------- -------------- Cash at the end of the year $ 37 $ (383) $ 980 $ 634 ============ ============== =============== ==============

F-31 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

~~March~~CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS YEAR ENDED MARCH 31, 2000 ~~March~~------------------------------------------------------------- 31GUARANTOR NON-GUARANTOR CONSOLIDATED ASIG, ~~1999~~INC. SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- --------------- ~~Weighted~~-------------- ~~average~~OPERATING ~~discount~~ACTIVITIES ~~rate.~~Net .Income .(loss) .$ .(9,179) ~~6.75%~~$ ~~8.0%~~793 ~~Rate~~$ of(939) ~~increase~~$ (9,325) Adjustments to reconcile net income (loss) to net cash provided by (used in) ~~compensation~~operating ~~levels~~activities: ~~3.75%~~Amortization ~~5.0%~~of ~~Expected~~intangible ~~long~~assets -~~term~~- ~~return~~2,705 22 2,727 Depreciation 18 6,898 592 7,508 Amortization of deferred financing costs 552 -- -- 552 (Gain)/Loss on sale of fixed assets .-- .187 9. 196 Provision for bad debt -- -- -- -- Equity loss in joint venture -- (464) 329 (135) Changes in operating assets and liabilities, net of acquisition: Accounts receivable (113) (4,744) (954) (5%,811) Due from (to) affiliates -- (2,723) 2,723 -- Prepaid expenses ( 9.) (537) (478) (1,024) Spare parts and supplies -- (328) ( 5%) (333) Other assets 130 (503) (139) (512) Accounts payable (153) 1,447 (142) 1,152 Accrued expenses (1,409) 5,714 (235) 4,070 Customer deposits -- 122 35 157 ------------ -------------- --------------- -------------- Net cash provided by (used in) operating activities (10,163) 8,567 818 (778) INVESTING ACTIVITIES Purchases of property, plant and equipment (16) (7,096) (915) (8,027) Purchase of Elsinore business 23 (5,695) -- (5,672) Investment in ACS -- -- (160) (160) Changes in Goodwill from ASIG Purchase -- 7 ( 7) -- Advances to joint venture -- 326 (326) -- ------------ -------------- --------------- -------------- Net cash used in investing activities 7 (12,458) (1,408) (13,859) FINANCING ACTIVITIES Capital contribution -- -- -- -- Borrowings, net 10,226 1,585 19 11,830 Deferred financing costs (83) -- -- (83) ------------ -------------- --------------- -------------- Net cash used in financing activities 10,143 1,585 19 11,747 ------------ -------------- --------------- -------------- Net (decrease) increase in cash (13) (2,306) (571) (2,890) Cash at the beginning of the year 124 2,216 971 3,311 ------------ -------------- --------------- -------------- Cash at the end of the year $ 111 $ (90) $ 400 $ 421 ============ ============== =============== ==============

F-32 AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 17. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (CONTINUED)

~~The~~CONDENSED ~~following~~CONSOLIDATING ~~table~~STATEMENT ~~sets~~OF ~~forth~~CASH aFLOWS ~~reconciliation~~YEAR ofENDED ~~benefit~~MARCH ~~obligations~~31, ~~plan~~1999 ------------ -------------- --------------- -------------- GUARANTOR NON-GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL OPERATING ACTIVITIES Net Income (loss) $ (10,308) $ 5,272 $ 266 $ (4,770) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Amortization of intangible assets ~~and~~-- ~~funded~~2,545 ~~status~~-- 2,545 Depreciation 9 5,589 578 6,176 Amortization of deferred financing costs 2,888 -- -- 2,888 Provision for ~~the~~bad ~~Company's~~debt ~~defined~~-- ~~benefit~~36 ~~pension~~-- ~~plan~~36 asEquity ofloss in joint venture -- -- 157 157 Changes in operating assets and ~~for~~liabilities, ~~the~~net ~~years~~of ~~ended~~acquisition: ~~March~~Accounts 31receivable -- (843) (226) (1,069) ~~2000~~Due from (to) affiliates (4,410) 3,763 647 -- Prepaid expenses (18) (504) (1) (523) Spare parts and ~~1999.~~supplies ~~March~~-- (350) 13 (337) Other assets (4) 317 6 319 Accounts payable -- 431 31 462 Accrued expenses 1,319 ~~2000~~(1,656) ~~March~~43 31(294) Customer deposits -- 965 90 1,055 ~~1999~~------------ -------------- --------------- ~~CHANGES~~-------------- INNet ~~BENEFIT~~cash ~~OBLIGATION:~~provided ~~Benefit~~by ~~obligation~~(used atin) ~~the~~by ~~beginning~~operating ofactivities ~~the~~(10,524) ~~period~~15,565 $1,~~337~~604 $16,~~122~~645 ~~Service~~INVESTING ~~cost~~ACTIVITIES ~~114~~Purchases 82of ~~Interest~~property, ~~cost~~plant 90and 83equipment ~~Actuarial~~(87) ~~loss~~(13,349) 5 (~~176~~13,431) 50Purchase of ASIG business (88,487) -- -- (88,487) Purchase of GAH business -- -- (438) (438) Advances to joint venture -- -- (200) (200) ------------ ~~Benefit~~-------------- ~~obligation~~--------------- at-------------- ~~end~~Net ofcash ~~period~~used ~~$1,365~~in ~~$1,337~~investing ~~=======~~activities ~~=======~~(88,574) ~~CHANGES~~(13,349) IN(633) ~~PLAN~~(102,556) ~~ASSETS:~~FINANCING ~~Fair~~ACTIVITIES ~~value~~Capital ofcontribution ~~plan~~24,100 ~~assets~~-- at-- ~~beginning~~24,100 ofBorrowings, ~~period~~net $180,~~153~~630 ~~$1,006~~-- ~~Actual~~-- ~~return~~80,630 onDeferred ~~plan~~financing ~~assets~~costs 83(5,508) 98-- ~~Employer~~-- ~~contribution~~(5,508) 57------------ 49-------------- --------------- -------------- ~~Fair~~Net ~~value~~cash ofprovided ~~plan~~by ~~assets~~financing atactivities ~~end~~99,222 of-- ~~period~~-- $199,~~293~~222 $1------------ -------------- --------------- -------------- Net increase in cash 124 2,~~153~~216 ~~=======~~971 ~~=======~~3,311 ~~RECONCILIATION:~~Cash ~~Funded~~at ~~status~~the $beginning 71of $the ~~184~~year ~~Unrecognized~~-- ~~net~~-- ~~(loss)~~-- ~~gain~~-- ~~130~~------------ ~~(337)~~-------------- --------------- -------------- ~~Accrued~~Cash ~~benefit~~at ~~cost~~the end of the year $ ~~201~~124 $ ~~(153)~~2,216 $ 971 $ 3,311 ============ ============== =============== ==============

F-33 REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS Stockholder Aircraft Service International Group, Inc. We have audited the consolidated financial statements of Aircraft Service International Group, Inc. and subsidiaries as of March 31, 2001 and 2000, and for each of the three years in the period ended March 31, 2001, and have issued our report thereon dated June 22, 2001 (included elsewhere in this Form 10-K). Our audits also included the financial statement schedule listed in Item 14 (a) of this Form 10-K. This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on the schedule based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein. /s/ ERNST & YOUNG LLP Miami, Florida June 22, 2001 S-1 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. MARCH 31, 2001 (DOLLARS IN THOUSANDS)

~~SUCCESSOR~~BALANCE ~~PREDECESSOR~~AT CHARGED TO BALANCE BEGINNING COSTS AND AT END OF DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS (1) PERIOD ----------- ----------- ~~Year~~------------ ~~ended~~--------------- ---------- Year ~~ended~~Ended ~~Year~~March ~~ended~~31, ~~Three~~1999: ~~months~~Deducted ~~ended~~from ~~December~~asset ~~31,~~accounts: ~~March~~Allowance ~~31,~~for ~~2000~~doubtful ~~March~~accounts ~~31,~~$ ~~1999~~546 ~~March~~$ ~~31,~~36 ~~1998~~$ ~~1997~~(15) $ 567 Deferred tax asset valuation -- 1,786 -- 1,786 ----------- -------------- --------------- ------ ~~Service cost~~-~~benefits~~--- ~~earned~~Total ~~during~~$ ~~the~~546 ~~period~~ $ ~~114~~1,822 $ 82(15) $ ~~215~~2,353 $=========== ~~715~~============ ~~Interest~~=============== ~~cost~~========== onYear ~~projected~~Ended ~~benefit~~March ~~obligation.~~31, 902000: Deducted from asset accounts: Allowance for doubtful accounts $ 567 $ 83 ~~213~~$ ~~815~~(5) ~~Return~~$ on645 ~~assets~~Deferred .tax .asset .valuation .1,786 .3,235 .-- .5,021 .----------- .------------ .--------------- .---------- .Total .$ .2,353 .$ ~~(127)~~3,318 ~~(140)~~$ (~~233~~5) (1$ 5,~~765)~~666 ~~Net~~=========== ~~amortization~~============ ~~and~~=============== ~~deferral.~~========== .Year .Ended .March .31, .2001: .Deducted .from .asset 31accounts: 58Allowance 16for 1doubtful accounts $ 645 $ (60) $ (37) $ 548 Deferred tax asset valuation 5,~~119~~021 3,090 -- 8,111 ----------- ------------ --------------- ---------- ~~Net~~Total ~~periodic pension expense . . . . . . . . .~~ $ ~~108~~5,666 $ 833,030 $ ~~211~~(37) $ ~~884~~8,659 ============ ============ =============== ========== (1) Uncollectible accounts written off, net of recoveries.

S-1

PREDECESSOR ----------- Three months ended Year ended December 31, March 31, 1998 1997 ------------------- ----------------------- Service cost-benefits earned during the period. $ 8 $30 Interest cost on accumulated benefit obligation 8 33 Net amortization and deferral . . . . . . . . . (1) (3) ------ ---- Net periodic post-retirement expense. . . . . . $ 15 $60 ====== ====

SUCCESSOR PREDECESSOR ------------ ------------ Year ended Year ended Three months ended Year ended March 31, March 31, March 31, December 31, 2000 1999 1998 1997 ------------ ------------ ------------------- ------------- Revenues: United States . $ 126,279 $ 102,883 $ 24,967 $ 98,853 Europe. . . . . 11,789 17,835 4,487 16,792 Bahamas . . . . 2,976 2,723 702 3,680 ------------ ------------ ----------------- ------------- $ 141,044 $ 123,441 $ 30,156 $ 119,325 ============ ============ =================== ============= Operating income (loss): United States . $ 1,150 $ 5,205 $ 632 $ 8,307 Europe. . . . . (347) 1,132 454 1,527 Bahamas . . . . 331 483 147 190 ------------ ------------ ------------------- ------------- $ 1,134 $ 6,820 $ 1,233 $ 10,024 ============ ============ =================== =============

MARCH 31 MARCH 31 2000 1999 --------- --------- Identifiable assets: United States. . . $ 125,116 $ 118,322 Europe . . . . . . 5,697 4,065 Bahamas. . . . . . 1,519 1,367 --------- --------- $ 132,332 $ 123,754 ========= =========

CONSOLIDATED BALANCE SHEET MARCH 31, 2000 NON- GUARANTOR GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL ------------ -------------- -------------- --------- ASSETS Current Assets: Cash and equivalents . . . . . . . . . . . . $ 111 $ (14) $ 324 $ 421 Accounts receivable, net . . . . . . . . . . -- 21,953 2,075 24,028 Prepaid expenses . . . . . . . . . . . . . . 27 1,159 508 1,694 Spare parts and supplies . . . . . . . . . . -- 2,394 34 2,428 ------------ -------------- -------------- --------- Total current assets . . . . . . . . . . . . 138 25,492 2,941 28,571 Property, plant and equipment, net. . . . . . 77 45,176 2,909 48,162 Due from affiliates . . . . . . . . . . . . . 112 (112) -- -- Goodwill, net . . . . . . . . . . . . . . . . -- 49,006 565 49,571 Deferred financing costs, net . . . . . . . . 2,736 -- -- 2,736 Investments in and advances in joint venture. -- 1 358 359 Receivable from Viad . . . . . . . . . . . . 2,125 -- - 2,125 Other assets. . . . . . . . . . . . . . . . . 4 798 6 808 ------------ -------------- -------------- --------- Total assets. . . . . . . . . . . . . . . . . $ 5,192 $ 120,361 $ 6,779 $132,332 ============ ============== ============== ========= LIABILITIES AND STOCKHOLDER'S EQUITY Current liabilities: Accounts payable . . . . . . . . . . . . . . $ -- $ 6,049 $ 338 $ 6,387 Due to (from) affiliates . . . . . . . . . . (82,754) 89,102 (6,348) -- Notes payable to affiliates. . . . . . . . . (12,193) -- 12,193 -- Accrued expenses . . . . . . . . . . . . . . 1,271 15,134 1,095 17,500 Customer deposits. . . . . . . . . . . . . . -- 3,519 126 3,645 Current portion of notes payable and term loan and other. . . . . . . . 500 491 48 1,039 ------------ -------------- -------------- --------- Total current liabilities. . . . . . . . . . (93,176) 114,295 7,452 28,571 Notes payable . . . . . . . . . . . . . . . . 10,055 -- 20 10,075 Senior Notes . . . . . . . . . . . . . . . . 80,000 -- -- 80,000 ------------ -------------- -------------- --------- Total liabilities. . . . . . . . . . . . . . 90,055 -- 20 90,075 Stockholder's Equity: Common stock . . . . . . . . . . . . . . . . -- -- -- -- Paid-in capital. . . . . . . . . . . . . . . 27,800 -- -- 27,800 Retained earnings (accumulated deficit). . . (19,487) 6,066 (674) (14,095) Accumulated other comprehensive income -- -- (19) (19) ------------ ------------- -------------- --------- Total stockholder's equity . . . . . . . . . 8,313 6,066 (693) 13,686 ------------ -------------- -------------- --------- Total liabilities and stockholder's equity . $ 5,192 $ 120,361 $ 6,779 $132,332 ============ ============== ============== =========

CONSOLIDATED BALANCE SHEET MARCH 31, 1999 GUARANTOR NON-GUARANTOR ELIMINATION CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES ENTRIES TOTAL ------------ -------------- ------------- -------------- --------- ASSETS Current assets: Cash and equivalents $ 124 $ 2,216 $ 971 $ - $ 3,311 Accounts receivable, net - 15,261 1,160 - 16,421 Prepaid expenses 18 602 30 - 650 Spare parts and supplies - 2,067 28 - 2,095 ------------ -------------- ------------- -------------- --------- Total current assets 142 20,146 2,189 - 22,477 Property, plant and equipment, net 78 44,186 2,625 - 46,889 Due from affiliates 90,120 - 21,565 (111,685) - Notes receivable from affiliates 11,018 - - (11,018) - Goodwill, net - 48,249 419 - 48,668 Deferred financing costs, net 3,205 - - - 3,205 Investment in consolidated subsidiaries 445 1,170 - (1,615) - Investments in and advances in joint venture - - 224 - 224 Receivable from Viad 2,125 - - - 2,125 Other assets 4 156 6 - 166 ------------ -------------- ------------- -------------- --------- Total assets $ 107,137 $ 113,907 $ 27,028 $ (124,318) $123,754 ============ ============== ============= ============== ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ - $ 4,602 $ 480 $ - $ 5,082 Due from affiliates 9,099 91,933 10,653 (111,685) - Notes payable to affiliates - - 11,018 (11,018) - Accrued expenses 1,319 8,257 3,274 - 12,850 Customer deposits - 3,398 90 - 3,488 Current portion notes payable - - 57 - 57 ------------ -------------- ------------- -------------- --------- Total current liabilities 10,418 108,190 25,572 (122,703) 21,477 Notes payable 2,927 - - - 2,927 Senior notes 80,000 - - - 80,000 ------------ -------------- ------------- -------------- --------- Total liabilities 93,345 108,190 25,572 (122,703) 104,404 Stockholder's equity: Common stock - 4 26 (30) - Paid-in capital 24,100 441 1,144 (1,585) 24,100 Retained earnings (accumulated deficit) (10,308) 5,272 266 - (4,770) ------------ -------------- ------------- -------------- --------- Accumulated other comprehensive income - - 20 - 20 Total stockholder's equity 13,792 5,717 1,456 (1,615) 19,350 ------------ -------------- ------------- -------------- --------- Total liabilities and stockholder's equity $ 107,137 $ 113,907 $ 27,028 $ (124,318) $123,754 ============ ============== ============= ============== =========

CONSOLIDATED STATEMENT OF OPERATIONS (SUCCESSOR) YEAR ENDED MARCH 31, 2000 -------------------------------------- NON- GUARANTOR GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL -------------------------------------- -------------- -------------- ------------ --------------- Revenues . . . . . . . . . . . . . . . . . . $ $ 126,280 $ 14,764 $141,044 Costs and expenses:: Operating expenses . . . . . . . . . . . . 16 103,727 12,666 116,409 Selling, general and administrative. . . . 10 11,755 1,501 13,266 Amortization . . . . . . . . . . . . . . . 18 6,899 591 7,508 Depreciation . . . . . . . . . . . . . . . -- 2,706 21 2,727 ------------- -------------- -------------- --------- Total cost and expenses. . . . . . . . . . . 44 125,087 14,779 139,910 ------------- --------------- ------------ -------- Operating income (loss). . . . . . . . . . . (44) 1,193 (15) 1,134 Other income (expense), net. . . . . . . . . -- (144) 168 24 Interest income. . . . . . . . . . . . . . . 7 84 9 100 Interest and other financial expense . . . . (9,163) (318) (1,102) (10,583) ------------- ------------ ----------- -------- Income (loss) before income taxes. . . . . . (9,200) 815 (940) (9,325) Income taxes . . . . . . . . . . . . . . . . -- -- -- -- ------------- ----------- ----------- --------- Net income (loss) before extraordinary item. $ (9,200) $ 815 $ (940) $ (9,325) ============ ============== ============== =========

AIRCRAFT SERVICE INTERNATIONAL GROUP, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) 16. SUPPLEMENTAL GUARANTOR CONDENSED CONSOLIDATING/COMBINING FINANCIAL STATEMENTS (CONTINUED) CONSOLIDATED STATEMENT OF OPERATIONS (SUCCESSOR) YEAR ENDED MARCH 31, 1999 -------------------------------------- GUARANTOR NON-GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL ---------------------- ------------- --------------- ------------ Revenues $ - $ 102,883 $ 20,558 $ 123,441 Cost and expenses: Operating expenses - 81,878 17,157 99,035 Selling, general and administrative - 7,657 1,208 8,865 Amortization - 2,545 - 2,545 Depreciation 9 5,589 578 6,176 Total cost and expenses 9 97,669 18,943 116,621 -------- -------- -------- -------- Operating income (loss) (9) 5,214 1,615 6,820 Other income (expense), net (5) 15 (263) (253) Interest income 21 129 57 207 Interest and other financial expense (10,102) (86) (1,093) (11,281) ---------- --------- -------- -------- Income (loss) before income taxes (10,095) 5,272 316 (4,507) Income taxes - - 50 50 ----------- --------- --------- ------- Net income (loss) before extraordinary item (10,095) 5,272 266 (4,557) Extraordinary loss on early extinguishment of debt (213) - - (213) ----------- --------- --------- ------- Net income (loss) $ (10,308) $ 5,272 $ 266 $ (4,770) ============= =============== ============== =========

COMBINED STATEMENT OF INCOME (PREDECESSOR) THREE MONTHS ENDED MARCH 31, 1998 ----------------------------------- NON- GUARANTOR GUARANTOR CONSOLIDATED SUBSIDIARIES SUBSIDIARIES TOTAL --------------------- -------------- -------------- Revenues. . . . . . . . . . . . . . . $ 24,967 $ 5,189 $ 30,156 Costs and expenses: Operating expenses. . . . . . . . . 21,855 4,131 25,986 Selling, general and administrative 1,561 257 1,818 Amortization. . . . . . . . . . . . 16 6 22 Depreciation. . . . . . . . . . . . 903 194 1,097 ---------------- ----------- ----------- Total cost and expenses . . . . . . . 24,335 4,588 28,923 ---------------- ------------ ------------ Operating income. . . . . . . . . . . 632 601 1,233 Other income (expense), net . . . . . (5) (52) (57) Interest income . . . . . . . . . . . 47 26 73 Interest and other financial expense. (170) -- (170) ---------------- ---------- ------------ Income (loss) before income taxes . . 504 575 1,079 Income taxes. . . . . . . . . . . . . 214 133 347 ------------------------------ ----------- ------------- Net income. . . . . . . . . . . . . . $ 290 $ 442 $ 732 ================== ============== ==============

COMBINED STATEMENT OF INCOME (PREDECESSOR) YEAR ENDED DECEMBER 31, 1997 -------------------------------------- NON- GUARANTOR GUARANTOR CONSOLIDATED SUBSIDIARIES SUBSIDIARIES TOTAL -------------------------------------- -------------- -------------- Revenues. . . . . . . . . . . . . . . $ 98,853 $ 20,472 $ 119,325 Costs and expenses:: Operating expenses. . . . . . . . . 81,058 16,058 97,116 Selling, general and administrative 5,464 2,117 7,581 Amortization. . . . . . . . . . . . 68 35 103 Depreciation. . . . . . . . . . . . 3,956 545 4,501 --------------- ---------- ----------- Total cost and expenses . . . . . . . 90,546 18,755 109,301 ---------------- ---------- ----------- Operating income. . . . . . . . . . . 8,307 1,717 10,024 Other income (expense), net . . . . . 56 (127) (71) Interest income . . . . . . . . . . . 216 134 350 Interest and other financial expense. (669) -- (669) --------------- ----------- ----------- Income (loss) before income taxes . . 7,910 1,724 9,634 Income taxes. . . . . . . . . . . . . 3,081 521 3,602 -------------------------- ----------- ------------ Net income. . . . . . . . . . . . . . $ 4,829 $ 1,203 $ 6,032 ================== ============== ==============

CONSOLIDATED STATEMENT OF CASH FLOWS (SUCCESSOR) YEAR ENDED MARCH 31, 2000 ------------------------- GUARANTOR NON-GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL --------------------------------------------------------------- OPERATING ACTIVITIES Net Income (loss) $ (9,179) $ 793 $ (939) $ (9,325) Adjustments to reconcile net income to net cash Provided by (used in) operating activities: Amortization of intangible assets -- 2,705 22 2,727 Depreciation 18 6,898 592 7,508 Amortization of deferred financing costs 552 -- -- 552 (Gain)/Loss on sale of Fixed Assets -- 187 9 196 Provision for bad debt -- -- -- -- Equity loss in joint venture -- (464) 329 (135) Changes in operating assets and liabilities, net of acquisition: Accounts receivable (113) (4,744) (954) (5,811) Due from (to) affiliates -- (2,723) 2,723 -- Prepaid expenses ( 9) (537) (478) (1,024) Spare parts and supplies -- (328) ( 5) (333) Other assets 130 (503) (139) (512) Accounts payable (153) 1,447 (142) 1,152 Accrued expenses (1,409) 5,714 (235) 4,070 Customer deposits -- 122 35 157 ------------ -------------- -------------- --------- Net cash provided by (used in) by operating Activities (10,163) 8,567 818 (778) INVESTING ACTIVITIES Purchases of property, plant and equipment (16) (7,096) (915) (8,027) Purchase of Elsinore business 23 (5,695) -- (5,672) Investment in ACS -- -- (160) (160) Changes in Goodwill from ASIG Purchase -- 7 ( 7) -- Advances to joint venture -- 326 (326) -- ------------ -------------- -------------- --------- Net cash used in investing activities 7 (12,458) (1,408) (13,859) FINANCING ACTIVITIES Issuance of common stock -- -- -- -- Borrowings, net 10,226 1,585 19 11,830 Deferred financing costs (83) -- -- (83) ------------ -------------- -------------- --------- Net Cash provided by financing activities 10,143 1,585 19 11,747 ------------ -------------- -------------- --------- Net increase in cash (13) (2,306) (571) (2,890) Cash at the beginning of the period 124 2,216 971 3,311 ------------ -------------- -------------- --------- Cash at the end of the period $ 111 $ (90) $ 400 $ 421 ============ ============== ============== ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid $ 9.654 $ 234 $ -- $ 9,888 ============ ============== ============== ========= Taxes paid $ -- $ 57 $ 458 $ 515 ============ ============== ============== =========

CONSOLIDATED STATEMENT OF CASH FLOWS (SUCCESSOR) YEAR ENDED MARCH 31, 1999 ----------------------------------------------------------- GUARANTOR NON-GUARANTOR CONSOLIDATED ASIG, INC. SUBSIDIARIES SUBSIDIARIES TOTAL OPERATING ACTIVITIES Net Income (loss). . . . . . . . . . . . . . . . . $ (10,308) $ 5,272 $ 266 $ (4,770) Adjustments to reconcile net income to net cash Provided by (used in) operating activities: Amortization of intangible assets . . . . . . . . -- 2,545 -- 2,545 Depreciation. . . . . . . . . . . . . . . . . . . 9 5,589 578 6,176 Amortization of deferred financing costs. . . . . 2,888 -- -- 2,888 Provision for bad debt. . . . . . . . . . . . . . -- 36 -- 36 Equity loss in joint venture. . . . . . . . . . . -- -- 157 157 Changes in operating assets and liabilities, net of acquisition: Accounts receivable . . . . . . . . . . . . . . . -- (843) (226) (1,069) Due from (to) affiliates. . . . . . . . . . . . . (4,410) 3,763 647 -- Prepaid expenses. . . . . . . . . . . . . . . . . (18) (504) (1) (523) Spare parts and supplies. . . . . . . . . . . . . -- (350) 13 (337) Other assets. . . . . . . . . . . . . . . . . . . (4) 317 6 319 Accounts payable. . . . . . . . . . . . . . . . . -- 431 31 462 Accrued expenses. . . . . . . . . . . . . . . . . 1,319 (1,656) 43 (294) Customer deposits . . . . . . . . . . . . . . . . -- 965 90 1,055 ------------ -------------- -------------- ---------- Net cash provided by (used in) by operating activities. . . . . . . . . . . . . . . . . . . . (10,524) 15,565 1,604 6,645 INVESTING ACTIVITIES Purchases of property, plant and equipment . . . . (87) (13,349) 5 (13,431) Purchase of ASIG business. . . . . . . . . . . . . (88,487) -- -- (88,487) Purchase of GAH business . . . . . . . . . . . . . -- -- (438) (438) Advances to joint venture. . . . . . . . . . . . . -- -- (200) (200) ------------ -------------- -------------- ---------- Net cash used in investing activities. . . . . . . (88,574) (13,349) (633) (102,556) FINANCING ACTIVITIES Issuance of common stock . . . . . . . . . . . . . 24,100 -- -- 24,100 Borrowings, net. . . . . . . . . . . . . . . . . . 80,630 -- -- 80,630 Deferred financing costs . . . . . . . . . . . . . (5,508) -- -- (5,508) ------------ -------------- -------------- ---------- Net Cash provided by financing activities. . . . . 99,222 -- -- 99,222 ------------ -------------- -------------- ---------- Net increase in cash . . . . . . . . . . . . . . . 124 2,216 971 3,311 Cash at the beginning of the period. . . . . . . . -- -- -- -- ------------ -------------- -------------- ---------- Cash at the end of the period. . . . . . . . . . . $ 124 $ 2,216 $ 971 $ 3,311 ============ ============== ============== ========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Interest paid. . . . . . . . . . . . . . . . . . . $ 4,345 $ 47 $ -- $ 4,392 ============ ============== ============== ========== Taxes paid . . . . . . . . . . . . . . . . . . . . $ -- $ 21 $ 380 $ 4,414 ============ ============== ============== ========== SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES: Receipt of fixed assets in satisfaction of a receivable. . . . . . . . . . . . . . . . . . . . $ -- $ 4,414 $ -- $ -- ============ ============== ============== ==========

COMBINED STATEMENT OF CASH FLOWS (PREDECESSOR) THREE MONTHS ENDED MARCH 31, 1998 --------------------------------------------------------- COMBINATION NON-GUARANTOR AND ELIMINATION COMBINED SUBSIDIARIES SUBSIDIARIES ENTRIES TOTAL -------------- -------------- --------- -------- OPERATING ACTIVITIES Net income. . . . . . . . . . . . . . . . . . $ 290 $ 442 $ -- $ 732 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Amortization of intangible assets. . . . . . 16 6 -- 22 Depreciation . . . . . . . . . . . . . . . . 903 194 -- 1,097 Deferred income taxes. . . . . . . . . . . . (226) (19) -- (245) Equity loss in joint venture . . . . . . . . -- 54 -- 54 Changes in operating assets and liabilities: Accounts receivable. . . . . . . . . . . . . 2,221 429 -- 2,650 Due from (to) affiliates . . . . . . . . . . 1,064 (581) (483) -- Prepaid expense. . . . . . . . . . . . . . . 264 31 -- 295 Spare parts and supplies . . . . . . . . . . (11) (7) -- (18) Other assets . . . . . . . . . . . . . . . . (179) 5 (26) (200) Accounts payable . . . . . . . . . . . . . . 34 (173) 550 411 Accrued expenses . . . . . . . . . . . . . . 1,119 17 -- 1,136 Customer deposits. . . . . . . . . . . . . . (385) (554) -- (939) -------------- -------------- --------- -------- Net cash provided by (used in) by operating activities . . . . . . . . . . . . . . . . . 5,110 (156) 41 4,995 INVESTING ACTIVITIES Purchases of property, plant and equipment. . (2,228) (438) -- (2,666) -------------- -------------- --------- -------- Net cash used in investing activities . . . . (2,228) (438) -- (2,666) FINANCING ACTIVITIES Advances from (to) Parent, net. . . . . . . . (2,869) 553 -- (2,316) Dividends . . . . . . . . . . . . . . . . . . (13) -- -- (13) -------------- -------------- --------- -------- Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . (2,882) 553 -- (2,329) -------------- -------------- --------- -------- Net increase (decrease) in cash . . . . . . . -- (41) 41 -- Cash at beginning of period . . . . . . . . . -- 550 (550) -- -------------- -------------- --------- -------- Cash at end of period . . . . . . . . . . . . $ -- $ 509 $ (509) $ -- ============== ============== ========= ========

COMBINED STATEMENT OF CASH FLOWS (PREDECESSOR) YEAR ENDED DECEMBER 31, 1997 COMBINATION GUARANTOR NON-GUARANTOR AND ELIMINATION COMBINED SUBSIDIARIES SUBSIDIARIES ENTRIES TOTAL -------------- -------------- --------- --------- OPERATING ACTIVITIES Net income. . . . . . . . . . . . . . . . . . $ 4,829 $ 1,203 $ -- $ 6,032 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization. . . . . . . . 4,005 599 -- 4,604 Deferred income taxes. . . . . . . . . . . . (135) (1) -- (136) Equity loss in joint venture . . . . . . . . -- 133 -- 133 Changes in operating assets and liabilities: Accounts receivable. . . . . . . . . . . . . 2,163 (96) -- 2,067 Due from (to) affiliates . . . . . . . . . . (644) 644 -- -- Prepaid expense. . . . . . . . . . . . . . . 191 (30) -- 161 Spare parts and supplies . . . . . . . . . . (69) (2) -- (71) Other assets . . . . . . . . . . . . . . . . 55 8 -- 63 Accounts payable . . . . . . . . . . . . . . 695 259 433 1,387 Accrued expenses . . . . . . . . . . . . . . 1,772 666 -- 2,438 Customer deposits. . . . . . . . . . . . . . (41) 502 -- 461 -------------- -------------- --------- --------- Net cash provided by operating activities . . 12,821 3,885 433 17,139 INVESTING ACTIVITIES Purchases of property, plant and equipment. . (2,877) (1,070) -- (3,947) Advances to joint venture . . . . . . . . . . -- (353) -- (353) -------------- -------------- --------- --------- Net cash used in investing activities . . . . (2,877) (1,423) -- (4,300) FINANCING ACTIVITIES Payments on notes payable . . . . . . . . . . (82) -- -- (82) Advances from (to) Parent, net. . . . . . . . (4,689) (1,378) -- (6,067) Dividends . . . . . . . . . . . . . . . . . . (5,173) (1,708) -- (6,881) -------------- -------------- --------- --------- Net cash used in financing activities . . . . (9,944) (3,086) -- (13,030) -------------- -------------- --------- --------- Net increase (decrease) in cash . . . . . . . -- (624) 433 (191) Cash at beginning of year . . . . . . . . . . -- 1,174 (983) 191 -------------- -------------- --------- --------- Cash at end of year . . . . . . . . . . . . . $ -- $ 550 $ (550) $ -- ============== ============== ========= =========

BALANCE AT CHARGED TO BALANCE BEGINNING COSTS AND AT END OF DESCRIPTION OF PERIOD EXPENSES DEDUCTIONS (1) PERIOD ----------------------------------------------- ----------- ----------- --------------- ------- Year Ended December 31, 1997 (Predecessor) Deducted from asset accounts Allowance for doubtful accounts $ 1,276 $ 245 $ 899 $ 622 =========== =========== =============== ======= Three Months Ended March 31, 1998 (Predecessor) Deducted from asset accounts Allowance for doubtful accounts $ 622 $ -- $ 77 $ 546 =========== =========== =============== ======= Year Ended March 31, 1999 (Successor) Deducted from asset accounts Allowance for doubtful accounts $ 546 $ 36 $ (15) $ 567 Deferred tax asset valuation -- 1,786 -- 1,786 ----------- ----------- --------------- ------- Total $ 546 $ 1,822 $ (15) $ 2,353 =========== =========== =============== ======= Year Ended March 31, 2000 (Successor) Deducted from asset accounts Allowance for doubtful accounts $ 567 $ 83 $ (5) $ 645 Deferred tax asset valuation 1,786 3,235 -- 5,021 ----------- ----------- --------------- ------- Total $ 2,353 $ 3,318 $ (5) $ 5,666 =========== =========== =============== ======= (1) Uncollectible accounts written off, net of recoveries.

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